TruthSavvy.

I would like to explain why I recommend the temporary suspension of ‘mark-to-market,' as stated in my previous commentary. Notice that my recommendation for mark-to-market suspension is predicated on three associated regulatory changes: Full disclosure and transparency, proper money supply management, and a new mandate for the FED. Remember, the FED blames voters for the bubbles since it was our U.S. Congress three decades ago that directed the FED to leverage growth (through Wall Street).

Some say that mark-to-market IS TRANSPARENCY. Not at the moment! Before becoming an academic I worked for two Wall Street firms. In today's dysfunctional markets, mark-to-market gives an inaccurate picture of what real estate based financial securities are worth, dramatically under-estimating their value in any scenario except economic collapse. To require banks to raise additional capital to meet reserve requirements as though a Global Depression persists creates a magnified crisis by which Paulson can claim that the financial world ends unless the American public capitulates and provides Wall Street with mountains of new capital. Blackmail!

Stop the Wall Street meltdown by proper means (not Paulson's!) and 70% of the U.S. real estate market will begin stabilizing. Prices are already reasonable relative to replacement costs in most parts of the nation. Seized markets for mortgages will loosen, too, once a mark-to-market suspension (but with full transparency) relieves financial firms from having to pursue new capital. The Paulson crisis is a bold contrivance that preys upon the ignorance of 95% of the population regarding how financial markets work. The crisis is aimed at taking away economic autonomy from the U.S. and placing the power in the hands of international bankers. For Paulson to win, this non-military overthrow of our freedoms has to be done rapidly and with congressional authorization before the public understands the relative attraction of alternative solutions.

One piece of the Paulson strategy, it appears, is to allow hundreds of billions of dollars of damaged assets to be bought on the cheap by hedge funds operating out of Cayman Island tax shelters and the like. If the Paulson plan succeeds and re-inflates the economy, these assets will triple in price. There is a trillion dollars to be made in the process — much of it offshore and waiting to manipulate the U.S. economy when the next chapter comes.

It is important to sidestep the trap of the Paulson plutocratic machine. If we take an alternative path, Wall Street's relevancy will decline, thus making way for new competition. None of us like the idea of suspending ‘mark-to-market'. Unfortunately, it is the best way we have left to prevent Wall Street's power from being reinvigorated. It gets us through the next few years with an economic depression of the size we can endure (assuming we take other prudent steps). America needs a new set of managers at the controls of the engines of finance. The current managers have proven their untrustworthiness.