“Lesson No. 1: Don’t underestimate the other guy’s greed. Lesson No. 2: Don’t get high on your own supply.” — From the 1983 movie Scarface
President Barack Obama is worse than the corner crack dealer who tells kids, “The first hit is free.” Instead of getting a neighborhood addicted to cocaine, he has the Nation hooked on cheap money.
It all worked out perfectly well — for Obama, that is. He won his Nobel Peace Prize, gave the economy its “fix,” was re-elected President and is assured of having inner city-schools named after him for the next century. Mission accomplished for the egomaniacal President.
For you and me, the nightmare is just beginning. And we will look back and say it began on June 19, when Federal Reserve Chairman Ben Bernanke suggested he is going to wean the economy off cheap cash.
Currently, the Fed is spending $85 billion every month to buy debt that Uncle Sam can’t sell to anyone else. Bernanke had the audacity to suggest the Fed may start winding down its stimulus program because the markets are strong enough to stand on their own.
Wall Street financiers are savvy. When they heard those words, they felt the way Charlie Sheen feels when walking into the doors of a rehab clinic.
The market understands that the days of high times are over. Its sudden awakening erased 500 points from the Dow Jones industrial average, which in one fell swoop reduced wealth by a couple of hundred billion dollars.
Our Stock Market Nightmare
Sigmund Freud, the father of psychoanalysis, pioneered the understanding of dreams. He also had a cocaine addiction. He found that cocaine helped cure depression.
In an article for CNN, Howard Markel, M.D., Ph.D., author of An Anatomy of Addiction, wrote: “Like so many others, Freud suffered from the most maddening symptom of addiction: the stealthy process by which the addict’s mind conspires to convince that nothing, nothing at all, is askew or dangerous about something that most decidedly is.”
Millions of people went on to find the ecstasy and short-term cure of cocaine. I suspect that many people (perhaps even Obama during his college days) discovered that it worked wonders until they were flat broke and even more depressed then when they started. Perhaps cocaine was Obama’s inspiration to get America hooked to an even stronger substance: cheap money.
The Independent reported in 2009:
Money works like a drug on the human brain – and even just the thought of earning a higher salary gives us a physical buzz, a study has found.
Scientists have discovered that thinking about cash stimulates the reward centres involved in pleasure and the higher the salary – even if it is just imagined – the greater the pleasure generated in the brain.
The results of the study suggest that the human brain is innately susceptible to the illusion of wealth that money can bring. This is known in economics as “money illusion” – when people get fixated on the nominal value of money, rather than on its actual purchasing power.