“Eat the Bankers” was written on a sign I saw in the background of the media coverage of the G20 meeting in London. To me the sign embodies the outrage working people have with the bankers. Not because there is an economic downturn but because the bankers are being put on a pedestal while the working stiff is being thrown under the bus. Nothing gets the attention of working people more than their jobs, income, pensions and savings being destroyed. It’s been reported that global financial assets lost 50 trillion dollars last year. Meanwhile, the bankers get unlimited bailouts and backdoor payouts for removing toxic assets from their balance sheets. For the most part, these are worthless or near worthless securities they themselves created and profited from. Bill Gross of PIMCO recently said that the Federal Reserve would have to expand its balance sheet to “5 or 6 trillion dollars.” The Fed currently has 2.2 trillion in these toxic assets bought from the banks to clear their balance sheets of bad debt. In total, the U.S. has already spent or committed in the neighborhood of 10 trillion dollars to “fix” the financial crisis. That’s enough money to just about pay off every mortgage in America!! Even with this massive amount of money spent or committed, the “powers” still say the credit markets are “clogged.” Is that like a giant log jam of money that needs to be blown up to get credit flowing again? My question is simple: How many more trillions will it take before the greedy incompetent bankers, who wrecked the world economy, will loan us our own money back? The answer is– no one really knows and even if they did know, they would not tell you because the number is just way, way too scary.

Tuesday President Obama said this, “We can not continue to excuse poor decisions. We can not make the survival of our auto industry dependent on an unending flow of tax payer dollars.” The White House asked GM CEO Rick Wagoner to step down. (Don’t feel bad for Mr. Wagoner, he will get more that 20 million in accrued compensation.) On top of that, President Obama even threatened bankruptcy for GM and Chrysler. Some speculate that was a ploy to get the bondholders and the UAW to take a haircut and keep GM from the taint of filing Chapter 11. Right on Mr. President! Now apply that kind of tough love to the financial institutions. But that is not what is happening to the folks who caused this mess. Instead of taking insolvent financial institutions into receivership, the banks, insurance companies and brokerage firms are getting TARP money from Treasury and toxic assets taken in trade for Treasury Bills from the Fed. No tough love there, just an… “industry dependent on an unending flow of taxpayer dollars.”

Meanwhile, back in the streets of London a protester holds a sign that says, “Capitalism isn’t Working.” Philip Jennings, UNI Global Union General Secretary, whose group represents 20 million workers, told CNBC that, “It isn’t working people that got us into this mess but it is working people paying the price.” Jennings predicts 50 million new unemployed and 200 million more will go into poverty. If that happens, civil unrest could breakout on a global scale and the financial crisis will morph into a catastrophe where no one, especially the bankers, will be safe.

My wife and I were out to lunch with a friend of ours and she asked me ,” When is the economy going to get better?” If you saw Fed Chairman Ben Bernanke’s testimony in the Senate yesterday, the answer is 2010. Of course that answer came with big caveats such as the 887 billion dollar stimulus package works to revive the economy. Many say it will not work but I hope it does. My answer to,” When is the economy going to get better?” is “It’s not going to get better; it is going to get different.” Meaning that the economy will not return to what we have grown to consider “normal.” There is going to be a new “normal.” This is not a recession, a dip or a temporary very bad economic condition. We are witnessing a “hard right turn” in a new direction on a global scale. Many of the jobs lost in this downturn will be gone forever. A couple of changing industries I can think of are financial services and the automotive sector. The good news is that people are going to be forced to live within their means. Almost everybody rich and poor will consume less and save more. There is going to be a new age of frugality and that, as Martha Stewart says, “Is a good thing.” Thrifty is the new black and this mind set is going to be in vogue for a generation or more!

Most people I come in contact with do not understand what is unfolding right in front of them. You can’t really fault them because, after all, look at the recent conflicting message President Obama sent out. He just signed the biggest spending bill in history and is now calling for the return of a Pay as you go Policy. This bill was passed without budget cuts or increased taxes. On top of that, the Treasury has a trillion dollar plan to “fix” the banking sector. Where are we getting the money for all of this spending? We are borrowing and printing it at the moment. In Senate testimony yesterday, Chairman Bernanke was asked a simple question, “How much money will it take to “fix” the banks?” Bernanke said that the Senator would have to ask, “The Treasury or the FDIC.” This was the answer from the man who is in charge of monetary policy for the United States. In my opinion, he either does not know or is afraid to give a number. My guess is the amount of money it will take to “fix” the banks will be many trillions of dollars and that is a down right scary repair.

I am not the only one who is concerned. George Soros, renowned billionaire investor, recently said, "We witnessed the collapse of the financial system…It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom." I do not profess to be able to forecast the future but I do know that given the circumstances surrounding the biggest economic mess in history, one thing is for sure. Forget about the economy you saw in the past, we are not going back there. Everything in the future is going to change and that includes the value of our money.

As I watch the News out of Washington today, I see the heads of our nation’s biggest banks being grilled in Congress on the causes of the economic problems we are facing. None of those guys can say they are there because their bank is flush with cash and great investments. The banks and the economy are in the shape they are in because of greedy incompetent bankers who paid lobbyists to erase all regulation to allow them to make reckless highly leveraged investments into toxic assets.

Now taxpayers are being asked to clean up the mess and pick up the tab.

Many people are asking what is going to happen next?

One of my jobs as a journalist is to break things down so people can understand what is going on. I don’t always hit the mark, but I can sure appreciate people who can do that task well. What is going to happen next was brilliantly summed up recently by Martin Armstrong an investment pro. He says, “We are headed into the debt tsunami that is of historical proportions unheard-of in history.” Succinctness and clarity all rolled up into one sentence. That is the simple truth.

A lot of that tsunami is coming from distressed homeowners facing resets of mortgage payments. Last year while I was working for CNN, I asked a 76 year old woman whose mortgage was resetting to higher payments why in the world she agreed to an adjustable rate mortgage when she knew the resets would force her into foreclosure. She told me the mortgage lender promised when the higher payments came she could simply refinance. Multiply that logic by millions of Americans and you can see where the flood of bad debt is coming from. The simple truth is best summed up by Richard Benson,” We got here because far too many loans were priced based on the probability of being refinanced and not the ability of being repaid! As long as liquidity was flowing, bad loans could be rolled over into bigger bad loans, but now the music has stopped for refinancing these loans.”

To address the economic crisis we are facing, the new Treasury Secretary Tim Geithner is proposing the taxpayer to commit up to a trillion dollars for the Fed to guarantee more illiquid loans. He admitted to Brian Williams this week on CNBC he did not know how much money it would take to fix the financial problem. Geithner has been widely criticized for announcing a “plan” this week with few details on how it would work. I did not find the simple truth in anything Geithner said this week. I just saw deep black water.

At the same time the bankers were being grilled to well done on Capitol Hill, the House and Senate were putting the final touches on a “stimulus bill” that is now headed for the President’s desk. Susan Collins the Republican Senator from Maine was one of three who broke ranks with the GOP and negotiated a compromise with the Democrats. She announced the bill was only “789 billion dollars” which was billions less that the House or Senate versions. Then with a straight face, she said the bill was “fiscally responsible.” Fiscally responsible is how the biggest single spending bill in history is characterized. I hear water.

While I was watching the wall to wall Inauguration coverage of Barack Obama there was a “man in the street” segment on one of the networks where people were being asked “What should the new President do about the troubled economy?” One man said “He should give money to all the homeowners who are in trouble and give some money to other homeowners too.” I think the idea of bailing out anyone and everyone is now in the vernacular of American society. How do you suppose people are getting the idea that everyone should get a financial rescue? Could it be story after story in the news everyday about how Citigroup, Bank of America or a variety of other banks are getting hundreds of billions of dollars in cash and government backing to keep them afloat? Maybe it’s the 200 billion given to AIG to keep it from causing systemic failure. It just couldn’t be the nearly 18 billion given to GM and Chrysler to keep them in business. Bailout fever is spreading like kudzu. The list of businesses and industries in need of a lifeline are like snowflakes in Colorado. Home builders, airlines, insurance companies, money market funds, states (41 are in financial trouble) and hundreds of cities around the nation are facing big budget shortfalls. Is that going to turn into some sort of bailout too? I was in North Carolina two weeks ago. While watching local television I heard the new Governor, Bev Perdue, say the state was 2 billion dollars in the red and that without federal bailout money there would have to be drastic cuts to the state budget. She was in Washington trying to get a piece of the TARP money and, why not, every other state governor is doing the exact same thing!!! Governors from around the country are asking the Federal government for a trillion dollars so they’ll not have to make some very hard choices.

With all this bailout talk, another word is starting to make it into the vernacular…Inflation!!! Before the Geithner confirmation hearing, former Fed Chief Paul Volcker, who I like to call “the Real Maestro,” gave a short testimony to vouch for tax dodging “Turbo” Tim Geithner. (He used Turbo Tax to do his returns.) The most newsworthy thing said were the few lines Volcker slipped in about his concern about inflation because of all the bailout money being created for the banks. No news organization I know of reported that little tidbit. Volcker’s fear of inflation should have been the real headline for the hearing because “Turbo” Tim was already a lock for Treasury Secretary. Later that night on Bloomberg Television, former SEC Chairman Harvey Pitt said he saw “no way” that there is not going to be inflation given the massive amount of money that will be spent for bailouts and economic stimulus. You won’t see that sound bite anywhere in the news either. When you talk about inflation you are really talking about consequences to monetary policy. Inflation was so feared by the founding fathers they wrote in the constitution that money shall be of “Gold and Silver.” That meant no fiat currency for economic stimulus packages and of course bailouts. We are a long way from the founding fathers and their kind of thinking. Today the government can print money until it runs out of trees, but what most people do not realize is there is an after effect for that kind of financial engineering. America has swept aside any talk of moral hazard and is embracing the toxic idea of a “bailout nation” for which the consequences risk our very survival as an independent country.