Dear editor,

When President Bush said, “We are in the midst of a serious financial crisis,” he wasn’t kidding. What he was really saying was that our economy is on the verge of total collapse.

A recent CIA report ranks the nations of the world according to their positive or negative cash flow. No. 1 on the positive side is Japan, with $165 billion-plus, then China with $164 billion-plus, followed by Germany with $115 billion-plus. Skipping a few, we have Hong Kong with $20 billion-plus. Then the negative balances begin — Africa, Latin America, Australia, India, the UK (third from the worst, with a $57 billion deficit), followed by Spain. Dead last on the list is the U.S. with a deficit of $829 billion — double the deficit of all the other nations of the world combined!

In other words, the U.S. is not just bankrupt, it is $829 billion below bankrupt and going lower every day. Now, I ask you, where will we get the $700 billion that is proposed to bail out the economy? Since the U.S. has no money, it must either borrow again from foreign governments or print money on worthless paper. If borrowed, interest must be paid. If printed, it will precipitate an economy-killing rise in inflation.

But that isn’t the whole story. When President Bush mentioned mortgage-backed securities, he was referring to derivatives. Derivatives are complex leveraged bundles of junk debts, made up of things like options, subprime mortgages, credit card debt, automobile debt, junk bonds, etc. Wall Street created derivatives to raise enormous amounts of cash out of thin air. But the bottom line is derivatives are debt. The biggest banks in the United States can’t pay back their derivative debts and they can’t issue any more. Unfortunately, these debts are not in the billions. They are in the trillions! These massive liabilities threaten to wipe out our financial system. As Warren Buffett warned, “Derivatives are financial weapons of mass destruction.”

Considering the financial situation in which we, as part of the United States, find ourselves, it would seem that this is a very poor time to begin an expensive building project. I predict that if Pacific Union College persists in its grasp for riches, the Angwin eco-village will turn out to be Napa County’s biggest financial fiasco. The Veterans Memorial Building, half-built and then torn down, won’t even compare!

Margaret Fakkema

Angwin