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The reasons given for the coming massive inflation are by no means complete. My own view is that – whether the $700 Paulson Plan is passed or not – Mainstreet America is going to suffer badly any way you look at it. Here’s why.

Most articles which address the effects of the Paulson Bail-Out by talking directly about the Economic view, the Wall Street view, the Mainstreet view and the Government view. Funny that no-one ever talks about the Paulson Plan with regard to banking laws and banking mechanisms – The Banking Viewpoint. If people studied it from this aspect – they would fully realize the disgusting and perverse affects of The Paulson Plan.

Put simply, The Fed is a Bank – and therefore acts under the normal banking laws and banking mechanisms of the US. One of these legal mechanisms is called ‘Fractional Reserve Lending’(FRL). This mechanism allows any bank to multiply its direct cash holdings by 10 in order to lend out money as loans. Simple and legal. If you don’t beleive this then look up ‘Fractional Reserve Lending’ in Wikipedia.

So when The Fed – a bank – receives the $700 billion – they will simply multiply this amount by 10, so that it has now grown to $7 trillion. And when the Fed ‘lends’ this money to save other financial institutions – these banks can also multiply their amounts received by 10 using the FRL mechanism.

So, now the amount has grown to $70 trillion out of thin air.

My question to you is this – what will happen to the value of the dollar when this $70 trillion suddenly hits the Mainstreet American Economy ? And who will suffer the most ? You can also bet that Palson knows the answer to this, Bernanke knows this and Bush knows this…

It’s a Mainstreet massacre any way you look at it.

A kolla can move to Santa Cruz or another city, live a western lifestyle and be recognized as a Camba. Most cambas are actually sons of kollas.

Bolivia’s divided, regionally, into three different “cultural” groups. The eastern, lowland departments of Santa Cruz, Beni, and Pando are considered camba dominated departments. The western, Andean departments of Oruro, Potosí, La Paz, Cochabamba, and Chuquisaca are considered dominated kolla departments. People from the southern department of Tarija are known as chapacos and are neither camba nor kolla.

President Morales is racially Aymara but he does not speak Aymara he speaks only Spanish. He hooked onto the movement relatively late (2000 or so). His politics was mostly in support of the coca farmers until recently. The new oppositon prefect of Chuquisaca speaks Quechua and is Kolla.

The percentage of indians in Bolivia that people cite is from the last census. In that census for the first time you had to choose white or indian there was not mestizo category.

The conflict has its roots in cultural differences. Attitudes towards property are also very marked. The kolla campesino is more familiar with the tradition of the ayllu, a form of communal farming. The camba & chapaco campesino isn’t. Private property is private property.

In school, Cambas learn about Melchor Pinta Parada & el once porciento — the bitter struggle to win the right to keep 11% of the oil profits in Santa Cruz (the rest all went to the “national” treasury, that is, La Paz). Such history of political marginalization left deep scars among both cambas & chapacos. This has led to a great deal of mistrust against La Paz (the center of political power) in particular and the poor western departments (Potosí & Oruro) that receive large chunks of economic support from the state while producing less than 5% of the national GDP (Santa Cruz alone produces more than 30% of Bolivia’s GDP). In essence, cambas & chapacos frequently see themselves supporting the nation economically while getting little back, and being politically ignored to boot.

Both the international & paceño press portrayed the guerra del gas as having pitted all of Bolivian political society against an unpopular government. Of course, cambas & chapacos are well aware that there were no anti-government protests in their cities, but rather pro-Goni rallies. Here, again, Santa Cruz & Tarija felt specifically slighted. The debate over what to do w/ their oil & gas resources was being debated in La Paz, w/ little interest in what the eastern half of the country felt about the issue. Remember that Bolivia is very centralized, so until recently even their governors were appointed.

I am just saying that the opposition isn’t made up of Dr. Evil characters as some would say whether you agree or disagree they have their reasons.

Back to Sucre… The Civicos (ACI) have nominated a former MAS member, with indigenous heritage, as prefect. And yet, they shouted “Shitty Indians, get on your knees!,” in the main square.

On the cops… you must have missed the part where they were confronted by a dynamite throwing crowd earlier in the day, and made the judgment that they couldn’t guarantee the safety of the President. The story gets longer and more complicated as one looks back. There was, of course, the option to more agressively confront the crowd, or try to carry out what would have been a hostage rescue operation on a couple hours notice. As I tentatively argue, it probably seemed better to have this heinous act on the hands of the ACI than several dead Civicos on the streets of Sucre.

Again, to look back at the American South, it took the federal government years to intervene while local police and mobs confronted African Americans with firehoses, beatings, torture in jail, and so on. Were they “manufacturing” Southern racism, or just failing to rise to its challenge with sufficient force?

Those who participated in the humiliations in Sucre should be punished, but so should the administration for pulling out the police and soldiers without even alerting their commanders so as to not allow an organized withdrawal. Can you imagine any gathering as large as that one without police not having some trouble makers? This was manufactured.