Categories » ‘Debt Bubble’
August 2nd, 2014 by olddog
Over a year ago I published an essay entitled ‘The Linchpin Lie: How Global Collapse Will Be Sold To The Masses’. This essay addressed efforts by the ever malicious Rand Corporation to create a false narrative surrounding the possibility of global collapse. Linchpin Theory, as it was named by it’s originator and Rand Corp. employee, John Casti, is I believe the very future of propaganda.
Every engineered crisis needs a clever cover story, and in Linchpin Theory, we are told that all human catastrophe is a mere natural product of the “over complexity” within various systems. Yes, there is no accounting of false flag geopolitics or elitist conspiracy, no acknowledgment of deliberately initiated chaos; such things do not exist in the world of “linchpins”. Rather, the Rand Corporation would have us believe that the world is a massive game of Jenga, and the supporting pieces just remove themselves from the teetering structure by magical and coincidental causality.
Today, the linchpin lie is now being carefully inserted into the mainstream narrative. I can’t say I was shocked to hear Alan Greenspan use its basic premise when he recently stated that:
I have come to the conclusion that bubbles…are a function of human nature. We don’t have enough observations, but my tentative hypothesis to what we’re dealing with is that both a necessary and sufficient condition for the emergence of a bubble is a protracted period of stable economic activity at low inflation. So it is a very difficult policy problem. I do believe that central banks that believe they can quell bubbles are living in a state of unrealism.
It is important that we understand what Greenspan is actually doing here. The former Fed chairman is asserting that economic bubbles like the derivatives bubble of 2008 are a “natural function”, like the seasons, and are out of the control of central bankers. The truth is that central bankers have never tried to “quell” economic bubbles, they have been deliberately creating them in order to position the global economy into a crisis which they can then exploit. Greenspan is not only diverting blame for all the past and future economic crashes central banks have engineered, he is also setting the propaganda stage for a great change in the dynamic of the central banking concept – what the IMF’s Christine Lagarde calls the “global economic reset”.
The current central banking structure gives the illusion of separation and sovereignty. Most people who have not researched the nature of the international banking cartel believe that the Federal Reserve, for instance, is a separate national entity from the Central Bank of Russia, or the Central Bank of China. They believe that these institutions act of their own accord rather than in concert with each other. The reality is, there is no Federal Reserve. There is no Central Bank of Russia. There are no separate entities. There are no Western banks and there are no BRICS. All of these banking edifices are merely front organizations for global financiers, as Council on Foreign Relations insider (and friend to the Rockefellers) Carroll Quigley made clear in his book, Tragedy And Hope:
It must not be felt that the heads of the world’s chief central banks were themselves substantive powers in world finance. They were not. Rather they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up, and who were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investment bankers who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks.
A “global economic reset”, I suspect, will consist of a grand shift away from covert cooperation between central banks to an OPENLY centralized one world banking system, predicated on the concepts put forward by the IMF and led by the Bank for International Settlements, which has always been behind the scenes handing down commandments to the seemingly separate central banks of nations.
In order for this “reset” to be achieved, however, the establishment needs a historically monumental distraction. A distraction so confounding and terrifying that by the time the public has a chance to examine the situation rationally, the elites have already tightened the noose.
I have been warning ever since the beginning of the derivatives/debt collapse of 2007/2008 that the international financiers and globalists who created the artificially low interest rates and fiat lending bonanza would one day be required to fashion a considerably dangerous event in order to trigger the final collapse of the dollar based monetary system and replace it with a new currency (or basket of currencies), along with a new centralized financial authority.
This distracting event would have to rely on three very important strategies in order to succeed -
1) The use of what I call the “scattershot effect”; a swarm of smaller crises growing exponentially until it blurs together to create one dynamic calamity.
2) The use of multiple false paradigms in order to confuse the masses and pit them against one another in an absurd fight over fake and meaningless causes.
3) The use of deceptive benevolence on the part of the financial elite as they tap dance in to act as global “mediators”, ready to save the public from itself.
The end result would be a new brand of “world war” rather unique to history.
When most people imagine WWIII, they immediately envision images of nuclear bombs and mushroom clouds; however, I believe that when world war erupts, it may progress far differently from our cinematic assumptions. Regional conflicts are very likely, there is no doubt, but if one places himself in the shoes of the elites, one realizes that all out mechanized nuclear Armageddon is not really necessary to achieve the desired result of global governance.
Economic warfare alone could be extremely effective in initiating full spectrum fiscal implosion as well as mass starvation, mass panic, and mass desperation. All the signs lead me to believe that financial combat and 4th generation warfare will be used in the place of large armies and missiles.
The Scattershot Effect
Consider the sheer scope and number of crisis situations that have reached explosive proportions just in the past six months.
Syria continues to destabilize due to ISIS insurgents supported by the U.S., Saudi Arabia, and Israel; it is a horrifying storm which is now bleeding into other nations such as Iraq.
Iraq is on the verge of complete disintegration as the same western organized ISIS moves towards the outskirts of Baghdad.
Libya has imploded, with the American embassy evacuated, as well as the French and British, as various militias battle for supremacy.
The Ukraine crisis is nearing mutation into another beast entirely after the attack on Malaysian flight MH17. In just the past week, the EU has instituted sanctions against Russia, fighting has become even more fierce around Donetsk, Russia has been accused of firing artillery into Ukraine, and the U.S. now claims that Russia has violated the terms of the Intermediate Range Nuclear Forces treaty.
In the meantime, the Federal Reserve continues to taper QE3 while ignoring the unprecedented equities bubble they have birthed in the stock market, as well as refusing to answer the question as to who will actually buy U.S. Treasury debt if they do not? Our secret friend from Belgium? And what if this secret friend is, as I suspect, actually the IMF/BIS global loan shark duo? What then? Do we become yet another third world African-style debtor owing our very infrastructure to a financial bureaucracy on the other side of the world?
And what about the Baltic Dry Index, one of the few measures of global shipping demand that cannot be manipulated by outside money interests? Well, the BDI is back down to historic lows, falling 65% since January, signaling that the so-called “economic recovery” is not at all what it is cracked up to be.
Add to this the deluge of illegal immigration on the southern border, aided by the Obama Administration, as well as possible presidential impeachment and lawsuit proceedings, and you have a recipe for total chaos of the fiscal variety.
If the first six to seven months of 2014 have been this frenetic, how bad will the next six months be?
We are all aware of the prevalence of the false Left/Right paradigm in American politics. Hopefully most people in the Liberty Movement understand, for example, that any impeachment or lawsuit proceedings against Barack Obama will be nothing more than a crafted circus designed to accomplish nothing – a con game to placate conservatives with useless top-down solutions while the country burns around their ears.
There are other false paradigms that are not so clear to some, though…
The false Israel/Hamas paradigm has certainly duped a particular subsection of Americans and even a few patriots, even though it is historical fact that the creation of Hamas itself was funded and supported by the Israeli government. Why do Israeli politicians put money and arms at the disposal of Muslim extremist groups like Hamas and ISIS, only to enter into brutal conflict with them later? Could it be that the Israeli government does not have the best interests of the Israeli people at heart? Could it be that Israel is being used by internationalists as a catalyst for chaos? It is vital that we question the intentions behind such contrary actions in the Middle East.
Why has the U.S. government (Democrats and Republicans), Saudi Arabia, and Israel put support behind the ISIS caliphate in Iraq after spending decades of time, billions in resources, and thousands of lives, attempting to overrun and dominate the region? Why are these governments creating enemies that will later try to harm us?
It is all about false paradigms; dividing the masses into numerous conflicting sides and pitting them against each other when they should be fighting against the elites.
The false East/West paradigm is perhaps the most dangerous lie facing free men today. It is a lie that may very well define our generation if not our century. I have outlined in multiple articles the substantial evidence that proves beyond a doubt that Russia and China are members of the globalist agenda, and that the tensions between our two hemispheres are completely fabricated.
The latest announcement of a BRICS bank to rival the IMF is yet another scheme to perpetuate the illusion that the elites of these nations are at odds. In fact, the BRICS conference mission statement makes it clear that developing nations have no intention of breaking from the IMF (and certainly not the BIS). Instead, the BRICS bank is meant to provide “leverage” to “force” the IMF to become more inclusive, and hand over more power and participation. Vladimir Putin had this to say at the latest summit:
In the BRICS case we see a whole set of coinciding strategic interests. First of all, this is the common intention to reform the international monetary and financial system. In the present form it is unjust to the BRICS countries and to new economies in general. We should take a more active part in the IMF and the World Bank’s decision-making system. The international monetary system itself depends a lot on the US dollar, or, to be precise, on the monetary and financial policy of the US authorities. The BRICS countries want to change this.
Brazilian President Dilma Rousseff insisted that the BRICS were not seeking to distance themselves from the Washington-based International Monetary Fund:
On the contrary, we wish to democratize it and make it as representative as possible…
Putin and the BRICS commonly rail against the “unipolar” financial system revolving around the U.S. dollar, but in the end they are only controlled opposition, and their solution is to place even more power into the hands of the IMF (a supposedly U.S. government controlled institution), creating a truly unipolar world order. If the U.S. loses its IMF veto status this year due to lack of allocated funds, and the BRICS dump the dollar as world reserve, this may very well happen.
As sanctions between Russia and the U.S. snowball, a perfect rationalization for a dollar decoupling will be created that very few people would have believed possible only a few years ago. It is only a matter of time before fiscal warfare escalates to destructive levels. Russia will inevitably cut off gas exports to the EU, and the BRICS will inevitably drop the U.S. dollar as a world reserve standard.
The U.S. relationship to the EU is also currently being presented as dubious, and this is not by accident. Failing relations between America and Germany are yet more theater for the masses to chew on. Western allies have been spying on each other for decades, but somehow the exposure of CIA activities in Germany is shocking news? The NY Fed suddenly attacks Deutsche Bank, seeking expanded monitoring and regulation? Germany’s business interests are highly damaged by U.S. sanctions against Russia? It would seem as though someone is trying to create an artificial divide between elements of the EU and the U.S.
I believe that the narrative is being prepared for a faked financial breakup between the U.S. and many of its former allies, isolating the U.S., and destroying the dollar, but to what end? To answer that question, we must ask WHO ultimately benefits from these actions?
The Rise Of The Hero Bankers
In June of last year, the Bank for International Settlements, the central bank of central banks whose history began with the financial support of the Third Reich, released a statement warning that “easy money” from central banks was creating a dangerous bubble in stock markets around the world.
The IMF, too, has been pushing warnings of stock bubble collapse into the mainstream.
In June of this year, the BIS, a normally obscure and secretive organization, released another statement pronouncing that government had been led into a “false sense of security” by easy monetary policy and low interest rates, making the world economy perpetually unstable.
For an organization so covert and occult, the BIS sure has become rather candid lately. Frankly, I agree with everything they have said. However, I do not agree with the hypocrisy of the BIS, which dominates the decisions of all of its member banks, publicly criticizing policies which it most likely scripted itself. Why would the BIS suddenly denounce fiscal methods it used to promote? Because the BIS is setting itself up as the great prognosticator of a collapse that IT HELPED ENGINEER.
After the great financial war has subsided, and the people are suitably poverty stricken and desperate, it will be institutions like the BIS and IMF that swoop in to “save the day”. Their offer will be to consolidate economic control into the hands of an elite group of bankers “not affiliated” with any particular nation state, thereby insulating them from “political concerns”. The argument will be that national sovereignty is a bane on the back of humanity. They will claim that the catastrophe will continue until we “simplify” and streamline our economic and political systems. They will present themselves as the heroes of the age; the ones who predicted the crisis would occur, and the ones who had a solution ready to save the day (after sufficient death and destruction, of course).
As long as people remain obsessed with false paradigms and faux enemies, the establishment’s goal of complete centralized dominance will be predictably attainable.
If we change our focus to the internationalists as the true danger instead of playing their game by their rules, then things will become far more interesting…
You can contact Brandon Smith at: firstname.lastname@example.org. Alt-Market, where this article first appeared, is an organization designed to help you find like-minded activists and preppers in your local area so that you can network and construct communities for mutual aid and defense. Join Alt-Market.com today and learn what it means to step away from the system and build something better.
If we change our focus to the internationalists as the true danger instead of playing their game by their rules, then things will become far more interesting… !!!!!! Well now, isn’t it strange that this old high school drop out has been saying the same thing for years.
ELIMINATE THE ELITE BANKERS BEFORE IT’S TOO LATE.
July 15th, 2014 by olddog
By Tony Cartalucci
When the special interests who created and direct the agenda of the European Union disagree with member states, the true nature of this supranational enterprise becomes painfully apparent – one of dictatorial special interests pursing regional policy that benefits none of its individual member states. No example of this can be clearer than the dispute that has emerged over the construction of Russia’s South Stream natural gas pipeline set to run through Bulgaria, Serbia, Hungary, and Italy.
The pipeline produces a large number of benefits for each of the nations it passes through, as well as for energy markets on either end of the pipeline. For the people and governments of these nations set to benefit most from the pipeline, the deal is an attractive, long-term investment. For the special interests that have created and currently direct the EU – on the other hand – it poses as a direct threat to their designs of continued expansion and corporate-financier hegemony beyond the collective borders of today’s EU.
For the hegemon, coexistence and collaboration are not options – thus the benefits of the South Stream pipeline escape them. Instead, these hegemonic special interests seek to control their own pipeline and energy markets on either side of it, and this can be seen developing along several fronts including the Southern Corridor Project, beginning in Azerbaijan along the Caspian Sea.
Energy and foreign policy expert Sinan Ulgen of the US government and corporate-financier funded Carnegie Europe think-tank complained about the disparity between the EU Commission’s stance, and that of individual EU member states in an Anadolu Agency (AA) article titled, “Russian South Stream gas pipeline divides EU,” stating:
“…the EU’s main concern about South Stream is that the project would increase its dependence on Russian gas. Last year a third of its consumed gas was supplied by Russia.
Additionally the AA article would state:
While the European Commission opposes Russia’s South Stream gas pipeline project, certain EU countries like Austria and Italy continue to openly support the world’s most expensive pipeline project, which aims to transport Russian gas by bypassing Ukraine.
For the last two years, Russia has signed bilateral agreements with Italy, Bulgaria, Serbia, Hungary, Greece, Slovenia, Austria and Croatia for the construction of the South Stream gas pipeline, which is estimated to cost nearly US$40 billion according to the Moscow Times. Gazprom recently announced however that it was abandoning construction of the Italian portion of the pipeline.
These agreements were deemed a breach of EU anti-trust law by the European Commission in December. And, in April, following the annexation of the Crimean peninsula by Russia, the European Parliament voted for the South Stream project to be stopped.
AA would also cite another corporate-financier funded think tank, Chatham House – also complaining about EU members pursuing their own interests in contradiction to the EU Commission’s dictates. The unelected EU Commission appears to be pursing its own extraterritorial geopolitical pursuits ahead of those of the individual member states and their respective populations. That corporate-financier funded “think tanks” are focused on this “divide” and championing the EU Commission’s agenda over that of the individual EU members it allegedly represents fully exposes the EU for what it truly is, a dysfunctional supranational dictatorship.
And what is done in the name of the EU by its institutions like the EU Commission, which admittedly does not represent the best interests or desires of those it claims to represent, unfortunately and perhaps unfairly reflects on the EU as a whole. For example, and as part of the energy debate, the current EU support of the regime occupying Kiev, Ukraine, taints all of Europe, even as many EU member states attempt to move cautiously or even in opposition to the greater agenda the EU Commission and others are pursuing.
While the EU promotes itself as a bastion of freedom, stability, and prosperity, it appears increasingly more like a hegemonic bloc, dictating to, rather than acting as a representative of, the European people. The slogan “Toward a Europe Whole and Free” rings hollow when the EU Commission begins dictating policy to individual states, and curtailing progress that benefits both individual nations and their people.
The EU, in this light, appears more of an autocratic oligarchical consolidation of regional power and resources, not a democratic collaboration between nations. A slogan like “Toward a Europe Whole and Free” appears then to represent Europe, but only from the perspective of special interests seeking to loot the region collectively, rather than nation-by-nation. The dysfunction and dictatorial nature of the EU Commission and other apparatuses within the supranational bloc serve as a cautionary example for other nations seeking to construct their own alliances – from Asia’s ASEAN-AEC (Asian Economic Community), to regional alliances between Russia, China and with nations along their peripheries.
Alliances that include obligations that usurp national sovereignty are not alliances at all, they are hegemonic infiltration by special interests who would rather see a village place their valuables in a single safe for them to crack and loot, rather than take the time and trouble to rob each individual home. Europe must decide whether it will continue along a path of internal conflict with its alleged EU representatives tainting their collective populations, cultures, and histories, or reform the EU into an institution that allows collaboration and national sovereignty to exist in tandem.
Tony Cartalucci, Bangkok-based geopolitical researcher and writer, especially for the online magazine “New Eastern Outlook”.
Copyright © 2014 Global Research
July 12th, 2014 by olddog
Thomas Jefferson, the author of America’s July 4, 1776 Declaration of Secession from the British empire, was a lifelong advocate of both the voluntary union of the free, independent, and sovereign states, and of the right of secession. “If there be any among us who would wish to dissolve this Union or to change its republican form,” he said in his first inaugural address in 1801, “let them stand undisturbed as monuments of the safety with which error of opinion may be tolerated where reason is left to combat it.”
In a January 29, 1804 letter to Dr. Joseph Priestley, who had asked Jefferson his opinion of the New England secession movement that was gaining momentum, he wrote: “Whether we remain in one confederacy, or form into Atlantic and Mississippi confederacies, I believe not very important to the happiness of either part. Those of the western confederacy will be as much our children & descendants as those of the eastern . . . and did I now foresee a separation at some future day, yet should feel the duty & the desire to promote the western interests as zealously as the eastern, doing all the good for both portions of our future family…” Jefferson offered the same opinion to John C. Breckinridge on August 12, 1803 when New Englanders were threatening secession after the Louisiana purchase. If there were a “separation,” he wrote, “God bless them both & keep them in the union if it be for their good, but separate them, if it be better.”
Everyone understood that the union of the states was voluntary and that, as Virginia, Rhode Island, and New York stated in their constitutional ratification documents, each state had a right to withdraw from the union at some future date if that union became harmful to its interests. So when New Englanders began plotting secession barely twenty years after the end of the American Revolution, their leader, Massachusetts Senator Timothy Pickering (who was also George Washington’s secretary of war and secretary of state) stated that “the principles of our Revolution point to the remedy – a separation. That this can be accomplished without spilling one drop of blood, I have little doubt” (In Henry Adams, editor, Documents Relating to New-England Federalism, 1800-1815, p. 338). The New England plot to secede from the union culminated in the Hartford Secession Convention of 1814, where they ultimately decided to remain in the union and to try to dominate it politically instead. (They of course succeeded beyond their wildest dreams, beginning in April of 1865 up to the present day.)
John Quincy Adams, the quintessential New England Yankee, echoed these Jeffersonian sentiments in an 1839 speech in which he said that if different states or groups of states came into irrepressible conflict, then that “will be the time for reverting to the precedents which occurred at the formation and adoption of the Constitution, to form again a more perfect union by dissolving that which could no longer bind, and to leave the separated parts to be reunited by the law of political gravitation…” (John Quincy Adams,>The Jubilee of the Constitution, 1939, pp. 66-69).
There is a long history of American newspapers endorsing the Jeffersonian secessionist tradition. The following are just a few examples.
The Bangor, Maine Daily Union once editorialized that the union of Maine with the other states “rests and depends for its continuance on the free consent and will of the sovereign people of each. When that consent and will is withdrawn on either part, their Union is gone, and no power exterior to the withdrawing [state] can ever restore it.” Moreover, a state can never be a true equal member of the American union if forced into it by military aggression, the Maine editors wrote.
“A war … is a thousand times worse evil than the loss of a State, or a dozen States” the Indianapolis Daily Journal once wrote. “The very freedom claimed by every individual citizen, precludes the idea of compulsory association, as individuals, as communities, or as States,” wrote the Kenosha, Wisconsin Democrat. “The very germ of liberty is the right of forming our own governments, enacting our own laws, and choosing or own political associates … The right of secession inheres to the people of every sovereign state.”
Using violence to force any state to remain in the union, once said the New York Journal of Commerce, would “change our government from a voluntary one, in which the people are sovereigns, to a despotism” where one part of the people are “slaves.” The Washington (D.C.) Constitution concurred, calling a coerced union held together at gunpoint (like the Soviet Union, for instance) “the extreme of wickedness and the acme of folly.”
“The great principle embodied by Jefferson in the Declaration of American Independence, that governments derive their just powers from the consent of the governed,” the New York Daily Tribune once wrote, “is sound and just,” so that if any state wanted to secede peacefully from the union, it has “a clear moral right to do so.”
A union maintained by military force, Soviet style, would be “mad and Quixotic” as well as “tyrannical and unjust” and “worse than a mockery,” editorialized the Trenton (N.J.) True American. Echoing Jefferson’s letter to John C. Breckinridge, the Cincinnati Daily Commercial once editorialized that “there is room for several flourishing nations on this continent; and the sun will shine brightly and the rivers run as clear” if one or more states were to peacefully secede.
All of these Northern state editorials were published in the first three months of 1861 and are published in Howard Cecil Perkins, editor, Northern Editorials on Secession (Gloucester, Mass.: 1964). They illustrate how the truths penned by Thomas Jefferson in the Declaration of Independence — that the states were considered to be free, independent, and sovereign in the same sense that England and France were; that the union was voluntary; that using invasion, bloodshed, and mass murder to force a state into the union would be an abomination and a universal moral outrage; and that a free society is required to revere freedom of association — were still alive and well until April of 1865 when the Lincoln regime invented and adopted the novel new theory that: 1) the states were never sovereign; 2) the union was not voluntary; and 3) the federal government had the “right” to prove that propositions 1 and 2 are right by means murdering hundreds of thousands of fellow citizens by waging total war on the entire civilian population of the Southern states, bombing and burning its cities and towns into a smoldering ruin, and calling it all “the glory of the coming of the Lord.”
[LewRockwell.com, July 4, 2014]
For those who have read this essay, does your heart not expand with the lust for freedom? Does the adrenalin of freedom not make you light headed? Can any one deny that this is what we need to enforce on the corporate scumbags that rule our country? Yes I agree there would be many problems to solve if America was not a slave state to the Banksters, but how little confidence would one have to not pursue it? Who care’s if the Vatican has title from the Dead King of England. We did not have a problem when we thought we were taking it by force. SO WHAT’S WRONG WITH DOING IT RIGHT THIS TIME? For those who have not been educated yet, here is the real history of America.
The King of England had seeded America, along with All the Kings holdings and power to the Pope to recover his soul for the sin of Divorce. The Banksters were hired by the Pope to control the Governments, and now we are sucking hind tit as slaves to the corporations that have managed to control the Government. America is run as a profit producing business as witnessed by all the laws they use to fine us. It’s all one huge extortion racket that has expanded globally. Pretty soon we will have to get a permit to take a crap. Hint, Never go through an air-port without some change in your pocket, just in case Nature Calls.
May 13th, 2014 by olddog
by Ryan McMaken on May 13, 2014
The Supreme Court’s recent decision on prayer at government meetings reminds me that Supreme Court “season” is upon us, and for the next two months or so, we can expect to see the court decide on a variety of cases that can have profound impacts on the lives of citizens and non-citizens alike. The court’s decision in Town of Greece vs. Galloway has produced a lot of commentary on both sides, with much discussion about the dynamics between justices, and how Justice Kennedy must have been in a pro-prayer mood that day, since his decisions appear to be made on a variety of unknowable whims.
Nearly all of this commentary contains the assumption that it is perfectly normal, and probably laudable, that the Supreme Court has the power to decide the legality of virtually everything under the sun, from the death penalty to where local governments can build strip malls.
If there was ever any doubt that public schooling has been an immense success when it comes to conditioning children to blindly accept even the most implausible myths of governance, we only need look to the high regard in which most Americans hold the Supreme Court. The fact that nine modern philosopher kings are empowered to sit in judgment of every American law and custom, right down to whether or not a city council meeting, in a town virtually no American could find on a map, can include some bland prayer time. It troubles no school child that he is taught that democracy is the source of legitimacy for all governments one minute, and then the next minute is told he should fully trust nine lawyers in robes in Washington, D.C. to have the final word on law for 300 million Americans.
The proposition that nine people should tell 300 million people what sorts of laws they should make is rather ludicrous on its surface, but the justification largely rests on the assertion that the judges are somehow above politics and make decisions based on nearly pure reason. Political scientists and most people with experience in the legal profession no doubt know this is nonsense, but the average American is far more likely to be accepting of the long-standing myth that the court is a sort of backstop that prevents “bad” American laws from being allowed to stand. “Sure,” they might say, “Congress and the president, which are infected by vulgar politics, can do many horrible things, but the Supreme Court will dispassionately evaluate them and decide laws strictly on their legal merits.”
This view of the court is of course hopelessly fanciful, and the truly political nature of the court is well documented. Its politics can take many forms. For an example of its role in political patronage, we need look no further than Earl Warren, a one-time candidate for president and governor of California, who was appointed to the court by Dwight Eisenhower. It is widely accepted that Warren’s appointment was payback for Warren’s non-opposition to Eisenhower’s nomination at the 1952 Republican convention. The proposition that Warren somehow transformed from politician to Deep Thinker after his appointment is unconvincing at best. Or we might point to the famous “switch in time that saved nine” in which Justice Owen Roberts completely reversed his legal position on the New Deal in response to political threats from the Franklin Roosevelt administration. Indeed, Supreme Court justices are politicians, who behave in the manner Public Choice theory tells us they should. They seek to preserve and expand their own power.
The court, jealous of its power, and reluctant to hand down decisions that might actually cause the court to lose prestige, is at times careful to reflect the majority opinion regardless of how atrocious it might be. To see this, we need look no further than Korematsu vs. The United States in which the court declared it perfectly legal to round up American citizens and throw them into concentration camps.
The court forever plays a careful balancing act with both the public and with other branches of the federal government in which if continually pushes the bounds of federal power without rocking the boat to the point of calling its legitimacy into question among the majority of the population. Naturally, Congress and the presidency, themselves committed to untrammeled federal power, have no problem with most of this on most occasions, except perhaps in the details.
Bizarrely, however, the court has even managed to cultivate a reputation as a limit on the power of government, and that justices will rein in the state because it is committed, however imperfectly, to the Constitution of the United States. This is wishful thinking in the extreme, however, since the Constitution is nothing more than what the Supreme Court says it is, and this has been well established since Justice Marshall first introduced judicial review into the court’s decisions. If the Constitution was designed to prevent rule by judges (which may or may not be the case), it has clearly failed in its mission. Moreover, the court acts to insert intellectual legitimacy into laws and policies that formed out of nothing more that interest group lobbying, political payoffs, and even outright corruption. Once these laws receive the imprimatur of the Supreme Court, they cease to be political acts, questionable in origin, and take on the life of perpetually established law and precedent.
The public’s deference to the court and its decisions is the key factor in the court’s immense power, and the myth of the court as the protector of what’s left of the Constitution is especially powerful. But, as Ludwig von Mises noted in Liberalism, as an agent of the Federal government, the idea of the court as a friend to limited government is an absurdity:
The tendency to impose oppressive restraints on private property, to abuse political power, and to refuse to respect or recognize any free sphere outside or beyond the dominion of the state is too deeply ingrained in the mentality of those who control the governmental apparatus of compulsion and coercion for them ever to be able to resist it voluntarily. A liberal government is a contradictio in adjecto. Governments must be forced into adopting liberalism by the power of the unanimous opinion of the people; that they could voluntarily become liberal is not to be expected.
Naturally, the court does not limit itself at all, but it knows it is nonetheless limited by public opinion at least as well as anyone else. The court’s strenuous efforts to maintain an aura of majesty and intellectual loftiness can be seen in its refusal to allow television cameras in its hallowed halls or any sort of direct observation by the public at large. The judges wear academic robes and sit on their high bench. They could just as easily do their jobs in business suits while sitting at the same height as everyone else. Of course, if that were the case, the justices would just look like the glorified county commissioners they are, and the court’s propaganda war against the public is essential in maintaining its near total immunity from any meaningful oversight from anyone at all.
Here we go again! Out of one of America’s most esteemed political commentary organizations comes the same old emission of the facts. By the above article any uninformed reader would conclude that this country really is a democracy, but run by self serving people. Absolutely nothing close to the truth was addressed. THE TRUTH concerning this situation in the Supreme Court is, they do not represent the people, they represent the United States Corporation and the oligarchy that owns it. AND THAT is why the organic Constitution is of no concern to them. AND THAT is why we now live in a slave state with brutal law enforcers assaulting the people for NON VICTIMS CRIMES. AND THAT is why we have been beguiled by a despicable education and meda industry to accept their theft of our freedom.
May 8th, 2014 by olddog
Despite popular belief, very few things in our world are exactly what they seem. That which is painted as righteous is often evil. That which is painted as kind is often malicious. That which is painted as simple is often complex. That which is painted as complex often ends up being disturbingly two dimensional. Regardless, if a person is willing to look only at the immediate surface of a thing, he will never understand the content of the thing.
This fact is nowhere more evident than in the growing “tensions” between the elites of the West and the elites of the East over the crisis in Ukraine.
I am continually astonished at the refusal of many otherwise intelligent people to consider the evidence or even the possibility that there is, in reality, no fundamental political or philosophical conflict between the power brokers of the East and the West. As I outlined in great detail in Russia Is Dominated By Global Banks, Too, the truth is they are both working toward the same goal; and both ultimately benefit from an engineered and theatrical display of international brinksmanship.
Russia, like the United States, is utterly beholden to globalist financiers through organizations like the International Monetary Fund and the Bank for International Settlements. Russia’s global economic adviser in matters ranging from investment image to privatization is none other thanGoldman Sachs.
Goldman Sachs has also worked closely with the Ukrainian government since 2011, and it started its advisory work with Ukraine for free. (Whenever Goldman Sachs does something for free, one should take special note.) Banking elites have been working both sides of the fence during the Russia versus Ukraine charade.
Russia has continued to borrow billions of dollars from Western banks, including Deutsche Bank and Credit Suisse, year after year, proving that they are not averse in the slightest to working closely with "evil Western robber barons".
Russian President Vladimir Putin meets with Mr. New-World-Order himself, Henry Kissinger, on a regular basis; and according to Putin’s press secretary, they are “old friends.” Putin’s meetings with Kissinger began almost immediately after he first took power in 2000.
Putin’s relationship with Kissinger has been so pronounced that the Russian Foreign Ministry gave Kissinger an honorary doctorate in diplomacy, and Putin placed Kissinger at the head of a bilateral “working group” — along with former KGB head and multilateralist (globalist) Gen. Yevgeny Primakov — dealing with foreign policy.
In more recent news, I would also remind pro-Putin cheerleaders that Putin and the Kremlin first pushed for the IMF to take control of the Ukrainian economy, and the IMF is now demanding that Ukraine fight Russia in exchange for financial support. This might seem like irony to more foolhardy observers; but to those who are aware of the false East/West paradigm, it is all the part of a greater plan for consolidation of power.
Clearly, Putin and Russia are just two more puppet pieces on the globalist chessboard, pitted against other puppets in the West in a grand theater designed to distract and divide the masses through chaos. As Kissinger points out, in crisis there is opportunity.
What is the goal? They’ve already told us, openly, on numerous occasions.
The first great prizes of the New World Order are a global currency and centralized economic control. The elites are not satisfied with quiet dominance of individual economies. They want complete political homogenization and the end of all sovereignty. Period. With a global currency in place, the steps towards global government become quick and small.
Heads of state from around the world, including Putin, as well as international bankers and IMF representatives have all publicly called for the IMF to take charge of the global economic system through its Special Drawing Rights currency program.
However, for the SDR to become a dominant currency, certain issues must be resolved. Here’s a short list.
The U.S. Dollar Must Fall
The dollar must lose its world reserve status, and most likely collapse in relative value, before the SDR can be elevated. This is where mainstream pundits lose track of the facts. For them, the dollar is an invincible monetary element, a currency product as infinite as time. Their normalcy bias prevents them from ever acknowledging the many weaknesses of the Federal Reserve note, including our country’s inability to ever service its more than $200 trillion debt. Others believe the dollar is the NWO currency, and that the globalists are somehow U.S.-centric. The evidence posted above suggests otherwise. Globalists have no loyalty to any nation or culture. Their only loyalty is to the progression of their own power. If sacrificing the dollar or the U.S. as a whole furthers that power, then they will have no problem cutting us loose like a rotting appendage.
A Liquidity Replacement Must Be Introduced
As my regular readers know, I have been covering China’s progression toward a decoupling from the U.S. economy for years. China, in my view, has always been the key to the elitist shift into a truly global currency mechanism. The primary argument in the mainstream against the idea of a dollar collapse is that there is no other currency with ample liquidity to take the dollar’s place. Well, in the past couple of years, this has changed.
China and the banks it controls have issued approximately $25 trillion in debt instruments and monetization. This is often referred to as a “debt bubble” created through panic and a weakness in China’s economy and a response to slowed quantitative easing in the United States. I would take a slightly different position. China began issuing Yuan denominated debt instruments in 2005, years before the mainstream had any inkling of the impending derivatives collapse. From then up to today, there has been no practical purpose for China to produce these Yuan denominated equities and securities, unless their target has always been to expand the Yuan market in a covert way.
I would say that China’s monetization has been carefully and deliberately engineered in order to lay the foundation for a massive liquidity spike in the Yuan. The argument that China’s incredible debt generation is a sign of impending collapse may be misguided. U.S. debt, including unfunded liabilities, absolutely dwarfs China’s $25 trillion. China's Yuan debt has barely had time to accrue concrete interest. The U.S., on the other hand, is caught in an endless cycle of interest payments that are slowly but surely eating away the skeleton of our fiscal structure. If any economy is on the verge of implosion, it is that of the United States, not of China.
The Chinese need exponential Yuan circulation. They do not want the Yuan to replace the dollar; instead, they are preparing it for induction into the IMF’s Special Drawing Rights basket. WithChina set to become the world largest economy this year according to World Bank, their inclusion is assured.
But, when might this occur?
The IMF holds an international conference and policy meeting on the SDR every five years. During these meetings, the IMF decides if it will absorb a new currency into the basket and if it will expand the creation or circulation of SDRs around the world. Interestingly, the next IMF conference on the SDR just happens to be scheduled for the end of 2014 to the beginning of 2015.
Another strange coincidence: The U.S. Congress was supposed to vote on legislation for further capital allocations to the IMF by April. The vote never came. The new allocations were to fund an expansion of IMF programs and help with the greater inclusion of BRIC nations in governing decisions. If the U.S. government does not pass this legislation, Russia and other nations have demanded that the IMF move forward without the United States on reforms. At the very least, the U.S. would lose its veto power over IMF decisions. I believe that the timing of this is deliberate, that the U.S. is meant to lose its veto power and that the simultaneous SDR conference will announce the inclusion of the Chinese Yuan, setting the stage for the replacement of the dollar as world reserve.
The SDR will not immediately be issued as a commonly traded currency itself. Rather, the IMF will take over management of included currencies and denominate those currencies using SDR valuations. For example, $1 U.S. is worth only .64 SDR today. In the near future, I expect that the dollar will plummet in relation to the SDR’s value. We will still have our greenbacks when the IMF begins administrating our currency system, but the international and domestic worth of those greenbacks will fall to pennies. In turn, other currencies with stronger economic positions will rise in worth relative to the SDR.
I believe one of the primary determinations in a currency’s value compared to the SDR will be a country’s stockpile of gold. This is why Russia and China in particular have been purchasing precious metals at an unheard-of rate (and why U.S. gold reserves have never been audited). The IMF itself is one of the world’s largest holders of physical gold, with nearly 3,000 metric tons (officially). With the crash of the dollar system and investors clamoring for a reliable hedge to protect whatever savings they have left, gold could conceivably skyrocket into the $5,000 to $10,000 per-ounce range. Governments holding the metal will be favorably placed during an implementation of the SDR as the new reserve standard.
A Cover Event Must Be Created
The centralization of power is best achieved during moments of bewildering calamity. The conjuring of crises is one of the oldest methods of elitist dominance. Not only can they confuse and frighten the masses into malleability, but they can also ride to the public’s rescue as heroes and saviors later on. The Hegelian dialectic is the mainstay of tyrants.
The destruction of the dollar and the institution of a global economic bureaucracy are not actions that can be executed openly by international financiers. These events will coincide with extreme catastrophe, likely worse than the Great Depression era, with millions upon millions of people losing the ability to financially support themselves and their families. Crime, death and public discontent will surely follow. People will be looking for someone to blame. This is where the false East/West paradigm comes in.
It is widely expected that as sanctions snowball between Russia and the U.S. that the dollar will end up on the chopping block. China has asserted its support for Russia in opposition to NATO interference in Ukraine. The stage has been set. I have warned for quite some time that the development of East/West tensions would be used as a cover for a collapse of the dollar system. I have warned that among the American media this collapse would be blamed on an Eastern dump of foreign exchange reserves and treasuries, resulting in a global domino-effect ending U.S. world reserve status. In turn, the international community would be conditioned to see this as the mere bumbling of a spoiled America gone power-mad, rather than the result of a covert program of economic destabilization. This might lead to all-out war or a fiscal firestorm that leaves much of the world crippled and desperate for aid.
In either case, the elitist plan is to use scapegoats and false enemies to draw our attention away from the real culprits: the international banks themselves. Make no mistake: This fight is not about President Barack Obama, it is not about Putin and it is not even about the Federal Reserve. These men are tools, errand boys, public mascots. Do not be fooled by the global stage play being perpetrated. Whatever happens in Ukraine and whatever happens between Russia, China and the West, there are only two real sides to this battle: the elitist establishment, and those who are smart enough to recognize their poison.
You can contact Brandon Smith at: email@example.com. Alt-Market is an organization designed to help you find like-minded activists and preppers in your local area so that you can network and construct communities for mutual aid and defense. Join Alt-Market.com today and learn what it means to step away from the system and build something better.
February 25th, 2014 by olddog
Stockman – $500 Trillion Derivative Bomb Threatens The World!
Today David Stockman warned King World News that a terrifying $500 trillion derivative bomb threatens the entire world. He also went on to caution about a second danger facing the world. KWN takes Stockman’s warnings very seriously because he is the man former President Reagan called on in 1981, during that crisis, to become Director of the Office of Management and Budget and help save the United States from collapse. Below is what Stockman had to say in part II of a series of powerful interviews that will be released today.
Stockman: “I think the great ticking time bomb is interest rate swaps. The last time I checked they were in the range of $500 trillion. Who knows what’s lurking underneath the surface there?….
Stockman: “The single greatest danger is that the game the central banks are playing today will come to an abrupt and destructive end. That’s the danger because the whole system is now running off the short-run maneuvers, liquidity, and guidance that the central banks are injecting into the market every day. The danger is that one of these days the whole system will fail because it is unnatural and artificial, and when that happens it’s going to be a pretty difficult (and chaotic) time.” read more!
Just think a moment, the International Investment Bankers have been sucking our country dry for more years than anyone on earth has lived. Does that make sense folks? when will the people understand they simply cannot have a life of total leisure, we must spend time learning what is going on in our government and discuss what to do about it. By now, the entire world could have financial security if it were not for these blood suckers. Please for the sake of your children and Grand children get off your ass and learn. If I can find and learn what is wrong with the world, there is no excuse for anyone to remain ignorant. There is a way to fix the world. KILL THE BANKERS, and confiscate their wealth! Does that offend you? You don’t seem to get upset when the bankers have millions killed in their wars, while you work in their war factories though, do you? Wake the hell up America!
February 13th, 2014 by olddog
This article was written by Koos Jansen and originally published at In Gold We Trust
These financial industry giants lived through all the wealth cycles of the past 100 years and more. What used to be long term wealth investments evolved to the day-trading, making money activities, with a top in the year 2000. Then the financial industry morphed rapidly into the absurd High Frequency Trading. All wealth is now a spooky derivative of what it once was. Debt rules!
The US was the biggest gold reserve holder in the entire world, with 28,000 metric tons of gold in its vaults (60% of the world's total gold reserves). Most, if not all, of that gold disappeared from the UST, whilst the financial industry and the debt driven economy, expanded. First there was the London Gold Pool selling central bank gold reserves, then in 1974 Louise Auchincloss Boyer discovered that N. Rockefeller was selling UST Fort Knox gold. Three days later she fell out of her window (July 3, 1974).
Immediately afterwards a Fort Knox propaganda tour was organized. All gold fever stopped in 1980. Stock markets started their rise to the moon. Fifteen years later, the European System of Central Banks started their gold sales. Stock markets reached for the stars and suddenly The Queen made a propaganda tour through the London gold vaults (Dec, 2012). Now, China, Russia and other pro gold states (BRICS Development Bank) are accumulating the scare residues of available physical gold. The debt driven Western economy is in stagnation and the global debt crisis remains unsolved.
Where has all the physical bullion gold gone? Where is it concentrated after 45 years of distribution and very low paper gold prices? Hard to say, but the main flow of physical gold went certainly from West to East. Simply because the Western financial (pseudo) wealth industry was rising since 1980 and that made physical gold obsolete, in particular for the average Western man on the street.
The MSCI emerging market index is declining and never reached the Dow/Nasdaq/S&P heights. Physical gold has flown to these Eastern emerging (mostly surplus producing) markets whilst Western deficits are still rising. An upside down world,…or not. European banks have a $ 3.4 trillion exposure to the weak emerging markets who are suffering from brutal $ withdrawals. China's shadow banking is enormous and dangerous. The entire world has multiple fundamental reasons to embrace physical gold as a wealth asset, but only an extremely small minority keeps accumulating physical gold. The bulk of physical gold is now in the very strong hands of Western and Eastern giant dynasties and a relative very small group of gold wealth connected individuals. They all continue to accumulate, whatever the paper price of gold may discourage. They all anticipate the same looming catastrophe: pseudo-wealth destruction!
The Far & Middle East stores its wealth in physical gold and the West keeps going for financial industry pseudo-wealth and paper gold for making more (debt)money. This gold imbalance will increase strongly the more the gold price declines! Declining gold prices must encourage the further accumulation of risk assets. The Western giants don't care that Joe sixpack has no gold. They must feed their financial industry pseudo-wealth (buy stocks and debt paper). The Western giants, with trainloads of physical gold, don't care that the scarce left-overs of available physical gold flows cheaply to the East. When the pseudo-wealth comes to an end and the East will say physical gold is the real store of wealth, the Western giants with gold in their vaults, remain wealthy. Then the whole (political) economic story restarts from scratch.
The giant dynasties *are* the financial industry. They produce and control the bulk of the debt-driven pseudo-wealth. The FED is even providing liquidity for Mario's ECB (swaps). That's why their balance sheet is diverging. Euro-land is in fact still $-land.
China's present gold policies are building a base to take over the paper gold pricing from the dollar's financial regime. The valuation of physical gold must be totally delinked from currency and risk assets. China wants an orderly and open Rimini gold market with satisfactory gold market laws as to protect all wealth assets. A gold market where all underground speculative activities are strictly forbidden. They invite all foreigners to gradually participate in this gold market with emphasis on the free floating valuation of physical gold. This is in 100% contrast with the de facto dollar's gold pricing and gold policies. The dollar system doesn't want your wealth assets to be protected with gold. One day, the masses will embrace China's gold policies and leave the international $-reserve for what it never was (hard currency). The Western giants, indeed anticipated this all along with stealth accumulation of physical gold in their private vaults. They know the day of reckoning comes near.
The time has come to s&%t or get off the pot. If you have any investments at all in paper instruments or currency, convert them to cash and buy gold and silver NOW! You will never see your savings mature if their in dollars and you expect to live another year. Who do you know personally that has lost their money in hard commodities? Gold has thousands of years of history supporting its value retention and appreciation. Likewise silver, which is a much better investment for the common man with less than a $million to invest. If you are living pay-check to pay-check sell everything you can do without and buy ammo, guns, shovels, heritage seeds, and various other necessities for when the SHTF. Your dollars will wither away just like your youth, only much faster now. It’s time to get off your backside and learn how to live in a post dollar America. Barter will be the common mans money system before you are five years older.
December 2nd, 2013 by olddog
Watch this eleven minute video by FutureMoneyTrends.com
By Mac Slavo
Few economic analysts truly understand the underlying fundamentals of the global economy and their impact on the workings of the world. Fewer still are willing to share that knowledge withthe general public and advise others on how toshield themselves against a destabilization of the system as we have come to know it.
Bud Conrad of Casey Research is one of those who does, and in the interview below with Future Money Trends he discusses the end result of the manipulations currently being executed by our government, central banks, and financial institutions.
Despite what we’ve be told is the case, they have fixed absolutely nothing. Our national debt has grown, millions have already been impoverished and millions more will be soon. The next crisis is imminent.
The complex of potential future problems will be based on the same problems that caused the 2008 downturn… too much government debt, too much private debt and a collapse of that debt when it can’t be paid, creating a new economic crisis.
Look at the big long-term future of our economic situation… I have predicted, that in my lifetime, the US government issue of currency can’t be trusted.
It will implode and will issue a new currency to replace the dollar. That will destroy an awful lot of debts.
It will give the government a new leg, and if they can base it on something like gold it will, both, be very bullish for gold and create new confidence. If they create a new paper system like the old paper system it’ll die just like a Banana republic [like] Argentina about every ten years later.
With that… I am saying in my lifetime we’ll see the demise of the dollar and certainly before that we’ll see gold at $10,000 an ounce.
This critical information for those who want to understand what’s happening behind the scenes and how those schemes will affect the future of our economic and monetary systems:
What’s important to understand is that the manipulation is rampant, as Bud explains in the interview above, and it will soon be revealed in the form of widespread collapse of our economic and financial systems.
Consider the monetary calamity that must occur in order for gold to rise to $10,000 an ounce, and understand that whatever causes such a price spike will be an unprecedented event in human history. It won’t just be gold that’s rising, but any tangible asset essential to survival or the flow of commerce.
Acquire those assets now at a fair price – while you still can.
Any investment you presently have that does not payoff in a hard commodity is shortly going to amount to ZERO, nothing, nada! You may have millions of dollars in the bank, and their only worth a loaf of stale bread. Don’t be ignorant enough to keep your dollar denominated investments any faster than you can convert them to physical gold, silver, or most other physical commodities. If you’re in denial about the dollar crash, you’re a fool. Your financial survival, or death, is only a matter of time, but it’s coming sure as hell. I pity you fools who believe it is disloyal to dump your dollars. Dollars have been nothing but a tool to rob you of your wealth!
November 25th, 2013 by olddog
By Tyler Durden
The Fed's Catch 22 just got catchier. While most attention in the recently released FOMC minutes fell on the return of the taper as a possibility even as soon as December (making the November payrolls report the most important ever, ever, until the next one at least), a less discussed issue was the Fed's comment that it would consider lowering the Interest on Excess Reserves to zero as a means to offset the implied tightening that would result from the reduction in the monthly flow once QE entered its terminal phase (for however briefly before the plunge in the S&P led to the Un-taper). After all, the Fed's policy book goes, if IOER is raised to tighten conditions, easing it to zero, or negative, should offset "tightening financial conditions", right? Wrong. As the FT reports leading US banks have warned the Fed that should it lower IOER, they would be forced to start charging depositors.
In other words, just like Europe is already toying with the idea of NIRP (and has been for over a year, if still mostly in the rhetorical and market rumor phase), so the Fed's IOER cut would also result in a negative rate on deposits which the FT tongue-in-cheekly summarizes "depositors already have to cope with near-zero interest rates, but paying just to leave money in the bank would be highly unusual and unwelcome for companies and households."
If cutting IOER was as much of an easing move as the Fed believes, banks should be delighted – after all, according to the Fed's guidelines it would mean that the return on their investments (recall that all US banks slowly but surely became glorified, TBTF prop trading hedge funds since Glass Steagall was repealed, and why the Volcker Rule implementation is virtually guaranteed to never happen) would increase. And yet, they are not:
Executives at two of the top five US banks said a cut in the 0.25 per cent rate of interest on the $2.4tn in reserves they hold at the Fed would lead them to pass on the cost to depositors.
Banks say they may have to charge because taking in deposits is not free: they have to pay premiums of a few basis points to a US government insurance programme.
“Right now you can at least break even from a revenue perspective,” said one executive, adding that a rate cut by the Fed “would turn it into negative revenue – banks would be disincentivised to take deposits and potentially charge for them”.
Other bankers said that a move to negative rates would not only trim margins but could backfire for banks and the system as a whole, as it would incentivise treasury managers to find higher-yielding, riskier assets.
“It’s not as if we are suddenly going to start lending to [small and medium-sized enterprises],” said one. “There really isn’t the level of demand, so the danger is that banks are pushed into riskier assets to find yield.”
All of the above is BS: lending has never been a concern for the Fed because if it was, then one could scrap QE right now as an absolute faiure. Recall that as we showed recently, the total amount of loans and leases in commercial US banks has been unchanged since Lehman, with the only rise in deposits coming thanks to the fungible liquidity injected by the Fed.
TOTAL DEPOSITS 7.3 TRILLION – LOANS 7.3 TRILLION
TOTAL DEPOSITS 9.5 TRILLION – LOANS 7.3 TRILLION
TOTAL BANK RESERVES 2.2 TRILLION
Furthermore, contrary to what the hypocrite banker said that "the danger is that banks are pushed into riskier assets to find yield”, banks are already in the riskiest assets: just look at what JPM was doing with its hundreds of billions in excess deposits, which originated as Fed reserves on its books – we explained the process of how the Fed's reserves are used to push the market higher most recently in "What Shadow Banking Can Tell Us About The Fed's "Exit-Path" Dead End."
What the real danger is, is that once the Fed lowers IOER and there is a massive outflow of deposits, that banks which have used the excess deposits as initial margin and collateral on marginable securities to chase risk to record highs (as JPM's CIO explicitly and undisputedly did) that there would be an avalanche of selling once the negative rate deposit outflow tsunami hit.
Needless to say, the only offset would be if the proceeds from the deposits outflows were used to invest in stocks instead of staying inert in some mattress or, worse (if only from the Fed's point of view) purchase inert assets like gold or Bitcoin.
Which brings us back to the first sentence and the Fed's now massive Catch 22: on one hand, should the Fed taper, rates will surge and stocks will once again plunge, as they did, in early summer, just to teach the evil, non-appeasing Fed a lesson.
On the other hand, should the Fed cut IOER as a standalone move or concurrently to offset the tapering pain, banks will crush depositors by cutting rates, depositors will pull their money from banks en masse, and banks will have no choice but to close on a record levered $2.2 trillion in margined risk position.
When the banks start charging depositors, watch the Bankers start massive investments in Bitcions, which will be followed by many disgruntled depositors, resulting in a massive price increase in bitcoins. When it’s high enough the bankers will cash out leaving behind massive losses for the remaining bitcoins holders.
By Robert Wenzel
I just spent two hours today with Bitcoin expert Trace Mayer and Vitalik Buterin, head writer atBitcoinMagazine.com, who have been in San Francisco for a couple of days.
It's always a pleasure to talk to Trace, who I consider one of the foremost Bitcoin experts. He bought a ton of bitcoins at 25 cents (and lower). I asked him if he was a billionaire yet, and he just smiled.
During our meeting he outlined the fascinating supply and demand dynamics of Bitcoin. There are currently 12 million bitcoins outstanding but Trace makes the case that the actual number of bitcoins in the float is much smaller.
For example, he believes that most of the bitcoins that the FBI grabbed at the time of Ross Ulbricht's arrest were not bitcoins that belonged to Ulbricht, but were coins that belonged to active buyers and sellers on Silk Road. Thus, these active coins are now in the hands of the FBI and are out of the float.
But more intriguing, Trace tells me he believes that between 3 million to 6 million of bitcoins will never trade again, because they were purchased early on and those who purchased them have forgotten the passwords to gain access to them. Thus, the true Bitcoin float maybe only between 6 million and 9 million bitcoins.
Given the amount of hedge fund money that is now entering the Bitcoin arena (He told me that at a meeting he attended in NYC that a Goldman Sachs analyst was even in attendance studying how GS can get into the Bitcoin game.), Trace believes that Bitcoin is headed to $3,500. A trader friend of mine thinks it will head to $10,000, before it crashes to zero.
I continue to believe that Bitcoin has many of the aspects of a pump and dump scheme and agree with Peter Schiff that it is Tulipmania 2.0, but I don't think the last tulip has been sold.
It is a very risky trade, but there is probably more upside here.
In the EPJ Daily Alert, I will have more details about Bitcoin and what Trace told me about when he plans to start selling and why. It's great timing advice for Bitcoin traders. LET THE BUYER BEWARE!
September 20th, 2013 by olddog
By Dave Hodges
There is a conspiracy being perpetrated against the American people with regard to the true nature of America’s financial situation. To most people, America appears to be on her last economic legs and the future looks hopeless. On the other hand, America has never been wealthier. However, the wealth has been horded and hidden from the American people.
This article exposes why the central bankers and the corporate controlled media are attempting to make it appear as America is dead broke with no hope of recovery. The central bankers, through the government, have indeed hijacked and are hording and hiding substantial assets as they are planning to take the surface economy down as early as this fall/winter. The globalist strategy consists of convincing the people, in advance of the collapse, that there is no hope of economic recovery. Under this scenario, the perpetrators of the collapse will meet with less direct resistance, both in the collapse phase and in the recovery phase in which we will all witness the establishment of a world government and a one world economic system.
Which side is correct? Are we broke or do we have substantial hidden assets? Both sides are correct. The visible economy, which is obvious to all (e.g. the health of the fiat currency, the unemployment rate, national GDP relative to the planet’s GDP), clearly indicates that a collapse is imminent. However, there is also substantial wealth that is being horded on behalf of the banks and corporations by their governmental partners, which could make a significant difference in the health of our economy. The wealth is substantial and has successfully been hidden from most Americans
The Case for a Looming Economic Collapse
The undoing of the America currency has been a century in the making. In 1913, the most evil organization on the earth was created by an unconscionable act of Congress with the creation of the Federal Reserve. The United States national debt is more than 5000 times larger than it was when the Federal Reserve was first created, and this fact has served to turn nearly all of us into debt slaves with each of us vulnerable to the manipulation of the global elite.
The bankers who helped to create the Federal Reserve intended to permanently enslave the U.S. government to a perpetually expanding spiral of debt, and their plan has worked and their final victory is nearly at hand.
Boston University economist Laurence Kotlikoff, stated that the U.S. government is facing a “present value difference between projected future spending and revenue” of 222 trillion dollars in the years ahead. Where are we going to come up with 222 trillion dollars? The short answer is that we won’t under the existing set of economic rules that we are forced to live under.
In 2001, the United States represented 31.8 percent of the world’s economic activity. By the end of 2011, that share had dropped to 21.6% in 2011, which means that America’s portion of the world’s economy is 32% smaller than it was a decade ago and it is declining more with each passing day. With economic indicators such as these, there is no way to climb out of the economic hole we have entered courtesy of the globalist inspired free-trade agreements (i.e. NAFTA, CAFTA and now the MEFTA, AFTA and the TPP). With these kinds of economic indicators, more Americans will be competing for a smaller number of jobs which are significantly declining in pay.
Over one hundred million unemployed Americans are no longer even looking for work. The next time you go into the Department of Motor Vehicles, please realize that you are subsidizing a drivers license for about a third of the people in that building. You are also paying for their health care, food stamps and shelter. And many of these lower class, poverty-stricken “Americans” are living a higher standard of living than you are and this is by design courtesy of Chairman Obama.
It Does Not Pay to Go to Work
Wayne Emmerich found that the family breadwinner who works only one week a month at minimum wage makes 92% as much as the breadwinner grossing $60,000 a year. Emmerich’s stats demonstrate that by working only one week a month one can save a lot of money in child care expense. But topping the list is Medicaid, which is accessible to minimum wage earners and the program has very low deductibles and co-pays. In short, by working only one week a month at a minimum wage job, a minimum wage earner is able to get total medical coverage for next to nothing courtesy of you and me.
The middle class is not as lucky as the $60,000 breadwinner pays out approximately $12,000 per year in health insurance costs with an addition $4,500 in co-pays. And if anyone in the part-time minimum wage earning family is disabled, SSI pays out an additional $8,088 per year. When one begins to calculate the expenses incurred by a typical breadwinner making $60,000 per year, compared to the part time minimum wage worker, coupled with minimum wage earners tax supported federal bailouts for these freeloaders, the poor have more discretionary income than those who pay the taxes that run the country. And if the part time minimum wage worker is willing to cheat and participate in the underground economy, they will have significantly more discretionary income than their hard-working $60,000 per year counterpart who actually works for a living. In short, if you are a full-time employee making above minimum wage, you are paying for your own economic demise. The numbers here suggest that we’d be better off staying home and living off of the labors of what’s left of the middle class and of course this would help to collapse the economy.
Unbearable Taxes Are Leading to Record Expatriation Rates
Overwhelmingly, the number one reason that Americans are fleeing the country is because of high taxes. The income tax rate rose this year to 39.6% from 35% for individuals earning more than $400,000 a year and married couples earning more than $450,000. As of this year, 77% of Americans will pay higher federal tax rates because the cuts in Social Security payroll taxes expired when Congress passed its tax package on New Year’s Day. The Tax Policy Center estimates that those who earn more than $1 million would pay an average of $170,341 more in taxes. The tax burden is adding crushing weight to a beleaguered upper and middle class America.
Hiding and Hording Massive Assets That Could Rescue the Country’s Economy
Americans are lamenting the fact that our budget deficit is now over $17 trillion dollars. Our national debt and deficit is a drop in the bucket compared to the assets that our government controls. However, far beneath the ground, the federal government owns the rights to mineral and energy leases, from which they receive royalties, rents, and bonus payment, states the Institute for Energy Research, an industry group. According to their estimates, government states that the assets are worth $128 trillion. That’s almost eight times the national debt. This is a hard asset which could be collateralized and matched against the deficit.
“These resources could be leased to third parties and could subsequently earn the state and national government huge royalties, rents, and bonus payments that it is estimated could total almost $150 billion over 10 years, just for the oil and gas leases alone.” Then why isn’t this being done? Simple, ask yourself who would lose money if these idle assets were to brought to fruition? The oil companies would lose money, that’s who! The same oil companies that block oil drilling on the North Shore of Alaska. The same oil companies who preserve the existing relationship with Middle Eastern nations, which someday, will pull us into a devastating world war with Syria and Iran.
Further, the unleashing of these assets would reduce the costs of energy for consumers and businesses. Now, the owners of the utilities, the same people who are the owners of the oil companies, could not permit that. The utilities have invested billions toward the installation of smart meters and a new infrastructure smart grid, in which they control all energy pricing.
Another factor that comes into play on why these assets are not being unleashed is because plentiful, reliable and cheap energy supplies would greatly accelerate economic growth and jump start the economy out of the doldrums. But when the globalists’ goal is the creation of a one world economic system, based upon keeping nations in debt, controlled by a tyrannical one world government, the old government and economy must be brought down and this economic boon to the economy cannot be allowed to transpire. Therefore, the government acts as a procurement agent for the globalists, who will eventually unleash these assets to themselves, after the collapse of the dollar.
CAFR’S the Source of Untold Wealth
For over a decade, accountant Walter Burien, has been trying to raise public consciousness over what he says is a massive conspiracy, totaling trillions of dollars. The conspiracy, Burien says, is one in which governments at all levels have hidden away funds in a practice commonly called CAFR’s. Burien’s numbers may be questioned, but there can be no doubt that significant hidden funds clearly exist. The existence of CAFR’s are evidenced by the existence of the Comprehensive Annual Financial Reports (CAFRs). CAFR’s are a required aspect of every government agency accounting practices. Therefore, the existence of this underground slush fund is a matter of public record.
The subject of CAFR’s first came to light when Colonel Gerald Klatt alerted Burien to their existence. Coincidentally, Klatt died under very mysterious circumstances, in 2004, which lent credence to the claim that there was a conspiracy to cover up the scope and true nature of CAFR’s. Just what is a CAFR and how does it explain how the American are being lied to about how much money truly exists within the control of the government?
To help you understand the nature and process of CAFR’s, let’s pretend that you were to have a checking account with $100 and a savings account with $1,000 in two different banks. Let’s further imagine that you only reported to the IRS, that you only had $100 dollars as your net worth because you don’t want to use your savings account to pay bills (i.e. taxpayer obligations). Subsequently, you’d be audited and put in a federal prison for failure to report the larger amount. However, the government grants itself permission to play by its own rules and to make up the CAFR rules as they go along. The government, as described in the above example, simply designates that it has two accounts (i.e. the $100 account and the $1,000 (CAFR) savings account). However, the larger CAFR account is designated as “non-governmental” or “non-taxpayer” income and this allows the government to hide all of this wealth from the people as reported in the government’s Budget Report. In this economic scenario, only the smaller account is the one that gets declared. And the reason that governments continue to engage in this shady practice, is that they want to be able to justify the taking of a greater portion of your income through increased taxation. I call this highway robbery. As an aside, have you noticed that many counties are building monumental justice centers which defy description of where the funds came from given the present state of economic affairs. These centers are being built with CAFR’s which are monetized in a variety of ways.
The subject of CAFR’s is something that has come into my life with an explosion. In Maricopa County (greater Phoenix area), former county attorney, Andrew Thomas, was disbarred eighteen months ago. A three-member panel found that former County Attorney Andrew Thomas violated the professional rules of conduct for lawyers in bringing criminal charges against two county officials and a judge in December 2009. What gets lost in the media reporting of Thomas sudden departure from office and his disbarment is why Thomas was prosecuting two county officials, County Supervisors Dan Stapely and Mary Rose Wilcox as well as Superior Court Judge Gary Donahoe. Thomas initiated the investigation with allegations of financial wrong doing on the part of the three individuals. The second phase of his investigation was to attack the use of off the books funds (i.e. CAFR’s).Thomas was gone from office before phase two of his legal action could be commenced and Arpaio was neutralized.
A few years ago, Maricopa County just completed the building of an expensive justice center worth more than 500 million dollars. Where did the money come from as it has repeatedly been reported in the Phoenix media that the County is broke? Who benefitted? Thomas found evidence of money being kept off of the books and was attempting to expose it and the forces of the establishment had him expelled from office and disbarred within months of the first accusations. Simultaneously, Sheriff Joe Arpaio was complicit in the ill-fated Thomas investigation by carrying out the investigation and participating in the arrests of the three officials. Shortly thereafter, Arpaio was the source of a massive Eric Holder led justice probe into his department’s alleged racial profiling of illegal immigrants in Maricopa County. Arpaio brilliantly retaliated with an investigation into the authenticity of Obama’s long form birth certificate. Obama was declared, by Arpaio, to be ineligible to appear on Arizona’s ballot for President in 2012. Then the controversy went dark and the back and forth between the Feds and Arpaio disappeared from the front page of the newspapers. Obama eventually appeared on the ballot and Arpaio received a mere slap on the wrist from the Department of Justice. Can anyone say “a deal was struck?” Apraio survived because he had leverage against Obama and Andrew Thomas did not and subsequently, Thomas’ license to practice law was revoked by a three judge panel, which operated in the spirit of the worst of any kind of Kangaroo court.
If the Thomas case had been fully exposed to the media, the subject of CAFR’s would have been irrevocably exposed. The obfuscation of public funds issue appeared to be dead. However, I had an inside source come forward and his name is Doug Rhoads. Doug is a former Maricopa County prosecutor. He approached me in early June of 2013 after reading a multipart series that I had published on my website regarding the privatization of for profit prisons and the fact that many states were promising private corporations a 90% prison occupancy rate, thus driving up zealousness of criminal prosecutions aimed at keeping the prisons full and profits high.
Doug Rhoads informed me that everyone of these criminal cases were being monetized as a traded commodity on the market and that the earned money went off of the books. Doug subsequently appeared on my talk show for two hours and exposed the fact that this was indeed taking place and we also discussed the Andrew Thomas affair. Since the airing of this interview with Rhoads, I have been personally threatened on two occasions that if I continued to report on prison privatization and the Rhoads revelations of hidden public assets, there would be “grave consequences.” Also, since the Rhoads interview, I have been contacted by several people, each with a different angle on this situation. However, all of them are afraid for their careers and their lives if their whistle-blowing were to ever be exposed.
The issue and existence of CAFR’s is being zealously guarded. The release of CAFR’s, alone, could erase our national debt and return financial affluence to America. For example, California Governor Brown, claims that the California’s state budget deficit of $16 billion requires austerity actions. However the state’s CAFR funds revealed $600 billion in undeclared assets. When all the CAFR surplus accounts are totaled, Californians have been overtaxed by $8 trillion dollars in a sampled study. This is being done at every level of government, two sets of books and two sets of figures. You do not have to be living in California and Arizona to be the victim of this deception, it is in every state. This makes the national debt appear to be meaningless.
And whatever happened to Col. Klatt, the man who first revealed the existence of the CAFR’s? He suffered a worse fate than Andrew Thomas, he was likely murdered as Klatt served for a long time as an Air Force auditor and federal accountant, and it’s likely that he got too close to some military CAFR’s being used for “off the books” operations and he died under very mysterious circumstances. Google “Walter Burien” and be prepared to get really upset about how much money is being withheld by government in this unholy accounting practice.
What Does It All Mean?
Through CAFR’s, the government is clearly hording money. Where does the money go? Nobody can be certain except that it makes the lion’s share of money collected eligible to be used as off the books spending.
This is where the plot thickens and things get very interesting. If the economy is collapsed due to the well-publicized debt listed in the first part of this article, it is not known what would happen to the CAFR’s, the underground mineral resources, etc. Since these assets are technically off the books and under the control of local governments and many of their corporate NGO’s, they would presumably be unaffected in an economic collapse scenario. And wouldn’t that be the goal of banking interests who would want to collapse the economy in that they would want to procure as many hard assets as possible before the collapse. Since government at all levels has repeatedly proven itself to be agents of the megabanks and the corporations, these institutions would survive an economic collapse with a great deal of hard assets.
I have concluded that the powers that be are hording hard assets as a means to maintain power following the economic reorganization which would follow a collapse. Further, this theory is further bolstered by the fact that Federal Reserve continues to buy $40 billion of mortgage backed securities every month and MERS is continuing their theft of home mortgages at record rates. This scenario looks like the globalists are following a massive wealth transfer scenario and the pace of this wealth transfer is accelerating. What is the rush? Could it be that what I wrote about two weeks ago is indeed coming into play?
The GRID EX II drill in which the power grid is being “taken down in a simulation,” is something that cannot be easily dismissed as the next false flag event. However, this is eerily similar to what happened in 9/11 and the 7/7 bombings as well as the Boston Marathon bombing in which a drill culminated in a false flag attack. If the grid is taken down, and as I have stated before, a false flag within a false flag can be executed and the banks can be collapsed and the country will barely notice. Who would notice the missing digits in their bank accounts when the grid is down and the people are starving by the third day following the blackout? Meanwhile, government as well as their banking and corporate partners would hold most of the hard assets in the country following an economic collapse and would stand to be in a position of extreme power when the smoke eventually clears.
In this scenario, the largest remaining asset that the banks would not totally control would be the privately owned homes and businesses. But after a collapse, how would people pay their mortgage? The short answer is that they could not. And who would the deeds revert to? They would revert to the banks.
Although I think this scenario is likely, this is only a theory regarding the tie in with GRID EX II, hidden wealth and collusion to collapse the economy in order to transfer wealth and to consolidate holdings. However, what is not a theory is the fact that our hidden assets outnumbers the sum total of our debt as a nation and the debt and the deficit could be paid off overnight should the people wake up and force the government to release the true wealth of the country.
September 20th, 2013 by olddog
By Ron Holland
This may directly impact how you invest or rebalance your portfolio, view or engage in politics, and how you will attempt to secure your wealth in the future.
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If you have followed The Daily Bell, you know our past track record on foreign affairs, finance and geopolitical and economic trends has been outstanding. Topics ranging from the usual Wall Street and Federal Reserve antics to oil, pipelines, the Middle East and the EU have been covered. In addition, many current events and foreign policy actions have been reviewed and explained from The Daily Bell's free-market perspective.
You also know that The Daily Bell abruptly ceased publication without notice or warning on July 16, 2013 (see Anthony Wile's "Hasta La Vista").
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July 31st, 2013 by olddog
By Matt Winkeljohn
What was once a great country has turned in to a maggot infested, unrecognizable carcass of its former self.
There was once a number of people who seceded and revolted against a tyrannical British government. Those same people had a great vision of what would become The United States of America.
Those great founders made it explicitly clear to all people and future governments as to how America is supposed to be. They even drafted documents to explain that the government is intended to be small and that the people have basic human rights that shall not be infringed upon.
Unfortunately, it has taken only a little less than 250 years to completely destroy that vision and the country.
“A private central bank issuing the public currency is a greater menace to the liberties of the people than a standing army.” We must not let our rulers load us with perpetual debt.”
The Federal Reserve, which is not federal at all, is a privately owned banking cartel that has been given power from the United States federal government, to print our paper money and divvy it out, with no oversight, as they deem necessary.
That is not the only thing the Federal Reserve does…They also create debt.
The debt is created by printing money without any backing by gold or silver and then placing debt on to each dollar printed. This debt, that is impossible to be payed back, is then passed on to the people of America. Through the use of banks, that debt is then held over Americans heads in order to force them to pay unlawful taxes and to work for “the system.”
The Federal Reserve is one of the largest contributing factors to most economic declines in the United States.
One would think, with a national debt that is nearing $17 trillion, people would start to wake up. I am positive that our founders wouldn’t have put up with this sort of madness. They did, however, try to warn us.
“They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.”
In 2010, there were 40,627 new laws put on the books across the United States. In 2012, 40,000. These are all laws telling We The People what we can and can not do. There are over 30,000 pages of just federal laws currently on the books. Most of which are victimless crimes put in to law for the sole purpose of revenue and control.
Who are hired to enforce these laws?
There are a number of agencies that have been established to enforce these laws, most of which do not have the interest of the people in mind, but the interest of the government and corporations.
Of these agencies, the city police, Sheriffs department and State Highway Patrol are the most commonly seen. The city police and State Patrol have essentially become no more than common street thugs. Their job is nothing more than revenue enforcement through the use of bully tactics and fear. While the Sheriffs departments are not without flaws, they are the only “police” in the entire country that is actually voted in by the people.
There has also been a recent trend of militarizing police forces. Parents can no longer teach their children that if they are in trouble, to go find the nearest person in uniform. If a screaming child is charging at today’s police, they are more likely to get shot than they are to get help. The police of today have become the judge, jury and many times, the executioner. People are 8 times more likely to get killed by a cop than they are by any terrorist.
The Transportation Security Administration (TSA) and the Department of Homeland Security (DHS) are two more agencies that have been created to keep Americans in check.
The duty of these two agencies are not so much about revenue as they are about keeping Americans compliant. The Obama and Bush administrations have used these agencies as their own personal gestapo against Americans, all in the name of fake terror threats. We are told that there are evil terrorists that could strike at any time, so the majority of Americans are now willing to give up most of their basic human rights for the illusion of protection.
The reality of these two agencies is that they are here to keep the people afraid, compliant and unwilling to stand up against the government. It is their sole purpose to detain and execute if necessary, any American that is not willing to obey the fake authority of them or the government.
“The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized.”
~ Thomas Jefferson
“The policy of the American government is to leave their citizens free, neither restraining nor aiding them in their pursuits”
~ Thomas Jefferson
Who is at the top of the heap when it comes to the destruction of this once great country? Well, that has a dual answer.
First.. government. This over reaching and illegal federal government that we have are the ones who put all of the tyranny in motion. It was/is a greedy government that protects the Federal Reserve, it is the federal government that illegally justifies unwarranted NSA spying on all Americans and it is the federal government that has left you for dead.
It is the federal government (Democrats and Republicans alike) that allow the Patriot act, which unlike the name, isn’t very patriotic. The Patriot act is designed to allow the federal government to keep tabs on every American alive today. It is the basis for the National Security Agency’s (NSA) spying, wiretapping and listening to every phone call, text and email. This has destroyed the entire 4th amendment to the constitution.
“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”
It is the federal government that has been pushing to completely disarm the American people in order to be able to better control us. Much of this has been done through laws and legislation that We The People never had a say in. This goes directly against the 2nd amendment to the constitution.
A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.
It is the federal government that not only allowed, but demanded that We The People not be allowed to protest. HR 347 essentially allows the government to take away your 1st amendment right, anywhere they choose that is shouldn’t apply. In fact, this and every other right that we have is not up for negotiation. It is not the right or the duty of the federal government to put ANY infringements on ANY of our rights, or to legislate when and where they apply.
“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”
Every part of this amendment has been destroyed!
The last three examples that I have given also goes directly against the 5th and 10th amendments.
“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”
“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
I did say that this was a dual answer, didn’t I? Here is part two of the answer.
Who else is at the top of the heap to blame for the destruction of this once great country?
If you want to know who really let all of this happen, look no further than the nearest mirror. The founders of this country were very specific in saying that it is the people’s duty to keep government in check.
“What country can preserve its liberties if its rulers are not warned from time to time that their people preserve the spirit of resistance?”
~ Thomas Jefferson
You have become weak and compliant to tyranny! You have let down the founders who once had a great vision for this country!
The Declaration of Independence states – “That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”
You have not done that! You have set idly by while government divides us and destroys something that was once beautiful, majestic, rich and great! It is your job to make sure that government doesn’t get too big, that America didn’t create their own enemies and that the constitution would always be followed..but you failed!
“The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.”
~ Thomas Jefferson
“When the people fear their government, there is tyranny; when the government fears the people, there is liberty.”
~ Thomas Jefferson
Now is the time to wake up! Now is the time to protect ourselves against the government and all of its agencies!
NOW IS THE TIME TO MAKE THEM AFRAID OF US!!!!
July 11th, 2013 by olddog
More and more people and organizations are becoming adept at identifying the evil injustices which have invaded every facet of our lives. Of all the identified enemies of humanity, there is one enemy which stands out among all others.
Pogo is correct. It is we the people who have become adept at mastering the craft of perpetuating our own enslavement. We provide the labor and the capital which enslaves us. This article illustrates one small example of how we are being enslaved and more importantly, what we can do about it.
Whether it is banking, healthcare or even public education, the globalists have virtual control over the entire system. They also control the dialogue through their domination of the mainstream media and they do so to their advantage and to our extreme detriment.
This article will take a very brief look at banking, and then propose solutions based upon common sense and from the field of psychology which could be used to mitigate the effectiveness of the globalists on a broad front in this arena.
Stop Feeding the Beast
The globalists have a definitive infrastructure and when we decide enough is enough and withdraw from this system, their house of cards will begin to crumble and could eventually collapse. The moment humanity realizes that we are contributing to our own enslavement and demise by our complicit participation in the globalists' rigged game, we can choose to alter our course by making different decisions. Our continuing decision to fully participate in the banking system is mind boggling because this system is sowing the seeds of humanity’s destruction.
First, it incomprehensible that people do not take the time to investigate with whom they are entrusting their money. The money changers represent the group most despised by Jesus; and if that is not enough, let us consider the fact these banksters contribute to the starting of every war in order to loan out the money for the arms build-up. And then the banksters loan out the money to clean up the mess and we repeat this scenario over and over and over again. To survive, the system needs your children’s involuntary servitude in the military. In other words, when you deposit money in the bank, you are participating in the future death of many of today’s children as they grow into young adulthood. Why would any reasonable person entrust their money to such a system of evil?
Second, the banksters take your money into their hallowed institutions and then multiply it by a factor of nine (i.e. fractional reserve banking) and then loan out this imaginary money at your expense by the inflationary practice that this culminates in. Then the banksters have the intestinal fortitude to loan us back the money at 15, 20, 25% interest on money created out of thin air. When you put money into the bank, you are committing financial suicide.
Third, when the banksters print their money out of thin air and then charge the government and the people for the right to use “their” money, we in effect are paying for the right to be their debt slaves. And all of this occurs despite the fact that the Constitution says that Congress shall coin money. Of course, a dumbed down populace cannot appreciate or be cognizant of the principles of the Constitution. Why? Because the globalists also control education which is another story for another time.
Fourth, the international banksters are hands down the most corrupt and evil influence on the planet. They perpetrated the Arab Spring in which many have died, and there is no end in sight.
The banksters, through the Bilderberg control over NATO, overthrew Libya because that country would not join the Bank of International Settlement’s central banking system and enslave their people into generations of crushing debt. Immediately prior to the time of Libya’s occupation, the Libyan people paid 14 cents for a gallon of gas, provided free education to their citizens as well as free health care. Young Libyan couples getting married were given a home. The banksters could not have that kind of wealth wasted on common people, because unless someone is a debt slave, they cannot be readily controlled.
Today, every one of the five megabanks are stealing the homes of their customers through the MERS fraud. The banks also launder money for the drug cartels (e.g. HSBC Bank and Wachovia Wells Fargo). They profit from child sex rings and they are using your bank deposits as a force multiplier to accomplish these evil deeds. Whether we want to face these facts or not, everyone who keeps their money in these institutions is an accomplice to these crimes.
We need to collectively come to realize that we the people are playing in a rigged game and we desperately need to cash out and find a new game to play. And it is just not banking that we need to be worrying about. The globalists control the very foundations of civilization. However, at the heart of this control is banking and that is where our attack needs to begin. Yet, I know that it seems impossible for most of us to not play in the globalist game of domination because so much of our lives are wrapped up in these evil institutions. So what is a victim to do?
The answer to the above question may have its roots in the field of psychology. Through institutions such Royal Institute of International Affairs and the Tavistock Institute, which controls over 30 research and polling sites in America. Tavistock is well known for the science of creating phony polls to influence and alter the public’s perception of an event based upon group think principles. More importantly, Tavistock has been at the forefront of psychological research on the manipulation of the masses. The psychological research of Tavistock helps us to understand how so few on this planet can so completely control so many. The effectiveness of their developed psychological controls are so complete, that the masses have largely been reduced to a herd of mindless sheep in which the many are conditioned to embrace and rejoice in their slavery.
What is good for the goose is also good for the gander. We, as a people, have the same opportunity to use the same psychological principles against the banksters. There are literally dozens of psychological strategies which we as the common people could employ. In the remaining part of the article, two strategies will be discussed and if they were employed by the masses, we would see an immediate impact on the control level of the globalists.
The Hawthorne Effect
Since the discovery of the Hawthorne Effect by the Harvard School of Business, it was discovered that research subjects change their behavior when they realize that they are being watched. Today, this is a well-known principle in the arena of effective research in which researchers are trained to minimize their level of intrusiveness in their naturalistic field research.
Based upon this principle, and if I were a globalist, I would welcome the public revelations of the NSA spy scandal for all the apparent reasons listed above. How many of us will be prevented from speaking out as things continue to decline for fear of future retribution? Fortunately, we live in a universe of duality and, therefore, this same principle can be also be used against the globalists as well.
What happens when you shine a light on rats? Everybody knows that the rats run for cover. This knowledge should be an empowering motivator for the alternative media. This knowledge should also encourage all of us to become a citizen journalist. Being a citizen journalist whistleblower needs to become our national pastime in which we report every act of wrongdoing on the part of every corporation and every government official, whether their rank is high or low.
To be effective and to create our own cultural norms, the alternative media needs to exalt people like Ed Snowden and immortalize the memories of Michael Hastings and Andrew Breitbart. There needs to become so many of us, that the globalists need to feel that there is nowhere to hide.
An Army of Citizen Journalists
America, if you want to preserve what little freedom you have left, you have a duty to become a participant in the resistance against global tyranny. Our collective efforts could someday be sufficient in numbers to shift the consciousness of this planet and create counter-critical mass in which a tsunami of opposition beliefs to the prevailing status quo sweeps across the planet and removes much of the control the banksters enjoy today.
In a person’s role as a citizen journalist, the coverage can seem minuscule on the surface. Perhaps the event one can cover may be as mundane as children cited for drawing with chalk on the sidewalk or a 10-year-old girl ticketed for operating a lemonade stand without a license. Together, we can create a debris field which can impede and eventually turn back the progress of the globalists. No, I do not think we can eliminate the influence the money changers, but we can invoke change by utilizing the principle of the Hawthorne Effect. And if there was one thing that I could have personal influence over, I would encourage all of you to educate your neighbors and friends about fractional reserve banking. I know of nobody, who understands this principle, who agrees with it. Fractional reserve banking could be the beginning point for any discussion about the unwarranted globalist control over humanity (i.e. “Do you know what happens to your money when you deposit it in the bank?”).
What To Do About the Banks?
You work at your job, your employer sends your check to your bank and you make automated payments for your bills from your bank account and you do not have to lift a finger to make all of this happen once your sign the banks paperwork. If you are like me, you can go months without having to withdraw any cash from the bank because the bank, on our behalf, controls most of our financial obligations if we so permit. Our lives are so intertwined in these corrupt financial institutions, it is not practical to totally extricate ourselves from the banks in one decisive action. However, we can systematically starve the banks to death through the gradual withdrawal of our support and our money.
Is it possible for you to withdraw enough of your money to equal over 90% of your total holdings in the bank? On the surface, this would appear to be an impractical solution. The concept of fractional reserve banking has built in a very effective firewall to real globalist profits through the multiplication of your deposits by 900%. For even if we were to collectively withdraw 80% of our money from the banks, the globalists would still double their profits based upon this concept. If Ron Paul in his former role on the House Banking Committee could not even audit the Federal Reserve, it is safe to say that, for now, the tinkering of this system is nearly impossible. However, this is where the idea of financial guerrilla warfare comes into play.
Attacking the Banksters On Our Terms
The most important decision we make is whether we believe we live in a friendly or hostile universe. — Albert Einstein
Is your glass half empty or half full? We make the choice to become optimistic or pessimistic. Voluminous amounts of psychological research is replete with the established fact that optimists live longer, make more money, have happier marriages and enjoy many more social advantages than do pessimists. Our happiness, our success and our well-being largely boils down to our own choices. Freedom is the space between the prison bars of life. When we realize that even in the most dire of situations, we have some measure of freedom, we can initiate change. And when many people realize this fact, we can initiate change on a global scale.
If we come to view the evil monolithic organizations such as the IRS and the Federal Reserve as insurmountable foes with no weaknesses to exploit on our end, then our pessimism will rule the day and we will capitulate to this criminal system just the like a herd of sheep.
When you change the way that you look at things, the things you look at change.
The alternative media is excellent at identifying and exposing problems. However, if all we do talk, then our revelations begin to become irrelevant. When all we do is to call attention to the negativity, then we invite more negativity into our paradigm. Our glass will always be half empty. And now it is time to discuss the second psychological principle that we can employ against the globalists.
Some psychologists call the following attractor energy in that we invite into our lives the things that we pay the most attention to. And what we invite into our lives attracts more of what it is that we are paying attention to. If we only focus on the problems, then we will invite more problems. Therefore, it is incumbent upon all of us to focus mostly on changes that are needed. Thus, significant action must follow our observations and words. You will eventually become what you think
As a man thinks in his heart, so is he. — Proverbs 3:27
First, we must visualize being out of the corporate dominated system of the globalists. Ask yourself, what would that look like and then work to make it happen.
With regard to beginning to withdraw from the central banking system, people should not use direct deposit from their employer to the bank. Keep a minimal amount of cash in the bank so that you may cash your checks. Pay your mortgages with a money order. Do the same for your car loans. Better yet, do not make purchases that you cannot afford to pay cash for. Debt makes you a slave to the banksters.
Pay cash for as much as you can and limit the amount of cash that you let go into the bank. Remember, for every dollar that goes into the bank, the globalists multiply it times nine, and much of that money goes toward programs designed to maximize their control over us.
Shop at your local merchants. Avoid corporate chain stores, owned by the megabanks, like the plague. Regularly, hold and/or attend garage sales, swap meets and farmers' markets to find what you need. Learn to grow your own food and subsist on that food supply as much as possible. You get the idea, get out of their money system as much as possible and we will significantly weaken the money changers system. We are not going to be able to invade Wall Street, so we have attack it from the inside. This is financial guerrilla warfare.
There is also a side benefit to these withdrawal strategies. When the collapse of the dollar finally arrives, you will be better prepared to survive. It is time to roll up our sleeves and work towards getting out of this corrupt system.
Do not conform to the pattern of this world… — Romans 12:2
Dave is an award winning psychology, statistics and research professor, a college basketball coach, a mental health counselor, a political activist and writer who has published dozens of editorials and articles in several publications such as Freedoms Phoenix, News With Views and The Arizona Republic.
The Common Sense Show features a wide variety of important topics that range from the loss of constitutional liberties, to the subsequent implementation of a police state under world governance, to exploring the limits of human potential. The primary purpose of The Common Sense Show is to provide Americans with the tools necessary to reclaim both our individual and national sovereignty.
June 28th, 2013 by olddog
How can anyone not see that the U.S. economy is collapsing all around us? It just astounds me when people try to tell me that "everything is just fine" and that "things are getting better" in America. Are there people out there that are really that blind? If you want to see the economic collapse, just open up your eyes and look around you. By almost every economic and financial measure, the U.S. economy has been steadily declining for many years. But most Americans are so tied into "the matrix" that they can only understand the cheerful propaganda that is endlessly being spoon-fed to them by the mainstream media. As I have said so many times, the economic collapse is not a single event. The economic collapse has been happening, it is is happening right now, and it will continue to happen. Yes, there will be times when our decline will be punctuated by moments of great crisis, but that will be the exception rather than the rule. A lot of people that write about "the economic collapse" hype it up as if it will be some huge "event" that will happen very rapidly and then once it is all over we will rebuild. Unfortunately, that is not how the real world works. We are living in the greatest debt bubble in the history of the world, and once it completely bursts there will be no going back to how things were before. Right now, we are living in a "credit card economy". As long as we can keep borrowing more money, most people think that things are just fine. But anyone that has lived on credit cards knows that eventually there comes a point when the game is over, and we are rapidly approaching that point as a nation.
Have you ever been there? Have you ever desperately hoped that you could just get one more credit card or one more loan so that you could keep things going?
At first, living on credit can be a lot of fun. You can live a much higher standard of living than you otherwise would be able to.
But inevitably a day of reckoning comes.
If the federal government and the American people were forced at this moment to live within their means, the U.S. economy would immediately plunge into a depression.
That is a 100% rock solid guarantee.
But our politicians and the mainstream media continue to perpetuate the fiction that we can live in this credit card economic fantasy land indefinitely.
And most Americans could not care less about the future. As long as "things are good" today, they don't really think much about what the future will hold.
As a result of our very foolish short-term thinking, we have now run up a national debt of 16.4 trillion dollars. It is the largest debt in the history of the world, and it has gottenmore than 23 times larger since Jimmy Carter first entered the White House.
The chart that you see below is a recipe for national financial suicide…
Of course things have accelerated over the past four years. Since Barack Obama entered the White House, the U.S. government has run a budget deficit of well over a trillion dollarsevery single year, and we have stolen more than 100 million dollars from our children and our grandchildren every single hour of every single day.
It is the biggest theft of all time. What we are doing to our children and our grandchildren is beyond criminal.
And now our debt is at a level that most economists would consider terminal. When Barack Obama first entered the White House, the U.S. debt to GDP ratio was under 70 percent. Today, it is up to 103 percent.
We are officially in "the danger zone".
If things really were "getting better" in America, we would not need to borrow so much money.
Our politicians are stealing from the future in order to make the present look better. During Obama's first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
That is utter insanity!
If you started paying off just the new debtthat the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
So what is the solution?
Get ready to laugh.
The most prominent economic journalist in the entire country, Paul Krugman of the New York Times, recently suggested the following in an article that he wrote entitled "Kick That Can"…
Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
You mean that we might actually do damage to the debt-fueled economic fantasy world that we are living in if we stopped stealing so much money from future generations?
Oh the humanity!
It is horrifying to think that all that one of the "top economic minds" in America can come up with is to "kick the can" down the road some more.
Unfortunately, neither Paul Krugman nor most of the American people understand that our financial system is actually designed to create government debt.
The bankers that helped create the Federal Reserve intended to permanently enslave the U.S. government to a perpetually expanding spiral of debt, and their plans worked.
At this point, the U.S. national debt is more than 5000 times larger than it was when theFederal Reserve was first created.
So why don't the American people understand what the Federal Reserve system is doing to us?
It is because most of them are still plugged into the matrix. A Zero Hedge article that I came across today put it beautifully…
US society in a nutshell: Chris Dorner has been around for a week and has 222 million results on Google; the Federal Reserve has been around for one hundred years and has 187 million results.
If nothing is done about our exploding debt, it is only a matter of time before we reach financial oblivion.
According to Boston University economist Laurence Kotlikoff, the U.S. government is facing a "present value difference between projected future spending and revenue" of222 trillion dollars in the years ahead.
So how in the world are we going to come up with an extra 222 trillion dollars?
But it is not just the U.S. government that is drowning in debt.
Just check out this chart which shows the astounding growth of state and local government debt in recent years…
All over the United States there are state and local governments that are on the verge of bankruptcy. Just check out what is going on inDetroit. The only way that most of our state and local governments can keep going at this point is to also "kick the can" down the road some more.
And of course most of the rest of us are drowning in debt as well.
40 years ago, the total amount of debt in the U.S. economic system (government + business + consumer) was less than 2 trillion dollars.
Today, the total amount of debt in the U.S. economic system has grown to more than 55 trillion dollars.
Can anyone say bubble?
The good news is that U.S. GDP is now more than 12 times larger than it was 40 years ago.
The bad news is that the total amount of debt in our financial system is now more than 30 times larger than it was 40 years ago…
At the same time that we are going into so much debt, our ability to produce wealth continues to decline.
According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number dropped to 21.6 percent in 2011. That is not just a decline – that is a nightmarish freefall. Just check out the chart in this article.
We are becoming less competitive as a nation with each passing year. In fact, the U.S. has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
Most Americans don't understand this, but the United States buys far more from the rest of the world than they buy from us each year. In 2012, we had a trade deficit of more than 500 billion dollars with the rest of the world.
That means that more than 500 billion dollars that could have gone to U.S. workers and U.S. businesses went out of the country instead.
So how does our country survive if hundreds of billions of dollars more is flowing out of the country than is flowing into it?
Well, to make up the shortfall we go to the countries that we sent our money to and we beg them to lend it back to us. If that doesn't work, we just print and borrow even more money.
Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.
That is 8 trillion dollars that could have saved U.S. businesses, paid the salaries of U.S. workers and that would have helped fund government.
But instead, our foolish policies have greatly enriched China and the oil barons of the Middle East.
Sadly, politicians from both political partiescontinue to boldly support the one world economic agenda of the global elite.
Just consider how destructive many of these "free trade" deals have been to our economy…
When NAFTA was pushed through Congress in 1993, the United States had a trade surpluswith Mexico of 1.6 billion dollars.
By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little "m") for the entire year.
In 2012, our trade deficit with China was 315billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
In particular, our trade with China is extremely unbalanced. Today, U.S. consumers spendapproximately 4 dollars on goods and services from China for every one dollar that Chinese consumers spend on goods and services from the United States.
But isn't getting cheap stuff from China good?
No, because it costs us good paying jobs.
According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.
Overall, more than 56,000 manufacturing facilities in the United States have been shut down since 2001. During 2010, manufacturing facilities in the United States were shutting down at a rate of 23 per day. How can anyone say that "things are getting better" when our economic infrastructure is beingabsolutely gutted?
The truth is that there are never going to be enough jobs in America ever again, because millions of our jobs are being sent overseas and millions of our jobs are being lost to technology.
You won't hear this on the news, but the percentage of the civilian labor force in the United States that is employed has been steadily declining every single year since 2006.
Younger workers have been hit particularly hard. In 2007, the unemployment rate for the 20 to 29 age bracket was about 6.5 percent. Today, the unemployment rate for that same age group is about 13 percent.
If you are under the age of 30 and you aren't living with your parents, there is a really good chance that you are living in poverty. If you can believe it, U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
Our economy has been steadily bleeding huge numbers of middle class jobs, and many of those jobs have been replaced by low paying jobs in recent years.
According to one study, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
And at this point, an astounding 53 percentof all American workers make less than $30,000 a year.
Oh, but "things are getting better", right?
Maybe if you live on Wall Street or if you arean employee of the federal government.
But for most families this economic decline has been a total nightmare. Median household income in America has fallen forfour consecutive years. Overall, it has declined by over $4000 during that time span.
Sometimes people forget how good things were about a decade ago. About three times as many new homes were sold in the United States in 2005 as were sold in 2012.
But we like to live in denial.
In fact, a lot of families are trying to keep up their standards of living by going into tremendous amounts of debt.
Back in 1983, the bottom 95 percent of all income earners in the United States had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.
Fake it until you make it, right?
But how much debt can our system possibly handle?
Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.
Total credit card debt in the United States is now more than 8 times larger than it was just 30 years ago.
We are a nation that is completely addicted to debt, but as the financial crisis of 2008 demonstrated, all of that debt can have horrific consequences.
As the economy has slowed in recent years, the Federal Reserve has decided that "the solution" is to recklessly print money in an attempt to get the debt spiral cranked up again.
Have they gone overboard? You be the judge…
And of course this won't have any affect on the value of the money that you have been saving up all these years right?
Every single dollar that you own is continually losing value…
Overall, the value of the U.S. dollar has declined by more than 96 percent since the Federal Reserve was first created.
As the cost of living continues to go up and wages continue to go down, millions of American families have fallen out of the middle class and into poverty.
If you can believe it, the number of Americans on food stamps has grown from about 17 million in the year 2000 to more than 47 million today.
But "things are getting better", right?
Incredibly, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history.
But "things are getting better", right?
There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
But "things are getting better", right?
In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.
But "things are getting better", right?
Today, more Americans than ever have found themselves forced to turn to the federal government for help.
Overall, the federal government runs nearly 80 different "means-tested welfare programs", and at this point more than 100 million Americans are enrolled in at least one of them.
According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
So is it a good sign or a bad sign that the percentage of Americans that are financially dependent on the federal government is at an all-time high?
And in future years the number of Americans that are receiving benefits from the federal government is projected to absolutely skyrocket.
Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
If you take a look at Medicare, things are very more sobering.
As I wrote recently, it is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.
At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for every single household in the United States.
Are you ready to contribute your share?
Social Security is a complete and total nightmare as well.
Right now, there are approximately 56 million Americans collecting Social Security benefits.
By 2035, that number is projected to soar to an astounding 91 million.
Overall, the Social Security system is facing a134 trillion dollar shortfall over the next 75 years.
Oh, but don't worry because "things are getting better", right?
I honestly do not know how anyone can look at the numbers above and come to the conclusion that the economy is in good shape.
We have accumulated the largest mountain of debt in the history of the world, our economic infrastructure is being gutted, we are bleeding good jobs, government dependence is at an all-time high and we are getting poorer as a nation with each passing day.
But other than that, everything is rainbows and lollipops, right?
If you want to see the economic collapse, just open up your eyes.
And if dramatic changes are not made quickly, things are going to get much, much worse from here.
Please share this article with as many people as possible. Time is quickly running out and there are a whole lot of people out there that we need to wake up while we still can.
One thing I have learned is the incredible confidence people have in our economy, and the near total lack of credible evidence that they are wrong. It’s kind of like loving one’s government instead of their country, it simply makes no sense. Perhaps they don’t want to face the challenge of learning how to acquire protection from the collapse of our Nation. Try this http://harrydentpredictions.com/P209-PPC-Harry-Dent-Predictions-2013-TY.html
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June 25th, 2013 by olddog
Did you know that Barack Obama has been secretly negotiating the most important trade agreement since the formation of the World Trade Organization? Did you know that this agreement will impose very strict Internet copyright rules, ban all "Buy American" laws, give Wall Street banks much more freedom to trade risky derivatives and force even more domestic manufacturing offshore? If you have not heard about this treaty, don't feel bad. Obama has refused to even give Congress a copy of the draft agreement and he has banned members of Congress from attending the negotiations. The plan is to keep this treaty secret until the very last minute and then to railroad it through Congress and have it signed into law by October. The treaty is known as "the Trans-Pacific Partnership", and the nations that are reported to be involved in the development of this treaty include the United States, Canada, Japan, South Korea, Australia, New Zealand, Chile, Peru, Brunei, Singapore, Vietnam and Malaysia. Opponents of this treaty refer to it as "the NAFTA of the Pacific", and if it is enacted it will push the deindustrialization of America into overdrive.
The "one world" economic agenda that Barack Obama has been pushing is absolutely killing the U.S. economy. As you will see later in this article, we are losing jobs and businesses at an astounding pace. And each new "free trade" agreement makes things even worse.
For example, just check out the impact that the recent free trade agreement that Obama negotiated with South Korea is having on us…
A 10 percent decline of U.S. exports to Korea
The U.S. trade deficit with Korea has climbed 37 percent
U.S. auto industry has been crippled
Loss of U.S. control where international trade, banking and finance is concerned
A projected 159,000 jobs will be lost
Wait a second – I though that "free trade" agreements were actually supposed toincrease exports.
So why have they declined by 10 percent?
Did someone make a really bad deal?
And of course we have all seen the economic devastation that NAFTA has wrought.
When NAFTA was pushed through Congress in 1993, the United States actually had a tradesurplus with Mexico of 1.6 billion dollars. By 2010, we had a trade deficit with Mexico of61.6 billion dollars.
And "free trade" with China has turned out to be a complete and total nightmare as well.
Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little "m") for the entire year.
In 2012, our trade deficit with China was 315billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
But instead of learning from the mistakes of the past, Barack Obama is pressing for more "free trade" agreements.
The New York Times is calling the Trans-Pacific Partnership "the most significant international commercial agreement since the creation of the World Trade Organization in 1995". It is reportedly going to include a whole host of provisions which would never be able to get through Congress on their own. Even though this treaty will affect all of our daily lives, the Obama administration is keeping this treaty a total secret. In fact, Obama won't even show it to Congress even though members of Congress have asked repeatedly to see it…
The agreement, under negotiation since 2008, would set new rules for everything from food safety and financial markets to medicine prices and Internet freedom. It would include at least 12 of the countries bordering the Pacific and be open for more to join. President Obama has said he wants to sign it by October.
Although Congress has exclusive constitutional authority to set the terms of trade, so far the executive branch has managed to resist repeated requests by members of Congress to see the text of the draft agreement and has denied requests from members to attend negotiations as observers — reversing past practice.
While the agreement could rewrite broad sections of nontrade policies affecting Americans’ daily lives, the administration also has rejected demands by outside groups that the nearly complete text be publicly released.
So exactly who in the world does this guy think that he is? Why won't Obama let us know exactly what is in this treaty?
Fortunately, there have been a few leaks. One thing that we have discovered is that this new treaty would reportedly ban all "Buy American laws".
That certainly would not be popular if it got out.
And do you remember SOPA?
The American people wanted nothing to do with the very strict Internet copyright provisions of SOPA and loudly expressed their displeasure to members of Congress.
Unfortunately, now the provisions of SOPA are back. It is being reported that most of the provisions of SOPA have been quietly inserted into this treaty. If this treaty is enacted, those provisions will become law and the American people will not be able to do anything about it.
And according to the New York Times, there are all sorts of other disturbing things that have been slipped into the treaty…
And yet another leak revealed that the deal would include even more expansive incentives to relocate domestic manufacturing offshore than were included in Nafta — a deal that drained millions of manufacturing jobs from the American economy.
The agreement would also be a boon for Wall Street and its campaign to water down regulations put in place after the 2008 financial crisis. Among other things, it would practically forbid bans on risky financial products, including the toxic derivatives that helped cause the crisis in the first place.
Are you starting to understand why the Obama administration is keeping this treaty such a secret?
If the details of this treaty were revealed to the American people right now, it would create such an uproar that Congress would never approve this treaty.
So please share this article with as many people as you can. We have got to get the American people educated about this.
Enough damage has already been done to the U.S. economy by "free trade" agreements. Just consider the following statistics…
-The United States has lost more than 56,000 manufacturing facilities since 2001.
-Back in the year 2000, there were more than 17 million Americans working in manufacturing. Now there are less than 12 million.
-There are less Americans working in manufacturing today than there was in 1950 even though the population of the country has more than doubled since then.
-According to the Economic Policy Institute, America is losing half a million jobs to China every single year.
-According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.
-Today, corporate profits as a percentage of U.S. GDP are at an all-time high, but wages as a percentage of U.S. GDP are near an all-time low.
-Without enough good jobs, more Americans are becoming dependent on the government. If you can believe it, the number of Americans on food stamps has gone from about 17 million in the year 2000 to more than 47 million today.
-Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.
And things continue to get even worse. The Institute for Supply Management manufacturing index declined to 49.0 in May. Any reading below 50 indicates contraction.
That was the lowest reading that we have seen since June 2009. Just like most of the rest of the world, we are rapidly heading toward another major economic downturn.
And if you want a perfect visual example of what deindustrialization is doing to America, just look at the city of Detroit.
It was once one of the greatest manufacturing cities in the history of the world, but now it is a rotting, decaying, festering hellhole.
According to the New York Times, there are now approximately 70,000 abandoned buildings in Detroit, and at this point the city is so broke that there is talk that the female giraffe at the Detroit Zoo could be sold offto help pay the bills.
For much more on how deindustrialization is ripping the guts out of the U.S. economy, please see the following articles…
1) "55 Reasons Why You Should Buy Products That Are Made In America"
2) "40 Ways That China Is Beating America"
3) "Show This To Anyone That Believes That 'Things Are Getting Better' In America"
4) "10 Amazing Charts That Demonstrate The Slow, Agonizing Death Of The American Worker"
5) "22 Stats That Show How The Emerging One World Economy Is Absolutely Killing American Workers"
What Barack Obama is trying to do is a mind blowing mistake.
The "one world" economic agenda that he is pursuing is destroying the American worker and the American middle class.
U.S. workers are being thrown into a global labor pool with workers on the other side of the planet that live in countries where it is legal to pay slave labor wages.
Do you want to directly compete with a worker on the other side of the globe that is doing your job for a dollar an hour with no benefits?
If not, you need to stand up and make your voice be heard.
There is no way in the world that American workers should have to compete for jobs with workers making slave labor wages in communist China.
What we desperately need are some red-blooded economic patriots to arise and to tell both political parties that we do not want this "one world" economic agenda.
So what do you think?
Will the American people wake up, or will our economy continue to lose thousands of businesses and millions of jobs?
Please feel free to post a comment with your thoughts below…
If Michael Snyder can find this information, and it is true, don’t you think most of Congress and the Senate knows what Obuma is doing?
Do you think they are all out chasing some sex obsession, drinking their self to death, or shooting up with some kind of dope? I’m asking this because it seems absurd that it isn’t common knowledge, and unless Michael has some crystal ball, or genie in a bottle, everyone in DC has known what OBUMA has been doing from the get go. SO, what do you think of our government now????? Make sure everyone you know has a copy of this article!
June 21st, 2013 by olddog
After the massive crash that rocked global markets in 2008, as Congress, central bankers and major financial institutions met in secret to mitigate the crisis, billionaires like Warren Buffet were buying up shares of some of the hardest hit companies.
At the time, the world was literally on the brink of an unprecedented economic collapse. It was so serious, in fact, thatmembers of Congress were told that should they fail to come to an agreement the fallout would leave the United States in such a state of disarray that martial law would be declared and tanks would be deployed to major American cities.
In the midst of it all, as if they had a private pipeline into the bailout meetings, the big boys were positioning themselves to profit. And profit they did, as the stock market rose from 6500 points in late 2008 to record highs as recently as last month. They made billions of dollars on the backs of bailouts funded by taxpayers who were themselves struggling to pay their mortgages and put food on the table.
They knew then what their friends at the Federal Reserve, Treasury and investment banks were planning to do. And they took the opportunity to make a killing.
Now, with the stock market indicating to the masses that the promised recovery has taken hold, and with mainstream analysts arguing that happy days are here again, those same moguls of finance who were undoubtedly tipped off in 2008, are making some very big moves yet again.
But these particular moves are exactly the opposite of what you might expect given that we’re at the beginning of a supposed recovery:
Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.
Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.
Unfortunately Buffett isn’t alone.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.
Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.
So why are these billionaires dumping their shares of U.S. companies?
From Money News via StanDeyo.com
The simple answer is… they know.
They know that this market has beenpropped up by trillion dollar infusionsfrom the Federal Reserve.
They know that Americans have lost 55% of their wealth since this crisis started.
They know nearly 25% of Americans are out of work (as opposed to the official 7.5% figures from the BLS) and that no meaningful jobs are being created.
They know that half of American households require government assistance, 100 million people are on welfare and nearly a quarter of them need nutritional assistanceto put food on the table..
They know that the economic growth rates being disseminated to the people are completely bogus because they fail to account for the inflationary impact of the Fed’s monetary expansion.
They know this is wholly unsustainable, and they are getting out of Dodge before the next phase of this crisis takes hold and hammers the world yet again.
Ben Bernanke’s magic show will soon come to an end, and all of his tricks will be exposed for the statistical illusions they really are.
Billionaires know this and they are preparing for the inevitable. The government, likewise, is preparing for financial collapse and the potential for widespread violence that will follow.
You should be doing the same.
You can read more of Mac Slavo's work at SHTFplan.com, where this article first appeared.
June 20th, 2013 by olddog
Excerpt from THE GREAT DEFORMATION: The Corruption of Capitalism in America
By David A. Stockman.
The stage was thus set for the final “run” on the dollar and for a spectacular default by the designated “reserve currency” provider under the gold exchange standard’s second outing. And as it happened, the American people saw fit to install in the White House in January 1969 just the man to crush what remained of gold-based money and the financial discipline that it enabled.
Richard M. Nixon, as we know, possessed numerous and notable flaws. Foremost was his capacity to carry a grudge against anyone whom he believed had caused him to lose an election, especially any economist, policy maker, or bystander who could be pinned with accountability for the mild 1960 recession that he believed responsible for his loss to John F. Kennedy.
Nixon’s vendetta on the matter of the 1960 election literally knew no limits. For example, he insisted that a midlevel career bureaucrat named Jack Goldstein, who headed the Bureau of Labor Statistics (BLS), had deliberately spun the monthly unemployment report issued on the eve of the 1960 election so as to damage his campaign. Eight years later, Nixon informed the White House staff that job one was to determine if Goldstein was still at the BLS, and to get him fired if he was.
It is not surprising, therefore, that Nixon rolled into the Oval Office obsessed with replacing Chairman Martin and bringing the Fed to heel. To be sure, his only real interest in monetary policy consisted of ensuring that the one great threat to Republican success, a rising unemployment rate, did not happen in the vicinity of an election.
Yet it was that very cynicism which made him prey to Milton Friedman’s alluring doctrine of floating paper money. As has been seen, Nixon wanted absolute freedom to cause the domestic economy to boom during his 1972 reelection campaign. Friedman’s disciples at Camp David served up exactly that gift, and wrapped it in the monetary doctrine of the nation’s leading conservative intellectual.
Friedman’s Rule of Fixed Money Supply Growth Was Academic Poppycock
Those adhering to traditional monetary doctrine always and properly feared the inflationary threat of state-issued fiat money. So when the CPI reached the unheard of peacetime level of 6.3 percent by January 1969, it was a warning that the tottering structure of Bretton Woods was reaching a dangerous turning point and that the monetary foundation of the postwar world was in peril.
But not according to Professor Milton Friedman. As was typical of the Chicago school conservatives, he simply brushed off the gathering inflationary crisis as the product of dimwits at the Fed. Martin’s “mistake” in succumbing to pressure to open up the monetary spigot to fund LBJ’s deficits, Friedman insisted, could be easily fixed. Literally, with the flick of a switch.
According to Professor Friedman’s vast archive of historic data, inflation would be rapidly extinguished if money supply was harnessed to a fixed and unwavering rate of growth, such as 3 percent per annum. If that discipline was adhered to consistently, nothing more was needed to unleash capitalist prosperity—not gold convertibility, fixed exchange rates, currency swap lines, or any of the other accoutrements of central banking which had grown up around the Bretton Woods system.
Indeed, once the central bank got the money supply growth rate into a fixed and reliable groove, the free market would take care of everything else, including determination of the correct exchange rate between the dollar and every other currency on the planet. Under Friedman’s monetary deus ex machina, for example, the unseen hand would silently and efficiently mete out rewards for success and punishments for failure in the banking and securities markets. The need for clumsy and inefficient regulation of financial institutions would be eliminated.
Friedman’s “fixed rule” monetary theory was fundamentally flawed, however, for reasons Martin had long ago discovered down in the trenches of the financial markets. The killer was that the Federal Reserve couldn’t control Friedman’s single variable, which is to say, the “money supply” as measured by the sum of demand deposits and currency (M1).
During nearly two decades at the helm, Martin learned that the only thing the Fed could roughly gauge was the level of bank reserves in the system. Beyond that there simply weren’t any fixed arithmetic ratios, starting with the “money multiplier.”
The latter measured the ratio between bank reserves, which are potential money, and bank deposits, which are actual money. As previously indicated, however, commercial banks don’t create actual money (checking account deposits) directly; they make loans and then credit the proceeds to customer accounts. So the transmission process between bank reserves and money supply wends through bank lending departments and the credit creation process.
Needless to say, the Fed couldn’t control the animal spirits of either lenders or borrowers; that was the job of free market interest rates. Accordingly, banks would utilize their reserves aggressively during periods of robust loan demand until borrower exuberance was choked off by high interest rates. By contrast, bank reserves would lie fallow during times of slumping loan demand and low free market rates. The “money multiplier” therefore varied enormously, depending upon economic and financial conditions.
Furthermore, even if the resulting “money supply” could be accurately measured and controlled, which was not the case, it did not have a fixed “velocity” or relationship to economic activity or GDP, either. In fact, during deflationary times of weak credit expansion, velocity tended to fall, meaning less new GDP for each new dollar of M1. On the other hand, during inflationary times of rapid bank credit expansion it would tend to rise, resulting in higher GDP gains per dollar of M1 growth.
So the chain of causation was long and opaque. The linkages from open market operations (adding to bank reserves) to commercial bank credit creation (adding to the money supply) to credit-fueled additional spending (adding to GDP) resembled nothing so much as the loose steering gear on an old jalopy: turning the steering wheel did not necessarily mean the ditch would be avoided.
Most certainly there was no possible reason to believe that M1 could be managed to an unerring 3 percent growth rate, and that, in any event, keeping M1 growth on the straight and narrow would lead to any predictable rate of economic activity or mix of real growth and inflation. In short, Friedman’s single variable–fixed money supply growth rule was basically academic poppycock.
The monetarists, of course, had a ready answer to all of these disabilities; namely, that there were “leads and lags” in the transmission of monetary policy, and that given sufficient time the money multipliers and velocity would regress to a standard rate. Yet that “sufficient time” caveat had two insurmountable flaws: it meant that Friedman’s fixed rule could not be implemented in the real day-to-day world of fast-moving financial markets; and more importantly, it betrayed the deep, hopeless political naïveté of the monetarists and Professor Friedman especially.
The Monetarist Cone: Silly Putty on the White House Graphs
As to practicality, I had a real-time encounter with it during the Reagan years when the Treasury’s monetary policy post was held by a religious disciple of Friedman: Beryl Sprinkel. Week after week at White House economic briefings he presented a graph based on the patented “monetarist cone.” The graph consisted of two upward-sloping dotted lines from a common starting date which showed where the money supply would be if it had been growing at an upper boundary of, say, 4 percent and a lower boundary of, say, 2 percent.
The implication was that if the Fed were following Professor Friedman’s rule, the path of the actual money supply would fall snugly inside the “cone” as it extended out over months and quarters, thereby indicating that all was well on the monetary front, the only thing which mattered. Except the solid line on the graph tracking the actual week-to-week growth of money supply gyrated wildly and was almost always outside the cone, sometimes on the high side and other times on the low.
In other words, the greatest central banker of modern times, Paul Volcker, was flunking the monetarists’ test week after week, causing Sprinkel to engage in alternating bouts of table pounding because the Fed was either dangerously too tight or too loose. Fortunately, Sprinkel’s graphs didn’t lead to much: President Reagan would look puzzled, Jim Baker, the chief of staff, would yawn, and domestic policy advisor Ed Meese would suggest moving on to the next topic.
More importantly, Volcker could easily explain the manifold complexities and anomalies in the short-term movement of the reported money supply numbers, and that on an “adjusted” basis he was actually inside the cone. Besides that, credit growth was slowing sharply, from a rate of 12 percent in 1979 to 7 percent in 1981 and 3 percent in 1982. That caused the economy to temporarily buckle and inflation to plunge from double digits to under 4 percent in less than twenty-four months. Volcker was getting the job done, in compliance with the monetarist cone or not.
In fact, the monetarist cone was just a Silly Putty numbers exercise, representing annualized rates of change from an arbitrary starting date that kept getting reset owing to one alleged anomaly or another. The far more relevant imperative was to slow the perilous expansion of the Fed’s balance sheet. It had doubled from $60 billion to $125 billion in the nine years before Volcker’s arrival at the Eccles Building, thereby saturating the banking system with newly minted reserves and the wherewithal for inflationary credit growth.
Volcker accomplished this true anti-inflation objective with alacrity. By curtailing the Fed’s balance sheet growth rate to less than 5 percent by 1982, Volcker convinced the markets that the Fed would not continue to passively validate inflation, as Burns and Miller had done, and that speculating on rising prices was no longer a one-way bet. Volcker thus cracked the inflation spiral through a display of central bank resolve, not through a single-variable focus on a rubbery monetary statistic called M1.
Volcker also demonstrated that the short-run growth rate of M1 was largely irrelevant and impossible to manage, but that the Fed could nevertheless contain the inflationary furies by tough-minded discipline of its own balance sheet. Yet that very success went straight to an even more fatal flaw in the monetarist fixed money growth rule: Friedman never explained how the Fed, once liberated from the external discipline of the Bretton Woods gold standard, would be continuously populated with iron-willed statesmen like Volcker, and how they would even remain in office when push came to shove like it did during the monetary crunch of 1982.
In fact, Volcker’s reappointment the next year was a close call because most of the White House staff and the Senate Republican leadership wanted to take him down, owing to the considerable political inconvenience of the recessionary trauma his policies had induced. Senate leader Howard Baker, for example, angrily demanded that Volcker “get his foot off the neck of American business now.”
Volcker survived only because of Ronald Reagan’s stubborn (and correct) belief that the Fed’s long bout of profligacy had caused inflation and that only a period of painful monetary parsimony could cure it. The next several decades would prove decisively, however, that the process of American governance produces few Reagans and even fewer Volckers.
So Friedman unleashed the demon of floating-rate money based on the naïve view that the inhabitants of the Eccles Building could and would follow his monetary rules. That was a surprising posture because Friedman’s splendid scholarship on the free market, going all the way back to his pioneering critique of New York City rent controls in the late 1940s, was infused with an abiding skepticism of politicians and all of their mischievous works.
Yet by unshackling the Fed from the constraints of fixed exchange rates and the redemption of dollar liabilities for gold, Friedman’s monetary doctrine actually handed politicians a stupendous new prize. It rendered trivial by comparison the ills owing to garden variety insults to the free market, such as rent control or the regulation of interstate trucking.
Implicit Rule by Monetary Eunuchs
The Friedman monetary theory actually placed the nation’s stock of bank reserves, money, and credit under the unfettered sway of what amounted to a twelve-member monetary politburo. Once relieved of the gold standard’s external discipline, the central banking branch of the state thus had unlimited scope to extend its mission to plenary management of the nation’s entire GDP and for deep, persistent, and ultimately suffocating intervention in the money and capital markets.
It goes without saying, of course, that the libertarian professor was not peddling a statist scheme. So the implication was that the Fed would be run by self-abnegating monetary eunuchs who would never be tempted to deviate from the fixed money growth rule or by any other manifestation of mission creep. Needless to say, Friedman never sought a franchise to train and appoint such governors, nor did he propose any significant reforms with respect to the Fed’s selection process or of the manner in which its normal operations were conducted.
This glaring omission, however, is what made Friedman’s monetarism all the more dangerous. His monetary opus, A Monetary History of the United States, was published only four years before his disciples, led by George Shultz, filled the ranks of the Nixon White House in 1969.
Possessed with the zeal of recent converts, they soon caused a realworld experiment in Friedman’s grand theory. In so doing, they were also implicitly betting on an improbable proposition: that monetarism would work because the run-of-the-mill political appointees—bankers, economists, businessmen, and ex-politicians who then sat on the Federal Open Market Committee (FOMC), along with their successors—would be forever smitten with the logic of 3 percent annual money supply growth.
Friedman’s Great Gift to Wall Street
The very idea that the FOMC would function as faithful monetary eunuchs, keeping their eyes on the M1 gauge and deftly adjusting the dial in either direction upon any deviation from the 3 percent target, was sheer fantasy. And not only because of its political naïveté, something Nixon’s brutalization of the hapless Arthur Burns aptly conveyed.
Friedman’s austere, rule-bound version of discretionary central banking also completely ignored the Fed’s susceptibility to capture by the Wall Street bond dealers and the vast network of member banks, large and small, which maintained their cash reserves on deposit there. Yet once the Fed no longer had to worry about protecting the dollar’s foreign exchange value and the US gold reserve, it had a much wider scope to pursue financial repression policies, such as low interest rates and a steep yield curve, that inherently fuel Wall Street prosperity.
As it happened, the Fed’s drift into these Wall Street–pleasing policies was temporarily stalled by Volcker’s epic campaign against the Great Inflation. Dousing inflation the hard way, through brutal tightening of money market conditions, Volcker had produced the singular nightmare that Wall Street and the banking system loathe; namely, a violent and unprecedented inversion of the yield curve.
With short-term interest rates at 20 percent or more and way above long-term bond yields (12–15 percent), it meant that speculators and banks could not make money on the carry trade and that the value of dealer stock and bond inventories got clobbered: high and rising interest rates mean low and falling financial asset values. Accordingly, the Volcker Fed did not even dream of levitating the economy through the “wealth effects” or by coddling Wall Street speculators.
Yet once Volcker scored an initial success and was unceremoniously dumped by the Baker Treasury Department (in 1987), the anti-inflation brief passed on to a more congenial mechanism; that is, Mr. Deng’s industrial army and the “China price” deflation that rolled across the US economy in the 1990s and after. With inflation-fighting stringency no longer having such immediate urgency, it did not take long for the Greenspan Fed to adopt a prosperity promotion agenda.
First, however, it had to rid itself of any vestigial restraints owing to the Friedman fixed money growth rule. The latter was dispatched easily by a regulatory change in the early 1990s which allowed banks to offer “sweep” accounts; that is, checking accounts by day which turned into savings accounts overnight. Accordingly, Professor Friedman’s M1 could no longer be measured accurately.
Out of sight was apparently out of mind: for the last two decades, the central bank that Friedman caused to be liberated from the alleged tyranny of Bretton Woods so that it could swear an oath of fixed money supply growth has not even bothered to review or mention money supply. Indeed, the Greenspan and Bernanke Fed have been wholly preoccupied with manipulation of the price of money, that is, interest rates, and have relegated Friedman’s entire quantity theory of money to the dustbin of history. And Bernanke claims to have been a disciple!
Constrained neither by gold nor a fixed money growth rule, the Fed in due course declared itself to be the open market committee for the management and planning of the nation’s entire GDP. In this Brobdingnagian endeavor, of course, the Wall Street bond dealers were the vital transmission belt which brought credit-fueled prosperity to Main Street and delivered the elixir of asset inflation to the speculative classes. Consequently, when it came to Wall Street, the Fed became solicitous at first, and craven in the end.
Apologists might claim that Milton Friedman could not have foreseen that the great experiment in discretionary central banking unleashed by his disciples in the Nixon White House would result in the abject capitulation to Wall Street which emerged during the Greenspan era and became a noxious, unyielding reality under Bernanke. But financial statesmen of an earlier era had embraced the gold standard for good reason: it was the ultimate bulwark against the pretensions and follies of central bankers.
Copyright © 2013 David Stockman. Used with the author's permission.
David Stockman was director of the Office of Management and Budget under President Ronald Reagan, serving from 1981 until August 1985. He was the youngest cabinet member in the 20th century. See David Stockman's article archives.
May 31st, 2013 by olddog
Our government is broke, in fact they are beyond broke!
Treasury Secretary Jack Lew
broke since the 2008-09 decisionwas made to cover the derivative debt losses of the criminal banksters. As a result of theirfinancial desperation, the government, on behalf of Wall Street, has become increasingly desperate, aggressive and criminal.
There can be no doubt that most of the aware among us are cognizant of the ongoing government discussions being held about their intentions of requiring every U.S. citizen to put at least a portion of their retirement savings into a government-controlled retirement accounts regardless of whether they have your approval or not.
As I have reported before, Treasury Secretary, Jack Lew, has announced that he is “borrowing” from federal pension funds this summer in order to help the federal government meet its debt obligations. Since the national deficit is $17 trillion dollars and the unfunded federal mandated liabilities will exceed $200 trillion dollars in one year, these victimized federal workers will never see their fullretirement. And if you find yourself breathing a sigh of relief because you do not work for the federal government, you have sadly deluded yourself because the government mafia is coming after all forms ofretirement accounts, both pension funds and invested retirements (e.g. 401k’s).
Why Would the Feds Start Their Crime Spree With Federal Retirement Accounts?
If the federal government is planning to steal retirements, would they be wise to steal them incrementally, or all at once? Of course, incremental theft is always preferable because it avoids an initial widespread confrontation with the public. And who better for the federal government to steal from than federal employees because who are they going to complain to?
Federal Employees Are Just the First Wave of Victims.
Our criminal-in-chief has suggested totally new and extremely onerous taxes to pay for Obamacare (e.g. a 5% tax on all home sales). He also has announced that he is expanding welfare program, including a new national sales tax as well as a national transaction tax.
The Treasury department is even discussing a new wealth tax coming to America. It is already in place in countries like France, Spain, and England. For some in France, the tax will reach 100% of earned income. Blue blood money is presently fleeing these countries.
Let’s say you are a small businessman, who despite Obama’s best efforts to destroy your business, becomes successful and begin to gross over $200,000 dollars per year. Your success will be short lived as you will hand over MOST of your income to the Sheriff of Nottingham (i.e. The Federal Government Mafia).
What Is A Citizen to Do?
First, we need to realize that there are morons among us who think it is somehow our duty to bail out the government and Wall Street. After all, the government and its parent companies, the Wall Street corporations, are too big to fail.
Second, you need to realize that it is YOU that must take action to preserve what little the government lets you keep. It is your money and therefore, your responsibility.
Third, you need to be aware of the fact that the government can never pay down the debt that they have acquired. Could the federal mafia pay down the $17 trillion dollar deficit? Yes, but they would need 2-3 generations of responsible fiscal policies to do so. Could the federal mafia ever meet its $200 trillion dollar unfunded liabilities such as Social Security and Medicare? The short and best answer is, NEVER. Even if by some miracle we could pay off the unfunded liabilities, totalling almost a quarter of a quadrillion debt, there is even a bigger reason why we can NEVER financially recover. America is doomed to absolute economic failure and there is nothing that can be done. When you understand that we can never pay the debt, and the collapse is evitable, then perhaps you will move to protect what you can.
The Final Nail
America, while you slept, your country was stolen from you. Your country was absconded by all the political misfits and corporate criminals that the disenfranchised former Republicans and Democrats have been trying to warn you about over the last several years.
Laws, originating out of New Deal legislation, written in response tothe Great Depression, provided some measure of protection for the American financial system from the unsavory forces which led to its initial demise in 1929. In 2008, corporate greed, governmental corruption and a populace who is asleep at the wheel, has succeeded in achieving what historians will someday label the “Greatest Depression of 2009.” I say The Greatest Depression of 2009, because that is when this irreversible action called the bailouts commenced. Most of the loyalists in this country objected to the bailouts strictly on philosophical grounds. Very few of us understood how catastrophic the bail outs would prove to be.
When Congress was intimidated into approving a series of bailouts,America signed her own death warrant. The remainder of this article will explain exactly why there is absolutely no way that America can financially survive. History, will clearly demonstrate that destruction of the late, great American economy was entirely self-inflicted.
What You Don’t Know Can Hurt You
If Americans knew their history, then we would be cognizant of the fact that one of the prime causes of the Great Depression was due tostock investors buying shares on margin (i.e., loans). The passage of the Glass Steagall Act protected Americans from this shady practice by separating commercial banking from this investment practice of stockbrokers. However, with one stroke of his New World Order pen, Bill Clinton’s repeal of the Glass-Steagall act opened the flood gates for the domestic AND foreign infusion of bad credit into both our stock market and banking system. Consequently, both industries stand upon the precipice of collapse in what is quickly becoming the most massive wealth transfer in world history. .
On September 30, 1999 , Fannie Mae and Freddie Mac sought governmental permission to “relax” (i.e., break) the prudent governmental regulations on sound lending practices and begin to make loansto individuals who were not credit worthy. This spelled the death of the mortgage industry as we once knew it.
The Uptick Rule once prevented companies from crashing due to large scale shorting of company stock. Do you remember it was Goldman Sachs that was fined for shorting mortgages just preceding the bursting of the mortgage bubble?
A company’s stock could not be sold short as long as it was in continuous decline. The short sellers had to wait for an uptick in the stock before engaging in shorting. At the urging of Goldman Sachs and Hank Paulson, the Uptick Rule was retired in 2007 and the rest, as they say, is history.
The elimination of the Uptick Rule is like going to a basketball game and not being able to see the scoreboard. Who’s ahead, who’s behind? Nobody knows but “Ladies and Gentlemen, place your bets!” What is your stock portfolio worth? Who knows? Who cares? Somebody wealthy is getting wealthier at your expense and you and your middle class investors are none the wiser. Let me be crystal clear here, the worst parts of today’s financial crisis was orchestrated by Goldman Sachs and Hank Paulson.
The derivative market is the main impetus for the breakdown of the American economy. The rapid increase in the price of fuel during the last several years is a good example of the destructive nature of the derivative market and it is this market which fueled the greatest debt load every visited upon the planet. Most of the price gouging which resulted in unprecedented increases in gas prices, and record oil company profits, was due to speculation in futures and this, again, was led by Goldman Sachs which just happens to be Treasury Secretary’s Henry Paulson’s old company. The derivatives market subsequently collapsed because the rampant speculative nature of futures drove prices, including homes and real estate through the roof. However, the real damage done by the collapse in derivatives is the fact that almost all other forms of financial instruments are tied to this market because they banks pledged their collateral assets to back this market.
A Quick Financial Lesson
In trying to write for the layman, I endeavor to make this as simple as possible. It is not an overstatement to proclaim that if you do not understand the principles discussed in the following paragraphs, you will have little chance in surviving the impending collapse and you will never know what has hit you when the inevitable comes.
Derivatives are not stocks or bonds or anything of tangible value. This is the ultimate money game in which paper derived from other paper, such as futures and options, has served to bolster the balance sheets on Wall Street. Futures and options are exchange and traded derivatives, but the largest group of derivatives is not even traded on the exchanges. These are called “counterparty derivatives” and consist of such financial entities as mortgage backed securities (MBS) and credit default swaps. After assimilating this material it will become obvious why the Federal Reserve is purchasing MBS’ to the tune of $40 billion per month, every month. This process began in September 2013. Of course, you should know that the Federal Reserve is just printing the money out of thin air, thus, making your existing cash supply worth a lot less.
It is estimated that total derivative exposure of the financial system is between one quadrillion and one and a half quadrillion. A quadrillion is 1,000 trillion dollars and the derivative market has largely collapsed.
The entire Gross Domestic Product (GDP) of all the world’s countries in 2009 was approximately 60 trillion dollars. GDP is an economic terms for everything that is produced for sale. The American middle class is being asked to bear the burden of the entire derivatives market which totals over 16 times the net value of the entire planet. The “Bail Out Monies” cannot not come close to covering the shortfall.
Where do you think the bail out money will go? Ask yourself why so many corporate heads are building homes overseas? Why did George Bush build a 100,000 acre ranch in Paraguay? Why is NORTHCOM, a combat organization, engaging in urban riot control training in terms of suppressing civil unrest? And again, we know that DHS has purchased 2.2 billion rounds of ammunition to go with their acquisition of 2700 armored personnel carriers. Are we to believe that all of these factors are unrelated? It is looking more and more like the bailout is actually doing what the name implies. Are we being asked to fund the getaway gifts for those that have stolen so much from the American people?
At one point, America spoke with one voice: “NO BAILOUT FOR THE CROOKS.” “Let Rome burn” was the prevailing feeling. We cheered as the House of Representatives voted down the attempt at further fleecing the American middle class. If the middle class is going down, then so should the Wall Street crooks who put “Mainstreet America” in this predicament. Despite this victory for the people, most Americans were disappointed that the crooks and the corrupt politicians, who put America in this dilemma, were not going to prison.
The no-bail-out-victory of the people was indeed short lived. Eventually, the House, bent to pressure applied by then Treasury Secretary, former Goldman Sachs official, Hank Paulson, in which he said if we did not bail out his former firm and the majority of Wall Street, we would have martial law in the streets. Well, four years later, we are more broke than ever and martial law is imminent.
“Meet the new boss, the same as the old boss” in which our corporate masters are determined to have their way with the assets of American people.
The banksters have us where they want us. We are in an endless, unpayable stream of debt with no hope of escaping unless we repudiate the debt. However, the people who could do that work for the banksters.
The Punch Line
As I will detail in Part Four of this series, there are things that you may do to lessen the impact of the coming collapse. However, I believe with a few common sense actions, it is possible to have a relatively soft landing in the face of the coming collapse. Of course, that assumes that you can protect what you have.
April 9th, 2013 by olddog
By DAVID A. STOCKMAN
The Dow Jones and Standard & Poor’s 500 indexes reached record highs on Thursday, having completely erased the losses since the stock market’s last peak, in 2007. But instead of cheering, we should be very afraid.
Over the last 13 years, the stock market has twice crashed and touched off a recession: American households lost $5 trillion in the 2000 dot-com bust and more than $7 trillion in the 2007 housing crash. Sooner or later — within a few years, I predict — this latest Wall Street bubble, inflated by an egregious flood of phony money from the Federal Reserve rather than real economic gains, will explode, too.
Since the S.&P. 500 first reached its current level, in March 2000, the mad money printers at the Federal Reserve have expanded their balance sheet sixfold (to $3.2 trillion from $500 billion). Yet during that stretch, economic output has grown by an average of 1.7 percent a year (the slowest since the Civil War); real business investment has crawled forward at only 0.8 percent per year; and the payroll job count has crept up at a negligible 0.1 percent annually. Real median family income growth has dropped 8 percent, and the number of full-time middle class jobs, 6 percent. The real net worth of the “bottom” 90 percent has dropped by one-fourth. The number of food stamp and disability aid recipients has more than doubled, to 59 million, about one in five Americans.
So the Main Street economy is failing while Washington is piling a soaring debt burden on our descendants, unable to rein in either the warfare state or the welfare state or raise the taxes needed to pay the nation’s bills. By default, the Fed has resorted to a radical, uncharted spree of money printing. But the flood of liquidity, instead of spurring banks to lend and corporations to spend, has stayed trapped in the canyons of Wall Street, where it is inflating yet another unsustainable bubble.
When it bursts, there will be no new round of bailouts like the ones the banks got in 2008. Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth.
THIS dyspeptic prospect results from the fact that we are now state-wrecked. With only brief interruptions, we’ve had eight decades of increasingly frenetic fiscal and monetary policy activism intended to counter the cyclical bumps and grinds of the free market and its purported tendency to underproduce jobs and economic output. The toll has been heavy.
As the federal government and its central-bank sidekick, the Fed, have groped for one goal after another — smoothing out the business cycle, minimizing inflation and unemployment at the same time, rolling out a giant social insurance blanket, promoting homeownership, subsidizing medical care, propping up old industries (agriculture, automobiles) and fostering new ones (“clean” energy, biotechnology) and, above all, bailing out Wall Street — they have now succumbed to overload, overreach and outside capture by powerful interests. The modern Keynesian state is broke, paralyzed and mired in empty ritual incantations about stimulating “demand,” even as it fosters a mutant crony capitalism that periodically lavishes the top 1 percent with speculative windfalls.
The culprits are bipartisan, though you’d never guess that from the blather that passes for political discourse these days. The state-wreck originated in 1933, when Franklin D. Roosevelt opted for fiat money (currency not fundamentally backed by gold), economic nationalism and capitalist cartels in agriculture and industry.
Under the exigencies of World War II (which did far more to end the Depression than the New Deal did), the state got hugely bloated, but remarkably, the bloat was put into brief remission during a midcentury golden era of sound money and fiscal rectitude with Dwight D. Eisenhower in the White House and William McChesney Martin Jr. at the Fed.
Then came Lyndon B. Johnson’s “guns and butter” excesses, which were intensified over one perfidious weekend at Camp David, Md., in 1971, when Richard M. Nixon essentially defaulted on the nation’s debt obligations by finally ending the convertibility of gold to the dollar. That one act — arguably a sin graver than Watergate — meant the end of national financial discipline and the start of a four-decade spree during which we have lived high on the hog, running a cumulative $8 trillion current-account deficit. In effect, America underwent an internal leveraged buyout, raising our ratio of total debt (public and private) to economic output to about 3.6 from its historic level of about 1.6. Hence the $30 trillion in excess debt (more than half the total debt, $56 trillion) that hangs over the American economy today.
This explosion of borrowing was the stepchild of the floating-money contraption deposited in the Nixon White House by Milton Friedman, the supposed hero of free-market economics who in fact sowed the seed for a never-ending expansion of the money supply. The Fed, which celebrates its centenary this year, fueled a roaring inflation in goods and commodities during the 1970s that was brought under control only by the iron resolve of Paul A. Volcker, its chairman from 1979 to 1987.
Under his successor, the lapsed hero Alan Greenspan, the Fed dropped Friedman’s penurious rules for monetary expansion, keeping interest rates too low for too long and flooding Wall Street with freshly minted cash. What became known as the “Greenspan put” — the implicit assumption that the Fed would step in if asset prices dropped, as they did after the 1987 stock-market crash — was reinforced by the Fed’s unforgivable 1998 bailout of the hedge fund Long-Term Capital Management.
That Mr. Greenspan’s loose monetary policies didn’t set off inflation was only because domestic prices for goods and labor were crushed by the huge flow of imports from the factories of Asia. By offshoring America’s tradable-goods sector, the Fed kept the Consumer Price Index contained, but also permitted the excess liquidity to foster a roaring inflation in financial assets. Mr. Greenspan’s pandering incited the greatest equity boom in history, with the stock market rising fivefold between the 1987 crash and the 2000 dot-com bust.
Soon Americans stopped saving and consumed everything they earned and all they could borrow. The Asians, burned by their own 1997 financial crisis, were happy to oblige us. They — China and Japan above all — accumulated huge dollar reserves, transforming their central banks into a string of monetary roach motels where sovereign debt goes in but never comes out. We’ve been living on borrowed time — and spending Asians’ borrowed dimes.
This dynamic reinforced the Reaganite shibboleth that “deficits don’t matter” and the fact that nearly $5 trillion of the nation’s $12 trillion in “publicly held” debt is actually sequestered in the vaults of central banks. The destruction of fiscal rectitude under Ronald Reagan — one reason I resigned as his budget chief in 1985 — was the greatest of his many dramatic acts. It created a template for the Republicans’ utter abandonment of the balanced-budget policies of Calvin Coolidge and allowed George W. Bush to dive into the deep end, bankrupting the nation through two misbegotten and unfinanced wars, a giant expansion of Medicare and a tax-cutting spree for the wealthy that turned K Street lobbyists into the de facto office of national tax policy. In effect, the G.O.P. embraced Keynesianism — for the wealthy.
The explosion of the housing market, abetted by phony credit ratings, securitization shenanigans and willful malpractice by mortgage lenders, originators and brokers, has been well documented. Less known is the balance-sheet explosion among the top 10 Wall Street banks during the eight years ending in 2008. Though their tiny sliver of equity capital hardly grew, their dependence on unstable “hot money” soared as the regulatory harness the Glass-Steagall Act had wisely imposed during the Depression was totally dismantled.
Within weeks of the Lehman Brothers bankruptcy in September 2008, Washington, with Wall Street’s gun to its head, propped up the remnants of this financial mess in a panic-stricken melee of bailouts and money-printing that is the single most shameful chapter in American financial history.
There was never a remote threat of a Great Depression 2.0 or of a financial nuclear winter, contrary to the dire warnings of Ben S. Bernanke, the Fed chairman since 2006. The Great Fear — manifested by the stock market plunge when the House voted down the TARP bailout before caving and passing it — was purely another Wall Street concoction. Had President Bush and his Goldman Sachs adviser (a k a Treasury Secretary) Henry M. Paulson Jr. stood firm, the crisis would have burned out on its own and meted out to speculators the losses they so richly deserved. The Main Street banking system was never in serious jeopardy, ATMs were not going dark and the money market industry was not imploding.
Instead, the White House, Congress and the Fed, under Mr. Bush and then President Obama, made a series of desperate, reckless maneuvers that were not only unnecessary but ruinous. The auto bailouts, for example, simply shifted jobs around — particularly to the aging, electorally vital Rust Belt — rather than saving them. The “green energy” component of Mr. Obama’s stimulus was mainly a nearly $1 billion giveaway to crony capitalists, like the venture capitalist John Doerr and the self-proclaimed outer-space visionary Elon Musk, to make new toys for the affluent.
Less than 5 percent of the $800 billion Obama stimulus went to the truly needy for food stamps, earned-income tax credits and other forms of poverty relief. The preponderant share ended up in money dumps to state and local governments, pork-barrel infrastructure projects, business tax loopholes and indiscriminate middle-class tax cuts. The Democratic Keynesians, as intellectually bankrupt as their Republican counterparts (though less hypocritical), had no solution beyond handing out borrowed money to consumers, hoping they would buy a lawn mower, a flat-screen TV or, at least, dinner at Red Lobster.
But even Mr. Obama’s hopelessly glib policies could not match the audacity of the Fed, which dropped interest rates to zero and then digitally printed new money at the astounding rate of $600 million per hour. Fast-money speculators have been “purchasing” giant piles of Treasury debt and mortgage-backed securities, almost entirely by using short-term overnight money borrowed at essentially zero cost, thanks to the Fed. Uncle Ben has lined their pockets.
If and when the Fed — which now promises to get unemployment below 6.5 percent as long as inflation doesn’t exceed 2.5 percent — even hints at shrinking its balance sheet, it will elicit a tidal wave of sell orders, because even a modest drop in bond prices would destroy the arbitrageurs’ profits. Notwithstanding Mr. Bernanke’s assurances about eventually, gradually making a smooth exit, the Fed is domiciled in a monetary prison of its own making.
While the Fed fiddles, Congress burns. Self-titled fiscal hawks like Paul D. Ryan, the chairman of the House Budget Committee, are terrified of telling the truth: that the 10-year deficit is actually $15 trillion to $20 trillion, far larger than the Congressional Budget Office’s estimate of $7 trillion. Its latest forecast, which imagines 16.4 million new jobs in the next decade, compared with only 2.5 million in the last 10 years, is only one of the more extreme examples of Washington’s delusions.
Even a supposedly “bold” measure — linking the cost-of-living adjustment for Social Security payments to a different kind of inflation index — would save just $200 billion over a decade, amounting to hardly 1 percent of the problem. Mr. Ryan’s latest budget shamelessly gives Social Security and Medicare a 10-year pass, notwithstanding that a fair portion of their nearly $19 trillion cost over that decade would go to the affluent elderly. At the same time, his proposal for draconian 30 percent cuts over a decade on the $7 trillion safety net — Medicaid, food stamps and the earned-income tax credit — is another front in the G.O.P.’s war against the 99 percent.
Without any changes, over the next decade or so, the gross federal debt, now nearly $17 trillion, will hurtle toward $30 trillion and soar to 150 percent of gross domestic product from around 105 percent today. Since our constitutional stasis rules out any prospect of a “grand bargain,” the nation’s fiscal collapse will play out incrementally, like a Greek/Cypriot tragedy, in carefully choreographed crises over debt ceilings, continuing resolutions and temporary budgetary patches.
The future is bleak. The greatest construction boom in recorded history — China’s money dump on infrastructure over the last 15 years — is slowing. Brazil, India, Russia, Turkey, South Africa and all the other growing middle-income nations cannot make up for the shortfall in demand. The American machinery of monetary and fiscal stimulus has reached its limits. Japan is sinking into old-age bankruptcy and Europe into welfare-state senescence. The new rulers enthroned in Beijing last year know that after two decades of wild lending, speculation and building, even they will face a day of reckoning, too.
Indebtedness Dwarfs the Economy
MULTIMEDIA FEATURE: A Gallery of Economic Villains and Heroes
A gallery of “heroes” who championed sound money and fiscal rectitude and “villains” who led the United States down the path of insolvency.
THE state-wreck ahead is a far cry from the “Great Moderation” proclaimed in 2004 by Mr. Bernanke, who predicted that prosperity would be everlasting because the Fed had tamed the business cycle and, as late as March 2007, testified that the impact of the subprime meltdown “seems likely to be contained.” Instead of moderation, what’s at hand is a Great Deformation, arising from a rogue central bank that has abetted the Wall Street casino, crucified savers on a cross of zero interest rates and fueled a global commodity bubble that erodes Main Street living standards through rising food and energy prices — a form of inflation that the Fed fecklessly disregards in calculating inflation.
These policies have brought America to an end-stage metastasis. The way out would be so radical it can’t happen. It would necessitate a sweeping divorce of the state and the market economy. It would require a renunciation of crony capitalism and its first cousin: Keynesian economics in all its forms. The state would need to get out of the business of imperial hubris, economic uplift and social insurance and shift its focus to managing and financing an effective, affordable, means-tested safety net.
All this would require drastic deflation of the realm of politics and the abolition of incumbency itself, because the machinery of the state and the machinery of re-election have become conterminous. Prying them apart would entail sweeping constitutional surgery: amendments to give the president and members of Congress a single six-year term, with no re-election; providing 100 percent public financing for candidates; strictly limiting the duration of campaigns (say, to eight weeks); and prohibiting, for life, lobbying by anyone who has been on a legislative or executive payroll. It would also require overturning Citizens United and mandating that Congress pass a balanced budget, or face an automatic sequester of spending.
It would also require purging the corrosive financialization that has turned the economy into a giant casino since the 1970s. This would mean putting the great Wall Street banks out in the cold to compete as at-risk free enterprises, without access to cheap Fed loans or deposit insurance. Banks would be able to take deposits and make commercial loans, but be banned from trading, underwriting and money management in all its forms.
It would require, finally, benching the Fed’s central planners, and restoring the central bank’s original mission: to provide liquidity in times of crisis but never to buy government debt or try to micromanage the economy. Getting the Fed out of the financial markets is the only way to put free markets and genuine wealth creation back into capitalism.
That, of course, will never happen because there are trillions of dollars of assets, from Shanghai skyscrapers to Fortune 1000 stocks to the latest housing market “recovery,” artificially propped up by the Fed’s interest-rate repression. The United States is broke — fiscally, morally, intellectually — and the Fed has incited a global currency war (Japan just signed up, the Brazilians and Chinese are angry, and the German-dominated euro zone is crumbling) that will soon overwhelm it. When the latest bubble pops, there will be nothing to stop the collapse. If this sounds like advice to get out of the markets and hide out in cash, it is.
David A. Stockman is a former Republican congressman from Michigan, President Ronald Reagan’s budget director from 1981to 1985 and the author, most recently, of “The Great Deformation: The Corruption of Capitalism in America.”
February 25th, 2013 by olddog
By Anthony Wile
"Fiscal trouble ahead for most future retirees." Or so the Washington Post tells us in a recent column explaining why future retirees (Baby Boomers) are headed for considerable trouble. Grim reading, actually.
For the first time since the New Deal, a majority of Americans are headed toward a retirement in which they will be financially worse off than their parents, jeopardizing a long era of improved living standards for the nation's elderly, according to a growing consensus of new research.
This is worth commenting on because it only illustrates a larger point we've made a number of times: The system is broken and if you listen to mainstream financial advice you're going to end up homeless on a soup line hoping for dinner.
What is pernicious about articles like this one, in my humble view, is that they purport to be telling the truth but don't provide either context or historical accuracy. Here's more from the Post article:
The Great Recession and the weak recovery darkened the retirement picture for significant numbers of Americans. And the full extent of the damage is only now being grasped by experts and policymakers. There was already mounting concern for the long-term security of the country's rapidly graying population. Then the downturn destroyed 40 percent of Americans' personal wealth, while creating a long period of high unemployment and an environment in which savings accounts pay almost no interest. Although the surging stock market is approaching record highs, most of these gains are flowing to well-off Americans who already are in relatively good shape for retirement.
Liberal and conservative economists worry that the decline in retirement prospects marks a historic shift in a country that previously has fostered generations of improvement in the lives of the elderly. It is likely to have far-reaching implications, as an increasing number of retirees may be forced to double up with younger relatives or turn to social-service programs for support. "This is the first time that Americans are going to be relatively worse off than their parents or grandparents in old age," said Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research.
Advocates for older Americans are calling on the federal government to bolster Social Security benefits or to create a new layer of retirement help for future retirees. Others want employers and the government to do more to encourage retirement savings and to discourage workers from using the money for non-retirement purposes.
But those calls have been overwhelmed by concern about the nation's fast-growing long-term debt, which has left many policy-makers focused on ways to trim Social Security and other retirement benefits rather than increase them. The economic downturn exacerbated long-term factors that were already eroding the financial standing of aging Americans: an inexorable rise in health-care costs, growing debt among older Americans and a shift in responsibility from employers to workers to plan for retirement.
The article never explains the "Great Recession" but merely asserts it – like a fact of life. We are supposed to accept that these things occur without searching for the cause. But those who don't understand history are doomed to repeat it.
There were, of course, those who understood quite clearly what was about to happen. They did their best to warn us but the powers-that-be (and general population) remained complacent. Late in 2007, things took a turn for the worse. The economy began to crash and by 2008 the devastation had spread to the rest of the world and the "sovereign" debt crisis had begun to afflict Europe.
In Greece, Spain, Portugal – most of Southern and Eastern Europe – retirements have been reduced or have evaporated entirely as a result of the "Great Recession." In the US, tens of millions lost 50 percent of their life savings or more in the ongoing crashes of 2007 and 2008. And today, tens of millions more don't have anything else to lose.
While once children could have supported their aged parents, the current crisis has reduced the employment prospects for young people in much of Europe to nearly nil. None of this was expected by those involved but a lot of it was predicted by those who understood monetary history and were aware of its goals.
One can argue, of course, that this was part of a larger Money Power strategy to create a fiat dollar – and shove the world toward a single currency. If so, then the rest of the West's (especially the US's) monetary history makes a lot of sense. Sovereign overspending was utilized to generate the justification for a deal with Japan. Japan would buy US treasuries and US consumers would purchase Japanese products.
This elevated some Japanese companies to world class status and also made Japan a more consumerist and Westernized society. The same sort of thing happened in China in the later 1990s and 2000s. Africa is apparently next on the list to be consolidated. In each instance, a case is made for the transformative effects of capitalism but unfortunately, it is not capitalism that is being created but a kind corporatist mercantilism.
The Washington Post article seems to yearn for the past, when government programs were seen as helpful and effective. Here's the important graf:
The precarious situation comes after a long period of change that improved life for the nation's seniors starting with the enactment of Social Security in 1935. By the 1960s, retirees also benefitted from universal health insurance through Medicare and Medicaid, sharp increases in Social Security benefits and new protections enacted by the federal government for workers who received traditional pensions, which for decades were a standard employee benefit. The changes rescued millions of retirees from poverty, while lifting millions of others to prosperous retirements symbolized by vacation cruises, recreational vehicles and second homes. But now problems for future retirees seem to be closing in from all sides.
You see? This is a sentiment that is beyond simplistic. It is dangerous. The more that people put their trust – and financial health – into the proverbial hands of the state, the more apt they are to end up without the security they've counted on. We can see this today. It is not a hypothesis but a reality.
Historically speaking, modern corporatist states are not run for citizens' benefit. The concern that is expressed, the dialogue that is being presented every day, are merely distractions. Think of how many billions of words have been written about Western retirements, how to save for the future and how to invest in a profitable way. Despite all that has been talked about, written and otherwise presented, the current system is wrecked and people's prospects are getting worse not better.
Lately, I've noticed an uptick in people's positive emotional response to the markets and the economy. But the same misinformation and economic manipulation that occurred before is occurring now. Central banks have dumped tens of trillions into the larger marketplace and when that money begins to circulate rates will have to be raised and recoveries, such as they are, will be cut short. The dollar reserve system itself must be seen as in a kind of terminal decline as well. Sorry, folks.
Let price inflation move up even a little, and the carrying costs of US debt will likely become insupportable. These trends simply aren't being explained on a regular basis. Instead, we get alarmed articles about how a US "savings deficit" has to yield to targeted, government oriented financial programs. Alternatively, we get widely publicized policy battles about deficit reduction and continued and expanded "austerity." But neither government programs nor austerity will help salvage the larger economy, in my opinion.
Here's the good news, though: You don't have to worry about it.
There are practical steps you can take to help yourself. Some of them you'll find right within the pages of this website, TheDailyBell.com. Don't wait for government. Don't keep hoping that bureaucratic "wonkery" will come to the rescue. Recognize you have to do it yourself.
There are, of course, certain kinds of equity opportunities that you can invest in – if you can find a trusted advisor. And there are – or should be – steps you can take to move some of your holdings offshore and into precious metals or even real estate. There are plenty of other positive steps you can take on your own and within your community to ensure your and your family's safety.
We are still being taught to look toward government for the solution to our private retirement dilemmas and general prosperity. The last century should have taught us that this is a chimera – what we like to call a dominant social theme – that government and public spending are a substitute for individual responsibility.
Unfortunately, no matter how many articles are written, or how much is broadcast, reality doesn't change. The person responsible for you is … you. And if you are to have a good and hopefully prosperous life, you will have to take action to make it so.
What can I say when I cannot convince my children, or my wife, that every dollar you can spare must go into silver. Either bars and coins or coins only depending on the amount of your funds. Gold is a good place for savvy investors but the average blue collar worker with three or four hundred thousand saved and invested, is at a disadvantage over how and when to buy and sell. Also, every middle class investor has been brain washed into looking for return on investment. In good times that is the way to go, but this is a time for preserving your assets, not increasing them. The powers that be, are manipulating both metals as much as they can, but silver has always been the commodity that carried through to the end. Gold, by its very nature is more attractive to the powers that be, and will continue to fluctuate violently before the bankers lose control of it. Silver by contrast is the poor investor’s salvation, as it has always been the most stable in the long run of any commodity. Don’t take my word for it, as there are hundreds of knowledgeable advisers on the net. Sort them out according to common sense and put your money in silver before you lose it all. Paper investments are going to be toilet paper investments before this is over.
Right now, anyone who has stocked up on ammunition is making a killing, but the days of buying it cheap and in quantity are long gone. Ditto for most other necessities of life. Those who have waited have lost the chance to survive and prosper. If you take any of this advise to heart, make this your highest concern, If you don’t have it, you don’t own it. Take possession of your silver and protect it with your life. Stay away from paper instruments. They are paper dollars in disguise.