Saturday, July 26, 2008

DECLINE of EMPIRES The Signs of Decay








WALLSTREET BAILOUT: THE SOLUTUON


WALLSTREET BAILOUT: THE TRUTH : WAKE UP AMERICA


"Some people would like to see some heads roll, but as Robespierre discovered in the course of the French revolution, that just puts you knee-deep in headless aristocratic corpses, still with neither bread nor cake to feed to the peasants."

Speaking of peasants, everyone continues to repeat that the bailout is being financed by "the taxpayer," although it is unclear why our soon-to-be jobless and destitute taxpayer should be expected to cough up an extra trillion or more.

The taxpayer may soon need a bailout too. If this mythical taxpayer actually tried to borrow her share of a trillion dollars against her future earnings, what sane person would want to give her that loan?

Clearly, the gratuitous mention of the taxpayer is just a ruse designed to hide the rather obvious truth.




The bailout is actually going to be financed by foreign interests that hold US Dollar assets. Yes, the value of their holdings will go to zero, but they do not want this to happen suddenly. They wish to continue redeeming their US Dollar holdings for all manner of things of value, from capital equipment and intellectual property, which can be expatriated, to farmland and other means of production, which can be used in situ to grow food, mine ore, and so forth, which are then expatriated.

There is some optimal function for this great unwinding, which will allow foreigners to expropriate the maximum amount of value in the minimum amount of time before their efforts to redeem their remaining US Dollar holdings stop paying for themselves in terms of the value of the available stuff.




The BLOWBACK SYNDROME: Oil Wars and Overreach

Nobody Knows Anything


Financial collapse, as we are currently observing it, consists of two parts. One is that a part of the general population is forced to move, no longer able to afford the house they bought based on inflated assessments, forged income numbers, and foolish expectations of endless asset inflation. Since, technically, they should never have been allowed to buy these houses, and were only able to do so because of financial and political malfeasance, this is actually a healthy development.

The second part consists of men in expensive suits tossing bundles of suddenly worthless paper up in the air, ripping out their remaining hair, and (some of us might uncharitably hope) setting themselves on fire on the steps of the Federal Reserve. They, to express it in their own vernacular, "fucked up," and so this is also just as it should be.

The government response to this could be to offer some helpful homilies about "the wages of sin" and to open a few soup kitchens and flop houses in a variety of locations including Wall Street.

The message would be: "You former debt addicts and gamblers, as you say, 'fucked up,' and so this will really hurt for a long time. We will never let you anywhere near big money again. Get yourselves over to the soup kitchen, and bring your own bowl, because we don't do dishes."

This would result in a stable Stage 1 collapse - the Second Great Depression.

However, this is unlikely, because in the US the government happens to be debt addict and gambler number one. As individuals, we may have been as virtuous as we wished, but the government will have still run up exorbitant debts on our behalf. Every level of government, from local municipalities and authorities, which need the financial markets to finance their public works and public services, to the federal government, which relies on foreign investment to finance its endless wars, is addicted to public debt.

They know they cannot stop borrowing, and so they will do anything they can to keep the game going for as long as possible.

About the only thing the government currently seems it fit to do is extend further credit to those in trouble, by setting interest rates at far below inflation, by accepting worthless bits of paper as collateral and by pumping money into insolvent financial institutions. This has the effect of diluting the dollar, further undermining its value, and will, in due course, lead to hyperinflation, which is bad enough in any economy, but is especially serious for one dominated by imports.

As imports dry up and the associated parts of the economy shut down, we pass Stage 2: Commercial Collapse.



Lies, War, and Empire - Part I

Surviving Peak Oil: Obstacles to Relocation

Oil and natural gas depletion will soon begin to undermine the capacity of urban and metropolitan areas to sustain human life. Modern urban and metropolitan life depends on oil and natural gas for food production and distribution, residential heating, water purification and distribution, sanitation, and the power grid that delivers electricity for the pumping of gasoline and diesel, airports, communications, elevators, home heating controls, and automated building systems. As international food transport collapses, most oil rich nations face starvation too, regardless of how much oil they possess. Oil depletion means population decline for all urban areas.

The notion that urban and suburban dwellers will relocate to small villages in agricultural regions is unrealistic. In the ensuing Peak Oil generated global economic depression, the value of urban residential properties will plummet. Increasing unemployment will slow new house sales and accelerate mortgage and property tax foreclosures. With more and more urban homes up for sale, their prices will decline sharply.

And, as the price of urban property declines in value, rural property will increase in comparative value. Indeed, in the last few years, the prices of agricultural land have increased. Soon, to move to a rural area most urban home owners will have to sell at a low price and buy a rural property for a higher price. The financial loss in selling and buying property will stifle the relocation to rural regions for most people.

At the same time, the cost of building new homes in rural areas will increase with the increasing cost of oil and natural gas. Building materials (asphalt and fiberglass shingles, cement, plastic and aluminum siding, fiberglass insulation, glass, lumber, and bricks) are either made from oil or they are manufactured with the energy of oil, natural gas, and coal. All building materials and construction workers are transported using oil (diesel and gasoline).

Electricity that is used in the manufacture and construction of houses will also become more expensive. Coal (which is transported with diesel) and natural gas (which uses oil in exploration, drilling operations, and transport of workers) provide the energy for electric power generation. Thus coal and natural gas costs, as well as the cost of electricity, will increase with the increasing price of oil.

Similarly, the construction of residential water (wells and pumps) and sanitation systems (septic systems or outhouses in rural areas) will cost more and more as the price of oil increases.

Local governments would have to construct schools and some roads in rural areas with expanding populations in an era of declining local government revenues (due to declining property values and property taxes). Local governments would have to raise taxes for new infrastructure at a time when citizens will vociferously oppose tax increases.

In colder regions of the world, including most of Europe and the U.S., urban to rural relocation means people moving close to wood supplies for home heating, but many agricultural areas lack significant forest land.

Inertia and procrastination are powerful forces in determining human behavior. It is basic human nature to deal with non-routine problems when they become obvious, not before. Very few people will study the Peak Oil future carefully to determine how it will impact them. Denial is encouraged by pervasive public, media, government, and business ignorance of Peak Oil impacts. Indeed, those who become vocal about Peak Oil face ridicule by the vast majority of the ignorant.

The combination of these obstacles means that only those who have ample resources and knowledge of Peak Oil impacts will be able to relocate, if they act sooner rather than later. Relocation will thus resemble a trickle of the affluent, rather than a mass movement.

As the Peak Oil economic depression undermines the value of investments and urban property, most people will be stuck where they are. When the highways fail, the movement of people from urban to rural areas will cease. That time is years away, not decades.

Studies by scientific organizations and independent analysts indicate that global crude oil production will now begin to decline, from 74 million barrels per day to 60 million barrels per day by 2015. During the same time demand will increase 14%. This is equivalent to a 33% drop in 7 years. The price of oil will skyrocket like never before.

No one can reverse this trend, nor can we conserve our way out of this catastrophe. Because the demand for oil is so high, it will always exceed the level of production; thus oil depletion will proceed at the same rate until all recoverable oil is extracted.

Alternatives energies will not fill the gap. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment. The proponents of the electric economy, the hydrogen economy, or an algal biodiesel economy ignore the obvious. There is little capital, time, energy, or public will for such trillion dollar infrastructure makeovers.

The belief in alternative energies is so strong that most scientists avoid examining obvious questions – does the development of alternative energies consume more energy than they provide, and do alternative energies consume liquid fuels and give us electric power, which is not what we need?

The U.S. government provides no studies to advise the Congress and president on what to do with this catastrophe. Congress and the president are so inept they don’t even know that they should commission the National Academy of Sciences to study the energy crisis and the advise the nation on how to plan for Peak Oil impacts. The NAS is the only objective body that can develop policy with the best scientists from many fields to work together cooperatively to develop sound policy recommendations.

And the NAS is the only authoritative source for making such policy recommendations to the nation. Thus Congress and the president grope around in the dark, relying on energy company lobbyists and well meaning “sages” who offer some plan to save the nation, but who know little about energy policy and Peak Oil impacts. FEMA has no Peak Oil risk management plans. Contingency planning for Peak Oil is an oxymoron.

We are facing the collapse of the highways that depend on diesel trucks for maintenance of bridges, cleaning culverts to avoid road washouts, snow plowing, roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, transformers, steel for pylons, and high tension cables, all from far away. With the highways out, there will be no food coming in from "outside," and without the power grid virtually nothing works, including home heating, pumping of gasoline and diesel, airports, communications, and automated systems.

After the last power black out, the people living in rural areas will find that surviving will become increasing difficult without all of the goods from the “outside” (food, canning jars, fencing, roofing, hay, straw, seed, animal feed, plastic tarps, fertilizer, clothes, fabric, medicine, hardware, saws, wood stoves, etc.).

The survivors will be the very few who live in areas with good rain and soil and who prepared intelligently for a life without oil.


AND PURCHASED SILVER


SEPTEMBER 25, 2008 CFTC Relents and Probes Silver Market

Persistent Complaints of Foul Play Draw the Still-Skeptical Agency to Investigate

With silver prices falling this past summer, silver bugs world-wide set out to prove that their metal was in short supply and market manipulation was at work. They bombarded federal regulators with hundreds of emails crying foul play and demanded answers.

Though such pleas proved futile in the past, this time the rousing chorus grabbed regulators' attention. On Wednesday, the Commodity Futures Trading Commission confirmed that there's an investigation into the silver market.

The CFTC isn't yet convinced there's systemic wrongdoing and in May published a report saying as much. But the agency decided to take a fresh look, in part to show critics that it checks out complaints, and also to make sure there isn't something new to uncover.

"We take the threat of manipulation in the futures and options markets very seriously and employ a number of measures to prevent, identify and prosecute it," said Stephen Obie, acting director of the agency's division of enforcement.

Silver investors have argued that a handful of U.S. banks have been controlling a large portion of silver's short positions -- or bets that prices will decline -- on Comex division of the New York Mercantile Exchange. Official data from the CFTC showed that two U.S. banks had increased short positions in the silver futures market between July and August by 450% and controlled 25% of the total open interest.

"The proof that this selloff was criminal lies in public data," wrote Theodore Butler of Cape Elizabeth, Maine, in August in a silver newsletter. "The concentrated sale of such quantities in such a short time" caused silver's fall, wrote Mr. Butler, who for many years has been vocal about purported silver-market manipulation. In September he reiterated to readers that they should email the CFTC.

The CFTC had argued in May that the large banks that people assailed for manipulating the market were instead acting appropriately as market makers, who take on futures positions to offset their exposure in over-the-counter markets.

Therefore, these traders aren't "naked shorts" and won't benefit from long-term depressed silver prices.

Many analysts agree with the agency's conclusion. **(HA!! more save our butts crap!)

Silver stalwarts weren't persuaded. Jason Hommel, a newsletter writer based in Penn Valley, Calif., directed readers to visit their local coin shops at 2 p.m. on Sept. 2 to size up for themselves whether there was a silver shortage. From Michigan to North Carolina and beyond, he says, investors trekked to coin shops. Many reported no silver for sale.

Bart Chilton, one of the CFTC commissioners, said he has received about 700 emails from silver investors since August, far more than the estimated 100 he received from May to July. Mr. Chilton, a Democrat who has criticized the CFTC as doing a poor job communicating with consumers, says he has spent nights and weekends personally answering emails.

Historically, silver has been a volatile market. This year it saw a near-50% drop and remains down 9.5% on the year. Gold is up 6.5%. The agency has long heard from frustrated silver investors. In 2004, it published an open letter by Michael Gorham, then the agency's director of market oversight, after receiving more than 500 letters and emails from silver investors.

That the enforcement rather than oversight division is taking on the issue marks a difference from the CFTC's previous efforts regarding the silver market. The oversight division performs overall market surveillance. The enforcement division looks at activities in a specific time period



Chalmers Johnson Speaking Freely Pt. 1



Chalmers Johnson speaking freely Pt. 2




Ron Paul : Stop Dreaming


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We are now faced with the fact that tomorrow is today.
We are confronted with the fierce urgency of now.
In this unfolding conundrum of life and history there is such a thing as being too late…
We may cry out desperately for time to pause in her passage, but time is deaf to every plea and rushes on.
Over the bleached bones and jumbled residue of numerous civilizations are written the pathetic words: “Too late.”

—Martin Luther King, Jr.





UPDATE: SEPTEMBER 23 2008
Tip of the iceberg
23-Sep-08 06:35 pm


Question: What is this financial meltdown all about?

The sub-prime meltdown was at most - after recovery in liquidation - about $250 billion. A very large sum… but not enough to tank the U.S. economy.
The crisis has occured because the financial system allowed entities to place bets on whether or not those mortgages would ever be paid.

These bets are called Credit Default Swaps.

They are complex, but they allow someone to profit immensely if large numbers of subprime mortgages are not paid off and go into default.
The profit can be wildly out of proportion to the real amount of defaults, because speculators can push down the price of these instruments or derivatives tied to the subprime mortgages far beyond what the real rates of loss have been. The profits here can be beyond imagining. In fact, they can be so spectacular that one might well wonder if the whole sub-prime fiasco was not set up just to allow speculators to profit wildly on its collapse.
These Credit Default Swaps have been written (as insurance is written) as private contracts.

There is no government regulation of them.

Who writes these policies?

Banks, Investment banks, and Insurance companies.

They now owe the buyers of these Credit Default Swaps on junk mortgage debt trillions of dollars (see Warren Buffet).

It is this liability that is the bottomless pit of liability for the financial institutions of America.

Because these giant financial companies never dreamed that the subprime mortgage securities could fall as far as they did, they did not enter a potential liability for these Credit Default Swaps policies anywhere near their true liability - which again, is virtually bottomless… and they do not have a countervailing asset to pay off the liability.

This is what all of the big investment banks and banks and insurance companies missed.

This is what the federal government totally and utterly missed.
This is what the truly brilliant speculators in these instruments did not miss.
They could insure a liability they could also create and control.
This is the whirlpool sucking down financial America and all of America with it.

And it doesn’t end here.

Next, we are about to have a similar phenomenon happen with commercial mortgage debt, debt from mergers and acquisitions, credit card debt, and car loan debt.
Many trillions of dollars in Credit Default Swaps have been sold on all of this, and the prices of all of them have fallen and can be made to fall more.

The pit of loss is bottomless.

Warren Buffett, considered to be the smartest man in the world of finance, has called financial derivatives, and in particular Credit Default Swaps, “weapons of financial mass destruction.” This whole thing should never have happened. Now that it did happen, should the taxpayer pay to make the billionaire speculators whole on their bets? Simple question… should they not be tried for treason?

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One thing is for sure. Expecting a workable solution to this economic meltdown from a man as knee-jerk, dishonest and incomprehensible as John McCain would be an exercise in national self-destruction. He doesn't have anything real to say, and what he does say, he can't sell. He simply can't do the gig. A vote for McCain-Palin is absolutely a vote for the end of America as we know it.
McCain: Worse than you think


Mobile Broadcast News



NEW YORK, Sep 18, 2008 (BUSINESS WIRE) -- Effective September 18, 2008 and until further notice, each Fund named below will no longer offer any class of shares for purchase, except through dividend reinvestment.
PRIMARY FUND
PRIMARY II FUND
RESERVE LIQUID PERFORMANCE MONEY MARKET FUND
TREASURY & REPO FUND
U.S. GOVERNMENT FUND
U.S. TREASURY FUND
U.S. GOVERNMENT II FUND
of the Reserve Fund
INTERSTATE TAX-EXEMPT FUND
CALIFORNIA MUNICIPAL MONEY-MARKET FUND
CONNECTICUT MUNICIPAL MONEY-MARKET FUND
FLORIDA MUNICIPAL MONEY-MARKET FUND
MASSACHUSETTS MUNICIPAL MONEY-MARKET FUND
MICHIGAN MUNICIPAL MONEY-MARKET FUND
NEW JERSEY MUNICIPAL MONEY-MARKET FUND
OHIO MUNICIPAL MONEY-MARKET FUND
PENNSYLVANIA MUNICIPAL MONEY-MARKET FUND
VIRGINIA MUNICIPAL MONEY-MARKET FUND
of the Reserve Municipal Money-Market Trust II
NEW YORK MUNICIPAL MONEY-MARKET FUND
of the Reserve New York Municipal Money-Market Trust
ARIZONA MUNICIPAL MONEY-MARKET FUND
LOUISIANA MUNICIPAL MONEY-MARKET FUND
MINNESOTA MUNICIPAL MONEY-MARKET FUND
of the Reserve Municipal Money-Market Trust
RESERVE YIELD PLUS FUND
RESERVE YIELD PLUS INSTITUTIONAL FUND
of the Reserve Short-Term Investment Trust
Effective September 18, 2008 and until further notice, the
following Funds will each price its shares once a day at the
indicated time.

12:00p.m. Eastern Time
Interstate Tax-Exempt Fund, California Municipal Money-Market Fund, Connecticut Municipal Money-Market Fund, Florida Municipal Money-Market Fund, Massachusetts Municipal Money-Market Fund, Michigan Municipal Money-Market Fund, New Jersey Municipal Money-Market Fund, Ohio Municipal Money-Market Fund, Pennsylvania Municipal Money-Market Fund, Virginia Municipal Money-Market Fund, New York Municipal Money-Market Fund, Arizona Municipal Money-Market Fund, Louisiana Municipal Money-Market Fund, Minnesota Municipal Money-Market Fund.

2:00p.m. Eastern Time
U.S. Treasury Fund
5:00p.m. Eastern Time
Primary Fund, Treasury & Repo Fund, U.S. Government Fund, Reserve Yield Plus Fund and Reserve Yield Plus Institutional Fund, Reserve International Liquidity Fund Ltd., Reserve USD International Treasury & Repo Fund Ltd., Reserve USD International Treasury Fund Ltd., Reserve USD International Government Fund Ltd.
5:30 p.m. Eastern Time
Liquid Performance Money-Market Fund, Primary II Fund and the U.S. Government II Fund.

These times will now be the cut-off times for each Fund.

Effective September 18, 2008 and until further notice, proceeds from a redemption request for any Fund listed in this release will not be transmitted to an investor for a period of up to seven calendar days after the receipt of the redemption request. Shares do not earn dividends on the day the redemption is processed, regardless of the time the order is received.

The seven-day redemption delay will not apply to debit card transactions, Automated Clearinghouse transactions or check transactions written against your account in connection with any Fund provided that any such transaction from an investor, individually or in the aggregate, does not exceed $10,000.

AS ABOVE SO BELOW


Ron Paul: "Some Big Events Are About To Occur"
Congressman warns of "chaos about to be unleashed" on economic and political system by globalist intervention and world empire

Texas Congressman Ron Paul has warned the House that he is "convinced the time is now upon us that some Big Events are about to occur." that will cause liberty to go "into deep hibernation".

Paul told the House:

"These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed."

"There are reasons to believe this coming crisis is different and bigger than the world has ever experienced. Instead of using globalism in a positive fashion, it's been used to globalize all of the mistakes of the politicians, bureaucrats and central bankers." Paul continued.

In one of Paul's most memorable speeches to date, the Congressman spoke of rampant authoritarianism having replaced the principles of liberty that the United States was founded upon and warned that current empire building financed through inflation and debt signals a most frightening period in history.

"Our arrogance and aggressiveness have been used to promote a world empire backed by the most powerful army of history. This type of globalist intervention creates problems for all citizens of the world and fails to contribute to the well-being of the world's populations. Just think how our personal liberties have been trashed here at home in the last decade." Paul urged fellow representatives.

Paul outlined the history of the current economic crisis and alluded to key events such as the inception of the Federal Reserve System, the creation of the Bretton-Woods Monetary System and the creation of a "dollar bubble".

"This bubble is different and bigger for another reason." Paul argued.

"The central banks of the world secretly collude to centrally plan the world economy. I'm convinced that agreements among central banks to “monetize” U.S. debt these past 15 years have existed, although secretly and out of the reach of any oversight of anyone--especially the U.S. Congress that doesn't care, or just flat doesn't understand."

Yesterday, the Congressman also confronted Federal Reserve Chairman Ben Bernanke over what he described as a 35 plus year dollar bubble, telling him "You are probably the biggest taxer in the country", citing the inflationary fiat money system as the most unfair and regressive form of taxation there is.

A stunned Bernanke put up little resistance and simply agreed with Paul, stating “Congressman, I couldn’t agree with you more that inflation is a tax, and that inflation is currently too high.”

Paul also pointed out that government bail out packages for lenders will inevitably lead to a further increases in the already stratospheric national debt.

Ron Paul's entire speech before the House now follows:

Madam Speaker, I have, for the past 35 years, expressed my grave concern for the future of America . The course we have taken over the past century has threatened our liberties, security and prosperity. In spite of these long-held concerns, I have days--growing more frequent all the time--when I'm convinced the time is now upon us that some Big Events are about to occur. These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed.

Though the world has long suffered from the senselessness of wars that should have been avoided, my greatest fear is that the course on which we find ourselves will bring even greater conflict and economic suffering to the innocent people of the world--unless we quickly change our ways.

America , with her traditions of free markets and property rights, led the way toward great wealth and progress throughout the world as well as at home. Since we have lost our confidence in the principles of liberty, self reliance, hard work and frugality, and instead took on empire building, financed through inflation and debt, all this has changed. This is indeed frightening and an historic event.

The problem we face is not new in history. Authoritarianism has been around a long time. For centuries, inflation and debt have been used by tyrants to hold power, promote aggression, and provide “bread and circuses” for the people. The notion that a country can afford “guns and butter” with no significant penalty existed even before the 1960s when it became a popular slogan. It was then, though, we were told the Vietnam War and the massive expansion of the welfare state were not problems. The seventies proved that assumption wrong.

Today things are different from even ancient times or the 1970s. There is something to the argument that we are now a global economy. The world has more people and is more integrated due to modern technology, communications, and travel. If modern technology had been used to promote the ideas of liberty, free markets, sound money and trade, it would have ushered in a new golden age--a globalism we could accept.

Instead, the wealth and freedom we now enjoy are shrinking and rest upon a fragile philosophic infrastructure. It is not unlike the levies and bridges in our own country that our system of war and welfare has caused us to ignore.

I'm fearful that my concerns have been legitimate and may even be worse than I first thought. They are now at our doorstep. Time is short for making a course correction before this grand experiment in liberty goes into deep hibernation.

There are reasons to believe this coming crisis is different and bigger than the world has ever experienced. Instead of using globalism in a positive fashion, it's been used to globalize all of the mistakes of the politicians, bureaucrats and central bankers.

Being an unchallenged sole superpower was never accepted by us with a sense of humility and respect. Our arrogance and aggressiveness have been used to promote a world empire backed by the most powerful army of history. This type of globalist intervention creates problems for all citizens of the world and fails to contribute to the well-being of the world's populations. Just think how our personal liberties have been trashed here at home in the last decade.

The financial crisis, still in its early stages, is apparent to everyone: gasoline prices over $4 a gallon; skyrocketing education and medical-care costs; the collapse of the housing bubble; the bursting of the NASDAQ bubble; stock markets plunging; unemployment rising; massive underemployment; excessive government debt; and unmanageable personal debt. Little doubt exists as to whether we'll get stagflation. The question that will soon be asked is: When will the stagflation become an inflationary depression?

There are various reasons that the world economy has been globalized and the problems we face are worldwide. We cannot understand what we're facing without understanding fiat money and the long-developing dollar bubble.

There were several stages. From the inception of the Federal Reserve System in 1913 to 1933, the Central Bank established itself as the official dollar manager. By 1933, Americans could no longer own gold, thus removing restraint on the Federal Reserve to inflate for war and welfare.

By 1945, further restraints were removed by creating the Bretton-Woods Monetary System making the dollar the reserve currency of the world. This system lasted up until 1971. During the period between 1945 and 1971, some restraints on the Fed remained in place. Foreigners, but not Americans, could convert dollars to gold at $35 an ounce. Due to the excessive dollars being created, that system came to an end in 1971.

It's the post Bretton-Woods system that was responsible for globalizing inflation and markets and for generating a gigantic worldwide dollar bubble. That bubble is now bursting, and we're seeing what it's like to suffer the consequences of the many previous economic errors.

Ironically in these past 35 years, we have benefited from this very flawed system. Because the world accepted dollars as if they were gold, we only had to counterfeit more dollars, spend them overseas (indirectly encouraging our jobs to go overseas as well) and enjoy unearned prosperity. Those who took our dollars and gave us goods and services were only too anxious to loan those dollars back to us. This allowed us to export our inflation and delay the consequences we now are starting to see.

But it was never destined to last, and now we have to pay the piper. Our huge foreign debt must be paid or liquidated. Our entitlements are coming due just as the world has become more reluctant to hold dollars. The consequence of that decision is price inflation in this country--and that's what we are witnessing today. Already price inflation overseas is even higher than here at home as a consequence of foreign central banks' willingness to monetize our debt.

Printing dollars over long periods of time may not immediately push prices up--yet in time it always does. Now we're seeing catch-up for past inflating of the monetary supply. As bad as it is today with $4 a gallon gasoline, this is just the beginning. It's a gross distraction to hound away at “drill, drill, drill” as a solution to the dollar crisis and high gasoline prices. Its okay to let the market increase supplies and drill, but that issue is a gross distraction from the sins of deficits and Federal Reserve monetary shenanigans.

This bubble is different and bigger for another reason. The central banks of the world secretly collude to centrally plan the world economy. I'm convinced that agreements among central banks to “monetize” U.S. debt these past 15 years have existed, although secretly and out of the reach of any oversight of anyone--especially the U.S. Congress that doesn't care, or just flat doesn't understand. As this “gift” to us comes to an end, our problems worsen. The central banks and the various governments are very powerful, but eventually the markets overwhelm when the people who get stuck holding the bag (of bad dollars) catch on and spend the dollars into the economy with emotional zeal, thus igniting inflationary fever.

This time--since there are so many dollars and so many countries involved--the Fed has been able to “paper” over every approaching crisis for the past 15 years, especially with Alan Greenspan as Chairman of the Federal Reserve Board, which has allowed the bubble to become history's greatest.

The mistakes made with excessive credit at artificially low rates are huge, and the market is demanding a correction. This involves excessive debt, misdirected investments, over-investments, and all the other problems caused by the government when spending the money they should never have had. Foreign militarism, welfare handouts and $80 trillion entitlement promises are all coming to an end. We don't have the money or the wealth-creating capacity to catch up and care for all the needs that now exist because we rejected the market economy, sound money, self reliance and the principles of liberty.

Since the correction of all this misallocation of resources is necessary and must come, one can look for some good that may come as this “Big Event” unfolds.

There are two choices that people can make. The one choice that is unavailable to us is to limp along with the status quo and prop up the system with more debt, inflation and lies. That won't happen.

One of the two choices, and the one chosen so often by government in the past is that of rejecting the principles of liberty and resorting to even bigger and more authoritarian government. Some argue that giving dictatorial powers to the President, just as we have allowed him to run the American empire, is what we should do. That's the great danger, and in this post-911 atmosphere, too many Americans are seeking safety over freedom. We have already lost too many of our personal liberties already. Real fear of economic collapse could prompt central planners to act to such a degree that the New Deal of the 30's might look like Jefferson 's Declaration of Independence.

The more the government is allowed to do in taking over and running the economy, the deeper the depression gets and the longer it lasts. That was the story of the 30s and the early 40s, and the same mistakes are likely to be made again if we do not wake up.

But the good news is that it need not be so bad if we do the right thing. I saw “Something Big” happening in the past 18 months on the campaign trail. I was encouraged that we are capable of waking up and doing the right thing. I have literally met thousands of high school and college kids who are quite willing to accept the challenge and responsibility of a free society and reject the cradle-to-grave welfare that is promised them by so many do-good politicians.

If more hear the message of liberty, more will join in this effort. The failure of our foreign policy, welfare system, and monetary policies and virtually all government solutions are so readily apparent, it doesn't take that much convincing. But the positive message of how freedom works and why it's possible is what is urgently needed.

One of the best parts of accepting self reliance in a free society is that true personal satisfaction with one's own life can be achieved. This doesn't happen when the government assumes the role of guardian, parent or provider, because it eliminates a sense of pride. But the real problem is the government can't provide the safety and economic security that it claims. The so called good that government claims it can deliver is always achieved at the expense of someone else's freedom. It's a failed system and the young people know it.

Restoring a free society doesn't eliminate the need to get our house in order and to pay for the extravagant spending. But the pain would not be long-lasting if we did the right things, and best of all the empire would have to end for financial reasons. Our wars would stop, the attack on civil liberties would cease, and prosperity would return. The choices are clear: it shouldn't be difficult, but the big event now unfolding gives us a great opportunity to reverse the tide and resume the truly great American Revolution started in 1776. Opportunity knocks in spite of the urgency and the dangers we face.

Let's make “Something Big Is Happening” be the discovery that freedom works and is popular and the big economic and political event we're witnessing is a blessing in disguise.

SOURCE: House.gov/Paul


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Gold Ambush Tactics & Potpourri
by Jim Willie, CB. Editor, Hat Trick Letter
July 24, 2008


For the second time in the last several weeks, the gold market has been on the receiving end of ambushes. Leading up to their July 3rd announced rate hike, the Euro Central Bank strong hints prompted the last ambush. The gold futures contracts bear this out easily, as the big cartel players sold down the gold price with heavy paper supply simultaneously.
They had to do so.

When physical is in reduced supply, resort to trusty paper. After stabilizing in the 920 to 925 range, gold promptly rose to exceed 980, only to be ambushed yet again. The ambush consists of an unexplainable sudden $20 decline in midday, cheered by the majority but without any analysis of where the decline originated.

The motive for the early July ambush was simple.

The EuroCB revealed their intention to hike rates by 25 basis points, thus exposing the USDollar to even more risk of decay, degradation, and depreciation.

Without more corrupt interference in its market, the gold price would have surely vaulted past 1000 in July. So enter JPMorgan and their vile henchmen comrades. Who ever said the only noisy communists resided in Moscow and Beijing and Pyongyang? Central planning and market control have migrated as tools from communists to those conmen posing as capitalists and defender of freedom!

Let’s call the US Federal Reserve and its partners in collusion what they really are: better dressed and younger Politburo members equipped with better sales pitches. These guys resemble the Gosbank goons, whose three featured henchmen should have substituted Bernanke, Paulson, and Cox.

So they whacked gold immediately before the EuroCB decision to hike rates three weeks ago, since the news was to be so very harmful to the USDollar.

The next ambush came late last week and this week. What was the risk posed to the USDollar? This time the dire bank situation had turned desperate in its bloody atmosphere, laden with many ugly features and developments.

First, the corrupt block of legitimate shorting of bank stocks coupled with selective enforcement of naked shorting of bank stocks coupled with improper blame of bank stock woes assigned to those nasty short speculators.

So they engineered a short cover rally in the bank stocks that truly defies any claim as absurd that the US stock markets are fair, open, and driven by equilibrium, or free from scum.

Speaking of scum, consider that the new SCUM = Sacred Cow Untouchable Mountains of banking manure.

See the Sacred Cow SCUM list of banks forbidden from shorting, led by Goldman Sachs, JPMorgan, Fannie Mae, Freddie Mac, Merrill Lynch, Morgan Stanley, and Lehman.

Do you think their bank executives loaded up on option calls before the news, all tipped off? Sure!
Lost somewhere along the way was the legitimacy of shorting a stock when the company behind the stock was insolvent and fending off bankruptcy. The protected few sacred cows have one thing in common, being all related to the London Bullion Market Assn (LBMA).

Thanks to Seeking Alpha for that jewel of information, details in next month’s newsletter issue. So those very banks most closely associated with corruption of the precious metals market are the sacred cows most protected by totally obscene selective regulatory enforcement. By the way, few have thought this through. By limiting legit short procedures, the regulators have interfered with legitimate option trading activity, as managed by dealers. They typically short a stock after taking the opposite position to a legitimate option put short position. So look for the options market to be all mangled as well. Free market? Not a chance!

Second, the US Federal Reserve announced on Tuesday that their lending facilities would be made available to selective large hedge funds. Again, the keyword is selective. This opens many new questions. Certainly some hedge funds are working in concert with many entitled Wall Street firms as they busily wreck the national financial structure by supporting the unsupportable USTreasurys and by trying to destroy the indestructible gold & silver market. If not for acting as USGovt agents in price control, the system would give them up for carved dinners on the bankruptcy table. Give credit where due. These conmen wizard control freaks have wielded leverage and corruption for longer than the 31-year record for previous fiat currency survival.

Alright, so hedge funds will be given access to bond swaps by the USFed benefactor. Will some hedge funds be slaughtered much like Bear Stearns, for the same motive?

The Bear Stearns book contained too much short USDollar positions and too many long gold positions. When they appealed to the USFed for help, the USFed killed them instead. Now hedge funds will be in the same predicament.

A big hedge fund might be intentionally targeted by privileged Wall Street syndicated bank operators for a kill, with the fund’s unwanted positions liquidated, but its desired positions in need of protection seized by JPMorgan.

A hedge fund that is loaded with almost all unfriendly positions will just be killed outright, a typical tactic being a cutoff of credit by the Wall Street firm itself. The USFed will come to lend a helping hand, assuming some of the necessary load. This is American financial capitalism at its most desperate, most scummy, most bound by elite welfare, and most despicable.

This is the Fascist Business Model on display, showing yet another new facet of corruption. Few realize that USFed bond swaps are temporary, and cannot alleviate bank woes unless the USFed makes the swaps permanent.

THAT WILL NOT HAPPEN, since the USFed is not a charitable organization willing to kill itself for the public good. The public remains clueless, bewildered, and too confused even to respond or to object. It understand little of inflation, and less of banking procedures.

Amidst the latest situation with a bank system reeling, their stocks in need of a corrupt engineered bounce, and announcement of a broader rescue from USFed swaps to hedge funds, the news was so bad that gold had to be ambushed yet again.

The BKX bank stock index bounced very close to my stated 57 target, for which the bear triangle deserves the credit.

Give the banks another couple weeks, and the gravity force will push its rancid juices to the bottom line again. This sector amazingly enjoys the benefit of accounting quiet darkness in the middle months of quarters, precisely when lies and false spin can be promulgated safely, with more willingness by sheeple to gobble it up as valid research, when it is pure deceptive promotional propaganda.

THE BANKS WILL BE DILUTED INTO OBLIVION, AIDED ONLY BY RESTRICTIONS TO TRADES, that is my ongoing mantra. Within a couple weeks, gold will rise again unfettered by the illicit assault on real money.

The basic underlying problem has not gone away.

The housing prices continue down. The formal collateral for bank-held mortgage bonds continues to fall in value. When the USEconomy was heretically built atop a housing bubble by Greenspan policies and US corporation coopted acquiescence, a systemic breakdown was assured. England shares in this destruction outcome being assured. In the Untied States, expect a housing bear market of double strength, since the first one in year 2001 was interfered with. It was not eliminated, only delayed.

GOLD & ITS SUPPORT BOWL

Notice the rounded support bowl that eventually will lift the gold price upward significantly. Notice how the two key moving averages are still rising. The 20-week moving average should offer key support here. The strong long-term trendline points the way still. The MACD cyclical index shows a downside crossover, a minor victory for the evil ones, but actually only a delay. The gold price does not usually benefit from the summer season, and this is no exception. Beware when the summer gives way to autumn, as the gold price will fire beyond the 1000 mark with ease. Reaching 1200 before year end should be easy.

Anyone who thinks the bank sector is out of the woods is as stupid as a fence post, as corrupt as a Wall Street bond dealer, or as asleep as Rip Van Winkle.

Also, a very smart lady from San Francisco told me this morning that no contract rollovers in gold & silver will occur between next week and December. Silver will have almost as long an advantage.

The evil ones saw some easy money to grab from options over the 930 price, which was ripe for the picking, provided they could corruptly push the gold price down away from 1000. Regulators permit it, all for the greater good.

That greater good objective has managed to take a monetary inflation avalanche in the last several years, and deliver unprecedented price declines in many important asset groups like housing and asset backed bonds. Put that in economics textbooks!

Curiously, watch the gold price recover after the crude oil stops its decline, and very likely before oil stabilizes. The bank problems are not tied to oil, but to housing and mortgage bonds.

The next stage of bank crisis will indeed contain both an economic and oil shock component, since some businesses are already failing due to costs.

Really lousy housing data today serves as a reminder that the sector needs to be put back on the radar. Existing housing sales were down 2.6% sequentially, with inventory remaining huge at 11.1 months supply.

To those who said lower home prices would alleviate inventory supply, wrong! My analysis has steadily claimed that housing inventory would rise to much worse levels, pushed by foreclosures. As housing continues to swirl down in a spiral to the bottom of the toilet, gold will be lifted by the Third Law of Motion by Newton. With every action comes an equal and opposite reaction.
The corrupt selective enforcement by the Securities & Exchange Commission of the short stock rules will come to an end, since limited, and since under fire from numerous unexpected camps.

The season will turn to autumn, something the evil ones cannot overturn. The futures expiration rollovers will soon eliminate the temptation to steal option player money that sits waiting to be stolen. The broad rescue packages are soon to kick in, complete with astounding inflation consequences and implications. Gold responds to the profound assured USDollar supply consequences. So far, the great majority of the USFed rescues have been directed toward elite bond subsidies to bankers connected to the inner sanctum.

The next round of bailouts will be for mortgage holders, homeowners, and lenders who live closer to the Main Street economic circles and commerce rotaries, far from the ivory towers of unspeakable and worsening corruption.

SOME IMPORTANT POTPOURRI

The new housing & mortgage rescue plan has some missing pieces. The Federal Housing Administration had asked specifically for some risk price protection. They were denied. So the FHA risk is open-ended. For those who are unaware, the FHA controls the under-water mortgage bailout mechanism. The official package, which took eleven months to prepare, when it should have taken no more than three or four months, is entirely inadequate out of the gate.

It is 5% of what will ultimately be needed. The US Congress is very likely to fall for the bait of a quasi unlimited bailout tab for its quasi-govt guarantees for the Fannie Mae enterprise, which in no way is quasi-honest. It is the quintessential colossus of corrupt US mortgage finance, the blackest of black eyes ever to grace the US financial landscape in its modern history. For the Congress to offer any substantial backstop will guarantee not its survival, but instead the zoom of the gold price well past the $2000 price level, as in two thousand dollars per ounce.

We are witnessing the gradual process of granting a blank check to Fannie Mae for losses that in my estimation will amount to over $1 trillion. Even Bill Gross of PIMCO just yesterday raised his estimate to a cool $1 trillion in mortgage losses for banks as a group.

He said, “Nearly one trillion dollars of cumulative losses will finally mark the gravestones of this housing bubble.”

The Three Stooges of Bernanke, Paulson, and Cox appeared before the US Congress in order to gather in near total power to control the system they succeeded in destroying, and to force the USGovt to bail out the conmen who remain unprosecuted for bond fraud.

They appear before the nearly equally compromised august body of legislators in order to appeal for extending the regulatory powers, especially the SEC, without any new formal legal approval.

Rarely do they appear as duos, yet alone threesomes, a testament to their utter desperation.

Notice that the Congressional members still lick their boots, even though they are more responsible for the bank destruction than almost anybody. Their reward will be total power, bestowed by the sleepy servants, or at least their acquiescence.

Those responsible for the bank breakdown want total authority in a queer audacious maneuver.

Today Cox from the SEC was all alone in the congame before Congress.

Imagine corrupt conmen making a major appeal before compromised legislators who are mainly beholden to special interest lobbies.

Cox disrupted the bank rally by advising regulatory differences to continue for commercial banks versus investment banks. Or was it the horrendous housing news that sent the Dow Jones Industrial Index down over 200 points?

Perhaps it was realization that the bank sector short cover episode has ended almost as suddenly as it began?

The opportunities for graft and fraud will be huge and ripe. Look to the FHA to become the focus of that corruption, which writes the bailout check given to the original loan underwriter, since all it requires is paperwork from an appraisal for a hefty check written to the originator. Research the Hurricane Katrina relief effort, if you wish to observe corruption. One dollar in three is stolen are tainted by corruption.

The Fannie Mae bailout and eventual New Resolution Trust Corp will represent the largest relief effort known to modern mankind. It too will be corrupt to the core. Give it time to become larger, assuredly more corrupt.

A Fascist Business Model requires ever greater corruption, fraud, and criminal activity, much like a Ponzi Scheme, in order to continue.

It spreads like a cancer, and does not offer any protection whatsoever from external threats, but rather subjects the nation to immense internal threats.

The regulators and central bank are pushing for more power after their own failures.

Only in America!

And these clowns wonder why the crude oil price is rising!

And wonder why the USDollar is falling! Watch the USDollar and gold price respond to precisely these Congressional decisions. This is what my analysis has pointed to for several months, the extension of the USFed bank bailout to a Congressional bailout of mortgage holders and loan originators.

Why?

Because this is the mechanism for delivering monetary inflation directly into the USEconomy, which will officially permit better household finances and spending, officially enable more credit extension and lending by smaller bankers.

Finally, the general economy might realize some of the inflation benefits, like higher wages and more discretionary income and more spendable cash. It is all a ruse though, since costs will continue up. A race will ensue, with costs rising and wages chasing them.
Few seem to complain about the assault on free market capitalism.

One could detect Larry Kudlow from CNBC decrying the short sale restrictions in a rare moment of criticism.

The restrictions seem to be very consistent with the pathogenesis that is the Fascist Business Model. It is ok to buy bank stocks, but not ok any longer for energy stocks or crude oil contracts.

One of the primary objectives (admittedly finally) of the Iraq War was to boost via control the price of crude oil and secure cozy oil service contracts. Now that the USEconomy is reeling from the bitter fruit of their success, energy investments are shunned, in favor of bank investments. Selective enforcement is a hallmark of a rigged system. The rigged game has been going on for a long time.

Just look at the Commodity Futures Trading Commission (CFTC) and their selective hegemonist directives laid against precious metals in the past, their tacit approval (lack of formal recognition) of outsized short positions in precious metals on an ongoing chronic basis.

The US financial markets are now globally regarded as the most lopsided, unfair, and corrupted in the developed world. Find a more fair financial market in Colombia or Brazil, and perhaps more worthwhile investments. Talk about Brazil! Wow! They have achieved energy independence from ethanol based on sugar cane, which contains four to five times as much energy as corn per acre of land.

Then you have the Exchange Traded Fund proliferation. Some call it progress, to make it easier for investors to pursue broad strategies. Anything to make it easier for investors to do anything is a ruse. The ease to invest goes hand in hand with the ease to corrupt the same market.

The growth in ETFunds to match the price for commodities such as oil or natural gas or coal or gold or silver or grains or financial stocks or water stocks, this growth enables corruption by their managers. The GDX, for instance, managed by Goldman Sachs, is reported the vehicle for suppressing the very stocks it managed and that many precious metals advocates invest in.

My rule of thumb is that any fund managed by firms with a scummy reputation for fraud, market suppression, and other unprosecuted criminal activity is in no way, shape, or form legitimate, and probably the vehicle for further price suppression in a broader manner.

This rule eludes many smart folks in the gold community, who still believe JPMorgan runs a legitimate honest GLD gold metal fund and Barclays still runs a legitimate honest SLV silver metal fund.

Their supposed proof is that the rise in the gold and silver prices. That argument is about as stupid and lame as the claim that my Sioux rain dance conducted on my balcony produces rain every day here in Costa Rica during the month of July. In the statistics world we call this the confounded effect trap. The odd fact omitted is that July is smack dab in the middle of the rainy season.

Me encanta lluvia! Que asca, las fascistas!


One might take some solace that the powerful evil maestros from the ‘In Crowd’ have suffered some staggering bank & bond losses. Focus not just on the bank stocks and their bank bonds. Look to the stock exchange IPOs that are way down. They were all the rage a year or two ago, now down significantly. Of course, the maestros might have sold out earlier.

Look also to the private equity groups like Blackstone, whose shares have been slaughtered, to the dismay even of the Chinese Govt. The Asians will think twice before plunking down more money to any US financial firm, let alone an insolvent bank. Leave that fool’s errand to the Arab sheiks and Singaporeans. Qatar did not invest in Barclays, a total lie.

They were secretly bailed out by the Bank of England, with Qatari collusion. So goes the rumor from Europe.

Then there is the energy market. The XLE properly foretold the current decline in the crude oil price, as mentioned in the May Hat Trick Letter report. All the focus on mean dirty speculators pushing up the oil price is misdirected.

How else can large fortunes be properly hedged from huge USDollar risk, except in a huge and highly liquid market?

Pity the hedge funds and all those guys wearing propeller hats. They have been using recent strategies to go long energy and short financials. They are taking big losses now. The goofballs sitting as network anchors believe the US can drill its way out of trouble, by releasing obstacles from offshore locations, like the gorgeous California coast.

The golden state has become a wasteland, a fire zone both from nature and humankind. Its economy is in a depression. Its state budget can be expected to be slashed every several months, two done already. Job layoffs are staggering. To think that drilling will offer any relief in oil or gasoline or diesel prices in the next two years is moronic. Drill rigs require up to five years lead time. By then the crude oil price might be above $200 per barrel, with celebration on Wall Street when it goes below that level and is perceived to be cheap.

My eyes continue to be trained on the rising USTreasury Bond yields. The 2-year TBill yield has gone from 2.40% as a recent low up past 2.7% just in time for an important Treasury auction on Wednesday and today Thursday.

Bad timing! That yield has come down somewhat. The USGunment must pay up for borrowed funds, and a hefty amount is was, over $50 billion. The long-bond, the 10-year USTreasury Note, saw its yield jump from 3.8% as a recent low to 4.10% before relaxation. The ugly side effect is that 30-year mortgage rates hit 6.5% this week, a far cry from a more friendly 6.14% earlier in July.

Removal of talk about further USFed rate cuts has a built-in backfire on the housing market. Thus the USFed might find that it MUST cut rates in order to help banks and housing.

The cost to the USEconomy be damned!

Higher costs must be accommodated. Such is the tragic policy option afforded the inept gang of inflation engineers and economic statistic endorsement agents, who are left with two ugly choices, Sophie’s Choices.

Kill the USDollar or kill housing, not much of a choice.

A new chapter to the mythology treatise has been written. The slow motion collapse of the US financial system proceeds on schedule. The claim nowadays is made, that the USEconomy will remain protected from the bank system woes.

What a crock! No, the planned destruction all started with Greenspan’s acquiescence to irrational exuberance in 1994. He decided to amplify the US$ money supply out of step (faster) than economic growth, so long as the (rigged) Consumer Price Index remained calm.

The export of inflation helped to keep it down for a decade, but now that policy has backfired. The destruction required a key push by the 1999 grant of Most Favored Nation status to China.

That enabled removal of a large chunk of the US industrial base. The resulting poverty kept down the power of the proletariat laborer, a key opponent to Politburo central bankers. Doesn’t anyone realize central bankers are more communist in nature than capitalist? Sadly, Americans learned little in school, surely not how communists identified, and not how fascists are identified. The absence of viable income from added value enterprise gave birth to the Asset Based Economy, wherein the Untied States took the deadly pill.

This was not a red pill versus blue pill, but a hemlock pill. It built the economic foundation atop a housing bubble, and laced the entire banking system with an unstable temporary mortgage latticework. The risk price model formed the glue, and that too has begun to dissolve.

THE UGLIEST PART OF THE ENTIRE FINANCIAL PATHOGENESIS IS THAT MOMENTUM IN THE BREAKDOWN IS FIERCE, AND FEEDBACK LOOPS ARE UNSTOPPABLE, AS THEY FORCE DE-LEVERAGING AND POWERFUL CONTINUATION OF THE PRICE DECLINE FOR ALL ASSOCIATED ASSETS.

In its wake lie gold & silver, which benefit from the retreat from a burning collapsing building built of paper girders and paper walls, held by faulty risk price model glue.

Copyright © 2008 Jim Willie, CB

Editorial Archive

Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a Ph.D. in Statistics. His career has stretched over 24 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials.

Jim Willie CB is the editor of the “HAT TRICK LETTER” Use the below link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise like a cantilever during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces.

An historically unprecedented mess has been created by heretical central bankers and charlatan economic advisors, whose interference has irreversibly altered and damaged the world financial system. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

A tad of relevant geopolitics is covered as well. Articles in this series are promotional, an unabashed gesture to induce readers to subscribe.


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Rosie Revisited: A U.S.-Led Solution to Global Warming

Humanity has arrived at what political scientist William Ophuls called a genuine
“civilizational crossroads” and our options are stark.: Continue to avoid a major
energy transition and risk a permanent nightmare world for us and our children, or
make a swift, resolute transition to a largely carbon-free U.S. and global energy
infrastructure.

----------------------------------------------

America's middle-class collapse

By Robyn Blumner
Sunday, July 6, 2008

In case you haven't been keeping up with the fortunes of the fortunate, the private jet business is booming. In the first quarter of this year, shipments of private jets were up 41 percent. It seems that servicing America's elite is a thriving niche. There are so many new mega-yachts that owners can't keep them staffed, says The New York Observer.

Now, back on Earth, let's look at how the rest of us are doing. Hmm. Not so well. Even for those in steady jobs, there is a creeping sense of instability; a generalized disquiet and unspoken worry that sits on one's shoulders, adding drag to the day.

Packaged in this malaise is the spike in oil prices and what that will mean for gas prices and every other thing we buy, the bottoming out of the housing market, companies announcing huge layoffs and rises in food and health insurance costs outpacing salaries and wages.

This volatility has led to a shift in how we see ourselves. "Vulnerable" is probably the best descriptor. Our thoughts turn to hunkering down rather than plans for the future.

But what makes this coming decline in economic security different from the one visited upon American families in the 1970s, for example, is that we are much less well positioned to withstand the financial buffering. The work of Harvard law professor Elizabeth Warren indicates there is a coming collapse of the middle class and she can prove it with a raft of scary statistics and charts.

Warren says we are moving toward a two-class rather than a three-class society, where there is a somewhat larger upper class made up of the financially comfortable and then there is the rest of America, people who are "constantly living on the edge of a cliff." These are families who might appear to earn a decent income but they enjoy none of the financial security that we normally associate with middle-class status.

Warren compares the median American family of 1970 with that of 2003. She unpacks why our savings rate has dropped to zero from a rather healthy 11 percent of take-home pay in 1970, even as the family added Mom as a breadwinner.

Typically, blame for this lands on families themselves. They're spending themselves into penury by buying designer clothes for their kids and indulging in $4 lattes, say social commentators.

Not so, Warren counters. She says that Americans are actually spending far less in inflation-adjusted dollars for things like clothes and food, including eating out, than they did in 1970. What has substantially changed, Warren reports, is the cost of big-ticket, fixed expenses. So that even though the income of the median two-parent, two-child family is higher because both parents are employed, the family has less income available to shore itself up against a rough patch.

Housing costs for a medium-size house (which has gotten modestly bigger since 1970 by adding either a second bathroom or a third bedroom but not both) have increased 76 percent.

Health insurance costs are up 74 percent.

Also up sharply are taxes (due to the second income), child care and car-related expenses. Americans keep a car more than two years longer than they did 30 years ago but they now need two cars to get to two jobs.

These big, inflexible expenses cost the median family three-fourths of its two-earner income. In 1970 they cost half of the single breadwinner's. We now live in a country where there is no financial margin for most families to fall back on in case someone gets sick or a job is lost. Life is far riskier.

Then add on an energy crisis and you can almost hear the foundation cracking.

Sen. Bernie Sanders, I-Vermont, has received hundreds of e-mails from Americans who suddenly have found themselves in desperate financial straits. He's been reading their plaintive stories on the Senate floor. How they were middle-class but are no longer.

I fear that Warren's collapse has begun.

Robyn Blumner is a columnist for The St. Petersburg Times.

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LRE Prediction: GLOBAL FAMINE - 2010


Soil erosion is the “silent global crisis” undermining food production and water availability, as well as being responsible for 30 percent of the greenhouse gases driving climate change. Every year, some 62,000 square miles of land loses its vegetation and becomes degraded or turns into desert. A Cornell University study, which pulls together statistics on soil erosion from more than 125 sources, finds that the US is losing soil 10 times faster—and China and India are losing soil 30 to 40 times faster— than the natural replenishment rate. As a result of erosion over the past 40 years, 30 percent of the world’s arable land has become unproductive.

***
More than 23,000 representatives of private industry are working quietly with the FBI and the Department of Homeland Security to collect information on individuals. The members of this rapidly growing group, called InfraGard, receive secret warnings of terrorist threats before the public, and at times before elected officials. In return they provide information to the government. The ACLU warns, “There is evidence that InfraGard may be closer to a corporate TIPS program, turning private-sector corporations—some of which may be in a position to observe the activities of millions of individual customers—into surrogate eyes and ears for the FBI.” Aside from information sharing, members are expected to assist the government when martial law is declared. “They’re very much looped into our readiness capability,” says DHS spokeswoman Amy Kudwa. According to more than one interviewed member they have permission to shoot to kill in the event of martial law without fear of prosecution. As of late January 2008, InfraGard had 23,682 members, according to its website, www.infragard.net, which adds that, “350 of our nation’s Fortune 500 have representatives in InfraGard.”
***
Outrage is mounting as construction of the US-Mexico border wall moves forward, destroying all homes, schools, businesses, ecosystems as well as family, social and business connections in its path. In response to protest and legal actions, Chief of Homeland Security, Michael Chertoff is using the power granted him in the Real ID Act of 2005 to waive all laws that might slow barrier construction. According to the Congressional Research Service, this grant of phenomenal power is unprecedented: It gives an unelected, political appointee —Chertoff—sole discretion to ignore all federal laws. In 2005, when environmental groups opposed wall construction through a delicate San Diego estuary, Chertoff waived the National Environmental Policy Act, the National Historic Preservation Act, the Clean Water Act, National Wildlife Refuge Act, the Federal Water Pollution Act, and other statutes. Chertoff again used his exemption in Yuma, Arizona, in January 2007. In October 2007 he suspended nineteen laws that stood in the way of a two-mile section of border fence through a national conservation area in Arizona. He is currently threatening the same in southern Texas. No judicial review of Chertoff’s decisions is permitted—except for alleged constitutional violation, a route lawyers say has yet to be tried.
*******
Testimony in the Japanese Parliament, broadcast live nationwide on Japanese TV in January 2008, challenged the premise and validity of the Global War on Terror. Parliament members insisted upon an investigation into the War’s origin: the events of 9/11. Parliament Member Yukihisa Fujita pointed out that 24 Japanese citizens were killed on 9/11, yet the mandate of a Japanese Government criminal investigation never followed. “So far the only thing the government has said is that we think it was caused by Al Qaeda because President Bush told us so. We have not seen any real proof that it was Al Qaeda.” Fujita went on to extensively ask “about the suspicious information being uncovered and the doubts people world-wide are having about the events of 9/11.” Fujita received support for concluding that the reason for participating in the US War on Terror needs to be investigated and analyzed. After the testimony, Fujita says that many of his fellow Parliament members thanked him for the bravery it took to publicly address 9/11. He also received a death threat.
***
One month after the Invasion of Iraq the United States Federal Reserve began shipping $12 Billion in U.S. currency (United Nations impounded funds dating back from the first Gulf war which belonged to the Iraqi People) to Iraq where it was to be dispensed by the Coalition Provisional Authority for reconstruction. Incredibly, at least $9 billion has gone missing, unaccounted for because of mismanagement and lack of oversight. In a little over a year, the Fed shipped $12 Billion, in bricks weighing a total of 363 tons. There was no auditing arm established by the Pentagon to track the money. The Coalition Provisional Authority was literally a rogue agency within the US, with no formal documents establishing it. Run out of a home in La Jolla, California, it was a shell corporation with no certified public accountants on staff, its address of record a post-office box in the Bahamas where it is legally incorporated. That post-office box has been associated with shadowy offshore activities.
***

A New National Security Presidential Directive gives the President dictatorial powers when dealing with a “catastrophic emergency.” Under the plan Bush entrusts himself with leading the entire federal government, not just the Executive branch and he gives himself the responsibility for ensuring “continuity of constitutional government.” National Security Presidential Directive/NSPD 51’ and “Homeland Security Presidential Directive/HSPD-20” defines a “catastrophic emergency” in vague terms, which could include an event like a 911 attack or an earthquake in California, for the takeover of government by the Executive. The White House literally has given itself dictatorial power over the government, bypassing the US Congress and obliterating the separation of powers. The document hollowly emphasizes the need to ensure the Constitution, yet in clear breach of the constitution assurance of checks and balances, says the President shall lead all activities of the Federal government. The secretary of Homeland Security is also placed in charge of domestic “security.” This directive has been given no scrutiny by Congress and very little by the press.

-------------------------

reddit is a source for what's new and popular online. vote on links that you like or dislike and help decide what's popular, or submit your own!

Real power comes from health and wisdom, and yet the people running our governments today have neither; so they must fabricate false power through the use of firearms, fear and intimidation.

These are the weapons of the weak, and they will ultimately fall to the strength and courage of enlightened, health-infused individuals like Ron and Nadine from Living Libations.


Because when this whole grand house of cards comes crashing down, with systemic financial collapse, crop failures, water depletion, and infectious disease, all those parasitic employees of the federal government are going to find themselves utterly incapable of surviving in the real world. Without their diabetes meds, diet sodas and processed junk foods, they will quickly find themselves irrelevant to life on Earth, swept under the carpet of life like the dust from which they came.


Those who are too stupid to recognize real food are ultimately doomed to become food. For the worms, that is.

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