"Inflation has now been institutionalized at a fairly constant 5 percent per year. This has been determined to be the optimum level for generating the most revenue without causing public alarm. A 5 percent devaluation applies, not only to the money earned this year, but to all that is left over from previous years. At the end of the first year, a dollar is worth 95 cents. At the end of the second year, the 95 cents is reduced again by 5 percent, leaving its worth at 90 cents, and so on. By the time a person has worked 20 years, the government will have confiscated 64 percent of every dollar he saved over those years. By the time he has worked 45 years, the hidden tax will be 90 percent. The government will take virtually everything a person saves over a lifetime."
And this is not factoring in the probate courts or guardianship program.......in case there is anything left over.....
Showing posts with label Financials. Show all posts
Showing posts with label Financials. Show all posts
Friday, February 11, 2011
Tuesday, June 15, 2010
Take Control of Your Financial Future
by George Daniel
Note what the author of the article below, says about the USD and VIX; Although VIX is showing a possible bottom, it is an Hourly Chart, so a bottom would not necessarily project into a test of the April Hi. Instead, I am seeing a correction, possibly even to the 50% level, before heading down again. Price Action on the Daily Chart is at a Lower Channel Line and Horizontal Support Line, which should translate into at least a bounce up. From there, we will have to monitor for a Balance Point to get an exact Target and Reversal Low.
http://www.gold-eagle.com/editorials_08/vermeulen060610.html
The following Article is confirming what I have been SCREAMING at my Friends to heed, for the past couple of years --
http://www.gold-eagle.com/editorials_08/baltin060710.html
As he notes, "All battles are won BEFORE they are even fought." Buying Gold is the ULTIMATE safe hedge, but he does not extrapolate the coming Mother of All Bubbles in Equities. That is a train that we all must get on, in order to maximize returns --
http://www.thegreatbustahead.com/
So we will watch with keen interest, for signs of the Market Bottom, which I expect to come in no later than this autumn, but possibly even as early as beginning of August.
There is a Target in the S&P Futures at 960, which is about 9,600 in the Dow. I give it 60% odds to manifest. Meanwhile, we can expect a decent Retracement back up to about the 50% level from the Top in April. So a hedge against higher prices, would be to BUY Equities or Call Options at this time, up to 1/3 of our Allocated Capital. THEN be sure to put a Trailing Stop at 50% of profits. We shall see. Charts attached.
Good Trading,
George
georgearies77@hotmail.com
Note what the author of the article below, says about the USD and VIX; Although VIX is showing a possible bottom, it is an Hourly Chart, so a bottom would not necessarily project into a test of the April Hi. Instead, I am seeing a correction, possibly even to the 50% level, before heading down again. Price Action on the Daily Chart is at a Lower Channel Line and Horizontal Support Line, which should translate into at least a bounce up. From there, we will have to monitor for a Balance Point to get an exact Target and Reversal Low.
http://www.gold-eagle.com/editorials_08/vermeulen060610.html
The following Article is confirming what I have been SCREAMING at my Friends to heed, for the past couple of years --
http://www.gold-eagle.com/editorials_08/baltin060710.html
As he notes, "All battles are won BEFORE they are even fought." Buying Gold is the ULTIMATE safe hedge, but he does not extrapolate the coming Mother of All Bubbles in Equities. That is a train that we all must get on, in order to maximize returns --
http://www.thegreatbustahead.com/
So we will watch with keen interest, for signs of the Market Bottom, which I expect to come in no later than this autumn, but possibly even as early as beginning of August.
There is a Target in the S&P Futures at 960, which is about 9,600 in the Dow. I give it 60% odds to manifest. Meanwhile, we can expect a decent Retracement back up to about the 50% level from the Top in April. So a hedge against higher prices, would be to BUY Equities or Call Options at this time, up to 1/3 of our Allocated Capital. THEN be sure to put a Trailing Stop at 50% of profits. We shall see. Charts attached.
Good Trading,
George
georgearies77@hotmail.com
Click to enlarge:
Wednesday, February 3, 2010
PREDICTING DATE OF ECONOMIC COLLAPSE
Ray Elliott
We must first make assumptions on what Economic Collapse is. History tells us. All paper money falls into one of two catagories, those that have failed and those that are going to fail. They failed in the past (including United States currency) in a spiral of constantly losing value. The federal government continually increases the obligations that it must pay for. Buyers of federal debt slowly back away from buying long term debt and later will not purchase even short term debt. The government begins buying its own debt by issuing new paper money. As more paper money is issued it loses more and more of its value. When the public becomes aware that the issuance of paper money is out of control, and that holding it weeks or days will result in a loss of value, they attempt to convert the paper money that they have into assets that retains some value. To do this, they have to remove any cash they have from banks and other institutions and convert it to something else. What ensues is a run on the banks.
When will this happen? We have some clues because of the process that will take place prior to the event. To understand this process, we must look at a recent event that changed the politics of the United States. Scott Brown, a Republican was elected to the Massachusetts senate seat formerly held by Ted Kennedy. Just thirty days prior to this, he was thirty points behind in the polls. The mainstream media (MSM) have more influence on the general public than any other source. Generally the MSM support the liberal and socialistic candidates and ideas. So why was Senator Brown elected thirty days after he was 30 points behind?
The last thirty days created a change in the MSM reporting. Brown ran against Obama's unpopular policies. MSM broadcast and print articles began appearing that supported Brown. Incidents showing his opponent (Coakley) in an unfavorable light began appearing. The MSM and the liberal majority changed their minds in the last few weeks and Brown was elected. Loss of confidence in the paper dollar will occur in a similar fashion. However; it can occur at a much faster pace such as days and weeks instead of months.
The MSM generally is in favor of big government spending and supports the socialistic policies of the Obama administration. The problem with socialism is that eventually you run out of other people's money (Margaret Thatcher). At the point that MSM begins to see the hazards of the uncontrolled printing of money, the beginning of the end is near. Then the MSM will begin to report the REAL MONEY CRISIS. For those that ask, "When will the SHTF?" That is when.
The events that follow this are events that you will not want to be a part of. Long lines will appear at banks for those trying to get their money out while it still has some value. Paper money will be issued in greater and greater denominations. Food and other necessities of life will skyrocket in price. Soon a bank holiday will be declared while the government attempts to control the panic. Rules will be enforced that restrict how much money may be withdrawn at a time. Attempts will be made to "freeze" food prices. Payment for all good and services will be turned upside down. Everything will rapidly increase in price. Soon, the paper money you have will not buy the things that you need. At some point, $1,000 will not buy a pair of shoes.
The events that follow this are also predictable because they have happened before. Gold and silver become extremely valuable. Pre 1965 silver coins (they still have some silver in them) will become a known standard of value that is accepted by those that still have something to sell. The barter system for goods and services will return. People that want to eat will grow gardens. Most people who have had life savings in 401Ks will be poor again. The winners are the ones that have planned in advance and the ones that still have outstanding loans or mortgages. The mortgages will no longer have any value. Homeowners will be able to send a million dollar note to a mortgage holder and tell them to keep the change. The change will not buy a loaf of bread. Large cities will become dangerous places to be.
Those that plan ahead can avoid the most severe aspects of this scenario. It is up to each individual to plan ahead early enough to survive. A following article will outline some suggested courses of actions that any individual can implement.
February 2, 2010
Sunday, January 24, 2010
America's Impending Master Class Dictatorship
America's Impending Master Class Dictatorship
By Stewart Dougherty
Jan 22 2010 2:24PM
www.kitco.com
FOREWORD: At certain times, focusing on the big picture is important not just for investment success, but for personal welfare, and even survival. We believe such times are here. It is estimated that 98% of Americans have never held a gold coin in their hands. Yet 100% of Americans regularly handle Federal Reserve Notes. From a contrarian standpoint, the financial message from those two statistics is clear. Even so, gold is much more than money or an investment medium; it stands for liberty and throughout history has facilitated escape and ensured freedom. Never having touched a gold coin is the monetary equivalent to never having breathed fresh air, felt the warmth of sunshine, looked up at the stars or risen from the gutter. Fiat Federal Reserve Notes are becoming nothing more than sewage decomposing in the vast, toxic septic tank of predatory Washington politics, epic Federal Reserve arrogance and error, blatant Wall Street fraud and outright Master Class plunder. Below, we outline America’s troubling and compounding predicament, and urge you to think about how to protect yourself from its consequences, both financially and personally.
Thanks to the endless barrage of feel-good propaganda that daily assaults the American mind, best epitomized a few months ago by the “green shoots,” everything’s-coming-up-roses propaganda touted by Federal Reserve Chairman Bernanke, the citizens have no idea how disastrous the country’s fiscal, monetary and economic problems truly are. Nor do they perceive the rapidly increasing risk of a totalitarian nightmare descending upon the American Republic.
One stark and sobering way to frame the crisis is this: if the United States government were to nationalize (in other words, steal) every penny of private wealth accumulated by America’s citizens since the nation’s founding 235 years ago, the government would remain totally bankrupt.
According to the Federal Reserve’s most recent report on wealth, America’s private net worth was $53.4 trillion as of September, 2009. But at the same time, America’s debt and unfunded liabilities totaled at least $120,000,000,000,000.00 ($120 trillion), or 225% of the citizens’ net worth. Even if the government expropriated every dollar of private wealth in the nation, it would still have a deficit of $66,600,000,000,000.00 ($66.6 trillion), equal to $214,286.00 for every man, woman and child in America and roughly 500% of GDP. If the government does not directly seize the nation’s private wealth, then it will require $389,610 from each and every citizen to balance the country’s books. State, county and municipal debts and deficits are additional, already elephantine in many states (e.g., California, Illinois, New Jersey and New York) and growing at an alarming rate nationwide. In addition to the federal government, dozens of states are already bankrupt and sinking deeper into the morass every day.
The government continues to dig a deeper and deeper fiscal grave in which to bury its citizens. This year, the federal deficit will total at least $1,600,000,000,000.00 ($1.6 trillion), which represents overspending of $4,383,561,600.00 ($4.38 billion) per day. (The deficit during October and November, 2009, the first two months of Fiscal Year 2010, totaled $296,700,000,000.00 ($297 billion), or $4,863,934,000.00 ($4.9 billion) per day, a record.) Using the GAAP accounting method (which is what corporations are required to use because it presents a far more accurate and honest picture of a company’s finances than the cash accounting method primarily and misleadingly used by the U.S. government), the nation’s fiscal year 2009 deficit was roughly $9,000,000,000,000.00 ($9 trillion), or $24,700,000,000.00 ($24.7 billion) per day, as calculated by brilliant and well-respected economist John Williams. (www.shadowstats.com) Fiscal Year 2010’s cash- and GAAP-accounting deficits will likely be worse than 2009’s, given government bailout and new program spending that is on steroids and psychotic.
Putting Fiscal Year 2009’s $9,000,000,000,000.00 ($9 trillion) deficit another way, 17% of America’s private wealth, accumulated over a period of 235 years, was wiped out by just one year’s worth of government deficit spending insanity.
Given this, is it any surprise that Treasury Secretary Geithner has announced that the release of the nation’s FY 2009 supplemental GAAP financial statements has been delayed? Remember, this is the same Secretary Geithner who bullied people to cover up the sordid details of the AIG, or more accurately, the taxpayer-funded, multi-billion dollar, Santa Claus bailout and bonus bonanza for Goldman Sachs. Do you really think this government, characterized as it is by fiscal and monetary secrecy, lies, chicanery, cronyism and stonewalling, wants the people to know what is actually happening? Obviously, it does not, so it hides from the public the inexcusable facts.
It is estimated that the top 1% of Americans control roughly 40% of the nation’s wealth. In other words, 3 million people own $21,400,000,000,000.00 ($21.4 trillion) in net private assets, while the other 305 million own the remaining $32,000,000,000,000.00 ($32 trillion). 77,000,000 (77 million) Americans (the lowest 25%) have mean net assets of minus $2,300 ($-2,300.00) per person; they live from paycheck to paycheck, or on public assistance. The lower 50% of Americans own mean net assets of $27,800 each, about enough to purchase a modest car. Obviously, it would be impossible to retire on such an amount without significant government or other assistance. Meanwhile, the richest 10% of Americans possess mean net assets of $3,976,000.00 each, or 143 times those of the bottom 50%; the top 2% control assets worth more than 1,500 times those in the bottom 50%. When you combine these facts with Wall Street’s typical multi-million dollar annual bonuses, you get an idea of wealth inequality in America. Historically, such extreme inequality has been a well-documented breeding ground for totalitarianism.
If the government decides to expropriate (steal) or commandeer (e.g., force into Treasuries) America’s private wealth in order to buy survival time, such a measure will be designed to destroy the common citizens, not the elite. Insiders will be given advance warning about any such plan, and will be able to transfer their money offshore or into financial vehicles immune from harm. Assuming that the elite moves its money to safety, there would then be $120,000,000,000,000.00 ($120 trillion) in American debt and liabilities supported by only $32,000,000,000,000.00 ($32 trillion) in private net worth, for a deficit of $88,000,000,000,000.00 ($88 trillion). In that case, each American would owe $285,714.29 to balance the country’s books. (Remember to multiply this amount by every person in your household, including any infant children.)
If the common people suspect that something diabolical was in the works, a portion of the $32 trillion in non-elite wealth could be evacuated as well prior to a government expropriation and/or currency devaluation, resulting in less money for the government to steal. What these statistics mean is that it is absolutely impossible for the government to fund its debt and deficits, even if it steals all of the nation’s private wealth. Therefore, the government’s only solutions are either formal bankruptcy (outright debt repudiation and the dismantling of bankrupt government programs) or unprecedented American monetary inflation and debt monetization. If the government chooses to inflate its way out of this fiscal catastrophe, the United States dollar will essentially become worthless. You can be absolutely certain that a PhD. in economics, such as Dr. Bernanke, is well aware of these realities, despite what he might say in speeches. For that matter, so are Chinese schoolchildren, who, when patronized by Treasury Secretary Geithner about America’s “strong dollar,” laughed in his face. One day, perhaps America’s school children will receive a real education so that they, too, will know when to laugh at absurd propaganda.
The government has announced that during the fiscal years from 2010 through 2019, it will create an additional $9,000,000,000,000.00 ($9 trillion) in deficits, an amount that is almost certain to be understated by trillions given the country’s current economic trajectory. The government assumes that this vast additional deficit will be funded by others, such as the Chinese, as it is a statistical fact that the United States will be incapable of funding it.
Furthermore, with the budgetary equivalent of a straight face, the Office of Management and Budget reports in its long-term, inter-generational budget projection that the United States government will experience massive, non-stop deficits for the next 70 (SEVENTY) years, requiring the issuance of tens of trillions of dollars of additional debt. The OMB does not project even one year of surplus during the entire seventy year budget period.
These deficits and debts are now so gargantuan that they have become surreal abstractions impossible even for sophisticated financiers to begin to comprehend. The common citizen has absolutely no idea what these numbers mean, or imply for his or her future. The people have been deluded into thinking that America’s arrogant, egomaniacal, always-wrong-but-never-in-doubt fiscal witch doctors and charlatans, including Greenspan, Rubin, Summers, Geithner and Ponce de Bernanke, have discovered a Monetary Fountain of Youth that endlessly spits up free money from the center of earth, in a geyser of good will toward the United States. Unfortunately, this delusion is false: there is no Monetary Fountain of Youth, and contrary to the apparent beliefs of the self-deified man-gods in Washington, D.C., the debt and deficits are real, completely out of control, and 100% guaranteed to create catastrophic consequences for the nation and its people.
When government “representatives” deliberately sell into slavery the citizens of a so-called free Republic, they have committed treason against those people. This is exactly what has happened in the United States: the citizens have been sold into debt slavery that they and their descendants can never escape, because the debts piled onto their backs can never, ever be paid. Despite expensive and sophisticated brainwashing campaigns emanating from Washington, claiming that America can “grow” out of its deficits and debt, it is arithmetically impossible for the country to do so. The government’s statements that it can dig the nation out of its fiscal hole by digging an even deeper chasm have become parodies and perversions of even totally discredited and morally disgusting Keynesianism.
The people no longer have elected representatives; they have elected traitors.
The enslavement of the American people has been orchestrated by a pernicious Master Class that has taken the United States by the throat. This Master Class is now choking the nation to death as it accelerates its master plan to plunder the people’s dwindling remaining assets. The Master Class comprises politicians, the Wall Street money elite, the Federal Reserve, high-end government (including military) officials, government lobbyists and their paymasters, military suppliers and media oligarchs. The interests and mindset of the Master Class are so totally divorced from those of the average American citizen that it is utterly tone deaf and blind to the justifiable rage sweeping the nation. Its guiding ethics of greed, plunder, power, control and violence are so alien to mainstream American culture and thought that the Master Class might as well be an enemy invader from Mars. But the Master Class here, it is real and it is laying waste to America. To the members of the Master Class, the people are not fellow-citizens; they are instruments of labor, servitude and profit. At first, the Master Class viewed the citizens as serfs; now that they have raped and destroyed the national economy, while in the process amassing unprecedented wealth and power for themselves, they see the people as nothing more than slaves.
America’s public finances are now so completely dysfunctional and chaotic that something far worse than debt enslavement and monetary implosion, terrible curses unto themselves, looms on the horizon: namely, a Master Class-sponsored American dictatorship.
Throughout history, the type of situation in which America now finds itself has been a fertility factory for tyranny. The odds of an outright overthrow of the people by the Washington and Wall Street Axis, or more broadly, the Master Class are increasing dramatically. The fact that so few people believe an American dictatorship is possible is exactly why it is becoming likely.
Dictatorships have blighted history and ruined lives since the beginning of civilization. In recent times alone, tyrants such as Hitler, Stalin, Lenin, Ceausescu, Amin, Hussein, Mussolini, Tojo, Kim, Pinochet, Milosevic, Tito, Batista, Peron, Pol Pot, Mugabe, Marcos, Somoza, Mengistu, Bokassa, Sese Seko, Franco, Ho Chi Minh, Mao, and Castro have power-sprayed blood onto the screen of time and ravaged mankind with murder, torture and human oppression. A full catalog of history’s tyrants would require a book of hundreds of pages. In the past 100 years alone, over 200 million human beings have been annihilated by wars, ethnic cleansings and government assassinations. Just when we think that civilization has been able to rise above tyranny’s inhumanity and disgrace, a new dictator appears on the scene to start the process all over again. Every time this happens, fear and submission paralyze the vast majority of the affected masses, leading them to “follow orders” and lick autocracy’s blood-stained boots.
History has proven to tyrants that oppression works. In fact, it is easy to control a populace, once you control the money, markets, military (including police), media and minions (the recipients of welfare, social security, free health care, government jobs and the like, who are dependent upon the state and likely to be compliant). This is exactly where the United States is today.
Recent American events paint an ominous picture of a Master Class that is now in total control.
When 90% of the American people vehemently rejected the $700,000,000,000.00 ($700 billion) TARP bailout plan, the Master Class put it on a fast track and approved it anyway.
When a clear majority of the American people said no to a government takeover of Chrysler and GM, the Master Class poured billions of taxpayer dollars into those corporate sinkholes and took them over anyway.
When the people said no to multi-trillion dollar crony bailouts for the bankers and insurers whose corruption had caused global financial mayhem, the government pledged to those elite insiders more than $13,000,000,000,000.00 ($13 trillion) of the people’s money anyway.
When the people expressed astonishment and anger that Wall Street planned to pay itself record 2009 bonuses, in the midst of America’s worst-ever fiscal and financial crisis caused by them, Wall Street stuffed its pockets with taxpayer-supported bonus money anyway.
When the people said no to a proposed $40,000,000,000.00 ($40 billion) bailout of AIG and its elite trading partners such as Goldman Sachs (an amount that subsequently exploded to $180,000,000,000.00+ ($180+ billion)), the Master Class went underground, covertly misappropriated taxpayer money and made the payoffs anyway.
When Fannie Mae and Freddie Mac were nationalized at enormous taxpayer expense, the government approved $6,000,000.00 individual pay packages in 2009 (150 times the average American wage) for the CEOs of both failed companies anyway.
When a clear majority of the people said no to nationalized health care, even after being bombarded by a multi-million dollar, lie-drenched propaganda campaign designed to bamboozle them, the House and Senate passed nationalized health care bills anyway.
When more than seven million American workers lost their jobs and were subsisting on unemployment benefits and food stamps, federal government employees, who now earn DOUBLE what private sector workers earn, were given another round of pay and benefits increases anyway.
When private sector workers’ 401Ks and IRA retirement plans plummeted in value due to economic collapse and endemic Wall Street-orchestrated market corruption (including systemic front running, flash trading, naked short selling and other manipulations), government “defined benefit,” lifetime-cost-of-living-adjusted pension plans, despite already being underfunded by $2,000,000,000,000.00 ($2 trillion), were made richer than ever anyway.
The long, shameful litany of events signaling the total divorce between the Master Class and the people of the United States doesn’t stop there. It goes on and on.
The message from the American Master Class to the American people is simple and clear:
We Defy You.
Governments that openly defy the people are either already totalitarian or in the process of becoming so. Monetarily, the United States clearly functions as a totalitarian dictatorship already, with a Federal Reserve that operates in secrecy, creates limitless amounts of debt and currency at will, and showers trillions of dollars upon favored Master Class insiders with zero transparency or accountability whatsoever. The Federal Reserve is so shameless about its dictatorial powers that it flatly refuses to provide details about multi-trillion dollar bailouts and rescues of privileged elites, in open defiance of Congress and the people. The fact that they get away with these blatant acts of defiance demonstrates the true extent of the Master Class chokehold on America.
If the Master Class were a benign despot and if its policies and programs actually worked, that would be one thing. But that is not the case. Rather, its programs are in a complete shambles.
Every single government entitlement program in the United States is bankrupt. This includes Social Security ($17,500,000,000,000.00 underfunded; $17.5 trillion); Medicare Part A ($36,700,000,000,000.00 underfunded; $36.7 trillion); Medicare Part B ($37,000,000,000,000.00 underfunded; $37 trillion); Medicare Part D ($15,600,000,000,000 underfunded; $15.6 trillion), Government and military pensions ($2,000,000,000,000 underfunded; $2 trillion), Food Stamps (current underfunding difficult to measure because the number of recipients is exploding; hundreds of billions underfunded versus original projections, minimum); and the list goes on. The above underfunding amounts are NET of projected tax receipts over the next 50 years. But the current recession has invalidated virtually all long-term budget and tax receipt assumptions, meaning that the true underfunded amounts are now greater than current, already mind-boggling estimates.
While the above statistics are terrifying enough to any citizen with a functioning brain, what is Twilight Zone-eerie and a far more serious cause for alarm is the casual indifference with which the Master Class is now making the country’s dire and irreparable fiscal circumstances even worse.
The nationalized health care program will cost at least $1 trillion over the next ten years, and most likely multiples of that. It is being crammed down America’s throat by a bankrupt government that does not have the money today and will not have the money tomorrow to pay for it. Worse is the fact that the same government that has bankrupted each and every existing social program now intends to directly or indirectly control the health care of all citizens. Based on the government’s existing track record and the health care program’s enormous complexity, invasiveness and cost, the probability that it will become a national fiscal and humanitarian catastrophe is roughly 100%.
“Cap and Trade” is a multi-trillion dollar tax scam being foisted onto the American public without a legitimate debate or popular referendum. You might be surprised to learn that “Climate Revenues” are already included in the federal budget, starting with $79,000,000,000.00 ($79 billion) in fiscal year 2012, which begins only 20 months from now. During fiscal years 2012 through 2019, the government expects to collect $646,000,000,000.00 ($646 billion) in “Climate Revenues,” a completely new tax category. Have any of your elected traitors told you that they have enacted $646,000,000,000.00 ($646 billion) in “Climate” taxes beginning twenty months from now and continuing forever? These “Climate Revenues” are based on junk science, lies and hysteria, and have been pimped by greed-diseased parasites who seek to make billions from operating and manipulating the Cap and Trade “marketplace.” Favored elitists such as Hank Paulson, Al Gore, General Electric and Goldman Sachs, among others, have positioned themselves to profit from the nation’s upcoming Cap and Trade tax misery and economic debilitation.
The reality is that the giant Ponzi scheme called the United States of America is running out of money. In any Ponzi scheme, money must constantly be poured into the top of the funnel in order to pay the redeemers at the bottom. As the number of redeemers has grown, tax receipts have fallen far short of covering their withdrawals, a problem that has now become an outright government funding emergency further aggravated by the fiscal, financial and economic crises.
If the Washington and Wall Street Axis were not legally able to create and distribute counterfeit American money, the Ponzi scheme would have collapsed already. Trillions of new, out-of-thin-air, printing-press and electronic “dollars” have bought the Axis additional time, but new sources of revenue must immediately be found to keep the scam alive. Congress is fully aware of this reality. Outright tax increases would be bad politics during a recession that is morphing into a depression, and also bad for 2010 re-election campaigns, so they cannot be implemented. Therefore, Congress continues to advance the health care and Cap and Trade agendas, which are nothing but taxation Trojan Horses festooned in righteousness and sanctimony, despite overwhelming popular opposition.
If the nationalized health care program is passed, revenues and fees will kick in immediately in 2010, whereas costs will not begin to accrue until 2012 and later. The government plans to spend the revenues immediately to forestall a total fiscal collapse. Nationalized health care has absolutely nothing to do with health care; it has to do with creating an immediate revenue stream to help fix the current government funding crisis. Similarly, Cap and Trade has nothing to do with fixing the environment. It, too, is nothing more than a massive tax increase similarly designed to address the government’s epic funding shortfall, with thick slices of pork thrown in for privileged insiders and deceitful propagandists like bloated “Father of the Internet” and now “Savior of the World” Al Gore.
The last thing the Master Class wants is for the people to understand the disastrous state of the nation’s finances. Master Class brainwashing tells the people that it is “negative” and “pessimistic” to look at the facts, despite the fact that psychological health is characterized by the ability to identify and deal with reality. The Master Class wants the people to put on Bozo the Clown happy faces and let sugar plums and green shoots dance in their brains as they write one check after another to pay for Cap and Trade, nationalized health care, and a mind-numbing assortment of other taxes and fees.
On Sunday night, November 30, 2009, North Korea’s dictator Kim Jong Il (a name that says it all, even better than Made-off’s), an international poster child of Master Class psychological illness, devalued his country’s currency by 99%. This vicious tyrant, who has given birth to a national hell on earth, is chauffeured in Mercedes Benz limousines, drinks the finest imported whiskies and dines in imperial dignity on foods prepared by personal chefs while his citizens starve to death on the streets or, at best, eke out a subsistence living. Kim became paranoid that the people were actually figuring out how to improve their pitiful, impoverished lives in tiny ways, so he decided to wipe them out. The people were given one week to exchange their money at a rate of 100 old Won for 1 new Won. Any lifetime family savings in excess of roughly $700.00 were simply confiscated by the North Korean government. To keep the people in line, the military and police were put on high alert, fully prepared to kill or arrest any protesters.
On January 9, 2010, Venezuela’s strong man Hugo Chavez devalued his country’s currency by 50%, overnight and without warning, causing immediate inflation, shortages of food and supplies, and general financial chaos throughout the nation.
While you might be shaking your head in pity over the plight of the citizens of North Korea and Venezuela, ask yourself this: could this not happen in the United States?
On April 5, 1933, President Franklin D. Roosevelt, an Obama hero, outlawed gold ownership overnight by signing Executive Order 6102, which gave the people three and one-half weeks to surrender all privately-owned bullion to the government for a price of $20.67 per ounce. On January 30, 1934, nine months after collecting the people’s gold, Roosevelt devalued the dollar 69% overnight, by raising the gold price from $20.67 to $35.00 per ounce.
Since its founding in 1913, the Federal Reserve has devalued the dollar by 98+% thanks to endless money printing and debt creation, a corrosive and impoverishing process that is now accelerating. In the past year, the Fed has engineered $20+ trillion in bailouts, subsidies and guarantees for well-connected and lucky scavengers and opportunists, an amount equal to roughly 40% of the total private wealth created in this country since its inception. All because a few elitist government man-gods with an almost perfect record of error and failure have deemed in their imperial wisdom that it shall be so. The citizens, whose hard-earned wealth is being systematically destroyed by this continual, government-decreed monetary debasement were never invited to the debate or given a say, which is par for the course for dictatorships. This massive de facto devaluation now hangs over the people’s wealth like a great monetary sword of Damocles.
Conceptually, whether it is a 50% overnight devaluation in Venezuela, a 69% overnight devaluation in the United States, a 98% devaluation in America over time, or a 99% overnight devaluation in North Korea, what is the difference? The fact is: there is no difference; monetary debasements are all the same. In each and every case, the people’s wealth is stolen via government edict, while the people stand by helplessly and in shock.
So one must ask: For whom does the bell toll? A foreign “them,” or a domestic us? Who is to say that you will not be told tomorrow morning that, effective immediately, in accordance with some perversely named mandate such as the “American Monetary Security, Wealth Preservation and Terrorism Prevention Act,” enacted by emergency for “the safety of the nation and the financial well being of the citizens,” all existing currency and bank balances will be redenominated in “New Dollars,” at a conversion rate of 1 new for every 100 old currency units? Would this not simply be another, almost predictable act of defiance toward the American people by the Master Class? And if that happened, do you honestly believe that the Master Class would not have been alerted in advance and allowed to make special preparations for itself ahead of the devaluation? Do you think they intend to go down in the same ship as the people they defy? If such a currency devaluation were announced, what could you do about it? March on Washington? But how would you get there if your money had been wiped out?
Despite what you may hear from State Media, which includes virtually all establishment news organizations, particularly financial ones (e.g., CNBC), America is on the precipice. No bankrupt nation in history has ever defended or preserved the freedoms of its citizens. In fact, it has been the exact opposite: in desperation, bankrupt governments have routinely plundered their citizens’ wealth and imposed totalitarian controls. What will make things different for the United States, the largest debtor nation in all of recorded civilization?
The United States government cannot ever, possibly pay its debts, is pathologically incapable of controlling its spending or curbing its hunger for both domestic and international empire and persistently refuses to tell the American people the truth. If America’s citizens were told the truth and given the benefit of true leadership, as opposed to the guile and dishonesty of an endless array of political liars and hacks, perhaps they could rally and defeat the problems that afflict them. But instead, they are fed by the Master Class a steady diet of narcotic propaganda that deludes, confuses and enervates them. The truth cannot set people free if it is never told, and that is the essence of America’s gathering tragedy.
In a future article, we will detail specific developments you should watch for to chart the course of America’s ominous and potentially deadly national storm. The current, grave situation is already a clear call to action. When the signals become even more urgent, it will be late in the game to take protective action, and possibly too late. Citizens should begin to prepare now not just for financial survival, but for the personal security of themselves and their loved ones should a Category 5 economic and political hurricane rip into the nation, something that becomes more likely every day.
With respect to personal finances, in virtually every national currency devaluation and major political upheaval in the past, gold has represented sanctuary for the affected people. Gold has not just preserved wealth, but personal freedom as well. While governments can devalue fiat currencies, they cannot, by edict, devalue gold. Yes, they can try to manipulate its price, but unless all governments join in the collusion, ultimately the price will return to market. The market for gold is global, and demand exists in all nations and among all peoples. Should the government attempt to confiscate gold, it will be an outright admission that the financial system is collapsing, and the people will know better than to hand over to a corrupt government their only means of survival. The most important point is this: devalued currencies never rise again. Once they are destroyed, they are gone forever, and those whose wealth had once been denominated in them are wiped out. As you have no doubt heard before, not one fiat currency has survived over time, and that is an indisputable fact. More significantly, no fiat currency has ever suffered the abuse that has been inflicted upon the United States dollar, meaning that it is at extreme risk. Gold has been money for 5,000 years. It has not merely survived, it has prevailed over each and every fiat currency collapse throughout history. Given this, the most important financial question a person can ask him- or herself today is: How is my wealth denominated at this time? And given its denomination, is my wealth likely to be safe in current and evolving circumstances?
One thing is certain: as the epic David and Goliath monetary battle unfolds, between the people fighting to defend their hard-earned wealth on one side, and a Master Class that greedily and pathologically wants to plunder them on the other, the price of gold will become extremely volatile for a period of time. Volatility will, in fact, tell you that the War on Wealth has officially been declared, and will be your signal to do whatever you must to protect what is yours. As the government Goliath and its Master Class allies short tonnes of bullion into rigged futures markets in a desperate attempt to make gold look dangerous and risky, the Davids will be coming forth not just in the United States but from all corners of the globe, buying 10 grams here and one ounce there. There are 6.8 billion Davids, versus one diseased Master Class that numbers in the small millions. There is no way the Master Class can defeat the people, if the people finally rise up and say “No More of Your Plunder. No More of Your Cold and Soulless Financial Oppression. No More of Your Cynical and Godless Exploitation.”
If you find the above argument compelling, you should consider how to protect yourself from Executive Orders that could be issued at any time, under any pretext, and that could be extremely hostile to your financial and/or personal health and well being. One simple way to start is to purchase one ounce of gold for yourself and each member of your household, and much more if you can afford it. That is not financial advice; it is merely the common sense generously communicated to you by history.
Stewart Dougherty
By Stewart Dougherty
Jan 22 2010 2:24PM
www.kitco.com
FOREWORD: At certain times, focusing on the big picture is important not just for investment success, but for personal welfare, and even survival. We believe such times are here. It is estimated that 98% of Americans have never held a gold coin in their hands. Yet 100% of Americans regularly handle Federal Reserve Notes. From a contrarian standpoint, the financial message from those two statistics is clear. Even so, gold is much more than money or an investment medium; it stands for liberty and throughout history has facilitated escape and ensured freedom. Never having touched a gold coin is the monetary equivalent to never having breathed fresh air, felt the warmth of sunshine, looked up at the stars or risen from the gutter. Fiat Federal Reserve Notes are becoming nothing more than sewage decomposing in the vast, toxic septic tank of predatory Washington politics, epic Federal Reserve arrogance and error, blatant Wall Street fraud and outright Master Class plunder. Below, we outline America’s troubling and compounding predicament, and urge you to think about how to protect yourself from its consequences, both financially and personally.
Thanks to the endless barrage of feel-good propaganda that daily assaults the American mind, best epitomized a few months ago by the “green shoots,” everything’s-coming-up-roses propaganda touted by Federal Reserve Chairman Bernanke, the citizens have no idea how disastrous the country’s fiscal, monetary and economic problems truly are. Nor do they perceive the rapidly increasing risk of a totalitarian nightmare descending upon the American Republic.
One stark and sobering way to frame the crisis is this: if the United States government were to nationalize (in other words, steal) every penny of private wealth accumulated by America’s citizens since the nation’s founding 235 years ago, the government would remain totally bankrupt.
According to the Federal Reserve’s most recent report on wealth, America’s private net worth was $53.4 trillion as of September, 2009. But at the same time, America’s debt and unfunded liabilities totaled at least $120,000,000,000,000.00 ($120 trillion), or 225% of the citizens’ net worth. Even if the government expropriated every dollar of private wealth in the nation, it would still have a deficit of $66,600,000,000,000.00 ($66.6 trillion), equal to $214,286.00 for every man, woman and child in America and roughly 500% of GDP. If the government does not directly seize the nation’s private wealth, then it will require $389,610 from each and every citizen to balance the country’s books. State, county and municipal debts and deficits are additional, already elephantine in many states (e.g., California, Illinois, New Jersey and New York) and growing at an alarming rate nationwide. In addition to the federal government, dozens of states are already bankrupt and sinking deeper into the morass every day.
The government continues to dig a deeper and deeper fiscal grave in which to bury its citizens. This year, the federal deficit will total at least $1,600,000,000,000.00 ($1.6 trillion), which represents overspending of $4,383,561,600.00 ($4.38 billion) per day. (The deficit during October and November, 2009, the first two months of Fiscal Year 2010, totaled $296,700,000,000.00 ($297 billion), or $4,863,934,000.00 ($4.9 billion) per day, a record.) Using the GAAP accounting method (which is what corporations are required to use because it presents a far more accurate and honest picture of a company’s finances than the cash accounting method primarily and misleadingly used by the U.S. government), the nation’s fiscal year 2009 deficit was roughly $9,000,000,000,000.00 ($9 trillion), or $24,700,000,000.00 ($24.7 billion) per day, as calculated by brilliant and well-respected economist John Williams. (www.shadowstats.com) Fiscal Year 2010’s cash- and GAAP-accounting deficits will likely be worse than 2009’s, given government bailout and new program spending that is on steroids and psychotic.
Putting Fiscal Year 2009’s $9,000,000,000,000.00 ($9 trillion) deficit another way, 17% of America’s private wealth, accumulated over a period of 235 years, was wiped out by just one year’s worth of government deficit spending insanity.
Given this, is it any surprise that Treasury Secretary Geithner has announced that the release of the nation’s FY 2009 supplemental GAAP financial statements has been delayed? Remember, this is the same Secretary Geithner who bullied people to cover up the sordid details of the AIG, or more accurately, the taxpayer-funded, multi-billion dollar, Santa Claus bailout and bonus bonanza for Goldman Sachs. Do you really think this government, characterized as it is by fiscal and monetary secrecy, lies, chicanery, cronyism and stonewalling, wants the people to know what is actually happening? Obviously, it does not, so it hides from the public the inexcusable facts.
It is estimated that the top 1% of Americans control roughly 40% of the nation’s wealth. In other words, 3 million people own $21,400,000,000,000.00 ($21.4 trillion) in net private assets, while the other 305 million own the remaining $32,000,000,000,000.00 ($32 trillion). 77,000,000 (77 million) Americans (the lowest 25%) have mean net assets of minus $2,300 ($-2,300.00) per person; they live from paycheck to paycheck, or on public assistance. The lower 50% of Americans own mean net assets of $27,800 each, about enough to purchase a modest car. Obviously, it would be impossible to retire on such an amount without significant government or other assistance. Meanwhile, the richest 10% of Americans possess mean net assets of $3,976,000.00 each, or 143 times those of the bottom 50%; the top 2% control assets worth more than 1,500 times those in the bottom 50%. When you combine these facts with Wall Street’s typical multi-million dollar annual bonuses, you get an idea of wealth inequality in America. Historically, such extreme inequality has been a well-documented breeding ground for totalitarianism.
If the government decides to expropriate (steal) or commandeer (e.g., force into Treasuries) America’s private wealth in order to buy survival time, such a measure will be designed to destroy the common citizens, not the elite. Insiders will be given advance warning about any such plan, and will be able to transfer their money offshore or into financial vehicles immune from harm. Assuming that the elite moves its money to safety, there would then be $120,000,000,000,000.00 ($120 trillion) in American debt and liabilities supported by only $32,000,000,000,000.00 ($32 trillion) in private net worth, for a deficit of $88,000,000,000,000.00 ($88 trillion). In that case, each American would owe $285,714.29 to balance the country’s books. (Remember to multiply this amount by every person in your household, including any infant children.)
If the common people suspect that something diabolical was in the works, a portion of the $32 trillion in non-elite wealth could be evacuated as well prior to a government expropriation and/or currency devaluation, resulting in less money for the government to steal. What these statistics mean is that it is absolutely impossible for the government to fund its debt and deficits, even if it steals all of the nation’s private wealth. Therefore, the government’s only solutions are either formal bankruptcy (outright debt repudiation and the dismantling of bankrupt government programs) or unprecedented American monetary inflation and debt monetization. If the government chooses to inflate its way out of this fiscal catastrophe, the United States dollar will essentially become worthless. You can be absolutely certain that a PhD. in economics, such as Dr. Bernanke, is well aware of these realities, despite what he might say in speeches. For that matter, so are Chinese schoolchildren, who, when patronized by Treasury Secretary Geithner about America’s “strong dollar,” laughed in his face. One day, perhaps America’s school children will receive a real education so that they, too, will know when to laugh at absurd propaganda.
The government has announced that during the fiscal years from 2010 through 2019, it will create an additional $9,000,000,000,000.00 ($9 trillion) in deficits, an amount that is almost certain to be understated by trillions given the country’s current economic trajectory. The government assumes that this vast additional deficit will be funded by others, such as the Chinese, as it is a statistical fact that the United States will be incapable of funding it.
Furthermore, with the budgetary equivalent of a straight face, the Office of Management and Budget reports in its long-term, inter-generational budget projection that the United States government will experience massive, non-stop deficits for the next 70 (SEVENTY) years, requiring the issuance of tens of trillions of dollars of additional debt. The OMB does not project even one year of surplus during the entire seventy year budget period.
These deficits and debts are now so gargantuan that they have become surreal abstractions impossible even for sophisticated financiers to begin to comprehend. The common citizen has absolutely no idea what these numbers mean, or imply for his or her future. The people have been deluded into thinking that America’s arrogant, egomaniacal, always-wrong-but-never-in-doubt fiscal witch doctors and charlatans, including Greenspan, Rubin, Summers, Geithner and Ponce de Bernanke, have discovered a Monetary Fountain of Youth that endlessly spits up free money from the center of earth, in a geyser of good will toward the United States. Unfortunately, this delusion is false: there is no Monetary Fountain of Youth, and contrary to the apparent beliefs of the self-deified man-gods in Washington, D.C., the debt and deficits are real, completely out of control, and 100% guaranteed to create catastrophic consequences for the nation and its people.
When government “representatives” deliberately sell into slavery the citizens of a so-called free Republic, they have committed treason against those people. This is exactly what has happened in the United States: the citizens have been sold into debt slavery that they and their descendants can never escape, because the debts piled onto their backs can never, ever be paid. Despite expensive and sophisticated brainwashing campaigns emanating from Washington, claiming that America can “grow” out of its deficits and debt, it is arithmetically impossible for the country to do so. The government’s statements that it can dig the nation out of its fiscal hole by digging an even deeper chasm have become parodies and perversions of even totally discredited and morally disgusting Keynesianism.
The people no longer have elected representatives; they have elected traitors.
The enslavement of the American people has been orchestrated by a pernicious Master Class that has taken the United States by the throat. This Master Class is now choking the nation to death as it accelerates its master plan to plunder the people’s dwindling remaining assets. The Master Class comprises politicians, the Wall Street money elite, the Federal Reserve, high-end government (including military) officials, government lobbyists and their paymasters, military suppliers and media oligarchs. The interests and mindset of the Master Class are so totally divorced from those of the average American citizen that it is utterly tone deaf and blind to the justifiable rage sweeping the nation. Its guiding ethics of greed, plunder, power, control and violence are so alien to mainstream American culture and thought that the Master Class might as well be an enemy invader from Mars. But the Master Class here, it is real and it is laying waste to America. To the members of the Master Class, the people are not fellow-citizens; they are instruments of labor, servitude and profit. At first, the Master Class viewed the citizens as serfs; now that they have raped and destroyed the national economy, while in the process amassing unprecedented wealth and power for themselves, they see the people as nothing more than slaves.
America’s public finances are now so completely dysfunctional and chaotic that something far worse than debt enslavement and monetary implosion, terrible curses unto themselves, looms on the horizon: namely, a Master Class-sponsored American dictatorship.
Throughout history, the type of situation in which America now finds itself has been a fertility factory for tyranny. The odds of an outright overthrow of the people by the Washington and Wall Street Axis, or more broadly, the Master Class are increasing dramatically. The fact that so few people believe an American dictatorship is possible is exactly why it is becoming likely.
Dictatorships have blighted history and ruined lives since the beginning of civilization. In recent times alone, tyrants such as Hitler, Stalin, Lenin, Ceausescu, Amin, Hussein, Mussolini, Tojo, Kim, Pinochet, Milosevic, Tito, Batista, Peron, Pol Pot, Mugabe, Marcos, Somoza, Mengistu, Bokassa, Sese Seko, Franco, Ho Chi Minh, Mao, and Castro have power-sprayed blood onto the screen of time and ravaged mankind with murder, torture and human oppression. A full catalog of history’s tyrants would require a book of hundreds of pages. In the past 100 years alone, over 200 million human beings have been annihilated by wars, ethnic cleansings and government assassinations. Just when we think that civilization has been able to rise above tyranny’s inhumanity and disgrace, a new dictator appears on the scene to start the process all over again. Every time this happens, fear and submission paralyze the vast majority of the affected masses, leading them to “follow orders” and lick autocracy’s blood-stained boots.
History has proven to tyrants that oppression works. In fact, it is easy to control a populace, once you control the money, markets, military (including police), media and minions (the recipients of welfare, social security, free health care, government jobs and the like, who are dependent upon the state and likely to be compliant). This is exactly where the United States is today.
Recent American events paint an ominous picture of a Master Class that is now in total control.
When 90% of the American people vehemently rejected the $700,000,000,000.00 ($700 billion) TARP bailout plan, the Master Class put it on a fast track and approved it anyway.
When a clear majority of the American people said no to a government takeover of Chrysler and GM, the Master Class poured billions of taxpayer dollars into those corporate sinkholes and took them over anyway.
When the people said no to multi-trillion dollar crony bailouts for the bankers and insurers whose corruption had caused global financial mayhem, the government pledged to those elite insiders more than $13,000,000,000,000.00 ($13 trillion) of the people’s money anyway.
When the people expressed astonishment and anger that Wall Street planned to pay itself record 2009 bonuses, in the midst of America’s worst-ever fiscal and financial crisis caused by them, Wall Street stuffed its pockets with taxpayer-supported bonus money anyway.
When the people said no to a proposed $40,000,000,000.00 ($40 billion) bailout of AIG and its elite trading partners such as Goldman Sachs (an amount that subsequently exploded to $180,000,000,000.00+ ($180+ billion)), the Master Class went underground, covertly misappropriated taxpayer money and made the payoffs anyway.
When Fannie Mae and Freddie Mac were nationalized at enormous taxpayer expense, the government approved $6,000,000.00 individual pay packages in 2009 (150 times the average American wage) for the CEOs of both failed companies anyway.
When a clear majority of the people said no to nationalized health care, even after being bombarded by a multi-million dollar, lie-drenched propaganda campaign designed to bamboozle them, the House and Senate passed nationalized health care bills anyway.
When more than seven million American workers lost their jobs and were subsisting on unemployment benefits and food stamps, federal government employees, who now earn DOUBLE what private sector workers earn, were given another round of pay and benefits increases anyway.
When private sector workers’ 401Ks and IRA retirement plans plummeted in value due to economic collapse and endemic Wall Street-orchestrated market corruption (including systemic front running, flash trading, naked short selling and other manipulations), government “defined benefit,” lifetime-cost-of-living-adjusted pension plans, despite already being underfunded by $2,000,000,000,000.00 ($2 trillion), were made richer than ever anyway.
The long, shameful litany of events signaling the total divorce between the Master Class and the people of the United States doesn’t stop there. It goes on and on.
The message from the American Master Class to the American people is simple and clear:
We Defy You.
Governments that openly defy the people are either already totalitarian or in the process of becoming so. Monetarily, the United States clearly functions as a totalitarian dictatorship already, with a Federal Reserve that operates in secrecy, creates limitless amounts of debt and currency at will, and showers trillions of dollars upon favored Master Class insiders with zero transparency or accountability whatsoever. The Federal Reserve is so shameless about its dictatorial powers that it flatly refuses to provide details about multi-trillion dollar bailouts and rescues of privileged elites, in open defiance of Congress and the people. The fact that they get away with these blatant acts of defiance demonstrates the true extent of the Master Class chokehold on America.
If the Master Class were a benign despot and if its policies and programs actually worked, that would be one thing. But that is not the case. Rather, its programs are in a complete shambles.
Every single government entitlement program in the United States is bankrupt. This includes Social Security ($17,500,000,000,000.00 underfunded; $17.5 trillion); Medicare Part A ($36,700,000,000,000.00 underfunded; $36.7 trillion); Medicare Part B ($37,000,000,000,000.00 underfunded; $37 trillion); Medicare Part D ($15,600,000,000,000 underfunded; $15.6 trillion), Government and military pensions ($2,000,000,000,000 underfunded; $2 trillion), Food Stamps (current underfunding difficult to measure because the number of recipients is exploding; hundreds of billions underfunded versus original projections, minimum); and the list goes on. The above underfunding amounts are NET of projected tax receipts over the next 50 years. But the current recession has invalidated virtually all long-term budget and tax receipt assumptions, meaning that the true underfunded amounts are now greater than current, already mind-boggling estimates.
While the above statistics are terrifying enough to any citizen with a functioning brain, what is Twilight Zone-eerie and a far more serious cause for alarm is the casual indifference with which the Master Class is now making the country’s dire and irreparable fiscal circumstances even worse.
The nationalized health care program will cost at least $1 trillion over the next ten years, and most likely multiples of that. It is being crammed down America’s throat by a bankrupt government that does not have the money today and will not have the money tomorrow to pay for it. Worse is the fact that the same government that has bankrupted each and every existing social program now intends to directly or indirectly control the health care of all citizens. Based on the government’s existing track record and the health care program’s enormous complexity, invasiveness and cost, the probability that it will become a national fiscal and humanitarian catastrophe is roughly 100%.
“Cap and Trade” is a multi-trillion dollar tax scam being foisted onto the American public without a legitimate debate or popular referendum. You might be surprised to learn that “Climate Revenues” are already included in the federal budget, starting with $79,000,000,000.00 ($79 billion) in fiscal year 2012, which begins only 20 months from now. During fiscal years 2012 through 2019, the government expects to collect $646,000,000,000.00 ($646 billion) in “Climate Revenues,” a completely new tax category. Have any of your elected traitors told you that they have enacted $646,000,000,000.00 ($646 billion) in “Climate” taxes beginning twenty months from now and continuing forever? These “Climate Revenues” are based on junk science, lies and hysteria, and have been pimped by greed-diseased parasites who seek to make billions from operating and manipulating the Cap and Trade “marketplace.” Favored elitists such as Hank Paulson, Al Gore, General Electric and Goldman Sachs, among others, have positioned themselves to profit from the nation’s upcoming Cap and Trade tax misery and economic debilitation.
The reality is that the giant Ponzi scheme called the United States of America is running out of money. In any Ponzi scheme, money must constantly be poured into the top of the funnel in order to pay the redeemers at the bottom. As the number of redeemers has grown, tax receipts have fallen far short of covering their withdrawals, a problem that has now become an outright government funding emergency further aggravated by the fiscal, financial and economic crises.
If the Washington and Wall Street Axis were not legally able to create and distribute counterfeit American money, the Ponzi scheme would have collapsed already. Trillions of new, out-of-thin-air, printing-press and electronic “dollars” have bought the Axis additional time, but new sources of revenue must immediately be found to keep the scam alive. Congress is fully aware of this reality. Outright tax increases would be bad politics during a recession that is morphing into a depression, and also bad for 2010 re-election campaigns, so they cannot be implemented. Therefore, Congress continues to advance the health care and Cap and Trade agendas, which are nothing but taxation Trojan Horses festooned in righteousness and sanctimony, despite overwhelming popular opposition.
If the nationalized health care program is passed, revenues and fees will kick in immediately in 2010, whereas costs will not begin to accrue until 2012 and later. The government plans to spend the revenues immediately to forestall a total fiscal collapse. Nationalized health care has absolutely nothing to do with health care; it has to do with creating an immediate revenue stream to help fix the current government funding crisis. Similarly, Cap and Trade has nothing to do with fixing the environment. It, too, is nothing more than a massive tax increase similarly designed to address the government’s epic funding shortfall, with thick slices of pork thrown in for privileged insiders and deceitful propagandists like bloated “Father of the Internet” and now “Savior of the World” Al Gore.
The last thing the Master Class wants is for the people to understand the disastrous state of the nation’s finances. Master Class brainwashing tells the people that it is “negative” and “pessimistic” to look at the facts, despite the fact that psychological health is characterized by the ability to identify and deal with reality. The Master Class wants the people to put on Bozo the Clown happy faces and let sugar plums and green shoots dance in their brains as they write one check after another to pay for Cap and Trade, nationalized health care, and a mind-numbing assortment of other taxes and fees.
On Sunday night, November 30, 2009, North Korea’s dictator Kim Jong Il (a name that says it all, even better than Made-off’s), an international poster child of Master Class psychological illness, devalued his country’s currency by 99%. This vicious tyrant, who has given birth to a national hell on earth, is chauffeured in Mercedes Benz limousines, drinks the finest imported whiskies and dines in imperial dignity on foods prepared by personal chefs while his citizens starve to death on the streets or, at best, eke out a subsistence living. Kim became paranoid that the people were actually figuring out how to improve their pitiful, impoverished lives in tiny ways, so he decided to wipe them out. The people were given one week to exchange their money at a rate of 100 old Won for 1 new Won. Any lifetime family savings in excess of roughly $700.00 were simply confiscated by the North Korean government. To keep the people in line, the military and police were put on high alert, fully prepared to kill or arrest any protesters.
On January 9, 2010, Venezuela’s strong man Hugo Chavez devalued his country’s currency by 50%, overnight and without warning, causing immediate inflation, shortages of food and supplies, and general financial chaos throughout the nation.
While you might be shaking your head in pity over the plight of the citizens of North Korea and Venezuela, ask yourself this: could this not happen in the United States?
On April 5, 1933, President Franklin D. Roosevelt, an Obama hero, outlawed gold ownership overnight by signing Executive Order 6102, which gave the people three and one-half weeks to surrender all privately-owned bullion to the government for a price of $20.67 per ounce. On January 30, 1934, nine months after collecting the people’s gold, Roosevelt devalued the dollar 69% overnight, by raising the gold price from $20.67 to $35.00 per ounce.
Since its founding in 1913, the Federal Reserve has devalued the dollar by 98+% thanks to endless money printing and debt creation, a corrosive and impoverishing process that is now accelerating. In the past year, the Fed has engineered $20+ trillion in bailouts, subsidies and guarantees for well-connected and lucky scavengers and opportunists, an amount equal to roughly 40% of the total private wealth created in this country since its inception. All because a few elitist government man-gods with an almost perfect record of error and failure have deemed in their imperial wisdom that it shall be so. The citizens, whose hard-earned wealth is being systematically destroyed by this continual, government-decreed monetary debasement were never invited to the debate or given a say, which is par for the course for dictatorships. This massive de facto devaluation now hangs over the people’s wealth like a great monetary sword of Damocles.
Conceptually, whether it is a 50% overnight devaluation in Venezuela, a 69% overnight devaluation in the United States, a 98% devaluation in America over time, or a 99% overnight devaluation in North Korea, what is the difference? The fact is: there is no difference; monetary debasements are all the same. In each and every case, the people’s wealth is stolen via government edict, while the people stand by helplessly and in shock.
So one must ask: For whom does the bell toll? A foreign “them,” or a domestic us? Who is to say that you will not be told tomorrow morning that, effective immediately, in accordance with some perversely named mandate such as the “American Monetary Security, Wealth Preservation and Terrorism Prevention Act,” enacted by emergency for “the safety of the nation and the financial well being of the citizens,” all existing currency and bank balances will be redenominated in “New Dollars,” at a conversion rate of 1 new for every 100 old currency units? Would this not simply be another, almost predictable act of defiance toward the American people by the Master Class? And if that happened, do you honestly believe that the Master Class would not have been alerted in advance and allowed to make special preparations for itself ahead of the devaluation? Do you think they intend to go down in the same ship as the people they defy? If such a currency devaluation were announced, what could you do about it? March on Washington? But how would you get there if your money had been wiped out?
Despite what you may hear from State Media, which includes virtually all establishment news organizations, particularly financial ones (e.g., CNBC), America is on the precipice. No bankrupt nation in history has ever defended or preserved the freedoms of its citizens. In fact, it has been the exact opposite: in desperation, bankrupt governments have routinely plundered their citizens’ wealth and imposed totalitarian controls. What will make things different for the United States, the largest debtor nation in all of recorded civilization?
The United States government cannot ever, possibly pay its debts, is pathologically incapable of controlling its spending or curbing its hunger for both domestic and international empire and persistently refuses to tell the American people the truth. If America’s citizens were told the truth and given the benefit of true leadership, as opposed to the guile and dishonesty of an endless array of political liars and hacks, perhaps they could rally and defeat the problems that afflict them. But instead, they are fed by the Master Class a steady diet of narcotic propaganda that deludes, confuses and enervates them. The truth cannot set people free if it is never told, and that is the essence of America’s gathering tragedy.
In a future article, we will detail specific developments you should watch for to chart the course of America’s ominous and potentially deadly national storm. The current, grave situation is already a clear call to action. When the signals become even more urgent, it will be late in the game to take protective action, and possibly too late. Citizens should begin to prepare now not just for financial survival, but for the personal security of themselves and their loved ones should a Category 5 economic and political hurricane rip into the nation, something that becomes more likely every day.
With respect to personal finances, in virtually every national currency devaluation and major political upheaval in the past, gold has represented sanctuary for the affected people. Gold has not just preserved wealth, but personal freedom as well. While governments can devalue fiat currencies, they cannot, by edict, devalue gold. Yes, they can try to manipulate its price, but unless all governments join in the collusion, ultimately the price will return to market. The market for gold is global, and demand exists in all nations and among all peoples. Should the government attempt to confiscate gold, it will be an outright admission that the financial system is collapsing, and the people will know better than to hand over to a corrupt government their only means of survival. The most important point is this: devalued currencies never rise again. Once they are destroyed, they are gone forever, and those whose wealth had once been denominated in them are wiped out. As you have no doubt heard before, not one fiat currency has survived over time, and that is an indisputable fact. More significantly, no fiat currency has ever suffered the abuse that has been inflicted upon the United States dollar, meaning that it is at extreme risk. Gold has been money for 5,000 years. It has not merely survived, it has prevailed over each and every fiat currency collapse throughout history. Given this, the most important financial question a person can ask him- or herself today is: How is my wealth denominated at this time? And given its denomination, is my wealth likely to be safe in current and evolving circumstances?
One thing is certain: as the epic David and Goliath monetary battle unfolds, between the people fighting to defend their hard-earned wealth on one side, and a Master Class that greedily and pathologically wants to plunder them on the other, the price of gold will become extremely volatile for a period of time. Volatility will, in fact, tell you that the War on Wealth has officially been declared, and will be your signal to do whatever you must to protect what is yours. As the government Goliath and its Master Class allies short tonnes of bullion into rigged futures markets in a desperate attempt to make gold look dangerous and risky, the Davids will be coming forth not just in the United States but from all corners of the globe, buying 10 grams here and one ounce there. There are 6.8 billion Davids, versus one diseased Master Class that numbers in the small millions. There is no way the Master Class can defeat the people, if the people finally rise up and say “No More of Your Plunder. No More of Your Cold and Soulless Financial Oppression. No More of Your Cynical and Godless Exploitation.”
If you find the above argument compelling, you should consider how to protect yourself from Executive Orders that could be issued at any time, under any pretext, and that could be extremely hostile to your financial and/or personal health and well being. One simple way to start is to purchase one ounce of gold for yourself and each member of your household, and much more if you can afford it. That is not financial advice; it is merely the common sense generously communicated to you by history.
Stewart Dougherty
Wednesday, December 30, 2009
U.S. Government: The New Growth Industry
(Editor's Note: This article originally appeared in Jason Farkas' November 6 "Weekly Insight" column of EWI's intensive Currency and Interest Rates Specialty Services.) The United States is facing a lot of problems, but one U.S. industry remains strong. It has access to capital and has increased in size every single year since 2000. Should you invest in this industry? Don't bother -- you already have. This mystery industry is the U.S. government, and its unbridled growth remains a reason to be bearish on the U.S. economy. Don’t be fooled into thinking the Great Recession is over because of the 3.5% gain in third-quarter GDP. The only reason for the uptick was the government’s contribution, as seen in the chart (courtesy of the Cato Institute):
A chance reading of a book on technical analysis and the Austrian school of economics led Jason Farkas, CMT, to EWI. Prior to joining the firm, Jason worked for 14 years as a futures, options and equity trader. He has been tutored by some of the best investment minds, including legendary trader Dick Diamond. You can read Jason's Weekly Insights every Friday in EWI's intensive Currency and Interest Rates Specialty Services.
Read the entire article =>>here
Monday, December 7, 2009
The Dubai Financial Nuke
The Dubai Financial Nuke
Clive Maund
What was really odd about yesterday was that we saw a big dollar breakout, but Treasuries fell heavily. We are now believed to be on the verge of another massive deflationary downwave, similar to last year, but worse. However, this time it is very possible that while we will see a flight to cash, we will not witness a stampede into Treasuries, or at least not on anywhere near the same scale. So what is going on here? - what are the principal underlying dynamics? Anyone who has had the misfortune to watch a nuke exploding, misfortune because you get irradiated, knows that first you see a very bright flash, then there is a period of tranquillity as the flash dies down and the mushroom cloud starts to rise, before the shockwave hits, when things get pretty rough to say the least.
You've seen the flash - now get ready for the shockwave...
What happened in Dubai just over a week ago was the bright flash, and the media have used the intervening period before the shockwave hits to reassure everyone that everything is going to be just fine - "You just relax, nothing will come of it, it's only $60 billion down the drain or whatever - have a cup of tea". The trouble is that it's not $60 billion at all - the reality is that this is a default on a massively larger scale. Dubai was a vast sinkhole into which western banks and governments unquestioningly poured not just billions but trillions of dollars which was then leveraged enormously by means of derivatives enabling Dubai to build itself up into a latter day Rome, with a level of opulence and extravagence that would have made Caesar green with envy.
When people think of Dubai the things that come to mind are the massively extravagent 7-star hotels, the towering record breaking skyscraper, palm-shaped island resort complexes etc and forests of new office buildings and apartments etc. What the vast majority don't realize is that the stupendous leverage afforded by derivatives has in addition enabled Dubai to create an immense global empire of businesses, most of the elements of which are broke, having racked up staggering levels of debt. Dubai is the nexus of the derivatives pyramid and it is flat, stony broke. Where did all the money come from to pay for all these things? - why from taxpayers and pension fund contributors the world over of course, but especially in the US, with Wall St acting as a giant conduit sluicing a torrent of cash into Dubai. The interesting thing is that there was never any accountability - countries and companies vied with each other for the privelege of pumping money into the exalted kingdom, seduced by its supposedly limitless oil wealth, and requesting or requiring guarantees was regarded as impolite. Now that Dubai is broke, the Dubai government has suddenly distanced itself from Dubai World, and the attitude towards the Western banks and governments who have poured trillions into Dubai is "Tough luck - you lose, suckers". What this means is that trillions of dollars which are now counted as assets on the balance sheets of banks worldwide and especially in the US are actually liabilities. So what do you think is going to happen to the stock prices of these banks - and stockmarkets generally, when the world wakes up and acknowledges this reality - when the shockwave hits?? Small wonder that the charts for Goldman Sachs and J P Morgan look very like the market charts before the '87 crash, but that was "small potatoes" compared to what is coming down the pipe this time.
Go ahead, take a good look at it - after all, You helped pay for it!.
If money panics out of commodities and stocks it has to go somewhere. Last year, as we know, it took refuge in US Treasuries, especially short-term Treasuries and it drove the dollar up as massive across the board liquidation went first into cash which was then used to buy Treasuries. While we can expect a similar dynamic to be in play this time round, largely because most investors simply don't have the imagination to think of an alternative to US Treasuries, there is a complicating factor, as highlighted repeatedly by Karl Denninger in his recent highly pertinent articles, which is that the US has been making a mockery of foreign Treasury buyers on an ever increasing scale with its endless monetization and ramping of the money supply - in effect treating them as morons by paying them zilch interest rates and undermining the dollar at the same time. They are right - they are morons, who are one way or another are going to get what's coming to them - after all, who but an imbecile buys the debt of a bankrupt country? However, there is a saying that "you can't fool all of the people all of the time" and foreign Treasury buyers and holders are getting increasingly fed up with their cavalier treatment at the hands of the US, and, in the absence of another deflationary implosion causing a renewed flight into the dollar and Treasuries, they look set to start dumping them, which as Denninger points out would set in train a "death spiral" of rising interest rates one consequence of which would obviously be a crashing stockmarket. So whether we see a rising dollar or a falling dollar it`s "Zugzwang" for the US stockmarket and economy - any move made loses, as does no move.
The rate of advance of the broad stockmarket has been slowing for months. On the 6-month chart for the S&P500 index we can see that it appears to have arrived at the top point of a large "Distribution Dome". If this Dome is valid - and it appears to be so - then we can expect the market to turn seriously lower soon, and we should remain aware that markets generally drop twice as fast as they go up, so it will not have to contact the Dome boundary on the way down - on the contrary, given the parlous fundamentals outlined above it will probably drop like a rock.
Bank stocks look set to be particularly hard hit in the event of a second downwave. This is apparent from their deteriorating relative strength in recent months - they are already very close to crashing key support as is clear on the charts for Goldman Sachs and J P Morgan. These 2 elite companies have had the richest of pickings during the financial crisis - being at the front of the line for everything, which is why their stock prices recovered so well - and because of this they are widely assumed to be invulnerable. They are not expected to be spared during the second downwave however, and their current lofty valuations make them a good candidate for shorting or Put options.
Goldman Sachs and J P Morgan chart analysis and Put option information follows for subscribers.
Clive Maund, Diploma Technical Analysissupport@clivemaund.com
www.clivemaund.com
Copiapo, Chile, 6 December 2009
No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.
Wednesday, February 11, 2009
Another Year of Shock and Awe
In their annual forecast edition, the editors of BIG GOLD asked Casey Research Chairman and contrarian investor Doug Casey to provide his predictions and thoughts on issues everyone's thinking about these days. Read what he has to say on the economy, deficits, inflation, and gold…
In their annual forecast edition, the editors of BIG GOLD asked Casey Research Chairman and contrarian investor Doug Casey to provide his predictions and thoughts on issues everyone's thinking about these days. Read what he has to say on the economy, deficits, inflation, and gold…
The $1.1 Trillion Budget Deficit
My reaction is that the people in the government are totally out of control. A poker player would say the government is "on tilt," placing wild, desperate bets in the hope of getting rescued by good luck.
The things they're doing are not only unproductive, they're the exact opposite of what should be done. The country got into this mess by living beyond its means for more than a generation. That's the message from the debt that's burdening so many individuals; debt is proof that you're living above your means. The solution is for people to significantly reduce their standard of living for a while and start building capital. That's what saving is about, producing more than you consume.
The government creating funny money - money out of nothing - doesn't fix anything. All it does is prolong the problem and make it worse by destroying the currency.
Over several generations, huge distortions and misallocations of capital have been cranked into the economy, inviting levels of consumption that are unsustainable. In fact, Americans refer to themselves as consumers. That's degrading and ridiculous. You should be first and foremost a producer, and a consumer only as a consequence.
In any event, the government is going to destroy the currency, which will be a mega-disaster. And they're making the depression worse by holding interest rates at artificially low levels, which discourages savings - the exact opposite of what's needed. They're trying to prop up a bankrupt system.
And, at this point, it's not just economically bankrupt, but morally and intellectually bankrupt. What they should be doing is recognize that they're bankrupt and then start rebuilding. But they're not, so it's going to be a disaster.
Read it all here=>>
In their annual forecast edition, the editors of BIG GOLD asked Casey Research Chairman and contrarian investor Doug Casey to provide his predictions and thoughts on issues everyone's thinking about these days. Read what he has to say on the economy, deficits, inflation, and gold…
The $1.1 Trillion Budget Deficit
My reaction is that the people in the government are totally out of control. A poker player would say the government is "on tilt," placing wild, desperate bets in the hope of getting rescued by good luck.
The things they're doing are not only unproductive, they're the exact opposite of what should be done. The country got into this mess by living beyond its means for more than a generation. That's the message from the debt that's burdening so many individuals; debt is proof that you're living above your means. The solution is for people to significantly reduce their standard of living for a while and start building capital. That's what saving is about, producing more than you consume.
The government creating funny money - money out of nothing - doesn't fix anything. All it does is prolong the problem and make it worse by destroying the currency.
Over several generations, huge distortions and misallocations of capital have been cranked into the economy, inviting levels of consumption that are unsustainable. In fact, Americans refer to themselves as consumers. That's degrading and ridiculous. You should be first and foremost a producer, and a consumer only as a consequence.
In any event, the government is going to destroy the currency, which will be a mega-disaster. And they're making the depression worse by holding interest rates at artificially low levels, which discourages savings - the exact opposite of what's needed. They're trying to prop up a bankrupt system.
And, at this point, it's not just economically bankrupt, but morally and intellectually bankrupt. What they should be doing is recognize that they're bankrupt and then start rebuilding. But they're not, so it's going to be a disaster.
Read it all here=>>
Thursday, January 1, 2009
Mardoff Ecomics-The Year in Review
The Big Picture- When it comes to the good old U.S.A., I believe there's one overwhelming view one must take despite all the political rhetoric and "I'm okay, your okay" from the "Don't worry, be happy" crowd on Wall Street; America is trying to operate on a failed business model. While doing so, Americans have truly mortgaged their futures on a far worse situation than the sub-prime fiasco.
- I threw my hat back into the bullish camp in the waning days of 2008.
U.S. Dollar Index - I've had a constant saying for the last few years that "the only party that doesn't know the U.S. Dollar is dead is the U.S. Dollar. "If I was wrong and it was only sick, trust me the trillions of dollars being created and pumped into the system was its death warrant. Pity the poor souls on Tout-TV who say the Fed will be able to remove these trillions of thin-air created dollars from the system without causing inflation. If you believe that one, you should join those who believe Elvis is still alive and on an island somewhere with Jimmy Hoffa. Look for a test of the low 70s by years-end, if not sooner.
U.S. Treasuries - The one remaining bubble that should burst in 2009 (watch). While the 10-year can still get below 2% yield, the time has come to short treasuries. We may go down before going up, but by years-end I think this strategy can be a winner. Read
Grandich Publications, LLC. P.O. Box 243Perrineville, NJ 08535www.Grandich.comphone o 732-642-3992email o Peter@Grandich.com
Abridged Read it all here=>>
Warning Danger Ahead
UNCOMMON COMMON SENSE For People Who Think, WARNING: DANGER AHEAD
by Aubie Baltin CFA, CTA, CFP, PhD.
Now that the $50 billion Madoff Ponzi debacle is all over the front pages of every newspaper and more importantly, affecting most major charities all over the world, the cry for regulation and Increased oversight has reached crescendo proportions. If there is one lesson that should be obvious, but throughout history has never been learned, is that Making Laws Does Not Prevent Crime. Only by changing the system so that it makes human nature the centerpiece of regulation can we possibly achieve our goals. Have you not noticed that these same types of crimes always come to light only after extensive new regulations lead to a major Economic and Financial breakdowns? Yet after each one, we put a couple of people in jail and pass a few more new laws, yet each new breakdown produces bigger and bigger swindles: Which upon careful examination are due almost for exactly the same reasons as the one before.
Look at this guy Madoff. He allegedly robs $50 billion and yet he is out on bail. If a kid robs a liquor store for $500, chances are he doesn't get bail. How does a guy who could potentially have stolen more money than anybody in history get granted bail? With our entire financial system on its knees, how is it that not one single individual has even be charged? The inequality within our justice system has never appeared more glaring. Nobody seems to be able to figure out what happened or why he confessed so quickly. To me the answer is obvious: He is a 70 year old man and by confessing he is trying to take the spotlight and heat off his 2 sons and wife. Also, where is all the money that he stole? He could not possibly have spent it all. If there is a possibility of "grabbing back" monies paid to innocent investors, can they not seize all assets (money, valuables and properties, etc.) owned by his wife and children since they were all accumulated by the use of ill gotten gains? Or is there something we are not seeing. Is he being paid to keep quiet and that is the real reason for his favorable treatment by the courts?
The coming year, 2009, is going to be much worse for the average American than 2008. Dissatisfaction with our current system could lead to widespread protests, riots and violence which, in turn, could lead to a tremendous loss of our personal freedoms as we fall into a Dictatorship Style Socialism. Every American should be outraged by this atrocious stewardship of our nation's wealth. Our future has been looted by a select moneyed few who are completely free of the consequences that so many millions of others will have to go through. Did any of you ever ask where the $900 million that was spent on the presidential campaign came from and what do they expect to get in return? To these politicians from either party, we are like sheep to be sheared and when necessary, led to the slaughter. And make no mistake, it is the working people of this country who will be paying the tab for these so-called Masters of the Universe. The stark reality of the current power grab and the degree of naked greed on such a grand scale with complete disregard for others is a prelude to the financial genocide of our nation's health. Unfortunately it is creeping Socialism that breeds cronyism and anarchy, which always leads to outrageous theft that a truly Capitalist system would not tolerate. However it will be Capitalism that will get the blame, which is why I am calling for a 20 year Depression as our country turns more and more to French style Socialism lead by our new FDR. Keynesian Messiah.
THE STOCK MARKET: I don't have much to say that is new except that the market is behaving almost exactly as expected and explained in my last two issues. We are in major Wave B of the BEAR MARKET with as long as 2 or 3 more months to go before Wave B is over and the devastating Wave C crash resumes. Continue to build up your cash positions. If you insist on action: Buy stocks only into sell offs - DO NOT chase rallies. REMEMBER to always use STOPS. DO NOT LOSE MORE THAN 10% on any position. You must not get caught sitting on losses when this market turns down and the best shorting opportunities present themselves.
Please Note: This article is for education purposes only and is designed to help you make up your own mind, not for me to make it up for you. Only you know your own personal circumstances so only you can decide the best places to invest your money and the degree of risk that you are prepared to take. The Information on data included here has been gleaned from sources deemed to be reliable, but is not guaranteed by me. Nothing stated in here should be taken as a recommendation for you to buy or sell securities.
Abridged for E.A. read the entire article here=>>
by Aubie Baltin CFA, CTA, CFP, PhD.
Now that the $50 billion Madoff Ponzi debacle is all over the front pages of every newspaper and more importantly, affecting most major charities all over the world, the cry for regulation and Increased oversight has reached crescendo proportions. If there is one lesson that should be obvious, but throughout history has never been learned, is that Making Laws Does Not Prevent Crime. Only by changing the system so that it makes human nature the centerpiece of regulation can we possibly achieve our goals. Have you not noticed that these same types of crimes always come to light only after extensive new regulations lead to a major Economic and Financial breakdowns? Yet after each one, we put a couple of people in jail and pass a few more new laws, yet each new breakdown produces bigger and bigger swindles: Which upon careful examination are due almost for exactly the same reasons as the one before.
Look at this guy Madoff. He allegedly robs $50 billion and yet he is out on bail. If a kid robs a liquor store for $500, chances are he doesn't get bail. How does a guy who could potentially have stolen more money than anybody in history get granted bail? With our entire financial system on its knees, how is it that not one single individual has even be charged? The inequality within our justice system has never appeared more glaring. Nobody seems to be able to figure out what happened or why he confessed so quickly. To me the answer is obvious: He is a 70 year old man and by confessing he is trying to take the spotlight and heat off his 2 sons and wife. Also, where is all the money that he stole? He could not possibly have spent it all. If there is a possibility of "grabbing back" monies paid to innocent investors, can they not seize all assets (money, valuables and properties, etc.) owned by his wife and children since they were all accumulated by the use of ill gotten gains? Or is there something we are not seeing. Is he being paid to keep quiet and that is the real reason for his favorable treatment by the courts?
The coming year, 2009, is going to be much worse for the average American than 2008. Dissatisfaction with our current system could lead to widespread protests, riots and violence which, in turn, could lead to a tremendous loss of our personal freedoms as we fall into a Dictatorship Style Socialism. Every American should be outraged by this atrocious stewardship of our nation's wealth. Our future has been looted by a select moneyed few who are completely free of the consequences that so many millions of others will have to go through. Did any of you ever ask where the $900 million that was spent on the presidential campaign came from and what do they expect to get in return? To these politicians from either party, we are like sheep to be sheared and when necessary, led to the slaughter. And make no mistake, it is the working people of this country who will be paying the tab for these so-called Masters of the Universe. The stark reality of the current power grab and the degree of naked greed on such a grand scale with complete disregard for others is a prelude to the financial genocide of our nation's health. Unfortunately it is creeping Socialism that breeds cronyism and anarchy, which always leads to outrageous theft that a truly Capitalist system would not tolerate. However it will be Capitalism that will get the blame, which is why I am calling for a 20 year Depression as our country turns more and more to French style Socialism lead by our new FDR. Keynesian Messiah.
THE STOCK MARKET: I don't have much to say that is new except that the market is behaving almost exactly as expected and explained in my last two issues. We are in major Wave B of the BEAR MARKET with as long as 2 or 3 more months to go before Wave B is over and the devastating Wave C crash resumes. Continue to build up your cash positions. If you insist on action: Buy stocks only into sell offs - DO NOT chase rallies. REMEMBER to always use STOPS. DO NOT LOSE MORE THAN 10% on any position. You must not get caught sitting on losses when this market turns down and the best shorting opportunities present themselves.
Please Note: This article is for education purposes only and is designed to help you make up your own mind, not for me to make it up for you. Only you know your own personal circumstances so only you can decide the best places to invest your money and the degree of risk that you are prepared to take. The Information on data included here has been gleaned from sources deemed to be reliable, but is not guaranteed by me. Nothing stated in here should be taken as a recommendation for you to buy or sell securities.
Abridged for E.A. read the entire article here=>>
Wednesday, December 31, 2008
No end in sight for US property slump as prices fall at record rate
Larry Elliott, economics editor The Guardian, Wednesday 31 December 2008
House prices in 20 big US cities fell at their fastest rate on record in the year to October as rising unemployment, rationed credit and a glut of foreclosed properties led to fresh weakness in the market, according to a report released yesterday.
After falling every month since January 2007, the closely watched S&P/Case Shiller index of property prices declined 2.2% in October, leaving them 18% down on a year earlier. Six cities - Charlotte, Washington, Minneapolis, Tampa, Detroit and Atlanta - saw record monthly falls, while the biggest annual declines were in Phoenix and Las Vegas, where prices fell by a third.
David Blitzer, chairman of the index committee at Standard & Poor's, said: "The bear market continues; home prices are back to their March 2004 levels."
Source=>>
House prices in 20 big US cities fell at their fastest rate on record in the year to October as rising unemployment, rationed credit and a glut of foreclosed properties led to fresh weakness in the market, according to a report released yesterday.
After falling every month since January 2007, the closely watched S&P/Case Shiller index of property prices declined 2.2% in October, leaving them 18% down on a year earlier. Six cities - Charlotte, Washington, Minneapolis, Tampa, Detroit and Atlanta - saw record monthly falls, while the biggest annual declines were in Phoenix and Las Vegas, where prices fell by a third.
David Blitzer, chairman of the index committee at Standard & Poor's, said: "The bear market continues; home prices are back to their March 2004 levels."
Source=>>
Sunday, December 28, 2008
Almost one in 10 Floridians on food stamps
BY JOSE PAGLIERY jpagliery@MiamiHerald.com
Unemployed and strapped for cash, Floridians are asking for state assistance to feed their families in record numbers.
In the last two years, the number of Floridians on food stamps has increased more than 40 percent to 1.7 million. That increase is the highest in the nation, according to the U.S. Department of Agriculture. And it's the second-largest jump in the state's history, surpassed only during the aftermath of Hurricane Andrew, said an analyst at the Center of Budget and Policy Priorities, a Washington-based think tank.
Almost one in 10 Floridians is now on food stamps, and state managers say many more qualify.
Unemployed and strapped for cash, Floridians are asking for state assistance to feed their families in record numbers.
In the last two years, the number of Floridians on food stamps has increased more than 40 percent to 1.7 million. That increase is the highest in the nation, according to the U.S. Department of Agriculture. And it's the second-largest jump in the state's history, surpassed only during the aftermath of Hurricane Andrew, said an analyst at the Center of Budget and Policy Priorities, a Washington-based think tank.
Almost one in 10 Floridians is now on food stamps, and state managers say many more qualify.
Tuesday, December 23, 2008
Bye bye dollar, bye bye Treasuries...
Clive Maund as posted in Gold-Eagle.Com
Over the past several days the dollar has gone into a severe decline, and this drop does not look like a reaction within an ongoing uptrend, as was the case in September, for as we can see on the 6-month chart it follows the development of a Head-and-Shoulders top area, a distribution pattern that took nearly 2 months to form. It looks like the dollar has broken down from an important reversal pattern. We had correctly identified the Head-and-Shoulders top back when the dollar index was high in the Right Shoulder of the pattern, when a Dollar Special update was posted on the site on 5th December, warning of a probable imminent dollar breakdown.
As we know, the dollar spike was not the result of positive fundamentals for the currency, rather it was largely the result of across-the-board forced liquidation of commodities and stocks due to deflation fears, with the tidal wave of released funds gushing into US Treasuries as a safe haven, which first necessitated the purchase of dollars. A fortuitous aspect of the panic for the US government and Fed was that the dollar spike gave them the leeway to embark on a bender of money creation to finance an orgy of bailout largesse, especially for the benefit and banks and cronies on Wall St, although clearly the auto industry does not enjoy such favored status. This has greatly exacerbated the downside danger to the dollar once the driver of Hedge Fund and other liquidation of commodities and stocks etc abates, which now appears to be happening as the market begins to perceive the hyperinflationary implications of the recent enormous money creation. Thus, once the dollar spike is seen to have ended we could witness an all-out panic out of the dollar, and market participants would do well to remember that that which rises steeply can drop even more quickly, which means that the dollar could well plunge vertically. We may be on the point of this now. In the event of the dollar plunging potential buyers and holders of US Treasuries are likely to get "cold feet" leading to a "buyers's strike" and possibly wholesale dumping of Treasuries by overseas holders. As the United States is in the unfortunate situation of being totally bankrupt, the choking off of foreign capital inflows can be expected to lead to an immediate and severe funding emergency, with the direst of consequences.
Holders of US dollars and Treasuries should therefore liquidate all positions immediately, the best possibly destination for the freed funds being physical gold and silver - if you can get it. We will be looking at the ways to secure physical gold and silver on the site shortly.
Clive Maund, Diploma Technical Analysissupport@clivemaund.comhttp://www.clivemaund.com/
Copiapo, Chile, 16 December 2008
No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.
Over the past several days the dollar has gone into a severe decline, and this drop does not look like a reaction within an ongoing uptrend, as was the case in September, for as we can see on the 6-month chart it follows the development of a Head-and-Shoulders top area, a distribution pattern that took nearly 2 months to form. It looks like the dollar has broken down from an important reversal pattern. We had correctly identified the Head-and-Shoulders top back when the dollar index was high in the Right Shoulder of the pattern, when a Dollar Special update was posted on the site on 5th December, warning of a probable imminent dollar breakdown.
As we know, the dollar spike was not the result of positive fundamentals for the currency, rather it was largely the result of across-the-board forced liquidation of commodities and stocks due to deflation fears, with the tidal wave of released funds gushing into US Treasuries as a safe haven, which first necessitated the purchase of dollars. A fortuitous aspect of the panic for the US government and Fed was that the dollar spike gave them the leeway to embark on a bender of money creation to finance an orgy of bailout largesse, especially for the benefit and banks and cronies on Wall St, although clearly the auto industry does not enjoy such favored status. This has greatly exacerbated the downside danger to the dollar once the driver of Hedge Fund and other liquidation of commodities and stocks etc abates, which now appears to be happening as the market begins to perceive the hyperinflationary implications of the recent enormous money creation. Thus, once the dollar spike is seen to have ended we could witness an all-out panic out of the dollar, and market participants would do well to remember that that which rises steeply can drop even more quickly, which means that the dollar could well plunge vertically. We may be on the point of this now. In the event of the dollar plunging potential buyers and holders of US Treasuries are likely to get "cold feet" leading to a "buyers's strike" and possibly wholesale dumping of Treasuries by overseas holders. As the United States is in the unfortunate situation of being totally bankrupt, the choking off of foreign capital inflows can be expected to lead to an immediate and severe funding emergency, with the direst of consequences.
Holders of US dollars and Treasuries should therefore liquidate all positions immediately, the best possibly destination for the freed funds being physical gold and silver - if you can get it. We will be looking at the ways to secure physical gold and silver on the site shortly.
Clive Maund, Diploma Technical Analysissupport@clivemaund.comhttp://www.clivemaund.com/
Copiapo, Chile, 16 December 2008
No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.
THE AMERICAN DREAM,An Obituary
Darryl Robert Schoon December 22, 2008
The American Revolution was an extraordinary event. The idea that freedom was an inherent right, that tyranny could be successfully opposed, that government could serve the people, not the few, was truly revolutionary in 1776-as it is today.
The American Revolution, however, has run its course; and unless resuscitated and given new life, the American dream and the dreams of America's founding fathers will soon be only a memory. Dreams rarely come to pass and those that do rarely last. The American dream is no exception.
What happened in 1776 has been subverted by the passage of time and the inconstancy of later generations. Those who rule America today have subverted the principles enumerated in the US Constitution; principles the Founding Father hoped would guide those who followed them through the crises yet to come.
The principles were not many, e.g. fiscal prudence, sound money, separation of church and state and a limited military and limited government. But even those few and clearly stated principles succumbed over the years to the imposition of policies that had given rise to the need to revolt in 1776.
Now, in 2008, tyranny and government excesses are again upon America, but this time it is by America's own hand. The policies of King George III were no more egregious than the policies of President George Bush II.- taxation without real representation, e.g. TARP (80 % Americans opposed), the imposition of policies contrary to the will of the people, e.g. US presence in Iraq and Afghanistan (70 % opposed), and the loss of individual freedoms under the Patriot Act (60 % opposed).
The difference between 1776 and 2008 is that America is now tyrannized not by the King of England but by its own government. Today, the US government does not represent the will of the people. It represents instead the special interests that control the US government through the buying of votes-America is not for sale only because it has already been sold.
The difference between 1776 and 2008 is not only 232 years. It is the difference between the dream of the Founding Fathers and the shadow of that dream in whose increasing darkness Americans now exist.
THE FEDERAL RESERVE BANK IS THE REASON FOR AMERICA'SFALL FROM POWER AND THE SOURCE OF ITS INCREASING PROBLEMS
Thomas Jefferson warned 200 hundred years ago that if private bankers were allowed to issue America's money, indebtedness, foreclosure and suffering would follow. Yet, in 1913, private bankers gained control over America's money by the passage of the Federal Reserve Act.
We are now suffering for ignoring Jefferson's warnings. Jefferson was right in predicting our problems but his words were overridden by those who had other plans for America, plans that would increase their profits at the expense of the nation.
It is no accident America is now an empty shell of the great economic power it once was. Bled dry by debt imposed by those whose sole intent was to profit, the US is now bankrupt at a time it desperately needs the resources it no longer has.
The US Treasury is now empty except for IOUs and only if others continue to buy America's debts can America continue to go forward. Once we were creditors, now we are debtors. America cannot escape the consequences of what has been done but we can limit our problems if we undo their cause.
The Federal Reserve Act was enacted by Congress and signed into law by President Woodrow Wilson who later bitterly regretted what he had done to America.
I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.Woodrow Wilson, US President
The power of the Federal Reserve System-a system controlled by a small group of dominant men-derives solely from is power to issue debt-based money in the form of US dollars and to charge interest on their issuance. We are paying our jailors for our enslavement and are fools for so doing. Who would have thought-except Jefferson.
FRANCE AND AMERICA'S FIGHT FOR FREEDOM
This article is being posted from Paris, France; a city and nation that supported America's War of Independence against England. Over time, Americans have forgotten this important fact.
Following the Declaration of Independence of the thirteen colonies, the American Revolution had been well received in France, both by the population and the enlightened elites. The Revolution was perceived as the incarnation of the Enlightenment Spirit against the "English tyranny". Benjamin Franklin, dispatched to France in December of 1776 to rally her support, was welcomed with enthusiasm, and numerous Frenchmen embarked for the Americas to help the war, motivated by the prospect of valor in battle or animated by the sincere ideal of liberty and republicanism, like Pierre Charles L'Enfant, and La Fayette, who enlisted in 1776.http://en.wikipedia.org/wiki/France_in_the_American_Revolutionary_War
In the last two centuries, Americans have come to identify more with England (perhaps a cultural variant of the Stockhausen syndrome) than with its first ally, France-the lure of a good Burburry overcoming its love for the great cloak of freedom. Unfortunately, Americans have forgotten their history and what they haven't forgotten they have now reinvented.
Freedom is always fragile and is always under attack from those who would enslave others for their own ends, including profit; and, the present crisis is as threatening to America as was the crisis of 1776.
Now, as then, the cause of America's problem is English in origin. But this time the cause is England's central banking system, recreated on our own shores as the Federal Reserve Bank, a private central bank masquerading as a US Federal government institution.
But America does not own or control the Federal Reserve Bank. The Federal Reserve Bank is owned and controlled by a small group of dominant men- private bankers who through their control of the Federal Reserve now control America.
GOLD IS FREEDOMTHE 5 % SOLUTION
Gold is freedom because gold is the antidote to the debt-based money of private bankers issued by central banks such as the Federal Reserve, debt-based money that has been destroying America's wealth, savings, and productivity for almost one hundred years.
Since the Federal Reserve began issuing debt-based US dollars 95 years ago, the US dollar has lost 95 % of its value. The whiff of the dollar's demise is now in the air and unless something is done quickly, its end is imminent. There is only 5 % left to go.
Only if America returns to the principle of sound money enumerated in its Constitution, will the abomination of unsound money and unsound governance end. If the Federal Reserve is allowed to continue, so too will our problems and the now 95 year downward spiral of America.
The choice is clear: End the Federal Reserve or the American dream will end. End of story.
Five….four.…three....two….fini
PROFESSOR FEKETE & THE END GAME
Professor Antal E. Fekete's recent writing on the backwardation of gold has created a firestorm of controversy regarding its significance, as well it should. This is an area in which Professor Fekete is the resident expert. The professor's words of warning about gold's backwardation should not be taken lightly-nor should any of his words.
I consider myself fortunate to have made the professor's acquaintance when I first began my inquiry into matters of economics. Grounded in academic inquiry, Professor Fekete's concern for economic truths is equaled by his concern for his fellow man, attributes not commonly shared by the "economists" responsible for our current problems.
On March 27th, 28th and 29th, I will be attending and speaking at Professor Fekete's event in Szombathely, Hungary, on the subject of the coming depression, an event that will dwarf the disaster of the Great Depression of the 1930s.
If you are able to attend, I strongly suggest that you do. I have stated before that in my opinion Professor Fekete is a giant in a time of small men. I stand by that statement today. Opportunities to listen to persons of such stature are rare as they are invaluable.
Information about the March event is available at www.professorfekete.com.
The meaning and significance of gold's backwardation will be discussed as will the Professor's observations regarding the accelerating economic crisis-the resolution of the end game.
Darryl Robert Schoonwww.survivethecrisis.comwww.drschoon.comblog www.posdev.net/pdn/index.php?option=com_myblog&blogger=drs&Itemid=81
The American Revolution was an extraordinary event. The idea that freedom was an inherent right, that tyranny could be successfully opposed, that government could serve the people, not the few, was truly revolutionary in 1776-as it is today.
The American Revolution, however, has run its course; and unless resuscitated and given new life, the American dream and the dreams of America's founding fathers will soon be only a memory. Dreams rarely come to pass and those that do rarely last. The American dream is no exception.
What happened in 1776 has been subverted by the passage of time and the inconstancy of later generations. Those who rule America today have subverted the principles enumerated in the US Constitution; principles the Founding Father hoped would guide those who followed them through the crises yet to come.
The principles were not many, e.g. fiscal prudence, sound money, separation of church and state and a limited military and limited government. But even those few and clearly stated principles succumbed over the years to the imposition of policies that had given rise to the need to revolt in 1776.
Now, in 2008, tyranny and government excesses are again upon America, but this time it is by America's own hand. The policies of King George III were no more egregious than the policies of President George Bush II.- taxation without real representation, e.g. TARP (80 % Americans opposed), the imposition of policies contrary to the will of the people, e.g. US presence in Iraq and Afghanistan (70 % opposed), and the loss of individual freedoms under the Patriot Act (60 % opposed).
The difference between 1776 and 2008 is that America is now tyrannized not by the King of England but by its own government. Today, the US government does not represent the will of the people. It represents instead the special interests that control the US government through the buying of votes-America is not for sale only because it has already been sold.
The difference between 1776 and 2008 is not only 232 years. It is the difference between the dream of the Founding Fathers and the shadow of that dream in whose increasing darkness Americans now exist.
THE FEDERAL RESERVE BANK IS THE REASON FOR AMERICA'SFALL FROM POWER AND THE SOURCE OF ITS INCREASING PROBLEMS
Thomas Jefferson warned 200 hundred years ago that if private bankers were allowed to issue America's money, indebtedness, foreclosure and suffering would follow. Yet, in 1913, private bankers gained control over America's money by the passage of the Federal Reserve Act.
We are now suffering for ignoring Jefferson's warnings. Jefferson was right in predicting our problems but his words were overridden by those who had other plans for America, plans that would increase their profits at the expense of the nation.
It is no accident America is now an empty shell of the great economic power it once was. Bled dry by debt imposed by those whose sole intent was to profit, the US is now bankrupt at a time it desperately needs the resources it no longer has.
The US Treasury is now empty except for IOUs and only if others continue to buy America's debts can America continue to go forward. Once we were creditors, now we are debtors. America cannot escape the consequences of what has been done but we can limit our problems if we undo their cause.
The Federal Reserve Act was enacted by Congress and signed into law by President Woodrow Wilson who later bitterly regretted what he had done to America.
I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.Woodrow Wilson, US President
The power of the Federal Reserve System-a system controlled by a small group of dominant men-derives solely from is power to issue debt-based money in the form of US dollars and to charge interest on their issuance. We are paying our jailors for our enslavement and are fools for so doing. Who would have thought-except Jefferson.
FRANCE AND AMERICA'S FIGHT FOR FREEDOM
This article is being posted from Paris, France; a city and nation that supported America's War of Independence against England. Over time, Americans have forgotten this important fact.
Following the Declaration of Independence of the thirteen colonies, the American Revolution had been well received in France, both by the population and the enlightened elites. The Revolution was perceived as the incarnation of the Enlightenment Spirit against the "English tyranny". Benjamin Franklin, dispatched to France in December of 1776 to rally her support, was welcomed with enthusiasm, and numerous Frenchmen embarked for the Americas to help the war, motivated by the prospect of valor in battle or animated by the sincere ideal of liberty and republicanism, like Pierre Charles L'Enfant, and La Fayette, who enlisted in 1776.http://en.wikipedia.org/wiki/France_in_the_American_Revolutionary_War
In the last two centuries, Americans have come to identify more with England (perhaps a cultural variant of the Stockhausen syndrome) than with its first ally, France-the lure of a good Burburry overcoming its love for the great cloak of freedom. Unfortunately, Americans have forgotten their history and what they haven't forgotten they have now reinvented.
Freedom is always fragile and is always under attack from those who would enslave others for their own ends, including profit; and, the present crisis is as threatening to America as was the crisis of 1776.
Now, as then, the cause of America's problem is English in origin. But this time the cause is England's central banking system, recreated on our own shores as the Federal Reserve Bank, a private central bank masquerading as a US Federal government institution.
But America does not own or control the Federal Reserve Bank. The Federal Reserve Bank is owned and controlled by a small group of dominant men- private bankers who through their control of the Federal Reserve now control America.
GOLD IS FREEDOMTHE 5 % SOLUTION
Gold is freedom because gold is the antidote to the debt-based money of private bankers issued by central banks such as the Federal Reserve, debt-based money that has been destroying America's wealth, savings, and productivity for almost one hundred years.
Since the Federal Reserve began issuing debt-based US dollars 95 years ago, the US dollar has lost 95 % of its value. The whiff of the dollar's demise is now in the air and unless something is done quickly, its end is imminent. There is only 5 % left to go.
Only if America returns to the principle of sound money enumerated in its Constitution, will the abomination of unsound money and unsound governance end. If the Federal Reserve is allowed to continue, so too will our problems and the now 95 year downward spiral of America.
The choice is clear: End the Federal Reserve or the American dream will end. End of story.
Five….four.…three....two….fini
PROFESSOR FEKETE & THE END GAME
Professor Antal E. Fekete's recent writing on the backwardation of gold has created a firestorm of controversy regarding its significance, as well it should. This is an area in which Professor Fekete is the resident expert. The professor's words of warning about gold's backwardation should not be taken lightly-nor should any of his words.
I consider myself fortunate to have made the professor's acquaintance when I first began my inquiry into matters of economics. Grounded in academic inquiry, Professor Fekete's concern for economic truths is equaled by his concern for his fellow man, attributes not commonly shared by the "economists" responsible for our current problems.
On March 27th, 28th and 29th, I will be attending and speaking at Professor Fekete's event in Szombathely, Hungary, on the subject of the coming depression, an event that will dwarf the disaster of the Great Depression of the 1930s.
If you are able to attend, I strongly suggest that you do. I have stated before that in my opinion Professor Fekete is a giant in a time of small men. I stand by that statement today. Opportunities to listen to persons of such stature are rare as they are invaluable.
Information about the March event is available at www.professorfekete.com.
The meaning and significance of gold's backwardation will be discussed as will the Professor's observations regarding the accelerating economic crisis-the resolution of the end game.
Darryl Robert Schoonwww.survivethecrisis.comwww.drschoon.comblog www.posdev.net/pdn/index.php?option=com_myblog&blogger=drs&Itemid=81
Monday, December 22, 2008
2009 Predictions
Roger Wiegand 321.Gold
"We think we now have enough data from both the fundamentals and technicals to make some serious forecasts and predictions for 2009. While 2008 was a nasty year when lots of things imploded, they are far from being repaired. Treasury Secretary Paulson told us this week there are no more surprises, which tells me we haven't even discovered but a small portion of this monster derivative mess. His ripping-off of the taxpayers to the tune of $700 billion is only a warm-up. However, the larger question for traders and investors is what could happen next and when.
In the following report we take the key global economic points and suggest the outcome for 2009."-Traderrog
The most important news for 2008 was the destruction of the big global banks' net worth and their badly wounded ability to conduct normal business and make market-moving loans. Ben & Hank's bailout only helped the bad-boy banks reliquify themselves to remain somewhat solvent and stay in business. They are doing nothing to extend credit to any business enhancing western or global economies. The 2009 result will be no significant banker lending, taking more bailout money and sweeping additional bad loans of all stripes under the banker's rug and hiding the rest in back rooms.
The largest surprise in our view was the massive disaster at insurance giant AIG. Despite numerous injections of bailout billions, AIG remains in very serious trouble hanging on by their proverbial fingernails. The 2009 result will be a surprise crash and failure of AIG frightening the world at large causing ripples of failures throughout western and Asian nations unable to conduct business without mandatory insurance policies. Most folks have no comprehension as to the monster fallout this will create. It is in our view literally immeasurable, and this is why Paulson handed them so much money.
Our new president is determined to hand out $860 Billion to One Trillion dollars in a Herculean effort to literally buy a new economic recovery. While some of his ideas are noble indeed the overall planwill have little effect and Great Depression II shall take hold in 2009 with crashing stock markets in May and September-October 2009. We think the worst of the worst hits in later September 2009.
During the spring of next year we see:
(1) A second larger wave of residential housing mortgage failures; (2) The first big wave of auto loan failures and repossessions; (3) Over $40 billion in credit card defaults, smashing the bank lenders; (4) The first wave of commercial mortgage failures and foreclosures on shopping malls, office buildings and other commercials; (5) And finally, the grand smashing finale of CDS Credit Default Swaps originated with No margin money or down payments! We heard today the total is 500 trillion! I cannot even fathom that number. These five converging train wrecks could take the Dow from a dead cat bounce of 10400-10800 back to 7250, or even 6600, or 5600.
Shares traders and investors have one more solid quarter, in our view to regain some stock market losses on the forthcoming Obama Trillion Dollar handouts. We think the rising share markets will help most all sectors gain some recovery and provide the illusion the bottoms are in and new bases found. The stark reality hits home after shares peak in April or early May taking an unprecedented selling high dive scaring the wits out of Americans and the watching world.
Even with these events and rising unemployment and social problems, economic observers and analysts could continue to plead the worst is over, the bottoms are in and a fine, new, shiny world of trading and investing in our bright economy lies just ahead for the fall of 2009. Then, in later September and early October, the New York, London, Tokyo and Asian markets take a monster crash. How low is low and how bad can it get? We think the Dow could end-up on November 1st, 2009 anywhere from 5,600 to a low of 3,000 or even 1,500. One guideline will be a falling overshoot of PE's on our largest, so-called international corporations posting lows of 4 to7. Today, many of them are near 18. What does this tell us about the severity of our projections?
Unemployment nationally in the USA is now touching 16%. The officially posted number is somewhere near half of that. By the fall of 2009, American REAL UNEMPLOYMENT WILL BE NEAR THE ALLTIME 1930'S DEPRESSION HIGH OF 25% UNEMPLOYED. SADLY, THAT IS NOT THE WORST AS IT GETS MORE DIRE. WE PREDICT REAL, USA UNEMPLOYMENT REACHES 30-40%. IN THE RUST BELT STATES OF MICHIGAN AND OHIO, WHILE 40% IS NOT UNREALISTIC.
Several European nations have larger, more established social safety nets for the unemployed. In the USA, local, regional and national authorities are not nearly as prepared. The American federal government departments for food stamps and the job of providing welfare provisions will be overwhelmed. This will be a Katrina event for the hungry citizens of the United States. Urban areas will see skyrocketing crime and in parts of some cities, life could become totally uninhabitable.
The last report we've seen on those receiving food handouts and related welfare amounted to 11 million USA citizens with 700,000 children going hungry each day. We suspect the true amount of those needing food help will rise to 35,000,000 with an untold tragic number of them being little, defenseless children. Governments remain in denial and are not prepared for this national emergency whatsoever. As things worsen, food riots and others with violence aimed at the "haves' are common.
The number of bank failures over the next three years will be in the thousands. In addition, the US Dollar's valuation could break recent lows near 70.00 on the index, dropping to 46.00 by 2011 or 2012.Inflation or potentially hyperinflation is quite real as the Federal Reserve and US Treasury strain to print and circulate cash to prod our stalled economy. It is simply not working even with the dramatically lower interest rates of late. Benny Bernanke is out of rate cut running room.
Consumers are broke and going broker. Households of interrelated families are doubling and tripling up even with several employed members being under one roof. Basic costs of rent, mortgage payments, health care, food, utilities and taxes are too much to bear on stagnant and in some cases falling wages. In some areas of America, there are entire subdivisions of homes totally abandoned or existing with only a hand full of occupants. The millions thrown at lenders for new mortgages are not getting through to buyers, as there are fewer of them. We are witnessing system breakdown.
Municipalities and states are sinking into a spending, debt-ridden morass. It was reported today that 22 of 50 USA states are in serious budgetary trouble. California is one of those in terrible condition and Michigan is already technically broke as are many of her cities. Detroit will file bankruptcy in 2009 and there will many other surprises as well. There will be a cascade of bond defaults and the outcome will cap the ability of these cities, states and counties to borrow ever more.
The shining light through all of this is the faster we find the bottom the faster we can recover. Sadly, the recovery process will take years. Futures and commodities traders should continue to earn steady profits as the stock markets slide into oblivion for years. We see no recovery until 2015.
Trader Rog - Roger WiegandEditor, Trader Tracksemail:
traderrog@comcast.netTrader Tracks from http://www.miningstocks.com/
Sunday, December 21, 2008
Monetary Policy
Antal E. FeketeGold Standard UniversityE-mail: aefekete@hotmail.com
Nor is it possible to argue that the American government continued to serve the interest of the American people after March, 1933, when Roosevelt confiscated gold belonging to the American people, only to write up its value from $20.67 $35 per ounce a few months later, allegedly "in the interest of the national economy". This great government of this great nation, stealing from its own citizens in the national interest? And selling the loot abroad at a high mark-up? Where will it all end? Never mind the Constitutional prohibition on confiscation without due process. Never mind that the Constitution does not recognize fiat money. Never mind that the only kind of money the Constitution recognizes is silver and gold. Just ask simple questions about basic morality. The moral standard of the U.S. government in its dealings with its own citizens has reached an all-time low, as shown by the new norms set in the monetary field.
This land of free men was turned into an Animal Farm where pigs have been running wild and making monetary policy for the past 75 years. It is small wonder that men of utter depravity, like Bernie Madoff, could operate Ponzi schemes unobserved and with impunity for as long as he did. Just how long could the legal system stand up to assaults of this width, this depth, and this magnitude? The name Bernie Madoff reads like the Biblical writing on the wall, suggesting that ours is a Madoff dollar; ours is a Madoff Social Security; and ours is a Madoff Medicare. What basis for optimism is there for the next 75 years? To find out, let's review the past 75 years.
The 'grapes of wrath' are ripening in Academia. Having exiled monetary science, agents of Madoff Economics (alias mainstream economists) have exposed society to untold dangers. All the people are going to be put through the wringer indiscriminately. No one will be spared.
What means Madoff Economics? It is the economics of "garbage in - garbage out". It features the central economic doctrine of Keynes that capital is for window-dressing purposes only. The smart guy does not need capital. The guy who is even smarter can milk previously accumulated capital for his own purposes.
For the first time we shall witness global destruction of capital in an advanced economy. The fabric of society is breaking down. Madoff Economics will continue to have a monopolistic influence in the councils of government. Adventurers will continue to be in charge, and will continue to display utter lack of responsibility for the damage they are causing to society. The script will be played out in full, to the bitter end. There will be no tabula rasa after Inauguration Day. Pigs will continue running Animal Farm, making monetary policy, until the fruit trees are picked bare of fruit, the barns are swept clean of grain, with nothing left in the cupboards or in the cookie jars.
Abridged for E.A. Read it all here=>>
Nor is it possible to argue that the American government continued to serve the interest of the American people after March, 1933, when Roosevelt confiscated gold belonging to the American people, only to write up its value from $20.67 $35 per ounce a few months later, allegedly "in the interest of the national economy". This great government of this great nation, stealing from its own citizens in the national interest? And selling the loot abroad at a high mark-up? Where will it all end? Never mind the Constitutional prohibition on confiscation without due process. Never mind that the Constitution does not recognize fiat money. Never mind that the only kind of money the Constitution recognizes is silver and gold. Just ask simple questions about basic morality. The moral standard of the U.S. government in its dealings with its own citizens has reached an all-time low, as shown by the new norms set in the monetary field.
This land of free men was turned into an Animal Farm where pigs have been running wild and making monetary policy for the past 75 years. It is small wonder that men of utter depravity, like Bernie Madoff, could operate Ponzi schemes unobserved and with impunity for as long as he did. Just how long could the legal system stand up to assaults of this width, this depth, and this magnitude? The name Bernie Madoff reads like the Biblical writing on the wall, suggesting that ours is a Madoff dollar; ours is a Madoff Social Security; and ours is a Madoff Medicare. What basis for optimism is there for the next 75 years? To find out, let's review the past 75 years.
The 'grapes of wrath' are ripening in Academia. Having exiled monetary science, agents of Madoff Economics (alias mainstream economists) have exposed society to untold dangers. All the people are going to be put through the wringer indiscriminately. No one will be spared.
What means Madoff Economics? It is the economics of "garbage in - garbage out". It features the central economic doctrine of Keynes that capital is for window-dressing purposes only. The smart guy does not need capital. The guy who is even smarter can milk previously accumulated capital for his own purposes.
For the first time we shall witness global destruction of capital in an advanced economy. The fabric of society is breaking down. Madoff Economics will continue to have a monopolistic influence in the councils of government. Adventurers will continue to be in charge, and will continue to display utter lack of responsibility for the damage they are causing to society. The script will be played out in full, to the bitter end. There will be no tabula rasa after Inauguration Day. Pigs will continue running Animal Farm, making monetary policy, until the fruit trees are picked bare of fruit, the barns are swept clean of grain, with nothing left in the cupboards or in the cookie jars.
Abridged for E.A. Read it all here=>>
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