China this morning reported 4.9% price inflation for the month of February, exceeding analyst expectations of 4.8%. With China now mimicking the U.S. Bureau of Labor Statistics and taking steps to artificially manipulate their consumer price index (CPI) numbers as low as possible, it is likely that real price inflation in China is now closer to 10%. China was at least smart enough to raise interest rates last month by 25 basis points to 6.06%, while the Federal Reserve continues to leave interest rates near zero with there being absolutely no talk of the Federal Reserve ever raising interest rates again. China will be successful at containing inflation, as U.S. inflation spirals out of control and becomes the greatest economic crisis in American history.
China this week reported a $7.3 billion trade deficit for the month of February, its largest trade deficit in seven years, which surprised many global economists. NIA believes China's trade deficit is temporary and that China will quickly return to having a trade surplus. The Federal Reserve's QE2 along with China's destructive monetary policies, which artificially devalue the yuan, have led to a massive rise in China's raw material costs this year. NIA believes that in the upcoming months, Chinese manufacturers will raise the prices of their products that get exported to the U.S., to counteract rising commodity prices. With most products used by Americans today having been manufactured in China, this will mean Americans will soon see massive price inflation in just about all consumer goods they use. NIA projects that by the end of 2011, we will begin to see the U.S. CPI increase by 4.9% or higher on a year-over-year basis, with real U.S. price inflation rising north of 10%.
The mainstream media is proclaiming that China's trade deficit will silence calls for the Chinese to allow their currency to strengthen against the U.S. dollar. The fact is, China's government has for long been making the major mistake of printing too many yuan in order to artificially prop up the U.S. dollar. Their fear was, if the U.S. dollar was allowed to decline too rapidly, prices of Chinese goods would rise in terms of U.S. dollars and Americans would no longer afford to import them.
The truth is, if China allowed the yuan to strengthen, the Chinese would have enjoyed a much higher standard of living. Sure, prices would rise in dollars and Americans would import less, but the Chinese would have the ability to consume more of their own products. Now, as a result of China expanding its own money supply in order to keep the yuan pegged to the U.S. dollar, Americans will be forced to pay a much higher price for Chinese goods anyway. The same higher prices Americans were going to pay as a result of exchange rate appreciation, Americans will now pay as a result of inflation. For the Chinese, the exchange rate appreciation route would have been a much better route to take than the inflation route, because now the Chinese will also be forced to pay higher prices. In the very short-term, China might actually suffer more than the U.S. because they lack the social safety nets that have been implemented here in America.
The U.S. government has been successful at temporarily paying off Americans into not rioting in the streets like in Arab nations. It was just announced a few days ago that the number of Americans on food stamps in the month of December of 2010 was a record 44,082,324, up 13.1% from one year earlier and 1.1% from one month earlier. That is more than 14% of the total U.S. population! Combined with President Obama extending unemployment benefits up to 99 weeks, American citizens are too busy and distracted playing with their iPad 2s and gossiping on Twitter about Charlie Sheen, to have any time to protest in Washington, DC.
NIA believes the U.S. government's entitlement spending is currently having the unintended consequence of making Americans dependent on government. It is like when you take wild animals into captivity and you feed them, teach them to do tricks and take care of them for a period of many years; if you just dump them one day back into the wild, it will be very difficult for them to survive. Americans who have become dependent on unemployment checks and food stamps will likely soon abruptly find out that they must begin to fend for themselves without any help from the government. The result will be many Americans turning into wild animals and becoming so desperate that they will have to rob and burglarize their fellow neighbors who were smart enough to prepare, or else they will risk starving to death.
As a result of QE2, the Federal Reserve is now buying 70% of U.S. treasuries, up from previously only buying 10% of treasury bonds. Foreign central banks are now buying just 30% of U.S. treasuries, compared to previously buying 50% of treasury bonds. The U.S. budget deficit in the month of February reached a record $222.5 billion or $2.67 trillion on an annualized basis. With the Federal Reserve now monetizing our debt in full swing, a complete and total loss of confidence in the U.S. dollar could be imminent.
Just like how nobody in the mainstream media was calling for the collapse of Egypt's government a few months ago, almost nobody in the media believes a collapse of the U.S. dollar could possibly take place anytime soon. NIA members are educated enough to see that the writing is on the wall. The Federal Reserve can deny all it wants that the U.S. is experiencing inflation, but with the cost to print a single U.S. dollar paper note rising by 50% since 2008, massive inflation is here right under Federal Reserve Chairman Ben Bernanke's nose. Every day that goes by, China is quietly implementing more and more steps that expand the yuan's use in cross border trade, in order to position the yuan as the world's next reserve currency.
So few Americans are presently preparing for hyperinflation that if hyperinflation broke out today, approximately 90% of Americans won't have the means to put food on the table or put fuel in their automobiles. During the upcoming hyperinflationary crisis, food stamps will no longer have any value at all and all U.S. entitlement programs will come to a complete halt. Americans will take to the streets like the world has never seen before.
The biggest question NIA has today is, will the U.S. government resort to firing at its own citizens, if major riots take place in Washington, DC. On Thursday, police in Saudi Arabia shot and wounded three protesters. The price of oil rose by a few dollars per barrel as soon as this news hit the wire, which shows just how nervous the world's financial markets have become in recent weeks. The fact that the Dow Jones has declined significantly in recent days, in our opinion means that the odds of QE3 being launched as soon as QE2 is over, are now much higher than they were several weeks ago.
The other big question NIA has today is, if in the unlikely event there is no QE3, who will fill in for the artificial buying demand currently coming from the Federal Reserve. After all, with no QE3, the Federal Reserve will go from buying 70% of treasury bonds to being a seller of U.S. treasuries. NIA is 100% sure that foreign central banks aren't itching to jump back in to fill the hole. While in the past, the private sector may have picked up the slack, we believe individual investors will now be more reluctant to jump into government bonds, especially with bond king Bill Gross reducing the government bond holdings in his Pimco Total Return Fund down to zero. The bottom line is, no QE3 means interest rates will fly sky high and destroy the phony so-called "economic recovery".
From April to August of 2010, the last time the Federal Reserve allowed its balance sheet to shrink, the Dow Jones fell by over 1,000 points. If Bernanke doesn't soon begin to leak out the strong likelihood of QE3, we could see the stock market decline by 1,000 points or more, which will force Bernanke into launching QE3. If we see a major sell off in stocks, NIA doesn't necessarily think that precious metals prices will follow. In fact, we could see gold and silver rise along with the Dow Jones falling. NIA projects the Dow Jones to gold ratio to decline to 6.5 in 2011. This means even if the Dow Jones fell to below 11,000, we still believe gold is likely to rise to around $1,600 to $1,700 per ounce this year, with silver soaring to around $42 to $44 per ounce. NIA believes the worst decision any American can make is to sell their gold and silver and go long U.S. dollars, hoping to buy their precious metals back at a lower price in the future.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us
Showing posts with label Outlook. Show all posts
Showing posts with label Outlook. Show all posts
Friday, March 11, 2011
Friday, March 4, 2011
An economic collapse is coming and you had better get ready.
When Barack Obama, the Federal Reserve and the mainstream media tell us that we are in the middle of an economic recovery, is that supposed to be some kind of sick joke? According to newly released numbers, over 44 million Americans are now on food stamps. That is a new all-time record and that number is 13.1% higher than it was just one year ago. So how many Americans have to go on food stamps before we can all finally agree that the U.S. economy is dying? 50 million? 60 million? All of us? The food stamp program is the modern equivalent of the old bread lines. More than one out of every seven Americans now depends on the federal government for food. Oh, but haven't you heard? The economy is showing dramatic improvement. Corporate profits are up. The stock market is soaring. Happy days are here again.
It just seems inconceivable that anyone can claim that the economy is improving when the number of Americans on food stamps continues to set a brand new record every single month. But the food stamp program is not the only indicator that the economy is still having massive problems. The following are 10 more reasons why the U.S. economy is simply not getting any better....
#1 Some recent statistics actually indicate that the number of unemployed Americans is still going up. According to Gallup, unemployment in the United States rose to 10.3% at the end of February. That is the highest number Gallup has reported since early last year.
#2 The housing industry is still a complete and total disaster. In fact, new home sales in the U.S. in January were 11.2% lower than they were in December. Not only that, the number of new home sales in January was 18.6% lower than the number of new home sales in January 2010. That is not a sign of improvement.
#3 There wouldn't even be much of a housing industry at all at this point if it was not for the U.S. government. Right now the U.S. government is either writing or guaranteeing well over 90 percent of all mortgages in the United States. So what would the housing market look like in 2011 if the government was not in the picture?
#4 In 2010, more than a million U.S. families lost their homes to foreclosure for the first time ever, and that number is expected to go even higher in 2011.
#5 Due to rampant economic decay and record numbers of foreclosures there are areas in most of our major cities that now look like "war zones". For example, the Huffington Post is reporting that there are now approximately 15,000 vacant buildings in the city of Chicago and there are approximately 60,000 vacant houses and apartments in the city of Las Vegas.
#6 According to the Oil Price Information Service, U.S. drivers spent an average of $347 on gasoline during the month of February, which was 30 percent more than a year earlier. This represented 8.5% of median monthly income. So what is going to happen when gas prices go even higher? Sadly, the average price of gasoline in the U.S. has risen another 4 cents since yesterday and it is likely to go much higher from here.
#7 The U.S. trade deficit continues to grow. The trade deficit was about 33 percent larger in 2010 than it was in 2009, and the 2011 trade deficit is expected to be even bigger.
#8 The CredAbility Consumer Distress Index, which measures the average financial condition of U.S. households, declined in every single quarter in 2010.
#9 The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high.
#10 The U.S. national debt is growing faster than ever. The Obama administration is projecting that the federal budget deficit for this fiscal year will be a new all-time record 1.65 trillion dollars. It is hard to even imagine how much money that is. If you went out today and started spending one dollar every single second, it would take you over 31,000 years to spend one trillion dollars. Long ago the U.S. government should have been getting these deficits under control, but instead they are just getting even larger.
So in light of the statistics above, can anyone really claim that we are in the middle of an economic recovery?
The truth is that there is no sign that any of the long-term trends that are destroying the U.S. economy are even slowing down.
Millions of jobs continue to be shipped overseas.
The U.S. dollar continues to be devalued.
The federal government continues to go into more debt.
State and local governments continue to go into more debt.
Our trade deficit continues to grow.
Our cities continue to be transformed into wastelands as they are being systematically deindustrialized.
The number of Americans that are dependent on the government continues to soar.
The U.S. middle class continues to shrink.
I know that I harp on these themes over and over, but it is vitally important that everyone understands that the mainstream media is lying to us.
The U.S. economy is dying a very painful death and there is no hope on the horizon.
Things are not going to be getting better. Well, they may get a bit better for the boys down on Wall Street, but for the rest of us our standards of living are going to continue to decline.
The best days for the U.S. economy are already behind us. What lies ahead is a whole lot of pain.
We are going to pay the price for decades of corruption and incompetence.
An economic collapse is coming and you had better get ready.
Is This The Future Of America?
Friday, February 4, 2011
Egypt: Preview of America in 2015
The rioting and looting currently taking place in Egypt is primarily a result of massive food inflation and shows what all major cities in the United States will likely look like come year 2015 due to the Federal Reserve's zero percent interest rates and quantitative easing to infinity. On December 16th, 2009, NIA named Time Magazine's 2009 'Person of the Year' Ben Bernanke our 'Villain of the Year', saying he created "unprecedented amounts of inflation in unprecedented ways" and "When it costs $20 for a gallon of milk in a few years, Americans will have nobody to thank more than Bernanke."
What started out a few weeks ago as protests in Algeria with citizens chanting "Bring Us Sugar!" and five citizens being killed, quickly spread to civil unrest in Tunisia which saw 14 more civilian deaths, and has now spread to riots in Egypt where 300 Egyptian citizens have been killed. Food inflation in Egypt has reached 20% and citizens in the nation already spend about 40% of their monthly expenditures on food. Americans for decades have been blessed with cheap food, spending only 13% of their expenditures on food, but this is about to change.
NIA was the first to predict the recent explosion in agricultural commodity prices in our October 30th, 2009, article entitled, "U.S. Inflation to Appear Next in Food and Agriculture", which said we have a "perfect storm for an explosion in agriculture prices". A couple of months later in 'NIA's Top 10 Predictions for 2010' we predicted "Major Food Shortages" and said, "Inventories of agricultural products are the lowest they have been in decades yet the prices of many agricultural commodities are down 70% to 80% from their all time highs adjusted for real inflation". Over the past year, agricultural commodities as a whole have outperformed almost every other type of asset, with silver being one of only a few other assets keeping pace with agriculture. (On December 11th, 2009, NIA declared silver the best investment for the next decade at $17.40 per ounce and it has so far risen 64% to its current price of $28.39 per ounce).
The world is at the beginning stages of an all out inflationary panic. Wheat, which NIA previously called on 'NIAnswers' its favorite investment besides gold and silver, is now up to a new 30-month high of $8.63 per bushel and has doubled in price since June of last year. Algeria bought 800,000 tonnes of wheat this past week, bringing their total purchases for the month of January up to 1.8 million tonnes, which was quadruple expectations. Saudi Arabia is also beginning to stockpile their inventories of wheat. Rice futures have gained 8% during the past few days with Bangladesh and Indonesia placing extraordinary large orders. Indonesia's latest rice order was quadruple its normal allotment and Bangladesh plans to double rice purchases this year. Meanwhile, the U.S., which is the world's third largest exporter of rice, is expected to cut production by 25% in 2011.
NIA considers rice to be one of the world's most undervalued agricultural commodities at its current price of $15.96 per 100 pounds and forecasts a move back to its 2008 high of $24 per 100 pounds as soon as the end of 2011. NIA believes cotton, at its current price of $1.80 per pound, may have gotten a bit ahead of itself in the short-term. In NIA's first ever article about agriculture on February 17th, 2009, we said that cotton's "upside potential is astronomical" at its then price of $0.44 per pound. NIA pointed to increasing sales to textile companies in China and the fact that cotton was down 70% from its all time high as reasons to be very bullish on cotton at $0.44 per pound. Early NIA members could have made 309% on cotton, but today we see much bigger potential in rice. The recent spike in cotton reminds us of the 2008 spike in oil. Although we believe cotton will ultimately rise above $3 per pound later this decade, we could possibly see a dip to below $1.40 per pound first.
Many people in the mainstream media have been criticizing NIA's recent food inflation report, claiming that agricultural commodity prices have very little to do with prices of food in the supermarket. CNBC's Steve Liesman, in particular, claims that "rising commodity prices won't cause inflation". Liesman has it backwards. NIA has never claimed that rising commodity prices cause inflation. Soaring budget deficits that the U.S. government can't possibly pay for through taxation causes inflation when the Fed is forced to monetize the debt by printing money.
Rising commodity prices are only a symptom of inflation. The reason NIA was so bullish on agricultural commodities going back two years ago when we produced our first documentary 'Hyperinflation Nation', is because while gold is the best gauge of inflation and is often the best tool for predicting future money printing, agriculture is where the majority of the monetary inflation ends up going after the Fed's newly printed money trickles down to the middle-class and poor. With gold prices already surging two years ago when we produced 'Hyperinflation Nation', NIA said in the documentary "food prices have the potential to surge most during hyperinflation".
One thing NIA is almost 100% sure of is that come year 2015, middle-class Americans will be spending at least 30% to 40% of their income on food, similar to Egyptians today. As NIA warned in its latest documentary 'End of Liberty', if you don't have enough money to accumulate physical gold and silver, it is important to begin establishing your own food storage, and store enough food to feed you and your family for at least six months during hyperinflation. Many store shelves in Egypt are now empty after recent panic buying, with shortages of nearly all major staple items throughout the country.
The U.S. Treasury is getting ready to sell $72 billion in new long-term bonds next week, as the U.S. rapidly approaches its $14.29 trillion debt limit. The debt limit is now expected to be reached by April 5th and Treasury Secretary Geithner warned the U.S. will see "catastrophic damage" if it isn't raised. With the Federal Reserve now surpassing China and Japan as the largest holder of U.S. treasuries, the real "catastrophic damage" ahead will be hyperinflation as a result of the U.S. government doing absolutely nothing to dramatically reduce spending. It is an absolute joke that Obama during his State of the Union address announced $400 billion in spending cuts over the next 10 years, but then the very next day, the Congressional Budget Office increased its 2011 budget deficit projection by $400 billion to $1.48 trillion.
Not raising the debt limit would be a good thing, as it would force Washington to live within its means. Sure, the stock market would collapse and the U.S. economy would enter into its next Great Depression, but at least it would save the U.S. dollar from losing all of its purchasing power. In fact, the standard of living for middle class Americans might actually improve if the government allowed the free market to put our economy into a depression, because goods and services would get cheaper.
The U.S. economy has become a drug addict that is dependent on cheap and easy money from the Federal Reserve. While Wall Street bankers took home a record $135 billion in total compensation in 2010, up 5.7% from $128 billion in 2009, this money was stolen from middle-class and poor Americans through inflation. The more monetary inflation (heroin) the Federal Reserve creates in order to satisfy the (in the words of Gerald Celente) "money junkies" on Wall Street, the more middle-class and poor Americans become dependent on unemployment checks and food stamps just to survive. Millions of American students are graduating college with hundreds of thousands of dollars in debt but no jobs. Luckily for them (but not holders of U.S. dollars), NIA is hearing reports from both unemployed and underemployed college graduates with student loans that the government is reducing their required monthly payments by sometimes 90% or more based on their current incomes.
China and Japan recently saw their credit ratings downgraded, while the U.S. credit rating remains at "AAA". NIA believes it would make far more sense for the world's largest debtor nation to be downgraded instead of the world's two largest creditor nations. The Federal Reserve's second round of quantitative easing has yet to even reach the halfway point and the Fed already holds about $1.11 trillion in U.S. treasuries. By the time QE2 is over at the end of June, the Fed will own $1.6 trillion in U.S. treasuries, about what China and Japan own combined. Shockingly, Kansas City Fed President Thomas Hoenig is already dropping hints about QE3. According to Hoenig, the Fed may consider extending treasury purchases beyond June 30th, 2010, (the scheduled completion date for QE2) if U.S. economic data looks disappointing.
With the Fed taking over as the largest holder of U.S. treasuries, China is beginning to rapidly move away from the U.S. dollar and into gold. In just the first 10 months of 2010, China imported 209 metric tons of gold compared to 45 metric tons in all of 2009, a stunning five-fold increase. While the western world is downplaying the threat of inflation as much as possible, Asian countries understand that hyperinflation is the most devastating thing that can possibly happen to any economy. The demand for gold in Asia right now is the most intense it has ever been, as they look to tackle rising inflation before it becomes hyperinflation.
The Chinese are so smart that families are now giving each other gold bullion as gifts instead of traditional red envelopes filled with cash. China is now on track to soon surpass India as the world's largest consumer of gold. The China Securities Regulatory Commission recently gave Beijing-based Lion Fund Management Co. approval to create a fund that will invest into foreign gold ETFs.
U.S. stock mutual funds saw $6.7 billion in net inflows during the past two weeks, the most in any two week period since May of 2009. The rioting, looting, and civil unrest in Egypt is now making the U.S. look like the safe haven of the world, even though it should be considered the riskiest place to invest. From the Dow's low in August until now, about $38 billion was actually removed from U.S. stock mutual funds, despite the stock market rising 20%. The Dow Jones has been rising from September until now solely due to the Federal Reserve printing around $350 billion out of thin air. When central banks print money, stock markets often act as a relief valve due to there being too much inflation going into the hands of financial institutions.
The U.S. M2 money supply surged by $46.6 billion during the week ending January 17th to a record $8.8623 trillion, following a rise during the previous week of $7.6 billion. The rise in the M2 money supply over the past two weeks of $54.2 billion equals an annualized increase of 16%. The M2 multiplier now stands at 4.218 compared to a long-term average of 10. When QE2 is complete, the Fed's monetary base will likely stand at $2.59 trillion. A return to the long-term average M2 multiplier of 10 means we are due to see a 192% increase in the M2 money supply and that is not even including a possible QE3 and QE4.
The U.S. economic ponzi scheme could unravel very quickly in the years ahead, with the velocity of money increasing much faster than anybody expects. As more Americans learn about NIA and become educated to the truth about the U.S. economy and inflation, a complete loss of confidence in the U.S. dollar could occur very suddenly. It is important for all Americans to prepare as if hyperinflation will be here tomorrow. At least in Egypt, their currency still has purchasing power and their citizens are trying to implement a regime change before it is too late. By 2015 in America, it will already be too late and the civil unrest here has the potential to be many times worse.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us
What started out a few weeks ago as protests in Algeria with citizens chanting "Bring Us Sugar!" and five citizens being killed, quickly spread to civil unrest in Tunisia which saw 14 more civilian deaths, and has now spread to riots in Egypt where 300 Egyptian citizens have been killed. Food inflation in Egypt has reached 20% and citizens in the nation already spend about 40% of their monthly expenditures on food. Americans for decades have been blessed with cheap food, spending only 13% of their expenditures on food, but this is about to change.
NIA was the first to predict the recent explosion in agricultural commodity prices in our October 30th, 2009, article entitled, "U.S. Inflation to Appear Next in Food and Agriculture", which said we have a "perfect storm for an explosion in agriculture prices". A couple of months later in 'NIA's Top 10 Predictions for 2010' we predicted "Major Food Shortages" and said, "Inventories of agricultural products are the lowest they have been in decades yet the prices of many agricultural commodities are down 70% to 80% from their all time highs adjusted for real inflation". Over the past year, agricultural commodities as a whole have outperformed almost every other type of asset, with silver being one of only a few other assets keeping pace with agriculture. (On December 11th, 2009, NIA declared silver the best investment for the next decade at $17.40 per ounce and it has so far risen 64% to its current price of $28.39 per ounce).
The world is at the beginning stages of an all out inflationary panic. Wheat, which NIA previously called on 'NIAnswers' its favorite investment besides gold and silver, is now up to a new 30-month high of $8.63 per bushel and has doubled in price since June of last year. Algeria bought 800,000 tonnes of wheat this past week, bringing their total purchases for the month of January up to 1.8 million tonnes, which was quadruple expectations. Saudi Arabia is also beginning to stockpile their inventories of wheat. Rice futures have gained 8% during the past few days with Bangladesh and Indonesia placing extraordinary large orders. Indonesia's latest rice order was quadruple its normal allotment and Bangladesh plans to double rice purchases this year. Meanwhile, the U.S., which is the world's third largest exporter of rice, is expected to cut production by 25% in 2011.
NIA considers rice to be one of the world's most undervalued agricultural commodities at its current price of $15.96 per 100 pounds and forecasts a move back to its 2008 high of $24 per 100 pounds as soon as the end of 2011. NIA believes cotton, at its current price of $1.80 per pound, may have gotten a bit ahead of itself in the short-term. In NIA's first ever article about agriculture on February 17th, 2009, we said that cotton's "upside potential is astronomical" at its then price of $0.44 per pound. NIA pointed to increasing sales to textile companies in China and the fact that cotton was down 70% from its all time high as reasons to be very bullish on cotton at $0.44 per pound. Early NIA members could have made 309% on cotton, but today we see much bigger potential in rice. The recent spike in cotton reminds us of the 2008 spike in oil. Although we believe cotton will ultimately rise above $3 per pound later this decade, we could possibly see a dip to below $1.40 per pound first.
Many people in the mainstream media have been criticizing NIA's recent food inflation report, claiming that agricultural commodity prices have very little to do with prices of food in the supermarket. CNBC's Steve Liesman, in particular, claims that "rising commodity prices won't cause inflation". Liesman has it backwards. NIA has never claimed that rising commodity prices cause inflation. Soaring budget deficits that the U.S. government can't possibly pay for through taxation causes inflation when the Fed is forced to monetize the debt by printing money.
Rising commodity prices are only a symptom of inflation. The reason NIA was so bullish on agricultural commodities going back two years ago when we produced our first documentary 'Hyperinflation Nation', is because while gold is the best gauge of inflation and is often the best tool for predicting future money printing, agriculture is where the majority of the monetary inflation ends up going after the Fed's newly printed money trickles down to the middle-class and poor. With gold prices already surging two years ago when we produced 'Hyperinflation Nation', NIA said in the documentary "food prices have the potential to surge most during hyperinflation".
One thing NIA is almost 100% sure of is that come year 2015, middle-class Americans will be spending at least 30% to 40% of their income on food, similar to Egyptians today. As NIA warned in its latest documentary 'End of Liberty', if you don't have enough money to accumulate physical gold and silver, it is important to begin establishing your own food storage, and store enough food to feed you and your family for at least six months during hyperinflation. Many store shelves in Egypt are now empty after recent panic buying, with shortages of nearly all major staple items throughout the country.
The U.S. Treasury is getting ready to sell $72 billion in new long-term bonds next week, as the U.S. rapidly approaches its $14.29 trillion debt limit. The debt limit is now expected to be reached by April 5th and Treasury Secretary Geithner warned the U.S. will see "catastrophic damage" if it isn't raised. With the Federal Reserve now surpassing China and Japan as the largest holder of U.S. treasuries, the real "catastrophic damage" ahead will be hyperinflation as a result of the U.S. government doing absolutely nothing to dramatically reduce spending. It is an absolute joke that Obama during his State of the Union address announced $400 billion in spending cuts over the next 10 years, but then the very next day, the Congressional Budget Office increased its 2011 budget deficit projection by $400 billion to $1.48 trillion.
Not raising the debt limit would be a good thing, as it would force Washington to live within its means. Sure, the stock market would collapse and the U.S. economy would enter into its next Great Depression, but at least it would save the U.S. dollar from losing all of its purchasing power. In fact, the standard of living for middle class Americans might actually improve if the government allowed the free market to put our economy into a depression, because goods and services would get cheaper.
The U.S. economy has become a drug addict that is dependent on cheap and easy money from the Federal Reserve. While Wall Street bankers took home a record $135 billion in total compensation in 2010, up 5.7% from $128 billion in 2009, this money was stolen from middle-class and poor Americans through inflation. The more monetary inflation (heroin) the Federal Reserve creates in order to satisfy the (in the words of Gerald Celente) "money junkies" on Wall Street, the more middle-class and poor Americans become dependent on unemployment checks and food stamps just to survive. Millions of American students are graduating college with hundreds of thousands of dollars in debt but no jobs. Luckily for them (but not holders of U.S. dollars), NIA is hearing reports from both unemployed and underemployed college graduates with student loans that the government is reducing their required monthly payments by sometimes 90% or more based on their current incomes.
China and Japan recently saw their credit ratings downgraded, while the U.S. credit rating remains at "AAA". NIA believes it would make far more sense for the world's largest debtor nation to be downgraded instead of the world's two largest creditor nations. The Federal Reserve's second round of quantitative easing has yet to even reach the halfway point and the Fed already holds about $1.11 trillion in U.S. treasuries. By the time QE2 is over at the end of June, the Fed will own $1.6 trillion in U.S. treasuries, about what China and Japan own combined. Shockingly, Kansas City Fed President Thomas Hoenig is already dropping hints about QE3. According to Hoenig, the Fed may consider extending treasury purchases beyond June 30th, 2010, (the scheduled completion date for QE2) if U.S. economic data looks disappointing.
With the Fed taking over as the largest holder of U.S. treasuries, China is beginning to rapidly move away from the U.S. dollar and into gold. In just the first 10 months of 2010, China imported 209 metric tons of gold compared to 45 metric tons in all of 2009, a stunning five-fold increase. While the western world is downplaying the threat of inflation as much as possible, Asian countries understand that hyperinflation is the most devastating thing that can possibly happen to any economy. The demand for gold in Asia right now is the most intense it has ever been, as they look to tackle rising inflation before it becomes hyperinflation.
The Chinese are so smart that families are now giving each other gold bullion as gifts instead of traditional red envelopes filled with cash. China is now on track to soon surpass India as the world's largest consumer of gold. The China Securities Regulatory Commission recently gave Beijing-based Lion Fund Management Co. approval to create a fund that will invest into foreign gold ETFs.
U.S. stock mutual funds saw $6.7 billion in net inflows during the past two weeks, the most in any two week period since May of 2009. The rioting, looting, and civil unrest in Egypt is now making the U.S. look like the safe haven of the world, even though it should be considered the riskiest place to invest. From the Dow's low in August until now, about $38 billion was actually removed from U.S. stock mutual funds, despite the stock market rising 20%. The Dow Jones has been rising from September until now solely due to the Federal Reserve printing around $350 billion out of thin air. When central banks print money, stock markets often act as a relief valve due to there being too much inflation going into the hands of financial institutions.
The U.S. M2 money supply surged by $46.6 billion during the week ending January 17th to a record $8.8623 trillion, following a rise during the previous week of $7.6 billion. The rise in the M2 money supply over the past two weeks of $54.2 billion equals an annualized increase of 16%. The M2 multiplier now stands at 4.218 compared to a long-term average of 10. When QE2 is complete, the Fed's monetary base will likely stand at $2.59 trillion. A return to the long-term average M2 multiplier of 10 means we are due to see a 192% increase in the M2 money supply and that is not even including a possible QE3 and QE4.
The U.S. economic ponzi scheme could unravel very quickly in the years ahead, with the velocity of money increasing much faster than anybody expects. As more Americans learn about NIA and become educated to the truth about the U.S. economy and inflation, a complete loss of confidence in the U.S. dollar could occur very suddenly. It is important for all Americans to prepare as if hyperinflation will be here tomorrow. At least in Egypt, their currency still has purchasing power and their citizens are trying to implement a regime change before it is too late. By 2015 in America, it will already be too late and the civil unrest here has the potential to be many times worse.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us
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
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
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=>>
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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