The economic storm clouds are getting darker. More writers are calling this a financial "tsunami," and more are comparing it with the Great Depression of the 1930's. The only voices of optimism are Paulson, Bernanke and Bush, and the lap dog mainstream press. And their credibility is plummeting.
Yet I find a number of people, in the spirit of American optimism, think I'm exaggerating. They believe the rhetoric that the Fed will fix things and we'll "muddle through" to face the next crisis. How I wish it were so this time.
The truth is, the die was cast a long time ago. When the US dollar was on a gold standard, monetary discipline was imposed on the financial system. With the founding of the Federal Reserve System in 1913 and Roosevelt's abandonment of the gold standard in 1933, we went on a debt standard. Nixon threw out the last vestige of monetary restraint in 1971 when he closed the gold window. Now the US dollar was backed by nothing but debt, and the "full faith and credit" of the US Government (i.e., the printing press in the back room).
Given the proclivities of politicians to spend money and wage war without raising taxes, the fate of the dollar was sealed. The only variable was how long would it take? A good date to pick for the death of the dollar is 2013, the hundreth anniversary of the founding of the Fed.
FDR and LBJ, as well as every administration since, ramped up social welfare spending that could not be funded in the long run, i.e, when the Baby Boomers started retiring. The Federal Government grew into a self-sustaining, expensive bureaucracy that outlasts every President and never stops increasing in size and cost. The military-industrial complex Eisenhower warned about turned the US into a welfare-warfare state, with the resulting Demopublican War Party firmly entrenched in power.
The media had its last hurrah as a watchdog after Watergate and Iran-Contra. Now the top media stars are highly paid celebrities beholden to their corporate masters, with interlocking ownership and directorates with the entire military-corporatist-banking-globalist establishment.
The Bush-Cheney-NeoCon "war on terror" has become a war on America, installing the machinery for a full-blown police state. John McCain and Barack Obama are salivating at the thought of wielding all that power to push their own agendas. Both have pledged to carry on the NeoCon program in the Middle East and subservience to Israeli Zionists. Moreover, Obama is pushing a socialist-communitarian-communist ideology that promises fundamental changes in the rights to life, liberty, property and self-defense that most Americans cherish. But more on politics in another post.
If you still believe things aren't too bad economically, you owe it to yourself to challenge your premises. Your financial future depends on it. Start with a trip to John Williams' excellent Shadow Government Statistics. He exposes in great detail the biased and often-manipulated government economic reporting.
For political reasons, important statistical indicators of economic health have been biased to minimize the bad news about inflation, the federal deficit, unemployment, GDP, etc. This started before Bush II. Williams reconstructs and continues measures the government dropped (like M-3 money supply growth), and recalculates others with their original components (like CPI). The results are staggering.
For instance, by applying Generally Accepted Accounting Practices to the US Government, we're adding an average of $4.6 Trillion a year to our indebtedness! The Federal Net Worth was a negative $57.1 Trillion at the end of 2007!! There is no way to tax or grow our way to solvency. And the politicians seem determined to keep printing money out of thin air to bail out the financial system and cover our obligations.
A must read is his comprehensive report "Hyperinflation." If you will take time to study this well-written 27-page report, you will see why he says a "hyperinflationary depression" worse than the Great Depression (Great Depression II, if you will) is unavoidable between 2010 and 2018. Probably it will be sooner than later. The graphs are clear about what has happened to the value of the dollar, and what is its fate.
Please read this report! His economic theory is sound and his statistics impeccable. You will see why you must put yourself on a plan to survive the meltdown of the dollar. Yes, the Weimar Republic can happen here. So can the rise of a messianic dictator who offers hope and "economic security" in the midst of economic catastrophe and the resulting social unrest. [Friends, the federal government is not able to provide economic security for anyone. Remember "I am from the government, and I'm here to help you"?]
At the risk of distracting you from the main report, I provide secondary evidence that the consumer is tapped out. Unemployment is rising, wages are falling, auto sales are crashing, credit cards are maxed, "discretionary" purchases are going instead to buy higher prices energy and food. The US economy, based 70% on consumer spending, is contracting.
Did I mention that banking systems around the world are failing? First Priority Bank in Florida failed Friday, the 8th US bank this year. The National Bank of Australia took a 90% loss on US mortgage debt writedowns. Royal Bank of Scotland is poised for the biggest loss in UK banking history. One observer says the Fed is panicking to hide the truth about the credit crisis so that the wealthy can be bailed out at the expense of the poor.
If Bush-Cheney-McCain-Obama-Israel start a war with Iran, the hyperinflation timetable shortens considerably. And shades of 9/11, what are we to make of Pulitzer Prize-winning journalist Seymour Hersh's shocking revelations "that Bush administration officials held a meeting recently in the Vice President’s office to discuss ways to provoke a war with Iran?"
Says Hersh, "There was a dozen ideas proffered about how to trigger a war. The one that interested me the most was why don’t we build — we in our shipyard — build four or five boats that look like Iranian PT boats. Put Navy seals on them with a lot of arms. And next time one of our boats goes to the Straits of Hormuz, start a shoot-up." Cheney's "false flag operation" sounds like Operation Northwoods reincarnated. (Keith Olbermann gave Cheney his "worst person in the world" award for this idea.)
Take advantage of the last few weeks of the traditional summer doldrums in the precious metals. The base for gold seems established at $910 and silver at $17. Expect gold at near $1200 and silver above $20 by the end of 2008, IF Iran is not attacked. (Big IF). A few graphs (and here) might give you courage. Howard Ruff says "inflation is not rising prices; it's a falling dollar."
I've been begging some of my dear friends to buy gold for the last five years. It was always "too high," at $375, $450, $600, $650. Today it still seems high at $910. Meanwhile, whereas the dollar could buy 1 Euro for $0.85 six years ago, it now takes almost $1.60. As experienced traders say, "Don't fight the trend!" And as Gary North says, "Procrastination kills!"
Grace and Courage and Peace be with you!
Showing posts with label bank failures. Show all posts
Showing posts with label bank failures. Show all posts
Sunday, August 3, 2008
Wednesday, July 16, 2008
Full-Blown Fascism Emerging in America
During the Viet Nam war, protesters freely threw around the accusation that the US government was becoming fascist. While I knew they were technically correct in terms of collusion of business and government, our government still seemed largely constrained by the chains of the Constitution. Sadly, that's no longer the case.
In his brilliant video, "From Freedom to Fascism," Aaron Russo traces the seeds of American fascism to the institution of the federal income tax and Federal Reserve Bank in 1913. Thomas Jefferson repeatedly warned that a central bank would spell the end of freedom in the US.
I've seen several lists like the one Naomi Wolf gives as her ten steps (video) (print) followed by every country that abandons freedom for fascism. They're all happening here. With the announcement yesterday that we now have one million people on the official terrorist watch, her discussion about how she and many others were put on the list is chilling.
Yes, 9-11 changed everything -- including Americans' understanding of, and desire for, political freedom. Hitler used the Reichstaag fire to pass the Enabling Act to take total power in Germany. In the same way, Bush used 9-11 as the pretext for passing the PATRIOT ACTS I & II and their bretheren. It is interesting that China is building a high-tech police state with the help of US technology.
The recent passage of the revamped FISA law is one more step towards total tyranny. Joel Skousen writes: "With the final passage of the FISA reform bill this week, the US Senate has reached a new low in its outright disregard for the constitution its members are sworn to uphold. Simply put, Congress has no power to legislate any law that violates any of the provisions of the constitution. Period.
In this case, the constitution is clear: no warrantless searches are permitted--none. That's what constitutions are supposed to do: put strict limits on lawmaking power so that individual rights are protected from evil minorities, evil majorities, or in this case, insipid yes men in Congress eager to please those above them conspiring to use the phony threat of terrorism to dismantle constitutional protections."
For all you folks who have put your hope in Obama, after saying he wouldn't, he voted for FISA. I hate to burst your bubble, but he won't do away with the total surveillance state. Nor will he withdraw from Iraq, or keep us out of Iran. He's under the thumb of the same PTB as Bush, and McCain. Think Obama is anti-war? He just promised 10,000 more US soldiers to Afghanistan! Does anyone remember how the Soviet Union was brought down in part because of their disastrous Afghan adventure? McBama OCain for President!
More and more liberals and progressives are warning that "voting for Obama and keeping one's fingers crossed, is not a sign of hope. It's a sign of self-delusion." So is voting for McCain to "perserve freedom."
Bill Moyers decries the demise of the media into their current position as lap dogs of the PTB. "Sadly . . . the Fourth Estate has become the fifth column of democracy, colluding with the powers that be in a culture of deception that subverts the thing most necessary to freedom, and that is the truth."
If the media had been doing its job, it "could have spared that country from rack and ruin, saved thousands of American lives and hundreds of thousands of Iraqi lives, and freed hundreds of billions of dollars for investment in the American economy and infrastructure." Instead, the media basically parroted the erroneous and misleading intelligence fed to them by the liars who wanted this war.
Stephen Colbert skewered the press two years ago when he revealed how they operate when he keynoted the US Press Club dinner: ". . . let's review the rules. Here's how it works. The president makes decisions, he’s the decider. The press secretary announces those decisions, and you people of the press type those decisions down. Make, announce, type. Put them through a spell check and go home. Get to know your family again. Make love to your wife. Write that novel you got kicking around in your head. You know, the one about the intrepid Washington reporter with the courage to stand up to the administration . . . You know, Fiction."
TSA announced earlier this month that they want to develop a "safety bracelet" for all airline passengers to wear. Taking the place of a boarding pass, it will not only monitor your whereabouts, but be your own personal Taser device -- on you, of course! Announcing the new iShock!
__________________________________________
A Sign of our Times - In the fifth this year of many coming bank failures, the California's IndyMac had lines of depositors trying to get their money. Those with more than $100K were left holding the bag. Without a massive infusion, the FDIC will be able to cover only a small fraction of the total number of bank deposits at risk. In an attempt to calm the public, and FDIC official assures us that the former IndyMac Bank is "as safe and as sound as any bank in the country right now." If IndyMac just failed, what does that say about the other banks?!
Some $1 billion of uninsured deposits held by 10,000 IndyMac customers are now trapped and federally seized. Since FDIC only insures deposits of up to $100,000, holders of accounts with larger amounts under one social security number (business and/or personal) may consider dispersing funds to safer havens.
The new plan to bail out Fannie Mae and Freddie Mac could cost US taxpayers hundreds of billions, if not trillions, of dollars. Ambrose Evans-Pritchard writes that as the full effects of the Fannie Mae and Freddie Mac debacle spread through the world, the US could face a "foreign funding crisis." That could be devasting since we depend upon $700 billion a year in funding from Asian, Russian and Middle Eastern sources to fund our current account deficit.
So we're borrowing money to fund to fund the wars in Iraq and Afghanistan, and so Iraqi puppet Prime Minister al-Maliki can hand out cash on the streets of Baghdad?
_____________________________________
The increase in the wholesale inflation rate is the highest in 27 years!
______________________________________________
Iran just discovered a huge new oil field and signed a signed a major oil deal with Russia. Now an attack on Iran will now be viewed as an attack on Russia's vital interests. China aleady views it as such because of a long-term $400 billion LNG contract. The Russions have reportedly stationed their latest fighters and bombers in easy reach of Iran and Iraq if their vital interests are threatened. Are we at the edge of the abyss? Maybe so, if it is true that Bush supports an Israeli attack on Iran.
Maybe it is only our own soliders who have the leverage to stop the war with Iran. Support the Troops! Bring 'em Home!
In his brilliant video, "From Freedom to Fascism," Aaron Russo traces the seeds of American fascism to the institution of the federal income tax and Federal Reserve Bank in 1913. Thomas Jefferson repeatedly warned that a central bank would spell the end of freedom in the US.
I've seen several lists like the one Naomi Wolf gives as her ten steps (video) (print) followed by every country that abandons freedom for fascism. They're all happening here. With the announcement yesterday that we now have one million people on the official terrorist watch, her discussion about how she and many others were put on the list is chilling.
Yes, 9-11 changed everything -- including Americans' understanding of, and desire for, political freedom. Hitler used the Reichstaag fire to pass the Enabling Act to take total power in Germany. In the same way, Bush used 9-11 as the pretext for passing the PATRIOT ACTS I & II and their bretheren. It is interesting that China is building a high-tech police state with the help of US technology.
The recent passage of the revamped FISA law is one more step towards total tyranny. Joel Skousen writes: "With the final passage of the FISA reform bill this week, the US Senate has reached a new low in its outright disregard for the constitution its members are sworn to uphold. Simply put, Congress has no power to legislate any law that violates any of the provisions of the constitution. Period.
In this case, the constitution is clear: no warrantless searches are permitted--none. That's what constitutions are supposed to do: put strict limits on lawmaking power so that individual rights are protected from evil minorities, evil majorities, or in this case, insipid yes men in Congress eager to please those above them conspiring to use the phony threat of terrorism to dismantle constitutional protections."
For all you folks who have put your hope in Obama, after saying he wouldn't, he voted for FISA. I hate to burst your bubble, but he won't do away with the total surveillance state. Nor will he withdraw from Iraq, or keep us out of Iran. He's under the thumb of the same PTB as Bush, and McCain. Think Obama is anti-war? He just promised 10,000 more US soldiers to Afghanistan! Does anyone remember how the Soviet Union was brought down in part because of their disastrous Afghan adventure? McBama OCain for President!
More and more liberals and progressives are warning that "voting for Obama and keeping one's fingers crossed, is not a sign of hope. It's a sign of self-delusion." So is voting for McCain to "perserve freedom."
Bill Moyers decries the demise of the media into their current position as lap dogs of the PTB. "Sadly . . . the Fourth Estate has become the fifth column of democracy, colluding with the powers that be in a culture of deception that subverts the thing most necessary to freedom, and that is the truth."
If the media had been doing its job, it "could have spared that country from rack and ruin, saved thousands of American lives and hundreds of thousands of Iraqi lives, and freed hundreds of billions of dollars for investment in the American economy and infrastructure." Instead, the media basically parroted the erroneous and misleading intelligence fed to them by the liars who wanted this war.
Stephen Colbert skewered the press two years ago when he revealed how they operate when he keynoted the US Press Club dinner: ". . . let's review the rules. Here's how it works. The president makes decisions, he’s the decider. The press secretary announces those decisions, and you people of the press type those decisions down. Make, announce, type. Put them through a spell check and go home. Get to know your family again. Make love to your wife. Write that novel you got kicking around in your head. You know, the one about the intrepid Washington reporter with the courage to stand up to the administration . . . You know, Fiction."
TSA announced earlier this month that they want to develop a "safety bracelet" for all airline passengers to wear. Taking the place of a boarding pass, it will not only monitor your whereabouts, but be your own personal Taser device -- on you, of course! Announcing the new iShock!
__________________________________________
A Sign of our Times - In the fifth this year of many coming bank failures, the California's IndyMac had lines of depositors trying to get their money. Those with more than $100K were left holding the bag. Without a massive infusion, the FDIC will be able to cover only a small fraction of the total number of bank deposits at risk. In an attempt to calm the public, and FDIC official assures us that the former IndyMac Bank is "as safe and as sound as any bank in the country right now." If IndyMac just failed, what does that say about the other banks?!
Some $1 billion of uninsured deposits held by 10,000 IndyMac customers are now trapped and federally seized. Since FDIC only insures deposits of up to $100,000, holders of accounts with larger amounts under one social security number (business and/or personal) may consider dispersing funds to safer havens.
The new plan to bail out Fannie Mae and Freddie Mac could cost US taxpayers hundreds of billions, if not trillions, of dollars. Ambrose Evans-Pritchard writes that as the full effects of the Fannie Mae and Freddie Mac debacle spread through the world, the US could face a "foreign funding crisis." That could be devasting since we depend upon $700 billion a year in funding from Asian, Russian and Middle Eastern sources to fund our current account deficit.
So we're borrowing money to fund to fund the wars in Iraq and Afghanistan, and so Iraqi puppet Prime Minister al-Maliki can hand out cash on the streets of Baghdad?
_____________________________________
The increase in the wholesale inflation rate is the highest in 27 years!
______________________________________________
Iran just discovered a huge new oil field and signed a signed a major oil deal with Russia. Now an attack on Iran will now be viewed as an attack on Russia's vital interests. China aleady views it as such because of a long-term $400 billion LNG contract. The Russions have reportedly stationed their latest fighters and bombers in easy reach of Iran and Iraq if their vital interests are threatened. Are we at the edge of the abyss? Maybe so, if it is true that Bush supports an Israeli attack on Iran.
Maybe it is only our own soliders who have the leverage to stop the war with Iran. Support the Troops! Bring 'em Home!
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