HOW I SEE IT: Webb, Warner, Obama must change | Culpeper Star-Exponent

HOW I SEE IT: Webb, Warner, Obama must change | Culpeper Star-Exponent

Safe Haven | Residential Lending Credit Losses Worsen as Unstainable Government Support Proves... Unsustainable

Safe Haven | Residential Lending Credit Losses Worsen as Unstainable Government Support Proves... Unsustainable

How Barack Obama and Ben Bernanke are destroying the dollar – and perhaps ushering in the amero

First under the Bush Administration and even more so under President Obama, the federal government has been seizing power and spending money as it hasn’t done since World War II. But as bold as the Executive Branch has been during this financial crisis, the innovations of Fed chairman Ben Bernanke have been literally unprecedented. Indeed, it is entirely plausible that before Obama leaves office, Americans will be using a new currency.

Bush and Obama have engaged in record peacetime deficit spending; so too did Herbert Hoover and then Franklin Roosevelt (even though in the 1932 election campaign, FDR promised Americans a balanced budget). Bush and Obama approved massive federal interventions into the financial sector, at the behest of their respective Treasury secretaries. Believe it or not, in 1932 the allegedly “do-nothing” Herbert Hoover signed off on the creation of the Reconstruction Finance Corporation (RFC), which was given billions of dollars to prop up unsound financial institutions and make loans to state and local governments. And as with so many other elements of the New Deal, FDR took over and expanded the RFC that had been started under Hoover.

In the past year, the government has seized control of more than half of the nation’s mortgages, it has taken over one of the world’s biggest insurers, it literally controls major car companies, and it is now telling financial institutions how much they can pay their top executives. On top of this, the feds are seeking vast new powers over the nation’s energy markets (through the House Waxman-Markey “Clean Energy and Security Act” and pending Kerry-Boxer companion bill in the Senate) and, of course, are trying to “reform” health care by creating expansive new government programs.

For anyone who thinks free markets are generally more effective at coordinating resources and workers, these incredible assaults on the private sector from the central government surely must translate into a sputtering economy for years. Any one of the above initiatives would have placed a drag on a healthy economy. But to impose the entire package on an economy that is mired in the worst postwar recession, is a recipe for disaster.

Debt and Inflation


Conventional economic forecasts for government tax receipts are far too optimistic. The U.S. Treasury will need to issue far more debt in the coming years than most analysts now realize. Yet even the optimistic forecasts are sobering. For example, in March the Congressional Budget Office projected that the Obama administration’s budgetary plans would lead to a doubling of the federal debt as a share of the economy, from 41 percent of GDP in 2008 to 82 percent of GDP by 2019. The deficit for fiscal year 2009 (which ended Sept. 30) alone was $1.4 trillion. For reference, the entire federal budget was less than $1.4 trillion in the early years of the Clinton administration.

Clearly the U.S. government will be incurring massive new debts in the years to come. The situation looks so grim that economist Jeffrey Hummel has predicted that the Treasury will default on its obligations, just as Russia defaulted on its bonds in 1998. But another scenario involves the Federal Reserve wiping out the real burden of the debt by writing checks out of thin air to buy up whatever notes the Treasury wants to issue.

Many analysts are worried about Fed chairman Ben Bernanke’s actions during the financial crisis; Marc Faber is openly warning of “hyperinflation.” To understand what the fuss is about, consider some facts about our monetary and banking system.

The United States has a fractional reserve banking system. When someone deposits $100 in a checking account, most of that money is lent out again to other bank customers. Only a fraction – typically around 10 percent – needs to be held “on reserve” to back up the $100 balance of the original depositor. A bank’s reserves can consist of either cash in the vault or deposits with the Federal Reserve itself. For example, suppose a given bank has customer checking accounts with a combined balance of $1 billion. Assuming a 10 percent reserve requirement, the bank needs $100 million in reserves. It can satisfy this legal requirement by keeping, say, $30 million in actual cash on hand in its vaults and putting $70 million on deposit in the bank’s account with the Fed.

Normally, the Fed expands the money supply by engaging in “open market operations.” For example, the Fed might buy $1 billion worth of government bonds from a dealer in the private sector. The Fed adds the $1 billion in bonds to the asset side of its balance sheet, while its liabilities also increase by $1 billion. But Bernanke faces no real constraints on his purchasing decisions. When the Fed buys $1 billion in new bonds, it simply writes a $1 billion check on itself. There is no stockpile of money that gets drained because of the check; the recipient simply deposits the check in his own bank, and the bank in turn sees its reserves on deposit with the Fed go up by $1 billion. In principle, the Fed could write checks to buy every asset in America.

Monetary Catastrophe

Since the start of the present financial crisis, the Federal Reserve has implemented extraordinary programs to rescue large institutions from the horrible investments they made during the bubble years. Because of these programs, the Fed’s balance sheet more than doubled from September 2008 to the end of the year, as Bernanke acquired more than a trillion dollars in new holdings in just a few months.

http://www.lewrockwell.com/murphy/murphy165.html

Daniel Rugroden, Hickson, N.D., letter: Obama didn’t earn the Nobel Peace Prize

President Barack Obama will travel to Norway this month to pick up his Nobel Peace Prize. My grandparents came from Norway. For the first time in my adult life, I am not proud of my heritage, Norway. I am so ashamed of my Norwegian roots that I fasted for a week. Yep, I gave up lutefisk for one whole week.

HICKSON, N.D. — President Barack Obama will travel to Norway this month to pick up his Nobel Peace Prize.
My grandparents came from Norway. For the first time in my adult life, I am not proud of my heritage, Norway.
I am so ashamed of my Norwegian roots that I fasted for a week. Yep, I gave up lutefisk for one whole week.
Things have to be pretty fishy to get his Norwegian Lutheran to give up lutefisk.
The Norwegian Parliament appointed five people to select the winner that bears the name of Alfred Nobel. They received 205 nominations.
Nobel wanted his peace prize to be awarded to the one person who has done the most to reduce standing armies and the promotion of peace.
Has Obama done the most for peace?
Maybe Obama got the peace prize for his years and years of public service as president. Not possible. Obama was president for less than two weeks when he was nominated.
Maybe Obama got the peace prize for ending wars. Not true. America is still at war in Iraq and Afghanistan, Under Obama, troop levels in Afghanistan have actually increased.
Maybe Obama got the peace prize for fantastic economic development that brought peace and prosperity. Not really. Unemployment has skyrocketed under Obama. The value of the dollar has plummeted. Private businesses have failed.
So, why was Obama given the Nobel Peace Prize? Obama was given the award because it was politically correct to do so.
The socialist rewarded a fellow socialist for being a socialist. Obama did not earn it. The noble intentions of Nobel are ignored for a political agenda. This is a conspiracy to destroy the sovereign Constitutional Republic of America and bring in a socialist North American Union.
http://www.grandforksherald.com/event/article/id/143824/group/Opinion/

A very convenient untruth in an Inconvenient Truth

Money that could and should be spent on creating jobs in recycling and remediation would go to financial industry plotters who create nothing but paper and wealth for multinational corporations

By Frank Touby

I am shocked and saddened to report that human caused global warming is likely a scam and that Environmental Saint Al Gore may be little more than an avaricious businessman picking as many pockets as he can. Perhaps by now you may have finally seen this story in the so-called “mainstream media.”

 

“Corporate media” is a better label, because some of those monster corporations that own mass media giants stand to gain from such a swindle. But they’re not quick to report on what looks like an unbelievably bold disinformation conspiracy by scientists who are taken at face value on what was called global warming and is now renamed climate change. The same criminals who shipped out US$25 trillion, give or take a few, to European and other foreign banks after draining Americans’ pockets with derivatives schemes that broke the economy and made many homeless, are back at it and they’re aiming at your pocket. And they are likely threatening Canada’s sovereignty.

 

The whole unsavoury business has apparently been exposed either by computer hackers or whistle blowers who entered the bastion of global warming/climate change “science” at East Anglia University in Britain and dug out emails and other disturbing proofs that you can readily see with an Internet search for “climate change scam.” You can download the 85- megabyte compressed file of all they discovered. The Wall Street Journal, among other websites, has made it available. The most damning files are already admitted by the culprits to be true.

 

They seem to be clear proof that compromised scientists invented man-made global warming evidence and, when it turned out that the forecasted warming wasn’t happening, they and their backers shifted to “climate change” as a catch-all label. They concealed that carbon—the elemental building block of life—isn’t much of a contributor. Financial-sector crooks who play with your deposits and premiums in the casino like “investment” markets are behind the cap-and-trade ( C & T ) plunder that would at the start give big businesses free derivative paper allowing them to emit various amounts of carbon in North America and Europe. They can sell the paper to smaller producers and ship their own carbon heavy manufacturing operations (and jobs) to less-developed countries, which are allowed to produce all the carbon they can.

 

So C&T is a big gift of cash to the insiders and it’s coming from you in the form of carbon taxes like those that silly professor touted to cost himself a recent federal election and the Liberal leadership: “Vote pour moi and I’ll carbon-tax you.” Compelling, eh? Sure, if you’re a dewy-eyed student who’s been force-fed Al Gore propaganda. The inconvenient truth is, according to the hacked or whistle-blown information, that human-produced carbon has nothing to do with climate change, which it seems, might even be heading us toward an era of cooler climate. Nobody really knows. The climate scientists, whose emails and research was disclosed for all to see, show that they tried to conceal information that contradicted their positions on warming and made efforts to punish and discredit colleagues who disagreed with their “findings.” The actual results of their research were tweaked to support a speculative theory of carbon threat to earth when there apparently isn’t one and they seemingly knew it.

 

So human-controlled sustainability of the planet isn’t an issue unless it’s in the less-lucrative arena of combating pollution. While human beings can certainly pollute the planet in many ways, there’s no consensus on how to do something truly useful in combating that. It’s just not sexy enough and there’s no money in it for the schemers. Money that could and should be spent creating jobs for work crews to reverse pollution of our oceans, fields, streams and mountains is handed over to financial “industry” plotters who produce nothing but paper and wealth for multinationals and their controlling elites. Money that should be spent creating jobs at recycling and remediation operations— something truly meritorious and sustainable as an industry—instead goes to impoverish the middle class. Whether oil is running out or not, the fact is that alcohol is well-known as a clean burning, higher octane motor fuel that can be made from non-food plants and inedible parts of food crops.

 

Yet industry cynically uses corn, a food crop, to produce methanol to slightly dilute gasoline for motor vehicles. Some peoples suffer food shortages that are made even more acute by industry committing a portion of corn crops and food cropland to alcohol production. They do because it takes big operations, like Alberta’s land-killing tar sands or mountain-demolishing coal mining in the U.S. , to deal with oil and gas production, while alcohol can be produced by many small local operations. Where are the profits for Big Business in that scenario? From the Copenhagen confab we’ll be hearing talk of “global governance” to “save the planet.” Shave the planet is more like it. These tax protocols are aimed at subjecting our nation to the orders of a super-dictatorial agency like the European Union.

 

Canada is already on the list to possibly merge with corrupt, third-world Mexico as part of a North American Union that includes the U.S. Sounds warm and cozy, doesn’t it? Watch your jobs vanish faster and your wages sag in this contrived, politically correct propaganda campaign to save the planet by losing our country. While we’re on the subject of tax scams let’s look at the Harmful Sales Tax poor dumb Dalton was tricked into sponsoring by Tory villain Jim Flaherty. It started in 1991 as a grab by the Rightly Despised Brian Mulroney, who imposed the Tory Tax Curse (GST) on Canadians, who later drove him from office in 1993. The job-creation baloney Mulroney spewed was that GST helped our manufacturers export. Then he went about signing free-trade deals that killed our manufacturing industries. Like all sales taxes, GST punishes the poor and middle classes to help corporations.

 

The HST will go a giant step farther and whack all consumers in Ontario, but hurt the poorest the greatest. To make things even more idiotic, Dalton has made Tory bad-guy Tim Hudak look like a consumer advocate in opposing the Tory initiated HST. The provincial Grits deserve to lose power, but not to get the Mike Harris swineherd on our backs again. The sad truth is that “inconvenient truths” may instead be convenient untruths driven by hidden agendas.

http://www.thebulletin.ca/

China Blames Foreign Investment Banks for Losses

BEIJING—A Chinese economic official blamed "fraudulent practices" at some international investment banks for large losses incurred by Chinese state-owned companies on derivative contracts, in the government's strongest criticism yet of the role played by foreign banks.
Li Wei, a vice chairman of the State-Owned Assets Supervision and Administration Commission, cited contracts tied to energy prices sold by banks including Goldman Sachs Group Inc., Merrill Lynch & Co., and Morgan Stanley to aviation and shipping firms.
Mr. Li, writing in the latest issue of the Study Times, a newspaper published by the Party School of the Central Committee of the Communist Party, also criticized Citigroup Inc., along with Merrill Lynch and Morgan Stanley, for developing "extremely complicated" derivatives products that were hard to understand.
He said 68 state-owned enterprises incurred combined book losses of 11.4 billion yuan ($1.67 billion) on 125 billion yuan worth of derivatives investments by the end of October last year. Foreign investment banks were the "chief culprits" behind the huge losses, he said.
Between June and August last year, when global oil prices peaked at $140 a barrel, state-owned China Eastern Air Holding Co., China National Aviation Holding Co. and Cosco Group signed large contracts with foreign investment banks to buy call options and sell put options, Mr. Li said.
Soon after those contracts were signed, oil prices fell below the exercise prices of the options, which caused losses on both sides of the contracts, he said. As of the end of 2008, the three companies incurred net book losses of 19.9 billion yuan on a combined contract market value of 9.2 billion yuan, Mr. Li said.
"Some fraudulent practices by some international investment banks resulted in major losses," Mr. Li said. Chinese companies should bear some responsibility, but the losses "are also closely linked to hostile sales of certain fraudulent, complicatedly designed high-leveraged products by international investment banks."
Spokespersons for Goldman Sachs, Citigroup and Merrill Lynch declined comment. A spokesman for Morgan Stanley couldn't immediately be reached.
Privately, some foreign investment bankers have expressed frustration at the commission's support for state firms that now owe them huge sums of money, and they fear the funds will never be repaid.
The commission, which supervises more than 100 of China's largest state-owned enterprises, said in September that it would support state-owned companies challenging foreign banks over energy-linked derivatives losses. It also said it reserved the right to file lawsuits itself.
However, Mr. Li said state-owned enterprises shouldn't "give up eating for fear of choking" and stop buying derivative contracts. Derivatives offer opportunities to hedge against potential risk, and Chinese companies will find it hard to compete with foreign rivals without them, he said.
Mr. Li urged state-owned enterprises to comply with regulations and make sure any investments in financial derivative products are to hedge risk rather than speculate. State-owned companies must ask their financial advisers to list all possible risks, he said.
— Victoria Ruan

They're going to kill the Fed

Tentative last safe date to get your Bernankes traded for something of intrinsic value is the end of the first quarter, 2010.
Well...you you could just take my word for it and save both of us some valuable time, but you probably want enough details to know how I made this dizzying leap a couple of weeks ago. My landing spot has been confirmed to my satisfaction by what Chris Dodd is up to.
It is the usual combination of what the dogs did not do in the night, how I would solve the problem if it were mine and I were a Statist, and wisdom accumulated from my gracious hosts at Agora Financial and a lot of time reading obscure articles and foreign newspapers. (English papers can be far more informative than ours.)
I am supposing that you are aware of the money-laundering scheme which funds the current regime? Congress raises the debt ceiling, Treasury Timmy burns out bearings on the printing presses and funnels the money over to Benny Big Bucks; the "money" swooshes through the system several times to US and foreign banks and corporations, including that which is smuggled over so that other governments can "buy" treasuries with the newly-created money substitute, sticking to assorted fingers in copious amounts. Fiat currency is rather like depreciation on your house, as interpreted by your insurance company which does not recognize that the value of a thing is what it costs to replace it. Every time fiat money changes hands it is worth less for the reason insurers give: it's older.
In the meantime, the Fed has been very busy buying up sliced and diced materials to have sausage to hang in the window. (Okay, call them "toxic mortgages," but while I'm telling you the roof is really going to fall in this time we may as well indulge in a little flippancy.) Ostensibly, the Fed is rescuing Fannie Mae, Freddie Mac, and assorted banks who have no idea who holds title to many properties any more, and being the savior of what Hillary refers to contemptuously as "the little people" and their underwater mortgages. Right.
If you insist drearily on having that in dignified macroeconomic terms, the Fed is buying up GSE's by the trainload. The Fed has also announced that it will purchase another 1.2 trillion (yes, TRillion) in treasuries in the next quarter (and a mere two or three hundred billion more before the end of the year) and that it will buy no more after that-which was why I gave you the 31 March deadline. It is busy taking on all the debt it can...but has warned it will not continue to do so.
In the meantime we have learned from a censorious Congress that the Fed cannot account for umpty trillions and that it declines to say which banks it "bailed out" because that would jeopardize those banks' standing and gravitas, as well as making us all as mad as fire.
Congress, outraged on our behalf, gathered 285 sponsors for a bill to Audit The Fed. Gasp, what an idea, particularly since it hasn't been done honestly in nearly a century. So...how is it that that sort of power and support cannot pass the Bill and send a team of auditors trotting over? Once again, what the dogs did in the night was nothing. In speech they support the idea, but not with deeds.
Still got your eye on the wrong shell, huh? I doubt the pea has been under any of them for over a decade-to be generous. We can't audit the Fed because it isn't time. There are those who are connected who haven't finished closing out their positions in greenbacks, long a derogatory term. Why can't we audit? Oh, you modern generation. Because as soon as the Bill passes a lot of foofurraw will be kicked up, and the dead cat will drop half as far again, judging from the laws of physics, at least. When the team announces even a preliminary conclusion in Congress assembled, we're going to see a mass version of Captain Renault in Casablanca: "We are shocked to learn that gambling has been going on in this establishment!"
Hang on, Sweeties, because it gets much better from the perspective of the big boys. What happens to corporations that have no assets and shocking debts? Okay, so some of them are anointed solemnly as "too big to fail," but in general they declare bankruptcy. Most of the proletariat is unaware that the Fed is and has always been a private corporation, but we Shooters are better informed. WE know that the Feds (note the "S") can wash their hands of the Fed at any time! By definition the Fed cannot be "too big to fail." "Look!" the government will cry. "It already has!"
Now, if the Fed is undergoing bankruptcy proceedings while Bernanke heads for some area that never heard of Federal Reserve Notes for his health, how will the government continue to fund junkets, pay off voting blocks, and send out pay checks? Obviously, there has to be some sort of money, and Congress and the Auditors will have established that the Fed's version is suitable only for the board game, Monopoly, and putting in the Chic Sales. Whatever shall we do?! You there, in the back of the class?
Very good. The king is dead, long live the king. The Fed will be dead, but fortunately Chris Dodd, in his foresighted way, arranged recently for the three functions of the Fed to be transferred to new departments of the FedS. Besides, it says right there in the devalued Constitution that it is the responsibility of Congress to decree what money is. Son of Fed is born...and what happens?
Well, anyone who didn't know about the scam in time to flee with his stored value is going to take a brutal kick to the codpiece. The stock market crash and housing bubble will be regarded fondly as "the good old days."
China is obviously in on the plans (see Hillary's latest negotiations), and probably everyone who "counts" knows. They may not have told the upper levels of Bangladeshi, Icelanders, or the Yemeni...BRIC, OPEC, and the EU will all pretend to be furious, but most countries have been very busy attempting to devalue their currencies without anyone else recognizing that they're doing it. Trade balances, and that sort of stuff. It may be amusing to watch the scramble to refloat first.
Don't break out the champagne too early celebrating, because there is just one other little point to this exercise.
I already pointed it out: we have to have something we call "money." Obviously no one has anything as rash as gold in mind, and I can't help wonder how many of the golden ingots in Fort Knox-if, indeed, there are still any there, that being another place that doesn't get audited-may turn out to be genuine gold-plated tungsten. How convenient to have another metal with the same specific gravity as gold.
And this means? Yes, you there? Absolutely. It means that we must have a new currency to differentiate between new and improved genuine United States funny money and the disgraced notes of the Federal Reserve, which was neither holy, Roman, nor empire.
It doesn't matter whether they call it "the Amero," "the Globo," or "the Obama" in honor of a man who deserves precisely that sort of adulation and appreciation for his accomplishments. Snicker; think of it as America's version of the Nobel Peace Prize. Would that it were that harmless. Anyone who expects to get a 1:1 swap for his greenbacks leave quietly now, please.
My most sanguine guess-and it is only a guess-is that we'll turn them over for 30% of face value. And that was "sanguine" meaning "hopeful." It would not surprise me at all if you are offered ten per cent., or even one per cent., at which point I suggest they would make great wallpaper. Those still holding traditional dollars will be exsanguinated. My bet is on the Amero, since I don't think the coins I have seen were stamped "D" to indicate that they were turned out by the Franklin Mint as collectors' items. There were plausible reports that China received a shipment of eight billion of them already...and perhaps more, who can say? Oh, I know, I am such a conspiracy theorist. Other fringe benefits include claiming that the new currency will fight the drug war and smacking those whose assets are stored overseas as dollars still. Can't bring 'em home without exchanging them and explaining where you got them.
One of the pigeons devalued currency will kick into the fire is a large increase in the price of items with the lowest cost. Do you really suppose anyone is going to round down on a can of soup that costs $1.12 in debunked FRN? No, indeed, my friends; the rounding will be up and-just as tires soared immediately on news that future tariffs will be levied on the Chinese-those items will probably see hasty increases before the fact. That's where the big money is going to be on the exchange! Lower case "e." And, uh...who are the most famous purveyors of low-priced "goods?" Do I have to do all the thinking around here? Aren't these things pounding you thud, thud, thud? Wal-Mart and thousands of "dollar" stores full of geegaws from China, of course. The one I use has excellent merchandise and an honest policy. It changed from "Everything A Dollar" to "Everything $1.09″ a few months back. Given their choice of reducing quality or accepting that their costs had increased 9% (that being a fine example of "There is zero inflation.") they chose to raise prices. Sensible folks. Excellent value for the money. Their version of Vick's Salve is every bit as good as Kroger's $4.39 generic and Mr. Vick's original product which was up over seven the last time I looked. They sell a great many everyday objects which are sturdy and well-designed.
Okay, Sugars, you got all that? The debt is all being loaded onto the Fed, those in the know are scurrying to invest in kukui nuts, baht chains, ink cartridges, whatever they can find that is tangible, and in the fullness of time Mary Renault will be shown right again because The King Must Die.
You heard it here first, and if you don't get your money out of the mutuals, your CD collection, the Market, banks, and treasuries on your bottom line be it. I stopped to muse gently on the fate of T-bills, but concluded they will "merely" be revalued. Which doesn't mean there is not a way to repudiate them, only that I have not thought of it yet. Wahoo, would the FedS enjoy that even more than confiscating your 401(K) and replacing it with a genuine Government Retirement Account backed by the full faith and credit of the United States government, a project still in the works.
Killing the Fed like Caesar on the floor of the Senate is the perfect solution for everyone except those of us who are in line to become destitute. The government is off the hook for gazillions with a face-saving explanation for why they replaced the currency. "Devalued" it? Never!
Bernanke won't even murmur, "Et tu, Obama?" If my analysis is correct, he knows what is coming and helped arrange the biggest coup since FDR confiscated private gold.
Regards,
Linda Brady Traynham
Q&A Time:
"Mrs. Traynham, what if you are wrong?" You had the fun of reading my prose and getting out of FRN's is the most sensible course for many reasons.
"Are you never serious?" What's more serious than telling you the bottom is about to fall out of the basket you put all your eggs in? It doesn't matter how you have diversified your assets if they are all denominated in dollars. If they are revalued in a new currency you have no choice of rejecting you'll discover that broken eggs on pavement aren't good for much, although they may go well with splattered stock brokers of lesser rank.
"Did you come up with this all by yourself?" No, for once I did not. A very bright friend brought me the first few pieces and asked what I thought. I admire his grasp of things political and economic, the floor shifted under my feet, and I went looking for more straws in the wind and found a couple. He prefers to remain anonymous. Thanks again, fellow.
"How do I tell if the gold I have is real?" Pour aqua regia on it and wait until the acid has dissolved a hole a quarter of an inch deep? For centuries people bit gold coins. Don't do it; dentists are very expensive. Besides, what are you going to do if you whack a bar briskly with a heavy carving knife and discover that beauty is only skin deep? My guess is that the longer you have had it the more likely a bar is to be genuine, and you will lessen the numismatic value (if any) if you cut into coins. Best answer? Assume yours is real because you can't do anything about it. Don't buy any new gold from less than impeccable sources and think carefully about further new coin purchases. I'm sure coins can be minted in tungsten and gold-plated.  Kick yourselves for not buying sterling silver table ware; that isn't likely to turn out to be tungsten. Oh...go ask Byron King!

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