If This Doesn’t Make You Mad…
Why is the Fed threatening to raise interest rates when the economy is still in the doldrums? Is it because they want to avoid further asset-price inflation, prevent the economy from overheating, or is it something else altogether? Take a look at the chart below and you’ll see why the Fed might want to raise rates prematurely. It all has to do with the sharp decline in petrodollars that are no longer recycling into US financial assets. This is from Reuters:
“Energy-exporting countries are set to pull their ‘petrodollars’ out of world markets this year for the first time in almost two decades, according to a study by BNP Paribas. Driven by this year’s drop in oil prices, the shift is likely to cause global market liquidity to fall, the study showed…
This decline follows years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling.
This year, however, the oil producers will effectively import capital amounting to $7.6 billion. By comparison, they exported $60 billion in 2013 and $248 billion in 2012, according to the following graphic based on BNP Paribas calculations:
‘At its peak, about $500 billion a year was being recycled back into financial markets. This will be the first year in a long time that energy exporters will be sucking capital out,’ said David Spegel, global head of emerging market sovereign and corporate Research at BNP.
In other words, oil exporters are now pulling liquidity out of financial markets rather than putting money in. That could result in higher borrowing costs for governments, companies, and ultimately, consumers as money becomes scarcer.” (Petrodollars leave world markets for first time in 18 years – BNP, Reuters)
Can you see what’s going on?
Now that petrodollar funding has dried up, the Fed needs to find an alternate source of capital to keep the markets bubbly and to shore up the greenback. That’s why the Fed has been talking up the dollar (“jawboning”) and promising to raise rates even though the economy is still pushing up daisies. According to the Fed’s favorite mouthpiece, Jon Hilsenrath:
“Federal Reserve officials are on track to start raising short-term interest rates later this year, even though long-term rates are going in the other direction amid new investor worries about weak global growth, falling oil prices and slowing consumer price inflation…
Many Fed officials have signaled they expect to start lifting their benchmark short-term rate from near zero around the middle of the year. Recent developments in the economy and markets have caused some trepidation among Fed officials and, if sustained, could cause them to delay acting. However several have indicated recently they still expect to move this year and are withholding judgment on delay.” (Fed Officials on Track to Raise Short-Term Rates Later in the Year, Jon Hilsenrath, Wall Street Journal)
And we’re hearing the same from Reuters: “The Federal Reserve is still on track for a potential mid-year interest-rate increase, a top Fed official said on Friday, citing strong U.S. economic momentum and a falling unemployment rate.”
Notice the sudden change in tone from dovish to hawkish? Expect that to intensify in the months ahead as the major media tries to spin the data in a way that serves the Fed’s broader objectives. Like this article in Bloomberg titled, “Yellen Signals She Won’t Babysit Markets in Turmoil”:
“Janet Yellen is leaving the Greenspan ‘put”’behind as she charts the first interest-rate increase since 2006 amid growing financial-market volatility.
The Federal Reserve chair has signaled she wants to place the economic outlook at the center of policy making, while looking past short-term market fluctuations. To succeed, she must wean investors from the notion, which gained currency under predecessor Alan Greenspan, that the Fed will bail them out if their bets go bad — just as a put option protects against a drop in stock prices.
“The succession of Fed puts over the years has led to a wide range of distortions in financial markets,” said Lawrence Goodman, president of the Center for Financial Stability, a monetary research group in New York. “There have been swollen asset values followed by sharp declines. This is a very good time for the Fed to move away.
“Let me be clear, there is no Fed equity market put,” William C. Dudley, president of the New York Fed, the central bank’s watchdog on financial markets, said in a Dec. 1 speech in New York.” (She’s No Greenspan: Yellen Signals She Won’t Babysit Markets in Turmoil)
“There’s no Fed equity put”?
That’s ridiculous. Then how does one explain the way the Fed has launched additional rounds of QE every time stocks have started to sputter? And how does one explain the Fed’s $4 trillion balance sheet all of which was spent on financial assets?
Let’s face it, Central bank intervention has been the only game in town. It’s not just the main driver of stocks. It’s the only driver of stocks. Everyone knows that. Yellen is going to do everything in her power to keep stocks in the stratosphere just like her predecessors, Greenspan and Bernanke. The only that’s going to change, is her approach.
As for the economy, well, just a glance of the headlines tells the whole story. Like this gem from CNBC last week:
“U.S. consumer prices recorded their biggest decline in six years in December and underlying inflation pressures were benign,…The Labor Department said on Friday its Consumer Price Index fell 0.4 percent last month, the largest drop since December 2008, after sliding 0.3 percent in November. In the 12 months through December, CPI increased 0.8 percent…
Darkening prospects for the global economy could also complicate matters for the U.S. central bank.
Inflation is running below the Fed’s 2 percent target, despite a strengthening labor market and overall economy.” (Consumer Price Index drops 0.4% in December, in line with estimates, CNBC)
Think about that for a minute: Consumer prices just logged their biggest drop since the freaking slump of 2008 and, yet, the Fed is still babbling about raising rates.
Talk about lunacy. Not only has the Fed not reached its inflation target of 2%, but it’s abandoned the project altogether. Why? Why has the Fed suddenly stopped trying to boost inflation when the yields on benchmark 10-year US Treasuries have just plunged to record lows (1.70%) and are blinking red? In other words, the bond market is signaling slow growth and zero inflation for as far as the eye can see, but the Fed wants to raise rates and slash growth even more?? It doesn’t make any sense, unless of course, Yellen has something else up her sleeve. Which she does.
Now get a load of this shocker on retail sales in last week’s news. This is from Bloomberg:
“The optimism surrounding the outlook for U.S. consumers was taken down a notch as retail sales slumped in December by the most in almost a year, prompting some economists to lower spending and growth forecasts.
The 0.9 percent decline in purchases …. extended beyond any single group as receipts fell in nine of 13 major retail categories.
Treasury yields and stocks fell as a deepening commodities rout and the drop in sales spurred concern global growth is slowing…
…average hourly earnings falling 0.2 percent in December from the month before in the first drop since late 2012. That limits the amount of spending consumers can undertake without dipping into savings or racking up debt.” (U.S. Retail Sales Down Sharply, Likely Cuts to Growth Forecasts Ahead, Bloomberg)
Remember when everyone thought that low oil prices were going to save the economy? It hasn’t worked out that way though, has it? Nor will it. Falling oil prices usually indicate recession, crisis or deflation. Take your pick. They’re usually not a sign of green shoots, escape velocity, or sunny uplands.
And did you catch that part about falling wages? How do you expand a consumer-dependent economy, when workers are seeing their wages shrivel every month? In case, you haven’t seen the abysmal stagnation of wages in graph-form, here’s a chart from American Progress:
Negative real wage growth means the amount of slack in the market is still considerable.
So while stock prices have doubled or tripled in the last 6 years, wages have basically been flatlining. That’s a pretty crummy distribution system, don’t you think. Unless you’re in the 1 percent of course, then everything is just hunky dory.
But at least Yellen can find some comfort in the fact that unemployment continues to improve. In fact, just two weeks ago unemployment dropped to an impressive 5.4%, the lowest since 2007. So if we forget about the fact that wages are stagnating, that management has nabbed all the productivity-gains for the last 40 years, and that another 451,000 workers dropped off the radar altogether in December, then everything looks pretty rosy. But, of course, it’s all just a bunch of baloney. Take a look at this from Zero Hedge:
“Another month, another attempt by the BLS to mask the collapse in the US labor force with a seasonally-adjusted surge in waiter, bartender and other low-paying jobs. Case in point… the labor participation rate just slid once more, dropping to 62.7%, or the lowest print since December 1977. This happened because the number of Americans not in the labor forced soared by 451,000 in December, far outpacing the 111,000 jobs added according to the Household Survey, and is the primary reason why the number of uenmployed Americans dropped by 383,000.
So, yeah, unemployment looks great until you pick through the data and see it’s all a big fraud. Unemployment is only falling because more and more people are throwing in the towel and giving up entirely.
Finally, there’s the rapidly-expanding mess in the oil patch where the news on layoffs and cut backs gets worse by the day. This is from Wolf Richter at Naked Capitalism:
“Layoffs are cascading through the oil and gas sector. On Tuesday, the Dallas Fed projected that in Texas alone, 140,000 jobs could be eliminated. Halliburton said that it was axing an undisclosed number of people in Houston. Suncor Energy, Canada’s largest oil producer, will dump 1,000 workers in its tar-sands projects. Helmerich & Payne is idling rigs and cutting jobs. Smaller companies are slashing projects and jobs at an even faster pace. And now Slumberger, the world’s biggest oilfield-services company, will cut 9,000 jobs.” (Money dries up for oil and gas, layoffs spread, write-offs start, Wolf Richter, Naked Capitalism)
And then there’s this tidbit from Pam Martens at Wall Street on Parade:
“In a December 15 article by Patrick Jenkins in the Financial Times, readers learned that data from Barclays indicated that “energy bonds now make up nearly 16 per cent of the $1.3 trillion junk bond market — more than three times their proportion 10 years ago,” and “Nearly 45 per cent of this year’s non-investment grade syndicated loans have been in oil and gas.” Raising further alarms, AllianceBernstein has released research suggesting that the deals were not fully subscribed by investors with the potential that “as much as half of the outstanding financing from the past couple of years may be stuck on banks’ books.” (The perfect storm for Wall Street banks, Russ and Pam Martens, Wall Street on Parade)
How do you like that? So nearly half the toxic energy-related gunk that was bundled up into dodgy junk bonds (and is likely to default in the near future) is sitting on bank balance sheets. Does that sound like a potential trigger for another financial crisis or what?
And, no, I am not trying to ignore the fact that third quarter GDP came in at a whopping 5 percent which vastly exceeded all the analysts estimates. But let’s put that into perspective. According to economist Dean Baker, the growth spurt was mainly “an anomaly” …”driven by extraordinary jump in military spending and a big fall in the size of the trade deficit that is unlikely to be repeated.” Here’s more from Baker:
“As usual, just about everything we’ve heard about the economy is wrong. To start, the 5.0 percent growth number must be understood against a darker backdrop: The economy actually shrank at a 2.1 percent annual rate in the first quarter. If we take the first three quarters of the year together, the average growth rate was a more modest 2.5 percent.” (Don’t Believe What You Hear About the US Economy, Dean Baker, CEPR)
So, the economy is growing at a crummy 2.5 percent, but Yellen wants to raise rates. Why? Does she want to shave that number to 2 percent or 1.5 percent? Is that it? She wants to go backwards?
Of course not. The real reason the Fed wants to raise rates, is to attract foreign capital to US markets in order to keep stocks soaring, keep borrowing costs low, and reinforce the dollar’s role as the world’s reserve currency. That’s what’s really going on. The petrodollars are drying up, so US markets need a new source of funding. Direct foreign investment, that’s the ticket, Ducky. All the Fed needs to do is boost rates by, let’s say, 0.5 percent and “Cha-ching”, here comes the capital. Works like a charm every time, just ask former Treasury Secretary Robert Rubin whose strong dollar policy sent stock prices into orbit while widening the nation’s current account deficit by many orders of magnitude. (We never said the plan didn’t have its downside.)
The Fed’s sinister plan to raise interest rates (sometime by mid-2015) will push the dollar’s exchange rate higher thus triggering capital flight in the emerging markets which are already struggling with plunging commodities prices and an excruciating slowdown. The investment flows from the EMs to US financial assets and Treasuries will offset the loss of petrodollar revenue while expanding Wall Street’s ginormous stock market bubble. As for the emerging markets, well, they’re going to take it in the shorts bigtime as one would expect. Here’s a clip from an article by Ambrose-Evans Pritchard that lays it out in black and white:
“The US Federal Reserve has pulled the trigger. Emerging markets must now brace for their ordeal by fire. They have collectively borrowed $5.7 trillion in US dollars, a currency they cannot print and do not control. This hard-currency debt has tripled in a decade, split between $3.1 trillion in bank loans and $2.6 trillion in bonds. It is comparable in scale and ratio-terms to any of the biggest cross-border lending sprees of the past two centuries…
Officials from the Bank for International Settlements say privately that developing countries may be just as vulnerable to a dollar shock as they were in the Fed tightening cycle of the late 1990s, which culminated in Russia’s default and the East Asia Crisis. The difference this time is that emerging markets have grown to be half the world economy. Their aggregate debt levels have reached a record 175pc of GDP, up 30 percentage points since 2009…”
This time the threat does not come from insolvent states. They have learned the lesson of the late 1990s. Few have dollar debts. But their companies and banks most certainly do, some 70pc of GDP in Russia, for example. This amounts to much the same thing in macro-economic terms. ” (Fed calls time on $5.7 trillion of emerging market dollar debt, Ambrose-Evans Pritchard, Telegraph)
The Fed has been through this drill so many times before they could do it in their sleep. (” U.S. interest-rate hikes in 1980s and 1990s played a role in financial crises across Latin America and East Asia.” Foreign Policy Magazine) They’ve learned how to profit off every crisis, particularly the one’s that they themselves create, which is just about all of them. In this case, most of the loans to foreign businesses and banks were denominated in dollars. So, now that the dollar is soaring, (“The dollar’s value has risen about 15 percent relative to the euro and the yen just since the summer.” NPR) the debts are going to balloon accordingly (in real terms) which is going to push a lot of businesses off a cliff forcing sovereigns to step in and provide emergency bailouts.
Did someone say “looming financial crisis”?
Indeed. Bernanke’s “easy money” has inflated bubbles across the planet. Now these bubbles are about to burst due to the strong dollar and anticipated higher rates. At the same time, the policy-switch will send hundreds of billions of foreign capital flooding into US markets pushing stocks and bonds through the roof while generating mega-profits for JPM, G-Sax and the rest of the Wall Street gang. All according to plan.
Naturally, the stronger dollar will weigh heavily on employment and exports as foreign imports become cheaper and more attractive to US consumers. That will reduce hiring at home. Also the current account deficit will widen significantly, meaning that the US will again be consuming much more than it produces. (This took place under Rubin, too.) But here’s what’s interesting about that: According to the Bureau of Economic Analysis: “Our current account deficit has narrowed sharply since the crisis…The U.S. current account deficit now stands at 2.5 percent of GDP, down from more than 6 percent in the fourth quarter of 2005.” (BEA)
Great. In other words, Obama’s obsessive fiscal belt-tightening lowered the deficits enough so that Wall Street can “party on” for the foreseeable future, ignoring the gigantic bubbles they’re inflating or the emerging market economies that are about to be decimated in this latest dollar swindle.
If that doesn’t make you mad, I don’t know what will.
Sir Flinders Petrie discovered bowling artifacts in an Egyptian tome dating the game to 3200 B. C. in the 1930s. The game was being played in Germany in 300 A. D. and popular in England in 1366 A. D.
English, Dutch and German settlers brought their own variations of the game to America. Washington Irving’s Rip Van Winkle awakens to the sound of “crashing ninepins.” in 1819.
Arguably, the first permanent American bowling place, for lawn bowling, was in New York’s Battery area, now in the heart of the financial district. The small plot is still called Bowling Green.
But ten pin bowling did not take off as a major sport in America until the 1950s, following the introduction of the first rubber ball, the “Evertrue” in 1905 and Gottfried Schmidt’s automatic pinspotter. Owners of bowling establishments were no longer dependent on “pinboys.”
Playing a game cost 25 cents. Renting bowling shoes was a dime. The rate of inflation on the cost of bowling from 1955 to 2014 has been 781.2%.
The subject came up during the hour and 15 minutes I waited for a City Taxi Cab to arrive at Perry’s Automotive the other day. On the wall was an article from the Star Beacon chronicling the first 300 game of 1974 played by Fred Fish at Lake Shore Lanes. Fred works at Perry’s. Fred said he no longer bowls because of the cost, remembering the four games for a dollar he paid in 1974.
According to the cumulative rate of inflation if Lake Shore’s management had raised their prices along with other costs of living the price for those four games would be $4.79, with a rate of inflation of 379.0%. Lake Shore on occasion offers all you can bowl coupons for $10.
Fred gave up bowling.
America went off the gold standard in 1913 with the establishment of the Federal Reserve, whose stated goal was to provide stable prices. In 1913 a loaf of bread cost about a nickle. Today it costs about $1.45.
In 1776 when Thomas Jefferson bought a loaf of bread it cost the same as it did when J. P. Morgan bought a loaf a century later, about a nickle. The price had not changed. The value of the dollar increased 11% from 1776 to 1912, 136 years.
So, where did the money for bowling go? When you find out tell Fred.
Every year about this time, we are inundated with self-proclaimed prognosticators telling us (with great certainty) what the New Year will bring. The vast majority of the time they are wrong; but, somehow, that doesn’t keep people from listening to these pseudo-prophets or from buying their publications and videos. So, let me say upfront: I am not a prophet, nor the son of a prophet. I have no crystal ball; and the Almighty has not privileged me with special revelation regarding future events. However, I can predict with confidence that most of the predictions WON’T come to pass–especially the ones that deal with eschatology.
However, what I can report is the things that are ALREADY happening and the momentum that is driving them. It is an immutable law that, absent a significant force to the contrary, things in motion tend to stay in motion. Therefore, here are a few things that are already in motion as we go into 2015.
*Amnesty For Illegals And Obamacare
Let’s take Obamacare first: It is here to stay. Both major parties in Washington, D.C., overwhelmingly support national health insurance. Had Mitt Romney been elected in 2012, we would be calling it Romneycare instead of Obamacare. In fact, Mitt Romney’s state health insurance plan was the model for what we now call Obamacare. So, if any of you are still harboring any hope that somehow the new GOP Congress will pull a rabbit out of the hat and reverse Obamacare, it’s time to admit reality. Obamacare isn’t going anywhere. Supreme Court Chief Justice John Roberts, who was selected by President G.W. Bush, forever sealed Obamacare into the legal and political bone marrow of America.
And, like Obamacare, both major parties in Washington, D.C., support amnesty for illegals. Oh, I know that the vast majority of grassroots Republicans oppose amnesty, but since when has that mattered to a tinker’s dam to the GOP ruling class? John Boehner and Company has already orchestrated the funding for amnesty with the $1.1 trillion “Cromnibus” bill that recently passed. Another vote that could potentially defund amnesty is expected in Congress by February. But already the GOP leadership is positioning the new Republican majority to provide amnesty with permanent status. The fact that it was mostly anti-amnesty anger that swept Republicans into the majority in both houses of Congress means nothing to the GOP leadership. NOTHING!
Here is the most concise summary I’ve seen to date on what GOP leaders are doing regarding solidifying Obama’s (unconstitutional) amnesty order:
“The plan by GOP leaders to sell out and back up Obama’s executive amnesty is already coming together.
“‘Here’s the architecture of the coming sellout: there will be a show vote on defunding exec amnesty–either as a stand alone or part of the DHS bill,’ a congressional GOP aide told Breitbart News:
“‘But once they’ve let members vote on it, it will fall away. Instead, they’ll attach the McCaul “border securit” bill–what we’ll call free rides for illegal aliens to a city near you. The McCaul bill will follow the Pete Sessions’ rule: no illegal aliens will be deported. No e-verify, no welfare stoppage, a free pass for the 12 million here to stay here. It will just be more money for King Obama to use to help illegals enter the country and get a free education. The White House will play along, pretend it’s a tough bill, and then eagerly sign it–locking in the amnesty and taking real enforcement off the table (they’ll say it’s all done now). Then will come the gifts for the corporate sponsors.’”
The report also quotes George Rasley, the executive editor of Richard Viguerie’s ConservativeHQ, as correctly saying, “Looking at what the Republican Party’s Capitol Hill leaders did in the CRomnibus it’s hard for conservatives to figure out who’s worse: Obama or the GOP leaders who apparently plan to overturn the results of the 2014 midterms by allowing the president’s unconstitutional amnesty to stand and, adding insult to injury, passing the U.S. Chamber of Commerce wishlist of more spending and more visas to displace American workers.”
See the report at:
Folks, please understand that GOP leaders in Congress are not GOING to solidify Obama’s amnesty deal, they are ALREADY solidifying it. Therefore, this is not a prediction; it is simply an accurate reporting of what is already taking place. Republican leaders in Washington, D.C., are going to do what they always do: give grassroots conservative Republicans the royal shaft. But since conservatives seem to suffer from Stockholm Syndrome every election year, it is doubtful that much of anything will change in 2016 either.
The newest NAFTA-style trade agreement, called the Trans-Pacific Partnership (TPP), has been in the works for some time. However, with the Democrats in charge of the Senate, President Obama was not able to push the jobs-killing agreement through Congress. But with the GOP now in charge of both houses of Congress, passage of TPP will be a breeze.
As Rasley observed, Republican congressional leaders are mostly in the pocket of the U.S. Chamber of Commerce, and the TPP trade agreement is perhaps priority number one for the Chamber–and they are already pushing hard for its passage.
The Washington Post noted that “President Obama is preparing a major push on a vast free-trade zone that seeks to enlist Republicans as partners.”
See the report here:
With the GOP controlling Congress, globalist-minded Barack Obama is now able to bypass his own party and partner with internationalist-business-
The Chamber of Commerce spent millions in this last election helping to elect pro-Big Business Republicans to office. They expect payback.
A Breitbart.com report begins, “Not only does the U.S. Chamber of Commerce think it is the only reason the GOP won in November, it is now threatening Republicans with opposition next go round if they don’t lay down and give the Chamber precisely what it wants, including on immigration, increased spending on transportation, and economic deals that sweeten the pot for big business.”
See the report here:
*The American Police State
The American Police State saw a banner year in 2014. The militarization of local and State police, along with the instances of police-bullying, grew to record heights last year–and there is absolutely no sign of a let-up.
Excerpts from Joel Skousen’s December 26, 2014 World Affairs Brief (WAB) are relevant:
“This year we saw government further arrogate to itself broad new power through executive action that went unchecked thanks to a Congress coopted by globalist republican leaders and a neutered Supreme Court, which refuses to declare any of the president’s unilateral actions unconstitutional.”
Skousen continues, “We now live in a surveillance state and its purpose has nothing to do with terrorism: Domestic dissidents are the target; terrorism is just the excuse. The NSA records every type of electronic communication. Despite the initial public outrage over Edward Snowden’s revelation, government hasn’t stopped anything. They’ve made deceptive legislative proposals that claim to limit government’s ability to see content, but those claims are as much a sham and a lie as the government insistence that they only collect metadata. The content comes right along with the metadata, so there’s no way to collect only the metadata.”
Pertaining specifically to domestic police abuse, Skousen notes, “Police aggressiveness and brutality . . . is a precursor to a Police state. It reached a head this year with the Ferguson riots, but sadly the issue was falsely framed as one of racial prejudice and profiling, rather than the danger to all of us from thuggish police behavior. There is a steady increase in the percentage of macho, pushy law enforcement personnel, many of which have a military background. They bring with them their foul-mouthed habits and thuggish behavior. Coupled with police training that talks incessantly about ‘getting killed if you don’t react fast enough’ police are developing a shoot-first-and-ask-question-
“Just as bad is their attitude that ‘you need to do what I say, no questions asked.’ This is not right. Police are not allowed by law to demand the public follow their every order. It has to be a lawful order. Sadly, neither the police chiefs nor the courts are willing to sanction police with strong penalties when they abuse this power.”
To subscribe (paid only) to Skousen’s excellent WAB, go here:
Unfortunately, there are only a precious few who seem to understand this burgeoning Police State and who actively oppose it. A majority of Democrats and Republicans, liberals and conservatives, unbelievers and Christians, all seem to, not only tolerate the police-state mentality, but enthusiastically support it. And there is no momentum whatsoever to stopping it. It will only get worse in 2015.
*Christ And Caesar
True Christianity has never been associated with, supported by, or underneath Caesar’s (civil government’s) auspices or benevolence. For most of the 2,000+ years of Church history, true believers met in non-state-sanctioned or even underground churches and fellowships. In fact, the Early Church was birthed in a baptism of persecution from both the civil government (Rome) and established religion (Judaism) at the time. Not until the unholy union of the Church and State under Theodosius I (almost 400 years after Christ) did Christians accept official sanction from government. And for many centuries to follow, the official merger of Church and state led to the persecutions and deaths of untold thousands of believers deemed heretics and outlaws because their religious beliefs contradicted those of the official state-sanctioned church.
Even in early America, state-approved denominations and churches were guilty of horrific persecutions against independent-minded Christians who refused to submit to the doctrines and liturgies of state-sanctioned churches. These state-church persecutions ultimately led Roger Williams to found the colony of Rhode Island and John Leland to convince James Madison that religious liberty must be the first in our Constitution’s Bill of Rights.
After the acceptance of our Bill of Rights, America’s churches enjoyed complete independent status, being answerable only to their Creator and their own conscience. All of that changed in 1954 when then-Senator Lyndon Johnson (D-Texas) successfully introduced the Johnson Amendment to the code of the Internal Revenue Service: the now-infamous 501c3 nonprofit organization status for churches. This designation made churches a creature of the state–answerable to the direct dictates of government–even regarding speech and activity.
By accepting 501c3 status, America’s churches have effectively become state-licensed or state-sanctioned organizations. In much the same way that churches in Communist China risk vindictive state sanctions for not complying to state control, so, too, churches in the United States risk vindictive IRS sanctions for not complying to state control.
What is more than interesting is the comparison between the churches in China and the churches in America. In China, Christianity is growing exponentially. In fact, there are now more Christians in China than there are communists. Please carefully read this report:
“Though the Chinese Communist Party is the largest explicitly atheist organization in the world, with 85 million official members, it is now overshadowed by an estimated 100 million Christians in China. It is no wonder Beijing is nervous and authorities are cracking down on Christian groups.
“Christianity is growing so fast in China that some predict that it will be the most Christian nation in the world in only another 15 years. By far, the greatest growth is coming outside the official state-sanctioned churches, which are rightly considered subservient to the Communist Party. Numbers are increasing, rather, in unofficial Protestant ‘house churches’ and in the underground Catholic church.”
See the report here:
Did you get that? Let me repeat it: “By far, the greatest growth is coming OUTSIDE [emphasis added] the official state-sanctioned churches, which are rightly considered subservient to the Communist Party [state]. Numbers are increasing, rather, in UNOFFICIAL [emphasis added] Protestant ‘house churches’ and in the UNDERGROUND [emphasis added] Catholic church.”
But what do we see happening in the United States? Christianity is waning BIG TIME. On the whole, churches are in steep decline. For the most part, only the entertainment-oriented, circus variety churches are growing. The numbers of Americans professing Christianity in general and expressing loyalty to a specific church or denomination are at historic lows. And the trend for 2015 and beyond is more of the same.
So, what is the difference? Why is Christianity proliferating in China and declining in America? China has an openly atheistic government. For all intents and purposes, the government in Washington, D.C., is equally atheistic. The federal government in D.C. is responsible for virtually every single attack against the expression of the Christian faith at every level of society. It is the federal government that attacks Christian expression in our local public schools. It is the federal government that attacks Christian expression in local governing bodies. It is the federal government that has all but permanently dismantled the expression of Christianity throughout our country’s public institutions. But so does the government in Beijing. Yet, in China, the Church is mushrooming, while in America, the Church is dying. What’s the difference?
The difference is, in China, Christians understand that to be loyal to Christ, they MUST NOT SUBMIT to state-sanction or license. And they are willing to defy Beijing authorities in order to be faithful to that conviction. However, in America, pastors and churches insist that they MUST SUBMIT to state control–even using Romans 13 to justify this preposterous position. Bottom line: state-sanctioned churches in America are withering, while non-state-sanctioned churches in China are mushrooming. There is no doubt that the trend in both countries will continue into and beyond 2015.
Until America’s pastors and churches “see the light” and consciously withdraw themselves from Caesar’s grasp (at whatever cost), Christianity in this country will continue to evaporate.
Toward the end of 2014, I launched the Liberty Church Project, in which I am traveling the country helping pastors and churches withdraw from the tentacles of 501c3 government sanction and/or helping people start brand new non-501c3 churches and fellowships. So far, we are batting a perfect five-for-five. And I believe that the momentum of establishing “unofficial” or “underground” churches in this country has only begun.
I am absolutely convinced that very soon every pastor and Christian in America will have to make the conscious decision to either deny Christ and remain part of the apostate government-church or be faithful to Christ and become part of the “unofficial” or “underground” church–just as Christians have had to do in China. One will not be able to do both.
I also believe that what we are seeing happening via the Liberty Church Project is just the beginning raindrops of what will one day be a deluge. I am quite confident that I will be very busy in 2015 as we continue to help believers establish non-501c3 churches and fellowships. To learn more about the Liberty Church Project, go here:
Let me say it plainly: the ONLY way America’s Christians and churches are going to experience a true spiritual renewal is to withdraw themselves from state sanction. For all intents and purposes, the establishment Church in America is DEAD. It has forgotten the lessons of history. It would rather please Caesar; it relishes the endorsement of Caesar. By action, our church leaders are saying the same thing Jewish leaders said at the time of Christ: “We have no king but Caesar.”
So, while I am not a prognosticator or a prophet, I can easily see the trends listed above. There is absolutely no doubt in my mind that these trends will continue into 2015 and beyond.
Cancerous Humanistic Law…
The confusion that comes from attempting to manage a nation (or the world) without the immutable justice that is provided by God’s Law is plainly apparent in the United States of America!
Dishonesty, fraud, and immoral self-concern are rampant throughout our society. Politicians are elected by making promises they know they cannot keep and a conniving and unreliable press and media purposely misinform the public.
Private property is no longer safe from unscrupulous policemen and avaricious politicians. During a ten year span in the late Twentieth Century federal, state, and local governments seized the property of over 200,000 Americans. A stub from a marijuana cigarette left or planted in an automobile can warrant seizure of the vehicle. Land occupied and owned by private citizens can be expropriated without recourse. Children can be taken from their parents when nude pictures of a new baby are deemed pornographic.
Private homes, cars, boats, and cash are all vulnerable to the zealous hand of the state. One legislator maintained that 80 percent of the victims of property seizure under the drug laws have never committed any crime.
The litany of government murder and mayhem is depressing to review and the complete lack of proper oversight is astounding. Government officials and local police can invade property; destroy possessions; beat up, falsely charge, and arrest the obviously innocent; illegally invade privacy; lie; cheat; falsify evidence, and physically injure and murder American citizens without reprimand or accountability.
Serious problems begin with police demands that innocent citizens comply with their orders when no crime has been committed. The doctrine that suspicion allows forceful action has given authorities absolute power over those they are hired to serve. Absolute power vested in human beings is always misused.
In 1644 Samuel Rutherford published a book entitled “Rex Lex, The Law is King”. This sentiment was echoed by the Founders of the United States. When the law is king there is freedom, when the king is law there is tyranny. If the government of a nation is bound by law the people can enjoy freedom; when the citizens of a nation are bound by law and the government’s decisions are arbitrary, the citizens are tyrannized. This condition is more and more prevalent in the United States where the government ignores the law but imposes thousands of incomprehensible laws on citizens.
One wonders what kind of race relations we would have between Black and White citizens if the government has stayed out of the affairs of it subjects. Slaves were freed by government decree and integration was accomplished by government force. Technology would soon have made slavery untenable and freedom would have evolved at a slower and more orderly pace. Black progress would have come by Black achievement and not by government edict.
Ostensibly to protect us the State has inserted its power into society. Hundreds of professions now require government licenses: Barbers, dentists, teachers, plumbers, electricians, masseuses, interior decorators, tattoo artists, etc. etc. Recently I paid a thousand dollars to a dentist who worked about an hour drilling out a molar and capping it. I wonder what that manual procedure would have cost if the dental profession was free from licensing.
In 1988 the Rehnquist Supreme Court decided that checkpoint searches were legal since they were imposed equally on all drivers. This decision by the High Court essentially nullified the Fourth Amendment to the Constitution and showcased the practice of allowing human opinion to encroach on the letter of the law. The United States of America, founded as a nation of laws, is now a nation where the king is the law. When the law is no longer king power replaces law and citizens are subjected to the arbitrary decisions of the power structure.
The following famous case, seldom recounted in detail, is a prime example.
In 1989 a White Supremacist named Randy Weaver was targeted by the BATF. He was the victim of the sting operation perpetrated by an undercover agent who urged and intentionally sold him two illegal sawed off shotguns. The BATF then changed the date of his trial so that he did not appear resulting in a warrant for his arrest. Weaver and his family lived in a remote mountain area where he retreated from what appeared to be a government vendetta. His retreat was surrounded by BATF agents who began a lengthy surveillance of his home.
According to an article in the Washington Post, “The marshals called in military aerial reconnaissance and had photos studied by the Defense Mapping Agency.” They installed long range spy cameras, they read all of his mail, and even found the exact dates of his daughter’s menstrual cycle planning an arrest using that information.
In 1992 agents trespassed on Weavers property with machine guns. When fourteen year old son, Sammy, heard their dogs barking he grabbed his rifle and went with a friend, Kevin Harris, to see what was happening. The marshals shot and killed one of the dogs infuriating Sammy who fired a shot in their direction. Randy Weaver yelled at his son to come back. When Sammy turned he was shot in the back and killed. Kevin Harris then aimed his rifle, shot and killed one of the marshals.
The death of a marshal infuriated the Government and an FBI hostage rescue team was dispatched with orders to shoot to kill any armed person seen outside the home. Several hundred agents were dispatched to the area. Weaver had put Sammy’s body in a shed outside the house and when he went to pay his last respects he was shot and wounded. As he struggled back to the house his wife, Vicki, carrying a ten month old baby in her arms held the door. A sniper shot her in the face killing her instantly.
In eleven more days Weaver surrendered. He and Kevin Harris were charged with the murder of a U. S. Marshal. The government tried to prove that Weaver had conspired to have an armed conflict with the government and that Harris had fired first. As the trial went on the government case fell apart and the FBI was found to have fabricated evidence.
Weaver was found not guilty but was convicted of not appearing for the 1991 trial and violating his release conditions. He could have gotten a fifteen year sentence but the judge decided he had suffered enough and released him on time served.
In subsequent suits sizeable sums of money were paid to both Randy Weaver and Kevin Harris in out of court settlements.
Gerry Spence, Weaver’s famous and very capable lawyer said after the trial that someone must answer for these needless deaths. No one has. Lon Horiuchi, the shooter went free and the government agencies circled the wagons. FBI director Louis Freeh promoted one of the lead agents, Larry Potts, to the Bureau’s number-two position.
It is doubtful that justice would have resulted from this trial had it been held in another venue.
The power structure set up to enforce a just administration of the law is stained with a military-like elitism. Their esprit de corps allows rampant violations of law and justice without interior oversight.
In 1993, at Waco, Texas the government did it again when the FBI and local authorities brought an overwhelming military type siege against a religious cult known as the Branch Dividians burning nearly a hundred men, women and children to death in a fire that they were responsible for setting. Read about this siege here. https://en.wikipedia.org/wiki/Waco_siege
Following the genocide at Waco a high ranking official explained: “These people had thumbed their nose at law enforcement”. It is this assumption by federal and local police that causes minor incidents to escalate into mayhem and death. Only tyrants require innocent citizens to obey whimsical police commands. Police personnel who expect conformance to unnecessary orders create resentment and hamper their usefulness. When they expect obedience to commands that are not legal they become unable to get obedience to those that are.
As we have forsaken law we have embraced confusion. While our jails are full and overflowing with more inmates per capita than any other nation, our law enforcement is busy running sting operations to incarcerate more law abiding citizens by turning them into criminals. Policepersons sit under computer screens finding anyone who downloads child pornography – they don’t arrest the people who produce and put it on the net, only those who view it!
The BATF has undercover agents who attempt to lure unsuspecting citizens into purchasing illegal firearms. Drug enforcers arrest peaceful users subjecting them to long mandatory prison sentences. Local police departments dress female officers in provocative outfits and send them out on the street to tempt citizens with cheap sex, arresting them when they succumb. With our jails overflowing it is time they stopped this madness.
Have you considered that when you vote for a Congressperson or Senate person or even a local state representative you are voting to vest another person with the right to write and pass additional law when we already have more laws than a citizen can know and understand? Isn’t that insanity?
Yes, gentle reader, we need to stop all this humanistic legal cancer, return to God’s simple mandates and enforce them without prejudice. Did I hear someone say that God’s Law was for ancient Israel and no longer applies to modern society? I wonder, my friend, if you believe that the Triune God of the Bible has changed? Do you not know that He is the same today, yesterday and always and that His immutable standard is applicable throughout the ages?
Freedom is impossible when law is the product of the capricious minds of human beings and can logically be disobeyed by those whose opinion differs. Freedom requires the absolute standards of the One True God.
Much of the information in this article came from James Bovard’s excellent book “Lost Rights”. Bovard’s book, published in 1994, is an outstanding rendition of the thousands of injustices perpetrated by an unjust and tyrannical government. The travesties are so numerous and so blatant that reading about such utter depravity is shocking and depressing; it helps to put the book aside and take it up later with a fresh spirit.
In 1964, the Brazilian military, in a US-designed coup, overthrew a liberal (not more to the left than that) government and proceeded to rule with an iron fist for the next 21 years. In 1979 the military regime passed an amnesty law blocking the prosecution of its members for torture and other crimes. The amnesty still holds.
That’s how they handle such matters in what used to be called The Third World. In the First World, however, they have no need for such legal niceties. In the United States, military torturers and their political godfathers are granted amnesty automatically, simply for being American, solely for belonging to the “Good Guys Club”.
So now, with the release of the Senate Intelligence Committee report on CIA torture, we have further depressing revelations about US foreign policy. But do Americans and the world need yet another reminder that the United States is a leading practitioner of torture? Yes. The message can not be broadcast too often because the indoctrination of the American people and Americophiles all around the world is so deeply embedded that it takes repeated shocks to the system to dislodge it. No one does brainwashing like the good ol’ Yankee inventors of advertising and public relations. And there is always a new generation just coming of age with stars (and stripes) in their eyes.
The public also has to be reminded yet again that – contrary to what most of the media and Mr. Obama would have us all believe – the president has never actually banned torture per se, despite saying recently that he had “unequivocally banned torture” after taking office.
Shortly after Obama’s first inauguration, both he and Leon Panetta, the new Director of the CIA, explicitly stated that “rendition” was not being ended. As the Los Angeles Times reported at the time: “Under executive orders issued by Obama recently, the CIA still has authority to carry out what are known as renditions, secret abductions and transfers of prisoners to countries that cooperate with the United States.”
The English translation of “cooperate” is “torture”. Rendition is simply outsourcing torture. There was no other reason to take prisoners to Lithuania, Poland, Romania, Egypt, Jordan, Kenya, Somalia, Kosovo, or the Indian Ocean island of Diego Garcia, amongst other torture centers employed by the United States. Kosovo and Diego Garcia – both of which house large and very secretive American military bases – if not some of the other locations, may well still be open for torture business, as is the Guantánamo Base in Cuba.
Moreover, the key Executive Order referred to, number 13491, issued January 22, 2009, “Ensuring Lawful Interrogations”, leaves a major loophole. It states repeatedly that humane treatment, including the absence of torture, is applicable only to prisoners detained in an “armed conflict”. Thus, torture by Americans outside an environment of “armed conflict” is not explicitly prohibited. But what about torture within an environment of “counter-terrorism”?
The Executive Order required the CIA to use only the interrogation methods outlined in a revised Army Field Manual. However, using the Army Field Manual as a guide to prisoner treatment and interrogation still allows solitary confinement, perceptual or sensory deprivation, sensory overload, sleep deprivation, the induction of fear and hopelessness, mind-altering drugs, environmental manipulation such as temperature and noise, and stress positions, amongst other charming examples of American Exceptionalism.
After Panetta was questioned by a Senate panel, the New York Times wrote that he had “left open the possibility that the agency could seek permission to use interrogation methods more aggressive than the limited menu that President Obama authorized under new rules … Mr. Panetta also said the agency would continue the Bush administration practice of ‘rendition’ … But he said the agency would refuse to deliver a suspect into the hands of a country known for torture or other actions ‘that violate our human values’.”
The last sentence is of course childishly absurd. The countries chosen to receive rendition prisoners were chosen precisely and solely because they were willing and able to torture them.
Four months after Obama and Panetta took office, the New York Times could report that renditions had reached new heights.
The present news reports indicate that Washington’s obsession with torture stems from 9/11, to prevent a repetition. The president speaks of “the fearful excesses of the post-9/11 era”. There’s something to that idea, but not a great deal. Torture in America is actually as old as the country. What government has been intimately involved with that horror more than the United States? Teaching it, supplying the manuals, supplying the equipment, creation of international torture centers, kidnaping people to these places, solitary confinement, forced feeding, Guantánamo, Abu Ghraib, Bagram, Chile, Brazil, Argentina, Chicago … Lord forgive us!
In 2011, Brazil instituted a National Truth Commission to officially investigate the crimes of the military government, which came to an end in 1985. But Mr. Obama has in fact rejected calls for a truth commission concerning CIA torture. On June 17 of this year, however, when Vice President Joseph Biden was in Brazil, he gave the Truth Commission 43 State Department cables and reports concerning the Brazilian military regime, including one entitled “Widespread Arrests and Psychophysical Interrogation of Suspected Subversives.”
Thus it is that once again the United States of America will not be subjected to any accountability for having broken US laws, international laws, and the fundamental laws of human decency. Obama can expect the same kindness from his successor as he has extended to George W.
“One of the strengths that makes America exceptional is our willingness to openly confront our past, face our imperfections, make changes and do better.” – Barack Obama, written statement issued moments after the Senate report was made public.
And if that pile of hypocrisy is not big enough or smelly enough, try adding to it Bidens’ remark re his visit to Brazil: “I hope that in taking steps to come to grips with our past we can find a way to focus on the immense promise of the future.”
If the torturers of the Bush and Obama administrations are not held accountable in the United States they must be pursued internationally under the principles of universal jurisdiction.
In 1984, an historic step was taken by the United Nations with the drafting of the “Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment” (came into force in 1987, ratified by the United States in 1994). Article 2, section 2 of the Convention states: “No exceptional circumstances whatsoever, whether a state of war or a threat of war, internal political instability or any other public emergency, may be invoked as a justification of torture.”
Such marvelously clear, unequivocal, and principled language, to set a single standard for a world that makes it increasingly difficult for one to feel proud of humanity. We cannot slide back. If today it’s deemed acceptable to torture the person who supposedly has the vital “ticking-bomb” information needed to save lives, tomorrow it will be acceptable to torture him to learn the identities of his alleged co-conspirators. Would we allow slavery to resume for just a short while to serve some “national emergency” or some other “higher purpose”?
If you open the window of torture, even just a crack, the cold air of the Dark Ages will fill the whole room.
Cuba … at long, long last … maybe …
Hopefully, it’s what it appears to be. Cuba will now be treated by the United States as a country worthy of at least as much respect as Washington offers to its highly oppressive, murdering, torturing allies in Saudi Arabia, Egypt, Honduras, Israel, Pakistan, Afghanistan, and elsewhere.
It’s a tough decision to normalize relations with a country whose police force murders its own innocent civilians on almost a daily basis, and even more abroad, but Cuba needs to do it. Maybe the Cubans can civilize the Americans a bit.
Let’s hope that America’s terrible economic embargo against the island will go the way of the dinosaurs, and Cuba will be able to demonstrate more than ever what a rational, democratic, socialist society can create. But they must not open the economy for the Yankee blood-suckers to play with as they have all over the world.
And I’ll be able to go to Cuba not as a thief in the night covering my tracks and risking a huge fine.
But with the Republicans taking over Congress next month, all of this may be just a pipe dream.
Barack Obama could have done this six years ago when he took office; or five years ago when American Alan Gross was first arrested and imprisoned in Cuba. It would have been even easier back then, with Obama’s popularity at its height and Congress not as captured by the Know-Nothings as now.
So, Cuba outlasted all the punishment, all the lies, all the insults, all the deprivations, all the murderous sabotage, all the assassination attempts against Fidel, all the policies to isolate the country. But for many years now, it’s the United States that has been isolated in the Western Hemisphere.
Reason Number 13,336 why capitalism will be the death of us.
Antibiotic-resistant bacteria – the “superbugs” – if left unchecked, could result in 10 million deaths a year by 2050. New drugs to fight the superbugs are desperately needed. But a panel advising President Obama warned in September that “there isn’t a sufficiently robust pipeline of new drugs to replace the ones rendered ineffective by antibiotic resistance.”
The problem, it appears, is that “Antibiotics generally provide low returns on investment, so they are not a highly attractive area for research and development.”
Aha! “Low returns on investment”! What could be simpler to understand? Is it not a concept worth killing and dying for? Just as millions of Americans died in the 20th century so corporations could optimize profits by not protecting the public from tobacco, lead, and asbestos.
Corporations are programmed to optimize profits without regard for the society in which they operate, in much the same way that cancer cells are programmed to proliferate without regard for the health of their host.
Happy New Year. Here’s what you have to look forward to in 2015.
- January 25: 467 people reported missing from a university in Mexico. US State Department blames Russia.
- February 1: Military junta overthrows President Nicolás Maduro in Venezuela. Washington decries the loss of democracy.
- February 2: US recognizes the new Venezuelan military junta, offers it 50 jet fighters and tanks.
- February 3: Revolution breaks out in Venezuela endangering the military junta; 40,000 American marines land in Caracas to quell the uprising.
- February 16: White police officer in Chicago fatally shoots a 6-year old black boy holding a toy gun.
- March 6: Congress passes a new law which states that to become president of the United States a person must have the surname Bush or Clinton.
- April 30: The Department of Homeland Security announces plan to record the DNA at birth of every child born in the United States.
- May 19: The Supreme Court rules that police may search anyone if they have reasonable grounds for believing that the person has pockets.
- May 27: The Transportation Security Administration declares that all airline passengers must strip completely nude at check-in and remain thus until arriving at their destination.
- June 6: White police officer in Oklahoma City tasers a 7-month-old black child, claiming the child was holding a gun; the gun turns out to be a rattle.
- July 19: Two subway trains collide in Manhattan. The United States demands that Moscow explain why there was a Russian citizen in each of the trains.
- September 5: The Democratic Party changes its name to the Republican Lite Party, and announces the opening of a joint bank account with the Republican Party so that corporate lobbyists need make out only one check.
- September 12: White police officer in Alabama shoots black newborn, confusing the umbilical cord for a noose.
- November 16: President Obama announces that Iran, Syria, Lebanon, Palestine, North Korea, Sudan, Nicaragua, Venezuela, Bolivia and Cuba all possess weapons of mass destruction; have close ties to the Islamic State, al Qaeda, and the Taliban; are aiding pro-Russian rebels in Ukraine; were involved in 9-11; played a role in the assassination of John F. Kennedy and the attack on Pearl Harbor; are an imminent threat to the United States and all that is decent and holy; and are all “really bad guys”, who even (choke, gasp) use torture!
- November 21: The United States invades Iran, Syria, Lebanon, Palestine, North Korea, Sudan, Nicaragua, Venezuela, Bolivia and Cuba.
- December 10: Barack Obama is awarded his second Nobel Peace Prize
- December 11: To celebrate his new peace prize, Obama sends out drones to assassinate wrong-thinking individuals in Somalia, Afghanistan and Yemen.
- December 13: Members of Ukraine’s neo-Nazi parties, which hold several high positions in the US-supported government, goose-step through the center of Kiev in full German Storm Trooper uniforms, carrying giant swastika flags, shouting “Heil Hitler”, and singing the Horst Wessel song. Not a word of this appears in any American mainstream media.
- December 15: US Secretary of State warns Russia to stop meddling in Ukraine, accusing Moscow of wanting to re-create the Soviet Union.
- December 16: White police officer shoots a black 98-year-old man sitting in a wheel chair, claiming the man pointed a rifle at him. The rifle turns out to be a cane.
- December 28: The Washington Redskins football team finish their season in last place. The White House blames Vladimir Putin.
- Associated Press, December 11, 2014
- New York Times, December 11, 2014
- Los Angeles Times, February 1, 2009
- New York Times, February 6, 2009
- New York Times, May 24, 2009
- Washington Post, December 11, 2014
- National Security Archive’s Brazil Documentation Project
- Washington Post, December 10, 2014
- See note 7
- Washington Post, December 13, 2014
The global economy has just hit the wall. Do not underestimate the significance of the Asian downturn. Japan saw a dramatic rebirth after WWII and China was transformed into an industrial powerhouse from the “Free Trade” debacle. Now that the Central Bankers of the world are turning to Japan and China to keep the financial bubble from blowing, the focus pivots to the East. Pushing on a string is no easy task. Nervously, all eyes have to wonder if more debt will prevent the expected crash.
When the British financial press warns about Spreading deflation across East Asia threatens fresh debt crisis, people should listen.
“Deflation is becoming lodged in all the economic strongholds of East Asia. It is happening faster and going deeper than almost anybody expected just months ago, and is likely to find its way to Europe through currency warfare in short order.
China is in effect strapped to the rocketing dollar through its quasi-peg, increasingly a torture machine. George Magnus from UBS says this cannot continue. “What is happening in the property market is the tip of the iceberg for the whole economy. China will have to resort to monetary reflation over the winter, and I think this will include a lower yuan. We are heading into a currency war,” he said.”
The Economist provides the establishment viewpoint of the latest strategy in Deflation, deflated.
“WHEN people think of a large Asian country on the brink of deflation, they probably have Japan in mind. But China, the biggest of them all, is now skirting close to outright falls in prices across a wide swathe of the economy. Producer prices have been declining for nearly three years and consumer price inflation is mired at its lowest level since 2010.
Deflation is rightly feared by central bankers around the world as a most destructive economic force, making debts more expensive in real terms and leading to a vicious cycle of contraction as consumers delay purchases and companies put off investments. Yet the Chinese central bank has been remarkably laid-back about the downward lilt in prices. The most obvious tool in its kit to arrest the slide would be to cut interest rates, but it has not done so since July 2012; the benchmark one-year lending rate remains lofty at 6%. What explains the central bank’s calm in the face of falling prices, and is it making a big mistake?”
This last assessment demonstrates that when the shift in direction was announced, the financial community jumped on the bandwagon to In Change of Strategy, China Cuts Interest Rate.
“China finally admitted it has a growth problem — and that is a big step to getting the global economy back on track.
In cutting rates, China joins the parade of global policy makers who are stepping up their stimulus efforts to support growth. They are filling a void left by the United States Federal Reserve, which just ended a six-year bond-buying campaign that has kept borrowing costs low and has encouraged spending worldwide.”
The admission that a massive infusion to recapitalize the international system requires a new source to finance the retracting economies is significant. It seems that a tag team effort between China and Japan will hit the banking houses from different directions.
Japan Fires Another Shot in Global Currency War is the analysis from the Wall Street Journal.
“The Bank of Japan 8301.TO -1.63%’s surprise move to increase its asset purchases has sent the yen plummeting, with the dollar passing through ¥110 Friday to trade at highs not seen in six years. This is the mechanism through which Japan will try to restore inflation to its perennially stagnating economy. The BOJ describes its actions in terms of boosting domestic growth and pricing power, but the real way it works is to export deflation to the rest of the world – it has been doing this ever since the yen began an 30% decline versus the dollar once “Abenomics” stimulus measures were first floated in the fall of 2012.”
Japan will play the role of the QE Federal Reserve policy and the Chinese will finally slash their interest rates. Such moves are not taken because the global economies are prospering. Looking for actual growth is like Waiting for Godot.
The mystery that faces all economies is when does deflation become impervious to further stimulus? How many more times can the deficits, imbalances and shortfalls be papered or rolled over before a depression ensues.
Japan is already the poster child for negative growth and with the irrational expenditures that China has spent on ghost cities, their reported growth rates are about as valid as a stock buy recommendation from a Wall Street firm that is shorting their own portfolio.
Looking to the orient to pull the world out of a lethargic corporatist spiral is problematic at best. China slowed growth now reported at 7.3 percent is seen as setting the stage that fuels debt and property bubbles. Yet the balance of trade surpluses that China continues to build up against American consumption from their exports has never benefited economic conditions in the United States.
The Dollar Collapse site asks: Most of the World Panics — Is the US Next?
- Will stepped-up debt monetization and interest rate reductions succeed where the past batch failed?
- Can the US remain aloof from the carnage taking place all around it?
As the Asian economies suffer their own version of contraction on the road to a meltdown, who believes that the transnational corporations that have plotted to off shore their production for decades, will ever reverse their strategy and start returning manufacturing back in the US?
Who will buy the ever increasing US Treasury debt if China unwinds? Of course the Federal Reserve will ratchet up and even bigger QE infusion that will result with more zeros to the national debt.
The most effective solution for America is establishing a tax reform that encourages a domestic renaissance and setting tariffs at levels that will reverse the systemic balance of payments deficits. The worldwide deflation has commenced, so start thinking local and not global.
You Are The Slave…
Recently I received a book about the history of Islam. It is written in inviting prose and covers in detail the saga that unfolded through history from the time of the birth of Ishmael and Isaac. On the cover is the bust of a soldier armed with a rifle on a background tinted in blood red. The Tile of the book is “The Blood of the Moon” written by Dr. George Grant and published in 1991. It is a great read. I recommend it.
Grant contends that Islam is a religion that cannot be stamped out by the sole use of military force. Nevertheless he seems to support both Israel and the United States military. The book provides a clarion call for resistance to an Islamic plan to use brutalities to bring the world under their control.
I have just finished reading through several of R. J. Rushdoony’s books for the second time. . His writing platform has King Jesus enthroned and active in the affairs of the world. Rushdoony provides superb explanations of the implications of a thorough, literal interpretation of Scripture. He maintains that righteous government requires righteous citizens.
Good books written by capable thinkers invariably avoid the obvious existence of conspiracies. We have progressed from the empires of Rome and France where large portions of the world fell under tyranny to quests for new world orders that hope to extend hegemony over the entire earth. Like the airplanes that spray chemicals in our skies the public and most good commentators ignore reality, preferring instead to live in the comfortable but dangerous world of fantasy.
Chalcedon Foundation has published another collection of Dr. Rushdoony’s musings entitled “Our Threatened Freedom”. It is a collection of radio spots recorded in the early 1980s. As with all of Reverend Rushdoony’s commentaries they are incisive and pertinent. They cement the necessity of freedom in creating a prosperous society and pinpoint the insanity of allowing humanism to gain control. Over and over again Rushdoony documents the irrational chaos created by overzealous humanistic government. The book produces extensive evidence that the checks and balances incorporated into our Constitution are not working.
Unfortunately, Rushdoony does not entertain the premise that irrational chaos is being purposely created throughout the world because chaotic societies are easier to dominate. There is no mention of the yearly Bilderberg meetings (See Here) where the wealthy and powerful meet to discuss and implement their collective agenda. There is no mention of Zionism, which is a conspiracy, or the International bankers who control currencies, a power which is tantamount to control of the food supply. David Rockefeller’s long time promotion of world government now confirmed in his book “Memoirs” is not cited.
There is an element of irony in the fact that theologically sound Christian teaching maintains that the Triune God created the world and even in these rebellious and barbaric times is in firm control of current events. This fact allays the fears and striving of those that oppose the power seekers. God controls the world and will always do so in spite of the evil efforts of those He created.
Coincidentally, Presidential candidates are often invited to the Bilderberg meetings prior to running for office.
Princeton’s Martin Gilens and Northwestern’s Benjamin I. Page have published a study that concludes “–ordinary citizens have virtually no influence over what their government does in the United States. And economic elites and interest groups, especially those representing business, have a substantial degree of influence. Government policy-making over the last few decades reflects the preferences of those groups — of economic elites and of organized interests.” Read here and here.
Conspiracies are ignored because “conspiracy theorists” are widely considered a bit whacky. The word “conspiracy” has been demonized to prevent the expression of truth.
The plotters have made great progress in the past several decades World government wonks have become leaders in most Western nations and as the United States military does the bidding of the Zionists, hegemonic progress is occurring in the Muslim world.
Influential neocon Max Boot lobbies for perpetual war seeking the destruction of all enemies of Israel using the United States military. It has been going on for a long time. Boot is supported by scores of wealthy, influential neocons in powerful positions throughout the nation; he also has the media and a horde of wild eyed Evangelical Christians that make his current position almost impregnable. We are a giant puppet being controlled by a midget puppeteer creating an anomaly that is regularly ignored by prominent American authors. Read here and here
Jacob Hornberger (Future of Freedom Foundation) describes the current condition of our nation: “Is the situation here at home bad? We both know it is. Invasions, occupations, torture, indefinite detention, embargoes, sanctions, foreign aid, empire, militarized police, drug raids, asset forfeiture, infringements on civil liberties, IRS, income taxation, Federal Reserve, fiat money, welfare, minimum-wage laws, and economic regulations. The welfare-warfare state is destroying our freedom, morality, prosperity, and independence. We need to smash this immoral and destructive apparatus out of existence!”
Hornberger is on target with his description and the need to “smash this immoral and destructive apparatus out of existence”. However, he fails to identify exactly how it is to be smashed!
There are some cracks beginning to appear in one conspiracy that could bode for future confrontation. Publisher, Editor and writer, Tal Brooke, has used his SPC (Spiritual Counterfeits Project) Journal to bring some light to our current dilemma. In the latest issue 38.1 and 38.2 he has authored an incisive piece entitled “The Messiah of a Divided People”. In a paragraph describing the ancient Elders of the Sanhedrin he describes their dissatisfaction with a Messiah “who went like a lamb to the slaughter” preferring one that would defeat the Romans, install Zion as the world ruler and appoint them as rulers of the world
He writes, “This was, and remains, their aim and expectation. They would be the world’s five star generals and judges, Jerusalem would be the center of the World Court. And they could tell Caesar to roll over like a dog. They could walk into the city of Rome and take anything they wanted. They could occupy the palace, they could execute judgment on the multitudes of the treacherous. The world would finally be theirs as they believed Isaiah had promised them. And these Elders would rule the entire earth from Zion. This remains the goal.” (Emphasis mine.) . (For copies of the SPC Journal call 510-540-0300)
The same issue of the SPC Journal contains articles by Jewish Christian writers Steven Wohlberg and Steven Sizer. Confrontation is not about hatred but about justice, peace, truth and righteousness for all people.
Talmudic Zionists realize at least two goal by supporting perpetual war: They destroy the United States of America, a supposedly Christian nation (a religion they overtly hate), and at the same time contribute to the safety and power of neo-Israel. Christianity seeks to bring the Creation under the dominion of the Triune God by peaceful means; Talmudic Zionists by stealth; and Islam by siege.
What will happen when these various power structures conflict? Will the bankers dominate; the Zionists, the international Bilderbergers, Islam, or the business tycoons? Will the Christian Triune God allow His world to be controlled by evil forces as punishment to rebellious Christians? Or will Christians repent and allow the sword of the Spirit to Challenge the enemies of Christ? Time will tell.
Wake up America. It is not our elected officials who are setting policy for our nation. Instead, it is the money barons, the Zionists, the Bilderbergers, and the international business tycoons. That is at least a partial reason why elected officials do not keep their pre-electoral promises. Obedience to the enabling masters is mandatory and retribution for disobedience is severe – note the fate of Presidents Reagan and Kennedy.
President Nixon set the stage for China to decimate the U. S. economy; President Carter gave away the Panama Canal; the Patriot Act was written long before 9/11, and Obamacare was constructed before his election. The agenda is set in place before the presidents are elected and the people are expected to blame the puppet president rather than the invisible power centers that are actually setting policy. The system is working.
It is time for American voters to understand that the candidates for President of the United States are pre-selected and only those obedient candidates are allowed to gain the office. Voting is a sham to placate the populace.
Overt slavery has been eradicated in most of the Western World but the often denied sinfulness of men has put the entire world under a threat of becoming a massive slave plantation.
“Russia reinforced what Western and Ukrainian officials described as a stealth invasion on Wednesday [August 27], sending armored troops across the border as it expanded the conflict to a new section of Ukrainian territory. The latest incursion, which Ukraine’s military said included five armored personnel carriers, was at least the third movement of troops and weapons from Russia across the southeast part of the border this week.”
None of the photos accompanying this New York Times story online showed any of these Russian troops or armored vehicles.
“The Obama administration,” the story continued, “has asserted over the past week that the Russians had moved artillery, air-defense systems and armor to help the separatists in Donetsk and Luhansk. ‘These incursions indicate a Russian-directed counteroffensive is likely underway’, Jen Psaki, the State Department spokeswoman, said. At the department’s daily briefing in Washington, Ms. Psaki also criticized what she called the Russian government’s ‘unwillingness to tell the truth’ that its military had sent soldiers as deep as 30 miles inside Ukraine territory.”
Thirty miles inside Ukraine territory and not a single satellite photo, not a camera anywhere around, not even a one-minute video to show for it. “Ms. Psaki apparently [sic] was referring to videos of captured Russian soldiers, distributed by the Ukrainian government.” The Times apparently forgot to inform its readers where they could see these videos.
“The Russian aim, one Western official said, may possibly be to seize an outlet to the sea in the event that Russia tries to establish a separatist enclave in eastern Ukraine.”
This of course hasn’t taken place. So what happened to all these Russian soldiers 30 miles inside Ukraine? What happened to all the armored vehicles, weapons, and equipment?
“The United States has photographs that show the Russian artillery moved into Ukraine, American officials say. One photo dated last Thursday, shown to a New York Times reporter, shows Russian military units moving self-propelled artillery into Ukraine. Another photo, dated Saturday, shows the artillery in firing positions in Ukraine.”
Where are these photographs? And how will we know that these are Russian soldiers? And how will we know that the photos were taken in Ukraine? But most importantly, where are the fucking photographs?
Why am I so cynical? Because the Ukrainian and US governments have been feeding us these scare stories for eight months now, without clear visual or other evidence, often without even common sense. Here are a few of the many other examples, before and after the one above:
- The Wall Street Journal (March 28) reported: “Russian troops massing near Ukraine are actively concealing their positions and establishing supply lines that could be used in a prolonged deployment, ratcheting up concerns that Moscow is preparing for another [sic] major incursion and not conducting exercises as it claims, US officials said.”
- “The Ukrainian government charged that the Russian military was not only approaching but had actually crossed the border into rebel-held regions.” (Washington Post, November 7)
- “U.S. Air Force Gen. Philip M. Breedlove told reporters in Bulgaria that NATO had observed Russian tanks, Russian artillery, Russian air defense systems and Russian combat troops enter Ukraine across a completely wide-open border with Russia in the previous two days.” (Washington Post, November 13)
- “Ukraine accuses Russia of sending more soldiers and weapons to help rebels prepare for a new offensive. The Kremlin has repeatedly denied aiding the separatists.” (Reuters, November 16)
Since the February US-backed coup in Ukraine, the State Department has made one accusation after another about Russian military actions in Eastern Ukraine without presenting any kind of satellite imagery or other visual or documentary evidence; or they present something that’s very unclear and wholly inconclusive, such as unmarked vehicles, or unsourced reports, or citing “social media”; what we’re left with is often no more than just an accusation. The Ukrainian government has matched them.
On top of all this we should keep in mind that if Moscow decided to invade Ukraine they’d certainly provide air cover for their ground forces. There has been no mention of air cover.
This is all reminiscent of the numerous stories in the past three years of “Syrian planes bombing defenseless citizens”. Have you ever seen a photo or video of a Syrian government plane dropping bombs? Or of the bombs exploding? When the source of the story is mentioned, it’s almost invariably the rebels who are fighting against the Syrian government. Then there’s the “chemical weapon” attacks by the same evil Assad government. When a photo or video has accompanied the story I’ve never once seen grieving loved ones or media present; not one person can be seen wearing a gas mask. Is it only children killed or suffering? No rebels?
And then there’s the July 17 shootdown of Malaysia Flight MH17, over eastern Ukraine, taking 298 lives, which Washington would love to pin on Russia or the pro-Russian rebels. The US government – and therefore the US media, the EU, and NATO – want us all to believe it was the rebels and/or Russia behind it. The world is still waiting for any evidence. Or even a motivation. Anything at all. President Obama is not waiting. In a talk on November 15 in Australia, he spoke of “opposing Russia’s aggression against Ukraine – which is a threat to the world, as we saw in the appalling shoot-down of MH17”. Based on my reading, I’d guess that it was the Ukranian government behind the shootdown, mistaking it for Putin’s plane that reportedly was in the area.
Can it be said with certainty that all the above accusations were lies? No, but the burden of proof is on the accusers, and the world is still waiting. The accusers would like to create the impression that there are two sides to each question without actually having to supply one of them.
The United States punishing Cuba
For years American political leaders and media were fond of labeling Cuba an “international pariah”. We haven’t heard that for a very long time. Perhaps one reason is the annual vote in the United Nations General Assembly on the resolution which reads: “Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba”. This is how the vote has gone (not including abstentions):
|Year||Votes (Yes-No)||No Votes|
|1993||88-4||US, Israel, Albania, Paraguay|
|1995||117-3||US, Israel, Uzbekistan|
|1996||138-3||US, Israel, Uzbekistan|
|1997||143-3||US, Israel, Uzbekistan|
|2000||167-3||US, Israel, Marshall Islands|
|2001||167-3||US, Israel, Marshall Islands|
|2002||173-3||US, Israel, Marshall Islands|
|2003||179-3||US, Israel, Marshall Islands|
|2004||179-4||US, Israel, Marshall Islands, Palau|
|2005||182-4||US, Israel, Marshall Islands, Palau|
|2006||183-4||US, Israel, Marshall Islands, Palau|
|2007||184-4||US, Israel, Marshall Islands, Palau|
|2008||185-3||US, Israel, Palau|
|2009||187-3||US, Israel, Palau|
|2012||188-3||US, Israel, Palau|
This year Washington’s policy may be subject to even more criticism than usual due to the widespread recognition of Cuba’s response to the Ebola outbreak in Africa.
Each fall the UN vote is a welcome reminder that the world has not completely lost its senses and that the American empire does not completely control the opinion of other governments.
Speaking before the General Assembly before last year’s vote, Cuban Foreign Minister Bruno Rodriguez declared: “The economic damages accumulated after half a century as a result of the implementation of the blockade amount to $1.126 trillion.” He added that the blockade “has been further tightened under President Obama’s administration”, some 30 US and foreign entities being hit with $2.446 billion in fines due to their interaction with Cuba.
However, the American envoy, Ronald Godard, in an appeal to other countries to oppose the resolution, said:
The international community … cannot in good conscience ignore the ease and frequency with which the Cuban regime silences critics, disrupts peaceful assembly, impedes independent journalism and, despite positive reforms, continues to prevent some Cubans from leaving or returning to the island. The Cuban government continues its tactics of politically motivated detentions, harassment and police violence against Cuban citizens.
So there you have it. That is why Cuba must be punished. One can only guess what Mr. Godard would respond if told that more than 7,000 people were arrested in the United States during the Occupy Movement’s first 8 months of protest in 2011-12 ; that many of them were physically abused by the police; and that their encampments were violently destroyed.
Does Mr. Godard have access to any news media? Hardly a day passes in America without a police officer shooting to death an unarmed person.
As to “independent journalism” – What would happen if Cuba announced that from now on anyone in the country could own any kind of media? How long would it be before CIA money – secret and unlimited CIA money financing all kinds of fronts in Cuba – would own or control most of the media worth owning or controlling?
The real reason for Washington’s eternal hostility toward Cuba has not changed since the revolution in 1959 – The fear of a good example of an alternative to the capitalist model; a fear that has been validated repeatedly over the years as many Third World countries have expressed their adulation of Cuba.
How the embargo began: On April 6, 1960, Lester D. Mallory, US Deputy Assistant Secretary of State for Inter-American Affairs, wrote in an internal memorandum: “The majority of Cubans support Castro … The only foreseeable means of alienating internal support is through disenchantment and disaffection based on economic dissatisfaction and hardship. … every possible means should be undertaken promptly to weaken the economic life of Cuba.” Mallory proposed “a line of action which … makes the greatest inroads in denying money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation and overthrow of government.”
Later that year, the Eisenhower administration instituted its suffocating embargo against its everlasting enemy.
The United States judging and punishing the rest of the world
In addition to Cuba, Washington currently is imposing economic and other sanctions against Burma, Democratic Republic of the Congo, Iran, China, North Korea, South Korea, United Arab Emirates, Pakistan, Sri Lanka, Switzerland, Turkey, Germany, Malaysia, South Africa, Mexico, South Sudan, Sudan, Russia, Syria, Venezuela, India, and Zimbabwe. These are sanctions mainly against governments, but also against some private enterprises; there are also many other sanctions against individuals not included here.
Imbued with a sense of America’s moral superiority and “exceptionalism”, each year the State Department judges the world, issuing reports evaluating the behavior of all other nations, often accompanied by sanctions of one kind or another. There are different reports rating how each lesser nation has performed in the previous year in areas such as religious freedom, human rights, the war on drugs, trafficking in persons, and sponsors of terrorism. The criteria used in these reports are often political. Cuba, for example, is always listed as a sponsor of terrorism whereas anti-Castro exile groups in Florida, which have committed literally hundreds of terrorist acts over the years, are not listed as terrorist groups or supporters of such.
Cuba, which has been on the sponsor-of-terrorism list longer (since 1982) than any other country, is one of the most glaring anomalies. The most recent State Department report on this matter, in 2012, states that there is “no indication that the Cuban government provided weapons or paramilitary training to terrorist groups.” There are, however, some retirees of Spain’s Basque terrorist group ETA (which appears on the verge of disbanding) in Cuba, but the report notes that the Cuban government evidently is trying to distance itself from them by denying them services such as travel documents. Some members of the Revolutionary Armed Forces of Colombia (FARC) have been allowed into Cuba, but that was because Cuba was hosting peace talks between the FARC and the Colombian government, which the report notes.
The US sanctions mechanism is so effective and formidable that it strikes fear (of huge fines) into the hearts of banks and other private-sector organizations that might otherwise consider dealing with a listed state.
Some selected thoughts on American elections and democracy
In politics, as on the sickbed, people toss from one side to the other, thinking they will be more comfortable.
– Johann Wolfgang von Goethe (1749-1832)
- 2012 presidential election:
223,389,800 eligible to vote
128,449,140 actually voted
Obama got 65,443,674 votes
Obama was thus supported by 29.3% of eligible voters
- There are 100 million adults in the United States who do not vote. This is a very large base from which an independent party can draw millions of new votes.
- If God had wanted more of us to vote in elections, he would give us better candidates.
- “The people can have anything they want. The trouble is, they do not want anything. At least they vote that way on election day.” – Eugene Debs, American socialist leader (1855-1926)
- “If persons over 60 are the only American age group voting at rates that begin to approximate European voting, it’s because they’re the only Americans who live in a welfare state – Medicare, Social Security, and earlier, GI loans, FHA loans.” – John Powers
- “The American political system is essentially a contract between the Republican and Democratic parties, enforced by federal and state two-party laws, all designed to guarantee the survival of both no matter how many people despise or ignore them.” – Richard Reeves (1936- )
- The American electoral system, once the object of much national and international pride, has slid inexorably from “one person, one vote”, to “one dollar, one vote”.
- Noam Chomsky: “It is important to bear in mind that political campaigns are designed by the same people who sell toothpaste and cars. Their professional concern in their regular vocation is not to provide information. Their goal, rather, is deceit.”
- If the Electoral College is such a good system, why don’t we have it for local and state elections?
- “All the props of a democracy remain intact – elections, legislatures, media – but they predominantly function at the service of the oligarchy.” – Richard Wolff
- The RepDem Party holds elections as if they were auctions; indeed, an outright auction for the presidency would be more efficient. To make the auction more interesting we need a second party, which must at a minimum be granted two privileges: getting on the ballot in all 50 states and taking part in television debates.
- The US does in fact have two parties: the Ins and the Outs … the evil of two lessers.
- Alexander Cockburn: “There was a time once when ‘lesser of two evils’ actually meant something momentous, like the choice between starving to death on a lifeboat, or eating the first mate.”
- Cornel West has suggested that it’s become difficult to even imagine what a free and democratic society, without great concentrations of corporate power, would look like, or how it would operate.
- The United States now resembles a police state punctuated by elections.
- How many voters does it take to change a light bulb? None. Because voters can’t change anything.
- H.L. Mencken (1880-1956): “As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron.”
- “All elections are distractions. Nothing conceals tyranny better than elections.” – Joel Hirschhorn
- In 1941, one of the country’s more acerbic editors, a priest named Edward Dowling, commented: “The two greatest obstacles to democracy in the United States are, first, the widespread delusion among the poor that we have a democracy, and second, the chronic terror among the rich, lest we get it.”
- “Elections are a necessary, but certainly not a sufficient, condition for democracy. Political participation is not just a casting of votes. It is a way of life.” – UN Human Development Report, 1993
- “If you don’t vote, you can’t complain!” I reply, “You have it backwards. If you DO vote, you can’t complain. You asked for it, and they’re going to give it to you, good and hard.”
- “How to get people to vote against their interests and to really think against their interests is very clever. It’s the cleverest ruling class that I have ever come across in history. It’s been 200 years at it. It’s superb.” – Gore Vidal
- We can’t use our democracy/our vote to change the way the economy functions. This is very anti-democratic.
- What does a majority vote mean other than that the sales campaign was successful?
- Roman Emperor Marcus Aurelius: “The opinion of 10,000 men is of no value if none of them know anything about the subject.”
- We do have representative government. The question is: Who does our government represent?
- “On the day after the 2002 election I watched a crawl on the bottom of the CNN news screen. It said, ‘Proprietary software may make inspection of electronic voting systems impossible.’ It was the final and absolute coronation of corporate rights over democracy; of money over truth.” – Mike Ruppert, RIP
- “It’s not that voting is useless or stupid; rather, it’s the exaggeration of the power of voting that has drained the meaning from American politics.” – Michael Ventura
- After going through the recent national, state and local elections, I am now convinced that taxation without representation would have been a much better system.
- “Ever since the Constitution was illegally foisted on the American people we have lived in a blatant plutocracy. The Constitution was drafted in secret by a self-appointed elite committee, and it was designed to bring three kinds of power under control: Royalty, the Church, and the People. All were to be subjugated to the interests of a wealthy elite. That’s what republics were all about. And that’s how they have functioned ever since.” – Richard K. Moore
- “As demonstrated in Russia and numerous other countries, when faced with a choice between democracy without capitalism or capitalism without democracy, Western elites unhesitatingly embrace the latter.” – Michael Parenti
- “The fact that a supposedly sophisticated electorate had been stampeded by the cynical propaganda of the day threw serious doubt on the validity of the assumptions underlying parliamentary democracy as a whole.” – British Superspy for the Soviets Kim Philby (1912-1988), explaining his reasons for becoming a Communist instead of turning to the Labour Party
- US Supreme Court Justice Louis Brandeis (1856-1941): “We may have democracy in this country, or we may have wealth concentrated in the hands of a few, but we cannot have both.”
- “We don’t need to run America like a business or like the military. We need to run America like a democracy.” – Jill Stein, Green Party presidential candidate 2012
- Democracy Now!, October 30, 2013
- Huffingfton Post, May 3, 2012
- Department of State, Foreign Relations of the United States, 1958-1960, Volume VI, Cuba(1991), p.885 (online here)
- For the complete detailed list, see U.S. Department of State, Nonproliferation Sanctions
- U.S. Department of State, “Country Reports on Terrorism 2012, Chapter 3: State Sponsors of Terrorism,” May 20, 2013
How is your life going under the Global Empire? If you answer honestly, for non billionaires, the response must reflect disappointment if not immense distress. Middle America stands on the precipice of oblivion. While the recent past decades have shown steep declines in financial security and net wealth, the future looks much more ominous. The link between the shift to an internationalist de-industrialization economy and open border immigration has hit the United States hard. This harsh reality is routinely denied in the financial press, but the social chaos that engulfs society is largely caused by this betrayal mindset. Corporatists are waging war against the American public.
Summing up the battle lines is the quintessential voice of an America First philosophy. Pat Buchanan on Free Trade is a collection of quotations and references that should be a must read for every displaced citizen. And that group includes virtually everyone.
“Good for global business” isn’t necessarily good for US
“Global capitalists have become acolytes of global governance. They wish to see national sovereignty diminished and sanctions abolished. Where yesterday American businesses suffered damage to their good name for selling scrap iron to Japan before Pearl Harbor, today [war materiel is routinely exported] to potentially hostile nations. Once it was true that what was good the Fortune 500 was good for America. That is no longer true, and what is good for America must take precedence.”
Source: “A Republic, Not an Empire,” p.349 , Oct 9, 1999
The most puzzling malady that penetrates the “PC” culture is a fear of confronting the direct consequences of encouraging an invasion of illegal’s into the country. The disconnect that sweeps across national borders is not isolated just to the United States. Western Europe is not only in decay but is on the verge of social and economic collapse.
Demetrios Papademetriou, PhD, Director of the Migration Policy Institute, wrote in his Sep. 2005 Migration Policy Institute essay “The Global Struggle with Illegal Migration: No End in Sight”: How Are Illegal Immigration and Globalization Related?
“For nearly two decades now, capital and the market for goods, services, and workers of many types have weaved an ever more intricate web of global economic and social interdependence… No aspect of this interdependence seems to be more visible to the public of advanced industrial societies than the movement of people. And no part of that movement is proving pricklier to manage effectively, or more difficult for publics to come to terms with, than irregular (also known as unauthorized, undocumented, or illegal) migration…”
Dr. Papademetriou’s assumption that interdependency is the new normal may be supported with the procession of the Trilateral Commission’s “New International Economic Order”. Nonetheless, the destruction of national sovereignty is a price that no country can afford to adopt, much less pay and remain a nation. Interdependency is the death knell of traditional values, autonomous commerce and individual civil liberties. With the ringing of the bell at the NY Stock exchange, the sound of prosperity goes deaf for the populist, while globalist elites extract the last pound of flesh from an intentionally designed consolidation of a Corporatocracy economy.
The fate of the world is at stake if the forces of globalization are left to complete their total domination of monetary and financial control. It is just as important to prevent the next bipartisan arrangement to grant effective amnesty to millions of illegal foreigners, who have shown little interest to assimilate or adopt the heritage and values of our founding principles.
Warren Mass wrote over a year ago in Permanent Amnesty, Temporary Border.
“An important part of regulating legal immigration, in addition to evaluating each prospective immigrant’s ability to become a productive, law-abiding citizen, is to determine how many immigrants the United States is capable of absorbing each year, taking into consideration the impact on our nation’s economy and culture.”
If this standard needs to apply to those who apply for citizenship, by what absurd twist of logic or sanity pertains to President Obama’s intentions of issuing executive orders that are clearly unconstitutional? How insulting it is to hard press citizens, relegated to enduring impoverishment from off shoring livable wage jobs, while awarding effective amnesty to illegals.
Columnist Glenn R. Jackson review of author Kenneth Buchdahl’s book, Dismantling The American Dream: Globalization, Free Trade, immigration, Unemployment, Poverty, Debt, Foreign Dependency hits the mark.
“First and foremost it is good to see the recognition by Buchdahl of American culture as critical to the building of the American Dream. As Buchdahl writes the development of a culture is grounded in a unique American personality and intricate system of values and beliefs that is responsible for America’s enviable situation. And it is that enviable situation that has contributed to creating the forces that are working rapidly, knowingly or not, to dismantle the American Dream.
Dismantling the American Dream chronicles the unintended impact of America’s pop culture belief in globalization as a force for good in our economy and the failure of leadership to recognize that belief gone awry. America’s political leaders continued belief in free trade and give-away trade deals, in the face of the near deathblow of NAFTA to American manufacturing is but one of the delusions of globalization that Buchdahl lays bare.”
The interjection of cultural aspects may well be the missing link that escapes most chronicles on current events. Documenting the actual results from Free Trade Treaties, should in and of itself win the intellectual argument that economic destruction of Middle America has already happened. Add in the deliberate call for mass migration and social incentives to cross the border has created the latest flood in undocumented aliens.
When Democracy Now asks, Obama & McConnell Pledge Cooperation; Will Fast-Tracking Secretive TPP Trade Deal Top Their Agenda?, and presents Ralph Nader on TPP and the “Unstoppable” Left-Right Anti-Corporate Movement, one has hope that the Buchanan Brigades message is being heard.
With the celebrity coronation that the Democrats are showering on their new favorite daughter, the “Pocahontas Princess”, Elizabeth Warren’s Crusade Against Disastrous “Free Trade” Agreements, is welcomed.
An inquiry was made to NY Senator Charles E. Schumer on the TPA, Trade Priorities Act of 2014 (S.1900). His reply can be read on this link.
An alliance among anti-free trade factions from all ideological camps is necessary to stop the globalist juggernaut. Even if such a coalition could be grown, the likelihood that linkage to the need to stop illegal immigration and opposition to amnesty, would be frosty.
This brings up the opportunity to interject the appeal, WE MUST NOT SURRENDER TO IMMIGRATION AMNESTY, by Frosty Wooldridge. ““Why would any member of Congress who opposes executive amnesty provide President Obama the funds to carry it out? A Republican majority must force congressional Democrats to answer this question through their votes”.
Likewise, why would as covered in the New American essay, Republicans to Obama: We Will Give You Trade Promotion Authority, patriots want to grant “fast track” authority to a President, who is defiant to congressional constitutional separation of powers?
“Fast track authority eventually expired on April 16, 1994, and was not reauthorized by Congress until the passage of the Bipartisan Trade Promotion Authority Act (BPTAA) of 2002. BPTAA reinstated fast track authority renamed as “trade promotion authority” (TPA), which expired in 2007. In 2012, President Obama requested renewal of TPA/fast track authority to complete negotiations for the TPP and TTIP.”
The answer should be apparent that any support of “fast track” or for TPP is a vote bought with globalist control. If it is so obvious that such influence is at play in trade deals, why are so many confused activists not able to see through the “Open Border” fraud and act upon the best interests for American workers and families?
That taboo culture factor, covered in the Buchdahl book explains the blind spot from the Loony Left. A review of a pro immigration site, Open Borders will demonstrate a systemic disconnect from reality. Often Libertarian purists, also fall under the spell of a transcendental fantasy. To their credit, Open Borders presents the concept of CITIZENISM and provides the following its key features.
Citizenism places substantially greater weight on the rights and interests of citizens than non-citizens, though it operates within moral side-constraints.
Citizenism is about current citizens, not about the people who may become citizens as a result of immigration or deportation policy.
Citizenism, as conceived by its original proponent Sailer, is both about the individual ethics of voters and about the responsibilities of elected representatives.
Citizenism is about loyalty, not admiration, toward one’s fellow citizens.
If you understand the destructive nature of corporatist trade agreements that only benefit transnational conglomerates, while poisoning economic commerce for Middle Americans, why would you not oppose the lunacy of unrestrictive mass migration? The imperative moral directive is to protect and defend your own nation, its traditional culture and responsible citizens.
Saving the world is a concept that resides in the sick minds of the Save the Planet Kill Yourself mindset. If they are so devoted to a globalist utopia, the influx of trespassers must be leaving their own homeland in better shape. Just how well is life south of the border doing?
Both Good Guys and Bad Guys…
During my four score and five years I have witnessed a series of boggy men created by our elite masters that have horrified the population, allowed the deterioration of our freedom, and destroyed our Constitution. The terrifying phantoms they trotted out were often contrived and bogus.
Communism filled the bill for several decades; then the Russian atomic threat became so real that many citizens constructed shelters. Recently the Muslims have been used to create mainstream fear and hate. As I write this Russian has returned to the demon category and is being castigated by our devious press and media.
A feared enemy is a necessary element for the progression of tyranny and the American people are easily fooled.
Fooling the public is not confined to the government. Dissident truth tellers are guilty a well.
When I began writing regularly a number of years ago I wrote about the power grabs that were becoming regular fare in government circles. These essays were popular and were widely reproduced. As it became apparent that educating the populace was useless; that the problem was not entirely centered in our government; that ample responsibility rested with our citizens; indicting our foolish populace was not popular and my readership and popularity plummeted.
The bogus prophecies that beguile Charismatic Christian circles are eerily similar to many of the fear mongering prognostication written by talented and ambitious truth tellers in patriotic groups; both tend toward dramatic predictions that do not materialize and in the process destroy integrity.
Sensationalism is scintillating and sensational revelations and predictions are broadly popular. Truth is profound to a small number of readers and onerous to the majority. R. J. Rushdoony declares that “—the ability to investigate, denounce, and condemn evil is no guarantee of righteousness”. He compares the deterioration of the Roman Empire to a similar decline in the United States:
“The Romans of old, like Americans today, loved to see evil exposed. They loved to talk about national scandals. Evil is interesting to most people, whereas righteousness is not. At a dinner party, a suddenly disgusted host said, ‘Let’s stop all this talk about scandals and let’s talk about something good for a change!’ The result was a painful silence. No one was interested in talking about righteousness. But freedom rests on righteousness (or justice). Without righteousness freedom perishes.”
I recall the Y2K threat that was almost universally considered serious. Various commentators predicted all kinds of breakdowns but on January 2, 2000 things were mostly normal. For several decades we have been regaled with notices of a stock market crash; hyperinflation; death of the dollar; bank failures, or a depression; nothing really serious has occurred. We have been told that Martial Law was Imminent, that body bags had been purchased, burial vaults stock piled, and that Mexican soldiers or Russians soldiers were active in the United States.
Following are some of the titles of articles published by a popular Libertarian writer and radio host with the year they were published.
The Draft is Coming 2006
By 2010, you and I will no longer be Americans 2008
The Beginning of the End 2008
Pentagon Planning Deployment of Troops in Support of Nationwide Vaccination 2009
Depopulation by Inoculation 2009
The Economic Collapse of 2009
Freedom Loving Americans Headed for FEMA Camps 2012
More False Flags Coming! 2012
Mega Banks Stealing Customer Savings and Homes Prior to Collapse 2012
FEMA Trains with Human Shackles are Real! 2012
The DHS Plan to Convert Malls and Stadiums to FEMA Camps — 2012
Manufactured Presidential Assassination Attempt Expected to Justify Martial Law 2012
The Russians are Coming, The Russians are Coming 2012
WWW III is Right Around the Corner 2012
Nowhere to Run or to Hide From the New Killer Robots 2012
Will Your Family Survive the Coming Tyranny? 2013
The Eight Unfolding Stages of the Great American Genocide 2013
The Government Theft of Retirement Accounts Has Begun 2013
Five Months From the Biggest Depopulation Event in US History 2013
Where Will FEMA Take Your Children? 2013
A Military Coup Will Remove Obama 2013
The Mother of All Conspiracies Aimed At Our Children 2013
The Murdering of Our Daughters 2013
Game Over; Total Collapse is Imminent 2013
They Are Coming for Our Water 2013
The Chinese Military Will Be Knocking On Your Door 2013
The Sides are Forming for the Coming Civil War 2013
These are startling titles that are popular and get the attention of readers. There is often an element of truth but many of the events predicted never materialized and some of them were contrived lies. These titles provide an easy target but there are scores of other writers that use questionable statements to gain readership and popularity. He is not alone.
Charismatic Christian Churches entertain similar startling predictions made by modern day prophets who give the impression that their message comes from God. I have received numerous emails containing warnings given by these Christian oracles that are sent by people who take their words as gospel.
It is a deplorable mendacity to purposely lie to the public as a means of gaining popularity.
Both Christian and secular society should understand that our love for sensation and prurience is a result of our own sinful natures and that the perpetrator needs our cooperation to continue supplying us with evil fantasy. If we are serious about changing our government we must first change ourselves.
The Roman Empire lasted for over 500 years but it slowly deteriorated. Like the United States of America, the Empire began with a love of virtue but ended with a love of evil. Roman citizens, like present day Americans, thought that it was righteous to expose sin and malfeasance in high places. And, like present day Americans, they never understood that righteousness must start with the individual citizen’s obedience to the Law of the Creator; that exposing the sins in government and church would never produce righteous citizens.
Now, gentle reader, the above does not mean that exposing sin in high places is evil. It is not. Freedom is under siege and if we are to win the battle we must know and understand the enemy while realizing that exposing sin in high places will not by itself change our society. Societal change must come with each individual citizen and as individuals seek justice from the Only Source of Justice society will change and so will our government.
“It’s not the underlying economics that’s driving things, it’s central bank liquidity.”
— Matt King, Citigroup
Soaring auto sales are not so much a sign of a strong economy as they are an indication of financial hanky-panky. We saw this same type of fakery play out in housing between 2004 – 2006, when prices went through the roof due to a mortgage-lending scam (“subprime”) that crashed the stock market and sent the economy reeling. Now the bigtime money guys are at it again, writing up auto loans for anyone who can sit upright in a chair and scribble an “X” on the dotted line. As a result, car sales have surged to over 16 million for the last 6 months. (A full 7 million more than the low point in January, 2009.) And it’s not hard to see why either. The finance gurus are packaging these sketchy subprimes into bonds, offloading them on eager investors, and recycling the profits into more crappy loans. It’s a perfect circle and it won’t end until the loans start blowing up, jittery investors head for the exits, and Uncle Sugar rides to the rescue with more bailouts.
But we’re getting ahead of ourselves. First take a look at these charts by House of Debt which shows the disparity between auto spending and other types of spending since the end of the slump in 2009.
House of Debt: “New auto purchases have driven the consumer spending recovery to a large degree. The chart below shows the spending recovery for new auto sales and for all other retail spending…
From 2009 to 2013, spending on new autos increased by 40% in nominal terms. All other spending increased by only 20%. Further, excluding autos, 2013 saw lower growth in nominal retail spending than 2012…
The concern is that a lot of auto purchases are being fueled with debt, given a strong recovery in the auto loan market. Below is the net flow of auto loans from 2002 to 2013. It is a net flow because it includes pay downs in addition to new originations. As it shows, auto lending in 2012 and 2013 tops any other year during the previous expansion from 2002 to 2007 (although it is still below the amount of new auto loans in 2000 and 2001).
(“Another Debt-Fueled Spending Spree?” House of Debt)
How about that? So there’s a bigger debt bubble in auto loans today than there was before the bust. But why? Is it because demand is strong, jobs are plentiful, wages are rising, the economy is growing, and people are optimistic about the future?
Heck, no. It’s because rates are low, credit is easy, and dealers are ready to put anyone with a license and a heartbeat into a brand-spanking new car no questions asked. Here are the details from an article in the New York Times titled “In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates” by Jessica Silver-Greenberg and Michael Corkery:
”Auto loans to people with tarnished credit have risen more than 130 percent in the five years since the immediate aftermath of the financial crisis, with roughly one in four new auto loans last year going to borrowers considered subprime — people with credit scores at or below 640.
The explosive growth is being driven by some of the same dynamics that were at work in subprime mortgages. A wave of money is pouring into subprime autos, as the high rates and steady profits of the loans attract investors. Just as Wall Street stoked the boom in mortgages, some of the nation’s biggest banks and private equity firms are feeding the growth in subprime auto loans by investing in lenders and making money available for loans.
And, like subprime mortgages before the financial crisis, many subprime auto loans are bundled into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds — a process that creates ever-greater demand for loans.
The New York Times examined more than 100 bankruptcy court cases, dozens of civil lawsuits against lenders and hundreds of loan documents and found that subprime auto loans can come with interest rates that can exceed 23 percent. The loans were typically at least twice the size of the value of the used cars purchased, including dozens of battered vehicles with mechanical defects hidden from borrowers. Such loans can thrust already vulnerable borrowers further into debt, even propelling some into bankruptcy, according to the court records, as well as interviews with borrowers and lawyers in 19 states.
In another echo of the mortgage boom, The Times investigation also found dozens of loans that included incorrect information about borrowers’ income and employment, leading people who had lost their jobs, were in bankruptcy or were living on Social Security to qualify for loans that they could never afford.” (“In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates”, New York Times)
Can you believe that this kind of chicanery is going on in broad daylight without the regulators stepping in? Think about it for a minute: If the NYT’s journalists can find “dozens of loans that included incorrect information about borrowers’ income and employment”, then why can’t the government regulators? It’s ridiculous. What we’re talking about here is a new version of “liar’s loans” where dealers are helping people who don’t have the means to repay the debt, to fudge the details on their loan application so they can drive off in a shiny new Impala.
Haven’t we seen this movie before?
Here’s more from USA Today: “In the first quarter of 2014, 24.9% of all new-car loans were 73 to 84 months long. Four years ago, less than 10% of loans were that long. In fact, such lengthy terms have pulled the average new-car loan to 66 months. That’s an all-time record.”
7 years to pay off a car? You got to be kidding me? It’s like a second mortgage. And there’s more, too. The average monthly payment and average amount financed hit record highs in the first quarter too. This is from Auto News:
“The average monthly new-vehicle payment was $474 in the first quarter, up 3.3 percent from a year ago. The average monthly used-vehicle payment was $352, up 1.1 percent, Experian Automotive said.
Also in the first quarter, the average amount financed on a new-vehicle loan was $27,612, an increase of $964, or 3.6 percent. For used vehicles, the average amount financed was $17,927, up $395 or 2.3 percent.”
So Americans are not just loading on more debt, they’re also assuming that they’re financial situation is going to be stable enough to make these large payments well into the future. Good luck with that.
It’s also worth noting that, in many transactions, dealers are actually lending more than the value of the vehicle. According to Reuters David Henry,
“The average loan-to-value on new cars rose to 110.6 percent… On used cars it rose to 133.2 percent…
Auto lenders often provide loans that exceed the value of cars they are financing because borrowers want cash to pay sales taxes and fees.”
(“U.S. car buyers borrow more as rates fall and standards loosen“, David Henry, Reuters)
Let me see if I got this straight: You walk onto a car lot without a dime in your pocket, and drive off in a brand new car with everything paid for upfront? Such a deal! Can you see why we think that the sales numbers are a big fake? This isn’t the sign of a strong economy. It’s the sign of another gigantic credit bubble rip-off. But what do the dealers get out of this thing? Is it really worth their while to botch the underwriting when they know that eventually they’ll have to repossess the vehicle? Sure, it is, because there’s big money in stuffing people into loans they can’t afford.
Here’s how the Times explains it: ”Auto loans to borrowers considered subprime, those with credit scores at or below 640, have spiked in the last five years. The jump has been driven in large part by the demand among investors for securities backed by the loans, which offer high returns at a time of low interest rates. Roughly 25 percent of all new auto loans made last year were subprime, and the volume of subprime auto loans reached more than $145 billion in the first three months of this year.”
Bingo. So not only do they make dough on the high interest rates they charge their subprime borrowers, (Sometimes 23 percent or more.) they also make it by selling the loan to investors who are eager to buy any manner of crappy bond provided it offers a better return than US Treasuries. This is the mess Bernanke created by fixing interest rates at zero for nearly 6 years. Zirp (zero interest rate policy) unavoidably leads to excessive risk taking by yield-crazed speculators. The voracious appetite for subprime securities (ABS–Asset-Backed Securities) has even surprised the bond issuers who are constantly beating the bushes looking for sketchier products. This is from the same article by the NY Times:
“Investors, seeking a higher return when interest rates are low, recently flocked to buy a bond issue from Prestige Financial Services of Utah. Orders to invest in the $390 million debt deal were four times greater than the amount of available securities.
What is backing many of these securities? Auto loans made to people who have been in bankruptcy.
An affiliate of the Larry H. Miller Group of Companies, Prestige specializes in making the loans to people in bankruptcy, packaging them into securities and then selling them to investors.
“It’s been a hot space,” Richard L. Hyde, the firm’s chief operating officer, said during an interview in March. Investors are betting on risky borrowers. The average interest rate on loans bundled into Prestige’s latest offering, for example, is 18.6 percent, up slightly from a similar offering rolled out a year earlier…. To meet that rising demand, Wall Street snatches up more and more loans to package into the complex investments.” (NYT)
HA! Now there’s a good way to feather the old retirement fund; load up on bonds made up of loans to people who’ve gone bust.
This is the impact that zero rates have on investor behavior. The abundance of cheap and plentiful liquidity invariably leads to trouble. And there are victims in this Central Bank-authored gold rush too, namely the unsophisticated borrowers who pay prohibitively high rates on beater vehicles that are typically worth less-than-half the value of the loan. (Check the NYT article for examples.)
The Times also notes that the ratings agencies have been playing along with the finance companies just as they did during the subprime mortgage fiasco. Here’s more from the Times:
“Rating agencies, which assess the quality of the bonds, are helping fuel the boom. They are giving many of these securities top ratings, which clears the way for major investors, from pension funds to employee retirement accounts, to buy the bonds. In March, for example, Standard & Poor’s blessed most of Prestige’s bond with a triple-A rating. Slices of a similar bond that Prestige sold last year also fetched the highest rating from S.&P. A large slice of that bond is held in mutual funds managed by BlackRock, one of the world’s largest money managers.” (NYT)
Ask yourself this, dear reader: How are the ratings agencies able to give “many of these securities top ratings”, when the investigators from the Times found “dozens of loans that included incorrect information about borrowers’ income and employment, leading people who had lost their jobs, were in bankruptcy or were living on Social Security to qualify for loans that they could never afford”?
Let’s face it: The regulatory changes in Dodd-Frank haven’t done a damn thing to protect the victims of these dodgy subprime schemes. Borrowers and investors are both getting gouged by a system that only protects the interests of the perpetrators. The sad fact is that nothing has changed. The system is just as corrupt as it was when Lehman went down.
So, how long can this go on before the market implodes?
According to the Times:
“financial firms are beginning to see signs of strain. In the first three months of this year, banks had to write off as entirely uncollectable an average of $8,541 of each delinquent auto loan, up about 15 percent from a year earlier, according to Experian…
In another sign of trouble ahead, repossessions, while still relatively low, increased nearly 78 percent to an estimated 388,000 cars in the first three months of the year from the same period a year earlier, according to the latest data provided by Experian. The number of borrowers who are more than 60 days late on their car payments also jumped in 22 states during that period….” (NYT)
(According to Amber Nelson at loan.com: “In the second quarter, the value of all auto loans late by 60 days or more was more than $4 billion, up 27 percent from the prior year, according to Experian.”)
So, yeah, the trouble is mounting, but that doesn’t mean that this madness won’t continue for some time to come. It probably will. It’ll probably drag-on until the economy turns south and more borrowers start falling behind on their payments. That will lead to more defaults, heavier losses on auto bonds, and a hasty race to the exits by investors. Isn’t that how the subprime mortgage scam played out?
Indeed. But at least there are signs of hope on the regulatory front. Check out this clip from an article at CNBC:
“In August, both Santander Consumer and General Motors Financial Co. acknowledged receiving Justice Department subpoenas in connection with a probe over possible violations of civil-fraud laws. And the Consumer Financial Protection Bureau and the Securities and Exchange Commission have both stepped up their scrutiny of the auto-loan market.” (“New debt crisis fear: Subprime auto loans“, CNBC)
So the SEC, the DOJ, and the CFPB are actually investigating the underwriting practices of these behemoth finance companies to see if they violated “civil fraud laws”?
Will wonders never cease?
Just don’t hold your breath waiting for convictions.
The names Catherine Engelbrecht and Reggie B. Walton may not exactly be household names, but both are part of a disturbing court ruling that can only be described as a reprehensible government protection racket in plain sight for all to see. Ms. Engelbrecht was the plaintiff and Reggie B. Walton the judge. A succinct summary is provided by Breitbart in the report, True the Vote’s Lawsuit against IRS Gets Tossed by Federal Judge.
“A federal judge in the United States District Court for the District of Columbia entered an order dismissing a lawsuit filed by True the Vote, a Houston, Texas-based non-profit organization focused on “voters’ rights and election integrity” against the Internal Revenue Service (IRS). The order alleged that the IRS had improperly delayed granting their application for 501(c)(3) status and targeted them as a conservative organization. The opinion, by Judge Reggie B. Walton, found that the IRS had taken sufficient “remedial steps to address the alleged behavior.”
From the ruling by Judge Walton, analysis:
“The defendants contend that the Court does not have subject-matter jurisdiction over counts one, two, and five of the plaintiff’s complaint because the IRS ultimately approved the plaintiff’s application for tax-exempt status, and thus counts one, two, and five—all of which seek “to correct [the] alleged targeting [of the IRS] and delay during its application process” for tax-exempt status—are now moot as there is no longer any case or controversy for the Court to resolve.”
How nice that the IRS can slip out of a sticky wicket by simply retroactively approving a 501(c)(3) application that they officiated with a touch of harassment and a sprinkle of intimidation. The reasoning used by Judge Walton to protect the IRS from a “voluntary cessation” exception follows:
“The rationale supporting the defendant’s voluntary cessation as an exception to mootness is that, while the defendant’s unilateral cessation of the challenged conduct may grant the plaintiff relief, the defendant is free to return to its old ways—thereby subjecting the plaintiff to the same harm but, at the same time, avoiding judicial review. Accordingly, a case can be mooted by virtue of the defendant’s cessation of its allegedly illegal conduct only if (1) there is no reasonable expectation that the conduct will recur and (2) interim relief or events have completely and irrevocably eradicated the effects of the alleged violation.”
Oh praise the sacred high priests of the Internal Revenue Service for “seeing the light” and repenting their ways. Such a reasonable trust in the good intentions of the IRS to not only follow the law but to administer their trade under the “good faith” doctrine that only a judge working for the same corrupt government as do the Lois Lerner brigade of bureaucrats, would profess.
An important USA Today article, from hardly an anti government publication, IRS list reveals concerns over Tea Party ‘propaganda’, furnishes the evidence.
“Newly uncovered IRS documents show the agency flagged political groups based on the content of their literature, raising concerns specifically about “anti-Obama rhetoric,” inflammatory language and “emotional” statements made by non-profits seeking tax-exempt status.
The internal 2011 documents, obtained by USA TODAY, list 162 groups by name, with comments by Internal Revenue Service lawyers in Washington raising issues about their political, lobbying and advocacy activities. In 21 cases, those activities were characterized as “propaganda.”
The list provides the most specific public accounting to date of which groups were targeted for extra scrutiny and why. The IRS has not publicly identified the groups, repeatedly citing a provision of the tax code prohibiting it from releasing tax return information.”
The supporting items Document: IRS ‘political advocacy cases’ list, while the pattern of selective favoritism is authenticated in the report, IRS approved liberal groups while Tea Party in limbo.
For a more cutting edge analysis from Twitchy US politics on the insanity from the Loony Left, just absorb the rhetoric and ask, who the real totalitarians are in society and even worse in government. Outrage: Court acknowledges that IRS targeted True the Vote, dismisses lawsuit anyway explains.
“Voters’ rights group True the Vote , a nonprofit “founded to inspire and equip voters for involvement at every stage of our electoral process,” has had a hard time of it. As the 2012 election approached, Cher of all people referred to True the Vote as “a bunch of Tea Party Nazis” and “animals.” Maryland Rep. Elijah Cummings, who sits on the House Oversight and Government Reform Committee, informed True the Vote founder and president Catherine Engelbrecht that he would be launching an investigation into her organization.
Of course, all of this was happening while the IRS was targeting conservative groups and holding up applications for nonprofit status, often through several election cycles. And even though the U.S. Federal District Court didn’t deny this, True the Vote’s case against the IRS was dismissed today.”
Engelbrecht issued the following brief statement:
“The Court today correctly acknowledged that the IRS targeted True the Vote because of its perceived political beliefs. Such conduct is reprehensible and should never be acceptable in a free society. Despite this critical finding, we are stunned and disappointed in the court’s ruling which nevertheless dismisses our case. We will be evaluating our legal options and will announce our intent in that regard soon.”
Jenny Beth Martin, co-founder of Tea Party Patriots reaction to the DC Court Decision on IRS “Unconscionable”. “The Court’s decision not to sanction either the IRS or the individual agents because it and they had taken “remedial measures” is unconscionable.”
Supporting this conclusion are Top 9 Quotes on the IRS Targeting of Tea Party Groups.
- “Not even a smidgen of corruption.” – President Barack Obama to Fox News’ Bill O’Reilly February, 2014
- “Decline to answer that question.” – Lois Lerner, pleading the Fifth Amendment before the House Oversight and Government Reform Committee, March 5, 2014
- “The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention.” – Treasury Inspector General for Tax Administration Audit
- “Instead of referring to the cases as advocacy cases, they actually used case names on this list. They [Determinations Unit in Cincinnati, Ohio] used names like ‘Tea Party’ or ‘Patriots’ and they selected cases simply because the applications had those names in the title. That was wrong, that was absolutely incorrect, insensitive, and inappropriate.” – Lois Lerner
- “Even after admitting that it had targeted groups, and a TIGTA [Treasury Inspector General for Tax Administration] report detailed the abuses, the IRS did not let up. In August 2013, the IRS requested yet more documents and information. It asked us to provide, for example, all fundraising communications for the 60 days before the November 6, 2012 election, and all materials that we used in various “Get Out the Vote” activities. That request made no sense under the current standards for evaluating non-profit applications. The regulations proposed three months later, however, explain the requests, as they include specific provisions classifying any mention of a candidate’s name within 60 days of an election and get-out-the-vote efforts as taxable political activity.” – Jenny Beth Martin in testimony to the House Committee on Oversight and Government Reform, February 27, 2014
- “The Internal Revenue Service says acting IRS Commissioner Steven T. Miller was first informed in May 2012 that tea party groups were inappropriately targeted for scrutiny.” – Hot Air, May 13, 2013
- “The IRS inspector general said this week that while some liberal groups were given extra scrutiny by the tax agency, they were not subjected to the same invasive queries as tea party groups – a finding that seems to confirm political bias was at play.” – The Washington Times, June 27, 2013
- When the IRS revelations broke, Obama promised a full investigation. Yet Cleta Mitchell, an attorney for a number of tea party and conservative groups targeted by the IRS, testified, “None of my clients have received a single contact from the FBI, the DOJ [Department of Justice] or any other investigator regarding the IRS scandal.” – The Chicago Sun-Times, February 10, 2014
- More than 400,000 documents have been turned over to Congress, only a fraction of which have been publicly released under the Freedom of Information Act. Republicans say they’re still missing key documents including the e-mails of former IRS Exempt Organizations Director Lois Lerner. – USA Today, February 26, 2014
But remember, President Obama assures us there’s “not a smidgen of corruption!”
No matter your political leanings, every American should be concerned when the courts condone abusive and arbitrary administration in any agency. Allowing the IRS to retroactively cover their rear, while turning a blind eye to systemic illicit practices, is just part of the game plan that permits the court to make up law, which favors government tyranny.
The True the Vote decision is insulting and only goes to prove that reforms through the election process are truly the moot option.
Here we go again.
Last week, the country’s biggest mortgage lenders scored a couple of key victories that will allow them to ease lending standards, crank out more toxic assets, and inflate another housing bubble. Here’s what’s going on.
On Monday, the head of the Federal Housing Finance Agency (FHFA), Mel Watt, announced that Fannie and Freddie would slash the minimum down-payment requirement on mortgages from 5 percent to 3 percent while making loans more available to people with spotty credit. If this all sounds hauntingly familiar, it should. It was less than 7 years ago that shoddy lending practices blew up the financial system precipitating the deepest slump since the Great Depression. Now Watt wants to repeat that catastrophe by pumping up another credit bubble. Here’s the story from the Washington Post:
“When it comes to taking out a mortgage, two factors can stand in the way: the price of the mortgage,…and the borrower’s credit profile.”
On Monday, the head of the agency that oversees the mortgage giants Fannie Mae and Freddie Mac outlined … how he plans to make it easier for borrowers on both fronts. Mel Watt, director of the Federal Housing Finance Agency, did not give exact timing on the initiatives. But most of them are designed to encourage the industry to extend mortgages to a broader swath of borrowers.
Here’s what Watt said about his plans in a speech at the Mortgage Bankers Association annual convention in Las Vegas:
Saving enough money for a downpayment is often cited as the toughest hurdle for first-time buyers in particular. Watt said that Fannie and Freddie are working to develop “sensible and responsible” guidelines that will allow them to buy mortgages with down payments as low as 3 percent, instead of the 5 percent minimum that both institutions currently require.”
Does Watt really want to “encourage the industry to extend mortgages to a broader swath of borrowers” or is this just another scam to enrich bankers at the expense of the public? It might be worth noting at this point that Watt’s political history casts doubt on his real objectives. According to Open Secrets, among the Top 20 contributors to Watt’s 2009-2010 campaign were Goldman Sachs, Bank of America, Citigroup Inc., Bank of New York Mellon, American bankers Association, US Bancorp, and The National Association of Realtors. (“Top 20 Contributors, 2009-2010“, Open Secrets)
Man oh man, this guy’s got all of Wall Street rooting for him. Why is that, I wonder? Is it because he’s faithfully executing his office and defending the public’s interests or is it because he’s a reliable stooge who brings home the bacon for fatcat bankers and their brood?
This is such a farce, isn’t it? I mean, c’mon, do you really think that the big banks make political contributions out of the kindness of their heart or because they want something in return? And do you really think that a guy who is supported by Goldman Sachs has your “best interests” in mind? Don’t make me laugh.
The reason that Obama picked Watt was because he knew he could be trusted to do whatever Wall Street wanted, and that’s precisely what he’s doing. Smaller down payments and looser underwriting are just the beginning; teaser rates, balloon payments, and liars loans are bound to follow. In fact, there’s a funny story about credit scores in the Washington Post that explains what’s really going on behind the scenes. See if you can figure it out:
“Most housing advocates agree that a bigger bang for the buck would come from having lenders lower the unusually high credit scores that they’re now demanding from borrowers.
After the housing market tanked, Fannie and Freddie forced the industry to buy back billions of dollars in loans. In a bid to protect themselves from further financial penalties, lenders reacted by imposing credit scores that exceed what Fannie and Freddie require. Housing experts say the push to hold lenders accountable for loose lending practices of the past steered the industry toward the highest-quality borrowers, undermining the mission of Fannie and Freddie to serve the broader population, including low- to moderate- income borrowers.
Today, the average credit score on a loan backed by Fannie and Freddie is close to 745, versus about 710 in the early 2000s, according to Moody’s Analytics. And lenders say they won’t ease up until the government clarifies rules that dictate when Fannie and Freddie can take action against them.” (Washington Post)
Can you see what’s going on? The banks have been requiring higher credit scores than Fannie or Freddie.
But why? After all, the banks are in the lending business, so the more loans they issue the more money they make, right?
Right. But the banks don’t care about the short-term dough. They’d rather withhold credit and slow the economy in order to blackmail the government into doing what they want.
And what do they want?
They want looser regulations and they want to know that Fannie and Freddie aren’t going to demand their money back (“put backs”) when they sell them crappy mortgages that won’t get repaid. You see, the banks figure that once they’ve off-loaded a loan to Fannie and Freddie, their job is done. So, if the mortgage blows up two months later, they don’t think they should have to pay for it. They want the taxpayer to pay for it. That’s what they’ve been whining about for the last 5 years. And that’s what Watt is trying to fix for them. Here’s the story from Dave Dayen:
“Watt signaled to mortgage bankers that they can loosen their underwriting standards, and that Fannie and Freddie will purchase the loans anyway, without much recourse if they turn sour. The lending industry welcomed the announcement as a way to ease uncertainty and boost home purchases, a key indicator for the economy. But it’s actually a surrender to the incorrect idea that expanding risky lending can create economic growth.
Watt’s remarks come amid a concerted effort by the mortgage industry to roll back regulations meant to prevent the type of housing market that nearly obliterated the economy in 2008. Bankers have complained to the media that the oppressive hand of government prevents them from lending to anyone with less-than-perfect credit. Average borrower credit scores are historically high, and lenders make even eligible borrowers jump through enough hoops to garner publicity. Why, even Ben Bernanke can’t get a refinance done! (Actually, he could, and fairly easily, but the anecdote serves the industry’s argument.)
(“The Mortgage Industry Is Strangling the Housing Market and Blaming the Government“, Dave Dayen, The New Republic)
Can you see what a fraud this is? 6 years have passed since Lehman crashed and the scum-sucking bankers are still fighting tooth-and-nail to unwind the meager provisions that have been put in place to avoid another system-shattering disaster. It’s crazy. These guys should all be in Gitmo pounding rocks and instead they’re setting the regulatory agenda. Explain that to me? And this whole thing about blackmailing the government because they don’t want to be held responsible for the bad mortgages they sold to the GSE’s is particularly irritating. Here’s more from Dave Dayen:
“After the housing market tanked, Fannie and Freddie forced the industry to buy back billions of dollars in loans. In a bid to protect themselves from further financial penalties, lenders reacted by imposing credit scores that exceed what Fannie and Freddie require. ….And lenders say they won’t ease up until the government clarifies rules that dictate when Fannie and Freddie can take action against them.”
So the industry has engaged in an insidious tactic: tightening lending well beyond required standards, and then claiming the GSEs make it impossible for them to do business. For example, Fannie and Freddie require a minimum 680 credit score to purchase most loans, but lenders are setting their targets at 740. They are rejecting eligible borrowers….so they can profit much more from a regulation-free zone down the line.
So, I ask you, dear reader; is that blackmail or is it blackmail?
And what does Watt mean when he talks about “developing sensible and responsible guidelines’ that will allow them (borrowers) to buy mortgages with down payments as low as 3 percent”?
What a joke. Using traditional underwriting standards, (the likes of which had been used for the entire post-war period until we handed the system over to the banks) a lender would require a 10 or 20 percent down, decent credit scores, and a job. The only reason Watt wants to wave those requirements is so the banks can fire-up the old credit engine and dump more crap-ass mortgages on Uncle Sam. That’s the whole thing in a nutshell. It’s infuriating!
Let me fill you in on a little secret: Down payments matter! In fact, people who put more down on a home (who have “more skin in the game”) are much less likely to default. According to David Battany, executive vice president of PennyMac, “there is a strong correlation between down payments to mortgage default. The risk of default almost doubles with every 1%.”
Economist Dean Baker says the same thing in a recent blog post:
“The delinquency rate, which closely follows the default rate, is several times higher for people who put 5 percent or less down on a house than for people who put 20 percent or more down.
Contrary to what some folks seem to believe, getting moderate income people into a home that they subsequently lose to foreclosure or a distressed sale is not an effective way for them to build wealth, even if it does help build the wealth of the banks.”
(“Low Down Payment Mortgages Have Much Higher Default Rates“, Dean Baker, CEPR)
Now take a look at this chart from Dr. Housing Bubble which helps to illustrate the dangers of low down payments in terms of increased delinquencies:
Data on mortgage delinquencies by downpayment. Source: Felix Salmon
“When the mortgage industry starts complaining about the 14 million people who would be denied the chance to buy a qualified mortgage if they don’t have a 5% downpayment, it’s worth remembering that qualified mortgages for people who don’t have a 5% downpayment have a delinquency rate of 16% over the course of the whole housing cycle.” (“Why a sizable down payment is important“, Dr. Housing Bubble)
So despite what Watt thinks, higher down payments mean fewer defaults, fewer foreclosures, fewer shocks to the market, and greater financial stability.
And here’s something else that Watt should mull over: The housing market isn’t broken and doesn’t need to be fixed. It’s doing just fine, thank you very much. First of all, sales and prices are already above their historic trend. Check it out from economist Dean Baker:
“If we compare total sales (new and existing homes) with sales in the pre-bubble years 1993-1995, they would actually be somewhat higher today, even after adjusting for population growth. While there may be an issue of many people being unable to qualify for mortgages because of their credit history, this does not appear to be having a negative effect on the state of market. Prices are already about 20 percent above their trend levels.” (“Total Home Sales Are At or Above Trend“, Dean Baker, CEPR)
Got it? Sales and prices are ALREADY where they should be, so there’s no need to lower down payments and ease credit to start another orgy of speculation. We don’t need that.
Second, the quality of today’s mortgages ARE BETTER THAN EVER, so why mess with success? Take a look at this from Black Knight Financial Services and you’ll see what I mean:
“Today, the Data and Analytics division of Black Knight Financial Services … released its November Mortgage Monitor Report, which found that loans originated in 2013 are proving to be the best-performing mortgages on record…..
“Looking at the most current mortgage origination data, several points become clear,” said Herb Blecher, senior vice president of Black Knight Financial Services’ Data & Analytics division. “First is that heightened credit standards have resulted in this year being the best-performing vintage on record. Even adjusting for some of these changes, such as credit scores and loan-to-values, we are seeing total delinquencies for 2013 loans at extremely low levels across every product category.”
Okay, so sales and prices are fine and mortgage quality is excellent. So why not leave the bloody system alone? As the saying goes: If it ain’t broke, don’t fix it.
But you know why they’re going to keep tinkering with the housing market. Everyone knows why. It’s because the banks can’t inflate another big-honking credit bubble unless they churn out zillions of shi**y mortgages that they offload onto Fannie and Freddie. That’s just the name of the game: Grind out the product (mortgages), pack it into sausages (securities and bonds), leverage up to your eyeballs (borrow as much as humanly possible), and dump the junk-paper on yield-chasing baboons who think they’re buying triple A “risk free” bonds.
Garbage in, garbage out. Isn’t this how the banks make their money?
You bet it is, and in that regard things have gotten a helluva a lot scarier since last Wednesday’s announcement that the banks are NOT going to be required to hold any capital against the securities they create from bundles of mortgages.
You read that right. According to the New York Times: “there will be no risk retention to speak of, at least on residential mortgage loans that are securitized.”
But how can that be, after all, it wasn’t subprime mortgages that blew up the financial system (subprime mortgages only totaled $1.5 at their peak), but the nearly $10 trillion in subprime infected mortgage-backed securities (MBS) that stopped trading in the secondary market after a French Bank stopped taking redemptions in July 2007. (a full year before the crisis brought down Lehman Brothers) . That’s what brought the whole rattling financial system to a grinding halt. Clearly, if the banks had had a stake in those shabby MBS— that is, if they were required to set aside 5 or 10 percent capital as insurance in the event that some of these toxic assets went south– then the whole financial collapse could have been avoided, right?
Right. It could have been avoided. But the banks don’t want to hold any capital against their stockpile of rancid assets, in fact, they don’t want to use their own freaking money at all, which is why 90 percent of all mortgages are financed by Uncle Sugar. It’s because the banks are just as broke as they were in 2008 when the system went off the cliff. Here’s a summary from the New York Times:
“Once upon a time, those who made loans would profit only if the loan were paid back. If the borrower defaulted, the lender would suffer.
That idea must have seemed quaint in 2005, as the mortgage lending boom reached a peak on the back of mushrooming private securitizations of mortgages, which were intended to transfer the risk away from those who made the loans to investors with no real knowledge of what was going on.
Less well remembered is that there was a raft of real estate securitizations once before, in the 1920s. The securities were not as complicated, but they had the same goal — making it possible for lenders to profit without risking capital.
The Dodd-Frank Act of 2010 set out to clean that up. Now, there would be “risk retention.” Lenders would have to have “skin in the game.” Not 100 percent of the risk, as in the old days when banks made mortgage loans and retained them until they were paid back, but enough to make the banks care whether the loans were repaid.
At least that was the idea. The details were left to regulators, and it took more than four years for them to settle on the details, which they did this week.
The result is that there will be no risk retention to speak of, at least on residential mortgage loans that are securitized.
“…..Under Dodd-Frank, the general rule was to be that if a lender wanted to securitize mortgages, that lender had to keep at least 5 percent of the risk…….But when the final rule was adopted this week, that idea was dropped.” (“Banks Again Avoid Having Any Skin in the Game”, New York Times)
No skin in the game, you say?
That means the taxpayer is accepting 100 percent of the risk. How fair is that?
Let’s review: The banks used to lend money to creditworthy borrowers and keep the loans on their books.
They don’t do that anymore, in fact, they’re not really banks at all, they’re just intermediaries who sell their loans to the USG or investors.
This arrangement has changed the incentives structure. Now the goal is quantity not quality. “How many loans can I churn-out and dump on Uncle Sam or mutual funds etc.” That’s how bankers think now. That’s the objective.
Regulations are bad because regulations stipulate that loans must be of a certain quality, which reduces the volume of loans and shrinks profits. (Can’t have that!) Therefore, the banks must use their money to hand-pick their own regulators (“You’re doin’ a heckuva job, Mel”) and ferociously lobby against any rules that limit their ability to issue credit to anyone who can fog a mirror. Now you understand how modern-day banking works.
It would be hard to imagine a more corrupt system.
On Wednesday, stocks were hammered after economic data showed that the US and global economies were headed for a major slowdown. By mid-day, the Dow was down 460 points before clawing its way back to minus 173 points. It looked like the market was set for another triple-digit flogging on Thursday when the Fed stepped in and started talking-up an extension to QE3. That’s all it took to ease investors jitters, stop the meltdown and send equities rocketing back into space. By the end of Friday’s session, all the markets were back in the green with the Dow logging an impressive 263 points on the day. Here’s more background from Wolf Street:
“But just when some profusely sweating souls on Wall Street thought that the bottom was falling out, a savior appears. St. Louis Fed President James Bullard got on Bloomberg TV and pressed the red panic button (and) handed them what they wanted….That was enough.
Using declining inflation expectations as a pretext, he proposed to delay the end of QE. The Fed should continue buying $15 billion in securities a month…. it instantly turned around the markets. The spoiled brats on Wall Street were ecstatic to imagine that the Fed might continue to deliver the goodies they’ve become addicted to, and without which life seems unbearable.” (This Market is Driven by Psychology and Momentum,’ which ‘Works Really Painfully on the Way Down, Wolf Street)
For those readers who still think that the Fed doesn’t meddle in the markets: Think again. Friday’s stock surge had nothing to do with productivity, price, earnings, growth or any of the other so called fundamentals. It was all about manipulation; telling people what they want to hear, so they do exactly what you want them to do. The pundits calls this jawboning, and the Fed has turned it into an art-form. All Bullard did was assure investors that the Fed “has their back”, and , sure enough, another wild spending spree ensued. One can only imagine the backslapping and high-fives that broke out at the Central Bank following this latest flimflam.
As most people now realize, stocks haven’t tripled in the last 5 years because the economy is expanding. Heck, no. The economy is still on all-fours and everyone knows it. The reason stocks have been flying-high is because the Fed added a hefty $4 trillion in red ink to its balance sheet. Naturally, when someone buys $4 trillion in financial assets, the price of financial assets go up.
Who would’ve known?
And here’s something else to chew on: On Thursday I wrote an article titled “Stocks Plunge 460 Points on QE Exit”. Among the 2 or 3 thousand other articles on the topic in the mainstream, not one mentioned the fact that QE was set to end at the end of October. Instead, they pointed to sluggishness in Europe and China, and weaker-than-expected economic data in the US as the proximate causes of the downturn.
So let me ask you this, dear reader, if the end of QE was not the real trigger for the Dow’s 460 point bungee jump, then why did the markets do a quick 180 right after Bullard made his statement on Thursday? In fact, the media even admits that point now. Check out this article on Marketwatch on Friday titled “Bullard’s surprise suggestion of continuing QE lifts markets”:
“A comment from a hawkish Federal Reserve official on Thursday that central-bank bond buying should continue beyond its scheduled end lifted stock markets and surprised many observers.
The Federal Reserve should consider extending its bond-buying program beyond October due to the market selloff to see how the U.S. economic outlook evolves, said James Bullard, the president of the St. Louis Fed, on Thursday. …
If the economy is still as robust as I am describing it, then I think we could just end the program in December. But if the market is right, and this is portending something more serious for the U.S. economy, than the committee would have an option of ramping up QE at that point,” he said.
The S&P 500 SPX, +1.65% jumped from its session low of a 0.9% drop after Bullard’s remarks came out.” (Bullard’s surprise suggestion of continuing QE lifts markets, Marketwatch)
How do you like that? Just one word from the Fed and the markets do an immediate about-face. Now that’s power.
It’s too bad the Fed can’t put in a good word for the real economy while they’re at it. But, oh, I forgot that the real economy is stuffed with working stiffs who don’t warrant the same kind of treatment as the esteemed supermen who trade stocks for a living. Besides, the Fed doesn’t give a rip about the real economy. If it did, it would have loaded up on infrastructure bonds instead of funky mortgage backed securities (MBS). The difference between the two is pretty stark: Infrastructure bonds put people to work, circulate money, boost economic activity, and strengthen growth. In contrast, MBS purchases help to fatten the bank accounts of the fraudsters who created the financial crisis while doing bupkis for the economy. Guess who the Fed chose to help out?
Do you really want to know why the Fed isn’t going to end QE? Here’s how Nomura’s chief economist Bob Janjuah summed it up:
“I want to remind readers of a message that may be buried in the past: When QE1 ended, the S&P 500 fell just under 20% in a roughly three-month period before the QE2 recovery.
When the QE2 ended, the S&P 500 fell about 20% in a three-month period before the next Fed-inspired bounce (aided by the ECB). QE3 is ending this month…”
Is that why the Fed started jawboning QE4, to avoid the inevitable 20 percent correction?
You bet it is. But what’s odd is that stocks hadn’t even dropped 10 percent before the Fed hit the panic button. Why is that?
Could it be that they have no confidence in the market? Could it be that they know that their loosy-goosey monetary policies have inflated the biggest bubble of all time which has created a fragile, crisis prone system that can’t even withstand a measly 10 percent drop before bank balance sheets start going up in flames and the whole wobbly financial house of cards comes crashing to earth in a thud?
Of course, it is. They’re scared sh**less, which is why they dispatched bigmouth Bullard to promise investors the moon as long as they keep loading up on equities. Yellen an Co. are going to do everything in their power to keep this runaway train from going off the cliff, even if they kill us all in the process.
Now check out this blurb from Allianz ‘s chief economic adviser, Mohamed A. El-Erian, one of the few analysts who got it right:
“Due to excessive confidence in central banks, investors eagerly decoupled high market valuations from what was warranted by the sluggish fundamentals.”… That disconnect has been undermined over the last few weeks by signs that the global economy’s fundamentals are weaker than they seemed and concern that the European Central Bank will not adequately fight that continent’s economic drift…” (New York Times)
What El Erian is saying, is that, stocks are vastly overpriced given “sluggish fundamentals”. The only reason investors have been buying is because the Fed has been shoving money into the market hand-over-fist. That’s what’s kept equities airborne. But on Wednesday, investors woke up and said to themselves, “Hey, the economy’s circling the plughole, the Fed is bailing out, and I’m left with a boatload of dodgy stocks that might be worth $.30 on the dollar. Maybe I’ll get out now while I still can.” That’s why the market tanked.
So, what’s the lesson here?
The lesson is that the Fed is driving the markets. The whole “free market” trope is baloney. No one is loading up on stocks because they’re a good deal or because they think the economy is going gangbusters. Investors are buying stocks because they still believe in the power of money. They still think the Fed can pump a few more wisps of helium into the equities balloon and keep the rally going for a bit longer. And that’s why stocks surged on Friday, because, at least for now, greed still trumps fear.
But what’s the overall effect of this loony policy on the economy, or is that a fair question to ask after 6 years of falling incomes, flatlining wages, widening inequality and widespread economic stagnation?
The truth is, we already know what the impact is: The rich have gotten richer while the poor have been shunted off to tent cities, food pantries and under freeway off-ramps. Isn’t that what’s happened? Get a load of this brief summary in Friday’s WSWS:
“The richest one percent of the world’s population now controls 48.2 percent of global wealth, up from 46 percent last year, according to the most recent global wealth report issued by Credit Suisse, the Swiss-based financial services company.
Hypothetically, if the growth of inequality were to proceed at last year’s rate, the richest one percent for all intents and purposes would control all the wealth on the planet within 23 years.
The report found that the growth of global inequality has accelerated sharply since the 2008 financial crisis, as the values of financial assets have soared while wages have stagnated and declined…
The study revealed that the richest 8.6 percent of the world’s population—those with a net worth of more than $100,000—control 85 percent of the world’s wealth. Meanwhile, the bottom 70 percent of the world’s population—those with less than $10,000 in net worth—hold a mere 2.9 percent of global wealth.
The growth in inequality is bound up with a worldwide surge in paper wealth, fueled by the trillions of dollars pumped into the financial system by central banks via zero interest rate and “quantitative easing” policies…
As the report noted, “The overall global economy may remain sluggish, but this has not prevented personal wealth from surging ahead during the past year. Driven by … robust equity prices, total wealth grew by 8.3% worldwide … the first time household wealth has passed the $250 trillion threshold.” (Richest one percent controls nearly half of global wealth, Andre Damon)
That says it all, doesn’t it? The widening chasm between rich and poor is traceable to the policies that were adopted in 2008. That’s why things are so fu**ed up, it’s because the “surge in paper wealth, fueled by the trillions of dollars pumped into the financial system by central banks via zero interest rate and “quantitative easing” policies.”
In other words, it’s all deliberate. Robbing the poor and giving to the rich is all part of the plan.
That strikes me as an important point, and one that’s worth mulling over for awhile; that crushing the middle class isn’t an accident. It’s what they want. It’s the policy.
“…that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”
– James Truslow Adams, The Epic of America (1931)
The American Dream has been defined many ways by writers of both poetic and prosaic bent, but its essentials tend to involve life, liberty and the pursuit of happiness (or property, depending on your source).
The Declaration of Independence, upon which an entire nation was radically brought into existence, asserts that not only are all men created equal but that this is a “self-evident” truth. By this “unanimous Declaration of the thirteen united States of America,” a contract was agreed to, that their union would be founded on this principle. Thus, America was endowed with its dream at the moment of its conception: the freedom to succeed.
The United States has promoted a self-congratulating exceptionalism for decades, waving its Declaration and Constitution in the faces of other sovereign nations as if the latter had never considered such concepts. Our capital F “Freedom” sets us apart from the rest of the world, as the political rhetoric has repeated ad nauseam, no matter the freedoms enjoyed by democracies on almost every continent. And yet our basic freedom, the freedom to succeed, America’s contractual promise, has been shrinking for thirty years.
The freedom to succeed transcends economic systems but it is most potently expressed by capitalist gains. The ability to go “from rags to riches” is ingrained in this nation’s ethos and there is nothing intrinsically immoral about that goal. However, the current state of American inequality reveals a very real and expanding gap between the rich and poor that betrays the foundational endowment of this Union. When the freedom to succeed is denied every citizen, their equality is equally denied.
Recently, the Pew Research Center released a poll on what international citizens consider the greatest threat to the planet. Conducted between March 17 and June 5 of this year, the survey received answers from 48,643 respondents in 44 countries. In the U.S. and Europe, the growing gap between the rich and the poor was overwhelmingly considered the greatest danger to world prosperity. Over a quarter of Americans ranked “Inequality” as number one, above Religious & ethnic hatred, Pollution, Nuclear weapons and Infectious diseases.
This is hardly startling news considering that the median net worth of American households fell by 35 percent ($106,591 to $68,839) between 2005 and 2011, according to the U.S. Census Bureau. It is, however, disturbing that inequality remains so prevalent five years after the Great Recession.
Capitalism is not the problem. The problem is that we have let inequality advance in this country so gradually that its obviousness is masked by its familiarity. Below, I outline eight facts about inequality in America that every American should know.
1) 400 Americans have more wealth than half of all Americans combined. This ratio has been verified by Politifact and former Labor Secretary Robert Reich. To put it into context, last year the U.S. Census Bureau estimated that there were over 316 million people living in the United States. That means 400 Americans have more money than over 158 million of their fellow citizens. Their net worth is over$2 trillion, which is approximate to the Gross Domestic Product of Russia.
One explanation for the vast discrepancy in wealth is the definition of “worth,” which includes everything a person or household owns. This means savings and property but also mortgages, bills and debt. Poorer households can owe so much in debt that they possess a negative net worth.
2) America has the second-highest level of income inequality, after Chile. The Organization for Economic Cooperation and Development studies thirty-four developed countries and ranks them both before and after taxes and government transfers take effect (government transfers include Social Security, income tax credit and unemployment insurance). Before taxes and government transfers, America ranks tenth in income inequality. After taxes and transfers, it ranks second. Whereas its developed peers reduce inequality through government programs, the United States’ government exacerbates it.
3) The current state of inequality can be traced back to 1979. After the Stock Market Crash of 1929, the gap between the rich and the poor began to narrow. For fifty years, wages differed between the upper- and working-classes, but a robust middle-class took shape and there remained ample opportunity for working-class individuals to ascend.
In his book, “The Great Divergence,” journalist Timothy Noah traced today’s inequality to the beginning of the 1980s and the widening gap between the middle- and upper-classes. This gap was influenced by the following factors: the failure of American schools to prepare students for new technology; poor immigration policies that favor unskilled workers and drive down the price of already low-income labor; federally-mandated minimum wage that has failed to keep pace with inflation; and the decline of labor unions.
4) Non-union wages are also affected by the decline of unions. The Economic Policy Institute claims that 20 percent of the growth in the wage gap between high-school-educated and college-educated men can be attributed to deunionization.
Between 1978 and 2011, union representation for blue-collar and high-school educated workers declined by more than half. This has also diminished the “union wage effect,” whereby the existence of unions (more than 40 percent of blue-collar workers were union members in 1978) was enough to boost wages in non-union jobs – in high school graduates by as much as 8.2 percent. Not only did unions protect lower- and middle-class workers from unfair wages, they also established norms and practices that were then adopted by non-union employers. Two prime examples are employee pensions and healthcare.
Today, about 13 percent of workers belong to unions, which has reduced their bargaining power and influence.
5) There is less opportunity for intergenerational mobility. In December 2011, President Obama spoke at Osawatomie High School in Kansas. He was very clear about the prospects of the poor in today’s United States:
“[O]ver the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk. You know, a few years after World War II, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult. By 1980, that chance had fallen to around 40 percent. And if the trend of rising inequality over the last few decades continues, it’s estimated that a child born today will only have a one-in-three chance of making it to the middle class – 33 percent.”
As refreshing as that honesty is, Obama promised no fix beyond $1 trillion in spending cuts and a need to work toward an “innovation economy.”
In a speech one month later, Obama’s Chairman of Economic Advisers, Alan Krueger, elaborated on the dire state of America’s shrinking middle-class. The contraction, he stated, could partially be attributed to “skill-biased technical change”: work activities that have become automated over time, reducing the need for unskilled labor and favoring those with analytical training. He also highlighted the 50 year decline in tax rates for the top 0.1 percent, increased competition from overseas workers, and a lack of educational equality for children. Poor children are denied the private tutors, college prep and business network of family and friends available to their wealthier peers, which locks them into the class they are born into.
6) Tax cuts to the wealthiest have not improved the economy or created more jobs. Krueger also revealed that the tax cuts of the 2000s for top earners did not improve the economy any better than they did in the 1990s (meanwhile, income growth was stronger for lower- and middle-class families in the 1990s than in the last forty years).
Tax rates for the top income earners in America peaked in 1945 at 66.4 percent. Following decades of gradual reductions, they have since been cut in half. During the same time, the payroll tax has increased since the 1950s and individual income tax has bounced between 40-50 percent through the present day. Conversely, corporate tax declined from above 30 percent in the 1950s to under 10 percent in 2011.
All of these tax cuts are made ostensibly to improve the economy and create jobs. However, the National Bureau of Economic Research has concluded that it is young companies, “regardless of their size,” that are the real job creators in America. Tax cuts to the wealthiest do not create jobs.
7) Incomes for the top 1% have increased (but the top 0.01% make even more). Between 1979 and 2007, the average incomes of the 1 percent increased 241 percent. Compare that to 19 percent growth for the middle fifth of America and 11 percent for the bottom fifth. Put another way, in 1980 the average American CEO earned forty-two times as much as his average worker. In 2001, he earned 531 times as much.
Average income across the 1 percent is actually stratified into widely disparate echelons. Compare the $29,840 average income for the bottom 90 percent to the $161,139 of the top 10 percent. Compare the $1 million average income of the top 1 percent to the $2.8 million of the top 0.1 percent. Yet both still pale beside the $23 million average income of the top 0.01 percent.
If those numbers seem a bit overwhelming, Politizane has created a video that illustrates this staggering inequality:
8) The majority of Congress does not feel your pain. Empowered by the Constitution to represent their constituents, United States Congress members are, for the first time in history, mostly millionaires. The 2012 financial disclosure information of the 534 current Congress men and women reveals that over half of them have a net worth of $1 million or more.
After the past seven facts it is difficult to read this last one and believe that these 268 legislators have the best interests of the remaining 99 percent at heart. But if that is too presumptuous a leap, it is not too bold to say that wealthier donors, lobbyists and special interest groups enjoy greater access to these lawmakers than the average American.
In January, Congress failed to extend emergency benefits for unemployment, leaving 1.3 million people without federal aid. Congress then went on a weeklong recess that kept them from debating the issue until the end of the month. The bill was too divisive for Republicans and Democrats to reach an agreement on, though unemployment was then above 7 percent nationally.
Thankfully, the unemployed have their Congress working for them. And at $174,000 annual pay, those representatives are sure to return from their vacations committed to fresh solutions.
When I saw the movie “Saving Mr. Banks” during one of my interminably-long plane rides back from Syria, I liked it so much that I actually went out and bought a copy of the 1964 “Mary Poppins” Disney classic it was based on — the one with Julie Andrews and Dick Van Dyke frolicking across the rooftops of London.
And much to my surprise, I discovered that Mary Poppins might have been one of the world’s first hippies. Who woulda thought! And what was even more amazing is that Mary Poppins was one of the first people to warn us about the dangers and perfidy of big bankers and big banks.
And fortunately for those of us living here in America one hundred years later, Elizabeth Warren has now become the new Mary Poppins — also warning us about the dangers and perfidy of big bankers and big banks.
If only Americans would start paying attention to Elizabeth Warren as much as they paid attention to Julie Andrews!
“Hey, Elizabeth!” I also want to shout on the rooftops like Dick VanDyke, “voters aren’t listening to you!” Maybe if Disney studios made a movie about you too? Then maybe voters would finally start to listen.
According to Warren, the American middle class has been absolutely decimated by the banking and credit-card lobbies.
And yet voters still keep falling for all those glossy ads and happy lies that still keep getting pro-big-bank candidates elected to the White House and Congress even though voters can clearly see that they themselves are losing their jobs, having their homes repossessed, becoming slaves to their student loans and getting ripped off bigtime by credit-card debt. But then I guess that those syrupy ads actually do prove that “A spoonful of sugar helps the medicine go down” after all.
In the heroic country of Iceland, their well-informed voters have vigorously fought back against bankster greed and have even re-written their constitution in order to make lending-bubbles and bank fraud illegal.
But in America, the opposite happens. Here in America our very own government, the very one that bank lobbyists have chosen for us to elect, is handing over billions of our very own hard-earned dollars to big banks just as fast as it can. And Congress is always writing new bankruptcy laws that favor banksters over the middle class every time. Mary Poppins would be livid, of course, but nobody else seems to even notice these days — except for Elizabeth Warren.
And even the Federal Reserve is dancing over the rooftops in glee as it too gives away our money to the banksters just as fast as it possibly can, singing “Step in Time” as gleefully hands over giant bags of taxpayers’ money to Chase, Bank of America, CitiBank and Goldman Sachs.
Plus the Senate just vetoed a bill that would have given students a break from paying up to 12% interest on their college loans too. According to Warren, “This isn’t complicated. It’s a choice – a choice that raises a fundamental question about who the United States Senate works for. Does it work for those who can hire armies of lawyers and lobbyists to protect tax loopholes for billionaires and profits for the big banks? Or does it work for those who work hard, play by the rules, and are trying to build a future for themselves and their families?”
Not to mention the hidden (and not-so-hidden) fees that banks gleefully charge us customers for no reason at all.
To try to completely understand how banksters and their toadies in Congress and the Department of Justice are robbing the rest of us blind, you just gotta watch this video of Bill Moyers interviewing bank-fraud expert Thomas K. Black. Seriously. You really should watch this: http://vimeo.com/107916659
In this video, Black describes how Obama was elected by the banking industry and how Obama has totally paid back his debt to the banksters by handing them all “get out of jail free” cards. Is being elected president really worth selling us Americans out to the banksters? Apparently so.
“There’s no threat to capitalism like capitalists,” continues Black. “They are destroying its underpinnings. And when dishonest people gain an advantage in the marketplace, bad ethics drive good ethics out. This is why we need the rule of law.” Doesn’t Thomas K. Black sound just like Dick VanDyke, er, I mean Burt the Chimney Sweep here — as Black proposes that it’s high time to sweep clean our banks.
And now let’s talk about America’s ratings on the so-called “Misery Index”. Apparently America rates higher on the misery charts now than it ever has, even back in the Great Depression — and probably even as high as did Mary Poppins’s 1910 London. Thanks a lot, banksters.
Isn’t it time that American voters finally join up with Elizabeth Warren and Mary Poppins — and tell big banks and banksters to go “fly a kite!”
PS: Speaking of money, look how much of it is being spent in the Middle East — and not here at home where it is needed!
According to a recent blog-post at thehill.com, the first official estimates of the ISIS price tag from the Pentagon showed that, “the costs of intervention between mid-June and late-August was $7.5 million per day. At that rate, the U.S. has spent $850 million on operations against ISIS as of October 8, adding up to about $2.74 billion per year. The Pentagon has since revised the estimate up to as high as $10 million per day, or $3.65 billion per year. In reality, both of those numbers are quite likely to be underestimates of what’s to come.”
Looks like the US military is just as bad as the US banksters when it comes to cleaning out America’s pocketbooks — after they both have put us to sleep with false promises and false news https://www.youtube.com/watch?
What we Americans really need to do these days is to once again take Mary Poppins’s advice and “Stay Awake”! https://www.youtube.com/watch?