The Warren Buffett House of Cards

Now that the financial hype is celebrating a new all time high in the stocks, the time to exit the market may well be at hand. So what will that Oracle of Omaha do with all the insider information available from his compadre network? The business press swoons all over Warren Buffett with every report, while only a few intrepid journalists would dare write about the dark side of Wall Street’s favorite equity cheerleader. The guru of sweet heart deals floats in the rarified air of a political cronyism ongoing honeymoon. So what is likely for his Berkshire Hathaway flagship company now that the ticker is breathing on pure oxygen?

At the Berkshire Hathaway Shareholders Meeting, the forecast projects that the market will continue to rise. Berkshire Cash Hits Record $49.1 Billion as Profit Climbs, cites Bill Smead, portfolio manager of the Smead Value Fund, “Warren has organized the company around the rebirth of the United States economy over the next 10 years and this is the beginning of that rebirth.”

Not everyone looks at the next decade as a boom for the economy. The easy money out of the Federal Reserve ultimately fuels the hysteria that is pushing the current rally. For the average consumer the markets smell of an elitist stench. The venerability of a top and a collapse has many remnants of the former middle class scared. Should the expectation be that a House of Cards is on the horizon or should the deal from the bottom of the deck continue as the insiders pump and dump their latest speculative fizz?

Examine just how Buffett operates. His reputation as a stock picker largely ignores any of the dirty laundry that follows in his wake. In the event you forget, the audacious reporting of Charles Gasparino, reminds of the methods employed in the investment culture of his associates. Cited in Saint Warren’s dark side, the working of the protecting racket that rewards the Buffett organization, smacks of the very definition of “too big to fail”.

“The SEC interviewed Buffett last year over one of the most sordid corporate affairs I’ve seen in a long time: His longtime aide and one-time heir-apparent bought shares in a company called Lubrizol just before Buffett purchased the outfit.

The executive, David Sokol, made a hefty profit from the purchase, and even advised Buffett to buy the company in the first place.

Insider trading? I can’t say if it was outside the law. But the SEC is looking into the matter. (SEC and Sokol spokesmen declined to comment on the probe’s status; Buffett didn’t return repeated calls seeking comment.)

Yet I don’t recall any major media outfit bringing up the sordid affair while Buffett was lecturing the nation on tax fairness. Nor did any jump on Buffett’s bizarre initial reaction as Sokol was resigning from Berkshire last year: He defended Sokol’s actions — which, even if they weren’t illegal, still smack of the kind of corporate favoritism that Obama and the rest of the left continually denounce.”

Barrons report another sordid episode swept under the rug in the article, A Buffett Bubble in BYD?

“In September of 2008, just after Lehman Brothers’ collapse had taken the financial crisis to a new level, Warren Buffett’s Berkshire Hathaway scooped up 9.9% of Chinese battery and electric-car maker BYD for HK$8 (US$1.03) a share. Even a renowned long-term value investor had to be impressed by the near-term sizzle: Within 18 months, BYD shares had rocketed to HK$88. Then the engine started to sputter.

BYD also may have been spoiled by the Buffett bubble built into the shares, which some analysts estimate could be as big as a 30%. “People regard Buffett well as an investor and are happy to stick with the stock as long as he is still holding it,” says Lewis. His departure could have have a huge adverse effect, they say. “A big Berkshire [BRK.A] premium is the only way you could justify where the stock is trading right now,” says Lewis. “You’ve got to ask yourself: Would Warren make the same decision today on BYD? I suspect not.” At the least, he will see Berkshire’s stake diluted by the offering and local reports say Berkshire won’t subscribe further. BYD trades at more than 50 times earnings.”

Finally, Forbes reflects on the big daddy of deals with that great vampire squid in the analysis, Goldman Sachs Reworks $5B In Warrants Held By Buffett’s Berkshire.

“Essentially, Buffett had the right to purchase 43.5 million shares of Goldman at $115 apiece until October 1, 2013. Under the new terms, Buffett will receive “the number of shares of common stock equal in value to the difference between the average closing price over the 10 trading days preceding October 1, 2013 and the exercise price of $115 multiplied by the number of shares of common stock covered by the warrant (43,478,260).”

The short form: instead of paying Goldman $5 billion in cash for stock worth considerably more, Buffett will simply take the amount of stock equivalent to the difference without paying the company.”

Now are their examples of special circumstances just the sign of astute investing or is this a pattern of synergetic regulatory favoritism and fusion with ruling governmental outlaws? Poor old uncle Warren, licking his ice cream cone while playing the ukulele. When will the anti-trust laws apply to the game rigging plutocrats? Evidently, the Buffett’s of the fixed exchanges have bought and paid for the best political protection available. Avoiding a speculative melt down is impossible for the man on the street, but the privileged globalists are well entrenched in their protected palaces built upon ill-gotten gain.

Run Buffett out of town on one of his rails, for railroading free enterprise into a dark tunnel. The derailment of our economy benefits the market manipulators, as the rest struggles to dig out of the collapsed slide of rubble that buries us alive. Elevating Buffett as an investment sage defies common sense.

The Biggest Peaceful Coup In World History

The American Middle Class Is Almost Gone…

The culture of the United States of America is beginning to adjust to the new economic status brought on by the trade treaties and the world government legislation passed by our elected officials.  The vibrant middle class that was a Hallmark of the nation has succumbed to the exportation of millions of high paying jobs to cheaper locales and the retail outlets that were supported by that former affluence are beginning to close their doors.

A poorer society cannot support the broad selection of retail opportunities American shoppers have enjoyed and store closings are beginning to restrict the selection in marginal cities.

Prior to the Real Estate debacle the Florida town where I live was expanding at a record rate.  A South Florida developer had purchased a large horse farm and gotten approval to construct homes and a major outdoor shopping center.  Construction began.  Dillards opened, Dicks Sporting Goods, Old Navy, Barnes and Noble, Kohls, H. H. Gregg, McAllisters Deli, Panera Bread and McDonalds.  Scores of additional stores were constructed and several small businesses leased space.  The real estate crash halted construction.  Many of the smaller stores went out of business leaving acres of newly constructed retail spaces and residential lots that may never be used.  The anchor stores now stand as lonely lumps in an emaciated skeleton starved by the death of the middle class.

On the other side of a major highway an older indoor shopping Mall has lost two anchor stores and has several vacancies.  The Gap just closed.  New renters are textile stores on short leases; some of these have opened and closed within a month or two.  A new shop just opened offering a Chinese foot massage. The Mall was built in the 1980s and the high end jeweler that closed the beginning of this year and the men’s clothing store that just closed a couple of months ago were anchor stores.  These are stores that like The Gap have been supported by the upper Middle class.

Wikipedia has a list of significant business failures by year going back into the 1930s.  I counted the failures during the last decade of the Twentieth Century and the First decade of the Twenty First Century.  My figures may not be exactly accurate but the comparative rates are astounding.  I counted 87 failures during the 1990s compared to 327 from 2000 through 2010.  Read recent statistics here.

According to a Pew survey the middle class net worth dropped 28 percent in the decade following 2001 while the upper one percent edged higher.  They attributed this distinction to plummeting home values that impacted the middle class while wealthier people held broader based assets.  While inflation has torn away at the value of the dollar middle class family income has declined by about 4 percent in the new century.  From 1970 into the new century the percentage of total income enjoyed by the wealthy has risen from 29 percent to 46 percent while the middle class share has declined from 62 percent to 45 percent.  Read the results of the survey here.

In this new world created over the heads of the American people the United States will bear no resemblance to the proud, affluent and powerful nation that emerged victorious after WWII.  The objective is to flatten out the nations of the world making them more homogeneous and easier to govern.  United States wealth is long gone replaced by trillions of dollars of debt that will enslave its citizens for generations..

Hitler’s Germany has been propagandized as the primary Satan of the Twentieth Century but it is a myth created to hide the wholesale wickedness of the Russian Revolution.  Several decades ago Norman Dodd, then Director of Research to the Reece Committee, visited Alan Gaither, President of the Ford Foundation to explain why Congress was investigating foundations. Before he could explain, Mr. Gaither said, “Mr. Dodd, all of us who have a hand in the making of policies here, have had experience operating under directives, the substance of which is, that we use our grant-making power so as to alter life in the United States that it can be comfortably merged with the Soviet Union.”

It seems apparent now that what Henry Kissinger and President Nixon promised the Chinese during their visits in 1971 and 1972 was the United States of America offered up like the head of John the Baptist.  No wonder the Chinese were interested!  A scant 30 years later China is not only beneficiary of our manufacturing base but it also holds mortgages on our massive supplies of coal and oil.

A stupendous world change has occurred during the past several decades.  Assets of the world’s wealthiest nation were peacefully removed by a legislative agenda sold to the people as beneficial and passed by their democratically elected politicians. This legislative agenda was planned in advance with the wile of The Serpent and as the devastating results set in a War on Terrorism was used to hide them and to deflect the animosity.  The United States of America has now become the puppet of the money powers who have cannily used debt to enslave the world.

The time for redemption has passed.  The horse is out of the barn.  America cannot be redeemed!  We are no longer a nation of pseudo-Christians with European roots.  Immigration policies have filled our fruited plains with a variety of hungry immigrants who have been granted an opportunity made possible by several generations of hard working legally upright citizens.  It was given away as if it had no value and used as a tool to balkanize and divide the country. Consensus is now extremely difficult.  The goal has been accomplished, it cannot be stopped.

It has been the biggest peaceful coup in the history of mankind

While giant, world-wide, corporations spawned and nourished in America are forced to move their production to low wage countries by international agreements made over the heads of citizens, our balkanized nation must compete with this cheap labor.  The competition includes China, Japan, India, Singapore, and Korea. These are nations of hungry, intelligent, well educated, industrious people that are willing to work seven days a week to acquire some of the luxuries Americans have enjoyed for decades.  This transition will take more than a generation and by the time it is over the United States will be an insignificant part of the world.

It was not honest competition that sank the good ship America but a massive burglary carried out in darkness.  So far the theft has been successful.  We know who the burglars are but they are holding the citizens hostage while they remain free..

We are no longer the righteous nation that Alexis de Tocqueville so brilliantly described nearly two centuries ago.  The transition started in earnest with the success of the ACLU’s  legal challenges to Christianity.  Under the false assumption that separation of church and state meant that Christianity had to be removed from government and from the public square the ACLU conducted a legal war against Christianity that succeeded in banning any overt conduct of the nation’s primary religion.  This Kosher war against Christianity was not only evident in government but included our institutions of higher learning as well.  The Christian Church failed to mount an aggressive counter attack allowing Satan’s minions to achieve a victory.

Now, as the American middle class disappears and businesses begin to close we can begin to see the fruition of what Alan Gaither of the Ford Foundation said to Norman Dodd over fifty years ago.  We are beginning to resemble the Soviet Union.

Corporatism: A System Of Control Designed By The Monopoly Men Of The Global Elite

The Dow is at a record high and so are corporate profits – so why does it feel like most of the country is deeply suffering right now?  Real household income is the lowest that it has been in a decade, poverty is absolutely soaring,47 million Americans are on food stamps and the middle class is being systematically destroyed.  How can big corporations be doing so well while most American families are having such a hard time?  Isn’t their wealth supposed to “trickle down” to the rest of us?  Unfortunately, that is not how the real world works.  Today, most big corporations are trying to minimize the number of “expensive” American workers on their payrolls as much as they can.  If the big corporation that is employing you can figure out a way to replace you with a worker in China or with a robot, it will probably do it.  Corporations are in existence to maximize wealth for their shareholders, and most of the time the largest corporations are dominated by the monopoly men of the global elite.  Over the decades, the politicians that have their campaigns funded by these monopoly men have rigged the game so that the big corporations are able to easily dominate everything.  But this was never what those that founded this country intended.  America was supposed to be a place where the power of collectivist institutions would be greatly limited, and individuals and small businesses would be free to compete in a capitalist system that would reward anyone that had a good idea and that was willing to work hard.  But today, our economy is completely and totally dominated by a massively bloated federal government and by absolutely gigantic predator corporations that are greatly favored by our massively bloated federal government.  Our founders tried to warn us about the dangers of allowing government, banks and corporations to accumulate too much power, but we didn’t listen.  Now they dominate everything, and the rest of us are fighting for table scraps.

In early America, most states had strict laws governing the size and scope of corporations.  Individuals and small businesses thrived in such an environment, and the United States experienced a period of explosive economic growth.  We showed the rest of the world that capitalism really works, and we eventually built the largest middle class that the world had ever seen.

But now we have replaced capitalism with something that I like to call “corporatism”.  In many ways, it shares a lot of characteristics with communism, and that is why nations such as communist China have embraced it so readily.  Under “corporatism”, monolithic predator corporations run around sucking up as much wealth and economic power as they possibly can.  Most individuals and small businesses cannot compete and end up getting absorbed by the corporations.  These mammoth collectivist institutions are in private hands rather than in government hands (as would be the case under a pure form of communism), but the results are pretty much the same either way.  A tiny elite at the top gets almost all of the economic rewards.

There are some out there that would suggest that the answer to our problems is to move more in the direction of “socialism”, but to be honest that wouldn’t be the solution to anything.  It would just change how the table scraps that the rest of us are getting are distributed.

If we truly wanted a return to prosperity, we need to dramatically shift the rules of the game so that they are tilted back in favor of individuals and small businesses.  A much more pure form of capitalism would mean more wealth, less poverty and a more equitable distribution of the economic rewards in this country.

But it will never happen.  Most of our politicians are married to the big corporations and the wealthy elitists that fund their campaigns.  And most Americans are so uneducated that they believe that what we actually have today is “capitalism” and that the only alternative is to go “to the left” toward socialism.

Very few people out there are suggesting that we need to greatly reduce the power of the federal government and greatly reduce the power of the big corporations, but that is exactly what we need to do.  We need to give individuals and small businesses room to breathe once again.

With each passing year, things get even worse.  In fact, the founder of Subway Restaurants recently said that the environment for small businesses is so toxic in America today that he never would have been able to start Subway if he had to do it today.

For much more on how small business is being strangled to death in the United States, please see my previous article entitled “We Are Witnessing The Death Of Small Business In America“.

What I want to do now is to discuss some of the results that “corporatism” is producing in America.

First of all, we continue to see incomes go down even though we live in an inflationary economy.

As Time Magazine recently reported, personal incomes took a huge nosedive during the month of January…

Data released by the Commerce Department last week showed that personal income fell 3.6% in January, the biggest decline in 20 years. The drop was even bigger when taxes and inflation are taken into account. Real personal disposable income fell by 4%, the biggest monthly drop in half a century.

But this is part of a longer term trend.  Median household income in the U.S. has declined for four consecutive years, and it is now significantly lower than it was all the way back in 2001…

Real median US household income — that’s “real,” as in “adjusted for inflation” — was $50,054 in 2011, the most recent data available from the US Census Bureau. That’s 8% lower than the 2007 peak of $54,489.

Meanwhile, big corporations are absolutely raking in the cash.  The following is from a recent New York Times article…

“So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.”

The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India.

Today, corporate profits as a percentage of U.S. GDP are at an all-time high, but wages as a percentage of U.S. GDP are near an all-time low.

Just check out the following chart.  Corporate profits have absolutely exploded over the past decade…

Meanwhile, wages as a percentage of GDP continue to fall rapidly…

Most of the jobs being created in America today are “low wage” jobs.  Tens of millions of Americans are working as hard as they can only to find that they can barely put food on the table and provide a roof over the heads of their children.  The ranks of the “working poor” are exploding and the middle class continues to shrink.

Many of you that are reading this article are members of the working poor.  You know what it is like to stare up at your ceiling at night wondering how you are going to pay the bills next month.

Today, most Americans are living very close to the edge financially.  A recent article by NBC News staff writer Allison Linn shared some of their stories.  The following is one example…

Crystal Dupont knows what it’s like to try to live on the federal minimum wage.

Dupont has no health insurance, so she hasn’t seen a doctor in two years. She’s behind on her car payments and has taken out pawn shop and payday loans to cover other monthly expenses. She eats beans and oatmeal when her food budget gets low.

When she got her tax refund recently, she used the money to get ahead on her light bill.

“I try to live within my means, but sometimes you just can’t,” said Dupont, 25. The Houston resident works 30 to 40 hours a week taking customer service calls, earning between $7.25 and $8 an hour. That came to about $15,000 last year.

It’s a wage she’s lived on for a while now, but just barely.

Sadly, the number of Americans that are “just barely” surviving continues to grow.

But if corporate profits are soaring to unprecedented heights, then who is getting all of those rewards?

The monopoly men of the global elite are.

Just check out the following video which does a great job of illustrating how corporatism has systematically funneled all of the economic rewards in our system to the very top…

Once again, I want to make it very clear that I am not advocating socialism as the answer in any way, shape or form.  Socialism takes away the incentive to create wealth and it almost always results in almost all of the economic rewards going to a very tiny elite anyway.

As I said earlier, what we need is a return to a much more pure form of capitalism, but this is so foreign to the way that most people think that most people will not be able to grasp this.

It certainly would be possible to greatly reduce the power of the federal government and greatly reduce the power of the big corporations at the same time, but this is so “outside the box” for most people that they cannot even conceive of doing such a thing.

We need to create an environment where individuals and small businesses can thrive once again.  But instead, most of us are content to continue “playing the game” and getting enslaved in even more debt.

For example, according to CNBC, auto loans just continue to get larger and continue to get stretched out for longer periods of time…

American car buyers, attracted by new models and cheap financing, are taking out bigger auto loans and stretching out the terms of those loans to a new record length.

New analysis from Experian Automotive shows the average new car loan in the fourth quarter of last year was $26,691 and stretched out over an average of 65 months. The length of the average loan is one month longer than the previous record set in the third quarter of last year.

What will they think of next?

Will we eventually have auto loans that get paid off over 10 years?

By the way, that is another way that the monopoly men of the global elite get all of our money.  They enslave us to debt, and we spend year after year of our lives slaving away to make them even wealthier.

They are very smart.  There is a reason why they have 32 TRILLION dollars stashed away in offshore tax havens.  They know how to play the game, and they are very happy that most of the rest of us are asleep.

Fortunately, it appears that an increasing number of Americans are waking up.

For example, I wanted to share with you all an excerpt from a comment that one of my readers left on one of my recent articles…

In the past year, I’ve been slowly but surely waking up to the nonsense happening around me. There’s so many things I need to simply get off my chest, so excuse the length of this post. Recently in the past two years, I’ve gotten married and have been medically discharged from the Marines after being injured in Afghanistan. Being 23 years old and married, my goal is secure a secure a future for my family, but with the way things are going, I’m not exactly sure how much of a future we’re going to have in 50 years. I can’t explain it, but I’ve felt this need to change my attitude and motivations lately.

I started by turning off the garbage music, television and other mindless entertainment that seems to plague my generation. It was easier than it looked – I don’t miss most of it really. The next order of business was to educate myself on world news, so that’s what I did. Every day, like clockwork, I check all major mainstream news feeds (NBC, Fox, Abc, CNN, Reuters, BBC, etc.) as well as not-so-mainstream news sites – yours being one of them. It’s incredible how fast our world changes and the manner in which it changes. The local 10 o’clock doesn’t show anything but local news, sports, weather, lottery #’s and whatever else they decide to throw in. It’s a night and day difference once you start to actually research and see what’s happening all over the world. Look at the number of comments about a news story on the economy and then look at a celebrity story on the “news”….People are so blind, it truly amazes me. My friends, family and classmates at college seem to be under a spell of some sort. They’re distracted – and it’s contagious. Nobody I know gives a damn about global affairs/economics. They’re more interested in the newest iPhone, cars, shows, movies, and just about anything else you can think of. I’m not saying there’s anything wrong with these things, but my friends/family/peers are CONSUMED by these distractions. When the election was taking place in 2012, every Tom, Dick and Harry on Facebook had an opinion and rant. After the circus ended however, everyone simply went back to posting about parties, kittens, Farmville etc. It’s a huge joke. For me, it’s little terrifying and exciting to see history unfolding in front of our eyes. This country of ours is going through big changes now that will most certainly affect our future, so I strive to adapt and prepare myself and my family. I’m looking at buying my first home this summer. Right now I live in an apartment right outside Philly and spend more money on rent than most pay for a mortgage. I need a house with a little land to raise chickens, grow fruits/vegetables, store canned food – and to be as independent from the system as I can. For my job, I wanted a skill/trade that people would always need, so I picked the funeral business. On the side, I work in construction and have been learning everything there is to know about building with my own two hands. I feel as though these old forgotten skills are going to be handy in a short while.

Hopefully we can get a lot more people to wake up and start breaking out of “the matrix” of control that is all around us.

Right now, the system is designed to continually funnel more money and more power to the very top of the pyramid.  The global elite are becoming more dominant with each passing day.  Unless something dramatic happens, at some point the American people will become so powerless that they won’t be able to do anything about it even if they wanted to.

The idea of a very tiny elite completely dominating all the rest of us goes against everything that America is supposed to stand for.  In the end, it will result in absolute tyranny if it is not stopped.

Source: The Economic Collapse

Retail Apocalypse: Why Are Major Retail Chains All Over America Collapsing?

If the economy is improving, then why are many of the largest retail chains in America closing hundreds of stores?  When I was growing up, Sears, J.C. Penney, Best Buy and RadioShack were all considered to be unstoppable retail powerhouses.  But now it is being projected that all of them will close hundreds of stores before the end of 2013.  Even Wal-Mart is running into problems.  A recent internal Wal-Mart memo that was leaked to Bloombergdescribed February sales as a “total disaster”.  So why is this happening?  Why are major retail chains all over America collapsing?  Is the “retail apocalypse” upon us?  Well, the truth is that this is just another sign that the U.S. economy is falling apart right in front of our eyes.  Incomes are declining, taxes are going up, government dependence is at an all-time high, and according to the Bureau of Labor Statistics the percentage of the U.S. labor force that is employed has been steadily falling since 2006.  The top 10% of all income earners in the U.S. are still doing very well, but most U.S. consumers are either flat broke or are drowning in debt.  The large disposable incomes that the big retail chains have depended upon in the past simply are not there anymore.  So retail chains all over the United States are now closing up unprofitable stores.  This is especially true in low income areas.

When you step back and take a look at the bigger picture, the rapid decline of some of our largest retail chains really is stunning.

It is happening already in some areas, but soon half empty malls and boarded up storefronts will litter the landscapes of cities all over America.

Just check out some of these store closing numbers for 2013.  These numbers are from a recent Yahoo Finance article…

Best Buy

Forecast store closings: 200 to 250

Sears Holding Corp.

Forecast store closings: Kmart 175 to 225, Sears 100 to 125

J.C. Penney

Forecast store closings: 300 to 350

Office Depot

Forecast store closings: 125 to 150

Barnes & Noble

Forecast store closings: 190 to 240, per company comments

Gamestop

Forecast store closings: 500 to 600

OfficeMax

Forecast store closings: 150 to 175

RadioShack

Forecast store closings: 450 to 550

The RadioShack in a nearby town just closed up where I live.  This is all happening so fast that it is hard to believe.

But the truth is that those store closings are not the entire story.  When you dig deeper you find a lot more retailers that are in trouble.

For example, Blockbuster recently announced that this year they will be closing about 300 stores and eliminating about 3,000 jobs.

Toy manufacturer Hasbro recently announced that they will be reducing the size of their workforce by about 10 percent.

Even Wal-Mart is going through a tough stretch right now.  According to documents that were leaked to Bloomberg, Wal-Mart is having an absolutely disastrous February…

Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.

“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”

So what in the world is going on here?

The mainstream media continues to proclaim that we are experiencing a robust “economic recovery”, but at the same time there are a whole host of indications that things are continually getting worse.

Even global cell phone sales actually declined slightly in 2012.  That was the first time that has happened since the last recession.

Perhaps it is time that we faced the truth.  The middle class is shrinking, incomes are declining and there are not nearly as many jobs as there used to be.

Mort Zuckerman pointed this out in a recent article in the Wall Street Journal…

The U.S. labor market, which peaked in November 2007 when there were 139,143,000 jobs, now encompasses only 132,705,000 workers, a drop of 6.4 million jobs from the peak. The only work that has increased is part-time, and that is because it allows employers to reduce costs through a diminished benefit package or none at all.

So how can the mainstream media be talking about how “good” things are if we still have 6.4 million fewer jobs than we had back in November 2007?

And sadly, things may soon be getting a lot worse.  If Congress does not do anything about the “sequester”, millions of federal workers may shortly be facing some very painful furloughs according to CNN…

Federal workers could start facing furloughs as early as April, according to federal agencies trying to prepare for the worst.

Unless Congress steps in, some $85 billion in massive spending reductions will hit the federal government, doling out furloughs to much of the nation’s 2.1 million federal workforce, experts say.

If you still live in an area of the country where the stores and the restaurants are booming, you should be very thankful because that is not the reality for most of the country.

I often write about the stunning economic decline of major cities such as Detroit, but there are huge sections of rural America that are in even worse shape than Detroit in many ways.

For example, many Indian reservations all over America have been shamefully neglected by the federal government and have become hotbeds for crime, drugs and poverty.

Business Insider recently profiled the Wind River Indian reservation in western Wyoming.  The following is a brief excerpt from thatoutstanding article…

The Wind River Indian Reservation is not an easy place to get to, but I had to see it for myself.

Thirty-five-hundred square miles of prairie and mountains in western Wyoming, the reservation is home to bitter ancestral enemies: the Eastern Shoshone and Northern Arapaho tribes.

Even among reservations, it’s renowned for brutal crime, widespread drug use, and legal dumping of toxic waste.

You can see some amazing photos of the Wind River Indian reservationright here.

It is hard to believe that there are places like that in America, but the truth is that conditions like that are spreading to more U.S. communities with each passing day.

We are a nation that is in an advanced state of decline.  But as long as the financial markets are okay, our leaders don’t seem too concerned about the suffering that everyone else is going through.

In fact, former Federal Reserve Chairman Alan Greenspan essentially admitted as much during a recent interview with CNBC.  The following is how a Zero Hedge article summarized that interview…

Starting at around 1:50, Greenspan states the odds of sequester occurring are very high – in fact, the playdough-faced ex-Chair-head notes, “I find it very difficult to find a scenario in which [the sequester] doesn’t happen” But when asked how this will affect the economy, Awkward Alan is unusually clearly spoken - “the issue is how does it affect the stock market.”

While not so many of our leaders have taken the path to direct truthiness, Greenspan somewhat shocks a Botox’d and babbling Bartiromo when he admits “the stock market is the key player in the game of economic growth.”

Bartiromo shifts uncomfortably in her seat, strokes her imaginary beard and stares blankly as Greenspan explains that while the sequester will have a real effect on the real economy, “if the stock market can hold up through this, then the effect will be rather minor.”

Do you see?

As long as the stock market is moving higher they think that everything is just fine and dandy.

And the Obama administration?

They continue to pursue the same policies that got us into this mess.

Their idea of “economic reform” is to threaten to sue businessesthat do not hire ex-convicts.

And of course now that Obama has been re-elected he is putting a tremendous amount of effort into “stimulating the economy”.

For example, he spent this weekend golfing in Florida, and the Obamas recently spent about 20 million taxpayer dollars vacationing in Hawaii.

Meanwhile, the U.S. economy is getting worse with each passing day.

If you doubt that economic conditions are getting worse, please read this article: “Show This To Anyone That Believes That ‘Things Are Getting Better’ In America“.

When you look at the cold, hard numbers, it is undeniable what is happening to America.

And our leaders are not doing anything to fix our problems.  In fact, most of the time they are just making things worse.

So buckle up and get prepared.  We are in for very bumpy ride, and this is only just the beginning.

Source: The Economic Collapse

37 Statistics Which Show How Four Years Of Obama Have Wrecked The U.S. Economy

The mainstream media covered the inauguration of Barack Obama with breathless anticipation on Monday, but should we really be celebrating another four years of Obama?  The truth is that the first four years of Obama were an absolute train wreck for the U.S. economy.  Over the past four years, the percentage of working age Americans with a job has fallen, median household income has declined by more than $4000, poverty in the U.S. has absolutely exploded and our national debt has ballooned to ridiculous proportions.  Of course all of the blame for the nightmarish performance of the economy should not go to Obama alone.  Certainly much of what we are experiencing today is the direct result of decades of very foolish decisions by Congress and previous presidential administrations.  And of course the Federal Reserve has more influence over the economy than anyone else does.  But Barack Obama steadfastly refuses to criticize anything that the Federal Reserve has done and he even nominated Ben Bernanke for another term as Fed Chairman despite his horrific track record of failure, so at a minimum Barack Obama must be considered to be complicit in the Fed’s very foolish policies.  Despite what the Obama administration tells us, the U.S. economy has been in decline for a very long time, and that decline has accelerated in many ways over the past four years.  Just consider the statistics that I have compiled below.  The following are 37 statistics which show how four years of Obama have wrecked the U.S. economy…

1. During Obama’s first term, the number of Americans on food stamps increased by an average of about 11,000 per day.

2. At the beginning of the Obama era, 32 million Americans were on food stamps.  Today, more than 47 million Americans are on food stamps.

3. According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”

4. The number of Americans receiving money directly from the federal government each month has grown from 94 million in the year 2000 tomore than 128 million today.

5. According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income” at this point.

6. The unemployment rate in the United States is exactly where it was (7.8 percent) when Barack Obama first entered the White House in January 2009.

7. When Barack Obama first entered the White House, 60.6 percent of all working age Americans had a job.  Today, only 58.6 percent of all working age Americans have a job.

8. During the first four years of Obama, the number of Americans “not in the labor force” soared by an astounding 8,332,000.  That far exceeds any previous four year total.

9. During Obama’s first term, the number of Americans collecting federal disability insurance rose by more than 18 percent.

10. The Obama years have been absolutely devastating for small businesses in America.  According to economist Tim Kane, the following is how the number of startup jobs per 1000 Americans breaks down by presidential administration…

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

11. Median household income in America has fallen for four consecutive years.  Overall, it has declined by over $4000 during that time span.

12. The economy is not producing nearly enough jobs for the hordes of young people now entering the workforce.  Approximately 53 percentof all U.S. college graduates under the age of 25 were either unemployed or underemployed in 2011.

13. According to a report from the National Employment Law Project, 58 percent of the jobs that have been created since the end of the recession have been low paying jobs.

14. Back in 2007, about 28 percent of all working families were considered to be among “the working poor”.  Today, that number is up to 32 percent even though our politicians tell us that the economy is supposedly recovering.

15. According to the Center for Economic and Policy Research, only 24.6 percent of all of the jobs in the United States are “good jobs” at this point.

16. According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.

17. According to the Economic Policy Institute, the United States is losinghalf a million jobs to China every single year.

18. The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.

19. According to the World Bank, U.S. GDP accounted for 31.8 percentof all global economic activity in 2001.  That number declined steadily over the course of the next decade and was only at 21.6 percent in 2011.

20. The United States actually has plenty of oil and we should not have to import oil from the Middle East.  We need to drill for more oil, but Obama has been very hesitant to do that.  Under Bill Clinton, the number of drilling permits approved rose by 58 percent.  Under George W. Bush, the number of drilling permits approved rose by 116 percent.  Under Barack Obama, the number of drilling permits approved actuallydecreased by 36 percent.

21. When Barack Obama took office, the average price of a gallon of gasoline was $1.84.  Today, the average price of a gallon of gasoline is$3.26.

22. Under Barack Obama, the United States has lost more than 300,000 education jobs.

23. For the first time ever, more than a million public school students in the United States are homeless.  That number has risen by 57 percent since the 2006-2007 school year.

24. Families that have a head of household under the age of 30 now have a poverty rate of 37 percent.

25. More than three times as many new homes were sold in the United States in 2005 as were sold in 2012.

26. Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

27. Health insurance costs have risen by 29 percent since Barack Obama became president.

28. Today, 77 percent of all Americans live paycheck to paycheck at least part of the time.

29. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

30. The total amount of money that the federal government gives directly to the American people has grown by 32 percent since Barack Obama became president.

31. The Obama administration has been spending money on some of the most insane things imaginable.  For example, in 2011 the Obama administration spent $592,527 on a study that sought to figure out once and for all why chimpanzees throw poop.

32. U.S. taxpayers spend more than 20 times as much on the Obamas as British taxpayers spend on the royal family.

33. The U.S. government has run a budget deficit of well over a trillion dollars every single year under Barack Obama.

34. When Barack Obama was first elected, the U.S. debt to GDP ratio was under 70 percent.  Today, it is up to 103 percent.

35. During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.

36. As I wrote about yesterday, when you break it down the amount of new debt accumulated by the U.S. government during Obama’s first term comes to approximately $50,521 for every single household in the United States.  Are you ready to contribute your share?

37. If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.

But despite all of these numbers, the mainstream media and the left just continue to shower Barack Obama with worship and praise.  Newsweek recently heralded Obama’s second term as “The Second Coming“, and at Obama’s pre-inauguration church service Reverand Ronald Braxton openly compared Obama to Moses…

At Metropolitan African Methodist Episcopal Church, Braxton reportedly crafted his speech around Obama’s personal political slogan: “Forward!”

Obama, said Braxton, was just like Moses facing the Red Sea: “forward is the only option … The people couldn’t turn around. The only thing that they could do was to go forward.” Obama, said Braxton, would have to overcome all obstacles – like opposition from Republicans, presumably, or the bounds of the Constitution. Braxton continued, “Mr. President, stand on the rock,” citing to Moses standing on Mount Horeb as his people camped outside the land of Israel.

But it wasn’t enough to compare Obama with the founder of Judaism and the prophet of the Bible. Braxton added that Obama’s opponents were like the Biblical enemies of Moses, and that Obama would have to enter the battle because “sometimes enemies insist on doing it the hard way.”

So what do you think the next four years of Obama will bring?

Source: The Economic Collapse

Federal Reserve May Pause Quantitative Easing

An obscure report that the Federal Reserve may suspend the monetization of purchasing Treasury Bonds has the smell of disinformation. The perennial efforts to lift economic spirits with the beginning of a New Year often are packed with wishful thinking. Quantitative Easing is being treated as a useful tool for turning on and off the spigot of liquidity infusion. In reality, the results of the massive origination of debt created monies fundamental purpose is to save the commercial banks from insolvency.

The trial balloon report, Federal Reserve could pause QE this year if US economy improves, avoids the risks that come from another expansive round of deficit spending.

“St. Louis Fed President James Bullard, a voting member of the Fed’s monetary policy panel this year, said a drop in the unemployment rate to 7.1 per cent would probably constitute the “substantial improvement” in the labor market that the central bank seeks.

“If the economy performs well in 2013, the Committee will be in a position to think about going on pause” with the asset buys.

Minutes from their December policy meeting showed that “several” top officials expected to slow or stop the so-called quantitative easing program, dubbed QE3, “well before” the end of the year – news that surprised some on Wall Street and prompted a drop in stocks and bonds, and a rise in the dollar.”

The recent spike of equity prices after the sharp increase in taxes on high-end incomes just does not translate into improving the prospects of the beleaguered middle class. Temporary uncertainty relief does not make a healthy stock market alone. When the financiers of employment expansion must face the added costs of Obamacare and a drop in consumer disposable income, it simply does not follow that unemployment levels will drop in the near future.

Yet, segments of the Federal Reserve offers optimism, as the labor market may show “substantial improvement” in the coming months. Could this forecast imply some newfangled governmental make work new spending programs?

Surely, the financial media is pushing the success of the QE’s rescues. One example is the TV commercial where AIG advertises the end of its bailout.

“AIG has just launched a two-week, multimedia campaign seeking to reintroduce itself after its role in sparking the Great Recession,” MediaPost reported yesterday. “The company got an $85 billion bailout as the government took about an 80% stake.”

The ballyhoo over paying back the loans steers clear of the real reason why AIG was “Too Important” to fail; namely, to salvage the incalculable derivative obligations. Rescuing the money center banks has always been the intent of the “Too Big to Fail” taxpayer salvage schemes.

But when will the limit of such gifts be reached? When the banks are satisfied or when the Treasury is emptied and looted, as the cost of extending the usury based financial system. Future generations do not have a chance for economic prosperity as long as the Federal Reserve continues the bond-buying thievery.

In order to confuse the public even more, The Big Banks Expect Quantitative Easing Into Early 2014.

“The New York Fed’s primary dealers, the 21 banks with which it carries out transactions, expect quantitative easing to continue until 1Q 2014. This is according to a Dow Jones Business News report.

The recently released minutes of the December FOMC meeting revealed that several Fed governors were taking a more hawkish stance in regards to the bond-buying program.”

Remember that the Fed is forecasting a slow modest recovery. What will the change in attitude become with a serious double-dip recession?

Do not believe for a New York minute that the Fed is looking to transition out of their gravy train financial backdrop for their bankster holders of the privately owned central bank.

The practical gauge of how long Quantitative Easing remains will be decided by the amount of debt that needs to be refinanced. Rolling over current debt is easy enough of a concept to understand. Should it not be just as comprehensible to recognize that continued increases in the national debt requires even greater appetites to buy government bonds?

Notwithstanding, this normal mechanism of finance, the perverse imagination of the paper printers knows no bounds. The Trillion-Dollar Platinum Coins provides the latest absurdity.

“There’s a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses . . . Yes, it was intended to allow commemorative collector’s items—but that’s not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling—while doing no economic harm at all.”

In response, Rep. Greg Walden (R-Ore.) has introduced a bill to specifically ban President Barack Obama from minting the coins.

The obvious conclusion when the market refuses to support low interest T Bonds is that something has to give. Either interest rates need to rise significantly or the Fed must continue their Quantitative Easing.

As long as the Obama administration maintains, We Do Not Have a Spending Problem, and stonewalls significant and meaningful reductions in the federal expenditures, the national debt will continue to be a drain on the financial bond markets.

Mr. Bullard’s optimistic projection of lower unemployment might simply be a signal that the methods for compiling the statistics may be in the works. The main street economy sees no benefit from a banking system that shuns loaning money to productive businesses.

Quantitative Easing in any form or machination is a euphemism for crony corporate welfare. The big money center banks are virtually financially immune from lawful accountability or criminal prosecution.

Slapping fines and penalties for violating statues and regulations, results in escaping trial by juries. This basic exclusive protection for the elites that run the counterfeit presses is the proof of true power. Inexhaustible Quantitative Easing is just another means to keep the spending financed with other peoples’ money.

Swan Dive of the 2013 Economy

Hold your breath, the race to the bottom is ready to escalate. The consequence of the corporate consumerism economy has reached the tipping point. The old rules that mainstream spending will dig the way back to prosperity are permanently dead. The one sure implication that is indisputable is that taxes are set to rise at unprecedented levels. With Obamacare revenue obligations coming into effect, the latest phase of centralized medical socialism spreads like a virus. Under such circumstances, how can the patient regain their health?
The Rino Republicans have proven again their slimy deceit, as demonstrated inHighlights of Senate bill averting ‘fiscal cliff’. The bipartisan house is poised to make another deal with the devil. Such legislation that refuses to enact meaningful and significant spending cuts exemplifies the depth of the efforts to dismantle the economic wellbeing of the average taxpayer.

The only beneficiary out of the tax bill from hell will be the corporate/state axis. By setting aside the automatic sequestration program reductions for a typical irresponsible useless promise the McConnell, Biden reach tentative deal on sequester, con insults the intelligence of any rational taxpayer.

“The negotiating parties reached an agreement to delay it by two months with some spending cuts to offset the delay.”

Without a serious reduction in the rate of growth, much less a real shrinking in federal expenditures, deficit spending will shoot up higher than an addicted junkie. Examine the mess.

“According to the Congressional Budget Office, the last-minute fiscal cliff deal reached by congressional leaders and President Barack Obama cuts only $15 billion in spending while increasing tax revenues by $620 billion—a 41:1 ratio of tax increases to spending cuts.”

This factor alone provides ample evidence that the economy will sustain another substantial hit. Treading water is no way to save yourself when you are swimming inside a whirlpool of spiraling intensity or diving into a pool drained of water.

2013 is likely to be another generous year for the financial vultures. Mergers and acquisitions may well come back ‘with a vengeance’, as international corporatists push hard for even greater consolidation. The suspect “Free Trade” cabal has enormous support and protection from the selected public officials that administer a plutocrat economy. Even under the distractions of higher taxes on the super affluent, their wealth will grow dramatically, as public subsistence becomes more dependent on government handouts.

Business is very good for the governing bureaucrat. This New Year provides immense promises for government expansion. The crowding out of the credit markets for private business will continue as an inevitable result of public sector borrowing hitting new highs.

Private firms will struggle as disposable funds become rarer. The consumer has shown remarkable restrains since the 2008 meltdown, but the internal built up demand for lifestyle replacement standards will not generate the economic activity that so many financial experts tout.

Prospects of an intensified reoccurrence of the persistent recession are far more likely. The sustainability of Federal Reserve monetization has limits. The crucial test of this desperate repurchase of debt created obligations will play out in the bond market.

Another down grade of the U.S. credit status over the next political battle of raising the borrowing limit is a major concern. The potential free fall of the Dollar and international abandonment of the reserve currency standing is probably the greatest risk to the economy.

Any credit-based economy is at the mercy of the central banksters. Disregarding the phony political rhetoric of the governance ideologues, the basic constructs of economic facts cannot be separated from the harsh reality of a credit crunch.

Inflation is embedded in the under reported consumer pricing statistics. Grocery prices will rise, while food stamps proliferate. This SNAP economy is a telltale gauge of the wellness of the basic consumer. How can anyone believe that the prospects for a healthy economy are in the cards for 2013?

The one unassailable conclusion that is born out with every turn of the financial page is that the rich become richer, while the middle class struggles even harder to make ends meet.

Many will fall into the trap that rich people are the cause of the problem. Such social envy misses a proper perspective on wealth creation. The real reason why the economy scrambles to democratize medium affluence is that the monopolists of politically protected conglomerates suppress initiative and originative employment entrepreneurial enterprises.

The entire political and tax system operates to diminish the chances of small business to compete against the virtual unrestricted capital access of major public companies. 2013 will be a watershed year that regretfully will see the systemic demise of privately held endeavors.

The replacement of free enterprise, with state/capitalism has produced a fascist economy.

When the establishment operates under the favoritism principle, the inevitable result is that crony capitalists dig the graves of independent business operators, with publicly funded shovels. How under this formula can the ordinary citizen expect to prosper when the supplanting of individual intuitive is intentionally marginalized?

The financial markets reflect uncertainty in the face of record corporate receipts. The balance sheets of companies have been rebuilt from the depth of the housing implosion, with much assistance from public indebtedness. The globalist banks practice distress acquisitions, deliberately designed to solidify interdependency at the price of personal autonomy.

With this acceleration of financial austerity for the average citizen, the gap between the corporate economy and the main street market grows exponentially. Whatever degree of cash flow that the country enjoys in this New Year, the price that will be paid to stretch out one last celebration of former fortune, will inescapably result in national poverty.

Just blaming the one percent ignores the institutional corruption that perpetrates the war against the middle class. Hoping for a thriving 2013 dismisses the abject State of the Nation. The only relevant question unanswered is whether the beleaguered taxpayer will revolt or just swallow another dose of Obama collectivism.

Happy New Year Middle Class: The Fiscal Cliff Is Going To Rip You To Shreds

The middle class has quite a gift welcoming them as the calendar flips over to 2013.  Their payroll taxes are going to go up, their income taxes are going to go up, and approximately 28 million households are going to be hit with a huge, unexpected AMT tax bill on their 2012 earnings.  So happy New Year middle class!  You are about to be ripped to shreds.  In addition to the tax increases that I just mentioned, approximately two million unemployed Americans will instantly lose their extended unemployment benefits when 2013 begins, and new Obamacare tax hikes which will cost American taxpayers about a trillion dollars over the next decade will start to go into effect.  If Congress is not able to come to some sort of a deal, all middle class families in America will be sending thousands more dollars to Uncle Sam next year than they were previously.  And considering the fact that the middle class is already steadily shrinkingand that the U.S. economy is already in an advanced state of decline, that is not good news.  You would think that both major political parties would want to do something to keep the middle class from being hit with this kind of tax sledgehammer.  Unfortunately, at this point it appears that our “leaders” in Washington D.C. are incapable of getting anything done.  So get ready for much smaller paychecks and much larger tax bills.  What is coming is not going to be pleasant.

So what happened?

Weren’t the tax increases only supposed to be for the wealthy?

Well, that is what the politicians always promise, but it is always the middle class that ends up getting hit the hardest.

In this day and age, the big corporations and the ultra-wealthy are absolute masters at avoiding taxes.

For example, Facebook paid approximately $4.64 million in taxes on their entire foreign profits of $1.344 billion for 2011.

That comes out to a tax rate of about 0.3 percent.

Overall, the global elite have approximately 18 trillion dollars parked in offshore tax havens such as the Cayman Islands.

Keep in mind that U.S. GDP for 2011 was only slightly above 15 trillion dollars.

So the global elite have an amount of money parked in offshore banks that is substantially larger than the total value of all goods and services produced in the United States each year.

According to one estimate, a third of all the wealth in the entire world is stationed in offshore banks.  Our politicians are playing checkers and the global elite are playing chess when it comes to taxes.  Our current system of taxation is irreversibly broken and should be entirely thrown out and replaced with something else.

And of course under our current system those that are poor don’t pay much in taxes because they are just trying to survive.

So who always ends up getting the painful end of the hammer?

The middle class does, and that really stinks.

Let us hope and pray that our politicians can come together and do something for the middle class.  In particular, we should all be screaming and yelling at our politicians about the Alternative Minimum Tax.  It was originally designed as a method to “tax the rich”, but unless Congress does something the middle class is about to be ripped to shreds by it.  The following is from a recent CNBC article about the AMT…

In a cruel epilogue to 2012, roughly 28 million families would owe the IRS $86 billion more than they anticipated for this year should the country plunge off the cliff, according to the nonpartisan Tax Policy Center.

Those families would face the “Alternative Minimum Tax,” which was introduced in 1969 to supposedly guarantee that wealthy Americans could not elude the taxman. But the AMT not only flopped, it was never indexed to inflation. So with each passing year, it seeps away from high society and into the wallets of Target and Wal-Mart shoppers. That sets up a disaster for April 15.

So how much money are we talking about?

According to that same article, many families are about to be socked by tax bills that will be absolutely huge…

On the whole, 98 percent of those with incomes between $200,000 to $500,000 would pay an additional $11,000 in AMT this year, according to the center’s estimates. About 88 percent of those with incomes of $100,000 to $200,000 would need to fork over another $3100, and even the majority of Americans with earnings between $75,000 and $100,000 would have an AMT liability.

Most of the tax increases that will be coming as a result of the fiscal cliff will be for 2013 earnings, but the AMT tax hike will apply to 2012 earnings.  So if you end up falling under the AMT, you better get ready to write a very large check to Uncle Sam in just a couple of months.

And the AMT is only just one of the very painful tax increases that American families will be facing.  If no deal is reached in Congress, every single middle class American taxpayer will be dealing with significantly higher taxes.

A recent ABC News report entitled “Fiscal Cliff: By The Numbers” detailed some of the other tax increases that you can expect in 2013…

So why don’t our politicians do something about all of this?

What are they fighting so bitterly about anyway?

Sadly, neither side is actually serious about substantially reducing the size of government deficits or about getting government spending under control.

During a recent interview on CNBC, Ron Paul explained that “they pretend they are fighting up there, but they really aren’t. They are arguing over power, spin, who looks good, who looks bad; all trying to preserve the system where they can spend what they want, take care of their friends and print money when they need it.”

Most in the mainstream media are making it sound like some kind of a “battle royal” is going on in Washington, but as Lou Dobbs recently pointed out, the U.S. national debt is going to end up in just about the same place no matter what happens.

According to Dobbs, if we “do nothing” the U.S. national debt will be approximately 25.8 trillion dollars in 2022.

If “Obama wins”, the U.S. national debt will be approximately 25.4 trillion dollars in 2022.

If “Boehner wins”, the U.S. national debt will be approximately 25.2 trillion dollars in 2022.

You can watch the entire analysis by Lou Dobbs right here…

So they are putting all of us through all of this torture even though nothing will really change in the long run no matter who wins?

What kind of a circus is this?

Meanwhile, the reckless spending continues.

Barack Obama has just issued a new executive order that ends the pay freeze for federal workers that had been in place.

So now all federal employees will be getting a nice hefty pay raise.

For example, Vice President Joe Biden brought in $225,521 this year.

Next year, he will make $231,900.

Not that our politicians really need the money.  Most members of Congress are millionaires anyway.  But if they can get us to pay for it, they might as well go for it, eh?

There are now close to half a million federal employees that bring homeat least $100,000 a year.  Plus, it is important to keep in mind that the benefits that federal employees get are absolutely outstanding, and it is close to impossible to actually fire a federal worker.

Life is good if you are working for Uncle Sam.

Meanwhile, our politicians seem determined to keep draining more blood out of the middle class.  Even if a “deal” is reached, we will still be hit by some categories of tax increases.  Let’s just hope and pray that we don’t get hit by all of the tax increases that are scheduled to go into effect.  That would be a financial disaster for millions of families.

So happy New Year middle class.  Your taxes are about to go through the roof and our politicians are too busy fighting with each other to do anything about it.

What else will 2013 bring?

Source: The Economic Collapse

Why Are We Doing This To The Children of The World?

27,000 Starvation Deaths Daily!

In this modern era, we fly jet planes around the planet in a matter of hours. We create Smart Phones that take pictures and post them on our Facebook pages in a matter of seconds.  We pay billions of dollars to watch gridiron behemoths race toward the end zone.  We buy high-powered cars to hurl our obese bodies to the local grocery store to buy more food to stuff into our mouths.

Meanwhile, our politicians speak with soaring oratory to make the world better for all human beings.  At the same time, our leaders create wars all over the world that devour trillions of dollars in bombs, soldiers, rockets, planes and armaments.

But through all our riches, our words, our human nobility in 180 plus countries around the world, we cannot figure out how to stop the starvation deaths of 27,000 children every 24 hours.  How did we advance this far as the human race only to watch that many children die needlessly and endlessly around the world?  (Source: World Health Organization)

At the end of 2012, let’s encourage our church leaders and government leaders, and people of the world to address the fundamental need to feed the children of the planet instead of preparing for or making wars around the world. While we in the United States mourn the mayhem against the children of Newtown, Connecticut, we need to understand and solve the fact that the world suffers 27,000 “Newtown’s” every single day of the year.

With that in mind, let’s propose solutions to world hunger for 2013.  Let’s solve the great scourges of mankind: poverty, illiteracy, ignorance, disease, unemployment, homelessness, inadequate sanitation, low social mobility, and exclusion.

For example, in India, 1,000 children die every day of diarrhea, dysentery and other water borne diseases.  (Source: www.populationmedia.org) Yet, India does absolutely nothing to solve that problem while it adds another 11 million net gain to its already bloviated population of 1.2 billion impoverished people.  Not to mention its destroyed environment!

27,000 children die each day from needless poverty

Dr. Webster Tarpley, author of man books, said, “The tragic condition of humanity is perhaps most dramatically reflected in the fact that between 22,000 and 27,000 children die each day due to poverty, largely in the form of starvation, malnutrition, and diseases like diarrhea which can be cured for a few pennies. The upper end of this range corresponds to one needless childhood death caused by poverty every three seconds. Total needless childhood deaths from poverty, these data suggest, must be approaching at least 10 million per year – a yearly total which by itself rivals any of the great genocides of world history. Of the 2.2 billion children who live in today’s world, one billion live in poverty. This is the estimate from the most recent United Nations Human Development Report.”

Not only that, but Time Magazine reported that 8.1 million adults die annually from starvation. Total humans dying of starvation: 18 million annually.

 

While the United States spends trillions of dollars annually on war, 3.1 billion human beings live on less than $2.00 per day.  That same 3.1 billion lack a toilet or sanitation facilities of any kind. It’s beyond sickening that we see this kind of condition of humanity in 2012 with all our talents as a species.

“About 2.6 billion people or 40% of the world’s population are struggling to subsist on less than two dollars a day,” said Tarpley. “It is a world in which a total of 3 billion people or 50% of the world total must try to get along on less than $2.50 per day. For all the talk of a growing middle class made possible by globalization, 80% of humanity receives less than $10 per day.”

Almost a billion malnourished worldwide

According to the United Nations Food and Agricultural Organization in Rome, “There are in 2012 some 925 million persons experiencing hunger and malnutrition. Some 578 million of the hungry live in the Asian and Pacific countries, followed by 239 million malnourished in sub-Saharan Africa.”

At the same time, Americans spend $50 million per jet plane and several billions of dollars to build aircraft carriers annually that they don’t need to fight non-existent adversaries.

Ironically, the Catholic Church spends all its money worldwide to stop any form of birth control or family planning. In his brilliant book, Underdevelopment is a State of Mind by Lawrence E. Harrison, he shows where Catholic-dominated countries suffer massive child birth rates, grinding poverty and hopelessness beyond imagination.  The Catholic Church dominates in Haiti, Mexico and most of Latin America. Result: accelerating poverty to match accelerating birth rates.

Much the same holds true in Islamic countries like Pakistan, Egypt and Bangladesh.  Those ancient religions refuse to embrace birth control or abortion—thus, women die and children starve into that 10 million children death factor annually.  Additionally, they suffer horrific misery up to the point of death.

1.1 billion humans lack clean water

“Fully 1.1 billion people in developing countries today lack adequate access to clean water,” said Tarpley. “One third of all children, or 640 million kids, exist without adequate shelter. One fifth of all children, or a total of 400 million, do not have access to safe water. One seventh of all children, or 270 million, are denied access to adequate health services.”

Political instability in Egypt and much of Africa

Africa closes in on 1 billion human beings inhabiting that vast continent.  However, demographers state that the current rate of human growth will create 3.1 billion Africans by the end of the century.

In Egypt at 82 million people and headed for 150 million within decades, their form of birth control equals digging another canal off the Nile River to create more shanty tents and human misery.  No one takes responsibility for reality.

At some point, Islam, Hinduism, Buddhism, Mormonism, the Catholic Church and all other religions must join minds or hands or whatever it takes—to come to terms with human overpopulation that creates the 18 million starvation deaths annually.  They must advocate and endorse birth control and family planning.  They must un-stick themselves from the 1^st century or 6^th century and even B.C. eras in humanity’s march into the 21^st century.

Otherwise, all those civilizations will see horrific human die-off, unspeakable misery and continued degradation of our planet home.  We cannot get around it with faith, hope or prayers.  Mother Nature, aka, God, Allah, the Great Spirit, or whatever you call the Creator will unmercifully respond to our overwhelming numbers.  It won’t be pretty.

We can change course by changing our actions for a plausible future for all of humanity.

Damascus Street Notes

Syrian Students Condemn American Led Sanctions currently inflating Food Prices…

“Who does that obnoxious woman think she is?” demanded a staffer who works in the Russian Embassy media office inside the vast windowless soviet style massive high walled compound which belongs to his country, here in Damascus.

“Viktor” had been invited to our table, for lunch at the “Lady of Damascus” (“sitt a cham”) restaurant in the middle class neighborhood of Shalan, having been spotted by our charming host, a Sheik and MP in Syria’s Parliament. The well-spoken gentleman was furious, after putting down his mobile phone having apparently heard some rather upsetting news. What ignited Viktor were the recent statements of the US State Department spokesperson, Victoria Nuland and her seemingly anti-Russian statements lecturing and insulting Syria’s ally, which Victor considered a bald effort to misinterpret the recent statement of Russia’s Middle East envoy, Mikhail Bodganov. Badganov, on 12/13/12 had stated, in response to a question, “One must look the facts in the face… unfortunately, the victory of the Syrian opposition cannot be ruled out.” Bogdanov also noted that the Syrian government was “losing control of more and more territory.”

Viktor explained that what has galled the Russian and his embassy colleagues here about Nuland, known for her pro-Zionist, anti-Syrian, Russian, Arab and Muslim views, was her arrogant language: “We want to commend the Russian government for finally waking up to the reality and acknowledging that the regime’s days are numbered.”

According to Viktor, “Bodganov said nothing really new. And we will issue a clarification of this very soon.” He continued, “Everyone knows that theoretically the foreign-backed rebels could win. This is not new and is always a possibility during an uprising. But Mrs. Nuland surely knows that the Syrian government has purposely pulled back from some rural areas where there is mainly open space in order to concentrate its forces to protect population centers. This is very basic military strategy and has been employed throughout history. In the English language I think it’s called something like a “strategic retreat or tactical redeployment. It is reprehensible for western and Gulf media to use our Middle East envoys statement as a form of psychological warfare while deceiving the media.” He added, “Of course we have contingency plans for an evacuation of our citizens if necessary. This is quite normal and we and other countries have such plans for Afghanistan, Iraq, Lebanon, the Gulf countries and Palestine, among others. Russia has not lessened its support for Syria and to think otherwise is yet another in the series on many miscalculations from Washington.”

Sure enough, within hours, the Russian Foreign Ministry spokesman, Alexander Lukashevich, a friend of Viktor’s issued a statement: “We would like to remark that he (Bogdanov) has made no statements or special interviews with journalists in the last days. We once again confirm the principled Russian position about the lack of any alternative to a political solution in Syria.”

After venting on Nuland, Victor and others at our table were totally dismissive of the statement of the secretary general of NATO, Anders Fogh Rasmussen, who told reporters in Brussels after a meeting with the Dutch prime minister at NATO headquarters. “I think the regime in Damascus is approaching collapse,” he told reporters after a meeting with the Dutch prime minister at NATO headquarters. “I think now it is only a question of time.”

The Syrian MP explained that Rasmussen has no credibility at all after all the lies he spoke concerning NATO in Libya and how NATO’s more than 9,000 bombing missions “protected the civilian population” whereas in truth, everyone there at the time (including this observer) knew very well that the main threat to Libya’s population, starting in March 2011 and continuing until mid-October was from NATO. From Sorman to Sabna NATO forces rained indiscriminate death on the civilian population of Libya and according to Russian President, due to meet with Obama in February, has condemned the US and NATO for deceiving Russia and the international community regarding its true aims. Viktor told us that his country fears the same deception is afoot in Syria.

Damascenes are tense, sullen, but not panicked following the recent events and what many consider terrorist acts by so-called “rebels.”

According to students I very much enjoy meeting with from Universities and Colleges here, their President, Bashar Assad, still has the support of a majority of the population. Many, as does the Assad government, accept, in principal, the April 2012 Geneva Proposals. That initiative, proposes a transitional government resulting from dialogue leading up the 2014 election which would be open to all candidates. They favor letting the Syrian people choose at the ballot box the next president whoever that may be.

It is evident here in Damascus that the main worry of the population is the manifold effects of the generally viewed illegal and immoral US led sanctions. On a another subject, “Tamara, a university student explained that the target of students and intimidation by rebel backers of students and faculty plus the kidnappings, taking of houses and cars by these same elements are affecting education here although almost all the schools and universities are still functioning.

This observer had the help of a small group of Damascus University students in conducting a survey of the effects of the US led sanctions regime on the civilian population. Virtually every person who expressed a view on this subject told this observer that the only purpose of the American sanctions is regime change by way of trying to force the population to suffer to such an extent that the long lines for bread etc. turn violent and break the bond between the Bashar Assad government and the civilian population. People here commonly refer to the US led sanctions against Iran as also being about regime change and not because Washington believes it can force Iran to abandon its perfectly legal nuclear development program.

The results of a student led survey of grocery stores in Damascus, completed on 12/12/12, shows the following increases in food prices that citizens here must pay against the backdrop of current unemployment figures currently estimated by economists as being between 40-60 percent of the population.

Damascus Student survey: Price rises for food items between May 2011 and December 2012

(Official exchange rate is currently 80 Syrian pounds for one US dollar)

Lamb—500 Syrian pounds to this week’s price of 750 sp, Chicken—200 sp to 450 sp, Milk—per liter….from 40 to 95 sp, Rice—from 40 sp to 100 sp, Eggs—160-300 sp for a carton of 30 medium sized eggs, Cooking oil—30 per liter to 60, Sugar—40 sp per kilo to 85 sp, Bread—20 sp for 10 loaves of flat bread to 55 currently in Damascus but 220 s.p. in Aleppo where, as in Homs, Hama and the east, a massive humanitarian crises in rapidly spreading.

Russia has promised wheat for this basic staple in Syria. But time is of the essence. In many areas of Syria most in need, basic food stuff supplying NGO’s are absent.

Bottled cooking gas– 500 sp now up to 1000 sp, is also becoming more difficult to find in several Damascus neighborhoods.

Heating oil which was 100 sp per liter is now on average 250 sp but becoming quite scarce. Even some of the five star hotels here in Damascus, due to a severe shortage of “mazot” fuel oil, are cutting off the heat and hot water to rooms except for periods between 7 a.m. to 10 a.m. and 8-10 p.m. Russia has reportedly promised a tanker of fuel oil but it will be dangerous to transport it by road to the population centers here because, according to students working as volunteers with the Syrian Arab Republic Red Crescent Society and other humanitarian organizations, rebel forces are increasing stealing or destroying aid convoys and rampaging the countryside.

Students here in Damascus intend to publish a more detailed list of consumer goods every two weeks. Yesterday some picketed the empty American embassy in protest against US led sanctions. “The Syrian people will never forget or forgive the American campaign to starve us into submission”, one sign read.

It appears to this observer that, rather as is the case with Iran, the illegal and immoral US led sanctions, which urgently need to be challenged at The Hague, imposed on the civilian population of Syria is having the opposite effect of what their cynical architects intended. The piling on of sanctions is giving credibility to the Assad government which, while employing measures to curtail prices increases here, so far with modest success, is arguing that the price rises are the result of Syria’s American and Zionist enemies. This view is widely shared among students at Damascus University and the general public.

Paul Krugman Discovers Marx (And Misses The Point)

In his recent New York Times op-ed piece, Princeton professor and regular columnist for The New York Times Paul Krugman observed:

“The American economy is still, by most measures, deeply depressed. But corporate profits are at record high. It’s simple: profits have surged as a share of national income, while wages and other labor compensation are down. The pie isn’t growing the way it should — but capital is doing fine by grabbing an ever-larger slice, at labor’s expense.”

And then he adds with almost shocked incredulity: “Wait – are we really back to talking about capital versus labor? Isn’t that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy?”

This is exactly the conflict that Marx identified as the fundamental, inescapable contradiction of the capitalist system that would eventually create the conditions of its downfall: there is a tendency for the owners of businesses, the capitalists, to accumulate ever-vaster wealth while the people who work for them experience a declining standard of living.

Marx supported this conclusion by offering a description of the fundamental operating mechanism of capitalism. Capitalism is based on the principle of private ownership and competition. Private businesses compete with one another for customers, and those who fail to attract a sufficient number eventually perish. But in order to attract customers, businesses must maximize the quality of their product while minimizing its price. If two products embody the same quality but one is cheaper, customers, in pursuit of their self-interest, will purchase the cheaper version, all other factors being equal.

This means that capitalists must constantly attempt to minimize the price of their product simply for the sake of their own survival. If a business devises a way to lower costs, it can capture the market. But, as Marx pointed out, labor costs are a huge factor in determining the price of a product. So those businesses that minimize labor costs can prevail in the dog-eat-dog world of capitalism. For this reason, a downward pressure on wages and benefits is always operating to one degree or another.

But Krugman made no reference to this aspect of Marx’s analysis and instead identified two other factors that contribute to the growing inequality in wealth between capitalists and workers, both of which are discussed by Marx.

The first factor involves the introduction of technology into the labor process, i.e. “labor-saving” technology. In other words, machines replace workers or reduce the amount of skill required in the labor process. To give a current example, software has been developed that analyzes legal documents at a fraction of the time it takes lawyers while costing much less. Accordingly, many well-paid lawyers lose their jobs to such software. Living during the industrial age, Marx supplied many such examples.

Krugman referred to his second explanatory factor that increases inequality between capitalists and labor as the “monopoly power” of large corporations where “increasing business concentration could be an important factor in stagnating demand for labor, as corporations use their growing monopoly power to raise prices without passing the gains on to their employees.” Here Krugman is approaching the heart of Marxist theory.

Krugman is basically arguing that large corporations use their power to override purely economic trends and simply demand that their employees work for less. But this is precisely the point of Marxism, although from the other direction. Marx persistently argued that capitalism could not function without the willingness of the working class to perform the work. When workers organize and engage in collective action by withholding their labor, the balance of power shifts in favor of the workers who can then demand higher wages as a condition for their return to work, as the ILWU (International Longshore and Warehouse Union) recently did on the West Coast and the teachers did in Chicago.

Amazingly, Krugman never mentions the decline of organized labor as a huge factor explaining the decline of the standard of living of working people, adding that there has been so little discussion of these developments. But others, especially former Secretary of Labor Robert Reich, have discussed these trends and identified the decline of labor as a major factor.

In the 1930s when labor unions were tenaciously fighting for working people, huge gains were made in terms of salaries and benefits. They conducted militant sit-down strikes and mobilized tens of thousands of people from the community to support labor’s struggles. Their successes were to a large degree responsible for the emergence of the so-called middle class that thrived in the 1950s and 1960s.

Workers who are organized, acting both collectively and forcefully, can change the economic landscape. But once organized labor becomes complacent and relaxes its guard and ceases to struggle, the laws of capitalism ineluctably grind down their gains and the growing inequality returns until workers again rise up.

Marx argued that eventually workers would see the futility of this repeating cycle, reject capitalism altogether, and begin to construct a socialist society built on entirely humanistic and democratic principles.

In a recent New York Times article on unionizing workers at the bottom of the pay scale, a union organizer was quoted as saying, “We must go back to the strategies of nonviolent disruption of the 1930s.” Currently organized labor is all but dying out. Strikes are like an endangered species. Rather than engaging in militant struggles, union members are urged to elect Democrats who then call on workers to accept sacrifices.

AFL-CIO President Richard Trumka has called on working people “to fight like hell” to resist cuts to Social Security and Medicare. But these are just words. To this date, the unions have failed to mobilize their members to stage massive demonstrations across the country against cuts to these popular social programs – demonstrations that could culminate in hundreds of thousands of working people descending on Washington, D.C. to make their demands clear to the Obama administration and the rest of the politicians. Without the unions taking the lead in this struggle, there is little individual workers will be able to accomplish. And if the unions refuse to return to their more militant roots but remain invisible, economists like Paul Krugman will continue to ignore their existence and overlook their current historic failure to defend working people.

Democratic Socialists vs. America First Populists

How many times do you have to hear that going off the financial cliff is a failure of controlling spending as opposed to a lack of revenue? Systemic deficits exist because government is too big, not because taxpayers are not paying their fair share. This assessment is sacrilege to the Democratic Socialists who make up both political parties. The “so called” debate over cutting back the growth in budgetary increases is void of any real substance or focus. The basic reason that the federal government leviathan instills mass hysteria and fear about cutting back on social welfare programs is that the system preaches a false egalitarian and utopia deliverance from reality.

Contrast this dependency viewpoint with the foundations of America First populism. Thomas Jefferson presents the basis for a healthy economy. “Agriculture, manufactures, commerce, and navigation, the four pillars of our prosperity, are the most thriving when left most free to individual enterprise.” The National Center for Constitutional Studies summarizes.

Such a free market economy was, to them, the natural result of liberty, carried out in the economic dimension of life. Their philosophy tended to enlarge individual freedom – not to restrict or diminish the individual’s right to make choices and to succeed or fail based on those choices. The economic role of their Constitutional government was simply to secure rights and encourage commerce. Through the Constitution, they granted their government some very limited powers to:

¦assure that the ground rules were fair (a fixed standard of weights and measures)

¦encourage initiative and inventiveness (copyright and patent protection laws)

¦provide a system of sound currency with an established value (gold and silver coin)

¦enforce free trade (free from interfering special interests)

¦protect individuals from the harmful acts of others

Fox 2 News Headlines

 

The big government legacy from the New Deal destroyed the last vestige of a constitutional central government. A recent illustration of the institutional attitude for the entitlement mentality comes out of that shining example of democratic community; namely, Detroit Michigan. FoxDetroit video and report in We voted for you, now bail us out tells it all.

“City Council member JoAnn Watson said Tuesday the citizens support of Obama in last month’s election was enough reason for the president to bailout the struggling the city. (Click the video player to listen)

“Our people in an overwhelming way supported the re-election of this president and there ought to be a quid pro quo and you ought to exercise leadership on that,” said Watson. “Of course, not just that, but why not?”

Detroit’s former prosperity and manufacturing dominance rose out of the genius of Henry Ford and the companies that grew out of the auto industry. Now, Detroit teetering on the brink of bankruptcy, looks more like a Beirut war zone landscape than the affluence of Gross Point.

“No city Detroit’s size has ever gone through federal bankruptcy, and analysts say the experience could easily have negative effects statewide, from Michigan’s image to its bond rating.”Public officials like JoAnn Watson typify the poverty victimhood constituency. The Democratic Socialists of America is very clear on their vision for the country.

“Democratic Socialists believe that both the economy and society should be run democratically—to meet public needs, not to make profits for a few. To achieve a more just society, many structures of our government and economy must be radically transformed through greater economic and social democracy so that ordinary Americans can participate in the many decisions that affect our lives.”

With each passing administration, the federal government exerts more central planning and economic regulations. The middle class is under an unprecedented onslaught from bureaucrats that expand federal dependency programs that the Watson’s of this world demand as claims for quid pro quo votes. The earning class is systematically being impoverished for the benefit of crony capitalists that the Democratic Socialists assail. However, their alternative is to grow central government even larger.

“Bring home the bacon” to satisfy JoAnn Watson just puts a coat of paint on a dilapidated ghetto of a failed benefit and dependency Motown community. Her mindset has greatly contributed to the State laying groundwork for managed bankruptcy for Detroit. A step in the right direction for Michigan is the Right-to-work bills pass in Lansing.

True America First populism recognizes that an all powerful and intrusive federal government destroys not only personal liberty, but drastically diminishes economic viability for producing and working individuals. Without the productivity of legitimate commerce, no ceiling on taxes can generate the funds to raise the underclass out of poverty.

Genuine traditional populism is not progressive. While being anti corporatist, the heritage of honest free enterprise and the merchant economy is defended as the alternative to the democratic socialist corporate/state. Yet the like of Chip Berlet and Matthew N. Lyons condemn Right-Wing Populism in America.

“One of the staples of repressive and right-wing populist ideology has been producerism, a doctrine that champions the so-called producers in society against both “unproductive” elites and subordinate groups defined as lazy or immoral.”

This criticism of producerism is disingenuous because of the implicit bias that progress ideologues have in the superiority of their democratic socialization mission. The inbred Marxist, contaminant much needed reform activism that America First populism offers to those who understand that a real market economy has the best prospects, for the greatest gains, for the most people.

Earning a return on labor, ingenuity and innovation is the essence of noble work. The common enemy of all non-establishment political persuasions is the debt created fake money system under the Federal Reserve. Without an adequate understanding of the impossibility of taxing yourself into wealth, the democratic socialist just sinks deeper into the debt hole of central bankers.

Deficit spending is inevitable, when the U.S. Treasury borrows funds at interest, from the Federal Reserve to create fiat money. Authentic populism must be based upon a limited federal government, with a separation of shared powers, among sovereign states and local jurisdictions.

The anxiety of a federal government meltdown coming on January 1, 2013 should be no surprise for that same Democratic Socialists of America, in What is the fiscal cliff?

“An inflammatory term used by corporate elites to resist paying higher taxes and to allow them to keep offshoring jobs. Rather than prioritizing job creation and economic recovery as the road to long-term fiscal health, these advocates of austerity are using misguided hysteria about the federal debt level to further drive down the living standards of working people, the poor and the elderly. A more accurate term for the “fiscal cliff” would be “fiscal fake-out.”

Apprehension of the corporatist playbook does not necessarily translate into a workable solution, when the DSA advocates more money to feed the government that serves only the globalist elites.

Even the neoconservative flagship, the Weekly Standard feels the need to chime in their counterfeit conservative message in, No ‘Drama’ Obama–Wants to Raise ‘Debt Limit Without Drama or Delay’.

Republicans fighting the debt limit last go around, according to Reuters, is the reason America’s credit was downgraded:

It was the reluctance of congressional Republicans to agree to such an increase in 2011 without deep spending cuts that brought the nation to the brink of default. The result was a historic lowering of the U.S. credit rating and a setback to the recovery from a recession that ended in 2009.

The statutory ceiling on U.S. Treasury borrowing is $16.4 trillion. The nation is expected to hit the legal limit near the year’s end, although it can tap emergency measures to stave off a default and keep the government running into early 2013.

No Virginia, the real reason for the inevitable credit downgrading is that financing budget deficits with devalued dollars demands a drastic rise in interest rates. All sincere citizens must acknowledge that the Obama administration is committed to destroy Jefferson’s vision for a restrictive federal government. Washington’s spending problem is self-evident, but for the democratic socialist, the growth of central governance is paramount.

Barack Hussein Obama quoted in Yahoo Finance demonstrates the arrogance of an out of control dictator.

“If Congress in any way suggests that they’re going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of a budget negotiation…I will not play that game,” he said. “Because we’ve got to break that habit before it starts.”

Alas, America First populism exponents recognize the absurdity of surrendering constitutional Congressional control over the federal budget, in favor of an imperial tyrant.

“A person can’t be a real conservative if he rejects the primary populist message. The government is answerable to the people . . . The responsibility of the individual is to become a knowledgeable and a capable citizen. That means that pledges for a free lunch must be rejected as just another swindle dressed in a pretty package. The performance seldom matches the rhetoric and never attains compatibility with basic conservative principles. Our test is clear; if it harms individual liberty, it can’t be conservatism.”

Traditional populism realizes that the national debt must be repudiated because the criminal central bankers, the Jackals of Jekyll Island, have been running a banksters scam on all Americans. The fundamental difference between democratic socialists and America First populists is their standpoint on central government tyranny.

Our Collapsing Economy And Currency

Is the “fiscal cliff” real or just another hoax? The answer is that the fiscal cliff is real, but it is a result, not a cause. The hoax is the way the fiscal cliff is being used.

The fiscal cliff is the result of the inability to close the federal budget deficit. The budget deficit cannot be closed because large numbers of US middle class jobs and the GDP and tax base associated with them have been moved offshore, thus reducing federal revenues. The fiscal cliff cannot be closed because of the unfunded liabilities of eleven years of US-initiated wars against a half dozen Muslim countries–wars that have benefitted only the profits of the military/security complex and the territorial ambitions of Israel. The budget deficit cannot be closed, because economic policy is focused only on saving banks that wrongful financial deregulation allowed to speculate, to merge, and to become too big to fail, thus requiring public subsidies that vastly dwarf the totality of US welfare spending.

The hoax is the propaganda that the fiscal cliff can be avoided by reneging on promised Social Security and Medicare benefits that people have paid for with the payroll tax and by cutting back all aspects of the social safety net from food stamps to unemployment benefits to Medicaid, to housing subsidies. The right-wing has been trying to get rid of the social safety net ever since Franklin D. Roosevelt constructed it, out of fear or compassion or both, during the Great Depression.

Washington’s response to the fiscal cliff is austerity: spending cuts and tax increases. The Republicans say they will vote for the Democrats’ tax increases if the Democrats vote for the Republican’s assault on the social safety net. What bipartisan compromise means is a double-barreled dose of austerity.

Ever since John Maynard Keynes, economists have understood that tax increases and spending cuts suppress, not stimulate, economic activity. This is especially the case in an economy such as the American one, which is driven by consumer spending. When spending declines, so does the economy. When the economy declines, the budget deficit rises.

This is especially the case when an economy is weak and already in decline. A declining economy means less sales, less employment, less tax revenues. This works against the effort to close the federal budget deficit with austerity measures. Instead of strengthening the economy, the austerity measures weaken it further. To cut unemployment benefits and food stamps when unemployment is high or rising would be to provoke social and political instability.

Some economists, such as Robert Barro at Harvard University, claim that stimulative measures, the opposite of austerity, don’t work, because consumers anticipate the higher taxes that will be needed to cover the budget deficit and, therefore, reduce their spending and increase their saving in order to be able to pay the anticipated higher taxes.

In other words, the Keynesian effort to stimulate spending causes consumers to reduce their spending. I don’t know of any empirical evidence for this claim.

Regardless, the situation on the ground at the present time is that for the majority of people, incomes are stretched to the limit and beyond. Many cannot pay their bills, their mortgages, their car payments, their student loans. They are drowning in debt, and there is nothing that they can cut back in order to save money with which to pay higher taxes.

Many commentators are complaining that Congress will refuse to face the difficult issues and kick the can down the road, leaving the fiscal cliff looming. This would probably be the best outcome. As the fiscal cliff is a result, not a cause, to focus on the fiscal cliff is to focus on the symptoms rather than the disease.

The US economy has two serious diseases, and neither one is too much welfare spending.

One disease is the offshoring of US middle class jobs, both manufacturing jobs and professional service jobs such as engineering, research, design, and information technology, jobs that formerly were filled by US university graduates, but which today are sent abroad or are filled by foreigners brought in on H-1B work visas at two-thirds of the salary.

The other disease is the deregulation, especially the financial deregulation, that caused the ongoing financial crisis and created banks too big to fail, which has prevented capitalism from working and closing down insolvent corporations.

The Federal Reserve’s policy is focused on saving the banks, not on saving the economy. The Federal Reserve is purchasing not only new Treasury bonds issued to finance the more than one trillion dollar annual federal deficit but also the banks’ underwater financial instruments, taking them off the banks’ books and putting them on the Federal Reserve’s books.

Normally, debt monetization of this amount results in rising inflation, but the money that the Federal Reserve is creating in its attempt to manage the public debt and the banks’ private debt is hung up in the banking system as excess reserves and is not finding its way into the economy. The banks are too busted to lend, and consumers are too indebted to borrow.

However, the debt monetization poses a second threat that is capable of biting the US economy and consumer living standards very hard. Foreign central banks, foreign investors in US stocks and financial instruments, and Americans themselves observing the Federal Reserve’s continuous monetization of US debt cannot avoid concern about the dollar’s value as the supply of ever more dollars continues to pour out of the Federal Reserve.

Already there is evidence of central banks and individuals moving out of dollars into gold and silver bullion and into other currencies of countries that are not hemorrhaging debt and money. According to John Williams of Shadowstats.com, the US dollar as a percentage of global holdings of reserve assets has declined from 36.6% in 2006 to 28.7% in 2012. Gold has increased from 10.5% to 12.8% and other foreign currencies except the euro increased from 38.4% to 44.4%.

Russia, China, Brazil, India, and South Africa intend to conduct trade among themselves in their own currencies without use of the dollar as reserve currency. The EU countries conduct their trade with one another in euros, and although not reported in the US media, Asian countries are discussing a new common currency for trade among themselves.

The world is abandoning the use of the dollar to settle international accounts, and the demand for dollars is falling as the Federal Reserve increases the supply of dollars.

This means that the price of the dollar is threatened.

Concern over the dollar means concern over dollar-denominated financial instruments such as stocks and bonds. The Chinese hold some $2 trillion in US financial instruments. The Japanese hold about $1 trillion in US Treasuries. The Saudis and the oil emirates also hold large quantities of US dollar financial instruments. At some point the move away from the dollar also means a move away from US financial instruments. The dumping of US stocks and bonds would destabilize US financial markets and wipe out the remainder of US wealth.

As I have previously written, the Federal Reserve can create new money with which to purchase the dumped financial instruments, thus maintaining their prices. But the Federal Reserve cannot print gold or foreign currencies with which to buy up the dollars that foreigners are paid for their US stocks and bonds. When the dollars in turn are dumped, the exchange value of the dollar will collapse, and US inflation will explode.

The onset of hyperinflation can be as sudden as the collapse of a currency’s exchange value.

The real crisis facing the US is the impending collapse of the US dollar’s foreign exchange value. The US dollar’s value in relation to silver and gold has already collapsed. In the past ten years, gold’s price in US dollars has increased from $250 per ounce to $1,750 per ounce, an increase of $1,500. Silver’s price has risen from $4 per ounce to $34 per ounce. These price rises are not due to a sudden scarcity of gold and silver, but to a flight from the dollar into the two forms of historical money that cannot be created with the printing press.

The price of oil has risen from $20 a barrel ten years ago to as high as $120 per barrel earlier this year and currently $90 a barrel. This price rise has come about despite a weak world economy and without any supply restrictions other than those caused by the attempted US occupation of Iraq, the Western assault on Libya, and the self-harming Western sanctions on Iran, impacts most likely offset by the Saudis, still Washington’s faithful puppet, a country that pumps out its precious life fluid in order to save the West from its own mistakes. The moronic neoconservatives wish to overthrow the Saudi Arabian government, but what more faithful servant has Washington ever had than the Saudi royal house?

What can be done? For a number of years I have pointed out that the problem is the loss of US employment, consumer income, GDP, and tax base to offshoring. The solution is to reverse the outward flow of jobs and to bring them back to the US. This can be done, as Ralph Gomory has made clear, by taxing corporations according to where they add value to their product. If the value is added abroad, corporations would have a high tax rate. If they add value domestically with US labor, they would face a low tax rate. The difference in tax rates can be calculated to offset the benefit of the lower cost of foreign labor.

As all offshored production that is brought to the US to be marketed to Americans counts as imports, relocating the production in the US would decrease the trade deficit, thus strengthening belief in the dollar. The increase in US consumer incomes would raise tax revenues, thus lowering the budget deficit. It is a win-win solution.

The second part to the solution is to end the expensive unfunded wars that have ruined the federal budget for the past 11 years as well as future budgets due to the cost of veterans’ hospital care and benefits. According to ABC World News, “In the decade since the Sept. 11, 2001 terrorist attacks on the World Trade Center, 2,333,972 American military personnel have been deployed to Iraq, Afghanistan or both, as of Aug. 30, 2011 [more than a year ago].” These 2.3 million veterans have rights to various unfunded benefits including life-long health care. Already, according to ABC, 711,986 have used Veterans Administration health care between fiscal year 2002 and the third-quarter of fiscal year 2011. http://abcnews.go.com/Politics/us-veterans-numbers/story?id=14928136#1

The Republicans are determined to continue the gratuitous wars and to make the 99 percent pay for the neoconservatives’ Wars of Hegemony while protecting the 1 percent from tax increases.

The Democrats are little different.

No one in the White House and no more than one dozen members of the 535 member US Congress represents the American people. This is the reason that despite obvious remedies nothing can be done. America is going to crash big time.

And the rest of the world will be thankful. America along with Israel is the world’s most hated country. Don’t expect any foreign bailouts of the failed “superpower.”

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. paulcraigroberts.org

Source: Paul Craig Roberts

Is it FAIR to Tax the Rich out of Business?

In a caustic political environment that marks the rich to pay higher taxes because of their inordinate incomes, the outlook for a growing economy diminishes. The argument that well capitalized commercial enterprise owners provide the bulk of the small business jobs is well established. Certainly, not every proprietor is wealthy. On the contrary, many if not most employers struggle to meet their payroll. Even so, the political hysteria to raise the top rates stares directly into the eyes of every wageworker with the prospects of joining the unemployment lines.

What are the actual taxes paid by the small business owners that file under individual tax rates? Robert Frank in CNBC report, The Millionaires Who Pay the Highest Tax Rate, provides some interesting facts.

“According to new data from the IRS, people who make $1 million or more had an average tax rate of 20.4 percent in 2010. Tax filers who earned $30,000 to $50,000 paid an average rate of 4.8 percent, while those who made between $50,000 and $100,000 paid 7.7 percent. Those making under $30,000 had a negative effective rate, meaning they paid no federal income taxes after deductions and credits.

Put another way, millionaires pay a rate that’s more than four times that of the middle class.”

Lost in the debate on taxes is the distinction between the real producing economy and the investment return on capital speculation. The former is the genesis of all affluence, while the later is the manipulative abuse of Main Street prosperity. Wall Street finance is based upon fabricated fees, invented spreads, manufactured values and phantom riches. The notion that income from venture speculation is equated with the sweat equity of actual business endeavors is a root cause of the huge disparity that separates the leisure moneychanger cabal from the merchant class.

Still the Washington Examiner makes the following points in their editorial, If top 5% paid 40% of taxes, what is their ‘fair’ share?

“But income taxes, taken in isolation, do not tell the whole story, because lower-income Americans do pay payroll taxes. But even taking into account all forms of taxation, the top 1 percent still paid 22 percent of federal taxes while earning just 13.4 percent of household income. The top 5 percent paid 40 percent of all federal taxes, despite earning only 26 percent of all income. No matter how you slice the numbers, it’s hard to understand why anyone would think the wealthy aren’t already shouldering a burden commensurate with their blessings.”

What they miss is that not all income is equal. Money often begets more money. However, business income requires hard work to earn a minimum return. The question that is absent from the tax debate is whether the source of the profit, example passive vs. active income, should have much different tax treatment.

The quid essential crony capitalism corporatist, Warren E. Buffett, announces his remedy in the New York Times opinion page, Stop Coddling the Super-Rich. He admonishes Congress to hike rates on the top level of the wealthiest.

“Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.”

The idea that all capital gains are similar has dire consequences. Treating the sale of a family home in the same way as taxing derivative profits or algorithmic trading allows the systematic pillaging of unproductive financial instruments at the cost of Middle America. The Buffett plutocrats of privilege plunder, play the fairness card, while practicing the gaming of the buddy arrangement of State Capitalism.

As long as the small business owner is lumped into the identical tax category that enriches Bernie Madoff disciples, the dynamic and industrious elements of enterprise will suffer.

Since the banking community has shut off the loan faucet to small business, the erroneous argument that capital formation must be protected for a sound banking system, does not wash. As long as the banksters are using their capital to speculate and forego their stated function of providing constructive loans, the industry has lost what little honorable respect a vulture mercenary might claim.

The entrepreneur employing risk capital in the formation of a useful product or service is not focused on evading taxes. Such ventures employ the unemployed and provide the consumer with innovative and useful choices.

The ”Oracle of Omaha“ fails to disclose a significant point that the WSJ clarifies.

“What he doesn’t say is that much of his income was already taxed once as corporate income, which is assessed at a 35% rate (less deductions). The 15% levy on capital gains and dividends to individuals is thus a double tax that takes the overall tax rate on that corporate income closer to 45%.”

Taxing the predatory speculator that buys political favors and deals on inside information is quite different from penalizing the employer that earns a company profit on the efforts of a dedicated staff and prudential risk management.

The way to unlock the capital to expand the economy is to require commercial banks to conduct their function as lenders. Restoring that elusive fairness has never been more obvious then reenacting Glass–Steagall. However, the Wall Street Wizards hide behind the curtain of special tax treatment. Differentiate capital gains taxation much like the separation of investment and commercial banking.

Agenda 21: The Latest Sleight of Hand Trick by Corporate Elite

When the Corporate Elite tells us we need to be afraid of something, they almost always expect to make some money off our fear.

From the same people who brought us the “Ground Zero Victory Mosque,” FEMA concentration camps, and every single George Soros conspiracy theory, comes a brand new hyper-paranoid threat-to-America’s-sovereignty that, they say, should scare the hell out of all of us.

It goes by the name of Agenda 21, which just so happens to be the title of Glenn Beck’s new dystopic novel.

Billed as, “more frightening than anything Orwell could have envisioned,” Beck’s Agenda 21 paints a disturbing picture of America following the implementation of the United Nation’s Agenda 21, which is actually a real life UN initiative, though not nearly as nefarious as Beck would have us all believe.

The book’s tagline reads: “This used to be called America. Now it is just ‘the Republic.’ There is no president. No congress. No freedom.”

Over at GlennBeck.com you can watch a movie trailer made specifically for the book featuring grizzled Americans lined up on the streets in a post-Soviet winter landscape reeking of desperation, waiting for tiny morsels of food to be parceled out by “the authorities.” Reminiscent of both Nazi concentration camps and the Book of Revelation, everyone’s foreheads are tattooed with identification numbers – and in homage to Sarah Palin’s “death panels,” one scene in the trailer depicts an emaciated, scraggly-haired old man loaded on to a conveyor belt and sent into a burning furnace.

Of course, this is all fiction. Whether you like him or not, Beck has made a fortune off sensationalism – and more recently televangelism – and this book will tap into a wellspring of paranoia on the fringe Right that will undoubtedly make a lot more money for multimillionaire Mr. Beck himself.

But whether Beck really believes in his depicted Agenda 21 future for America isn’t all that important. What’s important is that a lot of other powerful people do believe in it. To them, there’s nothing fictional at all when it comes to Agenda 21.

On October 11th this year, the Georgia state Capitol building hosted a four-hour briefing for Republican state senators on the issue of…Agenda 21. It was emceed by a man named Field Searcy who, according to MotherJones, is a local Conservative activist, whose Tea Party leadership was revoked after endorsing birther and truther conspiracy theories. But on that day, Searcy had the attention of his state’s most powerful lawmakers – including the Republican Party’s Senate Majority Leader, Chip Rogers – to warn them of President Obama’s wicked plot to use Agenda 21 to hand the United States off to the United Nations.

Searcy told the Georgia Republicans, and later spoke of it on the Thom Hartmann Radio Program, that President Obama is using a mind control procedure known as the “Delphi Technique” to slowly condition Americans to submit to the control of the United Nations’ Agenda 21, which will, according to Searcy, force mass migrations of Americans out of the countryside and into the cities, while handing over control of our rural lands to an international, one-world government.

The goal of the presentation was to influence Georgia lawmakers to follow in the footsteps of Tennessee and Kentucky Republican lawmakers who’ve already passed legislation to block Agenda 21 from being implemented in their states. In fact, earlier this year Republican Senate Majority Leader Chip Rogers introduced legislation in Georgia to do just that.

Also on the “Fear Agenda 21″ bandwagon is newly-elected Tea Party Senator from Texas, Ted Cruz. He devoted an entire section of his website, TedCruz.org, to Agenda 21 fearmongering. Under the title, “Stop Agenda 21: The Constitution should be our only ‘Agenda,” Cruz writes:

“The originator of this grand scheme is George Soros, who candidly supports socialism and believes that global development must progress through eliminating national sovereignty and private property… Agenda 21 attempts to abolish ‘unsustainable’ environments, including golf courses, grazing pastures, and paved roads. It hopes to leave mother earth’s surface unscratched by mankind. Everyone wants clean water and clean air, but Agenda 21 dehumanizes individuals by removing the very thing that has defined Americans since the beginning—our freedom.”

Oh no! Not the golf courses! Luckily for the golfing community, Ted Cruz is headed to the United States Senate to stop George Soros and the UN from confiscating Augusta National.

Though, hopefully, someone will notify Cruz, perhaps by removing his tinfoil hat, that the United Nations has no interest whatsoever in turning Augusta National into a sustainable bio-dome. Likewise, hopefully someone will tell Mr. Field Searcy that the UN has no interest in forcibly removing Americans from the country-side, either.

Concerns coming from the Right about American sovereignty in the face of the United Nations aren’t anything new.

It’s true that FDR pushed the idea after World War Two, and Democratic President Harry Truman signed us up for the UN in 1945, and it’s also true that in signing up for the United Nations, the United States surrendered a small amount of our sovereignty, inasmuch as we can no longer unilaterally declare war on another nation – unless they attack us first – without getting the approval of the UN. Of course, this is true of every other nation in the UN as well. The UN was created to promote world peace, an idea that doesn’t sit well with the neocons and chickenhawks.

But, here’s what Agenda 21 really is. Standing for “Agenda 21st Century,” it’s a completely non-binding UN agreement that aims to address climate change and inequality by calling on local and federal governments, NGOs, and businesses, to develop plans to create more sustainable environments in their respective nations. The UN believes that by working together, and giving financial assistance to developing nations to promote sustainable living, wealth disparities can be reduced, indigenous populations can be protected, and the deterioration of ecosystems around the globe can be reversed.

If you ask the environmentalists who are growing more and more concerned with a warming, crowded planet what they think of Agenda 21, they’ll say it doesn’t go nearly far enough. Especially after new reports by the UN about record levels of greenhouse gases and the atmosphere, and a report by the World Bank on the global economic impacts of a planet that’s 7-degrees warming by 2100 as a result of climate change.

But, as you’d expect from a plan to reduce poverty worldwide and use resources and land in more eco-friendly ways, wealthy oil barons and banksters are opposed to it. When people, governments, or organizations talk about things like sustainable energy, corporate responsibility, and educating the world’s children, billionaires like the Koch brothers get a little uneasy.

So, right-wingers have employed their best charlatans in America, people like Glenn Beck, to reinvent Agenda 21 as something completely different: a nefarious plot by communist globalists to force redistribution of wealth and confiscation of private property, and ultimate devour American sovereignty. Or, according to Glenn Beck, an Orwellian takeover to purge the nation of its sick and elderly.

And it just so happens that legislation passed in Tennessee and Kentucky to block Agenda 21 comes straight from model legislation produced by the notoriously loony, yet well-funded, John Birch Society. The Koch Brothers dad, Fred Koch, who had no problem with state-controlled economies when he made his fortune working with Joe Stalin in the Soviet Union, was one of the founding members of the Jon Birch Society back in 1958.

The UN has provided right-wing fear mongers a lot of grandstanding opportunities over the years, but the UN has never lived up to their warnings that it’s coming to destroy America. Most people think of it as a toothless international body that’s been hijacked by the United States to protect its own interests and the interests of its allies.

And while the Bircher billionaire class continues to fret over the UN, they stay silent over the actual threat to our nation’s sovereignty in the form of the World Trade Organization, which has enforced free trade agreements through international courts that have overturned laws passed by our elected Congress and signed by our elected President. For example, laws banning the importation into the United States of poisonous additives to gasoline, products made by child labor, and tuna caught at the expense of dolphins have all been overturned by the “one-world government” that is the WTO.

Yet, not a peep from the same wealthy elite who are warning us about Agenda 21. That’s because there’s a lot of money to be made in so-called Free Trade, and not so much to be made in promoting sustainable living.

The same is true of why Glenn Beck isn’t writing a book about the $67 trillion global shadow banking system, which is extremely dangerous to our sovereign economy – yet making billions of dollars for banksters.

The point is, this latest scheme by the Corporate Elite to scare the hell out of all of us with Agenda 21 is just like every other scare tactic by the Corporate Elite – it’s meant to distract us. It’s a sleight-of-hand technique to keep us focused on bogeymen, while their ranks of Texas oilmen, outsourcing CEOs, and Wall Street banksters carry out the true destruction of the United States of America: the pillaging of the Middle Class at home and the construction of a WTO-style one-world corporate government to promote unfettered capitalism and free trade everywhere on the planet.

And in the process, useful quacks like Glenn Beck and Field Searcy can make a lot of money feeding the paranoid, Fox News-watching masses their latest conspiracy theories.

Source: TruthOut

The Direction of Equities In The Obama Economy

Corporate America has the largest cash reserves in recent memory. The product of the first Obama administration, the boards and management of the biggest companies, foregone mergers and acquisitions and cleaned up their balance sheets. Fear was the operative sentiment after the 2008 financial meltdown. Business confidence was marginal at best. Lacking consumer confidence was a natural result of a high unemployment and an insecure job environment. The modest improvements in the economy were a direct outcome of increases in government spending, especially an expansion in public employee endeavors.

For the beleaguered middle class, the Bush blame of an inherited awful economy was little relief. That shabby self-justification excuse is officially over with the prospects of a second presidential term.

The Wall Street Journal predicts in What an Obama Win May Mean for Stocks that watching monetary prescriptions of the Fed is crucial.

“Anyone who has been following the markets over the last few years knows how important Fed policy has been to the direction of everything from stocks to bonds, oil, gold and other assets. From record-low interest-rate policies to multiple rounds of quantitative easing, Fed Chairman Ben Bernanke has been about as dovish as it comes enacting policies to jumpstart the economy.”

Equities have benefited amply over the first Barak Obama term. The WSJ continues, “No matter your beliefs, the Dow is up more than 50% since Obama took office during the depths of the financial crisis.” The zero interest rate setting and the sparingly granting of business loans caused stocks to advance from a distressed level.

Now with Obama’s re-election, his ownership of economic circumstances will be hard to escape. The slide in stocks that started as soon as the ballot counting was over, forecasts the lack of confidence that the fiscal cliff will be resolved sufficiently to foster conditions to grow the economy.

Add in the rapid breakdown in international stability and the prospects that the European Union will implode, does not bode well for the engines of wealth creation. Equities gain in value when the products or services of their underlying companies prosper. Without the reasonable expectation that actual economic prosperity is on the rise the basic conditions for an advance in stock pricing is simply wishful thinking.

Yet, under a fundamental standard, the lack of favorable circumstances does not mean that stocks will simple lose value. Volatility in pricing, often with no distinct connection to price performance, is the norm. The perfect storm for speculative betting seems the more probable course for the markets in the coming years.

The backstop of the Federal Reserve that comes to the rescue of too big to fail conglomerates, is the operative criterion used to keep the financial bubble inflating. As the currency is debased and loses purchasing value, the price of stocks must rise just to stay even.

In addition, the negative aspects of tax increases especially on capital gains and dividends are unmistakable. Investing Daily’s Roger S. Conrad recently reported inStick With Dividend Stocks.

“Since Election Day last week, the S&P 500 has lost 4.5 percent of its value. And the Dow Jones Utility Index is off more than 5 percent.

But let’s suppose there really is a fiscal cliff and that the worst case forecasts of a 4 point drop in gross domestic product (GDP) prove on target. Such a shock could also trigger a tightening of credit conditions in the US, making it more difficult to borrow.

In such an environment, two things would really count for companies. One is reliable revenue, a business that will continue to produce cash flow come what may. The other is a lack of near-term debt maturities, so management can step back from a temporarily frozen credit market and wait for bond buyers to come back.”

The point is that stocks may not go up in real value while their relative pricing may mirror the overall lack of confidence in the economy in a persistent down market. However, a company with sound financial reserves and low or no debt will have a chance to survive in a depression.

As credit becomes non-existent, cash will be king in the short term. Notwithstanding this message from previous panics, the complexity of debasing the currency adds a new dimension to familiar lessons. Hyperinflation of price stability results in a slowdown of the real economy. Adding further government spending with monetized debt from the central bank cannot infuse productive commerce into an economy where consumer cash is fickle or nonexistent.

Stocks can only be a sensible investment when domestic mercantilism is oriented towards fostering prosperity of the national economy. Foreign trade will plunge as the worldwide financial upheaval exports its turmoil around the globe.

Solid companies that actually produce necessary items or endeavors have the best chance to retain some semblance of treasure. Nevertheless, the definitive risk for owning equities lies in the danger that the federal government will recall the counterfeit Federal Reserve Dollar, in a desperate attempt to forestall debt repudiation.

Only algorithmic trading with super computers will squeeze out fractions of price movement and generate returns on capital, because the equity exchanges are now structured to penalize or purge the individual investor from having any chance of profiting.

Market risk is nothing compared to the political hazard of collectivist policies slated for imposition in a second Obama term. In order to generate tangible wealth, the private sector must navigate around all the pitfalls that excessive taxation and destructive regulations impose on voluntary commercial transactions. Equities cannot reward stockholders under a command and controlled – centralized and imposed government. The expectations of an uncurbed Obama dogmatic executive order administration guarantees that stocks will suffer under all the restrictions of any socialistic economy.

When the conditions are unknown, uncertainty runs havoc with equity markets. Conversely, when the socialism of Obamaism is widely verbalized for all to digest, the gamble of stock ownership equates to your level of confidence in the future of the country and the economy. Good luck.

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