"Twist" provides a story from Barron's about the tsunami of default and the shadow inventory of foreclosures:
Amherst estimates this massive overhang at seven million units. That’s the equivalent of 135% of a full year’s existing-home sales and chillingly greater than the 1.27 million units that made up the overhang in early 2005, when the housing bubble had just begun its dizzying and more than a little lunatic ascent.
Put another way, of the 56 million units that the Mortgage Bankers Association says make up the mortgage universe, Amherst gauges 6.94 million units are in what it dubs the "delinquency pipeline" eventually headed for liquidation. And it reckons that another 300,000 mortgages replenish that unwelcome flow every month.
Essentially, then, this shadow inventory represents a massive furtive supply of future foreclosure. Amherst fingers negative equity as keeping the delinquency pipeline heavily stocked. Quite a reasonable assumption, we think. A home owner, saddled with a house that’s valued at less than it cost him to buy or that he can reasonably expect to sell it for may lack the will and, more importantly, the wherewithal to keep making payments on his mortgage.
The Most Ridiculous Argument Against Auditing the Fed Yet... ...comes from Barry Ritholz, as relayed by Bruce Bartlett:
While I have been critical of the Federal Reserve (especially the Greenspan years), my beef with them has been their judgment and decision-making process. Congress, on the other hand, is a whole different matter. It[']s not their judgment, but rather, the fact they are owned not by the American people, but by lobbyists, and corporate interests. They have become structurally deformed.
How weird is it for me, who spent so many pages blaming the Fed for a lot of the recent crisis, to find myself in a position of defending them from outside political pressure? The choice we face is the recent Fed regime of secrecy, nonfeasance, irresponsibility, and easy money — versus something possibly likely to be a whole lot worse.
To be found in “contempt of Congress” would require an improvement in opinion of them.
If the Fed has been a major source of problems, Congress is much worse. They were the great enablers of the crisis, readily corruptible, bought and paid for by the banking industry. I find Congress to be the worse of two evils — lacking in objectivity, incapable of producing legitimate regulatory review.
So to summarize: The Fed has handed literally hundreds of billions of dollars created "out of thin air" to politically connected financial institutions. Congress asked Bernanke to tell them which institutions got how much money. Bernanke refused to say.
So Ron Paul and friends are pushing a bill that would force the Fed to disclose the recipients of such handouts of freshly printed dollars. And Ritholz says, "No, that's dangerous, because Congress is owned by the banking industry."
The Fed is a government-enforced cartel of private banks. It is literally owned by the banking industry. In contrast, Congress is merely rented by the banking industry.
DAD FACES FELONY CHARGES... RESISTS DRUGGING OF HIS SON!
A Nation Crazed with Raising Children on Powerful Psychoactive Drugs...
"It's insane to take a perfectly normal kid and wipe him out with drugs just so he can sit still in school!"
TEMPE, Ariz. -- A Tempe man said he took his son to hide in Florida because he didn't want him to take ADHD medicine.
The debate over the drugs became a focal point in a recent custody dispute between Jim Kaiser and his ex-girlfriend, Shelly Griffin.
Griffin thought their 9-year-old son Ben needed the medication, and a judge gave her sole custody when Kaiser refused to go along.
"These drugs in my opinion are child abuse. It's insane to take a perfectly normal kid and wipe him out with drugs just so he can sit still in school," said Kaiser.
Earlier this month, police in Fort Lauderdale pulled Kaiser over for a traffic violation and discovered that he had an outstanding warrant issued in Arizona.
Kaiser had taken his son there more than three months ago, but he never told anyone where they were.
Kaiser is now facing felony charges of custodial interference and he's not allowed to speak with Ben.
Still, he said he has no regrets.
"I had to spend four days in jail for it, I'll probably have to spend a little more, but it was worth it," Kaiser said.
Imagine if Pope Benedict gave a speech saying the Catholic Church has had it wrong all these centuries; there is no reason priests shouldn't marry. That might generate the odd headline, no?
Or if Don Cherry claimed suddenly to like European hockey players who wear visors and float around the ice, never bodychecking opponents.
Or Jack Layton insisted that unions are ruining the economy by distorting wages and protecting unproductive workers.
Or Stephen Harper began arguing that it makes good economic sense for Ottawa to own a car company. (Oh, wait, that one happened.) But at least, the Tories-buy-GM aberration made all the papers and newscasts.
When a leading proponent for one point of view suddenly starts batting for the other side, it's usually newsworthy.
So why was a speech last week by Prof. Mojib Latif of Germany's Leibniz Institute not given more prominence?
Latif is one of the leading climate modellers in the world. He is the recipient of several international climate-study prizes and a lead author for the United Nations Intergovernmental Panel on Climate Change (IPCC). He has contributed significantly to the IPCC's last two five-year reports that have stated unequivocally that man-made greenhouse emissions are causing the planet to warm dangerously. Read the rest... Calgary Herald
KIPLINGER WAGS FINGER AT GOYETTE'S "THE DOLLAR MELTDOWN" AND DOLLAR CRITICS!
FINANCE NEWSLETTER SAYS "STAND BY YOUR BUCK; DON'T LISTEN TO DOLLAR CRITICS," AT SAME TIME WORLD BANK FACES DOLLAR REALITY!
World Bank Prez: It "would be mistaken to take for granted the dollar's place as the world's predominant currency."
Kiplinger senior editor opens fire; Charles responds!
Jeffrey R. Kosnett, Kiplinger.com: Some critics of the greenback, including those who breathlessly hawk gold (after it's already soared in price) and authors of books with such titles as The Dollar Meltdown, are plainly promoting their own interests. But it's also common to see references to the sick buck in mainstream investment advisories. For example, Larry Adam, chief U.S. investment strategist for Deutsche Bank Alex. Brown, recently cited the grim outlook for the dollar as a reason to invest aggressively in Asia and in U.S. tech and industrial companies (the latter group because a weakened dollar would make their products more attractive to overseas buyers).
Charles Goyette's letter to Kosnett:
Jeffrey R. Kosnett Senior Editor Kiplinger's Personal Finance
Dear Mr. Kosnett
Thank you for taking note of my book The Dollar Meltdown: Surviving the Impending Currency Crisis with Gold, Oil, and Other Unconventional Investments, forthcoming in late October from Portfolio/Penguin.
By including me as a dollar critic along with those who "breathlessly hawk gold," you suggest to your readers that I am "plainly promoting" my own interest. If you are referring to a solvent government and a sound monetary system, I trust you mean promoting our mutual interest. If that is not your meaning, I would like to assure you that I do not sell gold or have any interest in any company that does. Nor do I have any such interest in the sale of oil, natural resources, agricultural commodities or the other vehicles I recommend for weathering an inevitable currency crisis.
35 Billion Reasons The Crisis Has Taught Gov Nothing
Daniel Indiviglio, TheAtlantic.com: The Wall Street Journal is reporting today that the Obama administration is on the verge of committing as much as $35 billion in financing and subsidies to provide mortgages to low- to moderate-income families. Hmm... this sounds vaguely familiar. The government subsidizing the mortgage market making credit artificially easy -- oh yeah! That was one of the reasons why the mortgage market overheated, and we fell into a deep financial crisis. Have we learned nothing?
Here's some detail from WSJ:
The effort, which could be announced as early as this week, is aimed at relieving pressure on government-operated housing finance agencies, which have been struggling to find funding amid the downturn. These agencies, or HFAs, are a small part of the housing market but are critical to many first-time and low-income home buyers, who can get lower-rate mortgages through an HFA than they could through a private-sector lender. Rates are typically 0.5 to one percentage point lower than commercial lenders.
Here's some more explanation what this cash will do:
The Treasury Department, along with government-controlled mortgage giants Fannie Mae and Freddie Mac, is expected to buy as much as $20 billion of new housing bonds issued by the state agencies. It will also provide $15 billion in additional funding, as needed, to help the agencies continue to use a type of cheap, short-term financing.
(Bloomberg) -- Nassim Taleb, author of “The Black Swan,” questioned why Federal Reserve Chairman Ben S. Bernanke, and Treasury Secretary Tim Geithner kept their posts after failing to foresee the collapse in global credit markets.
Bernanke was appointed to a second term last month by President Barack Obama, while Geithner took his job after being the president of the New York Fed from November 2003 through January of this year. Current National Economic Council Director Lawrence Summers was treasury secretary between 1999 and 2001.
“Bernanke, Geithner and Summers didn’t see the crisis coming so why are they still there?” Taleb told a group of business people in Hong Kong. Bernanke is like “a pilot who didn’t see a hurricane,” he added.
Bernanke said on Sept. 15 that the U.S. recession had probably ended, following a financial meltdown that caused more than $1.6 trillion of losses at the world’s biggest financial institutions. Taleb said the risks that caused the global crisis are “still with us” and urged the U.S. government to avoid burdening the public or future generations with the cost of the bank bailout.
The national debt is $11.77 trillion, U.S. Treasury Department figures show.
Laissez Faire Books is back with a passion. We noted their return and are happy to report that they again have a wonderful selection of great books on a variety of topics that interest Liberty loving folks. Great job guys! Keep up the good work. Check them out Here.
Posted by Lew Rockwell on September 27, 2009 04:59 PM
The feds have finally released, 14 years later, some of the security tapes showing some aspects of the bombing. But as the heroic lawyer Jesse Trentadue points out, there are blank spots and some editing as well. Come on, federales: release all the tapes, undoctored. Or is there some reason you are still withholding evidence and obstructing justice?
Tom Woods in Testimony in Support of HR 1207, The Federal Reserve Transparency Act of 2009, House Financial Services Committee, September 25, 2009
I am speaking this morning in support of HR 1207, the Federal Reserve Transparency Act. As the Committee knows, this bill would require a full audit of the Federal Reserve by the Government Accountability Office (GAO).
On November 10, 2008, Bloomberg News ran the following headline: “Fed Defies Transparency Aim in Refusal to Disclose.” The story pointed out that the Fed was refusing to identify the recipients of trillions of dollars in emergency loans or the dubious assets the central bank was accepting as collateral. When the initial $700 billion congressional bailout was being debated last September, Fed chairman Ben Bernanke and then-Secretary of the Treasury Hank Paulson couldn’t emphasize their commitment to transparency strongly enough. But “two months later, as the Fed [lent] far more than that in separate rescue programs that didn’t require approval by Congress, Americans [had] no idea where their money [was] going or what securities the banks [were] pledging in return.”
Matthew Winkler, editor-in-chief of Bloomberg News, put it simply: “Taxpayers – involuntary investors in this case – have a right to know who received loans, in what amounts, for which collateral, and why specific loans were made.”
This has been portrayed as a trivial matter being pursued by some cynical and uppity Americans who don’t know their place. But there is no good reason for Americans not to know the recipients of the Fed’s emergency lending facilities. There is no good reason for them to be kept in the dark about the Fed’s arrangements with foreign central banks. These things affect the quality of the money that our system obliges the American public to accept. READ THE REST! Tom Woods, LewRockwell.com
The United States scarcely knew what a complex disaster it was confronting when it went to war in Afghanistan on October 7, 2001. It will eventually – perhaps years from now – suffer the same fate as Alexander the Great, the British, and the now-defunct Soviet Union: defeat.
What is called "Afghanistan" is really a collection of tribes and ethnic groups – Pashtuns, Tajiks, Uzbeks, and more – there are seven major ethnic groups, each with their own language. There are 30 minor languages. Pashtuns are 42 percent of the population and the Taliban comes from them. Its borders are contested and highly porous, and al-Qaeda is most powerful in the Pashtun regions of northern Pakistan as well as Afghanistan. "The fate of Afghanistan and Pakistan are inextricably tied," President George Bush declared in December 2007. This fact makes the war far more complicated, not the least because enormous quantities of military aid sent to Pakistan is mostly wasted.
Worse yet, Pakistan possesses about 70 to 90 nuclear weapons and the U.S. fears some may fall into the hands of Islamic extremists. At least three-quarters of the supplies essential for America’s and its allies’ war effort flow through Pakistan, and they are often assaulted. Moreover, a large and growing majority of the Pakistanis distrust U.S. motives. The U.S.’s tilt to New Delhi after 2007, which greatly augmented Indian nuclear power, made Pakistan far more reticent to do Washington’s bidding.
Afghanistan is a mess, complex beyond description with mountainous terrain to match. Its principal problems are political, social, and cultural – in large part because Great Britain concocted it arbitrarily. There is no durable military solution to its many problems. As in Vietnam, the U.S. will win battles but it has no strategy for winning this war. Gabriel Kolko AntiWar.com
Dr. Weiss is the son of J. Irving Weiss. I first heard his father at the very first gold investment conference, back in the fall of 1967. It was sponsored by Harry Schultz. At that conference, most speakers predicted an era of price inflation. The lone exception was J. Irving Weiss. He predicted deflation. He recommended being 100% in Treasury bills.
I remember phoning my parents and telling them to switch their retirement money to American $20 gold coins: 100% of it. They did.
A month later, the British government devalued the pound. The price of gold began moving up.
The American price level (CPI) in 1967 was less than one-sixth of what it is today. Shultz's speakers were correct, with one exception.
Martin Weiss continued his father's tradition relentlessly until this week.
He has not said that there will never be price deflation. (Neither do I.) He has clearly said that, at this point, price inflation is the threat. (So do I.)
This leaves deflationists "Mish" Shedlock, Rick Ackerman, and Robert Prechter with one fewer member in the always tiny deflationist hard money camp. (The Keynesians always worry about deflation, never about inflation.) -flynn
My bet is this. One fine day the bottom is going to drop out of the dollar. There will be a swift and sharp order of magnitude change. The recognition of the problems will reach a point at which it starts to go exponential, not just in terms of people being vaguely conscious that things are not right, but in terms of actually taking action to protect themselves. Foreign central banks may be reluctant to dump their dollar securities and think it better to liquidate them slowly so as not to drive prices down and break the market, but when they observe that others are running for the exits, they will run too. There will be a run on the FED and a run on the U.S. government.
Runs upon the dollar and U.S. government debt are where things are now headed, and that is a scenario that calls for action now. And the more of us that act upon it now, the more likely it is that we bring that reality into existence.
The FED and the government do not want to see runs upon them. They will soft soap everyone as long as they can because rhetoric is the cheapest form of action, but really to prevent these runs from occurring, they have to take concrete measures that suggest a fundamental shift in the fiscal and monetary courses they are now on.
If the major governments of the world could get themselves and their peoples involved in a war like World War I that killed 20 million human beings, can a government not create such economic imbalances that it derails its debt, currency, and economy? It has already happened many, many times in the past.
The only novelty now is that it is happening in America.
"Americans cannot get any truth out of their government about anything, the economy included!" - Paul Craig Roberts
Three Important "Takeaways" from Roberts' New Column, "The Economy Is A Lie, Too!"
1. The Consumer Price Index is a Fiction
The inflation rate, especially “core inflation,” is another fiction. “Core inflation” does not include food and energy, two of Americans’ biggest budget items. The Consumer Price Index (CPI) assumes, ever since the Boskin Commission during the Clinton administration, that if prices of items go up consumers substitute cheaper items. This is certainly the case, but this way of measuring inflation means that the CPI is no longer comparable to past years, because the basket of goods in the index is variable.
The Boskin Commission’s CPI, by lowering the measured rate of inflation, raises the real GDP growth rate. The result of the statistical manipulation is an understated inflation rate, thus eroding the real value of Social Security income, and an overstated growth rate. Statistical manipulation cloaks a declining standard of living.
2. The Unemployment Rate is Another Fiction
The unemployment rate, as reported, is a fiction and has been since the Clinton administration. The unemployment rate does not include jobless Americans who have been unemployed for more than a year and have given up on finding work. The reported 10% unemployment rate is understated by the millions of Americans who are suffering long-term unemployment and are no longer counted as unemployed. As each month passes, unemployed Americans drop off the unemployment role due to nothing except the passing of time.
If measured according to the methodology used when I was Assistant Secretary of the Treasury, the unemployment rate today in the US is above 20%. Moreover, there is no obvious way of reducing it. There are no factories, with work forces temporarily laid off by high interest rates, waiting for a lower interest rate policy to call their workforces back into production.
3. Consumer Income Growth - Another Illusion Created by Debt
The spin that masquerades as news is becoming more delusional. Consumer spending is 70% of the US economy. It is the driving force, and it has been shut down. Except for the super rich, there has been no growth in consumer incomes in the 21st century. Statistician John Williams of shadowstats.com reports that real household income has never recovered its pre-2001 peak.
The US economy has been kept going by substituting growth in consumer debt for growth in consumer income.
... while Federal Reserve chairman Ben Bernanke announces that the recession is over!
From NYTimes story: "Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.
The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune. "
Let's say you own a $200,000 house free and clear.
Let's further say that you would like fire insurance. Just in case you are a klutz in the kitchen, for example.
So you sit down and write yourself a fire insurance policy. You promise to pay yourself $200,000 to rebuild your house if it burns to the ground.
You then put your "insurance policy" in the safe and pat yourself on the back - you're insured! Now, you want to re-do your kitchen and add a pool, so you go to the bank to get a mortgage to finance those improvements.
The mortgage company would accept your self-written policy as proof of insurance, right? Oh wait - they'd call that fraud?
Richard Rahn, Washington Times: The entitlement programs (i.e., Social Security, Medicare, Medicaid, etc.) all continue to grow faster than the economy, and they will take more than 100 percent of all federal tax revenue this year, requiring that virtually all of the other government spending programs, including defense and interest payments on the debt, be funded by more borrowing....
Now suppose you are not an individual bondholder but the Chinese government official responsible for the Chinese economy, and you know your government holds about $1 trillion in U.S. government securities. You have watched Congress and the administration become less and less fiscally responsible - more spending, more taxes, and more debt....
The Chinese are not stupid, and they have been vocal in saying they are concerned that U.S. policies will lead to a further fall in the dollar and higher rates of inflation, both of which undermine the value of their investment in U.S. government securities.
The Chinese are now trying to diversify their holdings - and their recent activity in buying large quantities of tradable commodities is probably, in part, a hedge against a falling U.S. dollar. Thus, at the same time, the U.S. government needs to sell trillions of dollars of new bonds. It is by its own actions driving away foreign purchasers of bonds, which can only result in higher interest rates in the United States, which will further slow economic growth.
What is particularly frightening is that neither political party has offered a serious plan to defuse the debt bomb. The Democrats are just piling up more debt as if there were no limit, and the Republicans, to date, are only proposing measures to reduce the increase, rather than reverse it. When the debt bomb explodes - within the next one to three years - expect to see record high real interest rates and/or inflation, coupled with a collapse of many "entitlements." It will be like the neutron bomb, the buildings will be left standing, but the people will not.
... as the ultra-loose monetary policy of the US Federal Reserve forces China and the vibrant economies of the emerging world to forge a new global currency order, according to a new report by HSBC.
Ambrose Evans-Pritchard, Telegraph.co.uk "The dollar looks awfully like sterling after the First World War," said David Bloom, the bank's currency chief.
"The whole picture of risk-reward for emerging market currencies has changed. It is not so much that they have risen to our standards, it is that we have fallen to theirs. It used to be that sovereign risk was mainly an emerging market issue but the events of the last year have shown that this is no longer the case. Look at the UK – debt is racing up to 100pc of GDP," he said
Crucially, China and rising Asia have reached the point where they can no longer keep holding down their currencies to boost exports because this is causing mayhem to their own economies, stoking asset bubbles. Asia's "mercantilist mindset" of recent decades is about to be broken by the spectre of an inflation spiral.
The policy headache was already becoming clear in the final phase of the global credit boom but the financial crisis temporarily masked the effect. The pressures will return with a vengeance as these countries roar back to life, leaving the US and other laggards of the old world far behind.
A monetary policy of near zero rates – further juiced by quantitative easing – is completely incompatible with circumstances in most of Asia, the Middle East, Latin America, and Africa.
One of the strongest opponents of government intervention in reforming the health care industry is Ron Paul — a Republican congressman from Texas. He's known to some as "Dr. No" for his opposition to tax hikes and refusal to vote for spending bills. He's a doctor by training — an OB-GYN — and he's written a new book called End the Fed — as in the Federal Reserve. He tells Weekend All Things Considered host Guy Raz that he doesn't believe health care is a right.
Ron Paul: I do not believe peoples' needs or desires or wants or demands are rights. Once you do that, you embark on a system of government that is uncontrollable. You have a right to your life, your liberty and you should have a right to keep what you earn. So I do not believe medical care is a right. And that's one of the problems that we're facing today and why there's so much confusion on what we ought to do about health care. Read the rest...
IN THE WORDS OF RICHARD RUSSELL, THE MARKET'S JOB IS TO SEPERATE YOU FROM YOU MONEY!
James Grant, the interest rate observer, says "Our Great Recession would be marked for greatness if for no other reason than by the outpouring of federal dollars to repress it," and it may boom the stock market despite growing unemployment and consumer retrenchment.
"... by driving money market interest rates to zero and by setting all-time American records in money-printing ($1.2 trillion conjured in the past 12 months), the Fed is putting the value of the dollar at risk. Its wide-open policy all but begs our foreign creditors to ask the fatal question, What is the dollar, anyway? Why, the dollar is a scrap of paper, or an electronic impulse, the value of which is anchored by the analytical acuity of the monetary bureaucracy that failed to predict the greatest financial crackup since the 1930s.
The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets."
I can’t take it anymore. After hearing foes of big government slandered by the liberal press for their alleged racism, can I just point out that Obama won the Democratic nomination because of blatantly racial voting by blacks in the primaries? (This is the probable explanation for why a guy who virtually tied Hillary in the raw vote was always ahead in delegates. Hill would win a CD and split the delegates; Obama would win all the delegates in black CDs.) Obama won as much as 90% of the black vote against a fellow liberal Democrat who spent decades courting black voters. I don’t recall the liberal press ever doing features on “racist” black voters discriminating against Hillary based on her skin color.
Update: Memory did serve me correctly. Hill had more votes than Obama which means that racial voting put him over the top. Take that MSM! Also, that racial voting was engaged in by millions. In sharp contrast, the MSM relies on ten signs at a huge rally—signs that may have been a false flag operation—to label a whole movement racist. Keep up the great works guys. LRC blog
Irving Kristol, whom I once hosted (at George Roche’s request) for a week of lectures at Hillsdale College, was a brilliant Machiavellian. Using his early training as a Trotskyite, and a natural talent for organizing, recruiting, and demagoguery, he managed to take over the Stupid Party, i.e., the conservative movement and the Republicans. Whatever was good, he purged or smeared, in the cause of what he dubbed “neoconservatism”: corporatism, global war, and imperialism, with a special orientation towards Israel. He also influenced the major conservative foundations, and used their resources to great effect. As might be expected, he had a special animus for libertarianism and Ludwig von Mises, whom he denounced to me. As a warmonger and promoter of the police state, he had much blood on his hands, and wanted more. He leaves behind his son Bill, to carry on his work. (Thanks to C.J. Maloney)
GIVING WHOLE NEW MEANING TO THE TERM "CLASSLESS SOCIETY"
Let's say you're preparing dinner and you realize with dismay that you don't have any certified organic Tuscan kale. What to do?
Here's how Michelle Obama handled this very predicament Thursday afternoon:
The Secret Service and the D.C. police brought in three dozen vehicles and shut down H Street, Vermont Avenue, two lanes of I Street and an entrance to the McPherson Square Metro station. They swept the area, in front of the Department of Veterans Affairs, with bomb-sniffing dogs and installed magnetometers in the middle of the street, put up barricades to keep pedestrians out, and took positions with binoculars atop trucks. Though the produce stand was only a block or so from the White House, the first lady hopped into her armored limousine and pulled into the market amid the wail of sirens.
Then, and only then, could Obama purchase her leafy greens.
"Option" Mortgages to Explode, Officials Warn! Could Hit High-End Market Segment Hardest!
WASHINGTON (Reuters) - The federal government and states are girding themselves for the next foreclosure crisis in the country's housing downturn: payment option adjustable rate mortgages that are beginning to reset.
"Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama's administration to discuss ways to combat mortgage scams.
"That's the next round of potential foreclosures in our country," he said.
Option-ARMs are now considered among the riskiest offered during the recent housing boom and have left many borrowers owing more than their homes are worth. These "underwater" mortgages have been a driving force behind rising defaults and mounting foreclosures.
In Arizona, 128,000 of those mortgages will reset over the the next year and many have started to adjust this month, the state's attorney general, Terry Goddard, told Reuters after the meeting.
"It's the other shoe," he said. "I can't say it's waiting to drop. It's dropping now."
The mortgages differ from other ARMs by offering an option to pay only the interest each month or a low minimum payment that leads to a rising balance in the loan's principal.
When the balance of the loan reaches a certain level or the mortgage hits a specific date, the borrower must begin making full payments to cover the new amount. The loan's interest rate also may have been fixed at a low level for the first few years with a so-called teaser rate, but then reset to a higher level.
Because the new monthly payments can be five or 10 times what borrowers are accustomed to paying, they "threaten a much greater hit to the consumer than the subprimes," Goddard said, referring to the mortgages often extended to less credit-worthy
“Charles Goyette makes a strong case for a coming dollar collapse, and provides a sensible plan to protect your wealth. Don't wait for the dollar to melt down---protect your assets before they melt down with it."
— Peter D. Schiff, president of Euro Pacific Capital, Inc. and author of Crash Proof 2.0
"San Diego Sheriff Bill Gore deployed (but did not use) military type sonic crowd-control devices at two town hall meetings, one held by GOP Darrell Issa and the other by Democrat Susan Davis. These devices are the same as those used to control crowds of insurgents in the Iraq war theatre and have been linked to ear and brain injury."
The following account is from The Charles Goyette Show in 2006 about the Secretary of the Air Force threatening use of "LRAD" (long range acoustic devices) on civilians :
It fell off the national media radar awfully quickly, but here's a followup:
The Wynne story came and went so quickly that radio journalist Charles Goyette from KFNX in Phoenix tried to follow up. An interview was scheduled with the Air Force Secretary's spokesman, USAF Major Aaron Burgstein, to get elaboration on the Secretary's remarks. But Burgstein cancelled at the last minute without explanation.
Burgstein's email to Goyette added that "SECAR (Wynne) is not advocating using non-lethal weapons on the American public," just that they be "fully tested first before they're employed overseas" because our enemy "uses any and all opportunities to wage a propaganda war." Sounds benign enough. Unfortunately, it directly contradicts what Wynne actually said. "If we're not willing to use it here against our fellow citizens," said Wynne, "then we should not be willing to use it in a wartime situation."
"If they are used in the US," Burgstein wrote Goyette, "it would be by the police, not the military." Burgstein equates these energy beams to tasers, perhaps unaware of the controversy surrounding a number of taser injuries and deaths.
ACORN (Association of Community Organizations for Reform Now) is once again in the news, with some of its "tax counselors" being videotaped giving advice on tax evasion to two people posing as a pimp and a hooker and looking for a government-subsidized loan for a brothel. The two imposters also told the ACORN "counselors" that they intended to bring dozens of teenage girls into the country illegally from Central America to "work" in the brothel. On the videotape the counselors happily advised them on how to go about doing this without the legal authorities finding out about it. They seemed quite knowledgeable and experienced in such matters.
The organization is also being investigated by government authorities for allegedly perpetrating vote fraud, among other possible crimes. (Recall that ACORN is the organization that Barack Obama attached himself to after earning his Harvard law degree. During the presidential campaign his main claim to having the experience that would qualify him to be president was his "community organizing" experience while working for ACORN).
ACORN may be found guilty of the relatively petty crimes it is now being accused of, but there is a much larger issue that is being ignored. Over the past thirty years or so, ACORN has been a major player in what can be described as a legalized extortion racket administered by the Federal Reserve and the Comptroller of the Currency, among other federal government agencies. The racket started with Jimmy Carter’s 1977 Community Reinvestment Act (CRA), which empowered "community groups" like ACORN to effectively extort billions (yes, billions with a "b") of dollars from banks. Much of the money is then used for ACORN’s political activities, which involve the mass registration of Democratic Party voters; supporting left-wing political candidates at all levels of government; organizing rallies, protests, and lobbying efforts for various planks of its "People’s Platform," which is essentially the same as the Socialist Party Platform of 1922. The "People’s Platform" once promised, "We will continue our fight until the American way is just one way, until we have shared the wealth . . ." Accordingly, the organization has advocated the government takeover of the energy and healthcare industries, punishing taxation, massive income redistribution, pervasive price controls, and just about every asinine socialistic policy that one can think of. Tom Dilorenzo, LRC
"It's the new deadbeat, can't-get-a job, rocketing-inflation, trashed-currency, can't-sell-my-house, can't-make-my-payments, bankrupt-mafia-government, kazillions-in-debt, trade-warring-with-China recovery – that's what it is.
W. BAILS OUT THE ECONOMY: From Bush White House Speechwriter Matt Latimer:
...the president was clearly confused about how the government would buy these securities. He repeated his belief that the government was going to “buy low and sell high,” and he still didn’t understand why we hadn’t put that into the speech like he’d asked us to.
When it was explained to him that his concept of the bailout proposal wasn’t correct, the president was momentarily speechless. He threw up his hands in frustration.“Why did I sign on to this proposal if I don’t understand what it does?” he asked.
One of the president’s staff members anxiously pulled a few of us aside. “The president is misunderstanding this proposal,” he warned. “He has the wrong idea in his head.” As it turned out, the plan wasn’t to buy low and sell high. In some cases, in fact, Secretary Paulson wanted to pay more than the securities were likely worth ...
When White House press secretary Dana Perino was told that 77 percent of the country thought we were on the wrong track, she said what I was thinking: “Who on earth is in the other 23 percent?”
THE NEW RULES! There Goes the Constitutional Republic!
Andrew Napolitano, WSJ.com:"Last week, I asked South Carolina Congressman James Clyburn, the third-ranking Democrat in the House of Representatives, where in the Constitution it authorizes the federal government to regulate the delivery of health care. He replied: "There's nothing in the Constitution that says that the federal government has anything to do with most of the stuff we do." Then he shot back: "How about [you] show me where in the Constitution it prohibits the federal government from doing this?"
Rep. Clyburn, like many of his colleagues, seems to have conveniently forgotten that the federal government has only specific enumerated powers. He also seems to have overlooked the Ninth and 10th Amendments, which limit Congress's powers only to those granted in the Constitution."
Fascism will come at the hands of perfectly authentic Americans who have been working to commit this country to the rule of the bureaucratic state; interfering in the affairs of the states and cities; taking part in the management of industry and finance and agriculture; assuming the role of great national banker and investor, borrowing billions every year and spending them on all sorts of projects through which such a government can paralyse opposition and command public support; marshalling great armies and navies at crushing costs to support the industry of war and preparation for war which will become our nation’s greatest industry; and adding to all this the most romantic adventures in global planning, regeneration, and domination – all to be done under the authority of a powerfully centralised government in which the executive will hold in effect all the powers, with Congress reduced to the role of a debating society.
CAN YOU BUY THE ALLEGIANCE OF A PROFESSION WITH A FEW BILLION DOLLARS?
WE REPORT-- YOU DECIDE
The Social Security system has long been described as the third rail of American politics. "Touch it, and you die." You get electrocuted. If you should somehow survive, the next subway train will cut you in pieces.
There is such a rail in academia: the Federal Reserve System.
A fascinating article appeared on the Huffington Post on September 10. Its title was good, and its content was better: "Priceless: How the Federal Reserve Bought the Economics Profession." The title is a veiled reference to a popular series of MasterCard TV ads. The author began with this, and never looked back.
The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.
This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too.
It is a long article and well worth reading. It presents evidence that the Federal Reserve for three decades has had almost the entire profession of monetary economists on its payroll, one way or another.
What are the long-term trends that will drive our economy, trends of economic behavior and demographics? Here are some suggestions from Jeff Harding at TheDailyCapitalist.com.
While I don't agree with them in all particulars, in general I believe his consclusions are sound. The following seven bullet points that may lead you to consider his arguments in more detail:
Megatrend No.1. The culture of consumption is broken and won’t return to former levels. This is the key to everything.
Megatrend No. 2. Consumers will continue to increase savings to prepare for retirement.
Megatrend No. 3. Declining U.S. consumer demand will continue to negatively impact the world economy.
Megatrend No. 4. Deflation will continue for some time.
Megatrend No. 5. Home ownership rates will decline to more historical levels of, say, around 66%, down from the high of 69% during the boom, which will keep a lid on home prices.
Megatrend No. 6. Government stimulus and recovery programs only delay recovery and deepen the pain for workers.
Megatrend No. 7. Massive federal deficits will double the national debt, result in higher taxes, and will act as a permanent drag on the economy.
HIS NOTEBOOK WAS BURNED BY THE U.S. ARMY - But His Journal Survived!
"Were our case for war even somewhat justifiable, no doubt many of our traditional allies...would be praising our initiative... However, every leader of the world, with very few exceptions, is crying foul, as is the voice of much of the people. This leads me to believe that we have little or no justification other than our imperial whim. Of course (my brother) & I have... willingly allowed ourselves to be pawns in this game and will do our job whether we agree with it or not.
All that we ask it that it is duly noted that we harbor no illusions of virtue."
WHY SPEND DAYS TRYING TO TRACK DOWN A HARD TO FIND SPECIAL GEAR, GROMMET OR A GADGET...
WHY NOT JUST PRINT THE ONE YOU NEED - IN 3D - ON YOUR DESKTOP!
Producing solid objects, even quite complex ones, with 3-D printers is gradually becoming easier and cheaper. Might such devices some day become as widespread as document printers?
THE RECEDING TIDE OF PROTECTIONISM GROUNDS ALL SHIPS!
Mish with a Report from Mail Online about the Ghost Fleet of Recession!
The world's ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world's economies!
13 September 2009 Editor, The New York Times 620 Eighth Avenue New York, NY 10018
To the Editor:
By saving millions of people from starvation, green-revolution father Norman Borlaug arguably has done more for humanity than has any other human being of the past century ("Norman Borlaug, 95, Dies; Led Green Revolution," Sept. 13). Yet unlike Sen. Kennedy's, his death will go relatively unnoticed. He'll certainly not be canonized in the popular mind.
Alas, in our world, melodramatic loud-mouths thunder to and fro in the foreground, doing little of any value while stealing most of the credit for civilization. Meanwhile, in the background, millions upon millions of decent, creative people work diligently at their specialties - welding, waiting tables, performing orthopedic surgery, designing shopping malls, researching plant genetics - each contributing to the prosperity of the rest. Some contributions are larger than others (as Dr. Borlaug's certainly was) but even a contribution as colossal as his is quickly taken for granted, any potential notice of it submerged beneath the self-congratulation, swagger, and bellicosity of the politicians who pretend to be prosperity's source. How wrong.
Sincerely, Donald J. Boudreaux Professor of Economics George Mason University Fairfax, VA 22030
This is a long pamphlet about the medical industry, or "health care" as we've been taught to call it. It's about 50 pages.
It's an interesting analysis, by George Reisman, of the problems in this industry as existed in 1994 when it was written-- when HillaryCare was being promoted by all the closet Socialists/Fascists in Washington and elsewhere.
The claims of its proponents are analyzed and found wanting. Incentives at the heart of the system are examined and shown to be the cause of the continuing and alarming rise in costs- costs that are created by the system. Claims about the ability of the government to add 30 some millions of new consumers to the system and simultaneously lower costs without imposing rationing are exposed as the fairy tales that they are. Real reforms are suggested that are radical and pretty fascinating.
Does all of this sound familiar? The arguments of the Fascists haven't changed much in the last fifteen years.
There are meetings being held Monday and Tuesday in Yekaterinburg, Russia, (formerly Sverdlovsk) among Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization. The United States, which asked to attend, was denied admittance. Watch what happens there carefully. The gathering is, in the words of economist Michael Hudson, “the most important meeting of the 21st century so far.”
“Yekaterinburg,” Hudson writes, “may become known not only as the death place of the czars but of the American empire as well.” His article is worth reading, along with John Lanchester’s disturbing exposé of the world’s banking system, titled “It’s Finished,” which appeared in the May 28 issue of the London Review of Books....
“It means China, Russia, India, Pakistan, Iran are forming an official financial and military area to get America out of Eurasia. The balance-of-payments deficit is mainly military in nature. Half of America’s discretionary spending is military. The deficit ends up in the hands of foreign banks, central banks. They don’t have any choice but to recycle the money to buy U.S. government debt. The Asian countries have been financing their own military encirclement. They have been forced to accept dollars that have no chance of being repaid. They are paying for America’s military aggression against them. They want to get rid of this.”
HAS HIS DEATH BEEN CONCEALED TO SUIT THE PURPOSES OF WARMONGERS?
'All the evidence suggests Elvis Presley is more alive today than Osama Bin Laden.'
- Angelo M. Codevillaformer U.S. foreign intelligence officer
and American Spectator Senior Editor
Prof Codevilla pointed to inconsistencies in the videos and claimed there have been no reputable sightings of Bin Laden for years (for instance, all interceptions by the West of communications made by the Al Qaeda leader suddenly ceased in late 2001).
Prof Codevilla asserted: 'The video and audio tapes alleged to be Osama's never convince the impartial observer,' he asserted. 'The guy just does not look like Osama. Some videos show him with a Semitic, aquiline nose, while others show him with a shorter, broader one. Next to that, differences between the colours and styles of his beard are small stuff.'
There are other doubters, too. Professor Bruce Lawrence, head of Duke University's religious studies' department and the foremost Bin Laden expert, argues that the increasingly secular language in the video and audio tapes of Osama (his earliest ones are littered with references to God and the Prophet Mohammed) are inconsistent with his strict Islamic religion, Wahhabism. He notes that, on one video, Bin Laden wears golden rings on his fingers, an adornment banned among Wahhabi followers.
The Beatles are everwhere this month: TV retrospectives, CD's for sale in Starbucks, on the radio and background music in restaurants and stores... and now on Rock Band!
Here's my contribution, a great performance from friend Chris Bliss. Enjoy!
Is the government a policeman or a felon? Fed turns a blind eye to wholesale fraud, corruption, and abuse.
Karl Denninger, MarketTicker.org: Out-of-control banana republic regimes usually wind up that way incrementally. Rarely does a madman come to power and simply seize the crown. Oh sure, it happens, but it nearly always incites immediate civil disorder and even open warfare, civil or (often) externally-promoted. When Saddam invaded Kuwait it did not take long before the world responded with lots of guns, bombs and planes, as just one example.
But the slow, gradual co-opting of a government from inside out is another matter. These sorts of regimes usually collapse of their own weight, but not before they take down huge swaths of the population with them, reducing them to squalor. Thus it happened in Zimbabwe, Argentina and countless others over the years.
Has it happened in the United States already, but the people simply haven't woken up? Two years ago, five, ten I would have instantly dismissed such a proposition as preposterous. Now I'm not so sure.
As I'm sure many of you know, there is a whole industry (e.g. here) out there on how The Man is keeping down gold prices in order to keep everybody fat and happy with hanging on to fiat money. This stuff is typical of conspiracy theories; some of it is plain common sense--like quoting Greenspan and Bernanke saying matter-of-factly that they and other central bankers discuss when to sell gold when its price gets too high--whereas other stuff seems to think that there is no true market in gold at all, and that every wiggle in the price reflects Bernanke's mood.
But today, the conspiracy theorists have a good case. Gold shot up this morning above $1,000, but now has fallen back down to $998.60 (as of this writing), making it up about 0.19% for the session. But here's the interesting thing: Silver is up 1.57%, oil is up 5.03%, natural gas is up 4.36%, the euro is up 1.36%, the USD buys 1.04% fewer yen, and the British pound is up 1.1%.
Isn't that a bit odd? Obviously, every market is unique, but in its capacity as an internationally traded and fungible commodity, you'd think gold would perform comparably to those other things mentioned. And yet its initial gains out of the chute have been beaten back by some sellers. I wonder who?
Give me a B...B! Give me an E...E! Give me an N...N!
Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership.
- Sen. Barack Obama, 2006
ZeroHedge.com:Ironically, the President now has to completely backtrack on his rhetoric and must tell his adoring public that he was only kidding in 2006, being a young and foolish Senator, while the grizzled and cynical Obama of today is forced to convince another pack of young and foolish Senators to raise the US federal debt ceiling from $12.1 trillion to $13 trillion. Absent this approval, the US will likely default by mid-October.
ZeroHedge.com has begun a petiton drive to protest increasing the Federal debt ceiling: Once we have collected your signatures, we will forward the petition over to members of Senate who will certainly not change their behavior, and who will absolutely pass Obama's debt ceiling increase request, but who will be made aware that an increasing number of Americans are watching their every step and grow increasingly disapproving of the actions taken by both the Senate and the Congress, as they pile on a skyrocketing and untenable debt burden for future generations, all with the simple goal of buying some more election goodies and making sure that the current banking system can indefinitely postpone its inevitable day of reckoning.
The US Federal Reserve's policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy. Ambrose Evans-Pritchard, Telegraph.co.uk: Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive, said Beijing was dismayed by the Fed's recourse to "credit easing".
"We hope there will be a change in monetary policy as soon as they have positive growth again," he said at the Ambrosetti Workshop, a policy gathering on Lake Como.
"If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies," he said. China's reserves are more than – $2 trillion, the world's largest.
"Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets," he added.
Pat Buchanan, Antiwar.com: If we compare Afghanistan to Vietnam, we are about in 1964, when the Tonkin Gulf Resolution was passed and the bombing of the North began, or December 1965, when the Marines came ashore at Danang.
Obama can still choose not to fight this war.
... And it needs be said: The consequences of a U.S. withdrawal today would be far greater than if we had never gone in, or had gone in, knocked over the Taliban, run al-Qaeda out of the country, gotten out, and gone home.
Instead, we brought NATO in, put tens of thousands of troops in and declared our determination to build an Afghan democracy that would be a model for the Islamic world, where women’s rights were protected.
After inviting the world to observe how the superpower succeeds in taking down a tyranny and creating a democracy, we will have failed, and we will be perceived by the whole world to have failed.
"Some of its biggest boosters don't even quite believe it!"
Lew Rockwell: A year ago this month, the whole country was in agreement that we had been living an illusion for the previous ten years and that the prosperity we thought we were enjoying was not sustainable. There was no dissent on this point. Even Obama admitted it. Today, the illusion is even more egregious than it was, and yet people are once again embracing it as if it will not end.
The policy response to the downturn has been one of the most short-sighted and economically irrational in the entire history of mankind.
"Charles Goyette makes a strong case for a coming dollar collapse, and provides a sensible plan to protect your wealth. Don't wait for the dollar to melt down---protect your assets before they melt down with it."
— Peter D. Schiff, president of Euro Pacific Capital, Inc. and author of Crash Proof 2.0
The Dollar Meltdown from Portfolio/Penguin Books, in bookstores on October 29 - the anniversary of the 1929 stock Market Crash!
Find out more and pre-order The Dollar Meltdown now HERE!
Bob Murphy's blog: Progressive Thought [i.e. regressive thought]: Be Afraid, Be Very Afraid
So Bob Roddis got me into the bad habit of checking Matt Yglesias' blog every few days. In this post he follows the all-too-easy pattern--and right-wing pundits do this too--of disposing of an argument by pointing out that the federal politicians making it are (surprise surprise) a bunch of hypocrites:
[A]ll the Republicans plus Senators Baucus (D-MT), Bayh (D-IN), Cantwell (D-WA), Landrieu (D-LA), Lincoln (D-AR), Murray (D-WA), Nelson (D-FL), Nelson (D-NE), Pryor (D-AR), and Tester (D-MT) thought nothing of adding hundreds of billions of dollars to the deficit when the beneficiaries were a tiny number of already wealthy households. But quite a few of these people seem very concerned about the idea of spending similar amounts of money on making health insurance affordable to middle class Americans.
I was curious to see if anybody in the comments would point out that the deficit (and long-term forecast of the debt) was a heckuva lot lower when the death tax was phased out. (I assume that's what they're talking about; I didn't follow the link to be sure.) After all, using Yglesias' argument as-is, I could "prove" my new next door neighbor was a hypocrite by asking why he didn't buy any house in the city that was as expensive or cheaper than the house he just bought. He can afford it, right?
Anyway, one guy (Brad) in the comments said:
I love it when liberals characterize not confiscating wealth from taxpayers as a “cost.” By that logic, failing to confiscate the entire GDP “costs” the government $13 trillion every year. Those bastards! Blowing a hole in the budget! Liberals really do see every dollar in the US economy as belonging to the US government first.
Not bad, not bad. Some liberals on that thread shot back decent (from their POV) responses (and again I point out that minarchists really have nothing good to say here, except pointing to the vision of some dead guys who wrote the Constitution). But then I read this response that took my breath away:
"Liberals really do see every dollar in the US economy as belonging to the US government first."
Yes, Brad, I for one, do. Who prints the dollar in the first place? Who issues it? And whose collective will imbues the dollar with its value?
Whoa.
[Does anyone really believe that the above comment comes from someone who earns a living?]
In a letter to The Daily Telegraph, a group of experts who care for the terminally ill claim that some patients are being wrongly judged as close to death.
Under NHS guidance introduced across England to help doctors and medical staff deal with dying patients, they can then have fluid and drugs withdrawn and many are put on continuous sedation until they pass away.
But this approach can also mask the signs that their condition is improving, the experts warn.
As a result the scheme is causing a “national crisis” in patient care, the letter states. It has been signed palliative care experts including Professor Peter Millard, Emeritus Professor of Geriatrics, University of London, Dr Peter Hargreaves, a consultant in Palliative Medicine at St Luke’s cancer centre in Guildford, and four others.
“Forecasting death is an inexact science,” they say. Patients are being diagnosed as being close to death “without regard to the fact that the diagnosis could be wrong."
In the current global manic rush by central banks to inflate and by governments to spend that paper, there are a few observers who have expressed concern that at some future date this wholesale, last ditch Keynesian and Statist approach just might actually produce "inflation."
Many Wall St. types argue "No, inflation is not the problem and is not likely to be the problem for some time. And besides, gold is quiet, not signaling any concern about inflation." Though they like to espouse free market generalities from time to time, these same Wall St. types actually want the State(s) to intervene to protect this or that asset class – to which they are personally attached and now sinking with. While investors are down in most asset categories by 40% in 2008, the orthodox investor and his portfolio manager can’t weather another 20% drop this year! "Oh sure, Keynes was full of it, but good grief we can’t stop this stimulus because it just might work. It must work!" All intellect out the window, it’s desperation time, wish-fulfillment time on Wall St! And how short their memories – failure to remember the policies of the Fed, from August, 2007 onward when the Fed – armed to the teeth with "surprise" interventions – sought time-after-time to halt the ratcheting decline in equity and real estate prices. Was that a success? Or did those penny-in the-fusebox actions merely delay and therefore intensify the decline to the point where a market correction morphed into a collapse? So, let’s do it some more and find out yet again! We can then worry about an "exit strategy" later, we are told.
So, with that as a backdrop, what has been going on with the various "asset classes" in recent years? And especially, what if anything does gold tell us about the risk of inflation? Is it really the quiet unconcerned metal that these State apologist economists claim? Historically gold is a wise metal that often anticipates inflationary and deflationary trends; defining inflation in the Austrian School manner – as growth in the money supply (s), which we now must think of globally, not merely as a U.S. monetary and fiscal event. Read the rest...J. Mike Oliver LRC
To borrow from Mark Antony’s funeral oration, we of the affirmative are not here to praise Mr. Churchill — but to bury him.
But, first, let us concede the greatness of the man.
In that finest hour of the British nation, 1940, Winston Churchill was indomitable, an inspiration to men everywhere. He was the Lion who gave Britain’s roar of defiance in the face of Hitler’s Germany. For that, he will be honored by peoples everywhere — and forever.
And if we judged him on that year alone, there would be no debate. There would be unanimity.
But Churchill’s career did not last a single year. It lasted half a century. And, over that half century, no other career of a Western statesman was more calamitous for his country and his civilization than that of Winston Spencer Churchill. AntiWar.com
THE ANTIWAR CANDIDATE, BARACK OBAMA, TO CINDY SHEEHAN:
"GET LOST!"
John V. Walsh, Antiwar.com:"I spent but a short time with Cindy Sheehan as she carried her antiwar protest from an earlier time at Crawford, TX, to Martha’s Vineyard, vacation spot for Obama and many other Democrat Party elite. As Cindy remarked, the real story was not that she was protesting Obama’s wars but that the "leadership" of the peace movement did not support her protest. When the target was Bush in Crawford, she was all the rage with antiwar celebrities, but not so now that the target is Barack Obama. While there is considerable enthusiasm for her anti-Obama protest on the part of the rank and file in the anti-war movement, a refusal of its "leaders" to notify their members far and wide, high and low, crippled the action.
As a result of this betrayal, the numbers at Martha’s Vineyard were not large. But Cindy and her fellow anti-warriors were undeterred. "
DeGAULLE SENT THE NAVY TO PICK UP FRENCH GOLD FROM THE U.S. WHEN THE DOLLAR WAS BEING DISHONESTLY MANAGED.
HONG KONG GETS IT!
(MarketWatch) -- Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city's airport, in a move that won praise from local traders Thursday.
The facility, industry professionals said, would support Hong Kong's emergence as a Swiss-style trading hub for bullion and would lessen London's status as a key settlement-and-storage center.
"Having a central government-sponsored vault would create a situation where you could conceivably look at Hong Kong as being a hub, where metal could be traded for the region," said Sunil Kashyap, managing director at Scotia Capital in Hong Kong, adding that the facility was the first with official government backing in the region.
The Hong Kong Monetary Authority, which functions as the territory's unofficial central bank, will transfer its gold reserves stored in other vaults to the depository later this year, the Hong Kong government said in an earlier statement.
Didn't Murray Rothbard describe years ago how the regulators become captive of the regulated?
Clusterstock.com: Ponzi schemer Bernie Madoff told SEC investigators that he might be their boss someday.
This bit of info comes straight out from the SEC’s Inspector General David Kotz’s report, which says that that’s what the Madoff told the commission during one of its investigations.
Madoff also gloated to the “investigators” that he knew that Christopher Cox was to be the next SEC chairman, just a few weeks before his nomination.
... all throughout the examination, Bernard Madoff would drop the names of high-up people in the SEC. Madoff told them that Christopher Cox was going to be the next Chairman of the SEC a few weeks prior to Cox being officially named. He also told them that Madoff himself "was on the short list" to be the next Chairman of the SEC.
From the SEC report: Throughout the examination, the NERO examiners "had a real difficult time dealing with" Madoff as he was described as growing "increasingly agitated" during the examination, and attempting to dictate to the examiners what to focus on in the examination and what documents they could review.
Yet, when the NERO examiners reported back to their Assistant Director about the pushback they received from Madoff, they received no support and were actively discouraged from forcing the issue.
"An age of loose money not only destroys savings; it corrodes character."
It is no coincidence that the Western leader most worried about a new bout of inflation is German chancellor Angela Merkel. If there is one thing that Germans agree about, it is the necessity—social and political as much as economic—of a sound currency. The hyperinflation of the 1920s brought about a German change in mentality as great as, or greater than, the one caused by World War I, with what disastrous consequences 50 million dead might attest if they had voice. The solidity of the deutsche mark was the great German achievement of the second half of the twentieth century.
Inflation is not a bogey for everyone—not for those who wish to restructure society, for example, or for those who want government control of ever more aspects of people’s lives. But for the rest of us, the consequences of its full-blown return are not likely to be good: for inflation is not an economic problem only, or even mainly, but one that afflicts the human soul.
MOONBEAM KRUGMAN: HE'S SHOCKED, SHOCKED I TELL YA...
Government deficits totaling $9 trillion over the next ten years are coming, the Obama administration now projects. (Up from its prior projection of $7 trillion. For perspective, $9 trillion is over 20% more than the entire national debt accumulated from George Washington's inauguration until today: $7.4 trillion).
Many commentators are alarmed. Prof Hamilton at Econbrowser illustrates alarm with a nifty chart showing the difference for the worse between now and the last time such debt levels were reached, during World War II, and draws Paul Krugman's attention.
Krugman's response: Good God! He's "terrified"! This is a "looming threat to the federal government's solvency"!! No less than that. Brace yourself for the horrors he predicts, quoting here ... Read the rest Scrivener.net
From Bob Murphy's blog: I Want to Be Chris Martenson When I Grow Up (and BTW the Dollar Is Toast)
Wow. Chris Martenson was the guy who snooped around bond CUSIPs and realized the Fed bought up 47% of the freshly issued Treasurys from primary dealers the week after the auction. Now on his website he has made available a blockbuster report (that his paying members got a few weeks ago). (HT2EPJ) Really, if I hadn't been blessed with such a phenomenal ability to speak in public, I would have to work like Martenson and write analyses like this.
I am still checking on some definitions with various experts, to make sure I really understand all the capital flows etc. that Martenson throws around in this thing. But check out this graph and tell me if you aren't a little more concerned about the strength of the USD. (And note that right now, there is apparently a net outflow of capital from the dollar coupled with a current account deficit. I had thought this was an accounting impossibility, so that's one of the things I'm still checking on.)
Here are some salient excerpts from the report:
Since the start of 2009 and continuing through the month of May, private investors sold [on net] $364 billion dollars worth of US assets, while central banks purchased $50 billion dollars worth (source is a .csv file available here from the Treasury)...
Here we note that agency bonds peaked in October of 2008 at nearly a trillion dollars but have declined by $178 billion since then. Treasuries, on the other hand, have increased by over $500 billion over that same span of time. A half a trillion dollars! If you were wondering how the US bond auctions have managed to go so smoothly, here's part of your answer.
What is going on here? How is it possible that central banks are buying so many Treasury bonds, at the fastest rate of accumulation on record?
It would appear that foreign central banks have been swapping agency bonds for Treasury bonds, but that's not how the markets work. First, they would have to sell those bonds, before they could use the proceeds to buy government debt. So to whom did they sell those Agency bonds in order to afford the Treasury bonds?
Here we might recall that the Federal Reserve has been buying agency bonds by the hundreds of billions.
Martenson is my hero; he has solved the mystery (or at least a big chunk of it). I could not fathom how it was that anybody--even foreign central bankers--could allow CNBC to write a headline today, "Foreigners Snap Up Treasurys Even as US Debt Keeps Rising." I mean, it just didn't make any sense. Why would the Chinese and Russians be talking about a new global currency, if they intended to keep on stockpiling dollar-denominated assets?
Well, if Martenson's right, the answer is the Fed. (That's probably the only time you will ever see me end a sentence with those 5 words.) I'll save the punchline for Martenson, as he deserves the honor:
Shell #1: Foreign central banks sell agency debt out of the custody account.
Shell #2: The Federal Reserve buys those agency bonds with money created out of thin air.
Shell #3: Foreign central banks use that very same money to buy Treasuries at the next government auction.
As I read Martenson's report, I was reminded of Ralphie's father from A Christmas Story when he beheld his prized lamp and declared, "It's indescribably beautiful."
A Nation Crazed with Raising Children on Powerful Psychoactive Drugs...
- ChartoftheDay.com
