August 8th, 2011

After Debt Downgrade

The TGB Report | Thomas G. Brown

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default” said Greenspan on NBC’s Meet the Press. This is just some more lying by Former Fed Chair Allen Greenspan when discussing the possibility of the government defaulting on debt now that it had been downgraded. He like all other government officials cannot admit that the scam that is the Federal Reserve, the Ponzi schemes that are Social Security and Medicare as well as the wars overseas all contributed to the present situation.

The day after the Budget Control Act (S. 365) where 163 House members voted against it and 28 Senators did the same the bill passed despite it doing anything to cut the debt or make any actual changes to our spending habits as a nation. $400 billion was spent the first day due to a increase in the debt by $239 billion dollars. When the President certifies that we are within $100 billion of the debt limit the Joint Committee will have the ability to recommend an increase of the debt ceiling by $1.2 and $1.5 trillion.

Until we get rid of the Federal Reserve (Central Bank) and the fractional reserve system of banking and get back to a system of money that is backed by gold (or silver). Why back the system with one of these two metals? Simple, gold and silver have been money for over 5,000 years. In addition they are both mined from the ground and cannot be inflated like fiat paper currency or in current situation by computers. Yes, it is true that banks can manipulate the amount of gold/silver certificates (paper money) by creating more than they have in gold/silver reserve. But, If we had banks that competed for our businesses much like any other business this would not happen that much as most banks would want a good reputation in order to gain your business. In addition with today’s technology it is easier carry gold around with you in the form of a debit card or on your smart phone. Take GoldMoney for instance. This company allows you to purchase products and services with your gold using computer technology to transfer the amount needed to complete your transaction from your account to the store. This service has been around for several years and continues to grow more each day

Steps You Can Take to Protect Yourself From “Hurricane Reality”

The Daily Bell | Anthony Wile

Anthony Wile

Last week I discussed the nature of the “time taxers” and how easy it is for people to blindly be lulled into living their life in service of the State – or those who control it. And in that editorial I suggested that time, being the most precious commodity of all, is ours and ours alone to spend as we individually see fit – but that it takes knowledge of the world around us to separate the wheat from the chaff, so to speak.

Having said that, this week’s editorial will deal with some personal ideas and beliefs with respect to how people can protect their wealth amidst a global decline in confidence in fiat currencies – one that is justly going to propel the downward trajectory of them all and none more rapidly than the US dollar.

Now it has been said many times before that knowledge is power. And certainly that is true. However, I would argue that it is a certain type of knowledge – free-market thinking in its purest form – that enables one to perform a macro assessment of the world around them and to adequately predict the likely impact of major geopolitical actions and events on the overall business cycle. It involves assessing the dominant social themes being spun by the parasites who desire to siphon off the productivity of others by promoting the masses on an array of solutions to their manufactured fear-based problems. It involves a realistic assessment as to whether the larger segment of the population that tend to “dream” rather “think” will hand over their wealth and savings to the “dream weavers.”

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The Mysterious Death of Osama bin Laden: Creating Evidence Where There Is None

Global Research | Dr. Paul Craig Roberts

The New Yorker has published a story planted on Nicholas Schmidle by unidentified sources who claim to be familiar with the alleged operation that murdered Osama bin Laden.

There is no useful information in the story. Its purpose seems simply to explain away or cover up holes in the original story, principally why did the Seals murder an unarmed, unresisting Osama bin Laden whose capture would have resulted in a goldmine of terrorist information and whose show trial would have rescued the government’s crumbling 9/11 story?

The gullible Schmidle tells us: “‘There was never any question of detaining or capturing him–it wasn’t a split-second decision. No one wanted detainees,’ the special-operations officer told me.” In other words, the SEALs murdered bin Laden, because the US government did not want detainees, not because trigger-happy stupid SEALs destroyed a font of terrorist information.

Why did the SEALS dump bin Laden’s body in the ocean instead of producing the evidence to a skeptical world?

No real explanation, just that SEALS had done the same thing to other victims. Schmidle writes: “All along, the SEALs had planned to dump bin Laden’s corpse into the sea–a blunt way of ending the bin Laden myth.” But before they did so, the US checked with an unidentified Saudi intelligence operative, who allegedly replied, “Your plan sounds like a good one.”

I mean, really.

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United States loses prized AAA credit rating from S&P

Reuters | Walter Brandimarte and Daniel Bases

The United States lost its top-tier AAA credit rating from Standard & Poor’s on Friday in an unprecedented blow to the world’s largest economy in the wake of a political battle that took the country to the brink of default.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government’s budget deficit and rising debt burden. The action is likely to eventually raise borrowing costs for the American government, companies and consumers.

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P said in a statement.

The outlook on the new U.S. credit rating is “negative,” S&P said in a statement, indicating another downgrade was possible in the next 12 to 18 months.

The move reflects the deterioration in the global economic standing of the United States, which has had a AAA credit rating from S&P since 1941, and it could have implications for the U.S. dollar’s reserve currency status.

“The global system must now adjust to the many implications and uncertainties of the once-unthinkable loss of America’s AAA,” said Mohamed El-Erian, co-chief investment officer at Pacific Investment Management Co which oversees $1.2 trillion in assets.

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Ultra bearish Marc Faber says current gold price ‘low’, investors must prepare for the worst as ‘it will come to war’

Business Insider Middle East | BI-ME staff

NTERNATIONAL. Marc Faber the Swiss fund manager and Gloom Boom & Doom editor said markets are “extremely oversold” and a “snap-back” rally – 50 points on the S&P – could start as early as today.

However, he sees no new highs for the year, and expects markets to drift lower to a mid-term target of 1,050-1,100 for the S&P by October- November of this year.

In one of his gloomiest predictions, he tells investors to prepare for the worst by buying precious metals on dips.

Markets oversold

Speaking in a phone interview from Zurich with CNBC this morning, Faber said: “The market has experienced huge technical damage. Near term as of today, all markets are extremely oversold, so a rebound will happen.

“The damage technically is so great that the rebound, no matter if QE3 happens right here, is unlikely to lift the markets above the May 2 high on the S&P at 1,370,” he added.

Faber has set a mid-term target of 1,050-1,100 on the S&P 500 by October-November of this year. After, “we will have to see if QE3-QE4 will come and whether markets will stabilize.”

In general, the renowned investor said he would use rebounds as selling opportunities.

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Ron Paul Introduced Pro-gun Legislation

New American | Raven Clabough

Texas Congressman and GOP presidential hopeful Ron Paul continues to champion constitutional rights. His latest endeavor is a bill that would abolish “gun-free zones,” ultimately permitting teachers to carry firearms on school grounds. Predictably, anti-gun groups are calling the legislation “extremist.”

CNS News reports, “H.R. 2613, the Citizens Protection Act of 2011, would repeal the Gun-Free School Zones Act of 1990 and remove all federally created criminal safety zones.”

The Gun-Free School Zones Act was first enacted as section 1702 of the Crime Control Act of 1990. The text of the act reads, “It shall be unlawful for any individual knowingly to possess a firearm that has moved in or that otherwise affects interstate or foreign commerce at a place that the individual knows, or has reasonable cause to believe, is a school zone.”

Paul’s bill will permit individuals, including teachers, to carry firearms onto high-school and middle-school campuses.

The Gun-Free School Zones Act faced adamant opposition from Second Amendment advocacy groups like Gun Owners of America, which has indicated its support for Paul’s legislation.

According to a news release from Gun Owners of America, the Gun-Free School Zones Act protects criminals. The release points to attacks at Columbine, Virginia Tech, and Fort Hood, all of which are “government facilities where the private possession of firearms was prohibited.”

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The Nixon Shock

Buisness Week | Roger Lowenstein

How Nixon stopped backing the dollar with gold and changed global finance, a 40-year-old decision that still echoes in Greece, Ireland, and the U.S.

“Inauguration Day was cloudy, grim,” wrote Arthur Burns in his diary on Jan. 20, 1969. As he watched President-elect Richard Nixon, Burns—an immigrant from Galicia, the son of a housepainter who had risen to become the foremost expert on U.S. economic cycles and chief economist to Dwight Eisenhower—saw a man with “a look of exaltation about him.” It was not a feeling Burns shared. “I would have felt better if his head were bowed and his body trembled some.”

Nixon was inheriting an overheated economy—inflation was already a concern. Burns, 64, would be joining the Administration as a uniquely trusted adviser. In 1960, when then Vice-President Nixon was seeking the White House, Burns had warned him that if the Federal Reserve tightened interest rates, it could damage Nixon’s chances. It had played out just so: The Fed tightened, the economy suffered a recession, and Nixon lost to John F. Kennedy. Nixon never forgot the power of the Fed, and he remembered Burns as an economist with political savvy.

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Debating the Constitution

City Journal | Gerald J. Russello

During the recent debt-ceiling standoff in Washington, some observers debated what role, if any, the Constitution might play. An obscure provision of the Fourteenth Amendment states that the “validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions . . . shall not be questioned.” Some argued that this provision required that the debt ceiling be raised, so as to avoid a government default. Others said that the clause didn’t require raising the debt ceiling if resort to other means (such as higher taxes or reduced spending) could service the obligations. Also at issue was the question of who could make this determination—Congress or the president. Lawrence Solum and Robert Bennett have built careers exploring such questions. In their new book, they build state-of-the-art cases for the two main schools of constitutional interpretation. Each contributes a generous essay presenting the merits of his own approach and offering a thoughtful rebuttal to the other’s argument. If you’ve been seeking a concise introduction to the central debate in American constitutional theory, this is the book for you.

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Raising The Debt; Lowering The Boom | Chuck Baldwin

he big story this week is the decision of the US Congress and Senate to raise the debt ceiling. Did this really surprise anyone? Despite millions of pieces of communication from their constituents to the contrary, congressmen and senators voted by substantial margins to increase the debt ceiling by up to $2.4 trillion. The House vote was 269 to 161. The Senate vote was 74 to 26. Coincidentally, the amount of this increase to the debt ceiling is now the largest debt-limit increase in US history–all the rhetoric by politicians in DC that they are serious about “cutting” federal spending notwithstanding.

See Terence Jeffrey’s report at:

Here is a recent report regarding the debt-ceiling votes via C-SPAN:

And here is the liberal NPR report with more details:

At this point, I think it is fitting to quote Congressman Ron Paul. Dr. Paul is one of the very few people in Congress that has consistently warned the American people about the foolhardiness of America living beyond its means. Here are some excerpts from Dr. Paul’s statement regarding the debt ceiling deal:

“This deal will reportedly cut spending by only slightly over $900 billion over 10 years. But we will have a $1.6 trillion deficit after this year alone, meaning those meager cuts will do nothing to solve our unsustainable spending problem. In fact, this bill will never balance the budget. Instead, it will add untold trillions of dollars to our deficit. This also assumes the cuts are real cuts and not the same old Washington smoke and mirrors game of spending less than originally projected so you can claim the difference as a ‘cut.’

“The plan also calls for the formation of a deficit commission, which will accomplish nothing outside of providing Congress and the White House with another way to abdicate responsibility. In my many years of public service, there have been commissions on everything from Social Security to energy policy, yet not one solution has been produced out of these commissions.”

Congressman Paul went on to say:

“What should bother Americans most is that under cover of this debt ceiling circus, we learned from a recent GAO one-time, limited audit that the Federal Reserve secretly pumped $16 trillion into American and foreign banks over three years. All of the Fed’s fat cat cronies were taken care of at the expense of the American public.

“To put that into perspective, our entire national debt is $14.5 trillion, and our annual deficit will be about $1.6 trillion, meaning the Federal Reserve created and appropriated more than our entire national debt to banks around the world in a few short years. We have been fighting in Congress these past few weeks over raising our debt ceiling by $2 trillion, an amount the Fed secretly gave away to just one big bank.

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How Predatory Lenders Are Leaving Veterans Homeless, Broke and In Debt

AlterNet | s.e. smith

Last week, Andrea Chandler opened her mailbox in rural Virginia to find an official-looking envelope warning her that an immediate response was requested, with a Washington, DC return address and ominous logos to suggest it was a communication from a government agency. She knew what she’d find inside: a solicitation from a firm offering to refinance her home and lower her monthly payments.

Chandler is a US Navy veteran with almost 10 years of service, from June 1998 to January 2008, and she’s been getting these solicitations since she bought her home with the assistance of a Veterans Administration (VA) loan guarantee in 2008.

She’s a target of pre-screened credit offers, a practice used throughout the financial industry that violates consumer privacy and sets people up for identity theft. These offers prey upon people who may lack the financial savvy to understand the truth behind the appealing terms. In pre-screening, financial institutions take advantage of vast amounts of data on consumers and their habits to tailor offers of credit cards, home loans and other financing. While it is possible, when companies follow the law, to opt out of pre-screening and stop getting such offers, the fine print about how to do that is on the back of the notices, and no mention as to why people might want to do that is provided.

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Fannie Mae seeks $5.1 billion more from taxpayers

Reuters |

WASHINGTON (Reuters) – Mortgage finance giant Fannie Mae said it would ask for an additional $5.1 billion from taxpayers as it continues to suffer losses on loans made prior to 2009.

The largest U.S. residential mortgage funds provider on Friday also reported a second-quarter net loss attributable to common shareholders of $5.2 billion, or 90 cents per share.

Including the latest funding request, Fannie Mae has needed $104 billion in government capital injections since the U.S. Treasury seized control of it in 2008 during the financial crisis. Fannie Mae has paid back $14.7 billion in dividends.

Fannie said in a statement that its second-quarter loss “reflects the continued weakness in the housing and mortgage markets, which remain under pressure from high levels of unemployment, underemployment and the prolonged decline in home prices since their peak in the third quarter of 2006.”

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The loss of the gold standard and why US foundations are firmly in foreign money | Ben Traynor

Perhaps it’s coincidence, or perhaps The Connells were onto something, but the years 1974 and 1975 stick out as key dates in the economic history of the United States.

December 31 1974 was the day Americans finally regained their right to own gold. The US removed the last of its significant capital controls in 1974, while 1975 was the time it ever ran a trade surplus.

That’s not all. According to data from the US Treasury and the Bureau of Economic Analysis, 1974 was the year US national debt stopped falling as a percentage of economic output.

For the rest of the 1970s, national debt held constant at around a third of gross domestic product, before beginning the long climb that would lead to the debt ceiling theatrics we’ve seen in Washington over recent weeks.

To understand why this was, we need to go back to August 15 1971 – the day Richard Nixon cut the Dollar’s convertibility to gold. Take a look at what has happened since to the US federal deficit:

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