Author Topic: 2010-14 crime watch. "NWO or just shitty politics? You Decide!"  (Read 123507 times)

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Offline Jus DoC HoLiDaY

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AssociatedPress 3/15/12: International Demand for Treasury Debt Hits Record
« Reply #1035 on: March 16, 2012, 06:06:14 AM »
International Demand for US Treasury Debt Hits Record
Thursday, 15 Mar 2012 09:30 AM

Foreign demand for U.S. Treasury debt rose to a record high in January. China, the largest buyer of Treasury debt, increased its holdings for the first time in six months.

Total foreign holdings rose 0.9 percent in January to $5.05 trillion, the sixth consecutive monthly increase, the Treasury Department reported Thursday.

China boosted its holdings 0.7 percent to $1.16 trillion. Japan, the second-largest buyer of Treasury debt, increased its holdings 2 percent to a record $1.08 trillion.

U.S. government debt is considered one of the safest investments. Demand for it has increased as Europe's debt problems have intensified.

The demand has remained strong despite the first-ever downgrade of the government's credit rating last August. Standard & Poor's lowered its rating on long-term Treasury debt one notch from AAA to AA-plus following a prolonged debate in Congress over increasing the nation's borrowing limit.

The nation's borrowing needs will remain high based on projections of future deficits.

The Congressional Budget Office on Tuesday released a new estimate that the government will run a $1.2 trillion deficit for the current budget year, which ends Sept. 30. That would mark the nation's fourth straight trillion dollar-plus deficit.

In the Treasury report, Britain, the third-largest holder of Treasury debt, had a sizable 26.6 percent increase in its holdings to $142.3 billion.

However, much of that gain probably reflected purchases of Treasury securities that were made by British banks for investors in other countries. The figure is likely to be reduced in coming months with the gain reallocated to other nations.

© Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Offline Jus DoC HoLiDaY

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Reuters 3/14/12: Fitch Warns UK May Lose Triple-A Rating
« Reply #1036 on: March 16, 2012, 06:20:19 AM »
Fitch Warns UK May Lose Triple-A Rating
Wednesday, 14 Mar 2012 06:11 PM


Fitch Ratings revised down its outlook on Britain's AAA rating to negative on Wednesday, warning the nation could lose its top-notch status in the next couple of years if the government eases back on its debt-cutting stance.
The Fitch action, which comes just a week before British finance minister George Osborne presents his annual budget to parliament and follows a similar move by Moody's just a month ago, is likely to dampen calls for the government to loosen its fiscal stance.

"This is a salutary reminder as to why Britain needs to deal with the enormous debts and deficit that we inherited, why we have got to stick to those plans," said British Treasury minister Danny Alexander.

"And it should be a wake-up call to anyone who thinks we can afford as a country to loosen the purse strings. We can't afford to do that, and that is why there will be no unfunded giveaways in next week's budget."

Britain's Conservative-led coalition government has staked its reputation on plans to virtually eliminate a budget deficit that was at a record 11 percent of gross domestic product when it came to power two years ago.

However, progress has been slow due to a faltering domestic economy and weak demand in the euro zone, Britain's biggest trading partner, forcing the government to admit that it will take two years longer than planned to meet its deficit goal.

Osborne has insisted there will be no unfunded giveaways in the March 21 budget, but he has been coming under growing pressure from members of his own Conservative party, as well as from the Liberal Democrat party to find ways to boost demand and kick-start Britain's lacklustre economic recovery.

The measures being demanded by fellow lawmakers include raising the threshold at which income tax is paid to alleviate the squeeze on middle-income families, and cutting corporation tax to encourage firms to invest and create jobs.

Britain's Office for Budget Responsibility forecasts that public sector net debt will peak at 78 percent of GDP by 2014/15 but fall thereafter, and Fitch said that although this was consistent with its own forecast for Britain, it was at the limit of the level consistent with a triple-A rating.

"The revision of the rating outlook to negative reflects the very limited fiscal space to absorb further adverse economic shocks in light of such elevated debt levels," Fitch said in a statement.

"In light of the considerable uncertainty around the economic and fiscal outlook, including the risks posed to economic recovery by ongoing financial tensions in the euro zone and against the backdrop of a still large structural budget deficit and high and rising government debt, the Negative Outlook indicates a slightly greater than 50 percent chance of a downgrade over a two-year horizon," Fitch said.

And it said that the triggers for a downgraded included "discretionary fiscal easing that resulted in government debt peaking later and higher than currently forecast."

© 2012 Thomson/Reuters. All rights reserved.

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Offline Jus DoC HoLiDaY

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Reuters 3/15/12: Iran Cut Off From Global Fincial System
« Reply #1037 on: March 16, 2012, 03:11:10 PM »
Iran Cut off From Global Financial System

 Thursday, March 15, 2012 11:51 AM

BRUSSELS — Iran was effectively cut off from global commerce on Thursday, when the company that handles financial transactions said it was severing ties with many Iranian banks — part of an international effort to discourage Tehran from developing nuclear weapons.
 
The action enforces European Union sanctions because global financial transactions are impossible without using SWIFT, and it will go a long way toward isolating Iran financially.
 
The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is a banking hub crucial to oil, financial transactions and other trades.
 
"Disconnecting banks is an extraordinary and unprecedented step for SWIFT," said Lazaro Campos, chief executive of SWIFT. "It is a direct result of international and multilateral action to intensify financial sanctions against Iran."
 
In a statement, the company said the EU decision to impose sanctions "prohibits companies such as SWIFT to continue to provide specialized financial messaging services to EU-sanctioned banks" and "forces SWIFT to take action."
 
Though Thursday's move adds no new sanctions, it is intended to make sure that EU sanctions that have already been approved are watertight.
 
In a statement, the European Council — comprised of the government leaders of the 27 European Union countries — said it had "developed the application" of its restrictive measures against Iran.
 
"In this context, the Council agreed that no specialized financial messaging shall be provided to those persons and entities subject to an asset freeze," the statement said.
 
In addition to sanctioning various officials and freezing the assets of certain companies, the European Union plans to institute an embargo on the import of Iranian oil in July — an attempt to choke off funding for Iran's nuclear program.
 
The EU sanctions are aimed at forcing Iran to demonstrate to the international community that it is not trying to develop nuclear weapons. Iran says that its nuclear program is for peaceful purposes only, but officials in many other countries — including Israel — believe otherwise.
 

© 2012 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.


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Offline Jus DoC HoLiDaY

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NewsMax 3/16/12: "High Inflation Crisis" Looms for U.S. (Video)
« Reply #1038 on: March 17, 2012, 05:08:36 AM »
Very good Inflation Article and Video.

NewsMax 3/16/12

Charles Goyette: 'High Inflation' Looms for U.S.
http://www.moneynews.com/Headline/Goyette-High-Inflation-Crisis/2012/03/16/id/432848
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Offline Jus DoC HoLiDaY

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AssociatedPress: Gas Prices Hit National Average $3.83, 6 States Above $4.00
« Reply #1039 on: March 17, 2012, 05:22:12 AM »
Gas Prices Hit National Average of $3.83 a Gallon, With Six States Above $4.00
Friday, 16 Mar 2012 12:16 PM

Gasoline prices rose again Friday and drivers can expect to see the numbers on gas pumps creep higher over the weekend.

Retail gasoline prices were up a penny on Friday to a national average of $3.831 per gallon, according to AAA, Wright Express and Oil Price Information Service.

Meanwhile, oil prices rose closer to $106 per barrel and natural gas futures headed back above $2.30 per 1,000 cubic feet.

You may want to consider filling up your tank on Friday. Pump prices rose nearly 5 cents last weekend, following a nearly 3 -cent increase the previous weekend. Gasoline has jumped by almost 56 cents per gallon since January and is the highest ever for this time of year.

The average price for a gallon of regular is now above $4 in six states — Alaska, California, Connecticut, Hawaii, Illinois and New York.

Oil markets were calmer a day after the government denied reports that the U.S. and the U.K. plan to release some of their strategic crude reserves. Oil briefly dropped near $104 per barrel Thursday on those reports before recouping most of the losses when the White House said there was no plan to provide more crude to markets.

By late morning in New York, benchmark oil for April delivery was up 49 cents to $105.60. In London, Brent crude for May delivery rose $1.74 to $124.34 per barrel on the ICE Futures exchange in London.

In other energy trading, heating oil rose 3 cents at $3.26 per gallon and gasoline futures gained 4 cents at $3.33 per gallon. Natural gas rose 4 cents to $2.32 per 1,000 cubic feet.


© Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

« Last Edit: March 17, 2012, 05:33:16 AM by Jus DoC HoLiDaY »
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Offline Jus DoC HoLiDaY

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MoneyNews 3/16/12: Ex-OMB Chief Economist "World Can't Finance U.S. Debts"
« Reply #1040 on: March 18, 2012, 12:56:34 AM »
Ex-OMB Chief Economist: World Can’t Finance U.S. Debts
Friday, 16 Mar 2012 03:18 PM

By Greg Brown
Is there enough money in the world to finance the U.S. debt? Almost certainly not, according to a former chief economist for the White House’s Office of Management and Budget.

In a paper published in the journal International Finance, John Kitchen and co-author Menzie Chinn considered the size of U.S. debts held by foreigners in comparison with the needs the country would face it kept to its spending trajectory.

The world might be able to keep up over the medium term, but farther out the numbers cease to be believable, Kitchen and Chinn contend.

They conclude that “unprecedented levels and growth of foreign official holdings of U.S. Treasurys will be required to keep longer-term Treasury security interest rates from rising substantially above current consensus projections.”

Specifically, it would take an increase in foreign holdings of U.S. debt equal to 20 percent of world GDP by 2020, up from five percent now, if the target is to keep the 10-year Treasury yield at 5.4 percent. “Given the large demands for funding governments worldwide, imagining such an increase for the U.S. alone seems challenging at the least,” Kitchen writes on the economics web site Econbrowser.com.

The current 10-year Treasury rate is 2.29 percent, kept low in part by unprecedented Fed actions, including massive quantitative easing efforts. The current inflation rate is 2.9 percent, above the Fed’s target of 2 percent. A recent selloff in Treasurys is raising speculation that the monetary authority might not be able to keep rates at virtually zero through late 2014, as promised.

One highly placed critic is Federal Reserve Bank of Richmond President Jeffrey Lacker.

He wrote on the bank’s web site that the Fed would like have to raise interest rates in 2013 to hold off inflation. “My current assessment is that an increase in interest rates is likely to be necessary some time in 2013,” Lacker wrote.



© 2012 Moneynews. All rights reserved.

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MoneyNews 3/16/12: Roubini 'Oil Price May Soar Even Without Iran Conflict'
« Reply #1041 on: March 18, 2012, 01:13:28 AM »
Roubini: Oil Price May Soar Even Without Iran Conflict
Friday, 16 Mar 2012 02:36 PM

By Greg Brown
It won’t take an armed conflict over Iran’s nuclear program to push oil prices to dangerously high levels, warns Nouriel Roubini, chairman of Roubini Global Economics.

The so-called “fear” premium is not far off the mark, and that means risks to the markets are rising, Roubini says in a new column for Project Syndicate.

“Oil is already well above $100/barrel, despite weak economic growth in advanced countries and many emerging markets,” Roubini writes. “The fear premium might push prices significantly higher, even if no military conflict ultimately takes place, and could trigger a global recession if one does.”

Gasoline at $4 a gallon is “a damaging threshold for consumer confidence,” one that is likely to be breached as the summer vacation season commences in the United States, Roubini warns.

What’s more, before the 2008 credit crisis, the previous three global recessions were driven by oil shocks, led by military conflict in the Middle East in each case, he writes.

“Even the recent global recession, though triggered by a financial crisis, was exacerbated by spiking oil prices in 2008. With the barrel price reaching $145 in July of that year, oil-importing advanced economies and emerging markets alike faced a recessionary tipping point,” he explained.

Consumers seem to have accepted the notion of $4 gas for now, but $5 would be a serious problem, according to new data from the University of Michigan.

The current national average for regular is $3.80 a gallon, reports tracking service GasBuddy.com, vs. $3.53 a gallon one year ago.

The Thomson Reuters/University of Michigan consumer sentiment index out Friday fell slightly to 74.3 from 75.3 in February. Rising gas prices seem to be the culprit.

"Overall, the data indicate that $4 gasoline has lost its shock value, although the drain on discretionary income will still affect spending, mostly among lower-income households," survey director Richard Curtin said in a statement.

"If gasoline prices approach $5 per gallon, however, a widespread and substantial impact is likely."

© 2012 Moneynews. All rights reserved.
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Offline Jus DoC HoLiDaY

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I'm including link,
for the acoompaning interview.
http://www.moneynews.com/Headline/Rahn-Inflation-economy/2012/03/23/id/433712

It's really good information on just where we are heading.

Quote
Richard Rahn: Common Sense Would Save US From Damaging ‘70s Style Inflation
Friday, 23 Mar 2012 01:39 PM

By Forrest Jones and John Bachman
Managing the economy with a common-sense approach to family finances could steer the country away from damaging inflation, says Richard W. Rahn a senior fellow of the Cato Institute and Chairman of the Institute for Global Economic Growth.

The government spends 40 percent more than it takes in a month, which any family would know spells disaster, Rahn says.

"Just think of your own personal finances. How many years could you go ahead and spend 40 percent more than you take in? And whether you're an individual, a business or a government, eventually, you are going to be in trouble," he told Newsmax.TV in an exclusive interview.

Story continues below video.



Trouble for countries that spend too much can come in many different forms but normally ends up in either default or inflation, and painful austerity measures are called for to remedy economic ills.

The United States can expect inflation, in that it can avoid default by printing its own money to pay its debts.

Most countries default.

"Countries that produce their own currencies the way we do, the most likely scenario is inflation. We saw that in the late 1970s, and at some point it is likely to happen here again. At that point, the value of our purchasing power declines and makes everybody worse off," Rahn says.

"It's cheating, it's stealing from the people, and it's a non-legislative tax increase. Other than that, there's nothing wrong with it."

Excessive regulations can hamper recovery as well.

The Dodd-Frank financial-reform bill aims to curb the financial excesses that threw the country into recession, but too many regulations scare businesses from hiring.

Thousands of pages full of highly detailed dos and don't have too many people worried about compliance, smaller banks especially.

"Let's say you have a small community bank with 25 employees. These bills, the regulations, are thousands of pages, detailed pages. There's nobody at the bank that would have both the time and understanding to understand all of this," Rahn says.

"You could go off and hire all very expensive lawyers and accountants but the small banks can't afford this, and then what that does is drive bank mergers, and we have fewer banks, less competition and we have get into more banks in the too-big-to-fail category. It's stupid policy, Counterproductive policy. Dreadful."

Meanwhile, the economy moves along at a pace barely above idle and not nearly fast enough to make a dent in high employment rates, which are deceptively low anyway.

Headline unemployment rates currently stand at 8.3 percent, an improvement from 2011, when the rate hovered over 9 percent.

While jobs are being added to the economy, 227,000 in February, more and more workers have quit searching for work, millions of them likely.

Those discouraged workers are not counted as part of the labor force, which consists mainly of people out looking but remain jobless.

If the government were to throw the discouraged workers back into the labor force, the unemployment rate would be much higher.

"The unemployment rate doesn't really tell you a whole lot about that because you have all of these discouraged workers. The bottom line is the economy is not growing fast enough to bring the new jobs on rapidly enough to get us up to historic employment levels."

© 2012 Moneynews. All rights reserved.



« Last Edit: March 24, 2012, 06:43:23 AM by Jus DoC HoLiDaY »
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Offline Jus DoC HoLiDaY

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MoneyNews 3/23/12: Citigroup's Buiter "Worse Yet to come for Europe"
« Reply #1044 on: March 24, 2012, 06:47:28 AM »
Citigroup’s Buiter: Worst Yet to Come for Europe
Friday, 23 Mar 2012 07:54 AM

Greece may have restructured its private debts, and the European Central Bank has pumped liquidity into its banking system, but such measures plug leaks and don't repair underlying damage, meaning the worst is yet to come for Europe, says Willem Buiter, chief economist at Citigroup.

Greece recently restructured its debts with private creditors, avoiding a messy sovereign default.

The European Central Bank has made easy loans available to banks, a liquidity-injecting measure known as a long-term refinancing operation.

Both are quick fixes.

"We have really just paused for breath," Buiter tells CNBC.

"It (the long-term refinancing operation) really hasn’t solved the problem, and for Europe the worst is still to come."

Slow growth or even recession in many parts of Europe exacerbated by high unemployment and flawed fiscal and labor policies will take a while to fix.

And while Greece can relax for now, other European countries will grab the spotlight.

"There will be a further restructuring of Greece and Portugal, Ireland is at risk, and Spain has been deteriorating spectacularly in the recent past in terms of its public finances," Buiter warns.

Fed Chairman Ben Bernanke has said the European debt crisis has abated but warns that U.S. money market funds still remain vulnerable should the crisis rekindle.

"Europe's financial and economic situation remains difficult, and it is critical that the European leaders follow through on their policy commitments to ensure a lasting stabilization," Bernanke said in remarks prepared for the House Committee on Oversight and Government Reform.

"U.S. financial firms and money market funds have had time to adjust their exposures and hedge their risks to some degree as the European situation has evolved, but the risks of contagion remain a concern for both these institutions and their supervisors and regulators."



© 2012 Moneynews. All rights reserved.

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MarketWatch 3/23/12: Premier Bank becomes 15th U.S. failure this year
« Reply #1045 on: March 24, 2012, 07:08:08 AM »
March 23, 2012, 6:12 p.m. EDT

Premier Bank becomes 15th U.S. failure this year

By Wallace Witkowski SAN FRANCISCO (MarketWatch) -- Premier Bank of Wilmette, Ill., became the 15th bank failure of the year, according to the Federal Deposit Insurance Corp. Friday. International Bank of Chicago will buy Premier's $268.7 million in assets and assume its $199 million in deposits. The cost to the FDIC's deposit-insurance fund is $64.1 million. Premier is the third bank failure in Illinois this year. Earlier Friday, the FDIC said that Georgia's Covenant Bank had failed.
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Offline Jus DoC HoLiDaY

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GoldSeek 3/23/12: Doug Casey "It's A Dead-Man-Walking Economy"
« Reply #1046 on: March 24, 2012, 02:19:21 PM »
Doug Casey: "It's a Dead-Man-Walking Economy"

-- Posted Friday, 23 March 2012 | Share this article| Source: GoldSeek.com


By Doug Casey, Casey Research

In an interview with Louis James, the inimitable Doug Casey throws cold water on those celebrating the economic recovery.

[Skype rings: It's Doug Casey, calling from Cafayate, Argentina. He sounds tired, but pleased with himself.]

Doug: Lobo, get out your mower; it's time to cut down some green shoots again, and debunk a bit of the so-called recovery.

Louis: Ah. I have to say, Doug, the so-called recovery is looking more than "so-called" to a lot of smart folks. Even our own Terry Coxon says the recovery is real, albeit weak.

Doug: Terry's probably looking at it by the numbers, some of which are reported to be improving. But let's come back to the numbers later and start with fundamentals. The first order of business, as usual, is a definition: a depression is a period of time in which the average standard of living declines significantly. I believe that's what we're seeing now, whatever the numbers produced by the politicians may seem to tell us.

L: I was just shopping for food and noticed that the bargain bread was on sale at two for $5. My gas costs almost as much per gallon. That's got to hurt a lot of people, especially on the lower income rungs. I don't need to ask; a member of my family just got a job that pays $12 per hour – about three times what I made working for the university food service back when I was in college – and it's not enough to cover his rent and basic bills. If his wife gets similar work, they'll make ends meet, but woe unto them if anyone in their family crashes a car or requires serious medical treatment.

Doug: That's just what I mean. Actually, the trend towards both partners in a marriage having to work really started in the early '70s – after Nixon cut all links between the dollar and gold in August of 1971. Before then, in the "Leave It to Beaver" era, the average family got by quite well with only the husband working. If he got sick or lost his job, the wife was a financial backup system. Now, if something happens to either one, the family is screwed.

I think, from a very long-term perspective, historians will one day see the '60s as the peak of American prosperity – certainly relative to the rest of the world… but perhaps even in absolute terms, even taking continued advances in technology into account. Maybe the '59 Cadillac was the bell ringing at the top of that civilizational market.

My friend Frank Trotter, president of EverBank, was just telling me that the net worth of the median US citizen is only $6,000. That's the median, meaning that half of the people have less than that. Most people don't even have enough stashed away to buy the cheapest new car without going into debt. It used to be that people bought cars out of savings, with cash. Now they have to finance them over at least five years… or lease them – which means they never ever have even that trivial asset, but a liability in the form of a lease.

The bulk of the 49 percent below this guy don't even have that – with the concentration of wealth among the top one percent, most of those below average have seriously negative net worth, at least compared to their earning capacity. In other words, the US, Europe, and other so-called First-World countries are in a wealth-liquidation cycle that will be as profound as it will be protracted.

By that I mean that people are on average consuming more than they produce. That can only be done by living out of capital – consuming savings – or accumulating debt. For a time, this may drive corporate earnings up, and give this dead-man-walking economy the appearance of returning health, but it's essentially, necessarily, and absolutely unsustainable. This is an illusion of recovery we're seeing – the result of our Wrong-Way Corrigan politicians continuing to encourage people to do the exact opposite of what they should do.

L: Which is?

Doug: Save. People shouldn't be getting new cars, new TVs, and new clothes. They should be cutting expenses to the bone.

The Obama administration, just like the Baby Bush administration before it – there really is no great difference between the Evil Party and the Stupid Party – and its minions in the US and its cronies around the world, stubbornly stick to the bankrupt idea that economic growth is driven by consumption. This is confusing cause and effect. Healthy consumption follows profitable production in excess of consumption, resulting in savings – accumulated capital – that can either be spent without harm or invested in future growth.

Consumption doesn't cause an economy to grow at all. To paraphrase: "It's productivity that creates wealth, stupid!"

L: Policies aimed at encouraging consumption, instead of increasing production, are what turned the savings rate negative in the US and resulted in the huge sovereign debt issues we're seeing in supposedly rich countries…

Doug: Well, the governments themselves have spent way more than they had or ever will have, and that's par for the course when you believe spending is a virtue. However, it's the false signals government interference sends to the market that caused the huge malinvestments that only began to go into liquidation in 2008. That has to do with another definition of a depression: It's a period of time when distortions and malinvestments in the economy are liquidated.

Unfortunately, that process has barely even started. In fact, since the bailouts started in 2008, these things have gotten much worse. If the government had gone cold turkey back then, cut its spending by at least 50% for openers, and encouraged the public to do the same, the depression would already be over, and we'd be on our way to real prosperity. But they did just the opposite. So we haven't yet entered the real meat grinder…

L: Those false signals the government sends to the market being artificially low interest rates?

Doug: Yes, and Helicopter Ben's foolish leadership in the wholesale printing of trillions of currency units all around the world – I don't really want to call dollars, euros, yen, and so forth money anymore. When individuals and corporations get those currency units, they think they're wealthier than they really are and consume accordingly. Worse, those currency units flow first to the state – which feeds it power – and favored corporations, which get to spend it at old values. It's very corrupting. There is also an ongoing regulatory onslaught – the government has to show it's "doing something" – which makes it much harder for entrepreneurs to produce.

In addition, keeping interest rates low encourages borrowing and discourages saving – just the opposite of what's needed. I don't believe in any state intervention in the economy whatsoever, but in the crisis of the early 1980s, then-Fed Chairman Paul Volcker headed off a depression and set the stage for a strong recovery by keeping rates very high – on the order of 15-18%. They can't do that now, of course, because with the acknowledged government debt at $16 trillion, those kind of rates would mean $2.5 trillion in annual interest alone – more than the government takes in taxes.

At this point, there's no way out. And there's much more tinkering with the system ahead, at the hands of fools who remain convinced they know what they're doing, regardless of how abject their past failures have been.

L: And yet, the interventions seem to be working. The "orderly default" in Greece seems to have saved the Eurozone for now, and critically important employment figures in the US show definite signs of improvement.

Doug: Perhaps, but let's take a closer look. I advocate the Greek government defaulting, overtly and immediately, on 100% of its debt, for several reasons. First, it would punish those who lent it money to do all the stupid and destructive things it's done. Second, it would ensure that the Greek government wouldn't be able to borrow again for a very long time. Third, it would liberate young and yet unborn Greeks, who are being turned into serfs by all that debt. It would also mean that most European banks would fail. Tough luck for those who relied on them. When new banks are established, it will serve as a lesson to people to be more careful about where they put their capital.

Anyway, it would be much less of a catastrophe than the way we're currently heading.

Here in the US, the twelve-month fiscal deficit is still over $1.2 trillion, an extreme situation that is gutting the value of the dollar, because it's mostly financed by the Fed buying US debt. It's temporarily expanded the eye of the storm we're in, but it's done nothing to dissipate the storm itself. Their easy-money policies may have bought them a little more time, but they will only make it worse when we do exit the eye of the storm.

There's a third definition of a depression that I use: a depression is the end phenomenon of an inflation-caused business cycle. Inflation is the sole cause of business cycles, and inflation is caused by governments and their central banks printing money. The government – the state – is 100% responsible for society's economic problems. But it arrogantly represents itself as the cure. And people believe it. There's no hope until the psychology of the average person changes.

L: As Bob LeFevre used to say: "Government is a disease masquerading as its own cure." Want to update us on when you think the economy will return to panic mode?

Doug: Earlier this year, I was expecting it sooner than I do now. Unless some black-swan event upsets the apple cart suddenly, I would not expect us to exit the eye of the storm at least until after the US presidential elections this fall. Maybe not until early 2013, as the reality of what's in store sinks in. I pity the poor fool who's elected president.

In a way, I hope it's Obama who wins, mainly because the worthless – contemptible, actually – Republican candidates yap on about believing in the free market, which means if one of them is somehow elected, the free market will be blamed for the catastrophe. Too bad Ron Paul will be too old to run in 2016, assuming that we actually have an election then…

L: So, what about those numbers, then? Employment is up, and the oxymoronic notion of a "jobless recovery" was one of our criticisms before…

Doug: Yes, but look at the jobs that have been spawned; they are mostly service sector. Such jobs can create wealth for certain individuals – it looks like we've put more lawyers to work again, as well as waiters and paper-pushers – but they don't amount to increased production for the whole economy. They just reshuffle the bits around within the economy.

L: Unlike my favorite – mining – which reported 7,000 new jobs in the latest report, if I recall correctly.

Doug: Yes, unlike mining, which was more of an exception than the rule in those numbers. But that's making the mistake of taking the government at its word on employment figures. As we've discussed before, if you look at John Williams' Shadow Stats, which show various economic figures as the US government itself used to calculate them, unemployment has actually reached Great Depression levels.

The US government is dishonestly fudging the figures as badly as the Argentine government – which is, justifiably, viewed as an economic laughingstock in most parts of the world. One reason things are going to get much worse in the US is that many of those with economic decision-making power think Cristina Fernandez Kirchner is a genius. A little while ago, there was an editorial in the New York Times – the mouthpiece for the establishment – written by someone named Ian Mount. Get a load of this. I've got it in front of me.

If you can believe it, the author actually says: "Argentina has regained prosperity thanks to smart economic measures." The Argentine government "intervened to keep the value of its currency low, which boosts local industry by making Argentina's exports cheaper abroad while keeping foreign imports expensive. Argentina offers valuable lessons … government spending to promote local industry, pro-job infrastructure programs and unemployment benefits does not turn a country into a kind of Soviet parody."

Well, no, I guess it turns it into something the US can ape. He goes on: "Argentina is hardly a perfect parallel for the United States. But the stark difference between its austere policies and low growth of the late 1990s and the pro-government, high-growth 2000s offers a test case for how to get an economy moving again. Washington would do well to pay attention."

The guy has obviously never been here, though he admits that "Argentina is far from perfect." His modest concession is that the taxes to imports and exports have "scared away some foreign investment, while high spending has pushed inflation well over 20 percent. And it would be laughable to suggest that the United States follow its lead and default on its debt."

When I first read the article, I thought I was reading a parody in The Onion. I love Argentina and spend a lot of time down here. It's a fantastic place to live – but not because of the government's economic policies. Its only competition in state stupidity is Brazil, which regularly destroys its currency.

Fortunately, though, the Argentine government is quite incompetent at people control, unlike the US. It leaves you alone. And there's a reasonable chance the next president down here won't be actively stupid, which isn't asking much. But it's amazing that the NYT can advocate Argentine government policy as something the US should follow. A collapse of the US economy would be vastly worse than that of the Argentine economy – the US dollar is the world's currency.

Here in Argentina they're used to it and prepared for it to a good degree. Very unlike in the US.

L: In the US, the welfare state has bloated beyond imagination. The damage already done is less visible because where there used to be private charity soup kitchens, there are now "food stamps" that look like ordinary credit cards, making the destitute among us look like everyone else at the supermarket. There are 50 million recipients, and that number is growing, not declining.

By the way, John Williams is a speaker at the Casey Research Recovery Reality Summit we have coming up, April 27-29 in Weston, Florida. Perhaps this would be a good time to invite our readers down to hear John's take on what the numbers really are – and to meet us. We'll both be there.

L: What are the investment implications if the Crash of 2012 gets put off until the end of the year, or even becomes the Crash of 2013?

Doug: There are potentially many, but generally, the appearance of economic activity picking up is bullish for commodities, especially energy and raw materials like industrial metals and lumber. That's not true for gold and silver, so we might see more weakness in the precious metals in the months ahead. I wouldn't count on that, however, because government policy is obviously inflationary to anyone with any grasp of sound economics. That will keep many investors on the buy side.

Plus, the central banks of the developing world – China, India, Russia, and many others – are constantly trading their dollars for gold. There are perhaps seven trillion dollars outside the US, and about $600 billion more are sent out each year via the US trade deficit.

L: I know I bought some gold and silver in the recent dip and would love to have a chance to do so at even lower prices ahead.

Doug: That's the logical thing to do, given the fundamental realities we started this conversation with, but a lot of people will be scared into selling if gold does retreat. A good number will sell low, after buying high – happens every time, and is a big part of why commodities have such a tricky reputation.

Most investors just don't have the strength of conviction to be good speculators. Instead of looking at the world to understand what's going on and placing intelligent bets on the logical consequences of the trends, regardless of what anyone else says or does, they go with the herd, buying when everyone else is buying and selling when everyone else is selling. This inverts the "buy low and sell high" formula. They let their thoughts be influenced by newspapers and the words of government officials.

L: In other words, everything you see calls for gold continuing upward for some time – years – making any big retreats along the way great buying opportunities for those with the guts to act on them. Same for silver, and doubly so for the precious-metals mining stocks, and triply so for the junior stocks.

Doug: Just so. I look forward to the day when I can sell my gold for quality growth stocks – but we're nowhere near that point. But silver might correct less than gold if gold corrects due to the appearance of economic recovery – silver is, after all, an industrial metal as well as a monetary one.

L: Agreed. And I can see the positive implications for energy as well, but Marin – Casey Research's chief energy investment strategist – was just saying that natural gas has dropped below $2. That's apparently starting to force oil and gas companies to remove reserves from their books – because reserves need to be economic, not just exist – which the market isn't going to like. He sees some great bargains on solid companies ahead, and not just "gas" companies as many oil companies, including the major ones, produce both. Marin said one major company gets half its top line from gas sales. This is a huge shift.

Doug: The devil is always in the details – it's dangerous to oversimplify things, painting with a broad brush, as in, "A recovering economy will be bad for gold" or "A recovering economy will be good for energy." You have to understand these markets well enough to really see how different forces and factors will affect them.

Marin is unquestionably one of the sharpest analysts I've met in my life. He's actually something of a genius, both academically smart and very street smart, in addition to being a workaholic. He runs a lot of my money. He's done spectacularly well, and I expect him to do even better, because he constantly learns. Not much gets by him.

L: Good reminder. So, if we're looking at signs of economic recovery for a time, would you buy into copper, nickel, or other base-metal plays?

Doug: Well, just because we might see signs of a temporary economic recovery, that doesn't mean we will – and even if we do, they could easily be swept aside by any number of events, such as Europe taking another turn for the worse, or Japan or China starting to come apart at the seams. But, as a hedge, some near-term bets on industrial metals might not be a bad thing.

L: How about agriculture?

Doug: That's one thing for which demand can never go down. Economic upturns or downturns may affect the mix of what people eat, but they won't stop people from eating – or, if they do, we'll have more pressing concerns than which way to play the markets. I remain especially bullish on cattle.

L: Anything else?

Doug: [Laughs] Many things. The right technology companies should do well; finding ways to do things faster-better-cheaper always adds value. Select mainstream equities in currently profitable sectors might do well as well – but I'd be very careful there. I can't stress enough how close to the edge of collapse the global economic house of cards is – it could take another year or more to topple, or it could be starting today.

L: Which leads to the other reason for owning precious metals – not as a speculation on skyrocketing prices, nor as an investment for good yield, but for prudence.

Doug: Yes. Gold remains the only financial asset that is not simultaneously someone else's liability. Anyone who thinks they have any measure of financial security without owning any gold – especially in the post-2008 world – is either ignorant, naïve, foolish, or all three.

Look, we saw it coming, but everyone in the world could see Humpty Dumpty fall off the wall in 2008. Now we're just waiting for the crash at the bottom, and no amount of wishful thinking otherwise is going to change that. It's a truly dangerous world out there, and blue chips are no longer the safe investments they once seemed to be. You don't have to be a gold bug to see the wisdom of allocating some capital – and not just a token amount – to cover the possibility that I'm right about what's coming.

There's some opportunity cost associated with taking out this kind of insurance, but it's not catastrophic if I'm wrong, and the cost of failing to do so if I'm right is catastrophic. That really is the bottom line.

L: Financially. If you're right about the coming Greater Depression, people also need to take steps to batten down the hatches on their physical life arrangements.

Doug: Right. As we've said many times now, your government is the greatest threat to your well-being these days. If at all possible, you should be taking steps to diversify your political risk. Foreign bank accounts are not illegal for most people in most countries, though they need to be reported. Getting one is a good start.

Buying real estate I like in various countries is one of my favorite ways to diversify risk in my life. That's partly because I like speculating in real estate, but much more so because whichever government thinks you're its tax slave can't force you to repatriate real estate you own abroad. Most of all, it's because it's good to have places to go if things get ugly wherever you happen to be.

L: Very well. Any particular triggers you think we should watch out for – warning signs that we really are about to exit the eye of the storm?

Doug: In the US, the Fed being forced to raise interest rates would be one, or inflation getting visibly out of control – which would force a change in interest rates – would be another. Who knows – Obama getting reelected could tip the scales. War in the Middle East could do it, or, as we already mentioned, China or Japan going off the deep end. The ways are countless. Black swans the size of pteranodons are circling in squadron strength. A lot of them are coming in for a landing.

People will just have to stay sharp – sorry, there's no easy way to survive a depression. As my friend Richard Russell says, "In a depression, everybody loses. The winner is the guy who loses the least." It will take work and diligent attention to what's going on in the world and around us. We at Casey Research will do our best to help, but each of us is and must be responsible for ourselves.

L: Okay then, thanks for the guru update. No offense, but in spite of the investments I've made betting that you're right, I hope you're wrong, because the Greater Depression is going to destroy many lives, and the famines and wars it spawns even more – millions, I'm sure. Maybe more. The mind balks.

Doug: Oh, I agree. I only wish I could believe otherwise, because I'm sure it's going to be even worse than I think it will be… although I hope to be watching it in comfort and safety on my widescreen TV, not out my front window.

L: I think we need to find something more upbeat to talk about next time.

Doug: [Chuckles] Maybe. If there's something important in the news, we should cover it. It's sure to be fodder for comedy – at least black comedy.

L: As you say. 'Til next week then.

 
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Florida AG Bondi to Newsmax: How We’ll Defeat Obamacare
Friday, 23 Mar 2012 03:26 PM

By Martin Gould and Kathleen Walter

 President Barack Obama’s healthcare initiative is the biggest attempt at a government overreach in U.S. history, Pam Bondi, Florida’s attorney general, who is leading the fight against the program, tells Newsmax.TV.

And that is why Bondi is confident the Supreme Court will vote to overturn the Affordable Care Act after three days of hearings next week.

“We’re optimistic that they will rule in our favor because this is so much bigger than healthcare,” said Bondi in an exclusive interview. “It’s the biggest attempt at an overreach in our history. So we have to fight it and we have to stop it.

Story continues below video.
http://www.newsmax.com/Newsfront/BondiObamacareSupremeunconstitutional/2012/03/23/id/433728



“That’s why 26 states, along with the National Federation of Independent Business, are challenging this and that’s why we have been given an unprecedented amount of time, six hours, in front of the court.”

The hearing will start on Monday and go through Wednesday. Attorney Paul Clement will argue the states’ case before the nine justices, while solicitor general Donald Verrilli will defend the law.

“The bottom line is this: the Constitution’s limits on the federal power are real and they must be respected, even if they are inconvenient for the Obama administration’s goal to take over one-sixth of our economy,” said Bondi, a Republican.

The states’ main case is that it is unconstitutional for the federal government to insist that citizens buy anything, including health insurance. “If they can force us to do this, they can force us to do anything,” said Bondi.

Part of Bondi’s optimism is that there has already been a bipartisan decision in favor of striking down the law in the Atlanta-based 11th Circuit Court of Appeals. “People were playing the numbers game … saying we were going to lose because they had two Clinton appointees and a Bush appointee and look at the opinion we got out of it.”

She is confident that all Supreme Court justices will follow the law and not be guided by their own political views. “I believe when they hear our argument that they will know that this is such an overreach by the federal government,” she said.

Bondi said the Supreme Court case will be split into four distinct parts:

• Monday there will be arguments on the anti-injunction aspect of the case, which states that a tax cannot be challenged until it is paid;

• Tuesday is “the big day” when arguments on the constitutionality of the individual mandate will be heard;

• Wednesday morning is on severability – whether any part of the act can remain if the individual mandate is struck down;

• Wednesday afternoon will be arguments whether Washington can instruct states to expand Medicaid.

On the lesser-known aspects of the case, Bondi said she believes the government should accept the states’ argument about anti-injunction, otherwise, she said, it would mean there could be no arguments about the law until it is fully up and running. “What are they saying? It’s not a tax, it’s not a tax, it’s not a tax. How many times have you heard our president say that?”

And she said she is also confident about the Medicaid issue. “Our argument’s going to be that Congress cannot force us to increase our Medicaid that would put our state out of business or threaten all the states by losing all of our funding. It’s clearly coercion by the federal government and our Constitution protects us from coercion.”

At the end of it all, Bondi said she believes that “Obamacare will be no more.”

“That’s our hope. That’s what the law should be. It’s unconstitutional and we’re going to do everything in our power to present the best argument possible.”


© 2012 Newsmax. All rights reserved.

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AssociatedPress 3/18/12: 4 Justices Control Fate of ObamaCare
« Reply #1048 on: March 24, 2012, 05:06:12 PM »

4 justices control fate of ObamaCare

Published: 3/18 9:37 am 

WASHINGTON (AP) — Here's a thought that can't comfort President Barack Obama: The fate of his health care overhaul rests with four Republican-appointed Supreme Court justices.

The law could be struck down if they stand together with Justice Clarence Thomas, another GOP appointee who is the likeliest vote against.

The good news for Obama is that he probably needs only one of the four to side with him to win approval of the law's crucial centerpiece — the requirement that almost everyone has insurance or pays a penalty.

Lawyers with opposing views of the issue uniformly agree that the four Democratic-appointed justices will have no trouble concluding that Congress did not overstep its authority in adopting the insurance requirement that is aimed at sharply reducing the now 50 million people without insurance.
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NewsMax 3/23/12: Obamacare Foes Pick Experienced Lawyer For Their Case
« Reply #1049 on: March 24, 2012, 05:18:02 PM »
Obamacare Foes Pick Experienced Lawyer For Their Case
Friday, 23 Mar 2012 04:09 PM

By Martin Gould

Paul Clement, who is leading the fight against the Obama healthcare overhaul, is one of the most experienced attorneys in front of the Supreme Court, having argued more than 50 cases before the justices.

And most observers believe that he could one day end up sitting alongside the very people he has argued in front of on so many occasions. "It's unimaginable that any Republican president wouldn't have him on their short list," Curt Levey of the conservative Committee for Justice told The Associated Press.

Clement was selected for the all-important case because of his passion and humility, Florida Attorney General Pam Bondi, who made the choice, told Newsmax. “If it’s possible to have a great, brilliant lawyer without an ego, who is humble, it’s Paul Clement. He is just truly a genius.”

Clement, 45, is a native of Wisconsin, who attended Georgetown, Cambridge University and Harvard. He clerked for Associate Justice Antonin Scalia in the Supreme Court and worked as an associate in the Washington law firm of Kirkland & Ellis before becoming a partner at King & Spalding.

In 2004, President George W. Bush appointed Clement solicitor general, the official who takes the lead in defending the government’s position in Supreme Court cases. He argued in favor of the administration’s policy on detaining suspected terrorists, against partial-birth abortion and medical marijuana among other cases.

He is scheduled to argue seven cases in the Supreme Court’s current term, about 10 percent of the total of cases, “a staggering figure for a lawyer in private practices,” reported the AP. Among them is a defense of Arizona’s controversial immigration law.

"There's no doubt that Paul has become the leading advocate for the most deeply conservative causes in the law. That is a reputation he has worked hard to earn," fellow Supreme Court lawyer David Frederick said.

Bondi said Clement’s price tag – a flat rate $250,000 to be split between the 26 states that have signed up to appeal the healthcare law – was one of the reasons for his selection. Other lawyers who were approached wanted several times that figure, she told Reuters.

Clement himself is passionate about the healthcare case. He says he is “really interested” in the main question,“a test of power between Washington and the states.”

Since he was chosen, Clement – who represented the NFL owners in the contract dispute with the players that threatened the 2011 season – has left King & Spalding and joined a smaller firm, Bancroft. He quit because he took on the Obama administration on the Defense of Marriage Act, something his old firm was not entirely comfortable with.

The man facing Clement in court will be current Solicitor General Donald Verrilli, 54. The Wall Street Journal pointed out that the two men worked together in 2005 in the landmark Supreme Court case that shut down the music-sharing website Grokster.

They also share a love of rock music, the Journal reported. But while Verrilli prefers classic acts such as Jimi Hendrix, Eric Clapton and the Grateful Dead, Clement’s favorites are more cutting edge: Nirvana, the Killers and the English indie rock band, the Kooks.



© 2012 Newsmax. All rights reserved.
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