Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals.
SINGAPORE (Reuters) - U.S. crude prices fell by more than $1 a barrel on Tuesday on profit-taking, after surging 5 percent overnight on fears that Israel's deepening incursion into Gaza...
HONG KONG (Reuters) - Asian stocks inched higher for a seventh day on Tuesday on hopes for a global economic recovery later in 2009, but the yen's gains against high-yielding...
TOKYO (Reuters) - Toyota Motor Corp , the world's biggest automaker, is to halt production at all its Japanese plants for a total of 11 days in February and March...
NEW YORK (Reuters) - Bob McCann, head of brokerage at Merrill Lynch & Co, announced his plans to leave the securities firm, just days after its acquisition by Bank of...
NEW YORK/WASHINGTON (Reuters) - U.S. prosecutors asked a judge to jail accused swindler Bernard Madoff on Monday, saying he sent jewelry and other items worth more than $1 million to...
DETROIT (Reuters) - U.S. auto sales plunged by 36 percent in December led by outsized declines at Chrysler LLC, Hyundai Motor and Toyota Motor Corp as the battered industry closed...
NEW YORK (Reuters) - Apple Inc Chief Executive Steve Jobs sought to soothe investor concerns about his health on Monday, saying his weight loss was caused by a hormone imbalance...
SAN FRANCISCO (Reuters) - Top economists at the Allied Social Sciences Association's annual meeting have been searching -- in some cases, in vain -- for signs of life in the...
LOS ANGELES (Reuters) - Health insurer Cigna Corp said on Monday it will cut 1,100 jobs, or about 4 percent of its workforce, and consolidate certain operations as it...
NEW YORK (Reuters) - The Federal Reserve on Monday kick-started its latest unconventional program to boost the moribund economy, this time taking aim at the heart of the slumping housing...
Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.
MPC founder member Willem Buiter
The long-held assumption that US assets - particularly government bonds - are a safe haven will soon be overturned as investors lose their patience with the world's biggest economy, according to Willem Buiter.
Professor Buiter, a former Monetary Policy Committee member who is now at the London School of Economics, said this increasing disenchantment would result in an exodus of foreign cash from the US.
The warning comes despite the dollar having strengthened significantly against other major currencies, including sterling and the euro, after hitting historic lows last year. It will reignite fears about the currency's prospects, as well as sparking fears about the sustainability of President-Elect Barack Obama's mooted plans for a Keynesian-style increase in public spending to pull the US out of recession.
Writing on his blog, Prof Buiter said: "There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place."
He said that the dollar had been kept elevated in recent years by what some called "dark matter" or "American alpha" - an assumption that the US could earn more on its overseas investments than foreign investors could make on their American assets. However, this notion had been gradually dismantled in recent years, before being dealt a fatal blow by the current financial crisis, he said.
"The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the US materially weakened financially, economically, politically and morally," he said. "Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the US must recognise that its financial system has collapsed."
He said investors would, rightly, suspect that the US would have to generate major inflation to whittle away its debt and this dollar collapse means that the US has less leeway for major spending plans than politicians realize.
The Home Office has quietly adopted a new plan to allow police across Britain routinely to hack into people’s personal computers without a warrant.
The move, which follows a decision by the European Union’s council of ministers in Brussels, has angered civil liberties groups and opposition MPs. They described it as a sinister extension of the surveillance state which drives “a coach and horses” through privacy laws.
The hacking is known as “remote searching”. It allows police or MI5 officers who may be hundreds of miles away to examine covertly the hard drive of someone’s PC at his home, office or hotel room.
Material gathered in this way includes the content of all e-mails, web-browsing habits and instant messaging.
$2 Trillion Increase May Test Federal Ability to Borrow
With President-elect Barack Obama and congressional Democrats considering a massive spending package aimed at pulling the nation out of recession, the national debt is projected to jump by as much as $2 trillion this year, an unprecedented increase that could test the world's appetite for financing U.S. government spending.
For now, investors are frantically stuffing money into the relative safety of the U.S. Treasury, which has come to serve as the world's mattress in troubled times. Interest rates on Treasury bills have plummeted to historic lows, with some short-term investors literally giving the government money for free.
But about 40 percent of the debt held by private investors will mature in a year or less, according to Treasury officials. When those loans come due, the Treasury will have to borrow more money to repay them, even as it launches perhaps the most aggressive expansion of U.S. debt in modern history.
With the government planning to roll over its short-term loans into more stable, long-term securities, experts say investors are likely to demand a greater return on their money, saddling taxpayers with huge new interest payments for years to come. Some analysts also worry that foreign investors, the largest U.S. creditors, may prove unable to absorb the skyrocketing debt, undermining confidence in the United States as the bedrock of the global financial system.
While the current market for Treasurys is booming, it's unclear whether demand for debt can be sustained, said Lou Crandall, chief economist at Wrightson ICAP, which analyzes Treasury financing trends.
"There's a time bomb in there somewhere," Crandall said, "but we don't know exactly where on the calendar it's planted."
The five Palestinian sisters were fast asleep when a night-time Israeli airstrike hit the next-door mosque in Gaza. One of the walls collapsed on to their small asbestos-roofed home and they were all killed in their beds. The eldest sister, Tahrir, was 17 years old, the youngest, Jawaher, just four.
"They grow up day after day and night after night. Within a second, I have lost them," the girls' father, Anwar Balousha, said yesterday. The 37-year-old, along with another three of his children, was himself injured in the attack on the densely populated Jabalya refugee camp.
The funerals of the sisters – Tahrir, 17; Ikram, 15; Samar, 12; Dina eight; and Jawaher, four – were attended by family members and thousands of mourners. But with space running out in the cemetery, the five girls had to be buried in just three graves, one for the eldest and the others forced to share.
May Do for the State What Mortgage Meltdown Did for the Nation
The state of California will go bust by March of 2009. Over the cliff we will go and to make sure there is no looking back, Arnold Schwarzenegger gave us an extra shove in the back – the Bank on California scheme.
This week the Governor has startled even his most adoring followers. He launched a program called "Bank on California" for the expressed purpose of allowing illegal aliens to open bank account and get loans using the fraudulent Mexican Matricular Consular and Central American "consular identification cards".
These consular identification cards, which only illegal aliens need, can be purchased for as little as $20 in any big city street corner or for $40 from official Mexican consulate. In the last few years the Mexican government has put in action a huge fleet of Mexican Consulates on wheels for the purpose of handing out Matricular Consular identification cards in any town and village in American where Mexican illegal aliens can be found. In some instances American public schools and libraries with administrators sympathetic of illegal aliens and open borders are allowing the mobile consular identification operations to issue these questionable identifications from classrooms and meeting rooms, to the outrage of tax-payer groups.
Martin Weiss writes: I have just received a series of urgent questions about the massive crisis swirling all around us. So to help you prepare for 2009, I am going to give you my best answers right here and now.
Urgent Questions from Readers
Q: I see disturbing similarities between this crisis and The Great Depression. Both were triggered by the bursting of massive debt bubbles, for instance. But this time, the government is doing so much more to pump up the economy. So is it safe to assume that this crisis will be a lot less severe than the 1930s?
A: No, it's not safe to make that assumption. True, the government's massive intervention is a major factor. But there are also powerful factors that can offset or even overwhelm the government's impact:
* Broader speculative bubbles. In the years prior to the Crash of 1929, the bubbles were limited primarily to stock speculation and restricted to a minority of the population. This time, the speculation has engulfed not only stocks but also millions of homes, commercial properties, local governments, corporations, and entire nations.
* More household debt. U.S. households are in far greater debt today with much less savings. In the 1930s, mortgages were rarer and less onerous. For all practical purposes, second mortgages, home equity loans, creative financing, and credit cards didn't even exist. Today, they are everywhere in our society.
* U.S. is now a debtor nation. In the 1930s, the U.S. had large surpluses of foreign reserves and was a creditor to the rest of the world. Now, it has minimal reserves and huge foreign debts. As a result, there's ultimately a limit to how much Washington can throw good money after bad to save the U.S. economy before foreign investors rebel, refusing to continue providing abundant credit.
* Derivatives. In the early 1930s, derivatives were virtually unknown — a tiny niche of little consequence. Today there are nearly $600 trillion in notional value derivatives globally, according to the Bank of International Settlements. The forced liquidation of many of these derivatives could frustrate government efforts to revive credit markets, driving the global economy into a deeper decline than would normally be expected.
A gun-toting man with large dark glasses, large hat pulled down, stands in front of a bank teller, who is reading a demand note. It says, “Give me all the money in my account.”
Bernie Madoff showed us how it was done: you induce many investors to invest their money, promising steady above-market returns; and you deliver – at least on paper. When your clients check their accounts, they see that their investments have indeed increased by the promised amount. Anyone who opts to pull out of the game is paid promptly and in full. You can afford to pay because most players stay in, and new players are constantly coming in to replace those who drop out. The players who drop out are simply paid with the money coming in from new recruits. The scheme works until the market turns and many players want their money back at once. Then it’s game over: you have to admit that you don’t have the funds, and you are probably looking at jail time.
A Ponzi scheme is a form of pyramid scheme in which earlier investors are paid with the money of later investors rather than from real profits. The perpetuation of the scheme requires an ever-increasing flow of money from investors in order to keep it going. Charles Ponzi was an engaging Boston ex-convict who defrauded investors out of $6 million in the 1920s by promising them a 400 percent return on redeemed postal reply coupons. When he finally could not pay, the scam earned him ten years in jail; and Bernie Madoff is likely to wind up there as well.
Most people are not involved in illegal Ponzi schemes, but we do keep our money in accounts that are tallied on computer screens rather than in stacks of coins or paper bills. How do we know that when we demand our money from our bank or broker that the funds will be there? The fact that banks are subject to “runs” (recall Northern Rock, Indymac and Washington Mutual) suggests that all may not be as it seems on our online screens. Banks themselves are involved in a sort of Ponzi scheme, one that has been perpetuated for hundreds of years. What distinguishes the legal scheme known as “fractional reserve” lending from the illegal schemes of Bernie Madoff and his ilk is that the bankers’ scheme is protected by government charter and backstopped with government funds. At last count, the Federal Reserve and the U.S. Treasury had committed $8.5 trillion to bailing out the banks from their follies.1 By comparison, M2, the largest measure of the money supply now reported by the Federal Reserve, was just under $8 trillion in December 2008.2 The sheer size of the bailout efforts indicates that the banking scheme has reached its mathematical limits and needs to be superseded by something more sustainable.
This is the time of the interregnum, the week between Christmas and the New Year, in the period between the end of the Bush disaster and the beginning of the Obama ascendancy.
It is a quiet time, a slow week (except for wars and coups, of course) and a moment for reflection before we cheer more for the passing of the last year then the coming of the next. The Zogby Poll found, “Americans are overwhelming glad to say goodbye to 2008 but are somewhat unsure of the future. Americans are guardedly optimistic about 2009, but just as many feel that the coming year will be worse or the same as 2008.”
Many of us are looking for guidance from the past, perhaps even from the period when Herbert Hoover bid adieu and FDR waited for his turn at bat. The year was 1932. Here’s what it looked like:
It was year of famine in Russia, hunger marches in Britain, Nazis emerging in Germany, Gandhi striking for India’s independence, and 13 million Americans out of work. A temporary halt to foreclosures had been ordered while working hours and wages were cut.
The worst was still to come.
Clearly, prices have gone up quite a bit since then. Yet Randall Parker who wrote “Reflections on the Depression” sees parallels with today:
“In the 1920s, most everyone was saying that this was a new economy and all the old rules did not apply, Parker says. "We know from economic history — they said the same things in Japan in the 1980s and during the Internet bubble of the 1990s — that when you hear those words it is time to run like hell."
On his third day in office President Grant revoked two pardons that had been granted by President Andrew Johnson. President Nixon also undid a pardon that had been granted by President Lyndon Johnson. There may be other examples of this, as these two have somewhat accidentally come up in a discussion focused on numerous examples of presidents undoing pardons that they had themselves granted, something the current president did last week. (See http://pardonpower.com ). In 2001, President George W. Bush's lawyers advised him that he could undo a pardon that President Clinton had granted.
Much of the discussion of this history of revoking pardons deals with the question of whether a pardon can still be revoked after actually reaching the hands of the pardonee, or after various other obscure lines are crossed in the process of issuing and enforcing of the pardon. If President Bush issues blanket pardons to dozens of criminals in his administration for crimes that he himself authorized, he will probably -- with the exception of Libby -- not even name them, much less initiate any processes through which they are each formally notified of the pardons. He will be pardoning people of crimes they have not yet been charged with, so the question of timing is something you are unlikely to have to worry about (except perhaps with Libby).
Virtually none of the discussion of these matters ever addresses the appropriateness or legitimacy of the pardons involved or of the revoking of them. The history would appear to establish that you will have the power to revoke Bush's pardons. I want to stress that you will also have a moral responsibility to do so and a legal requirement to do so. Morally and legally, you have no choice in this matter. When you take the oath of office, you will be promising to faithfully execute the laws of the land. Through Article VI of our Constitution, the Geneva Conventions and the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment are the supreme laws of this land. Those laws bind you to prosecute violations, including torture and other war crimes of which Bush, Cheney, and their subordinates are guilty and which Bush is likely to try to pardon.
The year 2008 will be remembered as one that exposed the fatal flaws in free-market capitalism, sending it to an untimely death.
Or will it?
That capitalism’s obituary is already being written suggests the enemies of the free market were waiting to pounce.
Last week, Arianna Huffington, co-founder of the Huffington Post, wrote that laissez-faire capitalism, “a monumental failure in practice,” should be “as dead as Soviet Communism” as an ideology.
On National Public Radio, Daniel Schorr pronounced “the death of a doctrine” in his year-end review.
All I could think of was Winston Churchill’s assertion about democracy. Capitalism is surely the worst economic system, except for all the others that have been tried.
With its ideology under fire and its practice falsely maligned, it is to the defense of free markets that I devote my final column of the year.
Before you can declare free markets a failure, you have to establish that they exist, says Paul Kasriel, chief economist at the Northern Trust Co. in Chicago.
“We do not have free markets in credit in the U.S. or anywhere else that I know of,” he says. “The price of short- term credit is fixed by central banks. It would only be by accident that a central bank would fix the price of short-term credit” at the precise level that a free market would.
Buying a few gold coins or the odd mini-ingot and hiding them away has been a successful investment strategy over the past five years. Even in the annus horribilus of 2008 investors who chose gold over other asset classes have been well protected while others have seen their wealth decimated. US dollar gold prices have been maintained while gold in Australian dollars, for example, was one of the best performing global asset classes in 2008.
For 2009 the resumption of a strong bull market in gold is one of the few positive predictions that look reliable. The sell-offs by hedge funds which kept gold future prices down in 2008 are coming to an end, and that should unleash a powerful new up leg in the gold market.
Chartists can already see this happening in their technical analysis. The spot price of gold has moved above the futures price, something known as ‘backwardisation’. This is almost always a signal that a huge price shift is about to occur. The same ‘backwardisation’ is also present in the silver price chart.
Japan’s recession evidently deepened even further in November as industrial output fell at the fastest pace in 55 years. Production plunged 8.1 percent month on month from October (Trade Ministry data), and was down an enormous 16.2% year on year. For an economy which lives from the prowess of its industrial exports, this is simply an earthquake.
click to enlarge
The decline in production was the largest since data for the present time series was first published in February 1953. As a result the ministry downgraded its output assessment to “declining rapidly.”
click to enlarge
This report comes hot on the heels of an earlier one, which showed that Japan’s exports plunged 26.7 percent in November, the sharpest drop since at least 1980. Japanese retail sales also fell in November - by an annual 0.9%. According to data from the Ministry of Economy, Trade and Industry, on a monthly, seasonally adjusted basis, sales were down 0.1% in November. Sales at large retailers decreased 3.2% on the year. These results were rather better than expected, but I wouldn't hold out much hope simply on that count, since the job market is still holding up reasonably well at this point, and consumers will be getting some benefit from slowing price increases (or even from price decreases). It is important to remember that this data is not price corrected, which makes it all just a little bit misleading.
“The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position."
--Historian and writer James Truslow Adams in his 1931 book Epic of America.
Mr. Adams penned these words in the midst of the Great Depression, the worst economic crisis in our history. It is timely to reflect on these words, as it appears that the American Dream is slipping further out of reach for most Americans. If the dream of a better life for our future generations is lost, it will truly mark a turning point for our great Republic. The reason the American Dream is slipping away is due to the actions of politicians running our government and bureaucrats running the Federal Reserve. Those with ability who have earned a better life through their hard work, intelligence and integrity should be attaining a higher position in the social order. Instead, our government is rewarding those Americans who have taken unwarranted risks, made brainless decisions, and willingly chose the course of excessive debt to climb the social ladder.
As the politicians scurry to “save” capitalism through the use of communist measures, more Americans are becoming disheartened. The definition of communism according to Webster’s is:
A system in which goods are owned in common and are available to all as needed.
George Bush, Henry Paulson and Ben Bernanke have decided to seize money from the vast majority of Americans who lived within their means, utilized debt sparingly, and worked hard to get ahead, and give it to the most appalling failures in our society. They have shoveled billions to banks that operated their businesses like gambling parlors. They have shoveled hundreds of millions to people who bought houses with no money down, interest only mortgages and fraudulent loan applications. They are now rewarding automakers who made the wrong vehicles, pay 30,000 workers per year to not work, and have only been able to “sell” cars by giving them away with 0% financing to anyone who could sign on the dotted line. These acts fit the definition of communism. We are now more communist than China.
On June 15, 2007, Ron Paul introduced HR 2755: Federal Reserve Abolition Act. There were no co-sponsors, no further action was taken, and the legislation was referred to the House Committee on Financial Services and effectively pigeonholed and ignored.
It's a bold and needed measure to "abolish the Board of Governors of the Federal Reserve System and the Federal reserve banks, to repeal the Federal Reserve Act, and for other purposes."
The bill provides for management of employees, assets and liabilities of the Board during a dissolution period, and more as follows:
it designates the Director of the Office of Management and Budget to liquidate Fed assets in an orderly and expeditious manner;
transfer them to the General Fund of the Treasury after satisfying all claims against the Board and any Federal reserve bank;
assume all outstanding Board and member bank liabilities and transfer them to the Secretary of the Treasury; and
after an 18-month period, submit a report to Congress "containing a detailed description of the actions taken to implement this Act and any actions or issues relating to such implementation that remain uncompleted or unresolved as of the date of the report."
On November 22, "End the Fed" protests were held in 39 or more cities nationwide (including New York, Chicago, Los Angeles and Washington, DC), but you'd hardly know it for lack of coverage. Attendee demands were simple and emphatic:
end a private banking cartel's illegal monopoly control over the nation's money supply and price;
return that power to the US Treasury as the Constitution mandates;
end a fiat currency system backed by the waning full faith and credit of the government; and
return the country to a sound, hard currency monetary system.
"End the Fed! Sound Money for America!" is their slogan, and writer and US policy critic Webster Tarpley puts it well:
"....the privately owned central bank....has been looting and wrecking the US economy for almost a hundred years. We must end a system where unelected, unaccountable cliques of bankers and financiers loyal to names like Morgan, Rockefeller, and Mellon set interest rates and money supply behind closed doors, leading to de-industrialization, mass impoverishment, and a world economic and financial depression of incalculable severity."
In theory, the Fed was established to stabilize the economy, smooth out the business cycle, manage a healthy, sustainable growth rate, and maintain stable prices. In fact, it failed dismally. It contributed to 19 US recessions (including the Great Depression) and significantly to the following equity market declines that accompanied them as measured by the Dow or S & P 500 average - the S &P's inception was 1923; it became the S & P 500 in 1957:
The Federal Reserve has announced it is lowering the federal funds interest rate to between 0.00% and 0.25%. This means it will now be even easier for banks to create new money. When banks borrow money from the Federal Reserve, the Fed is not lending them money it has saved. The Fed is creating entirely new money that did not exist before. The banks then loan this money to individuals and businesses at an interest rate higher than the federal funds rate.
The 700 billion dollar bailout was only the beginning. The Fed has already greatly surpassed this amount. The Fed has created over two trillion dollars and used this to buys stocks, bonds, and debt. Who authorized the Fed to do this? No one! The Fed did it because it could. The reason the Fed could, is because the government illegally refuses to take on its constitutional responsibilities. The Constitution requires that the government create money, and most people think the government does create money. However, it is banks that create money, not the government.
The banks in America are collapsing, and the US government has spent over $700 billion to save them. The ostensible reason is they have lost so much money because of loan defaults, and they need money to keep the economy going by making more loans to each other, to businesses, and to consumers. But this is a lie that twists the reality of the financial system. Banks do not really provide the valuable service to society most people think they do.
American Soldiers Are Dying Of Lung Cancer - And May Have Been Knowingly Exposed
The military contractor Kellogg Brown and Root, known as KBR, has won more than $28 billion in U.S. military contracts since the beginning of the Iraq war.
KBR may be facing a new scandal.
First, accusations its then-parent company Halliburton was given the lucrative contract. And later, allegations of shoddy construction oversight that resulted in Americans getting electrocuted.
Now, some other American soldiers say the company knowingly put their lives at risk.
In April of 2003, James Gentry of the Indiana National Guard arrived in Southern Iraq to take command of more than 600 other guardsmen. Their job: protect KBR contractors working at a local water plant.
"We didn't question what we were doing, we just knew we had to provide a security service for the KBR," said Battalion Cmdr. Gentry.
Today James Gentry is dying from rare form of lung cancer. The result, he believes, of months of inhaling hexavalent chromium - an orange dust that's part of a toxic chemical found all over the plant.
At least one other Indiana guardsman has already died from lung cancer, and others are said to be suffering from tumors and rashes consistent with exposure to the deadly toxin.
"I'm a nonsmoker. I believe that I received this cancer from the southern oil fields in Iraq," he said.
Now CBS News has obtained information that indicates KBR knew about the danger months before the soldiers were ever informed.
The steep drop in oil prices may not be over yet, says the CEO of Gulf Oil.
While oil has tumbled more than $100 off its $147 a barrel high in the summertime, the price of US light, sweet crude could yet move as low as $25, and even $20 if current conditions persist, Gulf CEO Joe Petrowski said on CNBC.
"Oil's got some more downside," Petrowski said. "Whether it hits $20--could--but I think $25 is in the cards."
Several factors are critical in the move lower, particularly the pressure set against traders in the oil markets, and the control sovereign foreign governments, as opposed to private entities, have exerted on the market since the summer price shock that sent gasoline prices at the pump above $4 a gallon.
"They have a tendency to sell more on the way down, not less," Petrowski said of the governments ruling the energy trade.
In all, he thinks those who believe oil is due for a rebound aren't seeing the global economic factors that are playing into energy prices.
"There are things setting up in the oil markets that I think will give us lower prices, much lower prices, than we're all expecting," Petrowski said. "The down side is still well in gear."
2008 is mercifully coming to an end. The year of the ass-backward; the year of the bailout, the meltdown and of failed leadership will soon be behind us, as will the disaster known as the Bush Presidency. Unfortunately, it appears as if President Bush isn’t quite prepared to saddle up and ride off into the sunset singing “Home on the Range” just yet. His approval of a bailout for the auto industry is yet one more nail in the coffins of capitalism, our constitution and individual freedom.
Back in September, Americans expressed their distaste for bailouts of any kind. The president assured us when pleading with Congress for a bailout of the financial industry that it was an extreme measure and that bailouts wouldn’t become the national pastime. Yet they have. He assured us what they were doing wasn’t socialism. But it is. The US government now has an ownership stake in a large segment of the US financial industry as well as in the major players of the US auto industry.
When Congress announced that their legislation was the only solution to this problem, I said it would fail - and for specific reasons.
Hank Paulson was given too much power.
The legislation had too many loopholes.
It was far too big in scope, open to any financial institution.
It would result in other industries coming to Washington with their hands out.
So let’s look at what’s happened since October.
The stock market has not stabilized and remains volatile. It has been on a white-knuckle roller coaster ride with huge swings ever since the President’s announcement.
Three-hundred fifty billion of the 700 billion has been spent. Billions were given to banks that didn’t need them. By taking these funds, these institutions sent the signal they were in trouble. But some of them ended up using the billions they received to fund employee bonuses. Others are holding on to the money and adopting miserly lending practices.
The Troubled Asset Relief Program (TARP) has been a utter failure and waste of taxpayer money thus far. And now this failed policy is being extended to yet another industry. The TARP was specifically intended to stabilize only the real estate and housing markets. There is no mention of using bailout money beyond rescuing homeowners or financial institutions. Therefore, the President’s use of TARP funds for the auto industry is strictly unconstitutional.
Global Central Banks Acting In Concert - Disinformation In Financial Dailies To Confuse The People When The Truth Dawns On Hapless People, There Will Be Blood On The Streets. This Is The Warning By IMF!
The disinformation by the global financial dailies in the last twelve months as to the cause of the global financial tsunami, serve the same purpose as the global mass media when they perpetuated the lies that lulled the people to support the war criminals Bush, Blair and Howard to launch the barbaric war against Iraq and Afghanistan which resulted in the genocide of millions, the mutilation of hundreds of thousands, physically and psychologically, and the devastation of an entire nation.
The wars unleashed thus far, specifically the “War on Terror” was launched to preserve the shadow money-lenders’ political and military power.
This War on Terror is the greatest military sideshow that distracted the great American people from the financial rape and plunder of their economy and the destruction of their Constitution.
Since the summer of 2007, we have witnessed a concerted effort by the world’s central banks and global commercial and investment banks to preserve the shadow money-lenders’ financial power, one that is founded on fraud and structured in every detail as in the infamous Ponzi scheme.
In the last seven years, the Ponzi scheme was globalised by the Shadow Money-Lenders, siphoning hundreds of billions from so-called sophisticated investors and sovereign wealth funds. At its peak, the Ponzi scheme was estimated to be worth over $500 Trillion, with the Credit Default Swap (CDS) portion just under $60 Trillion!
Hidden behind the headlines of the financial destruction that is sweeping across the globe, lies another story – a dark tale of men who orchestrated the crisis and have amassed enormous wealth and power at the expense of the millions who are now unemployed and whose homes have been foreclosed. This select group of men is in absolute control of the unfolding events.
(We urged them to become influential in politics, and that's exactly what they did.)
On Saturday, December 6, 2008, the Republican Party of Los Angeles County (RPLAC) met at the Ronald Reagan State Office Building in Los Angeles to choose its leadership for the next two years. After a brief but intensive parliamentary battle with the entrenched leadership, control was wrested away by a newly formed coalition of those who were anxious to re-dedicate and re-energize the Party along traditional Republican principles and strategies. Ron Paul and Ed Griffin of Freedom Force International have urged their supporters to become active in political parties. That's exactly what happened in Los Angeles, dramatically demonstrating that it can be done.
Linda Boyd had been the Chairman of RPLAC for six years, and many felt it was time for her to leave and for the Republican Party to get back to its roots of: limited constitutional government, fiscal responsibility, sound monetary policy, Second Amendment rights, strong national defense, a non-interventionist foreign policy, personal freedom, and opposition to illegal immigration. Actually, the former Chairman supported all of these concepts, but , but the coalition felt the Party was languishing under the old leadership. It was not fielding candidates for many of the hundreds of political offices available, and it was not providing strong support for the ones who did run. Of the 26 Assembly Districts, there are now only 13 district offices open. Republicans were losing the majority of elections. They had not been getting enough money to be effective, and most of the money that was raised did not go to the individual districts or candidates. So, it was felt that it was time for a change.
Several Freedom Force members formed a coalition with followers of Ron Paul and formed a plan of action. Some, who had supported other alternative candidates for President, also joined the coalition. About 40 Angelenos took out papers to run for offices on the Central Committee. A majority (29) of these were elected in the June 3rd Primary. Fourteen more were write-in candidates. This unprecedented grass-roots action was the result of freedom-minded people deciding to quit complaining and quit following political leaders they did not like and, instead, offering themselves as leaders instead. That is the mission of Freedom Force.
At the RPLAC meeting on Dec. 6, (which is an election of County and District Officers who decide how the party is run), a Temporary Chairman was elected to conduct the business of the Organizational Meeting that day. Linda Boyd's choice for Temporary Chairman was defeated 39 - 54. The new Temporary Chairman asked who wanted to be Chairmen of the Credentials, Nominating, Resolutions and By-Laws Committees. As Freedom Force members were unknown to him, he selected Chairmen he had known; however, when he asked who wanted to be members of those two most important committees, he picked two volunteers who were Freedom Force members.
The American Revolution was an extraordinary event. The idea that freedom was an inherent right, that tyranny could be successfully opposed, that government could serve the people, not the few, was truly revolutionary in 1776-as it is today.
The American Revolution, however, has run its course; and unless resuscitated and given new life, the American dream and the dreams of America's founding fathers will soon be only a memory. Dreams rarely come to pass and those that do rarely last. The American dream is no exception.
What happened in 1776 has been subverted by the passage of time and the inconstancy of later generations. Those who rule America today have subverted the principles enumerated in the US Constitution; principles the Founding Father hoped would guide those who followed them through the crises yet to come.
The principles were not many, e.g. fiscal prudence, sound money, separation of church and state and a limited military and limited government. But even those few and clearly stated principles succumbed over the years to the imposition of policies that had given rise to the need to revolt in 1776.
Now, in 2008, tyranny and government excesses are again upon America, but this time it is by America's own hand. The policies of King George III were no more egregious than the policies of President George Bush II.- taxation without real representation, e.g. TARP (80 % Americans opposed), the imposition of policies contrary to the will of the people, e.g. US presence in Iraq and Afghanistan (70 % opposed), and the loss of individual freedoms under the Patriot Act (60 % opposed).
The difference between 1776 and 2008 is that America is now tyrannized not by the King of England but by its own government. Today, the US government does not represent the will of the people. It represents instead the special interests that control the US government through the buying of votes-America is not for sale only because it has already been sold.
The difference between 1776 and 2008 is not only 232 years. It is the difference between the dream of the Founding Fathers and the shadow of that dream in whose increasing darkness Americans now exist.
THE FEDERAL RESERVE BANK IS THE REASON FOR AMERICA'S FALL FROM POWER AND THE SOURCE OF ITS INCREASING PROBLEMS
Thomas Jefferson warned 200 hundred years ago that if private bankers were allowed to issue America's money, indebtedness, foreclosure and suffering would follow. Yet, in 1913, private bankers gained control over America's money by the passage of the Federal Reserve Act.
We are now suffering for ignoring Jefferson's warnings. Jefferson was right in predicting our problems but his words were overridden by those who had other plans for America, plans that would increase their profits at the expense of the nation.
It is no accident America is now an empty shell of the great economic power it once was. Bled dry by debt imposed by those whose sole intent was to profit, the US is now bankrupt at a time it desperately needs the resources it no longer has.
American trade and budget deficits have grown worse and Treasury Secretary Henry Paulson Jr., with President Hu Jintao of China, has not been able to allay the problem.
“Usually it’s the rich country lending to the poor. This time, it’s the poor country lending to the rich.” — Niall Ferguson
In March 2005, a low-key Princeton economist who had become a Federal Reserve governor coined a novel theory to explain the growing tendency of Americans to borrow from foreigners, particularly the Chinese, to finance their heavy spending.
The problem, he said, was not that Americans spend too much, but that foreigners save too much. The Chinese have piled up so much excess savings that they lend money to the United States at low rates, underwriting American consumption.
This colossal credit cycle could not last forever, he said. But in a global economy, the transfer of Chinese money to America was a market phenomenon that would take years, even a decade, to work itself out. For now, he said, “we probably have little choice except to be patient.”
Today, the dependence of the United States on Chinese money looks less benign. And the economist who proposed the theory, Ben S. Bernanke, is dealing with the consequences, having been promoted to chairman of the Fed in 2006, as these cross-border money flows were reaching stratospheric levels.
In the past decade, China has invested upward of $1 trillion, mostly earnings from manufacturing exports, into American government bonds and government-backed mortgage debt. That has lowered interest rates and helped fuel a historic consumption binge and housing bubble in the United States.
China, some economists say, lulled American consumers, and their leaders, into complacency about their spendthrift ways.
“This was a blinking red light,” said Kenneth S. Rogoff, a professor of economics at Harvard and a former chief economist at the International Monetary Fund. “We should have reacted to it.”
In hindsight, many economists say, the United States should have recognized that borrowing from abroad for consumption and deficit spending at home was not a formula for economic success. Even as that weakness is becoming more widely recognized, however, the United States is likely to be more addicted than ever to foreign creditors to finance record government spending to revive the broken economy.
Japan should write-off its holdings of Treasuries because the U.S. government will struggle to finance increasing debt levels needed to dig the economy out of recession, said Akio Mikuni, president of credit ratings agency Mikuni & Co.
The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes “drastic measures” to help bail out the U.S. economy, Mikuni said. Treasury yields, which are near record lows, may fall further without debt relief, making it difficult for the U.S. to borrow elsewhere, Mikuni said.
“It’s difficult for the U.S. to borrow its way out of this problem,” Mikuni, 69, said in an interview with Bloomberg Television broadcast today. “Japan can help by extending debt cancellations.”
The U.S. budget deficit may swell to at least $1 trillion this fiscal year as policy makers flood the country with $8.5 trillion through 23 different programs to combat the worst recession since the Great Depression. Japan is the world’s second-biggest foreign holder of Treasuries after China.
