Archive for September 29, 2009

The Economy is a Lie, too

Posted in Attack on Freedom, economic tyranny, Economy, Fiat Currency, International Bankers, New World Order with tags , , , , , , on September 29, 2009 by truthwillrise

Paul Craig Roberts
Infowars
September 22, 2009

Americans cannot get any truth out of their government about anything, the economy included. Americans are being driven into the ground economically, with one million school children now homeless, while Federal Reserve chairman Ben Bernanke announces that the recession is over.

At the urging of Larry Summers and Goldman Sachs’ CEO Henry Paulson, the Securities and Exchange Commission and the Bush administration went along with removing restrictions on debt leverage.

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The spin that masquerades as news is becoming more delusional. Consumer spending is 70% of the US economy. It is the driving force, and it has been shut down. Except for the super rich, there has been no growth in consumer incomes in the 21st century. Statistician John Williams of shadowstats.com reports that real household income has never recovered its pre-2001 peak. 

The US economy has been kept going by substituting growth in consumer debt for growth in consumer income. Federal Reserve chairman Alan Greenspan encouraged consumer debt with low interest rates. The low interest rates pushed up home prices, enabling Americans to refinance their homes and spend the equity. Credit cards were maxed out in expectations of rising real estate and equity values to pay the accumulated debt. The binge was halted when the real estate and equity bubbles burst.

As consumers no longer can expand their indebtedness and their incomes are not rising, there is no basis for a growing consumer economy. Indeed, statistics indicate that consumers are paying down debt in their efforts to survive financially. In an economy in which the consumer is the driving force, that is bad news.

The banks, now investment banks thanks to greed-driven deregulation that repealed the learned lessons of the past, were even more reckless than consumers and took speculative leverage to new heights. At the urging of Larry Summers and Goldman Sachs’ CEO Henry Paulson, the Securities and Exchange Commission and the Bush administration went along with removing restrictions on debt leverage.

When the bubble burst, the extraordinary leverage threatened the financial system with collapse. The US Treasury and the Federal Reserve stepped forward with no one knows how many trillions of dollars to “save the financial system,” which, of course, meant to save the greed-driven financial institutions that had caused the economic crisis that dispossessed ordinary Americans of half of their life savings.

The consumer has been chastened, but not the banks. Refreshed with the TARP $700 billion and the Federal Reserve’s expanded balance sheet, banks are again behaving like hedge funds. Leveraged speculation is producing another bubble with the current stock market rally, which is not a sign of economic recovery but is the final savaging of Americans’ wealth by a few investment banks and their Washington friends. Goldman Sachs, rolling in profits, announced six figure bonuses to employees.

The rest of America is suffering terribly. 

The unemployment rate, as reported, is a fiction and has been since the Clinton administration. The unemployment rate does not include jobless Americans who have been unemployed for more than a year and have given up on finding work. The reported 10% unemployment rate is understated by the millions of Americans who are suffering long-term unemployment and are no longer counted as unemployed. As each month passes, unemployed Americans drop off the unemployment role due to nothing except the passing of time.

The inflation rate, especially “core inflation,” is another fiction. “Core inflation” does not include food and energy, two of Americans’ biggest budget items. The Consumer Price Index (CPI) assumes, ever since the Boskin Commission during the Clinton administration, that if prices of items go up consumers substitute cheaper items. This is certainly the case, but this way of measuring inflation means that the CPI is no longer comparable to past years, because the basket of goods in the index is variable.

The Boskin Commission’s CPI, by lowering the measured rate of inflation, raises the real GDP growth rate. The result of the statistical manipulation is an understated inflation rate, thus eroding the real value of Social Security income, and an overstated growth rate. Statistical manipulation cloaks a declining standard of living.

 

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In bygone days of American prosperity, American incomes rose with productivity. It was the real growth in American incomes that propelled the US economy. 

In today’s America, the only incomes that rise are in the financial sector that risks the country’s future on excessive leverage and in the corporate world that substitutes foreign for American labor. Under the compensation rules and emphasis on shareholder earnings that hold sway in the US today, corporate executives maximize earnings and their compensation by minimizing the employment of Americans.

Try to find some acknowledgement of this in the “mainstream media,” or among economists, who suck up to the offshoring corporations for grants.

The worst part of the decline is yet to come. Bank failures and home foreclosures are yet to peak. The commercial real estate bust is yet to hit. The dollar crisis is building.

When it hits, interest rates will rise dramatically as the US struggles to finance its massive budget and trade deficits while the rest of the world tries to escape a depreciating dollar. 

Since the spring of this year, the value of the US dollar has collapsed against every currency except those pegged to it. The Swiss franc has risen 14% against the dollar. Every hard currency from the Canadian dollar to the Euro and UK pound has risen at least 13 % against the US dollar since April 2009. The Japanese yen is not far behind, and the Brazilian real has risen 25% against the almighty US dollar. Even the Russian ruble has risen 13% against the US dollar.

What sort of recovery is it when the safest investment is to bet against the US dollar?

The American household of my day, in which the husband worked and the wife provided household services and raised the children, scarcely exists today. Most, if not all, members of a household have to work in order to pay the bills. However, the jobs are disappearing, even the part-time ones.

If measured according to the methodology used when I was Assistant Secretary of the Treasury, the unemployment rate today in the US is above 20%. Moreover, there is no obvious way of reducing it. There are no factories, with work forces temporarily laid off by high interest rates, waiting for a lower interest rate policy to call their workforces back into production. 

The work has been moved abroad. In the bygone days of American prosperity, CEOs were inculcated with the view that they had equal responsibilities to customers, employees, and shareholders. This view has been exterminated. Pushed by Wall Street and the threat of takeovers promising “enhanced shareholder value,” and incentivized by “performance pay,” CEOs use every means to substitute cheaper foreign employees for Americans [How Well-Educated, Hard-Working Americans are Treated in America, By Rennie Sawade, WashTech News, September 14, 2009 ]. Despite 20% unemployment and cum laude engineering graduates who cannot find jobs or even job interviews, Congress continues to support 65,000 annual H-1B work visas for foreigners.

In the midst of the highest unemployment since the Great Depression what kind of a fool do you need to be to think that there is a shortage of qualified US workers?

It Is Going To Be A Rocky Road

Posted in Attack on Freedom, International Bankers, New World Order, Police State/Martial Law, Shadow Government with tags , , , , , on September 29, 2009 by truthwillrise

Chuck Baldwin
September 22, 2009

Let’s face it: most Americans live in a world of false security. This is somewhat understandable, given the fact that the majority of the U.S. population was born after 1945. Few remember the dangers and hardships of World War II; fewer still remember the Great Depression. Few Americans know what it’s like to not have some sort of “supercenter” nearby with shelves stocked with every kind of food imaginable, twenty-four hours a day. Few know what life was like before there were restaurants of all sizes and types on virtually every street corner in America. And only a handful remembers when most roads were unpaved, or when sports were truly a pastime and not a megabuck obsession.

The paranoia regarding the Swine Flu being demonstrated by both government and media spokesmen begs a giant push for some type of “government solution.”

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Modern

 

 

 

 

 

 

 

 

 

living within the world’s only “superpower” has created a giant unsuspecting, soft, lackadaisical, and lethargic society. We expect the government to keep our streets safe, our roads paved, our stores stocked, our jobs secure, and our enemies at bay. However, in the desire to make government the panacea for all our problems, we have sold not only our independence, but also our virtue.

Where the federal government was contracted (via the U.S. Constitution) to accept limited power for the overall good of both states and people, it has become a monster of gargantuan proportions, claiming authority over virtually every liberty and right known to man. And in the process, it decided it didn’t need God, either.

It is no hyperbole to say that the U.S. federal government has been on a “Ban God” bandwagon for the past 50 years. Whether it kicks prayer and Bible reading out of school, bars military chaplains from praying in Jesus’ name, burns Bibles in Iraq, removes state supreme court chief justices from their positions for posting the Ten Commandments, or threatens high school principals with jail for asking the blessing, the federal government has invoked the judgment of Heaven upon our country as surely as did Old Testament Israel.

Although the comfortable, sports-crazed, TV addicts probably aren’t paying attention, this country is on the verge of an implosion like you cannot believe. For anyone who cares to notice, the signs are everywhere.

First of all, Israel and Iran are on the verge of war. And right now, I’m not concentrating on the “why” or “who’s right or wrong” of the equation. I’m simply telling you, war between Israel and Iran could break out at any time. And when it does, the chances that it will not become nuclear and not become global are miniscule. Yes, I am saying it: the prospects for nuclear war have never been greater. The CBS-canceled TV show, JERICHO, could become a reality in these United States in the very near future. (I strongly urge readers to purchase both seasons of JERICHO and watch them, because this could be our future.)

 

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Secondly, America is on the verge of total financial collapse. By the end of this year, America’s budget deficit will stand at around $2 trillion. The debt gap is many trillions more than that. But the nail in the coffin for America’s fiscal health will be the decision by China to dump the U.S. dollar. Ladies and gentlemen, this will be the death knell for our financial stability (and a painful lesson in sowing and reaping).

 

It is estimated that China owns around one-third of all U.S. debt. If and when China dumps the U.S. dollar, there would be nothing left to stabilize it, and Weimar Republic/Zimbabwe-style inflation will ensue. America will be thrust into financial chaos. (If one doubts that China is planning to dump the dollar, consider that China is currently purchasing and stockpiling gold at an unprecedented level. This is why gold has suddenly surged to over $1,000 per ounce and why it will continue to rise.)

Third, the paranoia regarding the Swine Flu being demonstrated by both government and media spokesmen begs a giant push for some type of “government solution.” If they keep hyping this “pandemic,” mass hysteria and fear (created by the government and its lackeys in the media) will result. This would, no doubt, necessitate some form of forced vaccination, quarantine (maybe this is what all those internment camps will be used for), and martial law.

Exactly how and when all of the above will actually materialize is yet to be seen. There is no doubt in my mind, however, that within the next few months, the world that we know today is going to vanish. And most Americans are totally unprepared for what’s coming.

If you are able to get out of debt, do it. If you need to scale down your lifestyle in order to be better prepared for difficult days, do it. If you don’t have guns and ammo, buy them. If you have not prepared some sort of preserved food pantry, do it. If you don’t have some kind of survival plan in place for you and your family, get one. If you are not physically fit, get in shape. If you are able to move to a more secure, out-of-harm’s-way location, do it. (During any kind of financial or societal meltdown, urban areas will quickly turn into war zones. Can anyone say, “New Orleans after Hurricane Katrina”?) In other words, get your nose out of the boob tube, get your bottom off the easy chair, and get busy.

Am I worried or discouraged? Absolutely not! (But I am preparing.) The potential good that may result from all of the above is that perhaps God will protect and raise up a remnant of people who would be willing to rebuild a place where Natural Law is respected, constitutional government is revered, and where a ubiquitous, loathsome, overbearing federal government is far, far away. You know, like America’s Founding Fathers did 233 years ago.

In the meantime, get ready. It’s going to be a rocky road.