Please reference the thread within the Forum addressing Mr. Chapman's background, and bear this in mind should you choose to review the following:
We have come a long way from the freedom that existed in America in the 19th century. Our freedoms and privacies have been snatched from us – one by one – as we have traversed the past 100 plus years. Since the First World War we have lived in perpetual war, revolution and crisis deliberately made to order for us. We are now told we could leave all this behind if the world was democratized and free trade and globalization were allowed free rein.
Privacy is based upon respect for private property and the law, which protects that right. The recent Supreme Court decision allowing eminent domain for commercial purposes effectively ended that. Government now, for any reason, can take your property. The wealthy and connected can now have what is yours. They have taken part of your privacy and freedom away.
Over the last century the promise of perpetual peace has been deliberately replaced by perpetual war and revolution for perpetual peace.
Today we have laws for laws. We have a totally fiat commercial, economic and financial system that simply doesn’t work. That system will end when other central governments simply can no longer purchase our debt. Gold is the only true money, but we do not expect it to be reaccepted as that.
We have totally immoral government, which is only legitimate because the law says it is. The laws were written to create a condition in which government can do exactly as instructed by those who control it from behind the scenes. As a result of such laws we have become slaves of the state. We are being denied our right to our personal property as we are taxed into oblivion. Part of everything we produce goes to government whether we like it or not. If you do not pay tribute – taxes your private property is confiscated. Your private property is taken from you by law. This brings about the question of legitimacy of government. All that has changed is that your master doesn’t directly control you – he indirectly controls you via taxes and other laws that make you subservient to that state. There is no life, liberty and the pursuit of happiness when you live in a police state as Americans now do. In the bogus pursuit of terrorism all our freedoms have been removed and unless we stop this insidious process now we’ll live forever in chains or revolution.
Our economy and the world economy are out of control and that is the main reason gold is going higher. It’s the only real currency. As we mentioned last week, the word in Geneva and Zurich is that the dollar will fall in value 50%. The only question now is when. In reading this publication you are all well aware of all the reasons for this calamity. Worse yet, in the conventional sense there is no way back. We passed the point of no return five years ago. Our economy continues to amass higher external deficits that are totally unpayable. The foreign central banks are well aware of this, but they are all in varying degrees – part of the great game, which is the deliberate destruction of the world economy from which they expect to build their New World Order. Confidence is beginning to ebb as those running nations begin to realize the enormous ramifications of what is about to occur. These nations are going to be left holding the bag and no one likes to be a goat. The legitimacy of the dollar, the US economy and of the US government is about to collapse.
The quagmire that is Iraq and Afghanistan continues unabated in its loss of money and lives. Congress will approve another $120 billion request and Mr. Bush’s $40 billion war will have become a $440 billion war and occupation with no end in sight. The building of four large airbases around Baghdad can only lead to the conclusion that America plans to be in Iraq for decades to come - a perpetual financial drain on our economy. There is a $600 billion embassy complex being built in Baghdad’s green zone. We are sure that is not for temporary occupancy.
Rep. Jack Murtha has been saying for sometime that Iraq is not about terrorism; it is about civil war.” The bloody events as of late have proven his assessment all too true. Jack is unusual for a politician. He’s a truth seeker and a truth teller. Jack has been giving us the facts, the truth.
The flipside of that is George and the neocons know for sure they have brought democracy to Iraq. Democracy like terrorism is a cover for all the other real reasons we are there. Even Jack Murtha doesn’t get that because he is inside the box. America is now in the midst of a civil war in Iraq and our military is stuck in the middle of it. The civil war is the result of rigging Iraq’s “democratic elections.” The Association of Muslim Scholars, a hard line Sunni group, blamed America for worsening conditions in Iraq and they are right. Hundreds of thousands of Muslims across the country are chanting, “no to the occupation,” and they are right in doing so.
This has made us less safe in America because it could motivate Muslims to retaliate against us in the US and they have every right to do so. How would you feel if you were an Iraqi and your country and people were being torn apart, and you had done nothing wrong? Our troops are in a crossfire and we have helped recruit even more Islamic combatants. History resonates with the enmity and violence between Muslim sects, and our American youth are losing their lives and limbs trying to sort out these centuries of ancient hatreds. Many politicians in both parties want out of Iraq and Afghanistan, but are afraid of bringing up the issue because 45% of dumb Americans still are convinced it is a good idea to be there.
The Chinese are not much for words so when they say something you had best listen. They will cut back their foreign dollar reserves by 50% soon, but over a period of time, in order to increase the value of the yuan. If you had $820 billion you’d want to diversify some of your holdings. It’s an event that has to happen and once it begins it will be unstoppable. That is one of the key reasons the dollar’s value has to go substantially lower.
We also want to remind you again that Syria is exchanging most of its dollar reserves for euros and other currencies that they need in trade. In addition, as we told you last week, Norway wants its own oil bourse to trade oil in euros. The world is starting to move in that direction and the trend will be unstoppable if the Iranian oil bourse opens on March 16, 2006. What is tragic is that Americans do not know any of this because the media has kept them in the dark.
For all intents and purposes we do not have a constitution left. The revised Patriot Act is being fast tracked for approval. This shows you how totally corrupt our Congress is. It places all Americans in the position of legally being spied upon based on the whims of government agents. Citizens are finally realizing that the law is terrorist in nature and in fact the terrorists are within our government. There is no longer use for probable cause – it is any cause they want it to be. Permanent passage of the Patriot Act deflects attention to a bogus enemy that doesn’t exist, it puts us in jeopardy for merely questioning government, and it allows our criminal government to keep their cover by preying on those who dissent.
Iran says if they are attacked they will retaliate with a military strike on Israel’s main nuclear facility Dimona, the port city of Haifa and the Zakhariya area. Our guess is you won’t see sanctions against Iran. The bluff of the US and Israel has been called.
The Army has recommended that seven 82nd Airborne Division Paratroopers be discharged following allegations they engaged in six acts shown on a gay pornographic website. They face court martial on charges of sodomy, pandering and engaging in sex acts for money.
The White House has finally turned over 250 pages of emails they said they didn’t have, from VP Dick Cheney’s office. From 2003 they relate to the leak of the cover of CIA operative Valerie Plame Wilson. The emails are said to be explosive, and may prove Cheney masterminded the caper. It is expected the emails will prove Cheney lied to FBI investigators. Some of the emails turned over to Special Prosecutor Patrick Fitzgerald gave up Plame Wilson’s identity and CIA status.
In a new incursion against freedom of the press, the SEC issued a subpoena to two journalists at Dow Jones and ordered them to provide information about conversations they had with stock traders and analysts. Then the SEC backed off, but they may return. What the SEC was looking for was unpublished communications. If the SEC can access these then the tools of every business reporter in this country becomes fair game for any company that doesn’t like scrutiny and chooses to play the conspiracy card. On the other hand, many brokerage firms, especially the major ones, have been going naked short and the SEC is well aware of it, and has done nothing about it. They have stopped trading in thousands of companies with no explanation and they never trade again, and the shareholders lose all of their money. That doesn’t seem to bother the SEC though. Very often they simply destroy companies.
We now have a government that has been forced to admit that it is tapping our telephones, faxes, emails, opening our mail and accessing our bank and medical records. None of these acts against us has to be covered by a warrant or probable cause. We are told we should not be concerned that our civil and personal liberties are gone because we must all fight terrorism and anyone can be a terrorist. Of course, Dubai Ports and the UAE can run 21 ports because they are our friends and they are part of the New World Order.
Buried very deeply in the supplemental Pentagon budget is $35 million for the Echelon operation in Yorkshire, England, which has been spying on you since 1985.First it was phones, faxes, money wire transfers, and now it includes all electronic communications. This should have been an issue long ago and that is probably why the recent NSA spying came to be an issue so that the elitists could continue to cover their Echelon operation. We bet you didn’t know another $700 million was allocated to the expansion of NSA operations in Augusta, GA, and in Hawaii, so they can better spy upon you via Echelon. The present NSA scandal is to see if the executive office can in fact assume dictatorial power. They want a stamp of approval to spy on you and control you.
Senator Lindsay Graham (R-SC) has suggested to Attorney General Alberto Gonzales a new target for the administration’s domestic operations – targeting fifth columnists - those who are disloyal Americans, those who sympathize or collaborate with the enemy. Graham said, “The administration has not only the right, but the duty, in my opinion to pursue fifth column movements, and I do not think you need a warrant to do that.” A. G. Gonzales said, “The President already said we’d be happy to listen to your ideas.” This is the same Graham who is sponsoring trade legislation and tariffs against Japan. You have to know now that legislation is phony inasmuch as these latest pronouncements would allow government to kidnap and imprison anyone who had anything negative to say about the government or the elitists who control government. There is no question that the neocons and elitists are behind Graham’s plans. They want to stop anyone from disseminating information that is critical of what they do or what they intend to do. They want to snuff out insufficiently loyal Americans, those who expose what the elitists are up too. These news informers cannot be allowed to tell the public the truth.
This is why KBR-Halliburton was awarded another no-bid contract for $385 million to construct detention centers throughout the US. They are not for an emergency influx or immigrants; they are to detain you if you say one thing against George and the neocons’ New World Order. We originally thought the centers would be used for you and us when Martial Law was declared, but with this statement by Senator Graham we believe as soon as they are completed, probably in a year or so, they will start collecting unpatriotic citizens who have anything negative to say about our government or the elitists. There will also be an additional roundup after the elitists stage the next 9/11-type of event. It should also be noted that a year ago a revision was made in the Army’s labor program that provides a template for developing agreements between the Army and corrections’ facilities for the use of inmate labor programs and civilian prison camps on Army installations. The document has recently been posted, which is not a coincidence in light of Graham’s statements. There is an urgency for these camps to be constructed – that is why it is referenced “rapid action revision” and KBR’s contract contemplation of “rapid development of new programs” have startled some with its sudden need for urgency. This is right in line with the Bush-neocon policies to involve the Pentagon-Army in “counter-terrorism” operations inside the US.
In spite of Posse Comitatus the Defense Department has secretly been creating new agencies that gather and analyze intelligence within the US, which is illegal. George and the neocons are also moving to expand the power of the Pentagon’s Counterintelligence Field activity, created three years ago to consolidate counterintelligence operations. It is being transformed into an office that has the authority to investigate crimes such as treason, terrorist sabotage or economic espionage.
The Pentagon has also presented legislation in Congress that would create an intelligence exception to the Privacy Act, allowing the FBI and others to share information about US citizens with the Pentagon, CIA and other intelligence agencies. In 2001, Defense said the US Army’s top intelligence officer wrote, “Contrary to popular belief, there is absolutely no ban on military intelligence components collecting US personal information.” NSA has been collecting information on Americans since 9/11 and since 1985 using Echelon. You have no rights – you have no privacy. The National Counter-terrorism Center’s central repository now holds the names of 325,000 terrorist suspects, a four-fold increase since 2003.
Did you take notice when Fatherland Security dispatched heavily armed paramilitary mercenaries from Blackwater, the private security company, to openly patrol the streets of New Orleans? That is just the beginning; next it will be your neighborhood under any pretense.
All government has to do is designate you a potential terrorist and you’ll be picked up and imprisoned. Jose Padilla was imprisoned for possibly being an enemy combatant for three years without charges. Our President tells us he has plenary or unlimited war powers as Commander in Chief for the duration in the war on terror, which could be forever. You have no constitutional rights left – none. If you do not act now to combat this menace you will lose all your freedom forever.
In 2000 a federal judge said Arizona did not provide schools with enough money for English-language learners, children who speak Spanish but very little English. In 2005 voters banned the use of any language except English. Starting in January of 2006 the state was fined $500,000 a day for every day without a funding plan. Two weeks ago the fine was raised by $1 million a day by George and the neocons. It provides state English emersion, only 11% of the children passed, which means 89% failed. That is how our federal government is extorting the state of Arizona to violate state law. It is ridiculous, but that is the way it stands.
Senate Judiciary Chairman Arlen Specter (R-PA) will retire in 2008, and thus he won’t be facing voters again. His payoffs will come after he is out of office. As a result, he is endeavoring to expand immigration numbers as much as possible to satisfy his masters. The bill in judiciary contains the McCain-Kennedy amnesty provisions, challenges the House bill’s enforcement provisions, and increases legal immigration and much more. If this bill passes it will be a disaster for our country.
It is expected that $1 trillion of $7.6 trillion in mortgages written in the first six months of 2005 are likely to default. These mortgages are packaged into pools and bonds are issued against them. The amount of bonds backed by these high-risk loans more than doubled since 2001, to $476 billion, so there are two branching-points feeding the potential housing bubble explosion. First, the home mortgages themselves - second, the bonds issued against the mortgages.
It is expected dollar volume of mortgage loans may fall 25% this year. This is borne out by the monthly housing index, a gauge of builder confidence in the single-family home market, which is at its lowest level since April 2003.
Our President last week told an audience in Milwaukee that the economy was growing at 3.5%; unemployment was down to 4.7%; more than four million new jobs were created in the past 30 months; home ownership was at record levels, and after tax income was up 8% over the past four years.
What he left out was the economy grew 3.5% because money and credit rose over 10% devaluing consumer-buying power; that unemployment was 13% because those who couldn’t get a decent job are not counted anymore. As well, he left out that over the past four years of recovery 10 million jobs should have been created and only three million were created. He did not address the five million jobs we offshored or outsourced. We hear nothing of the 3.3% rate at which sub-prime borrower homeowners are losing their homes, nor that the 8% gain in income was offset by a 40% loss in purchasing power – some recovery. We are not doing fine, we are doing terrible.
Our President says this is due to low taxation. He left out that our fiscal deficit since his tenure has been more than $500 billion annually. He has not engaged in careful government spending. Over $400 billion has been wasted on two needless wars and occupations.
Mr. Bush might look at US poverty figures as he wastes our money in the Middle East. US income grew at only 1.5% between 2001 and 2004, compared with 10.3% between 1998 and 2001. Between 2001 and 2004 real wages fell 6.2%. This was during a period of low unemployment, which does not auger well for the next crisis. We’ll have to send the unemployed to India and China to work.
Savings are minus 0.5% and ownership in mutual funds has fallen 3.3% to 48.6%, the first recorded drop since the survey began in 1989.
Prior to Hurricanes Rita and Katrina, 25 million Americans went to Second Harvest for food and shelter - that is up 9% from 2001. Thirty-eight million Americans live in hungry or food insure households, up 5 million since 2000. We find this to be a dismal track record in a recovery.
Sales of new homes fell 5% in January, the lowest in a year. The number of new homes on the market (inventory) increased 2.5% to a record 5.2 months supply at the January sales pace, the largest inventory in nine years. Sales were 1.233 million and the “experts” forecast 1.27 million sales fell in three of four regions. The West was up 11.3%; the South fell 10.3%; Midwest 10.8% and Northeast 14.9%.
The more we look at the situation that Ben Bernanke is in the more we believe that we’ll have at least two 1/4% interest rate increases and maybe two more before the year is over. He will use them as a cover to convince investors and professionals that he’s an inflation fighter; while he is expanding money and credit at better than a 10% rate. That is the plan and that is why in a few weeks M3 won’t be published anymore. He and his masters want to deceive us.
Ben would have us believe that the economy has absorbed oil sticker shock without inflation spiking. Official inflation cannot spike, because all of the numbers are rigged. They are what the Fed wants them to be. Inflation is not under control; it is more than 10% and ready to accelerate again.
Bernanke says, “The Fed doesn’t really have good instruments for addressing asset price bubbles should they exist, particularly if they are in on particular segment or another.” Yes Ben and we believe the tooth fairy. You don’t want to recognize them because the Fed creates them. Ben says inflation and inflation psychology have remained at bay, so the Fed can pursue a policy of rate hikes that is more gradual and predictable. He must think we are terribly dumb.
Palestinian funds have been cut off so they cannot pay for oil and Israel has cut off their oil. What can Israel be thinking? Israel will not transfer taxes and tariffs on products crossing Palestinian land borders as well. That is $60 million a month and is 60% of Palestinian public funds. That is terrible. That is no way to solve Arab-Israeli problems.
The total notional values in derivates in just US markets last year rose some 12.5% to $100 trillion. That is a tripling since 1999. In 1991, when we first wrote about derivatives, the notional values were $7.3 trillion. Today’s US derivatives are 7.8 times GDP. Systemic risks cannot be totally eliminated and we have to remember that a derivative writer is capable of going under.
The system is being abused when GM has $30 billion in debt and about $200 billion in derivatives. Buyers don’t even know who is on the other side of their trades. Just a 1% default or $1 trillion, would take down the financial system. Derivatives are like all kinds of gambling. If you play long enough you either lose or encounter bankruptcy.
Margin debt is back to where it was at the beginning of 2000, just 2 1/2 to 3 months before the crash. There are some 12 billion shares short.
1,000 companies in the Russell 300 have been designated as eligible under the Reg SHO Pilot program for shorting on downticks – we could see massive shorting and that could bring collapse. The shorting on an uptick rule is a good one. Again, the SEC is only interested in further allowing Wall Street to screw the public. Greed has overtaken Wall Street in the quest for more business and more profits. The more derivatives grow the bigger the chance for an accident. The more shorting the less companies will be worth.
We are now facing another scandal that had to happen on Wall Street even with the SEC’s protection and that is Overstock’s lawsuit versus Rocker Partners, Gradient Analytics. It’s a $4.6 billion lawsuit on New Jersey state statues under RICO who will award triple damages. This hedge fund empire of Steven Cohen could collapse if naked shorting, fraud and conspiracy are proven. Abuses on Wall Street today are worse than ever, and the SEC and the NASD will do nothing about it. They only go after the little guys and little brokers. They also try to shut up newsletter writers as part of the administration’s corporatist fascist agenda. We have been writing about naked shorting for 15 years, and all we have gotten for it is harassment from the SEC and NASD. We know the SEC fully understands the pervasive nature of crime and looks the other way when big hitters are involved. In the case of Steven Cohen it’s $150 million in commissions annually to Wall Street.
On Monday, the Fed added $2 billion in repurchase agreements causing the repo pool to again rise to $110.625 billion. That gives the Fed’s agents about $170 billion to use to manipulate markets.
Halliburton has again been paid disputed costs of $262 million. That is only $10 million short of what they had asked for – for the cost of delivering fuel and to repair oil equipment in Iraq. This was part of a $2.4 billion no-bid contract. KBR-Halliburton has reported $15.4 billion in revenues from its operations in Iraq since the US invasion in 2003.
Influential economics professor Xiao Zhuoji told China Securities News that China should reduce the dollar share of its foreign exchange reserves because of the risks posed by the instability of the dollar.
The next step is to allow companies to hold more foreign exchange, instead of being required to sell it to the central bank, and the Chinese could be permitted to invest in foreign currencies. China could also cut its trade surplus by reducing resource-intensive exports and importing more high tech products. We believe both are in process.
A major transition is underway in the US mortgage lending industry with consolidations and layoffs at the forefront as companies try to deal with lessdemand for home loans. As the year progresses these efforts will accelerate.
Employment in the real estate and mortgage industry peaked at 504,000 in October of last year, but fell to 501,000 in December. Employment was 283,000 in March 2001. As the market narrows over the next three years we probably will revisit those 2001 figures.
The Fed tells us that from 2001-2004, during Bush’s first term, the net worth of renters that is 31% of Americans, fell by a staggering 22%. For the 69% that owned homes, their net worth only gained 1%, yet during that period home prices soared 28%. This is a reflection of home values being cashed out in order to continue their lifestyle while their wages moved up 6% less than inflation. As house prices decline so will disposable income and if homeowners come up short, which they will, then the economy will enter a major crisis of confidence in the country’s economic and political system. Impoverishment will not be silent.
The rats are leaving the sinking ship. Four of seven Fed board members have resigned in less than a year. We have a majority, plus Ben Bernanke, who are inexperienced at a very alarming time in monetary policy. We are entering no man’s land where no Fed has ever gone before. If the Iranian Oil Bourse opens and trades oil in euros, the dollar will again begin its decent and the Fed will find it impossible to continue the practice of printing unlimited amounts of fresh dollars.
This is one of the reasons M3 will no longer be published. It’s to obscure the fact that the Fed cannot stop printing dollars and issuing credit. We are going to move into hyperinflation. It’s no wonder all the governors are fleeing their posts.
The NY Times tells us that two German intelligence agents in Baghdad obtained a copy of Saddam Hussein’s plan to defend the Iraqi capital, which a German official passed on to American commanders a month before the invasion. This was a key to the invasion and now that the Muslim world knows we are sure it will cost Germany lots of business.
The German role is not the only instance in which nations that publicly cautioned against the war privately facilitated it. Egypt and Saudi Arabia did the same. Egypt refueled our planes and Saudi allowed special operations forces to initiate attacks from its territory. Three million Turks in Germany won’t be happy to learn of German duplicity. German ships guarded the sea lanes near the Horn of Africa as part of Task Force 150, an effort to deter terrorist attacks in the Red Sea and the Gulf of Aden, for example. The patrols helped safeguard the waterways the US used to build up its force in the Persian Gulf for the invasion of Iraq. That also protected Kuwaitis in Doha from Chinese attack if it was necessary. German personnel also guarded American military bases in Germany, freeing US soldiers to go to Iraq. Germany provided the missiles for the Patriot batteries sent to Turkey and we thought “Perfidious Albion” was duplicitous.
Under the Bush administration the payoffs flourish. It seems investors from the UAE helped fund the $23 million Neil Bush raised from Ignite, the learning systems company that holds lucrative No-Child-Left-Behind contracts in Florida and Texas (where else). This is a portable computer designed to work in a classroom, providing interactive instruction aimed at improving students’ scores on standard tests. Neil Bush is connected in Dubai, along with fellow elitists Al Gore, Sandy Berger, Howard Dean and John Sununu. Thus, we have bipartisan hands in the trough.
Neil Bush as you remember was a director of Silverado S&L that cost taxpayers $1 billion. He was personally fined and permanently banned from any further activities in banking. During his divorce he admitted to multiple sex romps with prostitutes in Asia. Neil set up this Dubai deal, which has been in the works for months, but shut out of the media.
Neil has been hob-knobbing with Russian mafia criminal Boris Berezovsky now of London and has been spotted in Asia at the side of Sun Myung Moon. He also has business deals with Jiang Mianheng, the son of former Chinese President Jiang Zemin. We are following the money as the Dubai scandal widens. It may yet be labeled Neil-gate.
You saw January new home sales off 5% with a record inventory of 5.2-months. That was followed by a 2.8% fall in home re-sales, at an annualized rate of 6.56 million, the lowest rate in two years. The median price rose 11.6% y-o-y to $211,000 in January. That moved the inventory in unsold homes up to 5.3-months supply. The increase in inventories portends a deceleration in home price appreciation. Nearly half the new homes put up by builders aren’t being sold as expected. The slowdown that began last June and accelerated in September has now been confirmed by economists to be a permanent end to the five-year boom in soaring prices. The question now is, how deep will the correction be?
The strength in the Japanese yen has in a small way negatively affected the purchase of physical gold in Japan. That is an important event, but even more important is the strength of the yen versus the yen carry trade. The appreciation of the yen means a stampede out of dollars and into yen before it appreciates further. The most important aspect is not the losses on the yen, which the speculators borrowed, but the unwinding of enormous speculative positions in other markets, notably in the US stock market. This could be the event that cracks the market and sends the Dow down to test its old lows. Weakness will come not only in the US stock market, but also in other markets. An example was last week’s material weakness in the Icelandic currency and other currencies from the second and third worlds. This is just the beginning of the unwinding and we believe hedge funds will be quick to act – a condition that the Fed and the Working Group on Financial markets won’t be able to handle. The end of Japanese zero interest rates are upon us. The party is over and there will be a big hangover.
Twenty percent of US information technology workers say they are dissatisfied in their jobs and 33% are planning to find a new job in 2006. IT workers site unmanageable workloads, low pay and lack of effective leadership as the leading factors influencing their decisions to look for new opportunities. Sixty-one percent said their workloads have increased over the last six months and 50% said their workload is unmanageable. Thirty-three percent are dissatisfied with their balance between work and home.
The real reason Larry Summers was dumped as President of Harvard was the Harvard-Russia caper. Financial improprieties by those in charge of Harvard’s Russia project, led by Andavi Shleifer, a professor of economics, and friend and protégé of Dr. Summers and Jonathan Hay. They made personal investments in Russia at a time when they were working under contract to establish capitalism in the former Soviet Union.
Harvard paid a $26.5 million fine; Hay paid a fine based on future earnings and Shleifer paid a $2 million fine without admitting guilt. Harvard did not discipline Shleifer.
On Tuesday, the fed added $3.5 billion in repurchase agreements plus a $1.2 billion permanent open market operation. This took the repo pool to $113.325 billion. There is obviously a rising need for market manipulation.
A growing number of governors, along the border and beyond, are sharpening their complaints about the flood of immigrants pouring into their states, pushing the Bush administration and Congress for action. This problem will be discussed with the President this week.
John Williams is an econometric forecaster, and we believe he is among the top five in his field in America and he may be #1. He is the fellow that for some time has been tearing government statistics apart and exposing them as we have, to be bogus. John says that today the U6 unemployment is running around 9%, but if you take out all the funny games they’ve played with it, unemployment is really 12%. We have pegged it at 12 1/2 to 13 1/2% for the past five years, so we are close to agreement.
Mr. Williams says, “There are two types of manipulation of the data. You have systemic manipulations, where methodologies are changed. Again, the methodologies almost always have an upward bias in growth and a downward bias in inflation and that is not coincidental. The other type of manipulation is when someone does something to the numbers to make them come out a certain way at a certain time.” Political types go to businesses that are major factors in their industries and ask them to goose sales before elections. As all this transpires our President tells Americans the economy is booming. Our President is lying because he knows the figures are bogus.
In the early 1990s, Michael Boskin and Alan Greenspan fixed the CPI. They said the CPI was overstating inflation, which was untrue. Thus, they introduced hedonics. That is when you go to buy a steak and it’s too expensive so you buy hamburger instead. That in turn is disinflationary. That has to be one of the most moronic arguments we’ve ever heard. This is called substitution and if you use that the problem is you distort the very reason for the CPI. These distortions in the CPI don’t allow for a fair adjustment in Social Security, government pensions and other indexes. These people are plainly getting screwed and I happen to be one of them and I don’t like it. Substitution or hedonics is so unscientific it can be compared to witchcraft. If you strip back all the garbage from the Carter administration 25 years ago you’d have inflation 4% higher than it is now reported. That’s 4% plus 4% or 8% says, John Williams. We say 10%, but no matter who is right it is a long way from the adjustments in Social Security and pensions that we have received. It is robbery. Those retirement checks should be 70% to 80% higher than they presently are.
The BLS says the price really isn’t going up, as long as the product is improved in the interim, because you are getting greater benefit from it – what rubbish. Tell that to people who get $500 in Social Security and should be getting $900 and live like beasts.
Bill Clinton and his advisors led by Robert Reich found in their polling that if you could overstate economic growth, understate inflation, tell people things were really better than they were, it would help you win a tight election. That’s how politicians and elitists run our country screwing everybody.
Wall Street analysts and economics, as well as those in industry and government, don’t dare tell the truth about the statistics - they’ll lose their jobs and that is part of the reason they are right only 33% of the time.
Mr. Williams says the official federal deficit in 2004 was $412 but the GAAP-based deficit was $616 billion. In 2005 the official deficit was $319 billion, but the Treasury report said it was $760 billion and they don’t consider the inclusion of revenues of Social Security and Medicare. If you added in the net present volume of the under funding of Social Security and Medicare, the one-year deficit in 2004 was $11.1 trillion. That includes a one-time payment of $8 trillion for the Medicare drug benefit. Even if you don’t include that you are still offside $3.1 trillion in 2004. We are now at the point where we cannot cover the deficit by raising taxes. Our deficits are ten times higher than we are being told and they are totally unpayable. The situation is so out of control that the Bush administration is cutting taxes. We report these lies and discrepancies and that make us very unpopular in Washington.
In order to stay solvent massive amounts of liquidity has to be created. The problem is it brings on hyperinflation, a falling dollar and rising interest rates and gold and silver prices. Just one unexpected, untoward event, and the financial edifice will collapse. We believe the Fed has already begun monetizing debt. Once the world realizes it, interest rates will move higher. Ben Bernanke will pump in liquidity until he can’t anymore. Once the selling starts for whatever reason, they’ll be an avalanche as everyone tries to get out the door at the same time. Hyperinflation will scream and gold and silver will go berserk as we slide into depression. At that point they’ll be devaluation and a return to the gold standard. That is why some central banks have again become buyers of gold and that trend will accelerate.
Due to manipulation of GDP its results have been overstated by 3% and according to IRS reports, income is dropping. About a month ago consumer debt started to moderate as interest rates rose. The wealth effect is dying. Mortgage payments are rising as are minimum credit card payments. Income is falling. Watch the ten-year Treasury market, the dollar and gold. If ten-year yields spike up, the dollar spikes down and gold and silver spike up, you will know the game is on. This year corporate profits will fall and no matter what the Fed and the Working Group on Financial Markets do, the stock market and real estate are going to fall. Be fully invested in gold and silver related assets.
In the new Zogby Poll when US troops currently serving in Iraq were asked, “How long should US troops stay in Iraq? Only 23% backed Mr. Bush’s position that they should stay as long as necessary. In contrast 72% said that US troops should be pulled out within one year. Of those, 29% said we should withdraw immediately.
The CBS News Poll, which has always tried to show President Bush in the best light just released its latest poll. His job approval rating hit its lowest level ever at 34%. VP Dick Cheney is doing even worse. Only 18% approved of his job performance. Thirty percent approve of Bush’s handling of the war in Iraq; 27% approve of his energy policy; 32% approve of his handling of the economy and 5% of Americans are please with the way the rebuilding of the Gulf Coast is going. Worse yet, his ratings are headed lower. Congress should impeach him. Seventy percent oppose, including 58% of Republicans of a Dubai company taking over 21 ports.
The NAPM Chicago said its Regional Index fell to 54.9 this month from 58.5 in January. Manufacturing activity in the region appears to have cooled off. The Chicago area accounts for 40% of the nation’s auto production. The Employment Index rose to 54.9 this month, the highest since May, from 50.2 in January. The index of prices paid for raw materials fell to 71.6, the lowest since August, from 75.3. The Production Index fell to 56 from 60.6. The New Orders Index dropped to 54.9 from 63.7. The Inventories Index rose to 56 from 53.9. The index of orders backlog increased to 50.6 from 48.3. The measure of delivery times rose to 59.2 from 57.8.
The Conference Board’s Consumer Confidence Index fell to 101.7 from 106.8 in January. The Present Situation Index rose to 129.3, the highest since August 2001, from 128.8 in January. The gauge of expectations for the next six months fell to 83.3, the lowest since October, from 92.1. The share of consumers that said jobs were plentiful rose to 27.3% in February, the highest since August 2001 at 27%. The share of people who expect better employment opportunities in the next six months fell to 13.4% from 13.6%.
Our President is offering states no help in paying for Congressionally ordered changes to driver’s licenses and would foist new costs to provide food for low-income pregnant women, while slashing money to revitalize poor neighborhoods. Most additional cuts are for the poor that would curtail $6.7 billion in state and local grants next year.
Although efforts to crack down on illegal immigration are gaining momentum across the country, Bush’s budget would do away with reimbursements to state and local governments for jailing illegal aliens. Jailing is causing huge budget problems in Arizona. In 2004, the state spent $77 million incarcerating more than 4,000 illegal immigrants.
States are going to lose $31 billion in cost shifts from the federal budget to state budgets.
Medicaid was cut $6.9 billion last week by Congress and Bush has proposed a second round of cuts to entitlement programs that provide assistance to the poor, elderly and disabled, while hundreds of billions of dollars are thrown down a rat hole in Iraq.
The cuts are appalling: $15 billion in savings by consolidating or eliminating 141 federal programs with a 20%, $3.5 billion cut in education.
Bush wants permanent tax cuts almost all of which benefit the wealthy.
He would increase the National Guard by 350,000 for personnel for future wars.
Homeland Security grants to cities and states would be cut $400 million.
He would add 1,500 border patrol agents.
He would cut $91 million from state grants to help low-income citizens make their homes more energy-efficient, a 29% reduction.
A $66 million increase for solar technology, $41 million for development of hydrogen fuel and fuel cells, and $29 million more for bio-fuel research. $23 million for geothermal energy would be eliminated along with $35 million less for clean air programs.
He has proposed a $100 million program in five states for toll roads. Citizens would pay for upkeep rather than use federal gas tax funds.
This is about as bad as it gets.
Seventy-nine percent of would-be bankruptcy filers said their financial problems were caused by circumstances outside their control, such as loss of jobs, catastrophic medical expenses or the death of a spouse. Only 3.3% were candidates for debt repayment under a debt management plan.
Fourth quarter fixed-income trading revenue plunged 65% from the third quarter. The business accounted for 10% of the bank’s revenue in 2005. At JP Morgan Chase, CEO Dimon said, “Several of our trading books were on the wrong side of interest rates. A bunch of positions didn’t work out.” This tells us the Fed, of which Morgan is an appendage, is losing control of the bond market.
A bank created to provide emergency backup for the Treasury market will be ready to operate in the next 18 months. The so-called “New Bank” will be on standby, so it can spring into action to stabilize the government securities market if a legal or financial disaster strikes.
This should give all of us pause. This bank is supposed to be for clearing operations only. That means the Fed believes JP Morgan Chase and/or Bank of New York could fail to clear trades for whatever reason. Is this bank going to supply liquidity and where will that liquidity come from? This operation is being set up to handle a run on Treasuries and a failure to process trades. It would also include an absence of market makers, which makes the New Bank specialist of last resort.
Presently the two banks clear and process more than $1.9 trillion of very short-term trades each day between investors and dealers. The Fed and other private banks see a future run on Treasuries and that would include a run on the dollar as well. It could also be the Fed is preparing for another planned 9/11-type of event. Last time trade-processing operations were troubled for days, causing problems across the banking system. It took months to correct the problems. They also envision the possibility of a credit downgrade that could force one or both of the clearing agents to cease operations. This New Bank, a quasi-government entity, would perform emergency functions for the entire Treasury market.
The New Bank will have no physical location, and no full-time employees. It will be funded with $500 million from 24 banking industry shareholders - probably the banks that privately own the Fed. The New Bank would take over any troubled bank’s existing operations. The elitists are expecting big trouble. Get out of dollars and into gold and silver related assets.
Personal incomes rose 0.7% in January only to be devoured by official inflation of 0.5%, which in actuality was double that. Officially real disposable incomes are up 2.2% in the past 12 months. We show a loss in buying power of 6%. Consumer spending increased 0.4% in January.