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Tuesday, July 29, 2008

New York State on the Verge of Financial Collapse

More reasons to return to Gold.
The New York Times is reporting Paterson Warns of Economic Crisis.
In a rare, brief televised address, Gov. David A. Paterson announced on Tuesday afternoon that he would call the Legislature into an emergency session on Aug. 19 to address what he called an economic and budget crisis confronting New York State as a result of plummeting revenues and rising costs.
The new governor avoided any mention of new taxes, instead arguing forcefully for austerity. He said he was calling on the Legislature to reduce the size of the state workforce; cut agency spending; reduce property taxes for homeowners; aid New Yorkers with the soaring costs of home energy; and even consider public-private partnerships that would take over state assets.

“Revenues are dropping dramatically,” the governor added. At the start of May, the state budget office projected a cumulative deficit of $21.5 billion over the next three years. Now, just two months later, that estimate has risen to $26.2 billion — “a staggering 22 percent increase in less than 90 days.”

Mr. Paterson offered another example of the rapid deterioration in the state’s finances. In June 2007, he said, the 16 banks that pay the most on their business profits remitted $173 million to the state treasury. “This June, just a month ago, they sent us $5 million — a 97 percent decrease,” he said.

He vowed, “We will cut spending. Government will learn to do more with less.” He called for help from business and labor leaders and New York’s representatives in Washington to support him.

He added, “It is time for New York and other governments to cut up our credit cards. The era of ‘buy now and pay later, and later’ is over. The faster we address this crisis, the faster and stronger we will emerge from it.”

Era of ‘buy now and pay later, and later’ is over

New York is the second state in five days to declare a fiscal emergency. See Schwarzenegger Announced Intention To Slash State Workers' Pay Till Budget Passes for more on the crisis in California.

The most stunning thing about Paterson's announcement is how rational it is. He is not begging Washington for handouts, asking for higher taxes, or praying for miracles.

This is pretty stunning too: In June 2007, the 16 banks that pay the most on their business profits remitted $173 million to the state treasury. “This June, just a month ago, they sent us $5 million — a 97 percent decrease.”

Unlike Schwarzenegger who has for years resorted to floating bond or proposing various lottery schemes to "fix" the budget, Paterson has the correct solution.

Of course Schwarzenegger has at times vowed to "cut up the credit cards" but in the end has delivered nothing but promises and schemes of floating $500 billion in bonds to "rebuild California the way it needs to be rebuilt".

Can Paterson Deliver?

I hope Patterson can, but the state legislature is likely to resist all the way.

The Right Mindset

Cutting spending
Learning to do with less
Reduce the size of the government workforce
Reduce property taxes

Patterson had the courage to say exactly what I asked Senator Obama to say in Open Letter To Obama. However, saying these things is one thing, and doing them is another.
Regardless, of whether or not all of those things happen, some forced austerity is all but assured. The same goes for California as well.
And the word that describes the process best is the one word nearly everyone is in denial over: deflation.

Wars for Oil? BP Profits hit record 13.4 billion

Do we have a worldwide economic brewing and is the war on terror a ruse for a money grab and restructuring the World political structure? We have two choices, a return to Gold or another fiat currency money scam with total surveillance through chips embedded directly in humans.
BP, the British oil giant, unveiled a 23 per cent rise in profits this morning, boosted by record global crude prices.

Replacement cost profit, which strips out unrealised gains from changes in the value of fuel stocks, hit a record $13.44 billion (£6.7 billion) during the first half of the year, up from $10.93 billion a year ago.

During the second quarter to June 30 2008, profits rose from $6.48 billion to an all-time high of $6.85 billion.

Despite the record result, the company said that it was struggling to restore earnings from its troubled US refining division and offered little news on TNK-BP, its Russian joint venture. Source

Merrill Lynch needs $8.5 Billion to stay solvent

Julie Kollewe

Merrill Lynch shocked the market last night when it moved to raise $8.5bn (£4.3bn) through a public share offering to shore up its balance sheet, sold $11.1bn of toxic mortgage securities and took a fresh $5.7bn write-down.
The move came only days after the Wall Street bank unveiled a $4.6bn second-quarter loss and write-downs of $9.4bn related to sub-prime mortgages and risky debts. The latest write-down brings Merrill's total to $46bn, making it one of the biggest casualties of the credit crunch so far, along with rivals Citi and UBS.

Total write-downs announced by major banks around the world since the start of the crisis a year ago have hit $274bn, and some estimates suggest the figure could reach $1 trillion.

Deutsche Bank analyst Mike Mayo said Citi could post another $8bn write-downs from its CDO exposure, based on Merrill's figures.

Merrill's announcement came after Wall Street closed yesterday. Shares in Merrill had ended the day down 11.6% at $24.33, suggesting some traders knew what was coming. The shares rose 34 cents to $24.67 in early trading today, a rise of 1.4%.

Nomura, Japan's largest brokerage, added to the gloom this morning as it posted a surprise ¥76.6bn (£355m) loss for the three months to end June, compared with a profit of ¥75.9bn a year ago. Revenues crashed 60% to ¥257.9bn because of a slump in trading and new stock offerings. Source

Monday, July 28, 2008

U.S. Mortgage Crisis goes Global

The U.S. Mortgage Crisis goes worldwide. The Fed is dead. The Grand Socialist experiment started in 1913 is collapsing. Will it create a worldwide depression or will it remain isolated to the United States.

Robert Gottliebsen

NAB will shock Wall Street

The National Australia Bank's decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done. It is clear global banks have nowhere near provided for their exposures to US housing loans which in the words of John Stewart are experiencing a “meltdown”.

We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory. This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression.

It means the cost of bailing out housing exposures to the two mortgage insurers will be so great that it will leave no room to bail out anything else and there are several US banks that are now in big trouble. NAB says that the dislocation in the residential market is separate from the corporate market, but the flow on is inevitable.

While global banks have been writing down their balance sheet assets, few have tackled their conduit exposures which are off balance sheet but to which they are ultimately liable.

This morning at around 6am I wrote that we had been experiencing a 'dead cat bounce'. I had no idea that NAB would trigger the downturn and confirm what I had written. And of course Wall Street will receive a deep shock when it wakes up.

Saturday, July 26, 2008

The FDIC is almost out of Cash. Is your Money safe?

From Bob Chapman's International Forecaster:
Super Losses, Super Layoffs, Super Bailouts
Posted: July 23 2008

Financial sector statements dont add up, FDIC reserves pounded hard from IndyMac debacle, bailouts will soon come at the expense of the consumer, bond market watch, realities of a debtor nation, financial institutions given protection from shorting

So far this week we saw Wachovia get socked for an $8.86 billion loss with a layoff announcement of 10,750 employees, while Washington Mutual got hammered for a $3.3 billion loss and increased its beleaguered loan-loss reserves by $3.74 billion to $8.46 billion as it announced expense cuts and asset sales. This is nothing. This is just the beginning. This is just window dressing to protect incumbents. Together with the science fiction and fantasy we got last week from the banking sector, these latest financial statements from the banking sector should receive a Nebula Award from the Science Fiction and Fantasy Writers of America. Gene Roddenberry could not have dreamt up financial statements that were more phantasmagoric.

All these bank losses, as terrible as they are even in their understated amounts, are pathological accounting lies aimed at keeping the sheople from going ballistic on the incumbent scum-bags in Congress so that these corrupt reprobates and sociopaths can continue in office and maintain their rape, pillage and slaughter of the sheople of the US unabated on behalf of their evil, malevolent and rapacious Illuminist masters.

The stock markets, the bond markets, the derivative markets and the entire financial system would collapse if people knew the real truth about the balance sheets, income statements and debt-to-equity ratios of virtually all the major commercial and investment banking fraudsters of Wall Street. So the devastating truth will be withheld most likely until the final quarter which ends in December, because a good portion of the earnings results for the third quarter are going to be announced prior to the US general elections which would normally be held in early November, barring some false-flag attack. Until then, the huge whitewash reservoir behind the "creative accounting" dam will be sucked dry. We're not sure if there is enough whitewash left on the planet to cover up the losses for Q3, however.

Wait until the Pick-and-Pay loans all run their course. Ugly does not even begin to describe what is going to happen to many large banks when this jumbo variety of toxic waste comes home to roost on their financial statements. We doubt that the FDIC has enough funds to cover even the first ten to twenty banks that fail out the many hundreds that are expected, especially if a large bank like Wachovia goes under in the early going. Already, IndyMac has wiped out 10% of the FDIC's reserves. Depending on how the IndyMac liquidation goes, that percentage could go higher. And remember, IndyMac was not even on the FDIC's watch list. If that doesn't scare you, nothing will.

What will happen if the FDIC runs out of money? Will they get a big government bailout like the rest of the fraudsters? Of course not. That would benefit the banks' customers instead of the banks themselves. We certainly could not have that now, could we? Will the FDIC bailout money come from the source it is supposed to come from, meaning from the fraudsters themselves, most of which are now insolvent and bankrupt? It's a stupid question, of course, but we had to ask it for rhetorical purposes.

Friday, July 25, 2008

Panic Building On Wall Street- Flight to Silver

By David Morgan
Before getting into this missive, I would like to state that other silver commentators make a very strong case for silver being a metal that does well in good, prosperous times. I absolutely agree. If the world at large were gaining in real wealth and the economy were humming along, we all might be purchasing flat screen TV's and using even more silver than we do today. Bottom line, silver does not need bad times to do well.
However, I am experienced enough to know two people can look at exactly the same thing and see it differently. This is what makes the world go round—an exchange of ideas. In fact, I am on record as stating there is nothing more important in a true free market than the free exchange of ideas.

My worldview is that silver plays a role in the best of times and in the worst of times. Right now there is a huge shift of wealth; wealth is being created in the East and wealth is being diminished in the West. It is and has been my very studied opinion that wealth cannot be printed, and therefore the role of gold and silver at this point in time comes mainly as a means to protect or build wealth.

Fannie Mae (FNM) and Freddie Mac (FNM) were on the verge of collapse, only to be saved by the full faith and credit of the United States. But in reality the Fed did not save them, YOU did. If you are a U.S. citizen, the bailout has your name on it and you don't even know it, do you?

When a financial institution, bank, broker, hedge fund (Long Term Capital Management) gets bailed out, it is the taxpayer that ultimately pays for it. The Fed “loans” money to the failing institution and rewards mismanagement, but the loan is paid for by collecting taxes from you! How often has your friendly banker asked you to bail out others that have made poor business decisions? The answer is, plenty of times, but those who read the mainstream press never get a clue that the full faith and credit of the United States means simply, the ability of the federal government to tax its citizens. It is just that simple!

The U.S. government is coming to the rescue (through you), but is this “too little, too late”? All of this fear is also being fanned, thanks to statements by Federal Reserve Chairman Bernanke, who told Congress the U.S. economy is faced with "numerous difficulties," such as strains in financial markets, a shaky job market, and ongoing weakness in the housing market. These difficulties are persisting, despite the Fed's massive interest rate cuts and expanded lending efforts over the past year. Will the Federal Reserve and Treasury be able to save the country from suffering a massive financial collapse?

It depends. It depends upon what you consider a financial collapse, and I tend to look at it from a very realistic point of view. On a case-by-case basis. If you had your entire retirement account with Enron, then you have had a financial collapse. If you are an autoworker for General Motors, then you may be feeling a bit unsure of your future.

The only real way to gain an idea of whether this latest move by the Treasury and the Federal Reserve is going to help is by objectively asking yourself what currency has survived the test of time. The answer is NONE; no piece of (government backed) paper has ever stood the test of time.

However, fear not, because two commodities have stood the test of time and they are gold and silver. These metals have a 5,000-year track record of preserving wealth and at certain times enhancing wealth. You see both of these monetary metals stand outside the entire financial system and yet are money in and of themselves. They are immune to bank or brokerage failure, poor management, or even government intervention. That is the beauty of owning an asset outside the financial system: you have the peace of mind that some of your savings is safe no matter what happens.

Do Even Greater Troubles Lie Ahead?

Thomas Jefferson offered these words at the founding of our country, “Banking establishments are more dangerous than standing armies.” The next few months may prove to be very difficult if the financial crisis spreads throughout the world.

The big “IF” is, if perhaps the worst is behind us, the system will continue and the past errors made by leading financial institutions will be resolved. Certainly, if you are objective, this is a “possibility” but in my view a very remote one. The problem is that if things deteriorate slowly, more people will not wake up in time to really take action.

Which action? The act of buying a metal that reflects the light of truth in good times and bad.

Ford may go Bankrupt. U.S. Auto Industry in Meltdown

Ford and GM may both go bankrupt, another sign of the impending economic collapse. The only solution is a return to a fixed metal-backed monetary system as advocated by our Constitution, Ron Paul and GoldMoneybill.org. The New Hampshire Gold currency bill that may be re-introduced this winter in the State legislature, the bill can be found at Goldmoneybill.org.

By: Nadeem_Walayat
The Ford motor companies stock price fell sharply by more than 10% following news of a worse than expected second quarter record loss of $8.7 billion, this follows a first quarter profit of $100 million. Ford has been witnessing a near meltdown in sales from a year earlier with auto sales down 28%, and truck sales down 36%, as following the surge in gas prices the once profitable SUV's have now become a liability by clogging up dealer forecourts with unsold inventory and thus contributing to the sales meltdown.The stock price seems destined towards a break of 23 year lows seen at the start of this month.

The company also saw revenues plummet from $44.2 billion to 38.6 billion. Ford announced a series of initiatives in an attempt at revive the auto companies fortunes including:

• Developing new fuel efficient small cars and crossovers to North American product lineup. This includes six European small vehicles that are coming to the North American market.
• Converting three large truck and SUV plants to small car factories with retooling to begin this December.
• Upgrading of the Ford, Lincoln and Mercury models by end of 2010.
• Doubling hybrid vehicle production and models during 2009.
• Doubling the capacity for North American four-cylinder engines by 2011.
• Ford also aims to improve fuel economy on every new model.

Wednesday, July 23, 2008

Faith-Based Currency even Atheists and Agnostics believe is Fairy tales

This article was released by Ron Paul yesterday and his plane almost crashes the next day.
"There are no coincidences, Delia... only the illusion of coincidence."
V- V for Vendetta

The Latin term "fiat" roughly translates to "there shall be". When we refer to fiat money, we are referring to money that exists because the government declares it into existence. It is not based on production or earnings, and not backed by any commodity. It is solely based on trusting the government. Fiat money is exchanged in the economy as long as there is faith in the government that issues it.
Some are blaming the recent shakeup in the markets to "whining" or financial fear-mongering, which misses the whole point. History has shown that fiat money, or "faith-based currency" always fails, because when governments claim this power, they always behave irresponsibly.

When government has the ability to create and spend all the money it wants, priorities shift, and the concept of budgeting, as most Americans know it, loses all meaning. Hand a teenager a credit card, and tell him there is no limit and no accountability for what he spends, and the effect would be the same. You see, this problem is not unique to our government. It is a predictable outcome based on human nature, and we've seen variations of what we are experiencing now happen over and over throughout history. I didn't have a crystal ball or a fortune teller when I predicted this 3, 7, or even 30 years ago. Actions have logical consequences. The government becomes the reckless teenager with the credit card, and in the end, the taxpaying citizens get the bill. What happens after that is never pretty.

This is why our founding fathers considered, but decidedly rejected the creation of a national central bank. They understood that governments, even the best of governments, cannot control spending. Even the current administration, which promised strict fiscal responsibility, has had to increase the national debt limit by 65 percent to keep up with its spending sprees. Every dollar created and spent by government makes the dollars in your pocket worth less and less. Eventually any currency controlled by government will be debased to worthlessness, and will wipe out the savings of the citizens who put faith in that currency.

Hard currencies, on the other hand, force governments to remain in check, strictly limited to the revenues they can raise from the country's economic health. This is also an incentive for government to stay out of the way of productivity. The hyper-regulation in today's economy demonstrates that this is no longer the case. What does it matter if the economy is crippled and the tax-base eroded, if government can create whatever dollars they need to keep the special interests happy?

We have been building economic castles on the sand, and the tide is coming in. The answer is not to bring in more sand, but to move to more solid foundation.

So yes, it is true that many are complaining about our economic trouble, but our economic trouble is not caused by their complaining. Many are being forced to wake up to the predictable troubles associated with faith-based currency. As more people notice the hardships, more will lose faith.

We are long overdue for a course correction and I can only hope that this awakening translates to a solid approach to currency reform. Source.

Congressman Ron Paul's Plane almost Crashes

The champion of the Constitution and the chief critic of the Fraudulent Federal Reserve; Dr. Ron Paul plane almost crashed today. Conspiracy theories are sure to swirl in the aftermath. In today's climate does it really matter if it was an accident? Today, the government is guilty until proven innocent. Why would the American Patriot not apply the same standard that the government uses on it's own populace?
People should not be afraid of their governments. Governments should be afraid of their people. V for Vendetta.

AP Article on Ron Paul

Is Blackwater being reigned in by the U.S. Military

Nothing is as it appears to be in the media. I was told about a year ago by some U.S. Military contacts that the troops would be brought home from Irag to checkmate Blackwater, which would play a large part in any NWO takeover scenario. Well the troops have not been brought home, but maybe Blackwater is being neutered a bit behind the scenes; time will tell.
Blackwater, the US private military contractor widely accused of abuse of power in Iraq, is getting out of the security business.

Company executives said they are moving away from security work in the wake of close media scrutiny of private contractors' behaviour in Iraq, particularly a Baghdad shooting involving Blackwater employees that left 17 Iraqi civilians dead. The incident is under investigation by American law enforcement.

"The experience we've had would certainly be a disincentive to any other companies that want to step in and put their entire business at risk,'' Blackwater founder and chief executive Erik Prince told an Associated Press reporter who was given a daylong tour of the company's headquarters.

Anne Tyrrell, a Blackwater spokesman, said the company has not planned any "shift," but rather that the company would grow in other areas besides private security.

"When we are seeking to expand the business we will be doing it in other area," she said. "We don't see that market growing".
Blackwater has made hundreds of millions of dollars off of contracts to guard US state department officials. Its seemingly ubiquitous presence, combined with the larger-than-life personality of the conservative Prince, turned Blackwater into an emblem for the privatised military that the Bush administration relied upon to help wage the Iraq war.

The company also operated under broad legal immunity from criminal prosecution in Iraq, attracting criticism from government officials in Washington as well as Baghdad. The US Congress ultimately passed legislation bringing contracting firms under the American military code of justice. To finish the article.

Tuesday, July 22, 2008

Devvy Kidd UnConstitutional Bailout of Freddie and Fanny

By: Devvy
July 17, 2008

© 2008 - NewsWithViews.com

Arthur Henning of the Chicago Tribune said back in 1935, "The New Deal will bring the Communist Party within striking distance of overthrow of the American form of government..." Mark Sullivan of the Buffalo Evening News also expressed alarm in 1935: "The New Deal is to America what the early phase of Nazism was to Germany..."

The nation is awash in fear because they are coming to realize that while they've been buying all the hype from the cabal of gangsters in Washington for decades, reality is now setting in as poverty is slamming millions who used to belong to the middle class. From dangerous lending practices to the derivatives time bomb waiting to go off and inflation getting ready to launch into hyper inflation, the situation is more grim by the week. A financial catastrophe so many have been warning about for decades, it's all coming home to roost. The "perfect storm" as it's being called. The beast is now devouring itself and we the people are caught in their cross fire.

Unfortunately, most Americans haven't been listening. They're either addicted to sports, shopping, porn, drugs or yaking on their cell phones while the world has been heading for financial Armageddon. Oh, they perk up when they hear things like how many new jobs Bill Clinton created! Clinton used to love to brag that he had created 14 million new jobs during his tenure. He did? Sure, and Mr. Jones can thank Clinton for all three of his minimum wage jobs while Clinton supported the destruction of our true and meaningful job bases: ag, industrial and manufacturing. George W. Bush has steadfastly supported the same destructive redistribution of America's wealth into the hands of foreign countries while our people go without - backed up by both Democrats and Republicans.

Still, the American people continue to vote the same incumbents back into office expecting change as they did in 2006. Nothing has changed. We tried to tell people they were being led like cattle to the slaughter house. But, since corporate media has controlled the flow of information in this country for decades, the majority remain in the dark without a clue. The Internet has been a tremendous tool, but not everyone owns a computer and too many continue to play the right vs the left.

Tragically, the majority of Americans have zero knowledge of our monetary and banking systems. Take a good look at the person in front of you at the grocery store, post office or at these rallies during this past primary 'season.' Virtually all of them will tell you our form of government is a democracy and that mother government is the answer to what's bringing us to ruin. Ignorance is not bliss. As the empty bellies in this country grow louder because families have to sacrifice food for gas, dental appointments for gas and other basic necessities, the anger and frustration will build. As their paychecks continue to shrink from more and more heavy taxation, spending will decline and the economy will not grow.

As the American people become more desperate, they will grab at anything thrown out there to save their homes and jobs. Barack Hussein Obama and Juan McCain will continue feeding them gibberish about "fixing the economy." Why, only yesterday, Obama "calls for a new stimulus package to jump start the economy." Who does this huckster think he's kidding?

Since tens of millions have little understanding of how and why we got here, they will grab the lie that sounds the best. Neither Obama or McCain have ever even whispered the only real solution to our monetary and financial crisis. Perhaps they're listening to another blithering idiot, US Treasury Secretary Henry Paulson who said last week: "...the US economy would most likely be stronger at the end of 2008, even as oil prices surged to new records above 146 dollars. "I think there is a very strong possibility that we will be growing at the end of the year. We will have stronger growth at the end of the year than we have right now."

The upside is that millions of Americans do know and understand how we came to this point. They know because, just like me, they learned from individuals like Dr. Edwin Vieira, who has been educating on this issue for over 30 years. The same as Congressmen Louis McFadden (deceased, 1936) and Ron Paul; G. Edward Griffin and too many more to list. We also know that what is being proposed regarding Freddie Mac and Fannie Mae is against the law. The U.S. Constitution does NOT authorize Congress to act as a bank to bail out corporations like Lee Iacocca's Chrysler Corporation, the infamous 'Mexican Peso Bailout' under Marxist Bill Clinton or Freddie and Fannie.

As James K. Hickel, of the Heritage Foundation so accurately pointed out in 1983: "In the case of the Chrysler bail-out, a big chunk of taxpayer money was committed to a shaky and inappropriate venture. Every American became an involuntary and uncompensated partner in a company whose future is still in doubt. On top of this, the bail-out even failed in its purpose. The precedent established is extremely dangerous."

Not only was it a dangerous precedent and in violation of the supreme law of the land, here we are 25 years down the road: "Chrysler to lay off thousands of salaried workers, cut 750 job at Ohio plant. The white-collar cuts come on top of the 13,000 layoffs Chrysler announced in February as part of a massive restructuring plan." GM has also announced huge lay offs coming. This bail out of Freddie and Fannie will not help the local economies where the lay offs happen. The situation will worsen when those workers can't make their mortgage payments and default. The states won't be able to tax at the same rates and will begin to crumble. Services in your state will be cut and those who lose their state, city and county jobs will have a hard time with their mortgages. Add the number of seniors already dependent upon the state for their very existence, including medical care and the increasing numbers of seniors filing for bankruptcy and you have a financial sledge hammer coming down on the states that's going to get ugly.

As for the Mexican Peso bail out, millions of us demanded Congress stop such lunacy, but you see, it was tied to NAFTA. The same NAFTA both the Republicans and Democrats have allowed to remain in effect for over 15 years even though it is clearly unconstitutional and has killed MILLIONS of good jobs. An excellent analysis can be found here: The Peso Crisis and Cause. The U.S. Constitution was again trashed and too few cared.

On July 16, 2008, I happened to catch a segment with Judge Andrew Napolitano on FAUX News Network's afternoon session hosted by the affable, but ignorant, Shepard Smith. Napolitano patiently tried to explain to Smith why Congress has NO authority to bail out any of these private corporations. Smith looked perplexed, as usual. Andrew Napolitano is one smart man who isn't afraid to call it like it is and would have made a first rate Attorney General under a Ron Paul presidency. Add Dr. Edwin Vieira as Secretary of the Treasury and we would have seen the first steps taken towards ridding America of her shackles to the unconstitutional "Federal" Reserve Banking System.

What Smith didn't seem to grasp, the looting of the American people once more to save stock holders of these corporations -- just what is going to be used for this latest swindle of the people's purse? The U. S. Constitution does not authorize Congress to act as a bank or loan guaranty agency. All the cable network gas bags and political pundits are weighing in on this financial tsunami with one band aid or another. Of the dozens of columns and news items I've read in the past couple of weeks, I believe the one that best sums it up is by Lew Rockwell, Fannie, Freddie, Fascist:

"Place the blame not only on the banks, but also on the institutions that are siphoning off their liabilities for irresponsible behavior, and that would be Freddie and Fannie. And who created these? Travel back in time to the New Deal. Here is an article about the creation of Freddie Mac. And here is another about Fannie Mae.

They were created by FDR in 1938 to fund mortgages insured by the Federal Home Administration. They were used by every president as a means to achieve this peculiar American value that every last person must own a home, no matter what. So they were given the legal permission to purchase private mortgages and make them part of their portfolios. Still later, under LBJ and Nixon, they became public companies and sold stock."

These crooks in Washington want to rescue the stock holders of Freddie and Fannie to the tune of ONE TRILLION dollars. That's just what these two entities need right now. Who knows what the final numbers will be? We have to remember that close to another million homes will go into foreclosure by the time the next puppet president is sworn into office. What will they "need" a year from now? Where will this ONE TRILLION "dollars" come from? July 15, 2008: Bernanke: Economy faces 'numerous difficulties'

"Bernanke's testimony comes just two days after the Fed and the Treasury Department came to the rescue of mortgage giants Fannie Mae and Freddie Mac, offering to throw them a financial lifeline. The Fed chief was later joined by Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman Chris Cox, who were summoned to detail the rescue plan. The two companies hold or guarantee more than $5 trillion in mortgages -- almost half of the nation's total. The Bush administration is asking Congress to temporarily increase lines of credit to Fannie and Freddie and to let the government buy their stock. The Fed has offered to let the companies draw emergency loans."

Where in Art.1, Section 8, of the U. S. Constitution does it authorize the federal government to buy up stock in any corporation and reward stockholders for their gross mismanagement? Where is the "FED" going to get this ONE TRILLION "dollars"? Why, they're going to create it out of thin air - the magical money machine! As I write this column, Congress has run this country into a $9,498,511,404,143.63 debt. That's just under $9.5 TRILLION "dollars." How many Americans know what "debt ceiling" means?

March 22, 2008: Congress Raises the Debt Ceiling To Accommodate Bush's Legacy

"The House fiscal 2009 budget, which passed last week, raises the borrowing authority of the United States from $9.815 trillion to $10.2 trillion, an increase of $385 billion dollars. The Senate, passing its own version of the 2009 budget, did not raise the federal borrowing authority, but does expect to spend $3 trillion, with a projected deficit from $340 to $366 billion. Some estimate that the Treasury Department will hit the $9.815 ceiling limit shortly after the November elections, which will be no surprise to anyone. The two chambers will have to reach a compromise in the next few weeks. The big winners in all of this are the foreign entities the U.S. will borrow from in an effort to finance the expenditures."

Increase lines of credit, Mr. Bush? What you're asking is to further enslave my daughter who already works two jobs just to keep afloat, to save these stock holders and entities that should never have been created in the first place. If this ONE TRILLION "dollars" created out of thin air is added to the national debt, it will exceed the current 'debt ceiling' as the interest accumulates; Congress will have to raise it again. Counterfeit U.S. Senator, Chris Dodd wants everyone to shut up about Freddie and Fannie. Could it be because this incompetent blowhard is the Chairman of the U.S. Senate Committee on Banking, Housing and Urban Affairs that recently passed another rape of we the people:

July 11 (Bloomberg) -- "The U.S. Senate passed a $300 billion plan to help thousands of Americans keep their homes and tighten regulation of Fannie Mae and Freddie Mac in an effort to ease the worst housing slump since the Great Depression. The legislation, approved 63-5 today, would let an estimated 400,000 struggling homeowners avoid foreclosure by refinancing their subprime mortgages into fixed-rate loans backed by the government. The measure also offers tax incentives to potential home buyers and sets aside $4 billion to help communities buy foreclosed properties."
For rest of the article- Source

Monday, July 21, 2008

Silver is like TNT for 5 years running

Silver Stock Report
Jason Hommel July 11th

Whenever silver prices take a dip, people lament the delay in the rise in prices and ask me "When will silver prices explode?"

Well, it's been exploding for 5 years now. In 2003, silver's low point was $4.15/oz. in the spring. This year, silver is "about" $18. From $5 to $18 over 5 years is an "average" annual gain of a whopping 29%. It may not seem like a lot because we have such high expectations for silver (along with waiting during price consolidations lasting 1.5 years at a time), but let's see what 29% gains per year really look like over the next 15 years. Most people don't seem to understand the power of compounding gains. So, I made two charts to illustrate the points.

In the second chart, a lot of people think that most of the gains come later. That's not true. This shows a 29% gain, every single year.

I would not expect such "regular" gains, silver prices will show more ups and downs than this projection.

But clearly, silver will do better than that, for several reasons, as follows.

1. Most people today are trend investors. Silver's price action so far is a good trend.

2. Silver's price action is more than justified by the fundamentals. With only about 60 million ounces of annual investment demand, which is less than 1/10th of overall annual silver demand, any newly increased investor demand is sure to have a high impact on the price.

3. Annual investor demand for silver of 60 million ounces is only about $1 billion. That is so small in the scale of world finance, it's scary.

4. More than 90% of people are concerned about rising prices and inflation, and will be looking for ways to protect their money. Silver is the natural choice, and more people are discovering silver every day. As they do, investment demand can grow substantially and quickly.

5. In the U.S., there are about 4000 coin shops that can help people find silver to buy. www.find-your-local-coin-shop.com

6. Just this year, investment demand for American Silver Eagle 1 ounce coins has doubled, from 10 million/year to 20 million. The public really got excited about silver and gold when prices hit $20/oz. for silver, and $1000/oz. for gold, with customer volumes increasing 10 times a many coin shops. Just wait to see how excited people get when silver gets past $50, and then, they realize that the inflation adjusted high price for silver from 1980 when silver was $50, is now nearing $400/oz.!

Conclusion? Don't "wait" for silver to explode before acting. It's exploding already. Get some. As soon as you can. The longer you wait, the more you will pay.


Jason Hommel