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On the Verge of Collapse?
Experts from all over predict an economic collapse but you can protect yourself and prosper.
By James P. Tucker Jr.
Several prominent financial experts have forecast the likely collapse of the U.S. economy in the not-so-distant future, which would mean not only ruin for hundreds of millions of Americans but also disaster for the countless foreign countries linked by Wall Street banks to the United States. But, according to these same leading authorities, there are steps which Americans can take that may save their life savings from the widely predicted economic collapse.
You can prosper when the anticipated stock market crash comes by putting your money in silver and gold, where prices are artificially low and the value survives.
Although the Treasury Department and the Federal Reserve Board (Fed) are conspiring to keep the price of gold low, prices will rise dramatically in the next few years, advises Bill Murphy, chairman of the Gold Anti-Trust Action Commit tee, as well as precious metals dealers, Ed Lee, Bill Haynes and James Cook.
Murphy’s committee can show that at least 10,000 tons of gold have been sold short al though the actual amount of salable gold is far less. Murphy told this to the Fourth International Conference on Authentic History & the First Amendment, jointly sponsored by The Barnes Review and American Free Press.
Murphy’s committee is suing the Fed and Rep. Ron Paul (R-Tex.) is sponsoring legislation to abolish the illegal consortium of private, international bankers that manipulates the economy in secret meetings.
For 90 years, the Fed has operated in absolute secrecy and has never been audited. American taxpayers are audited and jailed if the IRS can nail them on something—but no one ever audits the Fed, including the General Accounting Office. What monstrosities are being covered up boggles the imagination.
[People have tried to argue that this is a lie on various message boards but when asked for evidence of an audit none has been forthcoming: if you have it post it here.]
“Since the creation of the Federal Reserve,” said Paul, “middle- and working-class Americans have been victimized by a boom-and-bust monetary policy.
“In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies,” Paul said. “This represents a real, if hidden, tax.”
Paul is also pushing the Honest Money Act to repeal legal tender laws that force Americans to accept irredeemable paper ticket or electronic money.
“Legal tender laws disadvantage ordinary citizens by forcing them to use money that is vulnerable to vast depreciation,” Paul said. “As Stephen T. Byington wrote in the September 1895 issue of the American Federationist: ‘No legal tender law is ever needed to make men take good money; its only use is to make them take bad money.’”
“U.S. stocks today are still overvalued,” said economist Kurt Richebacher. “”The worst part of the bear markets is still to come and it will result in the wholesale destruction of wealth from the bubble economy.”
“When you say it can’t be like 1929 through 1931 [when stocks lost 89 percent of their value], you’re right,” said Michael O’Higgins, a money manager. “It could be worse.”
[Or "they" could pull it out and nothing big happens at all...better safe than sorry: get silver, get gold.]
“Asian central banks alone hold $1.4 trillion in U.S. ‘paper,’ ” said Bill Buckler, newsletter editor. “If part of this immense stock of funds lent to the U.S. were to start to run for the exits, the U.S. financial system would be forced against a wall and then off a cliff.”
* For more on this subject, you can order AFP’s informational reports, Billions for the Bankers: Debts for the People, or 8 Reasons Why the Budget is a Fraud (one copy is $2, six copies are $4 and 40 or more are 30 cents each). Write to American Free Press, 1433 Pennsylvania Avenue SE, Washington, D.C. 20003. Call toll free at 1-888-699-NEWS to order by Visa or MasterCard.
http://www.americanfreepress.net/08_31_03/On_the_Verge/on_the_verge.html
CONGRESSMAN RON PAUL: A STATESMAN FOR ALL SEASONS
By: Murray Sabrin
Last Friday on the floor of the House of Representatives Congressman Ron Paul of Texas gave a one-hour speech. What was so remarkable about Dr. Paul's speech was not its length but its content. He spelled out in great detail the inevitable negative consequences of paper money, the current monetary system of the United States and the other nation-states of the world.
Speech is here: http://www.lewrockwell.com/paul/paul124.html
Dr. Paul has been warning his fellow congressman and congresswomen for more than two decades about the Federal Reserve's destabilizing impact on the U.S. economy. So far, his warnings have fallen on deaf ears. Dr. Paul's colleagues may begin to take seriously his critique of the FED soon, because the proverbial chickens are coming home to roost.
The United States Government and the Federal Reserve are conducting the most inflationary policies in the history of the Republic. The federal budget is growing greater than personal income and population growth, and the deficit for this fiscal year, which ends on September 30th, may exceed $500 billion. Total spending is running at a $2.2 trillion annual rate. Next year's budget deficit may reach at least $600 billion.
On the monetary front, the Federal Reserve has pushed short-term rates to 1%, well below the inflation rate and "real rate" of interest, effectively "robbing" individuals of a real return on their savings. The FED's unlimited checking account gives it the power to create money out of thin air, in effect, having a legal monopoly to print money. The inevitable consequences of the FED's legalized counterfeiting have been the business cycle, stock market bubbles, runaway housing prices, increasing unemployment, rampant speculation, increasing bankruptcies, and big government at home and military interventionism abroad.
With such a track record, one would think members of Congress, the "people's" representative body, would question the need for the FED and hold its chairman Alan Greenspan and his board accountable for the economic and financial wreckage they have caused. Instead, FED chairman Alan Greenspan is treated like a god when he testifies in Congress. What's going on here?
There are three explanations. Members of Congress are ill informed about the effects of monetary policy. Virtually all of them have been taught that the FED is necessary to promote "economic growth"--one of the great economic fallacies of the ages. Print money and reap the benefits of prosperity! So, in other words, Africa is in the economic pits because their central bankers have failed to crank up the printing presses. What nonsense.
Congressman Paul has educated his colleagues with his speech on September 5th, thus the people's representatives now have no excuse for not understanding how the FED destabilizes the economy.
Second, members of Congress could be as dumb as nails. Congressman Paul has been criticizing the Federal Reserve since he first entered Congress more than 25 years ago. He is co-author of The Case for Gold, the 1982 Gold Commission's minority report, which outlines the monetary and banking history of the United States, and the effects of fiat money on the economy. Dr. Paul's analysis of the FED has been in the public record for two decades. Members of Congress should read Dr. Paul's and Lewis Lehrman's report and they can judge for themselves if paper money is compatible with freedom, sustainable prosperity, and peaceful international relations. If they still "don't get it", it will confirm what some of have said about the intelligence of our congresspersons--they are on the left side of the bell curve.
Lastly, members of Congress could know exactly what is happening, but they are unwilling to buck the FED, knowing the FED's enormous power and influence could destroy their political careers. In other words, members of Congress are unwillingly to challenge the FED's nefarious activities, because they would rather play ball with Greenspan and Company so they could keep their cushy jobs, perks, and pensions.
Please Read Congressman Paul's September 5th speech and then send it your representative and two senators. If they still support the FED after reading Dr. Paul's systematic analysis about the pernicious effect of paper money, we can conclude they are dumb, afraid, or bought and paid for by the political establishment.
We need more statesmen like Dr. Ron Paul to expose the great lies of the Welfare-Warfare State. Dr. Paul is working hard for all the American people who love liberty. That's why he is a statesman for not only our era but for all the ages.
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."
http://www.etherzone.com/2003/sabr090903.shtml
Dollar Hammered on Doubts About Recovery
Tuesday September 9, 4:41 pm ET
By Gertrude Chavez
NEW YORK (Reuters) - The dollar was clobbered on Tuesday, troubled by falls on Wall Street and worries over the sustainability of the U.S. economic rebound, following weak U.S. employment numbers on Friday.
"There's very little going the dollar's way," said Steven Englander, chief FX Strategist Americas at Barclays Capital in New York. "It's still basically a dollar-negative environment following Friday's weak employment numbers," he said.
Late afternoon in New York, the euro climbed to $1.1231 (EUR=), up 1.5 percent from Monday's New York close against the dollar, breaching a key technical level around $1.1212. This triggered some investors to cut their losses and sell dollars for euros, traders said.
The euro also posted gains against the yen and sterling, benefiting indirectly from the greenback's weakness across the board. The single currency rose around 1.5 percent against the yen to 131.22 (EURJPY=) and was roughly 1 percent firmer against sterling at 70.58 pence (EURGBP=).
Against the Swiss franc, the dollar fell to 1.3774 francs (CHF=), while sterling traded about 0.49 percent higher against the greenback at $1.5904 (GBP=).
Englander said the U.S. stock market's weakness also contributed to falls in the dollar as equity investors reeled from a warning from Finnish mobile phone giant Nokia (NOKIV.HE) that revenue might fall at its main unit.
Nokia's revenue alert compounded fears that revenue growth at U.S. companies will slow down in the third quarter.
MARKETS BEGINNING TO DOUBT RECOVERY
Analysts also said currency markets were still spooked by Friday's disappointing employment report, spurring doubts the economic recovery in the United States is not in full swing.
"Financial markets have fully discounted all of the potential good news in the U.S. economy," said John Johnston, global markets research head at RBC Capital in Toronto. "Now, the doubting has begun. The bad news is creeping back in with the weak labor market data," he said.
Johnston expects a period of additional downside for the dollar, weighed down by increasing evidence that other economies like Japan and some countries in Asia are starting to emerge from their economic slump.
Analysts believe that for the dollar to regain its footing, the U.S. economy needs to show a more sustainable growth path.
"The current recovery continues to unfold very much like that in the early 1990s, when there were several false starts as the economy struggled for traction," said Johnston.
The dollar is also being buffeted ahead of the second anniversary of the Sept. 11 attacks on the United States and President Bush's request that Congress supply an additional $87 billion to fund operations in Iraq and Afghanistan.
"The question remains, 'Can you sustain a recovery without job growth?' -- which has an impact on consumer spending and tax revenues. I think the deficit is riding high on people's minds and Iraq is turning into a much more costly situation and the elections are coming up," said Tod Van Name, vice president of foreign exchange at Fortis Bank.
[Talk about an article that pussy foots around the issues...]
YEN MARGINALLY HIGHER VS DOLLAR
The yen, meanwhile, showed traded flat against the dollar, with the greenback nearly unchanged on the day at 116.81 yen (JPY=).
Traders' suspicions that Japan was buying dollars for yen were cited as one reason the greenback was virtually flat against the Japanese currency. The surge higher in the dollar came during the U.S. Treasury Department's (News - Websites) strong four-week bill auction, sparking talk that the Bank of Japan was a bidder.
Traders cited talk in the market that Japanese names were in buying dollars around the 116.10 yen area, but there was no confirmation Japanese authorities were behind the buying.
Intervention by Japanese authorities was cited by traders last week and on Monday for the dollar's firm position against the yen while the greenback was being sold off elsewhere.
[Free market? What free market? Was there supposed to be a free market?]
(Additional reporting by Daniel Bases)
http://biz.yahoo.com/rb/030909/markets_forex_5.html
The market that won't die!
David Chapman
Sep 9, 2003
Go here for charts: http://www.321gold.com/editorials/chapman_d/chapman_d_090903.html
The bull market that had its beginnings back in October 2002 keeps trudging higher. Indeed to the consternation of many bears it is becoming a "market that won't die." Of course the fact that it makes little sense that it should keep going up has nothing to do with. The trend is up, the money flows have been positive, earnings are improving, the economy is improving, unemployment looks shaky but the market seems to ignore it, housing prices have been at their highest levels ever, money is coming back into the mutual fund market, and, as they seem to perennially note, a lot of money is still sitting on the sidelines. If the market is discounting future better times then the almost year long rally (the correction into March 2003 aside) must be telling us that the good times of the 1990's are back again.
Nothing, of course could be further from the truth. The rally, particularly as the summer has worn on has been on some of the most pitiful volume we have ever seen. If there was a way of describing this rally it is the "sleep walk" rally due to the daily manner in which it tries to put market participants to sleep. Of course the low volume has not been everywhere. A prime exception has been the gold stocks where volumes have been high as the market moves higher.
And fueling the market further is the prognostications of some that say that not only is this a cyclical recovery but that it will continue well on into 2004 because 2004 being an election year the markets always go up. They might be right. After all it is not difficult to note that election years since 1970 have generally been to the upside. An exception was 1982 the year the major bull market at the end of the century began, but once it bottomed in August it was straight up the rest of the year.
And 1998 wasn't too good either although the market rallied into the summer but then it caught Asian contagion and the collapse of Long Term Capital Management (LTCM) and a nasty bull market correction got underway. Of course once the Fed flooded the market with liquidity to prevent a global financial collapse due to LTCM it was up into 2000 and the bull market top.
But as we try to remind everyone we are in a secular bear market not a secular bull market. The secular bull market that began in the doldrums of the summer of 1982 lasted 18 years. Through that period we saw significant corrections in 1987, 1990, 1994 and 1998 or roughly every four years. There is no question now that the last 4-year cycle low was the one we experienced in October 2002. So the argument goes that we should now go up and we won't experience another significant bear correction until 2006. The presumption by the bulls is that the market has entered a new secular bull market and in a secular bull the cycles are right skewed so the market should continue strong into at least 2005. And even though we firmly believe we are in a secular bear a bull market correction could last into 2005, as even in earlier secular bears it was not unusual to see bull corrections that lasted the better part of three years.
The last secular bear we experienced was the one from 1966 to 1982. During that period we experienced significant lows in 1966, 1970, 1974, 1978 and of course the final low in 1982. Peaks during that period were seen in 1968, 1973, 1976 and 1981. One of the highlights of that era was that the Dow Jones Industrials was never able to climb significantly over 1000. This was the inflationary period of the Kondratieff cycle. In real terms the market of course fell even further with the 1982 low expressed in constant dollars even lower than the 1974 actual low. But overall it was a rolling 16-year bear market characterized by many rallies and equal setbacks. The 1966-1982 bear market ended in 1983 when the Dow Jones Industrials firmly took out the previous highs.
The most famous bear market was the one seen from 1929-1949. The actual low in the market of course was seen in 1932. Cycle lows were seen in 1932, 1938, 1942, 1946 and 1949. Market peaks were seen in 1930, 1937, 1939, 1945 and 1948. The only one that clearly threw out the 4-year cycle was the 1937 peak and subsequent 1938 low. A half cycle high and low was seen in 1934 while 1936 instead of seeing a low experienced a sharp rally. The highlight of this era was of course the devastating 1929-1932 bear market that wiped off almost 90% of the value of the Dow Jones Industrials. The next 17 years was spent trying to create the base and conditions that set off the 1949-1966-bull market. A huge symmetrical triangle formed between 1937 and 1949 that was broken in 1950. It wasn't until 1954 that the highs of 1929 were taken out. This was the deflationary period of the Kondratieff cycle.
We have noted in the past that this is the deflationary period of the Kondratieff cycle. So will the market play itself as it did from 1929-1949? Not likely as each cycle takes on its own characteristics. One thing we are sure about is that this is merely a correction within the context of the secular bear and yes it could continue to be in play until 2005. But as our weekly chart of the Dow Jones Industrials shows us we have been in a steady downward trend since the peak that was seen in 2000.
All the recent rally has accomplished is to bring us back towards the down trend line that has been forming during this period. And it may be that while the next move is down the lower end of this downward trend could once again hold any move. We do note the support zones that are forming around 9000, 8000 and 7000 any one of which could contain the next downward move. The market would then move upward again within the context of this downward move to once again test the upper regions. This could easily be our scenario between now and 2005 when the forces of the next 4-year cycle low once again takes over.
But this type of downward drift also eventually plays itself with a huge drop through the bottom of the forming descending triangle. So it is good to keep this in mind as we go forward. The growing massive overhang of debt that in the USA grows at a rate of $1.2 billion a day is not sustainable. The US is trying to monetize this debt through competitive devaluation of its currency.
Witness the recent efforts in China to try and convince the Chinese to set the Yuan free to trade on world markets or at least revalue their currency upward against the current fixed rate against the US$. Given the strength of the Chinese economy (having now assumed much of the manufacturing sector that used to reside in America) an instant upward valuation would get underway (Currently US$1 = 8.28 Yuan).
But there is going to be some reluctance on the part of the Chinese to revalue their currency upward as they will not want to spoil a good thing in their export economy. As well other Asian countries are trying to prevent their currencies from rising. These export led economies like Japan would be hurt if their currencies rose against the US$. Clearly a struggle is being played out in the currency world and when countries do this there is only one currency that will hold its value and that of course is gold. [And silver.]
The "market that won't die" is ignoring a lot of other things besides the currency struggles and rising debt. Rising and unsustainable levels of price earnings, rising unemployment where more and more workers are dropping out or former career driven salary employees are being forced to take hourly jobs at a fraction of their former incomes, rising interest rates that will feed back into the mortgage market putting a damper on the hot housing market, a deteriorating situation in Iraq and an end to the "road map" for peace in the Israeli/Palestinian conflict, threats of further terrorist attacks, threats still being made against Iran, Syria or Korea. Any or any combination of these could suddenly derail this market. To ignore them while maintaining a bullish stance on the market could turn the gains of the past several months quickly into a mere remembrance. With most cycles turned down into the fall even a rising market needs a pause to refresh and reflect. Go away and don't come back until December at the earliest.
David Chapman
Sep 9, 2003
email david@davidchapman.com
www.davidchapman.com
I swear I put up a post about Ron Paul...
Bush Poll Numbers Hit New Low
NewsMax.com Wires
Monday, Sept. 8, 2003
President George W. Bush’s job performance ratings have reached the lowest point since his pre-Inauguration days, continuing a steady decline since a post-9/11 peak, according to a new Zogby America poll of 1,013 likely voters conducted September 3-5.
Less than half (45%) of the respondents said they rated his job performance good or excellent, while a majority (54%) said it was fair or poor. In August Zogby International polling, his rating was 52% positive, 48% negative.
Today’s results mark the first time a majority of likely voters have given the president an unfavorable job performance rating since he took office.
A majority (52%) said it’s time for someone new in the White House, while just two in five (40%) said the president deserves to be re-elected. Last month, 45% said re-election was in order, and 48% said it was time for someone new.
A like number (52%) said the country is heading in the wrong direction, while 40% said it is the right direction. Overall opinion of President Bush has also slipped to 54% favorable – 45% unfavorable, compared to August polling which indicated 58% favorable, 40% unfavorable.
Just two in five (40%) said they would choose Bush if the election were held today, while 47% said they would elect a Democratic candidate. In August polling, respondents were split (43% each) over President Bush or any Democratic challenger.
In the same poll, likely Democratic primary voters give a plurality of their support to former Vermont Governor Dr. Howard Dean (16%), whose campaign has been gathering support in recent polling. He is followed by Massachusetts Senator John Kerry (13%), Connecticut Senator Joseph Lieberman (12%), and Missouri Congressman Richard Gephardt (8%). No other candidate polled more than 3%.
Nearly two-thirds (63%) of the likely Democratic primary voters said it is somewhat or very likely that President Bush will be re-elected in November 2004, regardless of how they intend to vote. The Zogby America poll involved 1,013 likely voters selected randomly from throughout the 48 contiguous states using listed residential telephone numbers.
Polling was conducted from Zogby International’s Call Center in Utica, NY. The poll has a margin of sampling error of +/- 3.2%. The Democratic candidates’ portion of the poll involved 507 respondents, and has a margin of error of +/- 4.5%.
http://www.newsmax.com/archives/articles/2003/9/7/181331.shtml
The 2004 Election Has Already Been Rigged
Posted September 2, 2003 thepeoplesvoice.org
By Schuyler Ebbets
The pollsters have recently been forced to admit that the majority of Americans are against the re-election of George Bush. Two wars, thousands of dead human beings, and nine million lost jobs later and people are beginning to realize that something is very wrong. In spite of this gradual awakening most registered voters continue to depend on TV for their news and they are kept woefully in the dark about issues like election reform and touch screen voting. The media has gone to great lengths to foster an illusion of legitimacy and normalcy surrounding the electoral process. People have been intentionally lead to believe that their vote counts and Bush could actually be booted out of office on Election Day. No way is Bush going to lose, it just can’t happen. The 2004 election has already been rigged. The corporations and the military industrial complex have bought them selves a government and they aren’t going to let some silly little presidential election jeopardize their investment.
On February 23, 2001 Florida Secretary of State Katherine Harris suggested that Florida rent rather than buy touch screen voting machines in time for the 2002 midterm election. She said, "I think it would be wrong-headed and precipitous to purchase any equipment now. If you buy now, you're buying antiquated technology". According to her twisted logic, it was acceptable to use faulty voting systems in the election, it just wasn't a good idea to purchase them.
Prior to Florida's outrageous September 10, 2002 primary election, poll data showed heavy support for Janet Reno in Broward County, but election results from one Broward precinct alone revealed an impossible 0% turnout among more than 800 registered voters. Reno requested a recount of eighty precincts containing 31,375 registered Democrats because they reported only 1,952 votes. Her request was immediately turned down by the State Elections Board. According to an AP analysis, if those precincts matched the average county turnout, they should have produced 10,260 votes, more than five times the number recorded by the Election Systems & Software (ES&S), iVotronic touch-screen voting machines.
Almost two months later on election night, November 5th, 2002, tens of thousands of Floridians experienced difficulties using the iVotronic machines. Voters called in to Neil Rogers AM radio talk show the day after the election and complained of “broken” voting machines, and machines that voted multiple times for Bush when McBride was selected. Electronic voting expert, Rebecca Mercuri told American Free Press, “Numerous severe voting system problems occurred throughout Florida electronic voting on November 5th, but none of the major news networks are covering these problems,” On November 6th, David Host, spokesman for the Florida Secretary of State, declared the elections, "an unqualified success", and the Associated Press reported, “The closely watched contest for governor in Florida was decided without a hitch.” This propaganda might have been believed if 103,222 ballots in Broward County alone had not been “misplaced”.
Katherine Harris is infamous for using her position as Florida’s Secretary of State during the 2000 election to unjustly purge over 90,000 predominantly black and Hispanic Democratic voters from the rolls. People remembered how Harris had taken away their civil rights when she prevented them from voting. On November 5th, 2002, most of the Democratic electorate of 3.7 million people turned out to vote for Jan Schneider who ran against Harris. Although registered Democrats outnumbered Republicans by 340,000, it was too late, the new ES&S iVotronic machines had already been installed in eleven key Florida counties. On November 5, 2002 Jeb Bush became governor of Florida again, and Katherine Harris was given a seat in the House of Representatives with only 138,940 votes, defeating Democratic opponent Jan Schneider's oddly low 114,618 votes.
This wasn’t the first Republican victory involving “Election Systems & Software” (ES&S). Former right wing radio talk-show host and CEO of ES&S, Chuck Hagel, decided he would run for the U.S. Senate in Nebraska with his own ES&S machines counting the votes. Hagel failed to mention that he had been both CEO and Chairman of ES&S on his disclosure documents, or that he was an owner in the company that installed, programmed, and operated the voting machines used by most of the citizens of Nebraska. In 1996, Republican Hagel won the race in Democratic Nebraska for the U.S. Senate easily carrying both the primary and general elections. According to Bev Harris of blackboxvoting.com, Hagel scored lopsided victories in almost every demographic group, including Black communities that had never voted for a Republican. With the widest margin of victory in state history Hagel became the first Republican in 24 years to win a Senate seat in Nebraska. On November 5, 2002 Hagel ran against Democrat Charlie Matulka and was re-elected to his second term in the United States Senate by an unreal 83% of the vote. Again, the votes were counted by computer-controlled voting machines built programmed and installed by Hagel’s company Election Systems & Software.
In Georgia, Republican Saxby Chambliss repeatedly questioned the patriotism of Democratic incumbent and triple amputee war hero Max Cleland during his campaign. Chambliss made the absurd claim that he was more patriotic than Cleland even though he had avoided service in the Vietnam war with a "medical deferment". A Poll taken by the Atlanta Journal Constitution published on November 1st, just five days before the election, showed support for Georgia Democratic Senator Max Cleland at 49%, clearly 5% ahead of Republican Saxby Chambliss at 44%. Many People in Georgia, particularly veterans, had been angered by the crude remarks made by Chambliss and they turned out in record numbers to vote for Cleland. When the 'Diebold' Electronic Voting tally was made public it stunned and confused the Georgia voters. Saxby Chambliss had won with 53% of the vote compared to Max Cleland’s 46%. It represented a 13% pro-Republican swing that seemed to materialize out of cyberspace. The victories of Chambliss and Hagel, along with the tragic October 25, 2002 plane crash that killed Democratic Senator Paul Wellstone, virtually guaranteed Republican control of the Senate.
The Neocon election rigging juggernaut lurches forward unstoppable in the guise of so-called election reform. Two Republican dominated corporations, Election Systems & Software (ES&S), and Diebold Voting Systems, now control 80% of the vote count in the United States. As this transition has moved forward, a pattern of election upsets which overwhelmingly favor Republican candidates is emerging. These are test runs in preparation for the 2004 presidential selection. The Neocons have determined that elections can be manipulated easily with the new touch screen voting systems and when accompanied by a media pounding of lies the public will accept the rigged election results as fact. The greatest advantage of the new touch screen voting scam is the removal of a paper trail and the blockage of access to the inner workings of the software. When a voter touches the screen to select a candidate there is no confirmation that the machine has actually registered the correct selection. In the old punch-card and fill-in-the-circle paper systems, voters could see their choice marked on the ballot. In the event of any confusion or question, a record of the vote existed and a recount was possible. Since the new electronic systems leave no paper trail there can be no recount and the results must be accepted as fact. Attempts to examine the code used by the machines in Florida were blocked in the courts by the GOP citing, "proprietary/trade secrecy" protections under a law, which made it impossible for the DNC to ascertain how the machines tabulated votes.
It would be admirable if the American people could resist the next rigged presidential election as they did the scam of 2000. Of course the ‘Supreme Court five’ would uphold the "proprietary/trade secrecy" protections and the bogus election results would be ruled as legitimate. The coming election fraud has been so well planned that it probably won’t make it into the courts. With the help of the media, the Neocons will deliver the deathblow to democracy at the touch screen voting terminals.
http://liberty.hypermart.net/Newsletter/3/4_The_2004_Election_Has_Already_Been_Rigged.htm
This war on terrorism is bogus
The 9/11 attacks gave the US an ideal pretext to use force to secure its global domination
Michael Meacher
Saturday September 6, 2003
The Guardian
Massive attention has now been given - and rightly so - to the reasons why Britain went to war against Iraq. But far too little attention has focused on why the US went to war, and that throws light on British motives too. The conventional explanation is that after the Twin Towers were hit, retaliation against al-Qaida bases in Afghanistan was a natural first step in launching a global war against terrorism. Then, because Saddam Hussein was alleged by the US and UK governments to retain weapons of mass destruction, the war could be extended to Iraq as well. However this theory does not fit all the facts. The truth may be a great deal murkier.
We now know that a blueprint for the creation of a global Pax Americana was drawn up for Dick Cheney (now vice-president), Donald Rumsfeld (defence secretary), Paul Wolfowitz (Rumsfeld's deputy), Jeb Bush (George Bush's younger brother) and Lewis Libby (Cheney's chief of staff). The document, entitled Rebuilding America's Defences, was written in September 2000 by the neoconservative think tank, Project for the New American Century (PNAC).
The plan shows Bush's cabinet intended to take military control of the Gulf region whether or not Saddam Hussein was in power. It says "while the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein."
The PNAC blueprint supports an earlier document attributed to Wolfowitz and Libby which said the US must "discourage advanced industrial nations from challenging our leadership or even aspiring to a larger regional or global role". It refers to key allies such as the UK as "the most effective and efficient means of exercising American global leadership". It describes peacekeeping missions as "demanding American political leadership rather than that of the UN". It says "even should Saddam pass from the scene", US bases in Saudi Arabia and Kuwait will remain permanently... as "Iran may well prove as large a threat to US interests as Iraq has". It spotlights China for "regime change", saying "it is time to increase the presence of American forces in SE Asia".
The document also calls for the creation of "US space forces" to dominate space, and the total control of cyberspace to prevent "enemies" using the internet against the US. It also hints that the US may consider developing biological weapons "that can target specific genotypes [and] may transform biological warfare from the realm of terror to a politically useful tool".
Finally - written a year before 9/11 - it pinpoints North Korea, Syria and Iran as dangerous regimes, and says their existence justifies the creation of a "worldwide command and control system". This is a blueprint for US world domination. But before it is dismissed as an agenda for rightwing fantasists, it is clear it provides a much better explanation of what actually happened before, during and after 9/11 than the global war on terrorism thesis. This can be seen in several ways.
[I really don't have too much of a problem with total world domination by the US, just don't lie to me about it while you do it, dammit. Now if we could only revive the Constitution and The Republic; add an amendment that says we get to conquer the world if "we the people" want to...]
First, it is clear the US authorities did little or nothing to pre-empt the events of 9/11. It is known that at least 11 countries provided advance warning to the US of the 9/11 attacks. Two senior Mossad experts were sent to Washington in August 2001 to alert the CIA and FBI to a cell of 200 terrorists said to be preparing a big operation (Daily Telegraph, September 16 2001). The list they provided included the names of four of the 9/11 hijackers, none of whom was arrested.
It had been known as early as 1996 that there were plans to hit Washington targets with aeroplanes. Then in 1999 a US national intelligence council report noted that "al-Qaida suicide bombers could crash-land an aircraft packed with high explosives into the Pentagon, the headquarters of the CIA, or the White House".
Fifteen of the 9/11 hijackers obtained their visas in Saudi Arabia. Michael Springman, the former head of the American visa bureau in Jeddah, has stated that since 1987 the CIA had been illicitly issuing visas to unqualified applicants from the Middle East and bringing them to the US for training in terrorism for the Afghan war in collaboration with Bin Laden (BBC, November 6 2001). It seems this operation continued after the Afghan war for other purposes. It is also reported that five of the hijackers received training at secure US military installations in the 1990s (Newsweek, September 15 2001).
Instructive leads prior to 9/11 were not followed up. French Moroccan flight student Zacarias Moussaoui (now thought to be the 20th hijacker) was arrested in August 2001 after an instructor reported he showed a suspicious interest in learning how to steer large airliners. When US agents learned from French intelligence he had radical Islamist ties, they sought a warrant to search his computer, which contained clues to the September 11 mission (Times, November 3 2001). But they were turned down by the FBI. One agent wrote, a month before 9/11, that Moussaoui might be planning to crash into the Twin Towers (Newsweek, May 20 2002).
All of this makes it all the more astonishing - on the war on terrorism perspective - that there was such slow reaction on September 11 itself. The first hijacking was suspected at not later than 8.20am, and the last hijacked aircraft crashed in Pennsylvania at 10.06am. Not a single fighter plane was scrambled to investigate from the US Andrews airforce base, just 10 miles from Washington DC, until after the third plane had hit the Pentagon at 9.38 am. Why not? There were standard FAA intercept procedures for hijacked aircraft before 9/11. Between September 2000 and June 2001 the US military launched fighter aircraft on 67 occasions to chase suspicious aircraft (AP, August 13 2002). It is a US legal requirement that once an aircraft has moved significantly off its flight plan, fighter planes are sent up to investigate.
Was this inaction simply the result of key people disregarding, or being ignorant of, the evidence? Or could US air security operations have been deliberately stood down on September 11? If so, why, and on whose authority? The former US federal crimes prosecutor, John Loftus, has said: "The information provided by European intelligence services prior to 9/11 was so extensive that it is no longer possible for either the CIA or FBI to assert a defence of incompetence."
Nor is the US response after 9/11 any better. No serious attempt has ever been made to catch Bin Laden. In late September and early October 2001, leaders of Pakistan's two Islamist parties negotiated Bin Laden's extradition to Pakistan to stand trial for 9/11. However, a US official said, significantly, that "casting our objectives too narrowly" risked "a premature collapse of the international effort if by some lucky chance Mr Bin Laden was captured". The US chairman of the joint chiefs of staff, General Myers, went so far as to say that "the goal has never been to get Bin Laden" (AP, April 5 2002). The whistleblowing FBI agent Robert Wright told ABC News (December 19 2002) that FBI headquarters wanted no arrests. And in November 2001 the US airforce complained it had had al-Qaida and Taliban leaders in its sights as many as 10 times over the previous six weeks, but had been unable to attack because they did not receive permission quickly enough (Time Magazine, May 13 2002). None of this assembled evidence, all of which comes from sources already in the public domain, is compatible with the idea of a real, determined war on terrorism.
The catalogue of evidence does, however, fall into place when set against the PNAC blueprint. From this it seems that the so-called "war on terrorism" is being used largely as bogus cover for achieving wider US strategic geopolitical objectives. Indeed Tony Blair himself hinted at this when he said to the Commons liaison committee: "To be truthful about it, there was no way we could have got the public consent to have suddenly launched a campaign on Afghanistan but for what happened on September 11" (Times, July 17 2002). Similarly Rumsfeld was so determined to obtain a rationale for an attack on Iraq that on 10 separate occasions he asked the CIA to find evidence linking Iraq to 9/11; the CIA repeatedly came back empty-handed (Time Magazine, May 13 2002).
In fact, 9/11 offered an extremely convenient pretext to put the PNAC plan into action. The evidence again is quite clear that plans for military action against Afghanistan and Iraq were in hand well before 9/11. A report prepared for the US government from the Baker Institute of Public Policy stated in April 2001 that "the US remains a prisoner of its energy dilemma. Iraq remains a destabilising influence to... the flow of oil to international markets from the Middle East". Submitted to Vice-President Cheney's energy task group, the report recommended that because this was an unacceptable risk to the US, "military intervention" was necessary (Sunday Herald, October 6 2002).
Similar evidence exists in regard to Afghanistan. The BBC reported (September 18 2001) that Niaz Niak, a former Pakistan foreign secretary, was told by senior American officials at a meeting in Berlin in mid-July 2001 that "military action against Afghanistan would go ahead by the middle of October". Until July 2001 the US government saw the Taliban regime as a source of stability in Central Asia that would enable the construction of hydrocarbon pipelines from the oil and gas fields in Turkmenistan, Uzbekistan, Kazakhstan, through Afghanistan and Pakistan, to the Indian Ocean. But, confronted with the Taliban's refusal to accept US conditions, the US representatives told them "either you accept our offer of a carpet of gold, or we bury you under a carpet of bombs" (Inter Press Service, November 15 2001).
Given this background, it is not surprising that some have seen the US failure to avert the 9/11 attacks as creating an invaluable pretext for attacking Afghanistan in a war that had clearly already been well planned in advance. There is a possible precedent for this. The US national archives reveal that President Roosevelt used exactly this approach in relation to Pearl Harbor on December 7 1941. Some advance warning of the attacks was received, but the information never reached the US fleet. The ensuing national outrage persuaded a reluctant US public to join the second world war. Similarly the PNAC blueprint of September 2000 states that the process of transforming the US into "tomorrow's dominant force" is likely to be a long one in the absence of "some catastrophic and catalyzing event - like a new Pearl Harbor". The 9/11 attacks allowed the US to press the "go" button for a strategy in accordance with the PNAC agenda which it would otherwise have been politically impossible to implement.
[DO YOU GET IT YET? WE WERE "PEARL HARBORED". EVEN A FREAKING BRIT CAN FIGURE IT OUT. Works like a charm every fucking time with every fucking generation of Amerikan sheep.]
The overriding motivation for this political smokescreen is that the US and the UK are beginning to run out of secure hydrocarbon energy supplies. By 2010 the Muslim world will control as much as 60% of the world's oil production and, even more importantly, 95% of remaining global oil export capacity. As demand is increasing, so supply is decreasing, continually since the 1960s.
This is leading to increasing dependence on foreign oil supplies for both the US and the UK. The US, which in 1990 produced domestically 57% of its total energy demand, is predicted to produce only 39% of its needs by 2010. A DTI minister has admitted that the UK could be facing "severe" gas shortages by 2005. The UK government has confirmed that 70% of our electricity will come from gas by 2020, and 90% of that will be imported. In that context it should be noted that Iraq has 110 trillion cubic feet of gas reserves in addition to its oil.
A report from the commission on America's national interests in July 2000 noted that the most promising new source of world supplies was the Caspian region, and this would relieve US dependence on Saudi Arabia. To diversify supply routes from the Caspian, one pipeline would run westward via Azerbaijan and Georgia to the Turkish port of Ceyhan. Another would extend eastwards through Afghanistan and Pakistan and terminate near the Indian border. This would rescue Enron's beleaguered power plant at Dabhol on India's west coast, in which Enron had sunk $3bn investment and whose economic survival was dependent on access to cheap gas.
[ENRON? I think I may have heard that name before...]
Nor has the UK been disinterested in this scramble for the remaining world supplies of hydrocarbons, and this may partly explain British participation in US military actions. Lord Browne, chief executive of BP, warned Washington not to carve up Iraq for its own oil companies in the aftermath of war (Guardian, October 30 2002). And when a British foreign minister met Gadaffi in his desert tent in August 2002, it was said that "the UK does not want to lose out to other European nations already jostling for advantage when it comes to potentially lucrative oil contracts" with Libya (BBC Online, August 10 2002).
The conclusion of all this analysis must surely be that the "global war on terrorism" has the hallmarks of a political myth propagated to pave the way for a wholly different agenda - the US goal of world hegemony, built around securing by force command over the oil supplies required to drive the whole project. Is collusion in this myth and junior participation in this project really a proper aspiration for British foreign policy? If there was ever need to justify a more objective British stance, driven by our own independent goals, this whole depressing saga surely provides all the evidence needed for a radical change of course.
· Michael Meacher MP was environment minister from May 1997 to June 2003
http://www.guardian.co.uk/september11/story/0%2C11209%2C1036685%2C00.html
War on the Bill of Rights
By Nat Hentoff
The erosion of sections of the Bill of Rights quickened when the president signed the USA PATRIOT Act on October 26, 2001. With Attorney General John Ashcroft insisting on the crucial need for speed, the House passed the 342-page document by a vote of 356 to 56, although few had the chance to read it. Several members later said that parts of the new law seemed unconstitutional, but in view of the coming elections, they did not want to be attacked as “unpatriotic” by their opponents. In the Senate, only one senator, Wisconsin’s Russ Feingold, voted against the PATRIOT Act.
In the House, dissenter David Obey of Wisconsin said bitterly, “Why should we care? It’s only the Constitution.”
The Act has radically extended government electronic surveillance—on and off the Internet—with often reduced judicial review. For example, FBI agents can enter a home or office with a court order—while the occupants are not there—and insert the “Magic Lantern” (also known as the keystroke logger) into a computer.
It records every stroke, including messages not ever sent from the computer. On returning covertly, the agents can download everything that has been recorded. Notice of their entry can be delayed for 90 days or longer.
Under the PATRIOT Act, with a warrant from the secret Foreign Intelligence Surveillance Court, the FBI is empowered to go to libraries and bookstores to secure the lists of books borrowed or bought by persons under only tenuous suspicion of links to terrorism. A much lower standard than the Fourth Amendment’s “probable cause” is permitted for these inquiries. And with a gag rule unprecedented in American history, both the librarian and the bookstore owner are prohibited from informing anyone, including the press, that these searches have taken place.
Among the extraordinary unilateral incursions in the Bill of Rights taken by John Ashcroft: Government agents can now listen in on conversations between lawyers and their clients in federal prisons without a prior court order.
And it goes on. The December 20, 2002, New York Times reported, “The Bush administration is planning to propose requiring Internet service providers to help build a centralized system to enable broad monitoring of the Internet and, potentially, surveillance of its users through the Internet.”
Brandon Koerner, a fellow at the New America Foundation, has pointed out in The Village Voice that the bill that Congress passed so hastily—and that is now part of the law—“lowers the legal standards necessary for the FBI to deploy its infamous Carnivore surveillance system.” Without showing—as the Fourth Amendment requires—probable cause that a crime has been committed or is about to be committed, the government invades your privacy through Carnivore.
The fearful name “Carnivore” disturbed some folks, and so it has been renamed DCS1000. Carnivore, Koerner notes, is “a computer that the Feds attach to an Internet service provider. Once in place, it scans e-mail traffic for ‘suspicious’ subjects which, in the current climate, could be something as innocent as a message with the word ‘Allah’ in the header.” Or maybe: “SAVE THE FOURTH AMENDMENT FROM TYRANTS!” Carnivore also records other electronic communications.
Ashcroft’s Detention Camps
And there is the PATRIOT Act’s designation of two American citizens, so far, as “enemy combatants,” held in military brigs in this country, without charges and without access to lawyers, and unable to appear personally in court hearings. They are being held indefinitely for interrogation about their possible knowledge of or links to terrorism.
In the case of Yaser Hamdi, taken into custody in Afghanistan and now in a Virginia navy brig, Federal District Judge Robert Doumar, a Reagan appointee, has asked the Justice Department lawyer, “So the Constitution doesn’t apply to Mr. Hamdi?” This treatment of American citizens, Judge Doumar has said, “appears to be the first in American jurisprudence.”
Jonathan Turley, a professor of constitutional and public-interest law at George Washington University, wrote in a column in the August 12, 2002, Los Angeles Times: “Attorney General John Ashcroft’s announced desire for camps for U.S. citizens he deems to be ‘enemy combatants’ has moved him from merely being a political embarrassment to being a constitutional menace.” Actually, ever since Ashcroft pushed the PATRIOT Act through a supine Congress, he has subverted more elements of the Bill of Rights than any attorney general in American history.
Turley reports that Justice Department aides to General Ashcroft “have indicated that a ‘high-level committee’ will recommend which citizens are to be stripped of their constitutional rights and sent to Ashcroft’s new camps. … Of course Ashcroft is not considering camps on the order of the internment camps used to incarcerate Japanese-American citizens in World War II. But he can be credited only with thinking smaller; we have learned from painful experience that unchecked authority, once tasted, easily becomes insatiable.”
Turley insists that “the proposed camp plan should trigger immediate congressional hearings and reconsideration of Ashcroft’s fitness for important office. Whereas al-Qaeda is a threat to the lives of our citizens, Ashcroft has become a clear and present threat to our liberties.” There has, as yet, been no congressional call for such hearings.
On August 8, 2002, the Wall Street Journal, which much admires Ashcroft on its editorial pages, reported that “the Goose Creek, South Carolina, facility that houses [Jose] Padilla—mostly empty since it was designated in January to hold foreigners captured in the U.S. and facing military tribunals—now has a special wing that could be used to jail about twenty U.S. citizens if the government were to deem them enemy combatants, a senior administration official said.” The Justice Department has told Turley that it has not denied this story. And space can be found in military installations for more “enemy combatants.”
But once the camps are operating, can Ashcroft be restrained from detaining—not in these special camps, but in regular lockups—any American investigated under suspicion of domestic terrorism under the new, elastic FBI guidelines for criminal investigations? From page three of these Ashcroft terrorism FBI guidelines, it’s worth noting again that “The nature of the conduct engaged in by a [terrorist] enterprise will justify an inference that the standard [for opening a criminal justice investigation] is satisfied, even if there are no known statements by participants that advocate or indicate planning for violence or other prohibited acts.” That conduct can be simply “intimidating” the government, according to the PATRIOT Act.
Vanishing Liberties
On March 18, 2003, The Associated Press reported that at John Carroll University, in a Cleveland suburb, Justice Antonin Scalia said, “Most of the rights you enjoy go way beyond what the Constitution requires” because “the Constitution just sets minimums.” Accordingly, in wartime, Scalia emphasized, “the protections will be ratcheted down to the constitutional minimum.”
Most of the radical revisions of the Constitution that I and others have been writing about will ultimately be ruled on by the Supreme Court. Scalia indicates he will come down on the side of Bush and Ashcroft. A few days after the terrorist attacks on the World Trade Center and the Pentagon, Justice Sandra Day O’Connor said that as a result, we are “likely to experience more restrictions on our personal freedom than has ever been the case in our country.”
In his book All the Laws But One: Civil Liberties in Wartime (Alfred A. Knopf, 1998), William Rehnquist, the chief justice of the United States, who will be presiding over the constitutionality of the Bush-Ashcroft assaults on the Constitution, wrote, “In time of war, presidents may act in ways that push their legal authority to its outer limits, if not beyond.”
Reacting to Rehnquist’s deference to the executive branch in previous wars, Adam Cohen, legal affairs writer for the New York Times, wrote: “The people whose liberties are taken away are virtually invisible” in the pages of Rehnquist’s book.
Meanwhile, in an invaluable new report by the Lawyers Committee for Human Rights, Imbalance of Powers: How Changes to U.S. Law and Policy Since 9/11 Erode Human Rights and Civil Liberties (March 2003), a section begins: “A mantle of secrecy continues to envelop the executive branch, largely with the acquiescence of Congress and the courts. [This] makes effective oversight impossible, upsetting the constitutional system of checks and balances.”
So where is the oversight going to come from? If at all, first from the people pressuring Congress—provided enough of us know what is happening to our rights and liberties. And that requires, as James Madison said, a vigorous press, because the press has been “the beneficent source to which the United States owes much of the light which conducted [us] to the ranks of a free and independent nation.”
But the media, with few exceptions, are failing to report consistently, and in depth, precisely how Bush and Ashcroft are undermining our fundamental individual liberties.
For example, the Justice Department had kept secret from Congress the Domestic Security Enhancement Act, the proposed sequel to the PATRIOT Act. A week before an anonymous member of Ashcroft’s staff leaked PATRIOT Act II, a representative of the Justice Department even lied to the Senate Judiciary Committee about its very existence.
A few sections in that chilling draft were briefly covered in some of the media. But these invasions of the Constitution were only a one or two-day story in nearly all of the media.
How many Americans know that if the bill is passed (and Bush certainly won’t veto it), they can be stripped of their citizenship if charged with giving “material support” to a group designated by the government as “terrorist”? Sending a check for the outfit’s lawful activities—without knowing why it landed on Ashcroft’s list—could make you a person without a country and put you behind bars here indefinitely.
Justice Denied at its Source
Three days before the first anniversary of September 11, the Daily Journal Gazette of Fort Wayne, Indiana, published an indictment of Ashcroft and the Bush administration in an editorial, “Attacks on Liberty.” It was the paper’s first full-page editorial in nearly 20 years. The Journal Gazette charged:
In the name of national security, President Bush, Attorney General John Ashcroft, and even Congress have pulled strand after strand out of the constitutional fabric that distinguishes the United States from other nations. …
Actions taken over the past year are eerily reminiscent of tyranny portrayed in the most nightmarish works of fiction. The power to demand reading lists from libraries could have been drawn from the pages of Ray Bradbury’s Fahrenheit 451. … The sudden suspension of due process for immigrants rounded up into jails is familiar to readers of Sinclair Lewis’ It Can’t Happen Here.
Among the quotations from distinguished Americans in the editorial was one of my favorites—Louis Brandeis’ “The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.”
The changes in the air are not only far from slight, but they are ominous in view of what another current Supreme Court justice, Anthony Kennedy, has warned: “The Constitution needs renewal and understanding each generation, or else it’s not going to last.”
But the Constitution cannot be continually renewed unless enough Americans understand its crucial guarantees of personal liberties against an executive branch that eagerly and righteously keeps assuming powers that the Constitution mandates be shared with Congress and the judiciary.
During a radio interview in Alaska, on February 11, 2003, Rep. Don Young, a plainspoken conservative Republican, said to a caller from Hooper Bay, Alaska, “The events of September 11, as horrendous and horrible as they were, have had an even more horrendous effect—in my opinion and I think in the opinion of a lot of Americans—on our rights, through such of the legislation that has been passed as the PATRIOT Act. The worst act we ever passed.”
“Did you vote for it?” the caller asked.
“Everybody voted for it,” Don Young said, “but it was stupid. It was what you call ‘emotional voting.’ We didn’t follow it through, we didn’t study it. I think you’re going to see—what I call—improvements, changes. … I say this very strongly. American citizens have constitutional rights, and we have to follow them.”
On the National Day of Prayer, May 1, 2003, Attorney General John Ashcroft declared in Washington: “It is faith and prayer that are the sources of this nation’s strength.”
In view of Ashcroft’s systematic invasions of our liberties, it is understandable that he missed the quintessential source of this nation’s strength—the Bill of Rights—as Don Young of Alaska and increasing millions of Americans know, and are insistent on protecting.
Nat Hentoff is a columnist for The Village Voice and the Washington Times.
http://www.inthesetimes.com/comments.php?id=352_0_1_0_C
Asian debt withdrawal threat to US deficit
By Jenny Wiggins in New York
Published: September 7 2003 19:01 / Last Updated: September 7 2003 19:01
Economists fear that Asian investors, who are the largest foreign owners of US Treasuries, may cut their holdings of US government debt, withdrawing a key source of financing for America's large current account deficit.
The worries have been fuelled by recent sharp falls in the price of US government debt.
[You know, that crash in the bond market nobody talks about. Can they raise rates? (Raising rates attracts buyers.) "They" know what will happen if they do. I would expect this would happen around the changing of the guard in 2004 when they install Kerry as president. This way the dems can take the blame for the crash...remains to be seen though, if shrub stays in power it will be interesting to see what happens to interest rates...]
Weakness in the US Treasury market could make Asian investors "less willing" buyers of debt securities, said Marcel Kasumovich, head of G10 foreign exchange strategy at Merrill Lynch.
He said there had already been a "noticeable shift" downwards in the amount of debt issued by mortgage financiers Freddie Mac and Fannie Mae being bought by foreign investors.
Asian investors have piled into the US Treasury markets in recent years, helping to push Treasury prices high and interest rates low. China, Japan, South Korea and Hong Kong owned a combined total of about $696bn in Treasuries at the end of June, up from $512bn in December 2001, according to data from the US Treasury.
[Do you think China and Hong Kong have any interest in causing us financial harm? Balance their ability to create wealth by selling us stuff with their stated desire for world dominance...what about gold?]
Asian countries use the income they receive from exporting goods to the US to buy American assets, which helps keep their currencies weak compared with the dollar. This helps keep the price of Asian goods down in the US.
But in recent months, as investors have become more optimistic about an economic recovery, they have begun to sell Treasury debt, sending government bond prices down.
Political pressure on Asian governments to alter their exchange rates could also prompt selling. The US Treasury would like Beijing to abandon its fixed currency regime because it is concerned that China is keeping its currency low to support exports.
However, if China and other Asian countries were to allow their currencies to strengthen against the US dollar, they would have less need to own US assets.
"It could mean Asia pulls out of US markets," said Ethan Harris, chief US economist at Lehman Brothers.
If Asian countries were to reduce their holdings of American assets heavily, they would remove a key source of finance for US investment spending.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=105...
The coming first world debt crisis
Ann Pettifor
1 - 9 - 2003
The reckless financial policies of leading western powers in the last two decades make it likely that the next seismic debt crisis will be in America, not Argentina. It can be avoided, says Ann Pettifor of the Real World Economic Outlook, only by serious efforts to bring regulation and balance to the international economy.
Jubilee Research at the New Economics Foundation (NEF), the team that spearheaded global awareness of a third world debt crisis released provocative new research in September 2003 which argues that the “first world” is approaching a major debt crisis. These findings appear in the first of NEF’s annual reports on the global economy, Real World Economic Outlook – which shadows the IMF’s annual World Economic Outlook.
The report predicts that a giant credit bubble, created by central bankers and finance ministers (the engineers of decades of “easy money”) has now reached a “tipping point”. This point – at which the “bubble” of financial assets exceeds GDP by nine times – has triggered financial crisis elsewhere. Another “tipping point” would be a rise in interest rates – not unlikely for economies like the US and UK which have massive foreign deficits.
The financial system: unbalanced, unfair, unsustainable
On a global level, there is $100 trillion of debt outstanding, but only $33 trillion of income with which to repay those debts. Even the drastic recent stock market falls have barely dented the credit superstructure. When this credit bubble bursts in the United States and Britain, it will be middle-class consumers that will first bear the brunt of the financial crash.
That will be unjust and unfair, because American and British consumers have been actively encouraged in their borrowing by the financial deregulation policies of both central bankers and governments. Moreover, politicians and bankers have watched as dutiful and compliant consumers have propped up these two big economies – helping to keep the global economy afloat. They will be rewarded for their heroic efforts by bankruptcy, losses, liabilities, and personal anguish – which will extend some time into the future. The impact of a collapsing credit bubble will reverberate around the world, and hurt the poorest most.
The crisis will be exacerbated for individual consumers, because the end of the credit boom will take place in a deflationary environment. Deflation is in part a consequence of the policies of central bankers and finance ministers for opening up markets, and clamping down on wages and prices. Deflation is good for lenders, but bad for debtors. This is because the value of debts rises in real terms in a deflationary environment. This is in contrast to inflation, which ultimately erodes the value of debt.
A financial crisis under debt-deflationary conditions will be catastrophic for many debtors. It will also be grossly unjust and unfair, because while central bankers and finance ministers have clamped down on prices and wages – they have used the credit bubble (borrowing) to inflate asset values (stocks, bonds, and property) to extraordinary heights.
On the whole, it is the poor and the middle classes that rely on wages and salaries – while the rich derive their incomes from wealth. However, while the rich have been getting richer, they have not become indebted. Nor are they using these assets to spend and boost the economy. Instead, on the whole, they are standing by while their assets rise in value. The poor, by contrast, have watched as their wages and salaries declined as a share of GDP, and have had to borrow to compensate for these losses. By doing so, they are providing a service to the rest of the economy, and helping asset prices stay high.
[Which is why you should have "capital" not "wages".]
Winston Churchill’s storm warning
The team producing Real World Economic Outlook warns that the coming “first world” debt crisis will resemble the debt crisis of the 1920s – when bankers and politicians embarked on a similar experiment of “globalising” and deregulating capital. Then, as now, their liberalisation of capital markets and reckless inflation of credit encouraged massive borrowing. Then as now, the burden of resulting debts fell most heavily on the middle classes and poor.
Winston Churchill, in his book about that period, The Gathering Storm, described it well:
“The year 1929 reached almost the end of its third quarter under the promise and appearance of increasing prosperity, particularly in the United States. Extraordinary optimism sustained an orgy of speculation. Books were written to prove that economic crisis was a phase, which expanding business organisation and science had at last mastered. “We are apparently finished and done with economic cycles as we have known them” said the President of the New York Stock Exchange in September. But in October a sudden and violent tempest swept over Wall Street…
The whole wealth so swiftly gathered in the paper values of previous years vanished. The prosperity of millions of American homes had grown up a gigantic structure of inflated credit, now suddenly proved phantom. Apart from the nation-wide speculation in shares which even the most famous banks had encouraged by easy loans, a vast system of purchase by instalment of houses, furniture, cars and numberless kinds of household conveniences and indulgences had grown up. All now fell together. But yesterday, there had been the urgent question of parking the motor-cars in which thousands of artisans and craftsmen were beginning to travel to their daily work. Today the grievous pangs of falling wages and rising unemployment afflicted the whole community, engaged till this moment in the most active creation of all kinds of desirable articles…”
If we substitute “the urgent question of parking motor-cars” with the “urgent question of parking SUVs”, Winston Churchill could be writing in 2003.
A cycle of illusions
How did we get into this mess? Real World Economic Outlook challenges standard explanations for the launch of the “globalisation” experiment. We contest the view that deregulation of capital flows – the very core of the globalisation project – was brought about by a form of “spontaneous combustion” caused by new technology. Nor do we share the view of many activists that globalisation is “corporate-driven”.
Instead, we argue, globalisation was triggered by elected politicians, and central bankers, in both the US and the UK. In the post-Vietnam war era, led by Richard Nixon and later Ronald Reagan, these politicians sought ways to avoid making the “structural adjustments” necessary to the American economy if debts incurred by foreign wars were to be repaid by US taxpayers. Rather, these politicians preferred to disband the existing system of paying off debts by exchanging gold, and opening up capital markets, so that the US could borrow to pay off its debts.
This new arrangement also allowed them to print the money in which they paid off those debts (unlike poor countries which have to repay debts in foreign currencies like dollars or sterling). British politicians and central bankers were only too happy to act as US intermediaries in the capital markets. Together they constructed a new financial architecture that effectively obliges central banks of both rich and poor countries to lend to the US – by buying US treasury bills (debt).
It is US treasury bills that have now effectively become the world’s reserve currency – where once that reserve currency was neutral (gold). It is this international financial system that makes the US administration so arrogant in its refusal to “adjust” its economy by cutting spending and pay its way – as poor, indebted nations are required to do by the International Monetary Fund (IMF). (The IMF’s double standards in its dealings with poor countries on the one hand, and the US on the other, are breathtaking).
It is this financial system which makes US financiers so confident that the rest of the world will continue to finance their nation’s extravagant spending binge. In the words of David Goldman, head of debt research at Banc of America Securities: “America is at little risk for the foreseeable future, simply because the world’s capital has nowhere else to go”(Wall Street Journal, 13 August 2003).
[See:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=105...
See also:
http://www.investorshub.com/boards/read_msg.asp?message_id=1411718 ]
The day of reckoning
The Real World Economic Outlook challenges that view. There is now a growing consensus that the vast build-up of household, corporate, state and foreign debts of the US is not sustainable. Some central banks are already switching out of US dollars and into euros. When capital flows shift away from the US, and there are recent signs of this happening, Alan Greenspan may have to raise interest rates to attract capital back into the US to fund the growing federal, state and foreign deficits. Indeed, the bond markets seem to be signalling that they expect this to happen quite soon.
When interest rates begin to rise again, when debt costs soar both for corporates and households, when defaults and bankruptcies increase more rapidly than now – then the “tipping point” will be reached.
The latest official US government statistics show that mortgage debt rose in the previous year by a staggering $700 billion, to $6,219 trillion, in the first quarter of 2003. That is double the increase in the 1990s. At the same time, personal bankruptcies in the US rose in the last quarter by 9.0% more than in the same period in 2002; business bankruptcies in two successive quarters rose by 5.9%. Samuel J. Gerdano, executive director of the American Bankruptcy Institute said as far back as May 2003: “Today’s new bankruptcy record is continued evidence that U.S. households continue to struggle with the burden resulting from consumer debts incurred in the 1990s”.
[Carton Sheets "no money down" may be a great tool in the near future...]
Avoiding the next great crash
For some, therefore, the day of reckoning has already arrived. When it arrives for the millions more that are dutifully and heroically borrowing and spending, and thereby propping up the economy, great pain and anguish will be inflicted on individuals, businesses, their workers, families and communities. The consequences for the rest of us, and particularly for those in the poorest countries, are frightening.
Real World Economic Outlook calls on governments and central banks to take three measures to take responsibility for their reckless deregulation of finance.
First, we call on them to re-regulate international capital, by bringing back exchange controls. (It has been done before, and can be again. Capital was re-regulated in 1944, at Bretton Woods, after the “globalisation” experiment of the 1920s that created a giant credit bubble, which led to the crash of the 1920s and 1930s). [Not gonna happen...]
Second, we call on them to rein in the “easy money” of reckless lending and borrowing; to return the economy to scale. [How? Too late, I think...]
Third, we call on governments and central banks to compensate those consumers now dutifully propping up the US and the UK economies. But we argue that this should not be done by taxing the middle classes, but by obliging the rich to share some of the incredible gains that economic and political leaders have allowed them to make over the last two decades. [This wil NEVER happen.]
Our world has been turned upside down. It is time to put it right again.
http://www.opendemocracy.net/debates/article-3-77-1463.jsp
Conclusion buy gold on dips accumulate silver. Sip Margarittas on IBIZA. Enjoy "interesting times" from a distance.
Survey: Americans still favor security over personal liberties
Monday, September 8, 2003
By Judy Putnam
Lansing Bureau
LANSING -- Two years after Sept. 11, 2001, Americans are just as willing to sacrifice personal liberties for security's sake as they were right after the largest terrorist attack in U.S. history, a Michigan State University study finds.
"These results suggest that Americans are not ready to bury their fears of terrorism,'' concludes the report, released today.
MSU political scientists measured public attitudes in a national telephone survey of 1,448 in late fall of 2001. They conducted a second survey of 1,963, including 679 of the original respondents, from January to May.
Researchers asked respondents if they were willing to concede rights to the government -- allowing searches, surveillance, detentions without arrests and other potential intrusions on individual rights -- in order to gain greater security.
Overall, people gave about the same responses as they did in 2001, said MSU political science professor Brian Silver, negating a theory that as time passed, people would be less willing to give up personal liberties.
"We were surprised. We didn't know exactly what would happen. It's surprising to see so little movement in any direction,'' Silver said.
Daily news coverage over terrorism, security level alerts and the war in Iraq, keep the issues fresh in the public mind, Silver said.
"People have essentially come to a position we're in a new era and that era didn't go away -- yet,'' Silver said. "People have reason to be perpetually alert to the fact that we could have another attack on American soil.''
When asked a general question on civil liberties versus security, a majority, or 55.3 percent, favored civil liberties in 2001, but that shifted by 2003 to 45.3 percent favoring civil liberties.
Despite the marked change toward security, when asked about specific issues, Silver said, on average, people gave about the same responses in the two surveys. A majority of those surveyed supporting civil liberties over security in five of eight questions in both surveys.
Among the statements, those surveyed were asked to select between two positions:
Everyone should be required to carry a national identity card at all times to show a police officer upon request. Being required to carry an identity card would violate people's freedom of association and right to privacy. In 2001, 54 percent agreed with carrying a card, compared with 54.8 percent this year.
Some people say high school teachers have the right to criticize America's policies toward terrorism. Others say that all high school teachers should defend America's policies in order to promote loyalty to our country. In 2001, 62.3 percent said teachers shouldn't criticize America's policies, but that dropped to 51.6 percent in 2003.
Some people say that government should be allowed to record telephone calls and monitor e-mail in order to prevent people from planning terrorist or criminal acts. Others say that people's conversations and e-mail are private and should be protected by the constitution. In 2001, 35.2 percent agreed that the government should be able to monitor telephone and e-mails, increasing to 39.4 percent in 2003.
Some new questions in 2003, found mixed results on the public's attitude toward civil liberties. For example, 60 percent want to keep public access to information about the government's activities in fighting terrorism, but 49 percent favor the FBI's access to public library records.
Wendy Wagenheim, spokeswoman for the American Civil Liberties Union of Michigan, said she believes the public may be more willing to wait in line at airports, but will be less willing to give up free speech and privacy as they become aware of effects of laws such as the 2-year-old Patriot Act. She said the debate has picked up in the months since MSU finished its survey.
"People seem to be more aware than ever of their diminishing civil liberties,'' she said. "The debate has become more heated in the last couple of months.''
Wagenheim said she's seeing a shift with conservative groups beginning to side with the ACLU in debates over privacy and free speech. Former congressmen Bob Barr of Georgia and Dick Armey of Texas, both conservatives, are working as consultants for the ACLU on privacy issues.
Silver said another survey will be conducted next year. The survey was funded by $350,000 in grants from the National Science Foundation and the Russell Sage Foundation.
%%bodyend%%- Contact Judy Putnam at (517) 487-8888 or e-mail her at jputnam@boothnewspapers.com
Fear factor
MSU researchers quizzed U.S. residents about their fears in a national telephone survey in 2001 and in 2003. Their findings:
* 82.6 percent of U.S. residents surveyed this year are still very concerned or somewhat concerned about terrorism threats, versus 84.9 percent just after the Sept. 11 attacks.
* The fear of bioterrorism is on the rise with 59 percent concerned or very concerned in 2003, up from 55.4 percent in 2001.
* Mail fears have dropped. Only 21.6 percent express concern about opening mail in 2003, down from 32.6 percent in 2001.
* Tall buildings still scare about one third of those surveyed. There were 37 percent expressing concern in 2001, dropping to 34.9 this year.
* The fear of flying has 45.7 percent concerned in 2003, down a bit from 49.4 percent in 2001.
* Concern over stadiums and crowds are growing. Fifty-nine percent expressed fear in 2003 versus 55.4 percent following the Sept. 11 attacks.
- Contact Judy Putnam at (517) 487-8888 or e-mail her at jputnam@boothnewspapers.com
© 2003 Booth Newspapers. Used with permission
http://www.mlive.com/news/statewide/index.ssf?/base/news-2/10628016049400.xml
So? ...Ibiza it is then?
Sino Bubble
Bill Bonner
Sep 6, 2003
The Daily Reckoning
The Daily Reckoning PRESENTS: Bill Bonner looking ahead to the next great investment mania...
"An appreciation of the Chinese currency is only a matter of time." -Marc Faber
How do you say 'bubble' in Chinese?
We ask because, looking ahead, it may be a good word to know. For there is the latest... and perhaps the last... of the Dollar Standard blow-ups.
China was in the news yesterday... and again today. Hardly a day goes by without a mention of what has become one of the largest economies in the world... and one of the most interesting.
While the developed world grows at barely 1% or 2% per year, China's economy races ahead 4 times as fast. Imports to the U.S. alone are said to be up nearly 40% this year, filling China's pearly chests with dollars, and U.S. treasury bonds.
In 1985, only $2 billion went into China as foreign direct investment. By 2001, the figure had risen to nearly $50 billion. In 1985, total foreign trade with China was just $69 billion; in 2001 it was over $500 billion.
The U.S. has a GDP of about $11 trillion. China's GDP is thought to be only about 1/10th as big. But in rural societies, many transactions are not measured in currency. And local prices are much lower, so that a Chinese meal consumed in Shanghai might be recorded as worth $1... while the equivalent in Manhattan would go for $20. Some economists try to resolve these problems by measuring economies on the basis of purchasing power. In these terms, the U.S. has an annual production of $9.6 trillion, but China's economy is much larger than otherwise thought, at $4.9 trillion.
"You are so skeptical of everything else," began our friend Michel at lunch on Wednesday, "but you seem to believe every word about China. You seem to forget that the country is run by communists who lie about everything. In particular, they lie about economic statistics in order to make themselves look good. That's what the Soviets did right up until the whole system fell apart. And Western economists believed them! And now they believe the Chinese. Even you believe them!"
We do not really believe the Chinese numbers, dear reader. Then again, we don't believe the American numbers either. Instead, we take them all like dabs of paint on a Seurat or Pissarro painting. No number is reliable in itself, but stepping back, we're able to get an impression of something we recognize.
And what we see developing in China is the familiar face of Richard Nixon's Dollar Standard system: money floods into a country; a boom results... asset prices get marked up to absurd levels... factories and office buildings go up everywhere... finally, overcapacity and overpricing creates a bubble... that inevitably blows up.
But wait... we see something more: we also see - in broad strokes - the end of the whole system.
As the U.S. consumes more and more products from China, the Chinese accumulate more and more dollars. The average Chinese saves 25% of his income, so savings in local currency are building up, too - as much as 1 trillion dollars' worth is in interest-bearing accounts already. The money is lent out by commercial banks, and has triggered a typical boom... followed by a typical, Dollar Standard era bubble.
"Bad loans looming as a big cloud over China," warns today's International Herald Tribune. Visitors to China report that there are skyscrapers going up everywhere. Yet, 17% of the new buildings are already empty... and rents are slipping.
While the offices are empty, the factories hum with activity, day and night. The more Americans buy from the Chinese, the more the Chinese are encouraged to produce. As time goes by, more and more goods reach the U.S. at lower and lower prices. And so does the correction come into view. For as prices fall, profit margins fall, too. Soon, businesses - in the U.S. and in China - are no longer worth the money invested in them. Then, capital values drop, too.
At the same time, on the other end of the exchange, consumers cannot buy an infinite quantity of TV sets and automobiles. In America, the income of the average person rose only modestly in the last 30 years... and is presently dropping in real terms. How can these people be expected to buy more products? They have no more income; they have less.
And thus does the whole abstraction of credit, reserve currencies, debts, profits, and trade imbalances suddenly come clear. Stepping back, we see a ghastly picture.
But stepping back from the rush of everyday life, we get the impression that everything corrects sooner or later: financial trends, reputations, the wealth and power of nations. On this day in 1939, the Germans had already advanced deep into Poland (they crossed the border on September 1st, beginning WWII). Hitler must have thought that nothing could stop him... because, for a long time, nothing did. As he and Stalin subdued the Poles, the 'phony war' with France and Britain began. It was no war at all, because neither side wanted a fight. Later, he moved against the French and drove the English into the sea at Dunkirk. By 1942, Hitler controlled Europe. Had he stopped there, things might have gone better for him. But everything that swells up later shrinks down to about where it began. The Reich that was meant to last 1,000 years peaked out in early 1942.
It was almost as if the Fuhrer called together his generals and asked them: "How can we make a mess of this?" They soon had their answer; they found a way to do the almost-impossible... turn a nearly impregnable position in Europe into a losing situation... by sending troops to North Africa where they could be cut off by the British Navy... by picking a fight with his ally, Stalin... and by declaring war on the U.S.!
Three years later, Hitler's reputation, his army, his country, his finances... even his life itself... were fully corrected.
And now we see the Dollar Standard correcting, too. Bill Gross describes the scene:
"Since its monthly trade surplus of $10 billion+ with the United States implies a $120 billion annual addition to its dollar reserves, there will come a time when [China's] hundreds of billions if not a half trillion or so in holdings of U.S. notes and bonds look a tad too risky. In turn, the hundreds of billions that the Japanese and other Asian countries have been buying in order to keep their currencies competitive with the Chinese Yuan (Renminbi) and the U.S. dollar will be subject to a sanity check as well.
"The currency/bonds/stocks of a reflating economy engaged in guns and butter, Hummer and Hummvee spending of near-historical proportions are bad investments. Sooner, or perhaps later, our Asian creditors will wake up and smell the coffee. Perhaps their java will take the form of dollar or Treasury Note sales. Perhaps the aroma will resemble a revaluation of the Yuan and then the Yen. Either way we pay the price: higher import costs, a cutback in spending on cheap foreign goods, rising inflation, perhaps chaotic financial markets, a lower standard of living.
"Mark these words well for what they're worth (not much, some will say): China holds the keys to our kingdom, and our Hummers. Their willingness to buy our bonds, their philosophy of fixing their currency to the U.S. dollar will one day be tested. And should their patience be found wanting, all of their neighboring Asian China wannabes will move in near unison. Reflation's second round will have begun, U.S. interest rates will rise, our goods in the malls and the showrooms will be less affordable, and the process of national belt tightening and increased savings will have begun."
As we write, of course, belts are not being tightened; they're being loosened. Investors at the Krispy Kreme franchise are still feeling fat and sassy. Exactly when their attitudes will change, we cannot say. Nor can we say when the Chinese bubble will blow up.
But while it is too late to safely profit from the U.S. bubble (prices are too high), Marc Faber believes there are still excellent opportunities in Chinese stocks. Some sell for low P/Es - as low as 2 - with high dividend yields. Even China Telecom still sells for only about 8.5 times earnings. Beijing Datang - a large power company - has a dividend yield over 4%. Shenzhen Expressway sells for less than 10 times earnings. Tiny Wing Shing Chemical, by contrast, sells for less than 2 times earnings. You could buy the whole company for only about $15 million, says Andy Mantel, writing in Faber's newsletter.
The simplest China play, according to Mantel, may be the China Mantou Fund, with its offices in Hong Kong.
Your editor
Bill Bonner
6 Sep, 2003
P.S. Marc Faber is a contributor to our own Strategic Investment. If you're interested in learning more about what we expect is a rising bubble in Chinese assets, please see below for subscription information:
The Dollar Crisis
Editor's Note: Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter publishing companies, and the author of the free daily e-mail The Daily Reckoning. He is also the author, with Addison Wiggin, of "Financial Reckoning Day: Surviving The Soft Depression of The 21st Century" (John Wiley & Sons) due out in September.
http://www.321gold.com/editorials/bonner/bonner090603.html
Paper Money and Tyranny
HON. RON PAUL OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
September 5, 2003
All great republics throughout history cherished sound money. This meant that the monetary unit was a commodity of honest weight and purity. When money was sound, civilizations were found to be more prosperous and freedom thrived. The less free a society becomes, the greater the likelihood its money is being debased and the economic well-being of its citizens diminished.
Alan Greenspan, years before he became Federal Reserve Board Chairman in charge of flagrantly debasing the U.S. dollar, wrote about this connection between sound money, prosperity, and freedom. In his article “Gold and Economic Freedom” (The Objectivist, July 1966), Greenspan starts by saying: “An almost hysterical antagonism toward the gold standard is an issue that unites statists of all persuasions. They seem to sense…that gold and economic freedom are inseparable.” Further he states that: “Under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth.”
Astoundingly, Mr. Greenspan’s analysis of the 1929 market crash, and how the Fed precipitated the crisis, directly parallels current conditions we are experiencing under his management of the Fed. Greenspan explains: “The excess credit which the Fed pumped into the economy spilled over into the stock market- triggering a fantastic speculative boom.” And, “…By 1929 the speculative imbalances had become overwhelming and unmanageable by the Fed.” Greenspan concluded his article by stating: “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.”
He explains that the “shabby secret” of the proponents of big government and paper money is that deficit spending is simply nothing more than a “scheme for the hidden confiscation of wealth.” Yet here we are today with a purely fiat monetary system, managed almost exclusively by Alan Greenspan, who once so correctly denounced the Fed’s role in the Depression while recognizing the need for sound money.
The Founders of this country, and a large majority of the American people up until the 1930s, disdained paper money, respected commodity money, and disapproved of a central bank’s monopoly control of money creation and interest rates. Ironically, it was the abuse of the gold standard, the Fed’s credit-creating habits of the 1920s, and its subsequent mischief in the 1930s, that not only gave us the Great Depression, but also prolonged it. Yet sound money was blamed for all the suffering. That’s why people hardly objected when Roosevelt and his statist friends confiscated gold and radically debased the currency, ushering in the age of worldwide fiat currencies with which the international economy struggles today.
If honest money and freedom are inseparable, as Mr. Greenspan argued, and paper money leads to tyranny, one must wonder why it’s so popular with economists, the business community, bankers, and our government officials. The simplest explanation is that it’s a human trait to always seek the comforts of wealth with the least amount of effort. This desire is quite positive when it inspires hard work and innovation in a capitalist society. Productivity is improved and the standard of living goes up for everyone. This process has permitted the poorest in today’s capitalist countries to enjoy luxuries never available to the royalty of old.
But this human trait of seeking wealth and comfort with the least amount of effort is often abused. It leads some to believe that by certain monetary manipulations, wealth can be made more available to everyone. Those who believe in fiat money often believe wealth can be increased without a commensurate amount of hard work and innovation. They also come to believe that savings and market control of interest rates are not only unnecessary, but actually hinder a productive growing economy.
Concern for liberty is replaced by the illusion that material benefits can be more easily obtained with fiat money than through hard work and ingenuity. The perceived benefits soon become of greater concern for society than the preservation of liberty. This does not mean proponents of fiat money embark on a crusade to promote tyranny, though that is what it leads to, but rather they hope they have found the philosopher’s stone and a modern alternative to the challenge of turning lead into gold.
Our Founders thoroughly understood this issue, and warned us against the temptation to seek wealth and fortune without the work and savings that real prosperity requires. James Madison warned of “The pestilent effects of paper money,” as the Founders had vivid memories of the destructiveness of the Continental dollar. George Mason of Virginia said that he had a “Mortal hatred to paper money.” Constitutional Convention delegate Oliver Ellsworth from Connecticut thought the convention “A favorable moment to shut and bar the door against paper money.”
This view of the evils of paper money was shared by almost all the delegates to the convention, and was the reason the Constitution limited congressional authority to deal with the issue and mandated that only gold and silver could be legal tender. Paper money was prohibited and no central bank was authorized. Over and above the economic reasons for honest money, however, Madison argued the moral case for such. Paper money, he explained, destroyed “The necessary confidence between man and man, on necessary confidence in public councils, on the industry and morals of people and on the character of republican government.”
The Founders were well aware of the biblical admonitions against dishonest weights and measures, debased silver, and watered-down wine. The issue of sound money throughout history has been as much a moral issue as an economic or political issue.
Even with this history and great concern expressed by the Founders, the barriers to paper money have been torn asunder. The Constitution has not been changed, but is no longer applied to the issue of money. It was once explained to me, during the debate over going to war in Iraq, that a declaration of war was not needed because to ask for such a declaration was “frivolous” and that the portion of the Constitution dealing with congressional war power was “anachronistic.” So too, it seems that the power over money given to Congress alone and limited to coinage and honest weights, is now also “anachronistic.”
If indeed our generation can make the case for paper money, issued by an unauthorized central bank, it behooves us to at least have enough respect for the Constitution to amend it in a proper fashion. Ignoring the Constitution in order to perform a pernicious act is detrimental in two ways. First, debasing the currency as a deliberate policy is economically destructive beyond measure. Second, doing it without consideration for the rule of law undermines the entire fabric of our Constitutional republic.
Though the need for sound money is currently not a pressing issue for Congress, it’s something that cannot be ignored because serious economic problems resulting from our paper money system are being forced upon us. As a matter of fact, we deal with the consequences on a daily basis, yet fail to see the connection between our economic problems and the mischief orchestrated by the Federal Reserve.
All the great religions teach honesty in money, and the economic shortcomings of paper money were well known when the Constitution was written, so we must try to understand why an entire generation of Americans have come to accept paper money without hesitation, without question. Most Americans are oblivious to the entire issue of the nature and importance of money. Many in authority, however, have either been misled by false notions or see that the power to create money is indeed a power they enjoy, as they promote their agenda of welfarism at home and empire abroad.
Money is a moral, economic, and political issue. Since the monetary unit measures every economic transaction, from wages to prices, taxes, and interest rates, it is vitally important that its value is honestly established in the marketplace without bankers, government, politicians, or the Federal Reserve manipulating its value to serve special interests.
Money As a Moral Issue
The moral issue regarding money should be the easiest to understand, but almost no one in Washington thinks of money in these terms. Although there is a growing and deserved distrust in government per se, trust in money and the Federal Reserve’s ability to manage it remains strong. No one would welcome a counterfeiter to town, yet this same authority is blindly given to our central bank without any serious oversight by the Congress.
When the government can replicate the monetary unit at will without regard to cost, whether it’s paper currency or a computer entry, it’s morally identical to the counterfeiter who illegally prints currency. Both ways, it’s fraud.
A fiat monetary system allows power and influence to fall into the hands of those who control the creation of new money, and to those who get to use the money or credit early in its circulation. The insidious and eventual cost falls on unidentified victims who are usually oblivious to the cause of their plight. This system of legalized plunder (though not constitutional) allows one group to benefit at the expense of another. An actual transfer of wealth goes from the poor and the middle class to those in privileged financial positions.
In many societies the middle class has actually been wiped out by monetary inflation, which always accompanies fiat money. The high cost of living and loss of jobs hits one segment of society, while in the early stages of inflation, the business class actually benefits from the easy credit. An astute stock investor or home builder can make millions in the boom phase of the business cycle, while the poor and those dependent on fixed incomes can’t keep up with the rising cost of living.
Fiat money is also immoral because it allows government to finance special interest legislation that otherwise would have to be paid for by direct taxation or by productive enterprise. This transfer of wealth occurs without directly taking the money out of someone’s pocket. Every dollar created dilutes the value of existing dollars in circulation. Those individuals who worked hard, paid their taxes, and saved some money for a rainy day are hit the hardest, with their dollars being depreciated in value while earning interest that is kept artificially low by the Federal Reserve easy-credit policy. The easy credit helps investors and consumers who have no qualms about going into debt and even declaring bankruptcy.
If one sees the welfare state and foreign militarism as improper and immoral, one understands how the license to print money permits these policies to go forward far more easily than if they had to be paid for immediately by direct taxation.
Printing money, which is literally inflation, is nothing more than a sinister and evil form of hidden taxation. It’s unfair and deceptive, and accordingly strongly opposed by the authors of the Constitution. That is why there is no authority for Congress, the Federal Reserve, or the executive branch to operate the current system of money we have today.
Money As a Political Issue
Although the money issue today is of little political interest to the parties and politicians, it should not be ignored. Policy makers must contend with the consequences of the business cycle, which result from the fiat monetary system under which we operate. They may not understand the connection now, but eventually they must.
In the past, money and gold have been dominant issues in several major political campaigns. We find that when the people have had a voice in the matter, they inevitably chose gold over paper. To the common man, it just makes sense. As a matter of fact, a large number of Americans, perhaps a majority, still believe our dollar is backed by huge hoards of gold in Fort Knox.
The monetary issue, along with the desire to have free trade among the states, prompted those at the Constitutional Convention to seek solutions to problems that plagued the post-revolutionary war economy. This post-war recession was greatly aggravated by the collapse of the unsound fiat Continental dollar. The people, through their representatives, spoke loudly and clearly for gold and silver over paper.
Andrew Jackson, a strong proponent of gold and opponent of central banking (the Second Bank of the United States,) was a hero to the working class and was twice elected president. This issue was fully debated in his presidential campaigns. The people voted for gold over paper.
In the 1870s, the people once again spoke out clearly against the greenback inflation of Lincoln. Notoriously, governments go to paper money while rejecting gold to promote unpopular and unaffordable wars. The return to gold in 1879 went smoothly and was welcomed by the people, putting behind them the disastrous Civil War inflationary period.
Grover Cleveland, elected twice to the presidency, was also a strong advocate of the gold standard.
Again, in the presidential race of 1896, William McKinley argued the case for gold. In spite of the great orations by William Jennings Bryant, who supported monetary inflation and made a mocking “Cross of Gold” speech, the people rallied behind McKinley’s bland but correct arguments for sound money.
The 20th Century was much less sympathetic to gold. Since 1913 central banking has been accepted in the United States without much debate, despite the many economic and political horrors caused or worsened by the Federal Reserve since its establishment. The ups and downs of the economy have all come as a consequence of Fed policies, from the Great Depression to the horrendous stagflation of the ‘70s, as well as the current ongoing economic crisis.
A central bank and fiat money enable government to maintain an easy war policy that under strict monetary rules would not be achievable. In other words, countries with sound monetary policies would rarely go to war because they could not afford to, especially if they were not attacked. The people could not be taxed enough to support wars without destroying the economy. But by printing money, the cost can be delayed and hidden, sometimes for years if not decades. To be truly opposed to preemptive and unnecessary wars one must advocate sound money to prevent the promoters of war from financing their imperialism.
Look at how the military budget is exploding, deficits are exploding, and tax revenues are going down. No problem; the Fed is there and will print whatever is needed to meet our military commitments, whether it’s wise to do so or not.
The money issue should indeed be a gigantic political issue. Fiat money hurts the economy, finances wars, and allows for excessive welfarism. When these connections are realized and understood, it will once again become a major political issue, since paper money never lasts. Ultimately politicians will not have a choice of whether to address or take a position on the money issue. The people and circumstances will demand it.
We do hear some talk about monetary policy and criticism directed toward the Federal Reserve, but it falls far short of what I’m talking about. Big-spending welfarists constantly complain about Fed policy, usually demanding lower interest rates even when rates are at historic lows. Big-government conservatives promoting grand worldwide military operations, while arguing that “deficits don’t matter” as long as marginal tax rates are lowered, also constantly criticize the Fed for high interest rates and lack of liquidity. Coming from both the left and the right, these demands would not occur if money could not be created out of thin air at will. Both sides are asking for the same thing from the Fed for different reasons. They want the printing presses to run faster and create more credit, so that the economy will be healed like magic- or so they believe.
This is not the kind of interest in the Fed that we need. I’m anticipating that we should and one day will be forced to deal with the definition of the dollar and what money should consist of. The current superficial discussion about money merely shows a desire to tinker with the current system in hopes of improving the deteriorating economy. There will be a point, though, when the tinkering will no longer be of any benefit and even the best advice will be of no value. We have just gone through two-and-a-half years of tinkering with 13 rate cuts, and recovery has not yet been achieved. It’s just possible that we’re much closer than anyone realizes to that day when it will become absolutely necessary to deal with the monetary issue- both philosophically and strategically- and forget about the band-aid approach to the current system.
Money as an Economic Issue
For a time, the economic consequences of paper money may seem benign and even helpful, but are always disruptive to economic growth and prosperity.
Economic planners of the Keynesian-socialist type have always relished control over money creation in their efforts to regulate and plan the economy. They have no qualms with using this power to pursue their egalitarian dreams of wealth redistribution. That force and fraud are used to make the economic system supposedly fairer is of little concern to them.
There are also many conservatives who do not endorse central economic planning as those on the left do, but nevertheless concede this authority to the Federal Reserve to manipulate the economy through monetary policy. Only a small group of constitutionalists, libertarians, and Austrian free-market economists reject the notion that central planning, through interest-rate and money-supply manipulation, is a productive endeavor.
Many sincere politicians, bureaucrats, and bankers endorse the current system, not out of malice or greed, but because it’s the only system they have know. The principles of sound money and free market banking are not taught in our universities. The overwhelming consensus in Washington, as well as around the world, is that commodity money without a central bank is no longer practical or necessary. Be assured, though, that certain individuals who greatly benefit from a paper money system know exactly why the restraints that a commodities standard would have are unacceptable.
Though the economic consequences of paper money in the early stage affect lower-income and middle-class citizens, history shows that when the destruction of monetary value becomes rampant, nearly everyone suffers and the economic and political structure becomes unstable. There’s good reason for all of us to be concerned about our monetary system and the future of the dollar.
Nations that live beyond their means must always pay for their extravagance. It’s easy to understand why future generations inherit a burden when the national debt piles up. This requires others to pay the interest and debts when they come due. The victims are never the recipients of the borrowed funds. But this is not exactly what happens when a country pays off its debt. The debt, in nominal terms, always goes up, and since it is still accepted by mainstream economists that just borrowing endlessly is not the road to permanent prosperity, real debt must be reduced. Depreciating the value of the dollar does that. If the dollar loses 10% of its value, the national debt of $6.5 trillion is reduced in real terms by $650 billion dollars. That’s a pretty neat trick and quite helpful- to the government.
That’s why the Fed screams about a coming deflation, so it can continue the devaluation of the dollar unabated. The politicians don’t mind, the bankers welcome the business activity, and the recipients of the funds passed out by Congress never complain. The greater the debt, the greater the need to inflate the currency, since debt cannot be the source of long-term wealth. Individuals and corporations who borrow too much eventually must cut back and pay off debt and start anew, but governments rarely do.
But where’s the hitch? This process, which seems to be a creative way of paying off debt, eventually undermines the capitalist structure of the economy, thus making it difficult to produce wealth, and that’s when the whole process comes to an end. This system causes many economic problems, but most of them stem from the Fed’s interference with the market rate of interest that it achieves through credit creation and printing money.
Nearly 100 years ago, Austrian economist Ludwig von Mises explained and predicted the failure of socialism. Without a pricing mechanism, the delicate balance between consumers and producers would be destroyed. Freely fluctuating prices provide vital information to the entrepreneur who is making key decisions on production. Without this information, major mistakes are made. A central planning bureaucrat cannot be a substitute for the law of supply and demand.
Though generally accepted by most modern economists and politicians, there is little hesitancy in accepting the omnipotent wisdom of the Federal Reserve to know the “price” of money- the interest rate- and its proper supply. For decades, and especially during the 1990s- when Chairman Greenspan was held in such high esteem, and no one dared question his judgment or the wisdom of the system- this process was allowed to run unimpeded by political or market restraints. Just as we must eventually pay for our perpetual deficits, continuous manipulation of interest and credit will also extract a payment.
Artificially low interest rates deceive investors into believing that rates are low because savings are high and represent funds not spent on consumption. When the Fed creates bank deposits out of thin air making loans available at below-market rates, mal-investment and overcapacity results, setting the stage for the next recession or depression. The easy credit policy is welcomed by many: stock-market investors, home builders, home buyers, congressional spendthrifts, bankers, and many other consumers who enjoy borrowing at low rates and not worrying about repayment. However, perpetual good times cannot come from a printing press or easy credit created by a Federal Reserve computer. The piper will demand payment, and the downturn in the business cycle will see to it. The downturn is locked into place by the artificial boom that everyone enjoys, despite the dreams that we have ushered in a “new economic era.” Let there be no doubt: the business cycle, the stagflation, the recessions, the depressions, and the inflations are not a result of capitalism and sound money, but rather are a direct result of paper money and a central bank that is incapable of managing it.
Our current monetary system makes it tempting for all parties, individuals, corporations, and government to go into debt. It encourages consumption over investment and production. Incentives to save are diminished by the Fed’s making new credit available to everyone and keeping interest rates on saving so low that few find it advisable to save for a rainy day. This is made worse by taxing interest earned on savings. It plays havoc with those who do save and want to live off their interest. The artificial rates may be 4, 5, or even 6% below the market rate, and the savers- many who are elderly and on fixed incomes- suffer unfairly at the hands of Alan Greenspan, who believes that resorting to money creation will solve our problems and give us perpetual prosperity.
Lowering interest rates at times, especially early in the stages of monetary debasement, will produce the desired effects and stimulate another boom-bust cycle. But eventually the distortions and imbalances between consumption and production, and the excessive debt, prevent the monetary stimulus from doing very much to boost the economy. Just look at what’s been happening in Japan for the last 12 years. When conditions get bad enough the only recourse will be to have major monetary reform to restore confidence in the system.
The two conditions that result from fiat money that are more likely to concern the people are inflation of prices and unemployment. Unfortunately, few realize these problems are directly related to our monetary system. Instead of demanding reforms, the chorus from both the right and left is for the Fed to do more of the same- only faster. If our problem stems from easy credit and interest-rate manipulation by the Fed, demanding more will not do much to help. Sadly, it will only make our problems worse.
Ironically, the more successful the money managers are at restoring growth or prolonging the boom with their monetary machinations, the greater are the distortions and imbalances in the economy. This means that when corrections are eventually forced upon us, they are much more painful and more people suffer with the correction lasting longer.
Today’s Conditions
Today’s economic conditions reflect a fiat monetary system held together by many tricks and luck over the past 30 years. The world has been awash in paper money since removal of the last vestige of the gold standard by Richard Nixon when he buried the Bretton Woods agreement- the gold exchange standard- on August 15, 1971. Since then we’ve been on a worldwide paper dollar standard. Quite possibly we are seeing the beginning of the end of that system. If so, tough times are ahead for the United States and the world economy.
A paper monetary standard means there are no restraints on the printing press or on federal deficits. In 1971, M3 was $776 billion; today it stands at $8.9 trillion, an 1100% increase. Our national debt in 1971 was $408 billion; today it stands at $6.8 trillion, a 1600% increase. Since that time, our dollar has lost almost 80% of its purchasing power. Common sense tells us that this process is not sustainable and something has to give. So far, no one in Washington seems interested.
Although dollar creation is ultimately the key to its value, many other factors play a part in its perceived value, such as: the strength of our economy, our political stability, our military power, the benefit of the dollar being the key reserve currency of the world, and the relative weakness of other nation’s economies and their currencies. For these reasons, the dollar has enjoyed a special place in the world economy. Increases in productivity have also helped to bestow undeserved trust in our economy with consumer prices, to some degree, being held in check and fooling the people, at the urging of the Fed, that “inflation” is not a problem. Trust is an important factor in how the dollar is perceived. Sound money encourages trust, but trust can come from these other sources as well. But when this trust is lost, which always occurs with paper money, the delayed adjustments can hit with a vengeance.
Following the breakdown of the Bretton Woods agreement, the world essentially accepted the dollar as a replacement for gold, to be held in reserve upon which even more monetary expansion could occur. It was a great arrangement that up until now seemed to make everyone happy.
We own the printing press and create as many dollars as we please. These dollars are used to buy federal debt. This allows our debt to be monetized and the spendthrift Congress, of course, finds this a delightful convenience and never complains. As the dollars circulate through our fractional reserve banking system, they expand many times over. With our excess dollars at home, our trading partners are only too happy to accept these dollars in order to sell us their products. Because our dollar is relatively strong compared to other currencies, we can buy foreign products at a discounted price. In other words, we get to create the world’s reserve currency at no cost, spend it overseas, and receive manufactured goods in return. Our excess dollars go abroad and other countries-especially Japan and China- are only too happy to loan them right back to us by buying our government and GSE debt. Up until now both sides have been happy with this arrangement.
But all good things must come to an end and this arrangement is ending. The process put us into a position of being a huge debtor nation, with our current account deficit of more than $600 billion per year now exceeding 5% of our GDP. We now owe foreigners more than any other nation ever owed in all of history, over $3 trillion.
A debt of this sort always ends by the currency of the debtor nation decreasing in value. And that’s what has started to happen with the dollar, although it still has a long way to go. Our free lunch cannot last. Printing money, buying foreign products, and selling foreign holders of dollars our debt ends when the foreign holders of this debt become concerned with the dollar’s future value.
Once this process starts, interest rates will rise. And in recent weeks, despite the frenetic effort of the Fed to keep interest rates low, they are actually rising instead. The official explanation is that this is due to an economic rebound with an increase in demand for loans. Yet a decrease in demand for our debt and reluctance to hold our dollars is a more likely cause. Only time will tell whether the economy rebounds to any significant degree, but one must be aware that rising interest rates and serious price inflation can also reflect a weak dollar and a weak economy. The stagflation of the 1970s baffled many conventional economists, but not the Austrian economists. Many other countries have in the past suffered from the extremes of inflation in an inflationary depression, and we are not immune from that happening here. Our monetary and fiscal policies are actually conducive to such a scenario.
In the short run, the current system gives us a free ride, our paper buys cheap goods from overseas, and foreigners risk all by financing our extravagance. But in the long run, we will surely pay for living beyond our means. Debt will be paid for one way or another. An inflated currency always comes back to haunt those who enjoyed the “benefits” of inflation. Although this process is extremely dangerous, many economists and politicians do not see it as a currency problem and are only too willing to find a villain to attack. Surprisingly the villain is often the foreigner who foolishly takes our paper for useful goods and accommodates us by loaning the proceeds back to us.
It’s true that the system encourages exportation of jobs as we buy more and more foreign goods. But nobody understands the Fed role in this, so the cries go out to punish the competition with tariffs. Protectionism is a predictable consequence of paper- money inflation, just as is the impoverishment of an entire middle class. It should surprise no one that even in the boom phase of the 1990s, there were still many people who became poorer. Yet all we hear are calls for more government mischief to correct the problems with tariffs, increased welfare for the poor, increased unemployment benefits, deficit spending, and special interest tax reduction, none of which can solve the problems ingrained in a system that operates with paper money and a central bank.
If inflation were equitable and treated all classes the same, it would be less socially divisive. But while some see their incomes going up above the rate of inflation (movie stars, CEOs, stock brokers, speculators, professional athletes,) others see their incomes stagnate like lower-middle-income workers, retired people, and farmers. Likewise, the rise in the cost of living hurts the poor and middle class more than the wealthy. Because inflation treats certain groups unfairly, anger and envy are directed toward those who have benefited.
The long-term philosophic problem with this is that the central bank and the fiat monetary system are not blamed; instead free market capitalism is. This is what happened in the 1930s. The Keynesians, who grew to dominate economic thinking at the time, erroneously blamed the gold standard, balanced budgets, and capitalism instead of tax increases, tariffs, and Fed policy. This country cannot afford another attack on economic liberty similar to what followed the 1929 crash that ushered in the economic interventionism and inflationism which we have been saddled with ever since. These policies have brought us to the brink of another colossal economic downturn and we need to be prepared.
Big business and banking deserve our harsh criticism, but not because they are big or because they make a lot of money. Our criticism should come because of the special benefits they receive from a monetary system designed to assist the business class at the expense of the working class. Labor leader Samuel Gompers understood this and feared paper money and a central bank while arguing the case for gold. Since the monetary system is used to finance deficits that come from war expenditures, the military industrial complex is a strong supporter of the current monetary system.
Liberals foolishly believe that they can control the process and curtail the benefits going to corporations and banks by increasing the spending for welfare for the poor. But this never happens. Powerful financial special interests control the government spending process and throw only crumbs to the poor. The fallacy with this approach is that the advocates fail to see the harm done to the poor, with cost of living increases and job losses that are a natural consequence of monetary debasement. Therefore, even more liberal control over the spending process can never compensate for the great harm done to the economy and the poor by the Federal Reserve’s effort to manage an unmanageable fiat monetary system.
Economic intervention, financed by inflation, is high-stakes government. It provides the incentive for the big money to “invest” in gaining government control. The big money comes from those who have it- corporations and banking interests. That’s why literally billions of dollars are spent on elections and lobbying. The only way to restore equity is to change the primary function of government from economic planning and militarism to protecting liberty. Without money, the poor and middle class are disenfranchised since access for the most part requires money. Obviously, this is not a partisan issue since both major parties are controlled by wealthy special interests. Only the rhetoric is different.
Our current economic problems are directly related to the monetary excesses of three decades and the more recent efforts by the Federal Reserve to thwart the correction that the market is forcing upon us. Since 1998, there has been a sustained attack on corporate profits. Before that, profits and earnings were inflated and fictitious, with WorldCom and Enron being prime examples. In spite of the 13 rate cuts since 2001, economic growth has not been restored.
Paper money encourages speculation, excessive debt, and misdirected investments. The market, however, always moves in the direction of eliminating bad investments, liquidating debt, and reducing speculative excesses. What we have seen, especially since the stock market peak of early 2000, is a knock-down, drag-out battle between the Fed’s effort to avoid a recession, limit the recession, and stimulate growth with its only tool, money creation, while the market demands the elimination of bad investments and excess debt. The Fed was also motivated to save the stock market from collapsing, which in some ways they have been able to do.
The market, in contrast, will insist on liquidation of unsustainable debt, removal of investment mistakes made over several decades, and a dramatic revaluation of the stock market. In this go-around, the Fed has pulled out all the stops and is more determined than ever, yet the market is saying that new and healthy growth cannot occur until a major cleansing of the system occurs. Does anyone think that tariffs and interest rates of 1% will encourage the rebuilding of our steel and textile industries anytime soon? Obviously, something more is needed.
The world central bankers are concerned with the lack of response to low interest rates and they have joined in a concerted effort to rescue the world economy through a policy of protecting the dollar’s role in the world economy, denying that inflation exists, and justifying unlimited expansion of the dollar money supply. To maintain confidence in the dollar, gold prices must be held in check. In the 1960s our government didn’t want a vote of no confidence in the dollar, and for a couple of decades, the price of gold was artificially held at $35 per ounce. That, of course, did not last.
In recent years, there has been a coordinated effort by the world central bankers to keep the gold price in check by dumping part of their large horde of gold into the market. This has worked to a degree, but just as it could not be sustained in the 1960s, until Nixon declared the Bretton Woods agreement dead in 1971, this effort will fail as well.
The market price of gold is important because it reflects the ultimate confidence in the dollar. An artificially low price for gold contributes to false confidence and when this is lost, more chaos ensues as the market adjusts for the delay.
Monetary policy today is designed to demonetize gold and guarantee for the first time that paper can serve as an adequate substitute in the hands of wise central bankers. Trust, then, has to be transferred from gold to the politicians and bureaucrats who are in charge of our monetary system. This fails to recognize the obvious reason that market participants throughout history have always preferred to deal with real assets, real money, rather than government paper. This contest between paper and honest money is of much greater significance than many realize. We should know the outcome of this struggle within the next decade.
Alan Greenspan, although once a strong advocate for the gold standard, now believes he knows what the outcome of this battle will be. Is it just wishful thinking on his part? In an answer to a question I asked before the Financial Services Committee in February 2003, Chairman Greenspan made an effort to convince me that paper money now works as well as gold: “I have been quite surprised, and I must say pleased, by the fact that central banks have been able to effectively simulate many of the characteristics of the gold standard by constraining the degree of finance in a manner which effectively brought down the general price levels.”
Earlier, in December 2002, Mr. Greenspan spoke before the Economic Club of New York and addressed the same subject: “The record of the past 20 years appears to underscore the observation that, although pressures for excess issuance of fiat money are chronic, a prudent monetary policy maintained over a protracted period of time can contain the forces of inflation.” There are several problems with this optimistic assessment. First, efficient central bankers will never replace the invisible hand of a commodity monetary standard. Second, using government price indexes to measure the success of a managed fiat currency should not be reassuring.
These indexes can be arbitrarily altered to imply a successful monetary policy. Also, price increases of consumer goods are not a litmus test for measuring the harm done by the money managers at the Fed. The development of overcapacity, excessive debt, and speculation still occur, even when prices happen to remain reasonably stable due to increases in productivity and technology. Chairman Greenspan makes his argument because he hopes he’s right that sound money is no longer necessary, and also because it’s an excuse to keep the inflation of the money supply going for as long as possible, hoping a miracle will restore sound growth to the economy. But that’s only a dream.
We are now faced with an economy that is far from robust and may get a lot worse before rebounding. If not now, the time will soon come when the conventional wisdom of the last 90 years, since the Fed was created, will have to be challenged. If the conditions have changed and the routine of fiscal and monetary stimulation don’t work, we better prepare ourselves for the aftermath of a failed dollar system, which will not be limited to the United States.
An interesting headline appeared in the New York Times on July 31, 2003, “Commodity Costs Soar, But Factories Don’t Bustle.” What is observed here is a sea change in attitude by investors shifting their investment funds and speculation into things of real value and out of financial areas, such as stocks and bonds. This shift shows that in spite of the most aggressive Fed policy in history in the past three years, the economy remains sluggish and interest rates are actually rising. What can the Fed do? If this trend continues, there’s little they can do. Not only do I believe this trend will continue, I believe it’s likely to accelerate. This policy plays havoc with our economy; reduces revenues, prompts increases in federal spending, increases in deficits and debt occur, and interest costs rise, compounding our budgetary woes.
The set of circumstances we face today are unique and quite different from all the other recessions the Federal Reserve has had to deal with. Generally, interest rates are raised to slow the economy and dampen price inflation. At the bottom of the cycle interest rates are lowered to stimulate the economy. But this time around, the recession came in spite of huge and significant interest rate reductions by the Fed. This aggressive policy did not prevent the recession as was hoped; so far it has not produced the desired recovery.
Now we’re at the bottom of the cycle and interest rates not only can’t be lowered, they are rising. This is a unique and dangerous combination of events. This set of circumstances can only occur with fiat money and indicates that further manipulation of the money supply and interest rates by the Fed will have little if any effect.
The odds aren’t very good that the Fed will adopt a policy of not inflating the money supply because of some very painful consequences that would result. Also there would be a need to remove the pressure on the Fed to accommodate the big spenders in Congress. Since there are essentially only two groups that have any influence on spending levels, big-government liberals and big- government conservatives, that’s not about to happen. Poverty is going to worsen due to our monetary and fiscal policies, so spending on the war on poverty will accelerate.
Our obsession with policing the world, nation building, and pre-emptive war are not likely to soon go away, since both Republican and Democratic leaders endorse them. Instead, the cost of defending the American empire is going to accelerate. A country that is getting poorer cannot pay these bills with higher taxation nor can they find enough excess funds for the people to loan to the government. The only recourse is for the Federal Reserve to accommodate and monetize the federal debt, and that, of course, is inflation.
It’s now admitted that the deficit is out of control, with next year’s deficit reaching over one-half trillion dollars, not counting the billions borrowed from “trust funds” like Social Security. I’m sticking to my prediction that within a few years the national debt will increase over $1 trillion in one fiscal year. So far, so good, no big market reactions, the dollar is holding its own and the administration and congressional leaders are not alarmed. But they ought to be.
I agree, it would be politically tough to bite the bullet and deal with our extravagance, both fiscal and monetary, but the repercussions here at home from a loss of confidence in the dollar throughout the world will not be a pretty sight to behold. I don’t see any way we are going to avoid the crisis.
We do have some options to minimize the suffering. If we decided to, we could permit some alternatives to the current system of money and banking we have today.
Already, we took a big step in this direction. Gold was illegal to own between 1933 and 1976. Today millions of Americans do own some gold.
Gold contracts are legal, but a settlement of any dispute is always in Federal Reserve notes. This makes gold contracts of limited value.
For gold to be an alternative to Federal Reserve notes, taxes on any transactions in gold must be removed, both sales and capital gains.
Holding gold should be permitted in any pension fund, just as dollars are permitted in a checking account of these funds.
Repeal of all legal tender laws is a must. Sound money never requires the force of legal tender laws. Only paper money requires such laws.
These proposals, even if put in place tomorrow, would not solve all the problems we face. It would though, legalize freedom of choice in money, and many who worry about having their savings wiped out by a depreciating dollar would at least have another option. This option would ease some of the difficulties that are surely to come from runaway deficits in a weakening economy with skyrocketing inflation.
Curbing the scope of government and limiting its size to that prescribed in the Constitution is the goal that we should seek. But political reality makes this option available to us only after a national bankruptcy has occurred. We need not face that catastrophe. What we need to do is to strictly limit the power of government to meddle in our economy and our personal affairs, and stay out of the internal affairs of other nations.
Conclusion
It’s no coincidence that during the period following the establishment of the Federal Reserve and the elimination of the gold standard, a huge growth in the size of the federal government and its debt occurred. Believers in big government, whether on the left or right, vociferously reject the constraints on government growth that gold demands.
Liberty is virtually impossible to protect when the people allow their government to print money at will. Inevitably, the left will demand more economic interventionism, the right more militarism and empire building. Both sides, either inadvertently or deliberately, will foster corporatism. Those whose greatest interest is in liberty and self-reliance are lost in the shuffle. Though left and right have different goals and serve different special-interest groups, they are only too willing to compromise and support each other’s programs.
If unchecked, the economic and political chaos that comes from currency destruction inevitably leads to tyranny- a consequence of which the Founders were well aware. For 90 years we have lived with a central bank, with the last 32 years absent of any restraint on money creation. The longer the process lasts, the faster the printing presses have to run in an effort to maintain stability. They are currently running at record rate. It was predictable and is understandable that our national debt is now expanding at a record rate.
The panicky effort of the Fed to stimulate economic growth does produce what it considers favorable economic reports, recently citing second quarter growth this year at 3.1%. But in the footnotes, we find that military spending—almost all of which is overseas- was up an astounding 46%. This, of course, represents deficit spending financed by the Federal Reserve’s printing press. In the same quarter, after-tax corporate profits fell 3.4%. This is hardly a reassuring report on the health of our economy and merely reflects the bankruptcy of current economic policy.
Real economic growth won’t return until confidence in the entire system is restored. And that is impossible as long as it depends on the politicians not spending too much money and the Federal Reserve limiting its propensity to inflate our way to prosperity. Only sound money and limited government can do that.
http://www.fame.org/HTM/Paper%20Money%20and%20Tyranny.htm
A notice in the 1946 Federal Register may save numerous people considerable grief. The W-2 an employer files is considered a statement in lieu of a Form 1040 individual income tax return. See the article and a reduced version of the Federal Register pages at
http://www.usa-the-republic.com/revenue/irs_1040.html
In the next few days we will get a good copy of this Federal Register notice to put on the Law Research and Registry web page so everybody will have it available without having to trudge to the library.
There are some other interesting items on the web page. Use the Home button to go to the index.
Thanks to Bob Welti for sending the link.
Dan Meador
http://lawresearch-registry.org/lrrserch.htm
"You're basically killing each other to see who's got the better
imaginary friend." --Yasir Arafat(PLO leader)
(On going to war over religion.)
If there are no stupid questions, then what kind of questions do stupid people ask? Do they get smart just in time to ask questions?
Scott Adams (1957 - )
WHO OWNS DIEBOLD? And who owns Election Systems & Software?
Introductory Note from votefraud.org: Below is a very important few paragraphs. Mr. Hancock's analysis is another confirmation of the "Permanent Revolution" Thesis of Mr. Terry Hayfield as found in these two articles:
April 09, 2000 Network America Ewire
What is the Hayfield Research? You’d Better Find Out.
http://www.votefraud.org/News/2000/4/040900.html
May 06, 2000 Network America Ewire
Only Six Corporations Dominate Major Media Outlets
http://www.votefraud.org/News/2000/5/050600.html
Mr. Hayfield spoke at the Citizens for a Fair Vote Count Convention in August, 2000. In every major field of human endeavor, the "Permanent Revolution" operatives are using their control of the issue of the money of the major nations to consolidate control under 3 or 4 companies. This results in an ownership monopoly that is increasingly indistinguishable from communism, except that there are three companies exercising the monopoly instead of only one -- a much more clever way to operate. The same consolidation has gone on in office supplies (Staples, Office Max, Office Depot, all springing into existence in 1987-88), and is happening in banking and in the control of the big media. (See www.realnews247.com home page and scroll down to the link entitled "Who Runs the Media? Who Rules America?)
Below Mr. Hancock explains the ownership of Diebold and Election Systems and Software (ES & S). The third major company in vote-counting software is Sequoia.
**********************************************
The following email was sent out to the world wide web by votefraud crusader Ernest Hancock. We believe this email is based on research done by Bev Harris at www.blackboxvoting.com --
From: Ernest Hancock [ernesthancock@cox.net]
Sent: Friday, July 25, 2003 11:09 AM
WHO RUNS DIEBOLD ELECTION SYSTEMS? WHO WROTE THE PROGRAMS?
Bob Urosevich is the CEO of Diebold Election Systems. Urosevich created the original software architecture for Diebold Election Systems, and his original company, called I-Mark Systems, can be found in the source code signatures.
Prior to programming for and taking over Diebold Election Systems, Urosevich programmed for and was CEO of Election Systems & Software (ES&S), which counts 56 percent of the votes in the United States. When Urosevich left ES&S, Chuck Hagel took his position. (Hagel then ran for the U.S. Senate, with ES&S machines counting his own votes, but failed to disclose that he had been both CEO and Chairman of ES&S on his disclosure documents).
Bob Urosevich, together with his brother Todd, founded ES&S. Bob then went to run Diebold, while Todd still is a Vice President at ES&S. Diebold and ES&S, together, count about 80 percent of the votes in the United States.
(After Note from votefraud.org: while it is not at hand, we believe researchers will find that Star Bank and US Bank were run also by two brothers -- and finally these two banks merged and became US Bank. The Big Newsmedia keeps the American people completely in the dark about these agressive moves towards financial dictatorship by a very few people. Of course, we say "aggressive moves" because such rapid consolidation would not be possible without the backing of the international banksters running the Federal Reserve System -- which grants unlimited credit to their appointed operatives so that one industry after another can be gobbled up by this power-mad Ruling Elite.)
http://www.votefraud.org/who_owns_diebold.htm
Music Firms Sues 261 Online Swappers
Monday September 8, 2:51 pm ET
WASHINGTON (Reuters) - A recording-industry trade group said on Monday it had sued 261 individuals for distributing thousands of songs over the Internet without permission, and said more suits are on the way.
The Recording Industry Association of America said it had filed copyright-infringement suits in U.S. courts across the country, marking the first time the group has taken legal action against the millions of Internet users who copy music directly from one another's hard drives.
Until now, the trade group has focused its courtroom efforts on Kazaa and other "peer to peer" networks that enable such activity, which the industry blames for a decline in CD sales.
Those targeted by the lawsuits had distributed an average of more than 1,000 copyrighted songs each, the RIAA said. Under U.S. copyright law they could face penalties of up to $150,000 per song, but the trade group has already settled several cases for around $3,000 each, RIAA President Cary Sherman said.
"Nobody likes playing the heavy and having to resort to litigation, but when your product is being regularly stolen there comes a time when you have to take appropriate action," Sherman said.
Separately, Apple Computer (Nasdaq:APPL - News) reported that it has sold more than 10 million songs on its iTunes Music Store since it opened four months ago. The music store lets customers sample 30 seconds of any song for free. Each song costs 99 cents to purchase.
Sherman said the RIAA continues to investigate online song copying and plans to file thousands more lawsuits. The trade group also unveiled an amnesty program that would remove the threat of prosecution from those who promise to refrain from such activity in the future and erase all copyrighted music they have downloaded.
The president of peer-to-peer service Grokster, which is fighting a courtroom battle of its own with the industry, said the tactic would only waste money and alienate music fans.
"I feel sort of like the Russians fighting Napoleon," Grokster President Wayne Rosso said, adding that traffic on his network is nearly back to levels it reached before the RIAA announced its intention to sue users in late June.
RIAA members include Vivendi Universal's (NYSE:V - News) Universal Music Group; Sony Corp.'s (Tokyo:6758.T - News) Sony Music; AOL Time Warner Inc.'s (NYSE:AOL - News) Warner Music; Bertelsmann AG's (BERT.UL) BMG; and EMI Group Plc. (London:EMI.L - News).
http://biz.yahoo.com/rb/030908/tech_music_lawsuits_1.html
Yellowstone Super Volcano Update
By Dr. Bruce Cornet
Geologist, Paleobotanist, and Palynologist
9-8-3
Mt. Sheriden has been rumbling (15+ micro-quakes) between 1:00 pm and now (9/7/03). There were three small earthquakes at Yellowstone lake between 10:00 am and 1:00 pm MT (9/7/03), which were felt at Norris Junction. There were some small quakes between Midnight and 6:00 am (9/7/03) at Norris Junction. There was a whole string of micro-quakes (25 or more) at Madison River between 6:00 am and now, which are continuing. There have been sporadic micro-quakes (32+) all day at Mammoth Hot Springs. Micro-quakes started around Noon and have continued to the present at Mirror Lake Plateau. All in all, activity is picking up from a lull for about two weeks, before which a series of small and large quakes (including a 4.4) occurred. That quake prompted the web report.
Steam pressure is apparently building again, and hydrothermal fluids and steam are working their way up through fractures and vents. I do not expect anything unusual or extreme to happen in the immediate future, but if the trend continues, and the number of earthquakes gradually increase with time, more warnings from geologists will ensue.
What you should be alert to is any report that mentions increasing geyser activity, with new fumaroles and steam vents appearing near or on top of the rising dome. The dome has risen about three feet in the past few years, and magma has risen to within 3.7 km of the surface based on quake data. Earthquake loci measured to within 0.5 km under Mt. St. Helens, and people still didn't think it would erupt.
But everything has to be scaled up for Yellowstone, meaning that 3.7 km is not a safe depth. Ground temperatures in the northwestern part of the park are apparently on the rise (up to 200 dg F in some places), killing the vegetation. Large areas of the park are now closed, including areas with geysers, because their water temperature is now scalding and dangerous for visitors.
If more steam vents appear, that means a continuous pathway for pressure release has been established to the magma chamber. If that happens, the pressure in the magma chamber will continue to drop until it reaches a critical stage when the superheated water within the magma explodes. When that happens the super-volcano will blow violently, blowing out a chunk of its cap-rock and sending millions of cubic feet of ash into the atmosphere in a Pompeii-like explosion, but 100,000 times worse.
When you hear those reports, you will have about two days to "get out of Dodge" before the eruption. Unfortunately, as the steam venting subsides, there will be a false sense of security. People will think it was just another cyclical event, and the danger is over. But that will be the farthest from the truth. It will be the quiet before the storm. A major earthquake will suddenly rock their towns for hundreds of kilometers around Yellowstone, and soon thereafter 1,000+ degree pyroclastic flows will descend on them at hundreds of miles per hour, extending out to 600+ km.
That 600 km radius around the caldera will experience total devastation. The next 600 km out may receive as much as 5-10 feet of ash, depending on wind direction. The thickness of ash will decrease away from the super-volcano, but will reach the crop belt in the Midwest (Missouri, Iowa, Kansas, Nebraska, etc.), destroying most of the fertile croplands of the United States. California will be hit hard by falling ash, with its central wine valley severely damaged (the French will love it). Agriculture will have to shift east of the Mississippi for years. The Garden State will once again live up to its name.
In northern Idaho you will have to contend with several feet of ash and isolation. Roads will be closed. Power will be out. Phones will be out. Communication will depend on Ham radios and local stations that have generators. Rescue will take weeks or months. Some areas will never see rescue teams. The survivalists will be best prepared to make it through the difficult months following the eruption. Make new friends. Have plenty of dust masks on hand, because you cannot breath any airborne ash if you want to avoid lung disease. It's what caused mass kills of plains animals 12 million years ago, resulting in extensive bone beds beneath the ash. Drinkable water will sell at the price of gold.
To recap, I don't expect anything to happen in the near future. But with such an unpredictable event, being prepared is your best ticket to survival."
Dr. Bruce Cornet
http://www.rense.com/general41/yellowstoneupdate.htm
Stocks Rise; Nasdaq Hits 1-1/2 Year High
Monday September 8, 2:57 pm ET
NEW YORK (Reuters) - Stocks rose on Monday in active trade as investors welcomed reports from Wall Street analysts suggesting a rebound in the economy and corporate profits is on its way.
Technology stocks led the way, pulling the technology-packed Nasdaq Composite Index (NasdaqSC:^IXIC - News) to levels not seen since March 2002.
"The momentum is definitely to the upside, and it's continuing," said Peter Dunay, chief market strategist at brokerage Wall Street Access.
Wall Street stumbled on Friday after a report showed that U.S. employers cut jobs in August at their fastest pace since March, but the momentum is still upward, said Dunay.
"We know the economics are getting better -- barring employment -- and we are two weeks away from the earnings. The hope is that the earnings will show as much strength as the economic data."
The Dow Jones industrial average (CBOT:^DJI - News) was up 83.79 points, or 0.88 percent, at 9,587.13. The broader Standard & Poor's 500 Index (CBOE:^SPX - News) was up 9.99 points, or 0.98 percent, at 1,031.38. The technology-laced Nasdaq Composite Index (NasdaqSC:^IXIC - News) was up 27.77 points, or 1.49 percent, at 1,886.01.
International Business Machines (NYSE:IBM - News) was at center stage, its shares gaining ground after Credit Suisse First Boston raised its investment rating on the computer maker. IBM was among the biggest percentage gainers in the blue-chip Dow, rising $2.40, or 2.7 percent, to $89.34.
http://biz.yahoo.com/rb/030908/markets_stocks_19.html
IBM has been in a trading range that's been bery bery good to me although I was not along for this last ride...buy at 80 sell at 90:
http://finance.yahoo.com/q/hp?s=IBM
No video just audio:
http://www.albinoblacksheep.com./video/redux.php
Another 10 minutes of your life you'll never get back.
People who deal with IRS should be aware of and use procedure regulations published in 26 CFR Part 601. The current regulations are on the Government Printing Office web page at
http://www.access.gpo.gov/nara/cfr/waisidx_03/26cfr601_03.html
These can all be downloaded in PDF files.
IRS procedure regulations in the Part 601 series accommodate mandates in the Administrative Procedures Act, 5 U.S.C. sections 551 through 559. The Part 602 regulations accommodate the Paperwork Reduction Act.
I have the 1997 edition of the 26 CFR Part 601 et seq. regulations in a hard-copy book. There's only about 150 pages in the book. Anyone who supposes to deal with IRS in the administrative forum should read particularly sections 601. 101 through 601. 107, and it wouldn't hurt to read the balance of Part 601.
For general information read sections 601. 101 - 601. 104 (includes collection); examination is § 601. 105; appeals is § 601. 106; criminal investigation is § 601. 107; the kinds of "findings of fact and conclusions of law" IRS has are in § 601. 201, and if you study the regulations closely, you will find treasure, assuming you recognize what you're reading when you read it.
Administrative "due process" is governed by the Administrative Procedures Act. Those who suppose to deal with IRS in administrative forums should read 5 U.S.C. § 551 through 559, then sections 701 - 709; the latter sections provide the format for judicial remedies when agencies fail to comply with APA mandates.
Circuit courts have original jurisdiction under 5 U.S.C. sections 701 - 706. However, an action in the nature of mandamus can issue via a district court under 28 U.S.C. § 1361.
Under the Administrative Procedures Act and IRS 26 CFR Part 601 regulations, what duties do IRS examination, investigation, assessment and collection personnel have? If they don't perform those duties, performance can be compelled under APA litigation. I particularly recommend reading 5 U.S.C. § 706, the scope of judicial review, as it provides something akin to sideboards for consideration.
I also highly recommend reading and coming to terms with 5 U.S.C. sections 556(d) & (e) and § 557. Administrative appeals, i.e., administrative due process, is governed by sections 556 & 557. If you come to grips with sections 556(d) & (e) and § 557, along with § 706, you should have your feet pretty well on the ground so far as burden of proof and other such things are concerned. If you don't have access via internet, it wouldn't hurt to go to a law library & photocopy annotated versions of these Code sections.
Dan Meador
Clue: UPDATE 1-Pension shortfalls at troubled U.S. firms double
4 September 2003, 2:27pm ET
By John Crawley
WASHINGTON, Sept 4 (Reuters) - Pension underfunding at "troubled" U.S. companies has doubled this fiscal year and could exceed $80 billion, with airlines accounting for nearly a third of the shortfall, the government said on Thursday.
The Pension Benefit Guaranty Corp., which bails out corporate retirement plans, told Congress its own deficit grew to a record $5.7 billion as of July 31, $2 billion higher than the shortfall for all of fiscal 2002.
PBGC Executive Director Steven Kandarian called for reforms to pension rules, telling the House Education and the Workforce Committee that the cost of current pension problems would otherwise have to be met through reduced benefits, higher premium payments by companies to the agency or a taxpayer bailout.
Underfunding at "troubled" companies -- defined as those whose debt is rated below investment grade or are otherwise at risk -- could exceed $80 billion by the time the current fiscal year ends Sept. 30, Kandarian said, up from $35 billion last year.
A sluggish economy, falling stock prices and low interest rates have all contributed to the underfunding of traditional pension plans that promise a fixed amount at retirement based on salary and years of service.
[Super low interest rates are good right?]
UALAQ 0.87 0.09 dollars or (11.53%)
Airlines, including bankrupt United Airlines Corp. (BB:UALAQ), have underfunded liabilities of $26 billion, he said. Steel companies and the U.S. auto industry were also identified as pockets of particularly severe pension underfunding.
Overall underfunded pension liabilities in 2002 were more than $400 billion, but an agency official said that figure would likely be lower this year as recent increases in interest rates and stock prices continued to bolster pension funds.
The benefit guaranty corporation protects the pensions of nearly 44 million workers and retirees in more than 32,000 private plans. The agency will be responsible for paying benefits to nearly 1 million people this year.
Kandarian said the record agency deficit has been caused by "the failure of a significant number" of highly underfunded plans of financially troubled or bankrupt firms.
"Pension claims against (the agency) for 2002 alone were greater than the total claims for all previous years combined. At current premium levels, it would take about 12 years of premiums (the pension agency charges companies) to cover just the claims from 2002," Kandarian said.
Kandarian said the PBGC was working with the Departments of Labor, Treasury and Commerce to devise proposals that would eliminate rules that have encouraged companies to shift risk onto the government or delay contributions to plans.
Funding rules presently allow "contribution holidays" in hard economic times for even seriously underfunded plans. The rules also make it difficult to build a surplus in good times.
"We are examining how to eliminate some of the risk shifting and moral hazard in the current system," Kandarian said.
http://finance.lycos.com/qc/news/story.aspx?story=35574006
Foreigners displacing high-tech workers
Study: Firms pay immigrants less while Americans lose jobs
[Usually this is a myth, but not this time...corps are supposed to prove that there are no citizens that can fill the position BEFORE they can hire an alien...]
Among the study's key findings:
Temporary foreign workers are paid less than American counterparts, "driving down the prevailing wage and putting American workers at a competitive disadvantage."
To cut costs and increase profits, companies are shedding more expensive American workers and "replacing them with cheaper foreign workers under the H-1B and L-1 programs." Furthermore, the study says, there is no law preventing this practice.
The visa programs are "rife" with abuse and are not subjected to the required amount of government scrutiny. "The required government review of H-1B applications is a rubber stamp operation and is not safeguarding American jobs as Congress intended," said the study.
The visa programs were created to fill professional worker shortages but "no evidence" of such a shortage in the high-tech industry exists. "… To the contrary, the market is filled with laid off, unemployed American high-tech workers," analysts concluded.
So "blatant" is the abuse of the programs that American employees are being required to train their foreign replacements before being laid off.
Regulations governing the H-1B program are "miniscule," the report said, but "the L-1 program puts American workers at an even greater disadvantage."
"Labor dynamics are changing. Major companies can now hire people with top skills for $60,000 a year. We don’t need people on H-1Bs anymore. We can replenish staff from our own population," Howard Rubin, former adviser on technology issues to President Clinton, said in a February 2002 interview with InformationWeek.
"One recruiter flatly told me they have 50 H-1Bs willing to work cheap ahead of me in line," said one Dallas database administrator in a Sept. 26, 2002, interview with the San Jose Mercury News.
As overall unemployment remains at levels unheard of throughout the 1990s, U.S. corporations are reporting cheaper labor costs.
"U.S. employers incurred a much smaller increase in the cost of hiring and retaining workers during the second quarter of 2003 than they did in the previous three months," said the Dow Jones news service, rising only 0.9 percent from April to June. "The cost of wages and salaries grew even more slowly, rising just 0.6 percent."
"Follow the money," says Schlafly. "The big corporations hire aliens from India and China at half or a third the [U.S.] wages, work them long hours without overtime pay and treat them like indentured servants unable to quit for a better job."
"What makes this racket possible is the partnership between corporations and government," she adds.
Other critics point out more than just foreign worker programs are costing U.S. jobs. Writing in The American Conservative magazine this month, Pat Buchanan – two-time GOP candidate for president, author and syndicated columnist, blames free trade agreements such as the North American Free Trade Agreement as a leading cause of U.S. job loss.
"Across America the story is the same: steel and lumber mills going into bankruptcy; textile plants moving to the Caribbean, Mexico, Central America and the Far East; auto plants closing and opening overseas; American mines being sealed and farms vanishing. Seven-hundred-thousand textile workers – many of them minorities and single women – have lost their jobs since NAFTA passed in 1993," writes Buchanan, a co-founder of The American Conservative.
"Undeniably, free trade has delivered for consumers. A trip to the mall, where the variety of suits, shoes, shirts, toys, gadgets, games, TVs and appliances abounds, makes the case. But what has it cost our country?" he said. "Every month George Bush has been in office, America has lost manufacturing jobs. One in seven has vanished since his inauguration. In 1950, a third of our labor force was in manufacturing. Now, it is 12.5 percent. U.S. manufacturing is in a death spiral, and it is not a natural death. This is a homicide. Open-borders free trade is killing American manufacturing."
There are signs the Bush administration may be getting the message.
I TOLUSO way back at $272...
Up 100 bucks an ounce...more to go...
http://etools.ncol.com/a/jgroup/bg_wwwgoldcentralcom_wwwworldnetdailycom_15.html
Comes with audio and everything...
Still, get silver...better return...
CDE would be good if you can get a pullback...
"Not since the Great Depression have we experienced this level of sustained job loss 29 months after the start of the recession. Our analysis suggests that, unfortunately, unemployment will remain at about six percent over the next year," said EPI president Lawrence Mishel.
EPI will track job growth monthly on its new web site at http://www.jobwatch.org using the administration's own projection as the benchmark for measuring the effectiveness of the 2003 tax cuts at generating jobs, tracking each month's actual job creation against the 344,000 predicted by the administration.
Since the recession began 29 months ago in March 2001, 3.3 million private sector jobs have disappeared, a 2.9 percent contraction and the largest sustained loss of jobs since the 1930s. Unemployment has risen to over 8.9 million people, as the unemployment rate has risen from 4.0 percent in 2000 to 6.1 percent in August 2003.
http://story.news.yahoo.com/news?tmpl=story&u=/030905/180/562rf.html
Yet another POV on IRAQ but it's from Iraq:
'This Is No Good, Sir!'
The Guardian - UK
9-4-3
There are no police stations or banks, the American troops are scared and hated and anything that isn't guarded is stolen or destroyed. Is there hope for the people of Baghdad? The distinguished Peruvian novelist Mario Vargas Llosa reports from Iraq.
Iraq is the country with the greatest freedom in the world, but since freedom without law and order is chaos, it is also the most dangerous. There are no customs, nor customs officers, and the CPA (coalition provisional authority) governed by Paul Bremer has abolished all tariffs and duties on imports until December 31. As a result, the Iraqi borders have become strainers, through which all kinds of goods - except weapons - are pouring in without difficulties or costs. At the border with Jordan, the US watch officer assured me that just this week an average of 3,000 vehicles a day had entered Iraq with all types of merchandise.
That is why the two large avenues Karrada In and Karrada Out, which zigzag through Baghdad like conjoined twins, present an immense variety of industrial goods, clothes and food. The innumerable shops that flank them have spilled out on to the streets, turning the pavements into a plethoric bazaar - and into a paradise of pirate records, compact discs and videos. However, the one product that citizens of Baghdad are buying most eagerly is parabolic aerials, which allow them to see television broadcasts from all over the world, something that had never been possible before, and that infuriates the conservative Islamic clerics, who see this television frenzy as an invasion of the corrupting western pornography. Now Iraqis can also surf freely over the web, which in the days of Saddam Hussein was considered a crime. It is amusing to observe, in the internet coffee shops which have mushroomed throughout Baghdad, the passion with which the Baghdadis, especially the young, indulge in this new pastime that connects them with the rest of the world.
The active street trade has more in common with primitive bartering than with modern dealing. As there are no banks, nor cheques, nor credit cards, all transactions are made in cash and, given the plunge of the dinar (the rate was approximately 1,500 dinars to the dollar on my last day there), buyers, in order to make a purchase, must bring bundles of notes with them, at times suitcases full, which can be nicked from them at any moment by the scourge of the day: the omnipresent Ali Babas. For on top of the lack of customs officers, there are no policemen, no judges and no police stations to report the robberies or outrages one suffers. The ministries are closed, as are the public registers and the postal service; the telephones don't work, and there aren't any rules and regulations that stipulate what a citizen can or cannot do. Everything is left to each individual's intuition, boldness, prudence and instinct. The result is reckless freedom, which makes people feel helpless and frightened.
The only authority is represented by the tanks, the armoured cars, trucks and jeeps, and by foot patrols of US soldiers who cross and re-cross streets all over, armed with rifles and submachine guns, making the buildings shake with the power of their war vehicles. Soldiers who, on a closer look, seem as helpless and frightened as the citizens of Baghdad themselves. Since I arrived the attacks against them have been increasing systematically, and have already killed 30 and injured around 300. It is not surprising that they seem suspicious and in bad spirits, with fingers on triggers, patrolling streets full of people with whom they cannot communicate, amidst a hellish heat, which for them, dressed in helmets, bullet-proof jackets and other war paraphernalia, must be even worse than for the average local. I tried to talk to them - many being adolescents not yet capable of growing a beard - on four occasions, but I got only very concise replies. They were all pouring sweat, eyeballs perpetually moving, like distrustful grasshoppers.
But Morgana, my daughter, succeeded in conversing on a more personal level with a soldier of Mexican origin who suddenly opened his heart from atop his tank: "I've had it! I've been here for three months and I cannot stand it any longer! I ask myself what the hell I'm doing here every day! This morning they killed two buddies. I can't wait to go back to my wife and child, damn it!"
Endless stories about the US soldiers who patrol Baghdad are spreading all over, the majority of which are, without doubt, exaggerations or lies. One example is that, in their desperation against the growing attacks, they burst into houses and abuse their authority under the pretext of looking for arms. I tried to verify some of these charges and they turned out to be unfounded. The truth is that nobody knows what line to take. For the first time in its history there is complete freedom of press in Iraq - anyone can buy a newspaper or magazine without having to ask for permission from someone - and currently more than 50 news papers are being printed in Baghdad alone (where, since April, 70 political parties have emerged, some made up of only one person). Still, the information they publish is so contradictory and imaginative that everybody is complaining of living in complete uncertainty.
I went to the home of Kahtaw K Al-Ani, in the Sadea neighbourhood, because I had been told that in the house next to his there had been a very violent incident the night before which resulted in various casualties. It actually took place five houses beyond his. The patrol entered by breaking the door down with a kick. "This is no good, sir!" And there was one dead Iraqi. But did they find weapons there? Did they fire at the soldiers? He does not know, and does not want to know.
Al-Ani lived in Reading for three years and has good memories of England. He was a technician in the ministry of agriculture and now, like all other civil servants from the fallen regime, has been fired by the CPA. Is this not totally unfair? He and his colleagues hated Saddam Hussein and the Ba'ath party, which they were forced to join, and they were happy that the Americans freed them from the dictatorship. But what kind of liberation is this that puts you on the dole, for no reason, leaving in poverty tens of thousands of families, who previously felt like victims of the regime? "This is no good, sir!" Al-Ani is old and dignified, with close-cropped hair, and is dripping with sweat. His children soak up his perspiration with paper serviettes and he constantly apologises for the fan not working as a result of the lack of electricity. Before he hated Saddam and the Ba'ath party, but now he hates the US soldiers. As I was saying goodbye, he showed me his car: he never takes it out just in case it gets stolen, and he does not dare to leave his house for fear of it being attacked or burned. "This is no good, sir!"
Three wars, 12 years of international sanctions and 30-something years of Ba'ath satrapy have turned Baghdad, which in the 1950s was famous for its beauty, into the ugliest city in the world. Saddam's strategic centres of power, the ministries and official organisations, and many of the residences which belonged to the dictator and his accomplices now display their open jaws and insides gutted by the impact of the US precision bombing. And one can see everywhere the homes, shops, buildings and installations looted and burned during the criminal pandemonium that took over the city in the days that followed the arrival of US troops, and which has not entirely died down yet.
The Ali Babas ransacked everything that came their way and left half of the population in the street, with no possessions or roofs over their heads. Who were these plunderers? Saddam Hussein, in order to celebrate his re-election as president with 100% of the vote, opened the country's prison doors on October 15 2002 and set free all the common criminals (while sending the majority of political prisoners to their deaths). How many did he set free?
I'm given dislocated figures that run from 30,000 to 100,000. It doesn't explain all the outrages committed, but it does explain a good number, the Archbishop Fernando Filoni, Nuncio of His Holiness, assures me. (An expert in catastro phes, he began his diplomatic career in Sri Lanka when the Tamils started their decapitations and throat-cutting.) "The lack of practice of freedom initially spawns catastrophes. That is the reason why the Pope, who is very wise, opposed the war. Wanting to rush into things so fast, the US quickly came across something unforeseen: widespread vandalism."
But it is also true that the built-up hatred towards the ruling clique has incited many victims into destroying residences belonging to the people in power and all other buildings related to the regime. Still, why did they destroy the factories? Nagi al-Jaf, a veteran industrialist with business in the Iraqi capital and in the Kurdish city Suleymaniya, told me that the huge and mixed-regime Farida brewery in Baghdad, in which he owned shares, was mercilessly razed by the Ali Babas. "I could understand robbing things that they could consume or sell, but I can't see why they would destroy all the machinery and then, as if that were not enough, burn the whole thing down."
How many industries in Baghdad have been victim to similar forms of havoc? The answer is categorical: "All of them." I ask him not to exaggerate, to be objective. He looks at the stars in the Suleymaniya sky for a long time and repeats: "All of them. There's not a single industrial plant left in Baghdad that hasn't been wiped off the face of the Earth." How can we explain this? Maybe it is because people cannot live castrated and subject to abjection, terror and servility, as the Iraqis have lived in the three decades under the Ba'ath dictatorship, without reacting on feeling completely and absolutely free, which is just how the Iraqis felt on April 9, with that explosion of anarchy, profligacy and savagery that has destroyed Baghdad and left an open, bleeding wound in the soul of all of its citizens.
As none of the public services works and there are no traffic police on the corners, driving in Baghdad is pandemonium. (Petrol is dirt cheap: filling a tank costs less than half a dollar). Every driver goes wherever he or she wishes, so traffic-related accidents are rife, and the traffic jams can drive people mad. But, at least in this regard, I did notice some indications of the famous "spontaneous institutions" that Hayek sees as the most representative and long-lasting, those which emerge naturally from civil society and are not imposed by power. When the traffic jam reaches paroxysm, volunteers will always emerge who, armed with a whistle and a stick, set themselves up as traffic controllers. And the drivers stuck in the jam heed their instructions, relieved that someone is finally giving them orders.
The same thing happens in the neighbourhoods, overwhelmed by the insecurity that reigns over the city, where people are organised into watch groups to defend themselves against robbers or to cart the rubbish accumulated in the street to the corner to burn it. It is for this reason that the passer-by wanders through Baghdad not only surrounded by rubble, ruins, burned buildings, piles of rubbish and vermin, but also by the foul- smelling clouds of fire with which the citizens of Baghdad try to defend themselves against the rubbish that threatens to flood them.
For the long-suffering population of the Iraqi capital, the lack of electricity and drinking water is perhaps the worst ordeal. The power cuts are constant and in certain parts of the city they can last for whole days. Neighbours are left with no defence against the stifling temperatures, which never go below 40C (104F) in the shade and sometimes top 50. Being subject to this scorching heat, in complete darkness and without running water, is a form of torture.
In the home of my Spanish friends from the Iberoamerica-Europa Foundation, where I stayed during my first week in Baghdad, I experienced first-hand the hardships that the Iraqis have suffered over the past three months. Electricity came every now and then, but there were times when the blackout would last so many hours that it was impossible to cook, wash or cool oneself. And in order to avoid burning up in the oven-like bedrooms, my hosts took their mattresses to the garden, preferring cockroaches over suffocation.
The disheartenment that all this generates is just one of the obstacles the Iraqi people have to overcome so that their country, which has just come out of one of the most corrupt and brutal experiences of authoritarianism that mankind has known, can leave behind the long night of despotism and violence that makes up its history and become a modern, prosperous and democratic nation.
© El Pais. Translated by News Clips
Guardian Unlimited © Guardian Newspapers Limited 2003
http://www.guardian.co.uk/Iraq/Story/0,2763,1035899,00.html
Penned, Trapped
The absurd claim that PATRIOT increases your privacy
Nick Gillespie
If there's one honor I cherish more than being an actual dyed-in-the-khaki-wool Eagle Scout, it's being named an enemy of the state on Attorney General John Ashcroft's new propaganda site, Preserving Life & Liberty. (One way you know immediately it's propaganda is that it uses a quote from the Declaration of Independence, in a ye-olde-tyme font, as a banner on every single page on the site.) It turns out that I'm one of those rat bastards who, as Ashcroft once famously put it, "scare peace-loving people with phantoms of lost liberty." Hi, mom!
The site is part of the attorney general's pathetic attempt to whip up support for the idiotically named and widely reviled USA PATRIOT Act—an acronym for "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism." Other Ashcroft activities have included his highly publicized (and satirized) national tour to promote the PATRIOT Act and a would-be sequel. Your tax dollars at work. At least time spent on this public relations mystery tour is time Ashcroft can't spend prosecuting medical marijuana users and pornographers.
Along with Reason Associate Editor Jesse Walker, I show up in Preserving Life & Liberty's section of "stories and articles" that carry the government's water by castigating critics of PATRIOT as freakazoid lunatics who, in the words of the sagacious Des Moines Register, "tend to see bogeymen, or black helicopters, where there are none."
Scroll down far enough and you'll come across an excerpt from a June 2, 2003 National Review story in which Ramesh Ponnuru avers, "[M]ost of the concerns about Patriot are misguided or based on premises that are just plain wrong."
(As a side note, I'd like to give a rave review to Ponnuru's positively lurvly spasm of journalistic solipsism just yesterday on National Review's endlessly entertaining staff blog, The Corner—in which he answers for all time the question of whether anyone can hear you throw a hissy fit in cyberspace. "It would," wrote Ponnuru, "be nice if someone at Reason were to acknowledge the magazine's own repeated errors of fact in describing the Patriot Act, which I have mentioned in NR." Indeed, it would have been nice if anyone at National Review had seen fit to bring such "errors" to our attention when they appeared months ago in that fine publication, a standard practice when slagging—er, citing—other journos; while I and my crew read widely and conscientiously [especially about ourselves], we do occasionally miss an issue of the magazine that is about to publish a collection of President Bush's war speeches.)
Jesse Walker responded to Ponnuru yesterday. Here's my rejoinder. Citing an article I wrote for the October 2002 issue of Reason, Ponnuru writes:
Libertarians have been particularly exercised about Patriot's green light for "spying on the Web browsers of people who are not even criminal suspects"—to quote Reason editor Nick Gillespie. This is a misunderstanding of Patriot, as George Washington University law professor Orin Kerr has demonstrated in a law-review article. Before Patriot, it wasn't clear that any statute limited the government's, or even a private party's, ability to obtain basic information about electronic communications (e.g., to whom you're sending e-mails). Patriot required a court order to get that information, and made it a federal crime to get it without one.
Kerr believes that the bar for getting a court order should be raised. But he notes that Patriot made the privacy protections for the Internet as strong as those for phone calls and stronger than for mail. Patriot's Internet provisions, he concludes, 'updated the surveillance laws without substantially shifting the balance between privacy and security.
Yet it's Ponnuru who misunderstands. The immediate question is not how PATRIOT amended existing legal procedures (more on that in a minute), but whether it allows the government to delve into personal records, including Web use, of people who may or may not be charged with a crime. As my colleague Jacob Sullum pointed out recently, Section 215 of the act plainly allows this.
It is also misleading to suggest that PATRIOT somehow strengthens civil liberties by beefing up privacy protections for the Internet. In this, let me defer to Cindy Cohn, the legal director of the Electronic Frontier Foundation, whose October 2001 analysis of the PATRIOT Act remains an invaluable work. Cohn's comments come from an e-mail to me. Now granted, EFF is packed with precisely the sort of civil libertarians who drive the Des Moines Register and National Review to distraction, but I suspect most readers will find Cohn's take on that matter notably light on black helicopters and bogeyman and heavy on common sense and persuasion. And remember you read it here, because this sort of talk isn't getting airtime on Ashcroft's Preserving Life and Liberty site. Writes Cohn:
Here's the deal. Before the Patriot Act there was a theoretical disagreement between civil liberties types and the government about what standard would apply to government real-time surveillance of web activities like searches. The feds argued informally what Prof. Kerr states -- that there was no requirement of any court order because the information wasn't "content" and the lower level statute, pen/trap, didn't apply either because it is essentially limited to telephone calls (there was also a disagreement about the treatment of e-mail headers).
The civil liberties folks argued that internet searches are indeed content, just like the 'subject' line on an e-mail (which the govt admits is content in its internal manuals), and so a wiretap order was required. The basic argument is that if the government can tell that you are searching for information about fertilizer or cancer drugs, or following links to specific news stories or blogs, the government knows much more about you than they do if they just have a listing of the phone numbers you call and that call you, which is all they get with pen/trap orders on telephone calls.
There were no cases on the issue, so it was up for grabs. As far as we know, the government had never tried to get real-time information about a web surfer from an ISP prior to the passage of the Patriot Act. We on the civil liberties side thought we had a good chance of convincing a court that this information is 'content' for purposes of the wiretap laws, invoking a much higher standard, or of creating a newer standard with more protections for websurfing than pen/trap but still less than the wiretap act protections.
Patriot took that option away. It made clear that pen/trap orders are all that is required. It is a higher degree of protection than some government attorneys thought they could get away with, but it is lower than what many civil libertarians thought a court would do if asked. And of course it is a much lower standard than what most Americans think they have as privacy protection when they are surfing online. As you note, it does not require that the government demonstrate that you are a suspect, nor does it provide any substantive judicial review prior to issuance.
So I think you're correct in what you say and we were correct in our alert. Patriot did ensure that the government doesn't need to prove you are a suspect before they can do real-time surveillance of your online web-surfing activities.
Given this background...it's not really tenable to say that the public somehow gained MORE protections through Patriot simply because prior to Patriot some government attorneys thought they would win an argument that internet searches weren't content if the matter were brought before a judge. Prof. Kerr is a former federal prosecutor, by the way. I have a lot of respect for him, but here he is putting forth the opinions of the prosecutors.
Instead, I think it's correct to say that as a result of Patriot, the public lost the chance to argue that their web searches were 'content' and so a wiretap was required, or to argue for some middle standard between the wiretap act and pen/trap. Instead, the government got a clear green light to surveil us under the lowest level of court protection--the pen/trap statute.
Nick Gillespie is Reason's editor-in-chief.
http://www.reason.com/links/links090403.shtml
IRS flubs nearly half of tax—law questions
By Mary Dalrymple
Associated Press
WASHINGTON — IRS centers established to help people prepare their tax returns gave incorrect answers — or no answer at all — to 43 percent of the questions asked by Treasury Department investigators posing as taxpayers.
The investigators concluded that half a million taxpayers may have been given wrong information between July and December 2002.
Service varied widely by state, with some of the best in the Northeast and some of the worst in the Midwest and Plains.
Auditors were given correct answers to 57 percent of their tax law questions during the course of the study. Less than half, or 45 percent, of the questions were answered correctly and completely. In 12 percent of the cases, the answer was correct but incomplete.
Internal Revenue Service employees gave wrong answers to 28 percent of the questions. Twelve percent went unanswered, as taxpayers were told to do their own research in IRS publications. In 3 percent of the attempts to get questions answered, the auditor could not get any service at the center.
The IRS disputed the results. Using the raw numbers gathered by Treasury investigators, the IRS recalculated the error rate and ignored any instance when a taxpayer was denied service or told to do his own research. Of the questions answered, they calculated that 67 percent were answered accurately.
"We recognize that an accuracy rate of 67 percent for tax law service is inadequate," Henry O. Lamar, the IRS commissioner overseeing individual tax returns, wrote to the investigators.
The auditors said they had a better chance of getting a correct answer when IRS employees walked them through relevant material and asked probing questions.
The questions most commonly answered incorrectly dealt with the earned income tax credit, education credit and dependents.
"The IRS' failing grade here is unacceptable," said Senate Finance Committee Chairman Charles Grassley, R-Iowa. "It's especially discouraging that the IRS is often getting wrong basic answers to questions about the EITC and the child credit, which benefit low-income taxpayers."
In a sign of improvement, Treasury investigators went back undercover for two months during the height of this year's tax-filing season and found the number of incorrect answers dropped slightly. The auditors got incorrect answers to 25 percent of their questions.
The number of correct answers went up to more than 70 percent, as employees at the taxpayer assistance centers stopped instructing taxpayers to find IRS publications and do their own research. The IRS banned the practice in January.
The Treasury Department's inspector general started investigating the error rate at the nation's 400 taxpayer assistance centers when a 2001 study showed that auditors making anonymous visits got incorrect or insufficient answers to 73 percent of their tax law questions.
Since then, the IRS has increased training on topics that elicit the most questions and the most incorrect answers. The agency has also given employees more time to brush up on tax law topics during the day. Employees must pass certification tests before answering taxpayers' questions on certain topics.
The slow improvement shows "it will take time before the impact of additional training and managerial oversight will be reflected in the accuracy rates," Treasury investigators concluded.
The IRS hopes to improve its track record and answer 80 percent of the questions correctly this year, and 85 percent correctly next year.
The IRS audit produced these percentages of answers:
Wrong: 28
Correct: 45
Correct but incomplete: 12
No answer: 12
No service: 3
http://deseretnews.com/dn/view/0,1249,510051838,00.html
MOCK APPLE PIE (No Apples Needed) Pastry to two crust 9-inch pie 36 RITZ Crackers 2 cups water 2 cups sugar 2 teaspoons cream of tartar 2 tablespoons lemon juice Grated rind of one lemon. Butter or margarine Cinnamon Roll out bottom crust of pastry and fit into 9-inch pie plate. Break RITZ Crackers coarsely into pastry-lined plate. Combine water, sugar and cream of tartar in saucepan, boil gently for 15 minutes. Add lemon juice and rind. Cool. Pour this syrup over Crackers, dot generously with butter or margarine and sprinkle with cinnamon. Cover with top crust. Trim and flute edges together. Cut slits in top crust to let steam escape. Bake in a hot oven (425 F) 30 to 35 minutes, until crust is crisp and golden. Serve warm. Cut into 6 to 8 slices.
--Found lurking on a Ritz Crackers box.
(Perhaps a Sloofy favorite.)
The Ambassador Wilson Affair: The End of Karl Rove – And George Bush?
[Sent to me by email, anybody got any other info on this?]
(Sep 2) This is the hottest and most explosive story behind the scenes in Washington in terms of how it could affect the Bush administration.
Ambassador Joseph Wilson has been turning up the heat in this situation. He revealed on Friday August 29 in a symposium in Washington the person in the Bush administration, who had leaked it out to the Washington Post that Wilson’s wife is a CIA agent of 26 years. As a consequence of this leak, her entire team of overseas assets were liquidated.
The leaker, it turns out, was none other than the notorious Karl H. Rove, Bush’s so-called White House advisor. Ambassador Wilson identified him as Karl Roverer, with the umlaut over the “o.”
According to reliable sources, as well as our own Al Martin Raw.com investigation, Karl Rove is, in fact, the grandson of Karl Heinz Roverer, the gauleiter of Mecklenburg, who was also a partner and senior engineer of Roverer Sud-Deutche Ingenieurbüro AG. They built Birchenau, the concentration camp in Nazi Germany.
So Karl Rove has been identified as the leaker responsible for the deaths of more than 70 CIA assets overseas (See previous story “Will the Real Chemical Ali Please Stand Up? The Curious Case of Ambassador Joseph Wilson)
When Ambassador Wilson was asked how he knew it was Rove, he had documents in his possession identifying Rove as the leaker from a secret investigation of the State Department’s Internal; Security Unit. It was a from a small clique, four Clinton holdovers in that department of the State Department that were sympathetic to what had happened to Wilson.
These investigations could not have possibly been made without at least the tacit acquiescence of Secretary of State Colin Powell.
Wilson has announced that he will have his private attorneys petition the Department of Justice demanding that Roverer a/k/a Karl Rove be prosecuted under the 1982 Intelligence Identity Protection Act . This law specifically supposed to prevent what has happened in this case and that is the Bush administration attempting to retaliate against a senior government official who tells the truth about that administration by revealing the identities of intelligence members within their own families.
This is a law that was specifically designed to prevent this from happening. It is a law that was proffered by the Democrats in 1982 that the Republicans fought and could not defeat. The law carries an automatic mandatory 10 years to life imprisonment as punishment.
And where would Rove go? Karl Rove, it should be noted, is a dual citizen of the United States and Germany. Because of his position he has special diplomatic status. The idea is that if its absolutely necessary he could go to Switzerland where he couldn’t be extradited.
The law specifically states in this case (and this depends on how much Secretary of State Colin Powell is prepared to get involved, if he signs a formal complaint from the State Department, then the Attorney General has no choice but to prosecute. He is required to prosecute, even if he doesn’t want to do so.
This is very explosive and what makes it so explosive is that this Intelligence Identity Act, if it can be proved, and Rove can be successfully prosecuted and if Rove reveals that the president George Bush told him to institute this leak, then the President's automatic shield of immunity is removed and the president himself can be prosecuted for murder if any deaths of any US intelligence agents or assets resulted from the leak. This is the only legal statute that has this provision.
The Bush Administration is exerting enormous pressure on Colin Powell because he is the real linchpin. They are exerting pressure on him NOT to proceed to file a formal complaint with the Department of Justice.
Wilson’s problem is that he has no greater legal standing than that of a private citizen. The Department of Justice, unbeknownst to anybody, has had a lot of communications with Wilson’s attorney and they’re claiming that Wilson has no special status, that he's just an everyday citizen, so that any demand he would make for prosecution would carry no more weight than a private citizen or OFU.
(OFU is George Bush Senior’s term to describe the average American citizen. It stands for “One Fodder Unit.”)
Wilson is saying, however, that when Rove leaked this out, he was still formally employed by the State Department. Wilson, it should be remembered, was the former ambassador during the Clinton Regime, was formally rehired, and he received a paycheck from the Department of State. When these leaks took place he still had another three weeks left on his contract. Therefore he was still a United States Ambassador and that apparently is also a key legal point.
When this goes before the US Court of Appeals in Washington and if the court agrees that Wilson was a formal ambassador at the time, then Colin Powell can not refuse to formally petition the Department of Justice for the prosecution of Karl Rove and to open an investigation into the president’s and vice president’s role in the affair.
Was Rove really the source of the leak? The investigation held thus far by the State Department’s Internal Security (ISD) has stated that Rove did indeed leak the information out about the Ambassador’s wife, CIA agent Valerie Wilson, to the Washington Post. Apparently they have an affidavit from the reporter he leaked it to.
The way the Bush Regime is trying to quash it is to slow it way down by exerting so much pressure against Pro-Bush Media. Please note that you have not heard one word about this on CNN or MSNBC or Fox News And not one word about this on ABC, CBS, or NBC.
If there is no public attention, there will be no steam behind it. Some of the congressmen are trying to push this into higher quarters. They’re trying to get Howard Dean to talk about it since he’s getting so much press coverage
It’s been said that Dean is himself frightened to start talking about it because it would diminish the press coverage he’s been getting. The Bush Administration has let it be known to the Democratic National Committee that any Democrat who tries to push this will find press coverage severely limited.
When the Democratic presidential selection process filters out (since there are now nine declared Democrats) and when there is one Democrat that everyone is behind, who’s going to be the contender, then they won’t be so frightened.
But this is a story, which should be more widely known, since the treatment of Ambassador Wilson and his family (not to mention the US intelligence assets who were liquidated overseas) is certainly one of the most egregious abuses of power yet perpetrated by the Bush administration.
Yet. However, who knows what they might do tomorrow?
It is the day after -- Happy McLabor Day in the Land of Bushonomics.
As reported by CNN --
* 9 million unemployed in the US, and increase of 6 million since election of Bush-Cheney
* 4 million high paying tech jobs permanently lost
* Another 3 million tech jobs to be exported overseas in next 15 years, but the good news is that 3 million new minimum-wage food-service jobs will be created in the US over the same time period. Happy McLabor Day!
(To find out more about the Al Martin Raw: Political, Economic and Financial Intelligence website, click here http://www.almartinraw.com/subscription.html)
AL MARTIN is America's foremost expert on corporate and government fraud. A relentless whistleblower, he has written a book called, "The Conspirators: Secrets of an Iran Contra Insider," which chronicles his adventures with the Bush Cabal (National Liberty Press, Order Line: 866-317-1390). This detailed account of government criminal operations, namely State-sanctioned fraud, drug trafficking and illicit weapons sales, is unprecedented in publishing history. Al Martin is also well known for his great charm and profound insights into world events, and he is frequently interviewed on many talk radio shows across the nation. His weekly column "Behind the Scenes in the Beltway" is published regularly online at Al Martin Raw, (http://www.almartinraw.com).
Previous Columns:
Bush, Propaganda Minister O'Reilly, The P-Word and the Weiner Nation
Sedition & Treason in the US Imperial State
http://www.almartinraw.com/public/column106.html
Click forward three or four times:
http://www.squizzle.com/picview.asp?q=n&id=303
A great many people think they are thinking when they are merely rearranging their prejudices. -- William James
Looking for the next HLSH...
Gee that was a good call...
How 'bout them there gold stocks...and CDE is doing quite nicely also...but not as good as HLSH...
23 bagger from .14...
WHO NEEDS A PLUNGE PROTECTION TEAM ANYWAY?
Chris Temple, Editor
The National Investor
www.nationalinvestor.com
As the current rally on Wall Street has continued to make ground meat out of the market's bears (including Yours Truly to some extent) some particularly ornery bears are blaming the Fed's "rigging" of the market to force it higher. Specifically, some have pointed to what has been dubbed the "Plunge Protection Team" as a significant source of the market's recent behavior. Far from acting to support a declining market, they say, the PPT has itself been buying stocks to force them higher and, inevitably, pull in unsuspecting investors who are buying again, and chasing stocks higher still.
There may be some small grain of truth to these allegations. However, much more at work is the age-old tool of propaganda.
The official name of what many have labeled the "Plunge Protection Team" is the President's Working Group on Financial Markets. It was created by former President Reagan's Executive Order 12631, which he signed on March 3, 1988. This followed the October, 1987 Crash of the stock market, and was ostensibly designed to keep similar, sudden plunges from happening again.
The members of this group include the President, the Secretary of the Treasury, the Chairman of the Federal Reserve, the Chairman of the Securities and Exchange Commission, and the Chairman of the Commodity Futures Trading Commission.
Together with the institution of so-called "circuit breakers" on Wall Street-where program trading is either limited or suspended if the market moves up or down by a certain amount-the PPT's goal is to keep huge, short-term swings from happening. You may recall that the technical reasons given for the 1987 Crash were that there were no such mechanisms in place to support stocks; when everyone ran for the exit doors at once, there was simply no viable floor to stabilize the market. I doubt the PPT thinks that it can thwart trends in the markets; and that is evident given the stock market's nearly three year decline since early 2000. Among other things, I think that they hope "smoothing out" trends will cause less trouble for markets than if they were allowed to follow their natural course and unravel (or soar higher) all at once.
Just as important (if not more) is what is called the Exchange Stabilization Fund. This is essentially a fund authorized years ago by Congress over which the Treasury Department exercises ultimate authority, though I believe hand-in-hand with the Federal Reserve. Though I have no ready facts on which to base this, my impression is that, over the last several years, the ESF has been regularly employed where the value of the dollar and the level of Treasury securities is concerned. As its name implies, the ESF is intended to keep similarly sharp swings in the dollar's exchange rate from upsetting markets one way or another, just as the PPT supposedly does where stocks are concerned.
There are some in Congress who have sought to shed light on the actual transactions that the ESF has engaged in from time to time. Specifically (though this is not the only example) some think that the Fed's intervention in late September-early October, 1999 to cap a soaring gold price was done via the ESF. As you know, however, neither Treasury nor the Fed have never been forthcoming about this. Without a large enough number of Members of Congress pressing the issue, it's gone away.
In talking about whether the Fed (after all, it is the entity of all these which has in the past, and would in the future, orchestrate such endeavors) "rigs" the markets in any way, I often refer to Japan. That nation's central banking authorities have never made any secret of the fact that they actively intervene in supporting their markets, including the Nikkei. It's become a common ritual each Spring, for example, to hear that Japan has bought truckloads of shares on the Nikkei in order to goose it to a higher level for the end of the country's fiscal year. That allows a variety of institutions (especially banks) to record higher year-end values for their portfolios, and postpone the day when many of them have to inform the world that, yes, they are insolvent.
The Fed has never admitted to this; however, several months ago, it did hold out the possibility that it could intervene even in the stock market if it saw fit.
To some extent, I think the PPT has received more credit (or, if you prefer, scorn) than is warranted. Sure, I believe it has acted from time to time; those days even recently when a directionless market trading on relatively low volume suddenly saw buy orders relating to indexes come out of nowhere to push things higher. But let's think about all this for a minute, and in the context of the current behavior of the stock market and its legions of adherents.
I tend to think that the Establishment's overall propaganda machine is far more effective in getting investors themselves to do the Fed's bidding. Look at the economic backdrop currently. A good portion of the "growth" in the economy is courtesy of soaring government spending (and debt) which can only be bad news longer-term. Nearly three million jobs have been lost since 2001. Corporate America has made it clear that millions more will be shed over the next decade as white collar, technology, financial and similar positions are outsourced to countries like India. Consumers are in debt up to their eyeballs. The staples of life-such as food, energy, health care, local taxes-are rising in cost far more rapidly than the government's published inflation rate. Long term interest rates have seemingly bottomed, and their recent rise has squashed new mortgage and refinancing application rates. Last but not least, the world has become an increasingly dangerous place, perhaps even more so now by our occupation of Afghanistan and the Middle East.
Little of this matters to investors, however. Their cheerleaders on CNBC and elsewhere have seemingly convinced a growing number that good times are about to roll again. The Fed has made clear that it will keep monetary policy accommodative for virtually the rest of our natural life spans. Stocks are going up; and for this reason alone, they must go higher! Heck, if they have to, the Fed will shower each household in America with extra cash for the explicit purpose of buying stocks.
One of these days investors will again magically wake up to the fact that one or more of these dangers I've mentioned argue against the bullish tenor on Wall Street. For now, however, many have again been hypnotized by the Establishment's soothing refrain that all is well with the economy again. With Wall Street's shills so successful currently in convincing investors that none of these worrisome developments matter, who needs a Plunge Protection Team?
-Chris Temple
www.nationalinvestor.com
September 3, 2003
(NOTE: Chris has just completed a comprehensive update on the gold sector which, among other things, includes a look at gold’s fundamentals, investment demand, the future monetary role of gold, how to select viable gold companies for investment/trading purposes and more. As an introduction to The National Investor, he’s offering a FREE COPY to our readers; to get yours, send a request via e-mail to chris@nationalinvestor.com.)
http://www.gold-eagle.com/editorials_03/temple090403.html
MDCE: Well, guess I can't say much about my experience for 60 days or otherwise I might get Martha'ed.
They are alive and well and doing a lot of jobs some of which I got to go see and everything...there is market penetration...
IMO there is not enough biz at the moment to pay for the $30 to $50K needed to file and pay for the new ticker...yet.
No PR's because they cost money and everytime they put out a PR the MM's take it lower...
I have a few ideas as to how we might move forward without getting PCBM'ed. Bottom line is the company is working getting and winning bids etc and it is not the old MDCE anymore....time for a new ticker...they need to be able to do enough biz that they can pay for it themselves...and that day is still a ways off but may not be as far off as some think...
The long and short of is there is a company there...
JFSAG FWIW JMTC
Silver market continues to shine
http://www.clifdroke.com/silver/s090203.mgi
Gold: Elliott Wave and the Gold Price
Alf Field
Email: ajfield@attglobal.net
August 26, 2003
Robert Prechter's forecast that the gold price would drop below $250 (and possibly even below $200) has caused a degree of angst amongst gold bulls. Bob has made so many astonishingly accurate calls in the past, especially relating to the stock market in the 1980's, that one should consider his views very carefully.
I venture into this discussion with some trepidation but feel that my views may be helpful to understanding what motivates Bob's call and why he may be wrong. The gold market is approaching a point of resolution and it will be useful set out the relevant critical points.
I have some minor credentials for entering this debate. I was using the Elliott Wave Principle (EWP) years before Bob popularised it with his books on the subject and his accurate calls in his monthly publication "The Elliott Wave Theorist". During the 1970's I had a degree of success using the EWP in the gold market. For some reason, possibly the huge emotional element in this market, I found that the EWP produced its best results in the gold market.
I am not a gung ho advocate of the EWP. I discovered not only its strengths but also its weaknesses. I prefer to have fundamentals, technicals and the EWP all in place (if possible) before committing myself to an investment. The EWP does have the tools to provide a magnificent guide to potential future market movements and turning points, these being its major strengths.
The weaknesses of the EWP are as follows:
1. An incorrect reading of even a single minor wave can put one on the wrong side of the market for some time.
2. Corrective waves are notoriously difficult to evaluate and often their conclusion can only be determined after the event.
3. The exceptions, e.g. 5th wave failures and wave extensions, can lead to some serious mistakes and major lost opportunities.
4. Often the minor waves are confusing, difficult to interpret and conflict with EWP rules.
5. It is difficult to comprehend by other than seriously devoted students.
For purposes of this analysis I will use only the London PM Gold fixing prices. In the Futures markets the participants with the deepest pockets can control the market because settlement is invariably in cash. Futures' trading is almost always on a highly leveraged basis and the strongest player can push prices around to trigger forced stop loss trades by smaller players. In the gold fixings, to be a seller one must actually have physical gold for delivery and the price must be paid in full. The PM fix is the one where time differences allow both European and North American traders to participate. The PM fix is thus the "real" gold price in my opinion.
The following is a weekly chart of the London PM Gold Fixings for the past 5 years.
http://www.321gold.com/editorials/field/field082603.html
Horseman #2: Demopublican Political Control
One of the most popular ideas taught in American civics classes is that the strength of the American political system lies in the fact that we have a two-party political process. This, I maintain, is akin to teaching that babies come from storks. It's a fairy tale we spin out to avoid messy details of reality we prefer not to face. The reality is that the Democratic and Republican parties, as distinctive parties, are shams. They have become nothing but two divisions of the Central Leviathan Party. This has been our political reality ever since Dwight Eisenhower defeated the "old guard" individualist Republicans under Robert Taft in 1952 and made the Republicans into a big government welfare-state party like the New Deal Democrats of Roosevelt and Truman. From that year on, there has been no voice in the world of politics for the original Founders' vision. The last vestiges of limited, decentralized government died with Eisenhower's capitulation to Keynes and the New Deal.
In the ensuing decades, the collectivists have skillfully established a deceptive ONE-PARTY dictatorial system, which their media lackeys spin to the public as "two parties" and which the collectivist power elites maintain by waging phony battles every four years, all of which the gullible public buys into. Yet every year no matter who wins at the polls, government grows larger and more fascistic. Therefore, all talk about which of these Tweedledum and Tweedledee institutions is better than the other is a game of "nonsense on stilts" (to borrow a phrase from the 19th century philosopher, Jeremy Bentham). Because both parties subscribe to the same fundamental premises, which manifest in the dictatorial paradigm of fascism, they both end up tyrannizing our lives.
To those Republican sympathizers who still hold out hope that the GOP can be some kind of a solution to the runaway lunacy of today's spendaholics on the Potomac, I offer exhibit A, Mr. Republican himself, President George W. Bush. Remove the scales from your eyes America! This man's spending proclivities (as a percentage of GNP) far exceed those of Bill Clinton's, or Jimmy Carter's, or LBJ's -- all prototypical "big spenders" that preceded him and set the standard for fiscal irresponsibility. George Bush Jr. is as Big Government as you can get! Socialism (or actually fascism) has come to America via a "conservative" administration! But this is the inevitable result when both parties subscribe to the SAME flawed fundamental premises. Those flawed premises are: 1) Government needs to be centralized and highly interventionist to be effective. And 2) it is permissible for political legislation to violate individual rights in order to convey special privileges to groups. It is upon these two dictatorial premises that both Democrats and Republicans structure the entirety of their policies. Arbitrary law has trumped objective law as a policy tool for each of them. Both have abandoned belief in a higher natural law. Both endorse the wholesale violation of rights. Consequently they both are driving us toward economic fascism and dictatorship.
This Demopublican "one-party system" has given us an insufferably oppressive Leviathan that now takes 50% of our earnings every year to disgorge on monstrous personal entitlements and welfare handouts, multi-million dollar congressional pensions, egregious pork barrel projects, farm subsidies, corporation bailouts, foreign aid giveaways, World Bank loans, energy industry subsidies, artistic grants, mass busing programs, regional development programs, revenue sharing programs, and hundreds of other needless projects and regimental bureaucracies. It has brought us a national debt of over $6 TRILLION that requires $300 billion yearly to service. It has saddled us with $43 TRILLION in unfunded liabilities that will need to be paid in future years. It has bankrupted us as a nation. It has eroded our will as a people. It has transformed a resplendent Constitutional system where power resides in the states and localities into a contemptible "majoritarian despotism" where all power now resides in a coterie of ruthless Washington power elites who buy the allegiance of millions of voting dupes every year with bread and circuses.
What a far cry all this overweening prodigality is from the Founders' original intent. Such a system is insanity incarnate. If not radically reformed, it will continue to consume our freedom and earnings like a swarm of locusts consumes a wheat field until we in America are no better off than the simple serfs of feudal times. If we do not gather the forces to stand up to this beast, it will swallow everything in its path until it has created a wasteland of irredeemable death. Demopublicanism's ultimate denouement is apocalypse.
There is only one solution. Americans must form a viable third (or actually second) political party that is capable of competing with the tyrannical monopoly of Demopublicanism. I have outlined an innovative workable strategy for this in my article, "Gold Money and Equal Tax Rates!" that appeared earlier on this website. Without a competitive political vision that exposes the nakedness of the Demopublican emperor, there can be no reprieve from the path to disaster upon which we are now traveling.
Read the rest it gets better:
http://www.321gold.com/editorials/hultberg/hultberg090303.html