Trilateral Globalists Call For Gas Tax Hike
James P. Tucker Jr.American Free PressMonday, March 26, 2007
BRUSSELS—America should impose a $1-pergallon increase in the gasoline tax as penance for causing pollution, John Deutch, former head of the Central Intelligence Agency, told the Trilateral Commission’s secret meeting here.
When the TC called on the United States to increase gas taxes by 10 cents at a meeting in Tokyo in 1991, The Washington Post, which is always represented at TC and Bilderberg meetings, called for such an increase in an editorial the following day.
“The United States must adopt a carbon monoxide control policy,” Deutch said.
If the United States or any country in the Organization for Economic Development “that is a large producer of greenhouse gas emissions is to retain a leadership role in other areas, it cannot just opt out of the global climate change policy process.”
Deutch is most remembered for taking classified secrets home in his laptop, which led to the loss of his security clearance.
Later, CIA techies found that Deutch had been using the same computer, which contained national secrets, to surf the internet for pornography. The attorney general at the time, Janet “Butcher of Waco” Reno, declined to prosecute him.
The TC* got a ringing “chins up” about the pace of Europe’s becoming a superstate while greatly expanding its efforts to establish an “Asian-Pacific Union” similar to the European Union and its planned “American Union” covering the entire Western Hemisphere.
The ultimate goal of internationalist groups like the Trilateral-Bilderberg cabal is to divide the world into three great regions for the profit of the international plutocratic mattoids running the show.
Even in its own literature, the Trilateral Commission plays up the part that it was formed in 1973 by private citizens of Japan, Europe and North America to foster “closer cooperation”—today, that means globalization—among these industrialized regions. Since that time, the group meets throughout the year to discuss ways in which the group can advance world government.
An important weapon in their arsenal is fanning public hysteria over “global warming.”
But first, Peter Sutherland, TC’s European chairman, Bilderberg leader, former member of the European Commission and chairman of British Petroleum, lifted their spirits with assurances that a European constitution—the final step toward making the entire continent including Britain into a single nation—would be ratified. TC and Bilderberg had fretted about this since a draft had been rejected by French and Dutch voters in 2005. The problem, he said, was letting people vote on the issue instead of having the proposed constitution approved by bureaucrats.
“There is a subdued mood in Europe for the celebration of the 50th anniversary of the Treaty of Rome, the precursor of the European Union,” Sutherland said. “But the achievements are indeed remarkable . . . the free movement of goods, services, persons and capital has transformed Europe.
The effort succeeded because the integration process is based on a sharingof sovereignty and a method of governance that has challenged the traditional competences of the nation-state.”
However, Sutherland remarked, “the decision by [British Prime Minister] Tony Blair to hold a referendum . . . set off a train of events that has plunged Europe into a crisis of confidence about the future that is not warranted. After all, 18 countries, some by referendum, have taken all steps to ratify the treaty and of the rest, a significant majority could do so tomorrow without difficulty.”
Since the 2005 rejection, countries from the former Soviet bloc and Iron Curtain countries have joined the union and would have to ratify.
Sutherland’s message was clear: a new, shorter constitution must be proposed and ratified without the voters. His comments were also reflected in his commentary in the March 17 International Herald Tribune, which is published by the Bilderberg-controlled New York Times.
There was no mention that, at the same moment, he was attending the TC meeting. An independent source confirmed that the commentary was the text of his TC speech. A universal battle cry arose for the world to address “global warming” with a single voice. This issue is also a source of big bucks for these sons of smokestack industrialists.
One of those voices belonged to “the General Lord Guthrie,” director of N.M. Rothschild & Sons, member of the House of Lords and former chief of the Defense Staff in London.
“We must address the global climate crisis with a single voice, and impose rules that apply worldwide,” he said. “Otherwise, our children and children’s children will endure starvation and unimaginable hardship. We cannot address this crisis as 180 separate nation-states. We must act as a single world state.”
America’s TC leaders are growing old and frail, and another generation is being prepared. Founder David Rockefeller is 90 and in poor health. His nephew, Sen. John D. Rockefeller IV (D-W.Va.), a lineal descendant of John the Original, attended the TC for the first time in many years.
Familiar American faces included former House Speaker Tom Foley (D-Wash.), former Secretary of State Madeleine Albright, former Deputy Secretary of State Richard Armitage, assistant to President Jimmy Carter for national security Zbigniew Brzezinski, former House Majority Leader Richard Gephardt (D-Mo.); former U.S. Trade Representative Carla Hills, former Assistant Secretary of Defense Richard Perle, former Undersecretary of State Thomas Pickering, and former Secretary of State Henry Kissinger.
Newcomers included Sen. Dianne Feinstein (D-Calif.), former Rep. Jim Leach (R-Iowa) and Rep. Charles Rangel (D-N.Y.). All congressmen and senators were in violation of a federal law prohibiting public officials from attending secret meetings with private citizens to discuss public policy. They also traveled at taxpayers’ expense, and they do not fly coach.
Saturday, March 31, 2007
Further Steps in Europe Towards a One-World Government
They move slowly but surely. One wonders why a military is needed at all considering the EU 50th Anniversary proclamation of 50 years of peace. (never mind the war in the Balkans)
The real story is the quickening steps towards a one-world government. The Global Elite seem anxious to get us all under one world-wide socialistic umbrella.
EU dreams of common army
STEFAN NICOLAUPITuesday, March 27, 2007
German Chancellor Angela Merkel said the European Union should aim to create a common army within the next 50 years, an ambitious and at the same time controversial plan.
"We need to get closer to a common army for Europe," Merkel last week told German daily Bild.
Proponents of an EU army cite the greater efficiency for such a multinational force: The EU's member states have some 1.9 million soldiers -- 50 percent more than the United States -- and spend roughly $250 billion a year on military means, yet the effectiveness of these armies is one-tenth of the U.S. military.
A European army could save a significant amount of money, with smaller states focusing on individual military components, rather than having to build up a full military arsenal. And then there is of course the greater political clout a militarized EU would have, some say.
"We will not become a global player if we don't have a common military," Günter Verheugen, the EU's industry commissioner, told German news channel n-tv.
The first meaningful steps toward an EU army were taken in 1992, when the war in the Balkans handed Europe's leaders a wake-up call that the EU needed a common military positioning. At the time, the body in Maastricht, Netherlands, created the concept of the European Security and Defense Policy, which was concretized seven years later. In 1999 the EU decided it was willing to embark on joint humanitarian, rescue, peacekeeping and war missions.
Several EU brigades have been created in the past years, starting with the multinational Eurocorps, a force that consists of up to 60,000 soldiers drawn from the armies of Belgium, France, Germany, Luxembourg and Spain.
The latest EU military project has been the implementation of the EU Battle Groups, highly mobile rapid intervention units with roughly 1,500 soldiers each that can be deployed independently from NATO. The EU wants each battle group to be able to be launched within 10 days from command. The first two have been ready since earlier this year.
German Defense Minister Franz Josef Jung said the battle groups were only a first step.
"We want to continue on this route during our presidency, and create the necessary preconditions for naval and air forces, to in the long run get to a European army," Jung told n-tv.
Several costly military projects have been tackled by pooling resources, such as the Eurocopter military helicopter or the Eurofighter jet plane.
The 27-member body in the past has successfully launched numerous stability and peacekeeping missions, with the most media-heavy being in the former Yugoslavia, the Democratic Republic of Congo, and most recently, in Lebanon.
Nevertheless, the EU still has a long way to get to a joint army, and several hurdles plaster that route.
One is the lack of political unity when it comes to military missions; the most visible spat was during the U.S.-led war in Iraq, which virtually divided Europe in half.
London, one of Washington's closest allies, has been traditionally suspicious of an EU army that some fear could compete with U.S.-dominated NATO.
Henning Riecke, an EU expert at the German Council on Foreign Relations, said an EU army should not be directed against NATO.
"A European army would need political unity. ... NATO has capabilities that the EU doesn't have; what NATO does in Afghanistan could not be done by an EU army, so the need for cooperation would still exist in the future," he told United Press International in a telephone interview. "What the EU needs is a set of clear common policies to create a military union that exists alongside NATO without being a competitor."
Europe, Riecke added, is multifaceted as it takes into account its partnership with Russia as well as its alliance with the United States, and also banks on civil reconstruction efforts that go along with a security mission.
Peter Schmidt, a European security and defense policy expert at the German Institute for International and Security Affairs, a Berlin-based think tank, told UPI that an EU army would also need a fortified political basis.
"It's difficult to form a real army without a state," he said.
Merkel also told Bild that the EU Constitution, a political dream for 2009, will not mean that there will be a European federal state. "We will maintain the diversity of the nation states," she said.
A new EU Constitution would likely turn the 27-member body into something in between both models, and if successfully adopted, such a constitution would surely ease the way to an EU army, both experts said.
The real story is the quickening steps towards a one-world government. The Global Elite seem anxious to get us all under one world-wide socialistic umbrella.
EU dreams of common army
STEFAN NICOLAUPITuesday, March 27, 2007
German Chancellor Angela Merkel said the European Union should aim to create a common army within the next 50 years, an ambitious and at the same time controversial plan.
"We need to get closer to a common army for Europe," Merkel last week told German daily Bild.
Proponents of an EU army cite the greater efficiency for such a multinational force: The EU's member states have some 1.9 million soldiers -- 50 percent more than the United States -- and spend roughly $250 billion a year on military means, yet the effectiveness of these armies is one-tenth of the U.S. military.
A European army could save a significant amount of money, with smaller states focusing on individual military components, rather than having to build up a full military arsenal. And then there is of course the greater political clout a militarized EU would have, some say.
"We will not become a global player if we don't have a common military," Günter Verheugen, the EU's industry commissioner, told German news channel n-tv.
The first meaningful steps toward an EU army were taken in 1992, when the war in the Balkans handed Europe's leaders a wake-up call that the EU needed a common military positioning. At the time, the body in Maastricht, Netherlands, created the concept of the European Security and Defense Policy, which was concretized seven years later. In 1999 the EU decided it was willing to embark on joint humanitarian, rescue, peacekeeping and war missions.
Several EU brigades have been created in the past years, starting with the multinational Eurocorps, a force that consists of up to 60,000 soldiers drawn from the armies of Belgium, France, Germany, Luxembourg and Spain.
The latest EU military project has been the implementation of the EU Battle Groups, highly mobile rapid intervention units with roughly 1,500 soldiers each that can be deployed independently from NATO. The EU wants each battle group to be able to be launched within 10 days from command. The first two have been ready since earlier this year.
German Defense Minister Franz Josef Jung said the battle groups were only a first step.
"We want to continue on this route during our presidency, and create the necessary preconditions for naval and air forces, to in the long run get to a European army," Jung told n-tv.
Several costly military projects have been tackled by pooling resources, such as the Eurocopter military helicopter or the Eurofighter jet plane.
The 27-member body in the past has successfully launched numerous stability and peacekeeping missions, with the most media-heavy being in the former Yugoslavia, the Democratic Republic of Congo, and most recently, in Lebanon.
Nevertheless, the EU still has a long way to get to a joint army, and several hurdles plaster that route.
One is the lack of political unity when it comes to military missions; the most visible spat was during the U.S.-led war in Iraq, which virtually divided Europe in half.
London, one of Washington's closest allies, has been traditionally suspicious of an EU army that some fear could compete with U.S.-dominated NATO.
Henning Riecke, an EU expert at the German Council on Foreign Relations, said an EU army should not be directed against NATO.
"A European army would need political unity. ... NATO has capabilities that the EU doesn't have; what NATO does in Afghanistan could not be done by an EU army, so the need for cooperation would still exist in the future," he told United Press International in a telephone interview. "What the EU needs is a set of clear common policies to create a military union that exists alongside NATO without being a competitor."
Europe, Riecke added, is multifaceted as it takes into account its partnership with Russia as well as its alliance with the United States, and also banks on civil reconstruction efforts that go along with a security mission.
Peter Schmidt, a European security and defense policy expert at the German Institute for International and Security Affairs, a Berlin-based think tank, told UPI that an EU army would also need a fortified political basis.
"It's difficult to form a real army without a state," he said.
Merkel also told Bild that the EU Constitution, a political dream for 2009, will not mean that there will be a European federal state. "We will maintain the diversity of the nation states," she said.
A new EU Constitution would likely turn the 27-member body into something in between both models, and if successfully adopted, such a constitution would surely ease the way to an EU army, both experts said.
Thursday, March 29, 2007
China to build 93,000-ton atomic-powered aircraft carrier
Gee! What're They Going To Use This For???China to build 93,000-ton atomic-powered aircraft carrier:
Vessel to be on par with latest U.S. carrier, according to data
» Decommissioned Russian antisubmarine carrier Kiev that China bought in 2000.
China has been pushing ahead with construction of a mega-sized nuclear-powered aircraft carrier to be completed in 2020, according to a Chinese Communist Party's dossier.
A source close to Chinese military affairs said on March 27 that China has been promoting the construction of a 93,000-ton atomic-powered carrier under a plan titled the "085 Project." The nation also has a plan to build a 48,000-ton non-nuclear-powered carrier under the so-called "089 Project," added the source.
The source made such remarks based on government a dossier that reveals that China¡¯s Central Military Commision recently approved the two projects. The dossier also contained specifications of the aircraft carriers.
China had so far been known to be pushing ahead with construction of a non-nuclear-powered carrier, but not an atomic-powered one.
Once the proposed Chinese carriers are deployed, the radius of the Chinese Navy¡¯s range is expected to reach Guam, where a U.S. base is located. Thus, military experts are worried about China¡¯s moves prompting an arms race in Northeast Asia.
The dossier said the construction of the nuclear-powered carrier will be completed in 2020. China State Shipbuiling Corp¡¯s Jiangnan shipyard located on Changxing Island near Shanghai, will be responsible for its design and construction. The size is similar to former Soviet¡¯s unfinished atomic-powered carrier Ulyanovsk, the dossier states. China reportedly secretly purchased the design of Ulyanovsk from Russia. When the nuclear-powered carrier is finished, China will own an aircraft carrier which is on par with the U.S.¡¯s newest of such vessels, the 97,000-ton atomic-powered USS Ronald Reagan, which recently docked at Busan Port to participate in a joint exercise between the South Korean and U.S. militaries.
According to the dossier, China plans to construct a non-atomic-powered carrier as a transition stage to building the larger nuclear-powered one. The non-atomic-powered carrier, due to be completed in 2010, will be a mid-sized carrier with a standard displacement of 48,000 tons and a full-load displacement of 64,000 tons and will be able to carry 30-40 Chinese-built J-10 fighters, which China fielded in December last year. The Chinese authorities are reportedly overhauling J-10 fighters to be loaded onto the new aircraft carriers. Until the work is complete, the new carriers are going to handle 10-20 Russian-made Su-33 fighters.
The non-nuclear-powered carrier is reported to be a revised version of Ukraine¡¯s Varyag, which China purchased in 1998. A shipyard in Dalian is in charge of its design and construction. After the new carrier is completed, Varyag will be used for military training only.
Remarks made by Zhang Yunchuan, Minister of the Commission on Science, Technology and Industry for National Defense, to reporters after the National People¡¯s Congress (NPC) on March 16 - "The construction of an aircraft carrier with China-developed technology will be completed by 2010" - support the dossier¡¯s information as reported by the source.
A general-ranked official at South Korea¡¯s Ministry of National Defense said, "China¡¯s plan to push ahead with construction of atomic-powered aircraft carrier has not been widely known. However, it is sufficiently to predict that the nation will ultimately pursue the ownership of such a vessel."
Nicely said...........
"Under democracy, each party always devotes its chief energies to trying to prove that the other party is unfit to rule - and both commonly succeed, and are right." - H.L. Mencken
The Chairman Gets Quoted................During an NBA game.
I've not been much of a sports fan since the baseball lockout of '94. I still care about hockey and will watch that occaisional parity-ridden NFL game. Last night, I was channel surfing and ran across an NBA game on a sports network. What stopped me was that sideline announcer Jim Grey was actually quoting Chairman Mao Tse-Tung! It was a somewhat benign reference to the Houston Rockets Yao Ming's life philosophy, based on a saying by the communist Chairman. "Competition second, friendship first" or some gobbldygook like that.
For a man who set up brutal internment camps, caused widespread chronic famines and killed more people than Stalin, to be quoted on an American sports program is regrettably stupid. Poor Jim Grey who is proficient at sports, but seemingly dim on many other fronts (going after Pete Rose after he got a standing ovatuion in '99 at the World series) probably never paid attention to any history lessons as he idolized and drooled over sport stars.
"Boobus Americanus" probably isn't too informed on the Chairman's reign of oppression, but I wonder what the reaction would have been had Grey uttered a benign quote from Adolph Hitler.
For a man who set up brutal internment camps, caused widespread chronic famines and killed more people than Stalin, to be quoted on an American sports program is regrettably stupid. Poor Jim Grey who is proficient at sports, but seemingly dim on many other fronts (going after Pete Rose after he got a standing ovatuion in '99 at the World series) probably never paid attention to any history lessons as he idolized and drooled over sport stars.
"Boobus Americanus" probably isn't too informed on the Chairman's reign of oppression, but I wonder what the reaction would have been had Grey uttered a benign quote from Adolph Hitler.
Wednesday, March 28, 2007
Here's Something (you hope) That You Don't see Everyday...
Space junk falls around airliner: report
Mar 28 04:20 AM US/Eastern
Flaming space junk from a Russian satellite narrowly missed hitting a Chilean airliner over the Pacific Ocean, reports said Wednesday.
The pilot of a LAN Chile Airbus A340 en route to New Zealand told air traffic controllers he had seen pieces of flaming space junk falling about eight kilometres (four miles) in front of the plane and behind it, TV3 said.
The aircraft was not struck by any of the debris and later landed safely in Auckland.
Airways New Zealand, which manages New Zealand's air traffic, said it had been warned by Russian authorities that an obsolete satellite was due to fall into the Pacific Ocean on Wednesday.
But the debris had apparently fallen into the area 12 hours earlier than the time advised by the Russians.
A spokesman for the Civil Aviation Authority, which is responsible for air safety, said it would launch an inquiry after it was advised of the details of the incident.
Mar 28 04:20 AM US/Eastern
Flaming space junk from a Russian satellite narrowly missed hitting a Chilean airliner over the Pacific Ocean, reports said Wednesday.
The pilot of a LAN Chile Airbus A340 en route to New Zealand told air traffic controllers he had seen pieces of flaming space junk falling about eight kilometres (four miles) in front of the plane and behind it, TV3 said.
The aircraft was not struck by any of the debris and later landed safely in Auckland.
Airways New Zealand, which manages New Zealand's air traffic, said it had been warned by Russian authorities that an obsolete satellite was due to fall into the Pacific Ocean on Wednesday.
But the debris had apparently fallen into the area 12 hours earlier than the time advised by the Russians.
A spokesman for the Civil Aviation Authority, which is responsible for air safety, said it would launch an inquiry after it was advised of the details of the incident.
Back in Black: Elite 360 Confirmed
New HDMI-enabled system due in late April, 120GB HDD also sold separately.
by Douglass C. Perry
March 27, 2007 - In what appears to be Microsoft's standard cart-before-the-horse style of information delivery, the leading console manufacturer of this generation confirmed nearly all of the rumors preceding today's announcement of the new black, HDMI-enabled Xbox 360 Elite.Dubbed the Xbox 360 Elite (not the "Zephyr" as had been rumored), the new black, $479.99 Xbox 360 comes bundled with a 120GB hard drive, has an HDMI port, and will ship to the US and Canada Sunday, April 29, 2007, Microsoft told IGN today in an interview over the phone.
The new "Elite" console contains the same parts, processors and chips as the Core and Pro units, and has the same dimensions, only it's got an HDMI port on its back-side (in addition to the standard RGB port) and comes with a 120GB hard disc drive (HDD), cables and headset, all in black."And for a unit that's got twice the hard drive storage space as the PS3, comes with an HDMI cable, an Ethernet cable and a headset, it's still $120 cheaper than the $599.99 high-end PlayStation 3," said Albert Penello, Microsoft's director of global platform marketing.A standalone $179.99 HDD also ships April 29. This package includes one 120GB HDD, software, and a specialized cable to port data from a user's current hard drive to the new one. To complement the new black console, Microsoft will also ship a wireless black controller (MSRP $49.99), a black Play and Charge Kit ($19.99), and a standalone rechargeable battery pack ($11.99) on April 29, also in black."The Elite is not a limited edition. It's permanent. And we will not replace any sku," Penello explained when referring to the flurry of rumors preceeding the official announcement. "We now have three SKUs and we predict the primary seller will continue to be the Pro system."
Penello also addressed concerns the new bigger hard drive might lead game developers to require it as a standard. "We won't force experiences that require the new HDD. Games will still be optimized around the 20GB experience. Nobody will be forced to buy a new drive."Microsoft has no plans to offer rebates, discounts, or free trade-ins for loyal early adopters. When asked how he thought gamers would respond to the new higher-priced addition, Penello said, "I think and hope that people are going to understand. There is as price for being an early adopter and your points and feelings are valid (Penello said when referring to gamers IGN suggested would be angry about the new system). But whenever you innovate and change, you have to face this situation. Your same old system is still perfectly valid. Think about it this way, it's a new bundle that comes with a bigger hard drive."When IGN asked why the launch system didn't come with a larger hard drive and an HDMI port, Penello explained: "We could never have done this before, to bring HMDI and 120 GB to the system when we launched in 2005. The reason we didn't do it before was because the HDMI standard wasn't complete. It takes time to develop these things. We started the console earlier than Sony did and when the HDMI standard wasn't done. At the time we were developing, this stuff was in transition."IGN suggested to Penello that gamers might become skeptical about buying an Xbox 360 because of the introduction to this new system. Many gamers are already skeptical the existing systems aren't reliable, as they have witnessed countless stories of broken 360s only one and a half years since the launch in November 2005. Why should they buy a new system now, if for some new reason, Microsoft decides to create a new system a year and a half from now? "Should we just ignore new technology? Or listen to the input we hear from gamers and address it? If some new technology comes out, I'm going to have to look at that. We're trying something new."
The new "Elite" console contains the same parts, processors and chips as the Core and Pro units, and has the same dimensions, only it's got an HDMI port on its back-side (in addition to the standard RGB port) and comes with a 120GB hard disc drive (HDD), cables and headset, all in black."And for a unit that's got twice the hard drive storage space as the PS3, comes with an HDMI cable, an Ethernet cable and a headset, it's still $120 cheaper than the $599.99 high-end PlayStation 3," said Albert Penello, Microsoft's director of global platform marketing.A standalone $179.99 HDD also ships April 29. This package includes one 120GB HDD, software, and a specialized cable to port data from a user's current hard drive to the new one. To complement the new black console, Microsoft will also ship a wireless black controller (MSRP $49.99), a black Play and Charge Kit ($19.99), and a standalone rechargeable battery pack ($11.99) on April 29, also in black."The Elite is not a limited edition. It's permanent. And we will not replace any sku," Penello explained when referring to the flurry of rumors preceeding the official announcement. "We now have three SKUs and we predict the primary seller will continue to be the Pro system."
Penello also addressed concerns the new bigger hard drive might lead game developers to require it as a standard. "We won't force experiences that require the new HDD. Games will still be optimized around the 20GB experience. Nobody will be forced to buy a new drive."Microsoft has no plans to offer rebates, discounts, or free trade-ins for loyal early adopters. When asked how he thought gamers would respond to the new higher-priced addition, Penello said, "I think and hope that people are going to understand. There is as price for being an early adopter and your points and feelings are valid (Penello said when referring to gamers IGN suggested would be angry about the new system). But whenever you innovate and change, you have to face this situation. Your same old system is still perfectly valid. Think about it this way, it's a new bundle that comes with a bigger hard drive."When IGN asked why the launch system didn't come with a larger hard drive and an HDMI port, Penello explained: "We could never have done this before, to bring HMDI and 120 GB to the system when we launched in 2005. The reason we didn't do it before was because the HDMI standard wasn't complete. It takes time to develop these things. We started the console earlier than Sony did and when the HDMI standard wasn't done. At the time we were developing, this stuff was in transition."IGN suggested to Penello that gamers might become skeptical about buying an Xbox 360 because of the introduction to this new system. Many gamers are already skeptical the existing systems aren't reliable, as they have witnessed countless stories of broken 360s only one and a half years since the launch in November 2005. Why should they buy a new system now, if for some new reason, Microsoft decides to create a new system a year and a half from now? "Should we just ignore new technology? Or listen to the input we hear from gamers and address it? If some new technology comes out, I'm going to have to look at that. We're trying something new."
Tuesday, March 27, 2007
Love That 9th Circuit Court of Appeals! (a.k.a. "Circus Of Assholes")
Your Pension Plan Could Be in Danger
It's easy to get lulled into a false sense of security about your U.S. pension plan. After all, O.J. Simpson got to keep his NFL pension, even after he allegedly killed two people, right?
Don't take that protection for granted. While pension plans that qualify for protection under the federal ERISA statute (e.g., 401(k) plans and defined benefit plans) enjoy very strong creditor protection, that protection isn't absolute.
But if a government agency is after your assets, ERISA protection melts like butter. For example, ERISA won't protect against federal tax levies and criminal forfeiture judgments. Nor will ERISA protect against federal court orders for "restitution" in white-collar crime cases.
If you live in a community property state such as California, the situation is much worse, because an innocent spouse can lose his or her community property interest in an ERISA-qualified plan.
Here's what happened in a recent California case.
The IRS placed a US$300,000 levy against a man named Jerry McIntyre. When McIntyre didn't pay up, the IRS decided to collect against his pension.
Jerry's wife claimed that she owned half of his pension under the California community property law. And since the levy was against her husband, half of the pension should not be subject to the IRS lien.
Good argument, but the 9th Circuit Court of Appeals disagreed. Under California law, the "community estate" is liable for a debt incurred by either spouse before or during marriage, regardless of whether one or both spouses are parties to the debt or to a judgment for the debt.
That's bad enough, but the court went even further to imply that even ordinary creditors can penetrate ERISA qualified plans under California law. In other words, California law actually eliminates ERISA's asset protection!
It remains to be seen whether a similar situation exists in other community property states-although I suspect that it does.
I don't have a quick answer to those who are looking for a way to plan around this horrific decision, except to say that if you want to protect your assets, don't live in a community property state. If you do live in a community property state, do everything you can to keep your individual property out of the "community estate." (Individual or "separate" property is in most community property states property you owned before you were married, or inherited after your marriage.)
In the meantime, do everything you can to build a shield around your non-pension assets to protect them from legal predators.
If you don't, any creditor of your spouse can grab your property, too...including your "asset protected" pension.
It's easy to get lulled into a false sense of security about your U.S. pension plan. After all, O.J. Simpson got to keep his NFL pension, even after he allegedly killed two people, right?
Don't take that protection for granted. While pension plans that qualify for protection under the federal ERISA statute (e.g., 401(k) plans and defined benefit plans) enjoy very strong creditor protection, that protection isn't absolute.
But if a government agency is after your assets, ERISA protection melts like butter. For example, ERISA won't protect against federal tax levies and criminal forfeiture judgments. Nor will ERISA protect against federal court orders for "restitution" in white-collar crime cases.
If you live in a community property state such as California, the situation is much worse, because an innocent spouse can lose his or her community property interest in an ERISA-qualified plan.
Here's what happened in a recent California case.
The IRS placed a US$300,000 levy against a man named Jerry McIntyre. When McIntyre didn't pay up, the IRS decided to collect against his pension.
Jerry's wife claimed that she owned half of his pension under the California community property law. And since the levy was against her husband, half of the pension should not be subject to the IRS lien.
Good argument, but the 9th Circuit Court of Appeals disagreed. Under California law, the "community estate" is liable for a debt incurred by either spouse before or during marriage, regardless of whether one or both spouses are parties to the debt or to a judgment for the debt.
That's bad enough, but the court went even further to imply that even ordinary creditors can penetrate ERISA qualified plans under California law. In other words, California law actually eliminates ERISA's asset protection!
It remains to be seen whether a similar situation exists in other community property states-although I suspect that it does.
I don't have a quick answer to those who are looking for a way to plan around this horrific decision, except to say that if you want to protect your assets, don't live in a community property state. If you do live in a community property state, do everything you can to keep your individual property out of the "community estate." (Individual or "separate" property is in most community property states property you owned before you were married, or inherited after your marriage.)
In the meantime, do everything you can to build a shield around your non-pension assets to protect them from legal predators.
If you don't, any creditor of your spouse can grab your property, too...including your "asset protected" pension.
Monday, March 26, 2007
Interesting Thoughts On Our Favorite Subjects
Finally! Someone besides myself who sees the threat of these micro-Terrorists as something overplayed in our media. A knuckleheaded, extra Y-chromosome TSA worker (which comprises 93% of their current staffing) cause ten times more trouble than all these sand sheperds combined.
Jumping the Shark
When a once-popular TV show becomes a strained parody of itself, it is said to have "jumped the shark."
The pop culture phrase comes from an episode of Happy Days, in which Arthur "the Fonz" Fonzarelli jumps over a shark while water skiing. (And still wearing his leather jacket, of course.)
After a long and successful run, the Happy Days writers were running out of gas; the show just went downhill from that point. To "jump the shark" thus became shorthand for losing the plot.The phenomenon is not limited to TV shows. Hollywood has practically turned shark jumping into an art form; no movie franchise is immune from bad sequels. For every Karate Kid, it seems, there is a Karate Kid II and Karate Kid III. It happens to industries and companies too. Widely admired growth stocks jump the shark when, for whatever reason, perpetually rosy projections suddenly seem far-fetched. New realizations sink in, the old spell is broken, and the magic multiple fades. DELL and SBUX are recent examples of this.
Shark Jumping Candidate #1: Terrorism.
In an article titled "New Face of Jihad Vows Attacks," the New York Times reports on Fatah al Islam, a Lebanon-based terrorist organization with Al-Qaeda-like aspirations. The article begins:
TRIPOLI, Lebanon -- Deep in a violent and lawless slum just north of this coastal city, 12 men whose faces were shrouded by scarves drilled with Kalashnikovs.
In unison, they lunged in one direction, turned and lunged in another. "Allah-u akbar," the men shouted in praise to God as they fired their machine guns into a wall.
Hmm. Synchronized lunging in one direction and then another? Firing machine guns into a wall? Sounds like a campy rendition of West Side Story gone wrong. In describing Fatah al Islam's youthful recruits, things get worse:
Hussein Hamdan, 19, who keeps a poster of Osama bin Laden in the bedroom he shares with two sisters, is a street tough attuned to religious fundamentalism. He dropped out of school at age 10, spent 18 months in jail on assault charges, and in March - "just to make a statement," he said - took a razor and repeatedly slashed both his forearms. "I want to become a mujahedeen and go to jihad in any country where there are Jews or Americans to fight against them," he said.
To be clear, seething hatred is not funny. But come on now... a bin Laden poster on the bedroom wall? Sharing a bedroom with two sisters? What kind of statement might this "street tough" be making, other than "I am an angry teenage basket case?" This guy doesn't need to go fight infidels. He needs his own room.
US intelligence officials are taking Fatah al Islam seriously, as they should. But one can't help but think the terrorist song and dance is rather stale.
These days, geopolitical concerns are starting to look distinctly "old school" once again. Zealots are taking a back seat to hard-nosed governments. Call it the return of the nation state.
Just consider -- you've got China shooting down satellites, Russia threatening a new arms buildup, Venezuela funding its neighbors, Syria and Iran participating in Middle East strategy talks, Japan pondering re-militarization, Israel pondering preemptive attack, and the US and UK looking to overhaul their existing nuclear capabilities. Add to that mix the geopolitically sensitive nature of central bank cash flows, US dollar reserves, and global trade. Then top it all off with deep-seated energy concerns and a natural resource grab spanning multiple continents.
It's a new age of realpolitik... one in which terrorist organizations are no longer a driving geopolitical force.
Shark Jumping Candidate #2: Wacky Dictators.
For a while there, wackiness was in an uptrend. Mahmoud Ahmadinejad of Iran was making vaguely alarming references to the coming of the Twelfth Imam. Hugo Chavez of Venezuela was telling the US to "go to hell gringos!" and shouting from the rooftops about the Socialist Revolution. Robert Mugabe of Zimbabwe was bulldozing houses in Harare and consolidating his grip on power.
All three men in are still in power now, but cracks in the foundation are beginning to spread.
While Iran grows stronger as a regional force, Mr. Ahmadinejad grows weaker on the home front. Evidence suggests that ordinary Iranians are primarily concerned with their economy and personal well being -- just like Americans. Many resent the wild crusader, and say they would not have voted for Mr. Ahmadinejad had they known things would turn out this way. There are grumblings among the mullahs too. If Iran's latest round of nuclear machinations goes wrong, Ahmadinejad could yet be yanked off the stage.
In Venezuela, Chavez is overstepping his bounds and, in doing so, showing his limitations as a strategist. The Economist reports:
Even many "chavistas'are wary of the ever-greater power wielded by their president. Indefinite re-election is opposed by over 60% of respondents in his poll, according to Mr Schemel. Some of the president's academic sympathisers are expressing alarm. The new party is being set up "without debate, without consultation, and...in arrogant terms," argues Margarita López Maya, a historian. (I'd add here that the rich and well-to-do natives are leaving Venezuela in droves. Nothing weakens an economy like the moneymakers and financial leaders jumping ship.)
In Zimbabwe, Robert Mugabe has all but come unhinged. As the New York Times reports, Mugabe has "barred opponents from leaving the country, ordered his thugs to literally crack the skulls of opposition leaders, accused his own party's youth group of plotting against him, and told Western critics to "go hang.'"
Goofball fanaticism is out. Machiavellian pragmatism is very much in. This is demonstrated by Russia and North Korea's taste for cold hard cash.
North Korea's Kim Jung Il has long played the "crazy card' with surprising skill, using the threat of instability to keep the dollars flowing into his regime. The Dear Leader has realized that the west, and South Korea in particular, will endure an endless stream of tirades and hostility as long as everyone is able to "keep talking." China, too, is desperate to avoid an economic implosion that sends a mass of starving North Korean refugees pouring over its borders. (Actually, I call "bullshit" on this entry in particular. We all know that North Korea is a client state of China's. Il-Jongo doesn't take a crap without Beijing's say so. Their posturing is a test against the West and always will be. China will use N.K. to goad the US into WWIII)
Vladimir Putin plays his cards well too. Though he may look like a brazen thug to the rest of the world, Putin is overwhelmingly popular in Russia, thanks to oil and gas revenues fueling a widespread economic boom.
As Russia's economic expansion heads into its seventh year, Mr. Putin has put a relentless focus on collecting the cash. This has led to the blatant strong-arming of western oil & gas companies, like Shell, and now to an escalated game of hardball with Iran. Russia's sudden sharp turn against Iran on the subject of nuclear enrichment--and its threat to cease delivering fuel for the Bushehr power plant--is no doubt motivated by cash flow concerns.
It's all about the money honey. No wackiness there.
Shark Jumping Candidate #3: the US Dollar.
The US Dollar index is not far from its December 2006 lows as of this writing. Once those lows are broken, one has to go all the way back to 1992--the dollar's lowest point in twenty years or so--to find anything lower.
As the likelihood of a rate hike falls, so do the dollar's prospects. The stock market celebrated the Federal Reserve's softer tone at its latest meeting, ignoring the fact that rates are going on hold because the economy is vulnerable. (Weak homeowners and overstretched consumers are in no position for their debt service costs to go up.)
As it becomes obvious that the Fed's hands are tied, a number of other currencies begin to look more attractive. The krona, the ringgit, the baht, even the rupee... all are holding their own. The Euro and the Australian dollar, buoyed by rising rates, are carving out historic highs.
Nor does it help that the tide of foreign capital making its way into US equities and US treasuries is threatening to slow, or even reverse. Reduced interest in dollar-denominated assets will do the greenback no favors. In sum, the virtuous circle supporting the dollar in recent years could soon turn vicious.
The final problem for the US dollar is, of course, the massive trade deficit. This horse has been beaten thoroughly but is not yet dead; the challenge of rounding up $850 billion per year in financing is not trivial. As Brad Setser of Roubini Global Economics notes,
the US deficit is bigger than China's (not small) surplus, Japan's (not small) surplus and the oil exporters' (not small) surplus. You need to sum up all three big surpluses to come close to meeting the United States need for financing.
Look out below.
Shark Jumping Candidate #4: Private Equity.
Wall Street places a great premium on being taken seriously. There is a carefully crafted image built up around the sanctity of investing, the tradition of wise institutions, the reserved nature of distinguished firms, and so on.
Every once in a while, you get a chain of events that blows back the lid on that whole ethos, revealing the Street for what it is: a greedy circus. Or a mental institution where the inmates run the asylum. Or both.
Such a chain of events has recently culminated with news that the Blackstone Group, the face of private equity, plans to go public.
Folks, if ever a self-parody existed, this is it.
In February, Blackstone put together a whopping mega deal, buying out Sam Zell's Equity Office Properties Trust for $39 billion. The all-powerful head of Blackstone, Stephen Schwarzman, then threw himself a Gatsbyesque birthday party to which all of Wall Street and half of Washington was invited. (All the A-listers anyway.)
Shortly after that Mr. Schwarzman, with an estimated net worth of $10 billion, was featured on the cover of Fortune magazine as "the new king of Wall Street." (Jeff Bezos' man-of-the-year profile in Time comes to mind, not long before dot coms collapsed.)
And now, the new king of Wall Street plans take his firm public.
There is a delicious irony here. In theory, private equity firms make money through their skill at streamlining operations and fixing broken companies. (In reality, they make a much bigger killing through leveraged finance and cash flows bought on the cheap. But that's another discussion.) Firms like Blackstone can supposedly whip a company into shape better than public shareholders can, and prefer to do so without having anyone look over their shoulder.
Mr. Schwarzman has argued countless times for the superiority of the PE model. In seeking to go public now, he makes a blatant mockery of his own views.
Furthermore, there is no compelling reason for Blackstone to tap public equity... except for the lure of huge gobs of cash. The major news outlets--WSJ, NYT, The Economist and so on--are all reasonably skeptical, asking if such a move could be the marker of a top. After all, if the savviest buyers in the world are now selling, why should you and I be buying?
Yet Blackstone forges ahead anyway. And if the offering is successful, other PE titans will follow.
Your editor is reminded of an old NBA story, from the time when Larry Bird was winning championships with Celtics. Bird was so dominant and so good, it was said, that he could tell his defender exactly what he was going to do--and then do it anyway. "First I'm going to move here," Bird would say. "Then I'm going to move here. Then I'm going to shoot in your face and win the game."
The Blackstone version of this might be, "First we're going to make billions. Then we're going to make more billions. Then we're going to sell you the top tick and win the game."
Jumping the Shark
When a once-popular TV show becomes a strained parody of itself, it is said to have "jumped the shark."
The pop culture phrase comes from an episode of Happy Days, in which Arthur "the Fonz" Fonzarelli jumps over a shark while water skiing. (And still wearing his leather jacket, of course.)
After a long and successful run, the Happy Days writers were running out of gas; the show just went downhill from that point. To "jump the shark" thus became shorthand for losing the plot.The phenomenon is not limited to TV shows. Hollywood has practically turned shark jumping into an art form; no movie franchise is immune from bad sequels. For every Karate Kid, it seems, there is a Karate Kid II and Karate Kid III. It happens to industries and companies too. Widely admired growth stocks jump the shark when, for whatever reason, perpetually rosy projections suddenly seem far-fetched. New realizations sink in, the old spell is broken, and the magic multiple fades. DELL and SBUX are recent examples of this.
Shark Jumping Candidate #1: Terrorism.
In an article titled "New Face of Jihad Vows Attacks," the New York Times reports on Fatah al Islam, a Lebanon-based terrorist organization with Al-Qaeda-like aspirations. The article begins:
TRIPOLI, Lebanon -- Deep in a violent and lawless slum just north of this coastal city, 12 men whose faces were shrouded by scarves drilled with Kalashnikovs.
In unison, they lunged in one direction, turned and lunged in another. "Allah-u akbar," the men shouted in praise to God as they fired their machine guns into a wall.
Hmm. Synchronized lunging in one direction and then another? Firing machine guns into a wall? Sounds like a campy rendition of West Side Story gone wrong. In describing Fatah al Islam's youthful recruits, things get worse:
Hussein Hamdan, 19, who keeps a poster of Osama bin Laden in the bedroom he shares with two sisters, is a street tough attuned to religious fundamentalism. He dropped out of school at age 10, spent 18 months in jail on assault charges, and in March - "just to make a statement," he said - took a razor and repeatedly slashed both his forearms. "I want to become a mujahedeen and go to jihad in any country where there are Jews or Americans to fight against them," he said.
To be clear, seething hatred is not funny. But come on now... a bin Laden poster on the bedroom wall? Sharing a bedroom with two sisters? What kind of statement might this "street tough" be making, other than "I am an angry teenage basket case?" This guy doesn't need to go fight infidels. He needs his own room.
US intelligence officials are taking Fatah al Islam seriously, as they should. But one can't help but think the terrorist song and dance is rather stale.
These days, geopolitical concerns are starting to look distinctly "old school" once again. Zealots are taking a back seat to hard-nosed governments. Call it the return of the nation state.
Just consider -- you've got China shooting down satellites, Russia threatening a new arms buildup, Venezuela funding its neighbors, Syria and Iran participating in Middle East strategy talks, Japan pondering re-militarization, Israel pondering preemptive attack, and the US and UK looking to overhaul their existing nuclear capabilities. Add to that mix the geopolitically sensitive nature of central bank cash flows, US dollar reserves, and global trade. Then top it all off with deep-seated energy concerns and a natural resource grab spanning multiple continents.
It's a new age of realpolitik... one in which terrorist organizations are no longer a driving geopolitical force.
Shark Jumping Candidate #2: Wacky Dictators.
For a while there, wackiness was in an uptrend. Mahmoud Ahmadinejad of Iran was making vaguely alarming references to the coming of the Twelfth Imam. Hugo Chavez of Venezuela was telling the US to "go to hell gringos!" and shouting from the rooftops about the Socialist Revolution. Robert Mugabe of Zimbabwe was bulldozing houses in Harare and consolidating his grip on power.
All three men in are still in power now, but cracks in the foundation are beginning to spread.
While Iran grows stronger as a regional force, Mr. Ahmadinejad grows weaker on the home front. Evidence suggests that ordinary Iranians are primarily concerned with their economy and personal well being -- just like Americans. Many resent the wild crusader, and say they would not have voted for Mr. Ahmadinejad had they known things would turn out this way. There are grumblings among the mullahs too. If Iran's latest round of nuclear machinations goes wrong, Ahmadinejad could yet be yanked off the stage.
In Venezuela, Chavez is overstepping his bounds and, in doing so, showing his limitations as a strategist. The Economist reports:
Even many "chavistas'are wary of the ever-greater power wielded by their president. Indefinite re-election is opposed by over 60% of respondents in his poll, according to Mr Schemel. Some of the president's academic sympathisers are expressing alarm. The new party is being set up "without debate, without consultation, and...in arrogant terms," argues Margarita López Maya, a historian. (I'd add here that the rich and well-to-do natives are leaving Venezuela in droves. Nothing weakens an economy like the moneymakers and financial leaders jumping ship.)
In Zimbabwe, Robert Mugabe has all but come unhinged. As the New York Times reports, Mugabe has "barred opponents from leaving the country, ordered his thugs to literally crack the skulls of opposition leaders, accused his own party's youth group of plotting against him, and told Western critics to "go hang.'"
Goofball fanaticism is out. Machiavellian pragmatism is very much in. This is demonstrated by Russia and North Korea's taste for cold hard cash.
North Korea's Kim Jung Il has long played the "crazy card' with surprising skill, using the threat of instability to keep the dollars flowing into his regime. The Dear Leader has realized that the west, and South Korea in particular, will endure an endless stream of tirades and hostility as long as everyone is able to "keep talking." China, too, is desperate to avoid an economic implosion that sends a mass of starving North Korean refugees pouring over its borders. (Actually, I call "bullshit" on this entry in particular. We all know that North Korea is a client state of China's. Il-Jongo doesn't take a crap without Beijing's say so. Their posturing is a test against the West and always will be. China will use N.K. to goad the US into WWIII)
Vladimir Putin plays his cards well too. Though he may look like a brazen thug to the rest of the world, Putin is overwhelmingly popular in Russia, thanks to oil and gas revenues fueling a widespread economic boom.
As Russia's economic expansion heads into its seventh year, Mr. Putin has put a relentless focus on collecting the cash. This has led to the blatant strong-arming of western oil & gas companies, like Shell, and now to an escalated game of hardball with Iran. Russia's sudden sharp turn against Iran on the subject of nuclear enrichment--and its threat to cease delivering fuel for the Bushehr power plant--is no doubt motivated by cash flow concerns.
It's all about the money honey. No wackiness there.
Shark Jumping Candidate #3: the US Dollar.
The US Dollar index is not far from its December 2006 lows as of this writing. Once those lows are broken, one has to go all the way back to 1992--the dollar's lowest point in twenty years or so--to find anything lower.
As the likelihood of a rate hike falls, so do the dollar's prospects. The stock market celebrated the Federal Reserve's softer tone at its latest meeting, ignoring the fact that rates are going on hold because the economy is vulnerable. (Weak homeowners and overstretched consumers are in no position for their debt service costs to go up.)
As it becomes obvious that the Fed's hands are tied, a number of other currencies begin to look more attractive. The krona, the ringgit, the baht, even the rupee... all are holding their own. The Euro and the Australian dollar, buoyed by rising rates, are carving out historic highs.
Nor does it help that the tide of foreign capital making its way into US equities and US treasuries is threatening to slow, or even reverse. Reduced interest in dollar-denominated assets will do the greenback no favors. In sum, the virtuous circle supporting the dollar in recent years could soon turn vicious.
The final problem for the US dollar is, of course, the massive trade deficit. This horse has been beaten thoroughly but is not yet dead; the challenge of rounding up $850 billion per year in financing is not trivial. As Brad Setser of Roubini Global Economics notes,
the US deficit is bigger than China's (not small) surplus, Japan's (not small) surplus and the oil exporters' (not small) surplus. You need to sum up all three big surpluses to come close to meeting the United States need for financing.
Look out below.
Shark Jumping Candidate #4: Private Equity.
Wall Street places a great premium on being taken seriously. There is a carefully crafted image built up around the sanctity of investing, the tradition of wise institutions, the reserved nature of distinguished firms, and so on.
Every once in a while, you get a chain of events that blows back the lid on that whole ethos, revealing the Street for what it is: a greedy circus. Or a mental institution where the inmates run the asylum. Or both.
Such a chain of events has recently culminated with news that the Blackstone Group, the face of private equity, plans to go public.
Folks, if ever a self-parody existed, this is it.
In February, Blackstone put together a whopping mega deal, buying out Sam Zell's Equity Office Properties Trust for $39 billion. The all-powerful head of Blackstone, Stephen Schwarzman, then threw himself a Gatsbyesque birthday party to which all of Wall Street and half of Washington was invited. (All the A-listers anyway.)
Shortly after that Mr. Schwarzman, with an estimated net worth of $10 billion, was featured on the cover of Fortune magazine as "the new king of Wall Street." (Jeff Bezos' man-of-the-year profile in Time comes to mind, not long before dot coms collapsed.)
And now, the new king of Wall Street plans take his firm public.
There is a delicious irony here. In theory, private equity firms make money through their skill at streamlining operations and fixing broken companies. (In reality, they make a much bigger killing through leveraged finance and cash flows bought on the cheap. But that's another discussion.) Firms like Blackstone can supposedly whip a company into shape better than public shareholders can, and prefer to do so without having anyone look over their shoulder.
Mr. Schwarzman has argued countless times for the superiority of the PE model. In seeking to go public now, he makes a blatant mockery of his own views.
Furthermore, there is no compelling reason for Blackstone to tap public equity... except for the lure of huge gobs of cash. The major news outlets--WSJ, NYT, The Economist and so on--are all reasonably skeptical, asking if such a move could be the marker of a top. After all, if the savviest buyers in the world are now selling, why should you and I be buying?
Yet Blackstone forges ahead anyway. And if the offering is successful, other PE titans will follow.
Your editor is reminded of an old NBA story, from the time when Larry Bird was winning championships with Celtics. Bird was so dominant and so good, it was said, that he could tell his defender exactly what he was going to do--and then do it anyway. "First I'm going to move here," Bird would say. "Then I'm going to move here. Then I'm going to shoot in your face and win the game."
The Blackstone version of this might be, "First we're going to make billions. Then we're going to make more billions. Then we're going to sell you the top tick and win the game."
Is the best way to reduce poverty always a government program?
Pretty self-explanatory. Send it to your favorite pro-tax liberal and watch him squirm!
Spending Us Into the Poorhouse?
by Paul Jacob
Is the best way to reduce poverty always a government program?
Take the case of Wal-Mart. Many self-proclaimed advocates for the poor attack Wal-Mart ad nauseam as some kind of devil. But last year a study showed that the huge company lowers prices on products that poor people happen to buy. So much so, in fact, that Wal-Mart’s financial benefit to the poor proved greater than the federal government's entire Food Stamp program. The facts haven't yet stopped the attacks on Wal-Mart, though.
Now comes a new study by Matthew Ladner of Arizona’s Goldwater Institute and Paul Gessing of New Mexico’s Rio Grande Foundation. It’s entitled "Hood or Robin Hood? State Governments and the Reduction of Poverty."
The study found, "Although there are doubtlessly some who benefit from high state government spending, the poor do not seem to be among them."
Those states with the lowest per capita direct spending on the poor substantially lowered their poverty rates. But top spenders "not only failed to reduce poverty rates, they actually suffered an increase in poverty rates of 7.6 percent."
Quite a difference.
Governments claim to help the poor. But when taxes injure the businesses providing the jobs that lead out of poverty, and poverty programs tempt people to act in ways that lead to more poverty, governments do more harm than good.
Spending Us Into the Poorhouse?
by Paul Jacob
Is the best way to reduce poverty always a government program?
Take the case of Wal-Mart. Many self-proclaimed advocates for the poor attack Wal-Mart ad nauseam as some kind of devil. But last year a study showed that the huge company lowers prices on products that poor people happen to buy. So much so, in fact, that Wal-Mart’s financial benefit to the poor proved greater than the federal government's entire Food Stamp program. The facts haven't yet stopped the attacks on Wal-Mart, though.
Now comes a new study by Matthew Ladner of Arizona’s Goldwater Institute and Paul Gessing of New Mexico’s Rio Grande Foundation. It’s entitled "Hood or Robin Hood? State Governments and the Reduction of Poverty."
The study found, "Although there are doubtlessly some who benefit from high state government spending, the poor do not seem to be among them."
Those states with the lowest per capita direct spending on the poor substantially lowered their poverty rates. But top spenders "not only failed to reduce poverty rates, they actually suffered an increase in poverty rates of 7.6 percent."
Quite a difference.
Governments claim to help the poor. But when taxes injure the businesses providing the jobs that lead out of poverty, and poverty programs tempt people to act in ways that lead to more poverty, governments do more harm than good.
Pay Attention To China for The Drop of the USD and Rise in Gold
Paul Van Eeden. Only thing you need to know about this guy is his close rapport with Doug Casey. He does a good job breaking down trends and is long-term in his investment philosophy.
___________________________________________________________________
As usual, the market is over-thinking and over-analyzing the US Federal Reserve Open Market Committee Statement released Wednesday where the Fed conveyed its decision to keep the overnight interest rate steady at 5.25%. It appeared that the Fed's hawkish tone towards inflation was easing and even though the Fed expects the economy to continue to expand at a moderate pace over coming quarters, one has to wonder how much of the change in the Fed's tone is due to the current problems in the real estate sector.
While the dollar exchange rate showed little reaction to the Fed's statement, the equity markets in the US rallied, as did gold. That both gold and equities had the same response is to be expected: if the Fed is less likely than before to raise interest rates it may be more inclined to lower interest rates in the event economic activity takes a bigger hit from the real estate sector. Lower interest rates are good for stocks, lowering the borrowing costs of corporations and making bonds (which compete with stocks for capital) less attractive. Lower interest rates are also positive for the gold price since lower interest rates would most likely cause the dollar exchange rate to weaken, thereby increasing the gold price in US dollars.
But by Friday the market had changed its mind. According to interviews by Wall Street Journal journalists the market now thinks that Wednesday's Statement was not a move towards a dovish stance, but merely a move towards neutrality. In response to the change in sentiment the dollar rallied and the gold price fell.
As I said, I think people over-analyze these things. Short term fluctuations in the market are due to fickle emotional reactions by investors to new information, and are impossible to predict with any kind of consistency. On the other hand, longer term events that are based on fundamental changes or inconsistencies are far easier to predict even though the timing of such events is equally impossible to predict. Along those lines, a comment by the People's Bank of China's Governor, Zhou Xiaochuan, regarding that country's more than one trillion dollars' worth of foreign reserves, is far more important than what the Fed said this week.
Zhou was quoted as saying: "... many people say that foreign exchange reserves in China are large enough. We do not intend to go further and accumulate reserves.”
China's vast and rapidly growing foreign exchange reserves accumulate because China does not sell the surplus US dollars that it receives from its trade surplus with the United States into foreign exchange markets, but buys US debt with them instead. Under normal circumstances China would have sold its surplus US dollars and not accumulated such a vast foreign exchange reserve; however, the United States' trade deficit is so large that if China, Japan and Europe were to sell their trade dollars into foreign exchange markets the dollar exchange rate would collapse.
Last year the Organization for Economic Co-operation and Development (OECD) determined that the dollar had to fall by 35% to 50% in order to balance the US current account gap. My calculations of the dollar's over-valuation based on the gold price also suggest that the dollar has to fall by about 35%.
China does not have to sell any of its existing dollar reserves to precipitate a decline in the dollar -- all it has to do is stop accumulating dollars. The current US trade deficit with that country alone is running over $20 billion per month, and that is not an insignificant amount. If China stopped accumulating foreign reserves those dollars would be sold and I expect that when that happens, the dollar will fall.
Other Asian countries that helped prop up the dollar by accumulating foreign reserves may follow China and start selling their surplus trade dollars as well.
The ramifications are that there will subsequently be less demand for US Treasuries and agency debt. That will push US interest rates higher regardless of what the Fed says, and higher interest rates will be detrimental to US economic growth and US equities. One would expect that higher US interest rates would be positive for the dollar, but with surplus trade dollars hitting foreign exchange markets we can expect to see the dollar fall in tandem with rising interest rates. A falling US dollar in the face of rising US interest rates is the key event that I am waiting for to indicate that a significant and sustainable rise in the gold price is occurring. Until then the gold price should continue to creep upwards as a result of fiat money inflation.
___________________________________________________________________
As usual, the market is over-thinking and over-analyzing the US Federal Reserve Open Market Committee Statement released Wednesday where the Fed conveyed its decision to keep the overnight interest rate steady at 5.25%. It appeared that the Fed's hawkish tone towards inflation was easing and even though the Fed expects the economy to continue to expand at a moderate pace over coming quarters, one has to wonder how much of the change in the Fed's tone is due to the current problems in the real estate sector.
While the dollar exchange rate showed little reaction to the Fed's statement, the equity markets in the US rallied, as did gold. That both gold and equities had the same response is to be expected: if the Fed is less likely than before to raise interest rates it may be more inclined to lower interest rates in the event economic activity takes a bigger hit from the real estate sector. Lower interest rates are good for stocks, lowering the borrowing costs of corporations and making bonds (which compete with stocks for capital) less attractive. Lower interest rates are also positive for the gold price since lower interest rates would most likely cause the dollar exchange rate to weaken, thereby increasing the gold price in US dollars.
But by Friday the market had changed its mind. According to interviews by Wall Street Journal journalists the market now thinks that Wednesday's Statement was not a move towards a dovish stance, but merely a move towards neutrality. In response to the change in sentiment the dollar rallied and the gold price fell.
As I said, I think people over-analyze these things. Short term fluctuations in the market are due to fickle emotional reactions by investors to new information, and are impossible to predict with any kind of consistency. On the other hand, longer term events that are based on fundamental changes or inconsistencies are far easier to predict even though the timing of such events is equally impossible to predict. Along those lines, a comment by the People's Bank of China's Governor, Zhou Xiaochuan, regarding that country's more than one trillion dollars' worth of foreign reserves, is far more important than what the Fed said this week.
Zhou was quoted as saying: "... many people say that foreign exchange reserves in China are large enough. We do not intend to go further and accumulate reserves.”
China's vast and rapidly growing foreign exchange reserves accumulate because China does not sell the surplus US dollars that it receives from its trade surplus with the United States into foreign exchange markets, but buys US debt with them instead. Under normal circumstances China would have sold its surplus US dollars and not accumulated such a vast foreign exchange reserve; however, the United States' trade deficit is so large that if China, Japan and Europe were to sell their trade dollars into foreign exchange markets the dollar exchange rate would collapse.
Last year the Organization for Economic Co-operation and Development (OECD) determined that the dollar had to fall by 35% to 50% in order to balance the US current account gap. My calculations of the dollar's over-valuation based on the gold price also suggest that the dollar has to fall by about 35%.
China does not have to sell any of its existing dollar reserves to precipitate a decline in the dollar -- all it has to do is stop accumulating dollars. The current US trade deficit with that country alone is running over $20 billion per month, and that is not an insignificant amount. If China stopped accumulating foreign reserves those dollars would be sold and I expect that when that happens, the dollar will fall.
Other Asian countries that helped prop up the dollar by accumulating foreign reserves may follow China and start selling their surplus trade dollars as well.
The ramifications are that there will subsequently be less demand for US Treasuries and agency debt. That will push US interest rates higher regardless of what the Fed says, and higher interest rates will be detrimental to US economic growth and US equities. One would expect that higher US interest rates would be positive for the dollar, but with surplus trade dollars hitting foreign exchange markets we can expect to see the dollar fall in tandem with rising interest rates. A falling US dollar in the face of rising US interest rates is the key event that I am waiting for to indicate that a significant and sustainable rise in the gold price is occurring. Until then the gold price should continue to creep upwards as a result of fiat money inflation.
Sunday, March 25, 2007
Idaho? Who knew??!! You Go Idahoans!!
THE NEW WORLD DISORDER
Idaho lawmakers want out of SPP Resolution urges Congress to use 'all efforts, energies and diligence'
Posted: March 25, 2007 By Bob Unruh
© 2000 WorldNetDaily.com-->© 2007 WorldNetDaily.com
Lawmakers in Idaho have approved a "joint memorial" that urges the U.S. Congress to use "all efforts, energies and diligence" to get the United States out of the Security and Prosperity Partnership, a multinational plan that opponents believe is being used to blend the U.S., Mexico and Canada.
As WND has reported previously, many other state legislatures have resolutions pending that condemn the idea of a "North American Union," but Idaho's is the first to pass such a measure.
The "memorial," which is similar to a resolution, was written and adopted "to send the message to the Congress of the United States … that the First Regular Session of the Fifty-ninth Idaho Legislature … that the Congress of the United States, and particularly the congressional delegation representing the State of Idaho, are hereby urged and petitioned to use all of their efforts to withdraw the United States from any further participation in the Security and Prosperity Partnership of North America and any other bilateral or multilateral activity which seeks to advance, authorize, fund or in any way promote the creation of any structure to accomplish any form of North American Union."
The SPP, according to its own description, "was launched in March of 2005 as a trilateral effort to increase security and enhance prosperity among the United States, Canada and Mexico through greater cooperation and information sharing."
While federal officials, up to and including the White House, say that the plan doesn't and won't infringe on U.S. sovereignty, because it is just a dialogue among the nations, documents uncovered by WND show otherwise.
Commerce Secretary Carlos M. Gutierrez
A State Department cable released to WND shows Commerce Secretary Carlos Gutierrez has been pressing to implement major trilateral initiatives to help "capture the vision of North American integration."
The cable was among some 150 pages of State Department SPP documents recently released to WND under a Freedom of Information Act request.
Howard Phillips, who has formed a coalition to block development of a "North American Union" and formation of NAFTA superhighways, told WND the document "makes clear that the agenda of SPP is to pursue major economic integration that redefines U.S. businesses into a 'North American' definition."
"By leading with economics, SPP is crafting a North American regulatory structure that transforms U.S. regulations by 'harmonizing' them with Mexican and Canadian regulations, all without specific congressional approval," said Phillips, chairman of the Conservative Caucus.
The State Department communiqué, dated May 20, 2005, documents a March 13, 2005, meeting between Gutierrez, Mexican Secretary of Economy Fernando Canales and Canadian Privy Council Assistant Secretary Phil Ventura. The meeting was held just prior to the announcement of SPP at the trilateral summit with the country's three leaders in Waco, Texas, March 23, 2005.
The cable notes Gutierrez opened the discussion by stressing that the July 23, 2005, "Report to Leaders" needed "to show results" that would be "enduring and create an on-going process."
Gutierrez suggested each working group should propose one "big ticket" issue, rather than the "50-60 smaller initiatives" that were then in the SPP "matrix," allowing the "SPP ministers" to capture the attention of the "SPP leaders" with major North American integration goals that were both tangible and important.
Officials report that Idaho was one of 14 state legislatures where such resolutions have been introduced to oppose the SPP and North American Union. Only Idaho has completed the approval process, and in one other state, Utah, the Senate failed to vote on that state's encouragement to have the U.S. withdraw from the SPP.
Other states where proposals are pending are Arizona (S.C.M. 1002), Illinois (H.J.R. 29), Georgia (S.R. 124), Missouri (S.C.R. 15 and H.C.R. 33), Montana (H.J.R. 25), Oklahoma (S.C.R. 10), Oregon (S.J.M. 5), South Carolina (S. 416 and H. 3185), South Dakota (S.C.R. 7), Tennessee (S.J.R. 88), Virginia (S.J.R. 442 and S.J.R. 387), and Washington (H.J.M. 4018 and S.J.M. 8004).
The Idaho plan noted that "actions taken by the SPP to coordinate border security by eliminating obstacles to migration between Mexico and United States actually makes the United States-Mexico border less secure and more vulnerable to possible terrorist activities, and Mexico is the primary source of illegal immigrants, illegal drug entry and illegal human smuggling into the United States."
The document also noted that the U.S. Department of Commerce confirms that U.S. trade deficits with Mexico and Canada have significantly increased since the North American Free Trade Agreement was launched.
"The stability and economic viability of the U.S. ports along the western coast will be seriously compromised by huge cargos off-loaded by cheaper labor costs from foreign traders into the ports of Mazatlan and Lazaro Cardenas."
The vast increase in trucking that would trigger then would "threaten the American people and undermine the very charge given to our homeland security agency to defend our borders against these threats."
"WHEREAS, we strongly object to any treaty or agreement, which threatens to violate national security, private property, United States commerce, constitutional rights and American sovereignty…"
"Be it further resolved that we are asking our congressional delegation, our U.S. Department of Transportation Secretary Mary E. Peters and President Bush to reject appropriated federal fuel tax dollars for such SPP or NAFTA."
Idaho lawmakers want out of SPP Resolution urges Congress to use 'all efforts, energies and diligence'
Posted: March 25, 2007 By Bob Unruh
© 2000 WorldNetDaily.com-->© 2007 WorldNetDaily.com
Lawmakers in Idaho have approved a "joint memorial" that urges the U.S. Congress to use "all efforts, energies and diligence" to get the United States out of the Security and Prosperity Partnership, a multinational plan that opponents believe is being used to blend the U.S., Mexico and Canada.
As WND has reported previously, many other state legislatures have resolutions pending that condemn the idea of a "North American Union," but Idaho's is the first to pass such a measure.
The "memorial," which is similar to a resolution, was written and adopted "to send the message to the Congress of the United States … that the First Regular Session of the Fifty-ninth Idaho Legislature … that the Congress of the United States, and particularly the congressional delegation representing the State of Idaho, are hereby urged and petitioned to use all of their efforts to withdraw the United States from any further participation in the Security and Prosperity Partnership of North America and any other bilateral or multilateral activity which seeks to advance, authorize, fund or in any way promote the creation of any structure to accomplish any form of North American Union."
The SPP, according to its own description, "was launched in March of 2005 as a trilateral effort to increase security and enhance prosperity among the United States, Canada and Mexico through greater cooperation and information sharing."
While federal officials, up to and including the White House, say that the plan doesn't and won't infringe on U.S. sovereignty, because it is just a dialogue among the nations, documents uncovered by WND show otherwise.
Commerce Secretary Carlos M. Gutierrez
A State Department cable released to WND shows Commerce Secretary Carlos Gutierrez has been pressing to implement major trilateral initiatives to help "capture the vision of North American integration."
The cable was among some 150 pages of State Department SPP documents recently released to WND under a Freedom of Information Act request.
Howard Phillips, who has formed a coalition to block development of a "North American Union" and formation of NAFTA superhighways, told WND the document "makes clear that the agenda of SPP is to pursue major economic integration that redefines U.S. businesses into a 'North American' definition."
"By leading with economics, SPP is crafting a North American regulatory structure that transforms U.S. regulations by 'harmonizing' them with Mexican and Canadian regulations, all without specific congressional approval," said Phillips, chairman of the Conservative Caucus.
The State Department communiqué, dated May 20, 2005, documents a March 13, 2005, meeting between Gutierrez, Mexican Secretary of Economy Fernando Canales and Canadian Privy Council Assistant Secretary Phil Ventura. The meeting was held just prior to the announcement of SPP at the trilateral summit with the country's three leaders in Waco, Texas, March 23, 2005.
The cable notes Gutierrez opened the discussion by stressing that the July 23, 2005, "Report to Leaders" needed "to show results" that would be "enduring and create an on-going process."
Gutierrez suggested each working group should propose one "big ticket" issue, rather than the "50-60 smaller initiatives" that were then in the SPP "matrix," allowing the "SPP ministers" to capture the attention of the "SPP leaders" with major North American integration goals that were both tangible and important.
Officials report that Idaho was one of 14 state legislatures where such resolutions have been introduced to oppose the SPP and North American Union. Only Idaho has completed the approval process, and in one other state, Utah, the Senate failed to vote on that state's encouragement to have the U.S. withdraw from the SPP.
Other states where proposals are pending are Arizona (S.C.M. 1002), Illinois (H.J.R. 29), Georgia (S.R. 124), Missouri (S.C.R. 15 and H.C.R. 33), Montana (H.J.R. 25), Oklahoma (S.C.R. 10), Oregon (S.J.M. 5), South Carolina (S. 416 and H. 3185), South Dakota (S.C.R. 7), Tennessee (S.J.R. 88), Virginia (S.J.R. 442 and S.J.R. 387), and Washington (H.J.M. 4018 and S.J.M. 8004).
The Idaho plan noted that "actions taken by the SPP to coordinate border security by eliminating obstacles to migration between Mexico and United States actually makes the United States-Mexico border less secure and more vulnerable to possible terrorist activities, and Mexico is the primary source of illegal immigrants, illegal drug entry and illegal human smuggling into the United States."
The document also noted that the U.S. Department of Commerce confirms that U.S. trade deficits with Mexico and Canada have significantly increased since the North American Free Trade Agreement was launched.
"The stability and economic viability of the U.S. ports along the western coast will be seriously compromised by huge cargos off-loaded by cheaper labor costs from foreign traders into the ports of Mazatlan and Lazaro Cardenas."
The vast increase in trucking that would trigger then would "threaten the American people and undermine the very charge given to our homeland security agency to defend our borders against these threats."
"WHEREAS, we strongly object to any treaty or agreement, which threatens to violate national security, private property, United States commerce, constitutional rights and American sovereignty…"
"Be it further resolved that we are asking our congressional delegation, our U.S. Department of Transportation Secretary Mary E. Peters and President Bush to reject appropriated federal fuel tax dollars for such SPP or NAFTA."
Holy Crap! Did McCain Actually Bring Up a Real Issue??!!
Just when you think no one in Washington DC is paying attention, John McCain brings up the spread of Socialism (in South America) as a danger! Where've you been John??!! The Dems see no problem as that's what they want here in these United States anyways. Socialism is the ultimate crime against individualism and mankind, I hope John keeps it as an issue. Socialism has crept in noisily to our land and needs to be eradicated immediately. We'll see.
McCain Warns Against Spread of Socialism
Mar 21 02:42 PM US/EasternBy CURT ANDERSONAssociated Press Writer
MIAMI (AP) - Republican presidential candidate John McCain warned on Wednesday against the spread of socialism in Latin America and pledged to give the region renewed U.S. attention if elected.
Appearing in Little Havana, McCain carefully avoided criticism of President Bush but said the Iraq war "has diverted attention from our hemisphere and we have paid a penalty for that" in the form of a growing leftism embodied by leaders Hugo Chavez in Venezuela and Evo Morales in Bolivia.
In a speech to veterans of the ill-fated, CIA-backed Bay of Pigs invasion of Cuba in 1961, McCain said his first trip if elected to the White House in 2008 would be to Mexico, Canada and Latin America "to reaffirm my commitment to our hemisphere and the importance of relations within our hemisphere."
The Arizona senator said that "everyone should understand the connections" between Chavez, Morales and communist Cuban President Fidel Castro.
"They inspire each other. They assist each other. They get ideas from each other," McCain said. "It's very disturbing."
Cuban-Americans are a key voting bloc in electoral-rich Florida and typically cast their ballots for Republicans.
As president, McCain said he would work on political, diplomatic and economic fronts to counter the rise of socialism, including efforts to spread free trade. Yet the United States must also stress the advantages of capitalism and democracy to win "a war of ideas" in the region, he said.
McCain had a clearly receptive audience among the aging Bay of Pigs veterans, who consider him a hero for the years he spent as a prisoner of war in what was then communist North Vietnam. The group's president, former CIA agent Felix Rodriguez, noted McCain's years in captivity in his introduction and said: "It's a distinct honor to have you."
McCain was presented with a copy of the book "Against All Hope" by former Cuban political prisoner Armando Valladares, who was frequently tortured during his 22 years in a Cuban prison. McCain said that while he was in Hanoi, a Cuban agent came to show his Vietnamese captors "some new interrogation techniques" and he later discovered that the same agent had also tortured Valladares.
"Anything that I and my friends might have experienced is nothing—nothing—compared with what the men in this room went through," McCain said.
McCain said all the right things about Cuba for this audience, where a half-dozen men talked politics in Spanish and smoked morning cigars before the senator arrived. McCain told them he wouldn't support lifting the U.S. economic embargo against Cuba until there were free elections, human rights and release of all political prisoners.
Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
McCain Warns Against Spread of Socialism
Mar 21 02:42 PM US/EasternBy CURT ANDERSONAssociated Press Writer
MIAMI (AP) - Republican presidential candidate John McCain warned on Wednesday against the spread of socialism in Latin America and pledged to give the region renewed U.S. attention if elected.
Appearing in Little Havana, McCain carefully avoided criticism of President Bush but said the Iraq war "has diverted attention from our hemisphere and we have paid a penalty for that" in the form of a growing leftism embodied by leaders Hugo Chavez in Venezuela and Evo Morales in Bolivia.
In a speech to veterans of the ill-fated, CIA-backed Bay of Pigs invasion of Cuba in 1961, McCain said his first trip if elected to the White House in 2008 would be to Mexico, Canada and Latin America "to reaffirm my commitment to our hemisphere and the importance of relations within our hemisphere."
The Arizona senator said that "everyone should understand the connections" between Chavez, Morales and communist Cuban President Fidel Castro.
"They inspire each other. They assist each other. They get ideas from each other," McCain said. "It's very disturbing."
Cuban-Americans are a key voting bloc in electoral-rich Florida and typically cast their ballots for Republicans.
As president, McCain said he would work on political, diplomatic and economic fronts to counter the rise of socialism, including efforts to spread free trade. Yet the United States must also stress the advantages of capitalism and democracy to win "a war of ideas" in the region, he said.
McCain had a clearly receptive audience among the aging Bay of Pigs veterans, who consider him a hero for the years he spent as a prisoner of war in what was then communist North Vietnam. The group's president, former CIA agent Felix Rodriguez, noted McCain's years in captivity in his introduction and said: "It's a distinct honor to have you."
McCain was presented with a copy of the book "Against All Hope" by former Cuban political prisoner Armando Valladares, who was frequently tortured during his 22 years in a Cuban prison. McCain said that while he was in Hanoi, a Cuban agent came to show his Vietnamese captors "some new interrogation techniques" and he later discovered that the same agent had also tortured Valladares.
"Anything that I and my friends might have experienced is nothing—nothing—compared with what the men in this room went through," McCain said.
McCain said all the right things about Cuba for this audience, where a half-dozen men talked politics in Spanish and smoked morning cigars before the senator arrived. McCain told them he wouldn't support lifting the U.S. economic embargo against Cuba until there were free elections, human rights and release of all political prisoners.
Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Iran Messes With The British And Is Winning!
OMG! Iran is giving them a reason to go in and kick their asses, and the plucky British are relying on "diplomacy?" Why are they holding back? (I mean besides the fact that the British gov't just cut the size of their own navy in half! An island nation with half a navy! Go figure!) If we were going to mess with the Persians, this was an opportunity handed over on a silver platter! Talk about bold provocation! Maybe we're in worse shape in the Middle-East than is being reported. Or maybe the Iranians are militarily stronger than we think. Otherwise there'd be Air Raid sirens going off in Tehran.
BRITISH FORCES HELD BY IRAN
Friday, March 23, 2007 - FreeMarketNews.com
Fifteen British Navy personnel have been captured at gunpoint by Iranian forces, the Ministry of Defence says. The men were seized at 1030 local time when they boarded a boat in the Gulf, off the coast of Iraq, which they suspected was smuggling cars. -BBC
BRITISH FORCES HELD BY IRAN
Friday, March 23, 2007 - FreeMarketNews.com
Fifteen British Navy personnel have been captured at gunpoint by Iranian forces, the Ministry of Defence says. The men were seized at 1030 local time when they boarded a boat in the Gulf, off the coast of Iraq, which they suspected was smuggling cars. -BBC
The North American Union Effort Needs To Be Stopped!
(I'm simply aghast that more Americans aren't screaming from the rooftops as our hard-won independence is being subjugated by a New World Order edict bent on our economic demise. Wake up America, before it's too late.)
An American Union under Bush
By Jerry Mazza Online Journal Associate Editor Mar 23, 2007,
The establishment of a Union of the Americas is the longed for wish of the neocon colonizers and their current enabler, George W. Bush. It is to be accomplished with the help of the North American Union (with Canada), Clinton’s NAFTA (North American Free Trade Agreement) and Bush’s own CAFTA (Central American Free Trade Agreement).
The idea is to mix the United States, North and eventually South Americas into one banquet for the multi-national corporations to gobble. In the chewing and gnashing of nations, their laws and unions, labor would be fairly well digested into you know what.
In fact NAFTA is already being used to offshore U.S. transportation jobs to Mexico. Writing for the Monthly Review, David Vogel tells us, “Capital’s relentless search for cheap labor constantly alters the flow of surface transportation in North America with widespread consequences.
“The end-of-century deindustrialization of the United States and importation of cheap commodities from the Far East through the West Coast reversed historical east-west transportation patterns and established Los Angeles and Long Beach as the largest ports in the nation. To minimize transportation costs, which for many products are higher than the cost of production . . . transportation of containerized imports was developed.
“Manufactured goods are packed into mobile shipping containers at factories in the Far East and travel by ship, train, and truck to distribution centers and, ultimately, consumer outlets across the United States. Currently, intermodal transportation of cheap imported commodities is the lifeline of the American economy. In 2004, the Port of Los Angeles processed 7.3 million container units and Long Beach handled 5.8 million.
“These two ports alone accounted for 68 percent of the West Coast total and are, by far, the largest employers in California. U.S. workers, who have seen so many lucrative manufacturing jobs moved overseas, assumed that import transportation and distribution jobs could not be offshored and were, therefore, relatively secure.
“Current transportation trends are proving labor’s assumption to be dead wrong. Sparked by organized resistance and wildcat actions by workers against falling wages and deteriorating working conditions at America’s ports and on the nation’s highways, the flow of container traffic is being shifted to a south-north orientation.
“By leveraging both the U.S. and Mexican governments and taking advantage of the terms of the North American Free Trade Agreement (NAFTA), big capital is developing container terminals in Mexico and using that country as a land bridge and labor pool to deliver shipping containers to destinations in the United States at discount prices.”
The trend is responsible for a mammoth 450 percent increase of container units to and through the Pacific ports of Mexico since NAFTA went into effect in 1995. The intention really is to undermine the working class on both sides of the border, significantly pitting one against the other. This plan has been facilitated by developing huge transportation corridors in the US and Mexico, along with extensive exploitation of Mexican labor to build and operate the system.
This involved establishing the NAFTA Railway (Transportacion Ferroviaria Mexicana, Texas Mexican Railway, and Kansas City Southern Railway, all merged under the latter’s control). It began operations in the Lazaro Cardenas-Kansas City Transportation Corridor in 2003 and gives you a picture of capitalists’ offshoring plan in action.
Even though the NAFTA route from the center of the Pacific Rim, Shanghai, including its overseas voyage, is almost 2,000 miles longer, a 30 percent increase in mileage, a 15 percent savings over LA or Long Beach arrival is being promised to customers. That’s the capitalists’ bottom line.
The Lazaro Cardenas-Kansas City transportation corridor
For a closer, if not frightening, look at the “Two Worlds—One Route”, click on the link to the left. Behind this KC Corridor is Kansas City SmartPort. It bills itself as “a non-profit economic development organization formed to promote and enhance the Kansas City metro area’s status as America’s Inland Port Solution.”
It goes on to say, “KC SmartPort.com, the online component of Kansas City SmartPort, Inc., has been created to assist companies with transportation and logistics activities. The pitch continues, “from basic industry information to locating service companies and improving supply chain logistics, SmartPort is America’s inland port solution.” Sounds benign, but it’s economically lethal for Kansas, Dorothy, the United States and Mexico. Since 1999, the preponderance of truck traffic of the KC Corridor has been massive, with well over 4 million trucks per year crossing the southern US border and headed north.
Add to that, the huge NAFTA highways converging, crossing the international border at Laredo. When they enter the US, they join with some of the most heavily trafficked sections of the Interstate Highway system, notably I-35, running through the center of Texas, Oklahoma and Kansas, now nicknamed the “NAFTA Superhighway.” When the I-35 Corridor is completed it will cut 1,600 miles north to the US/Canada border, serving San Antonio, Austin Dallas/Ft. Worth, Oklahoma City, Wichita, Kansas City, Des Moines, Minneapolis/St Paul, Duluth, and if they have their way, all points north. But that’s not nearly all.
There is a proposed I-69 Corridor coming, originating in Laredo, that cuts northeast, serving Houston, Texarkana, Memphis, Evansville, Indianapolis, and Lansing to the US/Canada border so far, approximately 2,100 miles long at Port Huron. It is called the largest engineering project undertaken in US history. Of course, what they don’t mention is the price tag and how the construction will deface the environment and work force of America forever.
The monstrous size of the corridor
The NAFTA Corridor will be 1,200 feet wide, with separate lanes for passenger vehicles (three in each direction), sandwiched between truck lanes (two in each direction). Plus, the corridors will feature six rail lines (three in each direction), with two tracks for high-speed passenger rail, two for commuter rail, and two for freight.
The third part of the corridor will be a 200-foot wide utility zone, which can be filled in time with Burger Kings, MacDonald’s, and private space for people to stop and cry over what used to be their United States of America, one nation under god (for the religious), and under law (for the secular); a nation that used to protect their people, not serve them up for lunch on the free market counter.
This new hemispheric marketing monster/corridor, its underground utilities plus grade level railways and extensive bridging at crossovers and intersections, amount to 146 acres of right-of-way per mile. That means a land banquet for NAFTA corridors of 584,000 acres in Texas alone.
Total land consumption in the US for the NAFTA corridors could top one million, that’s one million acres. Since the corridors are routed for rural areas, they’ll eat up a total area of agricultural land and open spaces nearly as large as Vermont’s land area. So the corridors will be a state of environmental disaster, especially when you think of the pollution.
What with 82,000 plus vehicles a day by 2025, including 18,000 trucks (just for I-35), and with a speed limit of 80 mph, and with semi and tandem-trailer trucks ten feet longer and five tons heavier than anything on the road today, you will be welcomed to the future. With levels of air, water, and land pollution that far exceed those happening along the current NAFTA highway. As of now, in hotspots along I-10 east of Houston, you find the nation’s highest death rates from diesel particulate emissions. Sound like hell? It is. And here’s the itemized tab.
El tab-o for Texas alone
How’s $31.4 million a mile -- the 4,000-mile Texas sections some $125.5 billion, right-of-way and miscellaneous costs (and batteries) not included? R-O-W costs are $11.7-$38 billion, miscellaneous, $8-$20 billion. Total estimated outlay for NAFTA Texas corridors from $145.2 billion to $183.5 billion.
And despite the fact that these corridors will be toll roads, most profits will go to “private entities” under “exclusive development agreements with the “various state governments.” This is a massive move to privatize highways, in sharp contrast to the US Interstate Highway System built with public money for the nation’s public at large. If this doesn’t piss you off to perdition, we’re lost.
Offshoring US transportation jobs
Naturally, this whole plan takes an army of labor (with capital looking for the cheapest) to maximize profits. And Profit, that’s the new God of the free market. Pardon the editorializing, but while free-marketers turn our countrymen and our country into dog food, don’t talk to me about Profit. Let’s eat these guys alive.
The Profit in it is for a pack of useless suits, sitting around boardroom tables and their haciendas, cutting up pieces of your butt for lunch. Everything the US and Canada and Mexico ever worked for is the Profit. And a million American workers could end up working on this chain gang for lunch, and tens of thousands delivered daily from elsewhere “off the books.” It’s out of this world unbelievable. You can hear the labor vacuum sucking up workers down to the bottom of South America and spiting them up to the farthest reaches of Canada.
With Bush advocating a “guest worker” program for immigrants, and through their use, either legal or illegal, there stands to be unequaled offshoring of quality US transportation jobs: crane operators, warehouse workers, longshoremen, railroad construction and maintenance workers and supervisors, long haul and local truck drivers, a literal army of support workers for the network. Ironically, the privatization of Mexico and NAFTA has opened the door to the deconstruction of labor in the United States.
Todos privatization
Thanks to the IMF and World Bank, you have only to look at the privatization of Mexico to see the effects. Privatized victims include Telmex, the national telephone company; Aero Mexico, the national airline; the state-owned copper mines; 100 percent foreign investment in terminal ownership, 49 percent in each port’s operating authority. A multibillion-dollar megaport at Punta Colonet is already planned to divert the import of Far East imports that presently go to LA and Long Beach to Mexico instead. For the full scheme read the Monthly Review article in full. And for the sake of brevity, let’s turn our heads north.
NAFTA Corridors to hook up with a North American Union
It took a Republican maverick, Representative Ron Paul, from Texas to spell it out simply: Superhighway about North American Union. As of October 30, 2006, Paul “denounced plans for the proposed ‘NAFTA superhighway’ in his state as part of a larger plot for merger of the U.S., Canada and Mexico into a North American Union.
“‘By now many Texans have heard about the proposed ‘NAFTA Superhighway,’ which is also referred to as the trans-Texas corridor,’ Paul said in a statement. ‘What you may not know is the extent to which plans for such a superhighway are moving forward without congressional oversight or media attention.’”
Paul explained that most members of Congress are unaware of the plans because only relatively small amounts of money have been spent studying the plans and those allocations were included in “enormous transportation appropriations bills.”
He added, “The ultimate goal is not simply a superhighway but an integrated North American Union -- complete with a currency, a cross-national bureaucracy and virtually borderless travel within the union. Like the European Union, a North American Union would represent another step toward the abolition of national sovereignty altogether.”
It would certainly do that and usher in a corporate hegemony that will turn North America’s people into a cultural and economic oatmeal, feed for the free-marketers, free to pirate North America and then cross over to Central and South America.
So, buyer, citizen, American, Canadian, Mexican, Central and South American, beware! Beware of one America under Bush, or any of his free-market followers. Fight back, wherever you are. Because it is your country they will desecrate. And these men’s allegiance is to no country, only to the turf of their greed.
These men form the multi-national octopus whose giant tentacles swirl in all directions, forever starved for more prey. We don’t need more of them but less, less of their economics of selfishness, less disregard for the common good, less hollow economic hit men. Let us begin by dislodging their current enablers, Bush, Cheney, et al, and their wars, and return the country to its people, before there is nothing left to save.
An American Union under Bush
By Jerry Mazza Online Journal Associate Editor Mar 23, 2007,
The establishment of a Union of the Americas is the longed for wish of the neocon colonizers and their current enabler, George W. Bush. It is to be accomplished with the help of the North American Union (with Canada), Clinton’s NAFTA (North American Free Trade Agreement) and Bush’s own CAFTA (Central American Free Trade Agreement).
The idea is to mix the United States, North and eventually South Americas into one banquet for the multi-national corporations to gobble. In the chewing and gnashing of nations, their laws and unions, labor would be fairly well digested into you know what.
In fact NAFTA is already being used to offshore U.S. transportation jobs to Mexico. Writing for the Monthly Review, David Vogel tells us, “Capital’s relentless search for cheap labor constantly alters the flow of surface transportation in North America with widespread consequences.
“The end-of-century deindustrialization of the United States and importation of cheap commodities from the Far East through the West Coast reversed historical east-west transportation patterns and established Los Angeles and Long Beach as the largest ports in the nation. To minimize transportation costs, which for many products are higher than the cost of production . . . transportation of containerized imports was developed.
“Manufactured goods are packed into mobile shipping containers at factories in the Far East and travel by ship, train, and truck to distribution centers and, ultimately, consumer outlets across the United States. Currently, intermodal transportation of cheap imported commodities is the lifeline of the American economy. In 2004, the Port of Los Angeles processed 7.3 million container units and Long Beach handled 5.8 million.
“These two ports alone accounted for 68 percent of the West Coast total and are, by far, the largest employers in California. U.S. workers, who have seen so many lucrative manufacturing jobs moved overseas, assumed that import transportation and distribution jobs could not be offshored and were, therefore, relatively secure.
“Current transportation trends are proving labor’s assumption to be dead wrong. Sparked by organized resistance and wildcat actions by workers against falling wages and deteriorating working conditions at America’s ports and on the nation’s highways, the flow of container traffic is being shifted to a south-north orientation.
“By leveraging both the U.S. and Mexican governments and taking advantage of the terms of the North American Free Trade Agreement (NAFTA), big capital is developing container terminals in Mexico and using that country as a land bridge and labor pool to deliver shipping containers to destinations in the United States at discount prices.”
The trend is responsible for a mammoth 450 percent increase of container units to and through the Pacific ports of Mexico since NAFTA went into effect in 1995. The intention really is to undermine the working class on both sides of the border, significantly pitting one against the other. This plan has been facilitated by developing huge transportation corridors in the US and Mexico, along with extensive exploitation of Mexican labor to build and operate the system.
This involved establishing the NAFTA Railway (Transportacion Ferroviaria Mexicana, Texas Mexican Railway, and Kansas City Southern Railway, all merged under the latter’s control). It began operations in the Lazaro Cardenas-Kansas City Transportation Corridor in 2003 and gives you a picture of capitalists’ offshoring plan in action.
Even though the NAFTA route from the center of the Pacific Rim, Shanghai, including its overseas voyage, is almost 2,000 miles longer, a 30 percent increase in mileage, a 15 percent savings over LA or Long Beach arrival is being promised to customers. That’s the capitalists’ bottom line.
The Lazaro Cardenas-Kansas City transportation corridor
For a closer, if not frightening, look at the “Two Worlds—One Route”, click on the link to the left. Behind this KC Corridor is Kansas City SmartPort. It bills itself as “a non-profit economic development organization formed to promote and enhance the Kansas City metro area’s status as America’s Inland Port Solution.”
It goes on to say, “KC SmartPort.com, the online component of Kansas City SmartPort, Inc., has been created to assist companies with transportation and logistics activities. The pitch continues, “from basic industry information to locating service companies and improving supply chain logistics, SmartPort is America’s inland port solution.” Sounds benign, but it’s economically lethal for Kansas, Dorothy, the United States and Mexico. Since 1999, the preponderance of truck traffic of the KC Corridor has been massive, with well over 4 million trucks per year crossing the southern US border and headed north.
Add to that, the huge NAFTA highways converging, crossing the international border at Laredo. When they enter the US, they join with some of the most heavily trafficked sections of the Interstate Highway system, notably I-35, running through the center of Texas, Oklahoma and Kansas, now nicknamed the “NAFTA Superhighway.” When the I-35 Corridor is completed it will cut 1,600 miles north to the US/Canada border, serving San Antonio, Austin Dallas/Ft. Worth, Oklahoma City, Wichita, Kansas City, Des Moines, Minneapolis/St Paul, Duluth, and if they have their way, all points north. But that’s not nearly all.
There is a proposed I-69 Corridor coming, originating in Laredo, that cuts northeast, serving Houston, Texarkana, Memphis, Evansville, Indianapolis, and Lansing to the US/Canada border so far, approximately 2,100 miles long at Port Huron. It is called the largest engineering project undertaken in US history. Of course, what they don’t mention is the price tag and how the construction will deface the environment and work force of America forever.
The monstrous size of the corridor
The NAFTA Corridor will be 1,200 feet wide, with separate lanes for passenger vehicles (three in each direction), sandwiched between truck lanes (two in each direction). Plus, the corridors will feature six rail lines (three in each direction), with two tracks for high-speed passenger rail, two for commuter rail, and two for freight.
The third part of the corridor will be a 200-foot wide utility zone, which can be filled in time with Burger Kings, MacDonald’s, and private space for people to stop and cry over what used to be their United States of America, one nation under god (for the religious), and under law (for the secular); a nation that used to protect their people, not serve them up for lunch on the free market counter.
This new hemispheric marketing monster/corridor, its underground utilities plus grade level railways and extensive bridging at crossovers and intersections, amount to 146 acres of right-of-way per mile. That means a land banquet for NAFTA corridors of 584,000 acres in Texas alone.
Total land consumption in the US for the NAFTA corridors could top one million, that’s one million acres. Since the corridors are routed for rural areas, they’ll eat up a total area of agricultural land and open spaces nearly as large as Vermont’s land area. So the corridors will be a state of environmental disaster, especially when you think of the pollution.
What with 82,000 plus vehicles a day by 2025, including 18,000 trucks (just for I-35), and with a speed limit of 80 mph, and with semi and tandem-trailer trucks ten feet longer and five tons heavier than anything on the road today, you will be welcomed to the future. With levels of air, water, and land pollution that far exceed those happening along the current NAFTA highway. As of now, in hotspots along I-10 east of Houston, you find the nation’s highest death rates from diesel particulate emissions. Sound like hell? It is. And here’s the itemized tab.
El tab-o for Texas alone
How’s $31.4 million a mile -- the 4,000-mile Texas sections some $125.5 billion, right-of-way and miscellaneous costs (and batteries) not included? R-O-W costs are $11.7-$38 billion, miscellaneous, $8-$20 billion. Total estimated outlay for NAFTA Texas corridors from $145.2 billion to $183.5 billion.
And despite the fact that these corridors will be toll roads, most profits will go to “private entities” under “exclusive development agreements with the “various state governments.” This is a massive move to privatize highways, in sharp contrast to the US Interstate Highway System built with public money for the nation’s public at large. If this doesn’t piss you off to perdition, we’re lost.
Offshoring US transportation jobs
Naturally, this whole plan takes an army of labor (with capital looking for the cheapest) to maximize profits. And Profit, that’s the new God of the free market. Pardon the editorializing, but while free-marketers turn our countrymen and our country into dog food, don’t talk to me about Profit. Let’s eat these guys alive.
The Profit in it is for a pack of useless suits, sitting around boardroom tables and their haciendas, cutting up pieces of your butt for lunch. Everything the US and Canada and Mexico ever worked for is the Profit. And a million American workers could end up working on this chain gang for lunch, and tens of thousands delivered daily from elsewhere “off the books.” It’s out of this world unbelievable. You can hear the labor vacuum sucking up workers down to the bottom of South America and spiting them up to the farthest reaches of Canada.
With Bush advocating a “guest worker” program for immigrants, and through their use, either legal or illegal, there stands to be unequaled offshoring of quality US transportation jobs: crane operators, warehouse workers, longshoremen, railroad construction and maintenance workers and supervisors, long haul and local truck drivers, a literal army of support workers for the network. Ironically, the privatization of Mexico and NAFTA has opened the door to the deconstruction of labor in the United States.
Todos privatization
Thanks to the IMF and World Bank, you have only to look at the privatization of Mexico to see the effects. Privatized victims include Telmex, the national telephone company; Aero Mexico, the national airline; the state-owned copper mines; 100 percent foreign investment in terminal ownership, 49 percent in each port’s operating authority. A multibillion-dollar megaport at Punta Colonet is already planned to divert the import of Far East imports that presently go to LA and Long Beach to Mexico instead. For the full scheme read the Monthly Review article in full. And for the sake of brevity, let’s turn our heads north.
NAFTA Corridors to hook up with a North American Union
It took a Republican maverick, Representative Ron Paul, from Texas to spell it out simply: Superhighway about North American Union. As of October 30, 2006, Paul “denounced plans for the proposed ‘NAFTA superhighway’ in his state as part of a larger plot for merger of the U.S., Canada and Mexico into a North American Union.
“‘By now many Texans have heard about the proposed ‘NAFTA Superhighway,’ which is also referred to as the trans-Texas corridor,’ Paul said in a statement. ‘What you may not know is the extent to which plans for such a superhighway are moving forward without congressional oversight or media attention.’”
Paul explained that most members of Congress are unaware of the plans because only relatively small amounts of money have been spent studying the plans and those allocations were included in “enormous transportation appropriations bills.”
He added, “The ultimate goal is not simply a superhighway but an integrated North American Union -- complete with a currency, a cross-national bureaucracy and virtually borderless travel within the union. Like the European Union, a North American Union would represent another step toward the abolition of national sovereignty altogether.”
It would certainly do that and usher in a corporate hegemony that will turn North America’s people into a cultural and economic oatmeal, feed for the free-marketers, free to pirate North America and then cross over to Central and South America.
So, buyer, citizen, American, Canadian, Mexican, Central and South American, beware! Beware of one America under Bush, or any of his free-market followers. Fight back, wherever you are. Because it is your country they will desecrate. And these men’s allegiance is to no country, only to the turf of their greed.
These men form the multi-national octopus whose giant tentacles swirl in all directions, forever starved for more prey. We don’t need more of them but less, less of their economics of selfishness, less disregard for the common good, less hollow economic hit men. Let us begin by dislodging their current enablers, Bush, Cheney, et al, and their wars, and return the country to its people, before there is nothing left to save.
Saturday, March 24, 2007
Why Have Americans Become Socialist/Collectvist Faggots?
Absolutely tremendous essay from the folks at dailyreckoning.com
I emailed some of my conservative friends this email and they're still scratching their heads. Seems people have forgotten the true pioneer spirit that this country was originally based on. Of course, if you're paying up to 60% of your earnings and purchases in taxes, then you might indignantly demand to be bailed out for every hangnail and garden-variety cold. But I think our Founding Fathers would be embarrassed at what their hard work has wrought. A nation of whiners, complainers and freeloaders; willing to give up their hard won freedoms and money to a group of bureaucrats bent on this nation's economic destruction. Most of it is by the hand of "The Greatest Generation," (Brokaw is a drama-queen) but history will hold them as the generation that went to sleep in front of their TV sets whilst demanding more free heat, food and social security.
*** The subject before us is the direction taken by modern politics. Why is George W. Bush telling Latinos that America is committed to ‘social justice’ rather than the more modest, old-fashioned ‘justice’? And howcometh it to be that ‘liberals’ in America are opposed to the ‘liberal’ideas of the 19th century...and that now even ‘conservatives’ in Americaare opposed to the ‘conservatism’ of their grandfathers?In the discussion that follows, we propose a theory.We recall from yesterday that there are two large themes in modernpolitical theory - individualism and collectivism. Individualism is theidea that a man should look after himself. ‘Justice’ is done, according tothis view of things, when he isn’t improperly interfered with. The world,then, takes whatever shape it takes, based upon mankind’s aggregatedindividual results. Collectivism, on the other hand, is that idea that the political ‘collective’ - the state - should look out for everyone. It implies thatthe shape of society - the outcome - is not left to chance, but decidedcollectively, or by the collective’s elite ministers. ‘Social justice’ iswhat you get when the elite likes the results. America, in theory as in actual fact, was a nation founded on the rock of individualism. It didn’t matter what the elite liked. But now its ‘conservative’ president proposes a concept of justice that Marx or Leninwould have appreciated. Not only that, but he spends the nation’s bloodand treasure trying to make governments half-way around the world more to his liking. And he takes hundreds of billions of dollars from individuals- many of them not even born yet - to reward favored groups with drugs,bread, circuses or federal contracts. Your author has lived overseas for more than 10 years. Each place he haslived or visited has its quirks, but in every one, the individual seemed to enjoy about as much liberty as he did in America. Everywhere, a personis taxed, controlled, regulated, licensed, rewarded, privileged andpampered - according to how the ruling elite chooses. What gives? What happened to American individualism? We mentioned yesterday how our president is caught in the same trap that bedeviled Wilson and Teddy Roosevelt. They wanted to flex America’s newmuscles. The United States became the largest economy in the world in theearly 1900s. Now that they had power, they wanted to engage in powerpolitics...to shove and scrap...to wear funny hats with giant plumes onthem...and to sit down at a bargaining table with French, British andRussian ‘charge d’affaires’; oh, even the sound of it sent frissons downtheir greasy backs. They wanted to carve up the world...decide the fates of nations...redraw the map of the world. Of course, the whole spirit of it was contrary to the American ideal, wherein a free people determinetheir own fate and decide their own form of government.And poor Wilson and Roosevelt were still working within the old American system. The people back in Tennessee and Georgia wanted no part of world domination. They still had the U.S. Declaration of Independence on their walls. They still heard Washington’s words - ‘avoid foreign entanglements’- echoing in their ears. They still thought only Congress had the power to declare war; the bumpkins didn’t mind a fight, but they wanted a damned good reason for it. And so the old frauds had to dissemble...they had to talk about ‘making the world safe for democracy’ and about ‘protecting American interests’;of course, there were none...but the rubes wouldn’t know. The whole planet needed to be more like America itself - freer, more prosperous, and moredemocratic. George W. Bush continues the humbug, but he has a much easier time of it. Americans have generally forgotten the idea of individualism. They want public schools, Social Security, and free drugs - just like the krauts and the frogs. Bush II comes up with his preposterous “War on Terrorism” and nobody laughs, because Americans, like almost everyone else in the world, have all become collectivists. If a man’s town is flooded, he expects the feds to come in with donuts and house-trailers. If a man’s wife is sick,he expects the feds to offer medical treatment...or at least to regulate the marketplace so it is ‘affordable’ for him. If his house is repossessed, he turns his face to Chris Dodd in Washington...and the next thing you know, the windbag senator is proposing to bail him out! And if a handful of fanatics blow up a couple of office buildings in NewYork City, he wants the Marine Corps to kick butts all over the world.Whether they had anything to do with the crime barely matters to him; whathe wants is for his government to remake the face of the entire world, ifnecessary, so it is a more agreeable place for him.The old pioneers...the settlers...the farmers...the inventors...the robberbarons - all the people who built America - they were stupid and they weresmart...they were wicked and they were saints. But no matter what theywere...they stood up straight. How is it possible that these rugged,stalwart Americans evolved into a race of such fear-driven, collectivist drips?
I emailed some of my conservative friends this email and they're still scratching their heads. Seems people have forgotten the true pioneer spirit that this country was originally based on. Of course, if you're paying up to 60% of your earnings and purchases in taxes, then you might indignantly demand to be bailed out for every hangnail and garden-variety cold. But I think our Founding Fathers would be embarrassed at what their hard work has wrought. A nation of whiners, complainers and freeloaders; willing to give up their hard won freedoms and money to a group of bureaucrats bent on this nation's economic destruction. Most of it is by the hand of "The Greatest Generation," (Brokaw is a drama-queen) but history will hold them as the generation that went to sleep in front of their TV sets whilst demanding more free heat, food and social security.
*** The subject before us is the direction taken by modern politics. Why is George W. Bush telling Latinos that America is committed to ‘social justice’ rather than the more modest, old-fashioned ‘justice’? And howcometh it to be that ‘liberals’ in America are opposed to the ‘liberal’ideas of the 19th century...and that now even ‘conservatives’ in Americaare opposed to the ‘conservatism’ of their grandfathers?In the discussion that follows, we propose a theory.We recall from yesterday that there are two large themes in modernpolitical theory - individualism and collectivism. Individualism is theidea that a man should look after himself. ‘Justice’ is done, according tothis view of things, when he isn’t improperly interfered with. The world,then, takes whatever shape it takes, based upon mankind’s aggregatedindividual results. Collectivism, on the other hand, is that idea that the political ‘collective’ - the state - should look out for everyone. It implies thatthe shape of society - the outcome - is not left to chance, but decidedcollectively, or by the collective’s elite ministers. ‘Social justice’ iswhat you get when the elite likes the results. America, in theory as in actual fact, was a nation founded on the rock of individualism. It didn’t matter what the elite liked. But now its ‘conservative’ president proposes a concept of justice that Marx or Leninwould have appreciated. Not only that, but he spends the nation’s bloodand treasure trying to make governments half-way around the world more to his liking. And he takes hundreds of billions of dollars from individuals- many of them not even born yet - to reward favored groups with drugs,bread, circuses or federal contracts. Your author has lived overseas for more than 10 years. Each place he haslived or visited has its quirks, but in every one, the individual seemed to enjoy about as much liberty as he did in America. Everywhere, a personis taxed, controlled, regulated, licensed, rewarded, privileged andpampered - according to how the ruling elite chooses. What gives? What happened to American individualism? We mentioned yesterday how our president is caught in the same trap that bedeviled Wilson and Teddy Roosevelt. They wanted to flex America’s newmuscles. The United States became the largest economy in the world in theearly 1900s. Now that they had power, they wanted to engage in powerpolitics...to shove and scrap...to wear funny hats with giant plumes onthem...and to sit down at a bargaining table with French, British andRussian ‘charge d’affaires’; oh, even the sound of it sent frissons downtheir greasy backs. They wanted to carve up the world...decide the fates of nations...redraw the map of the world. Of course, the whole spirit of it was contrary to the American ideal, wherein a free people determinetheir own fate and decide their own form of government.And poor Wilson and Roosevelt were still working within the old American system. The people back in Tennessee and Georgia wanted no part of world domination. They still had the U.S. Declaration of Independence on their walls. They still heard Washington’s words - ‘avoid foreign entanglements’- echoing in their ears. They still thought only Congress had the power to declare war; the bumpkins didn’t mind a fight, but they wanted a damned good reason for it. And so the old frauds had to dissemble...they had to talk about ‘making the world safe for democracy’ and about ‘protecting American interests’;of course, there were none...but the rubes wouldn’t know. The whole planet needed to be more like America itself - freer, more prosperous, and moredemocratic. George W. Bush continues the humbug, but he has a much easier time of it. Americans have generally forgotten the idea of individualism. They want public schools, Social Security, and free drugs - just like the krauts and the frogs. Bush II comes up with his preposterous “War on Terrorism” and nobody laughs, because Americans, like almost everyone else in the world, have all become collectivists. If a man’s town is flooded, he expects the feds to come in with donuts and house-trailers. If a man’s wife is sick,he expects the feds to offer medical treatment...or at least to regulate the marketplace so it is ‘affordable’ for him. If his house is repossessed, he turns his face to Chris Dodd in Washington...and the next thing you know, the windbag senator is proposing to bail him out! And if a handful of fanatics blow up a couple of office buildings in NewYork City, he wants the Marine Corps to kick butts all over the world.Whether they had anything to do with the crime barely matters to him; whathe wants is for his government to remake the face of the entire world, ifnecessary, so it is a more agreeable place for him.The old pioneers...the settlers...the farmers...the inventors...the robberbarons - all the people who built America - they were stupid and they weresmart...they were wicked and they were saints. But no matter what theywere...they stood up straight. How is it possible that these rugged,stalwart Americans evolved into a race of such fear-driven, collectivist drips?
Thursday, March 22, 2007
Kiyosaki's Warnings Are Now Manifest
I've read and own all the Rich Dad books by Robert Kiyosaki. He gets bashed a lot as a snake-oil salesman; but I dig what he's pushing. I discovered after many years of being an investor that I "thought" about money in the wrong way. Kiyosaki taught me to think about it differently and I've been much wiser since. His columns on Yahoo should be required reading for the nation. The man is a prophet.
Robert Kiyosaki Why the Rich Get Richer
The Slow-Motion Stock Market Crash
by Robert Kiyosaki
Posted on Monday, March 19, 2007, 12:00AM
When my book "Rich Dad's Prophecy" was released in 2002, most financial newspapers and magazines trashed it because I discussed a looming stock market crash. Ironically, much of what I predicted in the book is coming true earlier than I expected.
On Feb. 27 of this year, a 9 percent market sell-off in China sent ripples of fear through stocks markets across the world. In the United States, the Dow's one-day plunge of 416 points was the steepest decline since the market opened after Sept. 11, 2001.
So the question is: Should stock investors be worried? As you might expect, some say yes and some say no.
Correction or Crash?
Personally, if I were counting on the stock market for my retirement or to put my kids through college, I'd be worried. Why? Because from my perspective, even if the Dow were to miraculously soar through 15,000, the stock market has been experiencing a long, slow crash for years.
This February, investors witnessed a drop of $583 billion in U.S. market wealth. Many experts are quick to point out that this loss of wealth is a mere drop in the bucket when you take into account that the stock market has been going up for four years. Most market experts say that the market was due for a correction, which is true.
In fact, the recent 3.5 percent drop is miniscule when compared to the 21 percent drop of the S&P 500 back in 1987. By definition, such a small drop isn't even classified as a true correction. According to BusinessWeek, a full-fledged correction is defined as a 10 percent drop, and a bear market is defined as a 20 percent drop.
Comparing Apples to Oranges
So how can I say that the market is crashing even if it continues to go up? To see the true crash, educated investors need to compare apples to oranges, not apples to apples.
When you compare the Dow to the Dow, or the S&P 500 to the S&P 500, that's comparing apples to apples. The Dow at 12,000 appears better than the Dow at 9,000, just as an apple at $1 a pound looks better than at $1.50 a pound, even though it's still the same apple. All that's happened is the price per pound of the apple has gone up -- the apple hasn't changed.
Years ago, my rich dad taught me to be a comparison shopper, especially when it comes to investments. He said, "You need to understand value more than price. Just because the price of something goes up doesn't necessarily mean the value has gone up."
He also told me, "If prices go up without a corresponding increase in value, it means the value of the asset has actually gone down." This holds true for all assets, including stocks, bonds, and real estate.
For example, when the price of a house goes up it doesn't mean that the house is more valuable. And prices going up may mean that something else is going down in value. In today's global markets, what's going down is the purchasing power of the U.S. dollar.
The Dow vs. Gold
To get a truer picture of comparative values, compare the Dow to the price of gold. When the purchasing power of gold is compared to the purchasing power of the Dow, the Dow appears to be crashing.
That means the average investor will need at least a 15 percent annual return on their stocks or mutual funds just to stay ahead of the U.S. dollar's purchasing power erosion -- that is, just to break even.
In my earlier Yahoo! Finance columns, I used history to forecast the future by comparing the dollar to gold and oil over a 10-year period. Here's the data:
1996
2006
Percent Increase
Oil
$10/barrel
$60/barrel
500
Gold
$275/ounce
$600/ounce
118
Table updated 3/21/07.
What Next?
What this means for you depends upon your bullish or bearish outlook, your financial education, and financial experience. For example, I hear many young people today saying that the price of real estate doesn't go down. This is a naive opinion due to lack of financial education and experience. I heard similar misguided opinions about stocks in the dotcom era, just before the market crashed.
Personally, I tend to heed former Federal Reserve Chairman Alan Greenspan's caution about a possible recession ahead. I predict that if there is a recession, current Fed chairman Ben Bernanke (and, in an attempt to hold onto the White House, the Republicans) will flood the market with more money at lower interest rates.
Then the purchasing power of the dollar will once again drop, asset prices may rise, and the financially naive will actually believe that the value of their assets -- houses, stocks, and mutual funds -- have gone up in value.
Robert Kiyosaki Why the Rich Get Richer
The Slow-Motion Stock Market Crash
by Robert Kiyosaki
Posted on Monday, March 19, 2007, 12:00AM
When my book "Rich Dad's Prophecy" was released in 2002, most financial newspapers and magazines trashed it because I discussed a looming stock market crash. Ironically, much of what I predicted in the book is coming true earlier than I expected.
On Feb. 27 of this year, a 9 percent market sell-off in China sent ripples of fear through stocks markets across the world. In the United States, the Dow's one-day plunge of 416 points was the steepest decline since the market opened after Sept. 11, 2001.
So the question is: Should stock investors be worried? As you might expect, some say yes and some say no.
Correction or Crash?
Personally, if I were counting on the stock market for my retirement or to put my kids through college, I'd be worried. Why? Because from my perspective, even if the Dow were to miraculously soar through 15,000, the stock market has been experiencing a long, slow crash for years.
This February, investors witnessed a drop of $583 billion in U.S. market wealth. Many experts are quick to point out that this loss of wealth is a mere drop in the bucket when you take into account that the stock market has been going up for four years. Most market experts say that the market was due for a correction, which is true.
In fact, the recent 3.5 percent drop is miniscule when compared to the 21 percent drop of the S&P 500 back in 1987. By definition, such a small drop isn't even classified as a true correction. According to BusinessWeek, a full-fledged correction is defined as a 10 percent drop, and a bear market is defined as a 20 percent drop.
Comparing Apples to Oranges
So how can I say that the market is crashing even if it continues to go up? To see the true crash, educated investors need to compare apples to oranges, not apples to apples.
When you compare the Dow to the Dow, or the S&P 500 to the S&P 500, that's comparing apples to apples. The Dow at 12,000 appears better than the Dow at 9,000, just as an apple at $1 a pound looks better than at $1.50 a pound, even though it's still the same apple. All that's happened is the price per pound of the apple has gone up -- the apple hasn't changed.
Years ago, my rich dad taught me to be a comparison shopper, especially when it comes to investments. He said, "You need to understand value more than price. Just because the price of something goes up doesn't necessarily mean the value has gone up."
He also told me, "If prices go up without a corresponding increase in value, it means the value of the asset has actually gone down." This holds true for all assets, including stocks, bonds, and real estate.
For example, when the price of a house goes up it doesn't mean that the house is more valuable. And prices going up may mean that something else is going down in value. In today's global markets, what's going down is the purchasing power of the U.S. dollar.
The Dow vs. Gold
To get a truer picture of comparative values, compare the Dow to the price of gold. When the purchasing power of gold is compared to the purchasing power of the Dow, the Dow appears to be crashing.
That means the average investor will need at least a 15 percent annual return on their stocks or mutual funds just to stay ahead of the U.S. dollar's purchasing power erosion -- that is, just to break even.
In my earlier Yahoo! Finance columns, I used history to forecast the future by comparing the dollar to gold and oil over a 10-year period. Here's the data:
1996
2006
Percent Increase
Oil
$10/barrel
$60/barrel
500
Gold
$275/ounce
$600/ounce
118
Table updated 3/21/07.
What Next?
What this means for you depends upon your bullish or bearish outlook, your financial education, and financial experience. For example, I hear many young people today saying that the price of real estate doesn't go down. This is a naive opinion due to lack of financial education and experience. I heard similar misguided opinions about stocks in the dotcom era, just before the market crashed.
Personally, I tend to heed former Federal Reserve Chairman Alan Greenspan's caution about a possible recession ahead. I predict that if there is a recession, current Fed chairman Ben Bernanke (and, in an attempt to hold onto the White House, the Republicans) will flood the market with more money at lower interest rates.
Then the purchasing power of the dollar will once again drop, asset prices may rise, and the financially naive will actually believe that the value of their assets -- houses, stocks, and mutual funds -- have gone up in value.
Ted Butler's Silver Assessment
I invest in silver like a demon. I advise you to allocate at least 5% of your portfolio to silver-based investments (ETF, Mining Stocks, Bullion Bars & Coins). Below is Ted Butler's column about the silver deficit and what it means as we progress forward in the
commodity bull cycle.
After The Deficit
By: Theodore Butler
-- Posted 20 March, 2007
Subject: Mr. Butler's end of structural deficit
At the bottom of the first page of your Mid-February 2007 issue, Mr. Butler clearly states that in his opinion the structural deficit has ended. This is an extremely significant happening! From what I have been reading from Mr. Butler before, an unexpected event to me. Over the past few years it looked like the overall consumption rate and the production rates were fairly constant and not easily changeable. I believe your entire readership should receive a detailed explanation by Mr. Butler as to how the structural deficit has ended. A listing of estimated annual productions and consumptions for the last few years would be very enlightening. An explanation of how the deficit was reduced would be helpful. What brought an end to the drawdown; and from a timeline standpoint how did it progress? The importance of this happening demands a thoughtful and detailed discussion.
Sincerely, Richard B.
Richard raises a valid point, namely, that a more detailed explanation should be given by me for what is a very significant event, the ending of the structural silver deficit, which has existed for more than 60 years. After all, I have stated on numerous occasions that a commodity deficit (more consumption than current production) is the most bullish circumstance possible and guarantees an eventual price rise to end the deficit. I can see where it would be easy to assume that I am now saying that the most bullish circumstance possible in silver, the structural deficit, has been terminated, and along with it the most bullish prop to prices. That assumption, however, would be wrong, as I am saying something else completely. Please allow me to explain.
As I have also written previously, commodity deficits are always temporary affairs. Surpluses (in which production exceeds consumption, creating growing inventories) can last for extended periods of time as producers can produce below the cost of production longer than expected, due to a variety of factors (such as government incentives to preserve employment). But deficits (where consumption exceeds production, draining previously-produced inventories) can only exist until inventories are drawn down completely. Once inventories, which are finite in nature, are exhausted, the deficit must end, forcing the price alone to balance consumption and production. This is also the point at which prices can surge dramatically higher and is the very essence of the law of supply and demand. There is no limit as to how high inventories can be built up in a surplus, but there is a very real limit as to how low inventories can be drawn down in a deficit. It is impossible to go below zero inventories.
In simple terms, I am of the opinion that the structural silver deficit of the past 60 years is over, because that which enabled the deficit to last so long, the accumulated inventory of thousands of years has been effectively exhausted. In other words, I am not saying the world is suddenly producing silver in surplus amounts, I am saying we have just about run out of available inventories to sustain a continued long-term deficit.
There are only two variations for how a commodity deficit can end. One, prices rise high enough, before inventories are effectively exhausted, and demand is discouraged and production is encouraged in sufficient quantity so that inventories can begin to be restored again. Prices peak near the bottom of inventory liquidations, and prices bottom at inventory peaks. This is the normal cycle of the law of supply and demand that we all understand and hope our children learn to understand.
But there is another variation for how commodity deficits end that not only do we hope our children never learn or experience, but that we have enacted laws against. This second type of variation is very rare and is the type I am referring to in the end of the silver structural deficit.
Sometimes, a commodity inventory can be exhausted before the law of supply and demand and price are allowed to take effect. These occurrences are usually temporary and local in nature. As an example, we have and probably will experience this in South Florida in the event of a hurricane. Everyone rushes out to buy gas and ice and batteries and foodstuffs. Most supermarkets and gas stations (due to price-gouging laws and good will) don’t ration their inventories by price, charging much more in response to the surge in demand. They simply sell at their regular prices until they run out of supplies. Then everyone must wait for the inventories to be replenished. This is clearly a case of the law of supply and demand being subverted and altered temporarily by a very visible extraordinary event – an act of nature.
While these acts of nature occur from time to time in geographically limited areas, it is very rare for a commodity to exhaust inventories on a worldwide basis before a price peak. That’s because many tens of thousands of individuals (producers, users, analysts and investors) are involved in monitoring all major world commodities. It’s hard to imagine world inventories of any major commodity being exhausted before a price peak under all their watching eyes. While it may be very rare, that is precisely what I am suggesting is the case in silver. Besides, it’s not unprecedented.
Before I give you my rationale for silver, let me first site an example of a world commodity exhausting its inventory long before a price peak – the metal nickel. (Please see my article "First Nickel, Then Silver?" http://www.investmentrarities.com/08-21-06.html). Last August, nickel inventories on the London Metal Exchange (LME) had fallen roughly 90% in just 8 months, with the price climbing by 250% in that time. More than six months later, inventories remain the same (effectively near zero), while prices have climbed a further 50%. Someone from another planet would look at this and conclude that the law of supply and demand didn’t exist. After all, how could record nickel prices not ration demand and encourage production before inventories were exhausted? How could six full months go by without any build in inventories? How could so many thousands of producers and users and analysts and investors be caught off-guard by this event? The answer is right in front of us.
The answer is that the law of supply and demand and price only applies to free markets, not controlled or manipulated markets. Clearly, nickel was not a free market. It is impossible to run out of world inventories before a price peak in a free market. There can only be a price peak long after an inventory nadir in a manipulated market, because free markets anticipate and discount (except in sudden and shocking events, which did not exist in nickel.) Besides, when the LME defaulted on its nickel contract and absolved the concentrated naked short sellers of the obligation to deliver that which they had sold short, that act certified to the whole world that nickel was a manipulated market. The fact that the price of nickel has climbed sharply after inventories were long-exhausted just proves how manipulated the nickel market was. The default was just the proof in the pudding.
What about silver? There are some remarkable similarities between silver and nickel, as well as some notable differences. Both are important industrial metals, vital to the needs of a growing world economy. Both have witnessed their world inventories decline by 90%, nickel over the past year, silver over the past 60 years. Both have been clearly subject to manipulation, nickel on the LME, silver on the COMEX and CBOT. It is precisely the price manipulation in each that has resulted in the dramatic draw down in inventories.
The differences are more striking. Nickel’s manipulation should be obvious in hindsight, with price peaks after inventory lows and the LME default. Further, it is possible that nickel is now in a free market state, although the low level of transparency on the LME makes that impossible to determine. Silver’s manipulation, while real as rain, is not yet obvious to all and any possible default lies in the future. Due to a verifiable and current concentrated short position on the COMEX, it is not possible that silver is a free market. Simply put, silver will be a true free market when the concentrated short position no longer exists.
But the major difference between nickel and silver is that nickel was never a true investment asset. It is a very valuable and vital industrial metal, but not an investment asset. Silver, in addition to being a vital industrial metal, is very much an investment asset, hopefully held by every reader of these words.
It is this dual role of silver that sets it apart from any other investment asset, in very practical terms. No other industrial commodity can be practically owned and held in one’s personal possession by large numbers of the world’s population. (Not even platinum and palladium). Gold can certainly be held, but gold is not largely used industrially, given its high price. It’s kind of funny to hear many speak somewhat disparagingly of silver’s dual role as an industrial and investment asset, implying silver can’t quite make up its mind which it is. That’s downright silly. It is precisely this dual role that makes silver so special. No other industrial commodity can possibly be subjected to a worldwide grassroots clamoring for actual ownership. And this is central to the question of the end of the structural silver deficit.
Sixty years ago, there were roughly 10 billion ounces in world silver inventories, with the US Government holding about half of that total. Today, most analysts quote a world inventory measured in the hundreds of millions of ounces. I try to be conservative and use a higher number of one billion ounces of silver bullion equivalent (bullion plus junk coins). Whatever the number, we are down 90%, or 9 billion ounces, from what we formerly had, thanks to the structural silver deficit.
You don’t have to be a rocket scientist to conclude that we can’t take another 9 billion ounces from inventory in order to balance the silver deficit, since we have no more, and quite possibly much less, than one billion ounces remaining. This is the reason I say the silver structural deficit is a largely a thing of the past. But this raises two points.
One, what about the hundreds of millions, or one billion, ounces that remain? Won’t they be consumed, like the 9 billion ounces of inventory was consumed in the past 60 years? Maybe, but not at artificially depressed prices. This is a key point in my thinking. The 9 billion ounces of inventory previously consumed were basically dumped on the market, principally by the US and other governments. Those hoards of silver are almost all gone. Therefore, no more dumping. The remaining silver inventory is almost entirely privately owned. This means that silver will only come to the market when economically enticed. In other words, at much higher prices, not dumped uneconomically by bureaucrats.
Two, I am not saying silver deficits are forever a thing of the past. I am saying that the silver structural deficit is a thing of the past. This may sound like a word game, but that is not my intention. Since the inventory that enabled the silver structural deficit is gone, the silver structural deficit is gone. That’s different from any deficit in silver. Like any market, if there is more consumption than current production, there is a deficit. This can (and probably will) happen in silver in the future. Only in the future, when silver consumption exceeds silver current production, there will be no big release of government owned silver at uneconomic prices. The only silver inventory available will be silver that is economically sensitive, that is, silver available at only sharply higher prices.
Thus, my conclusion is that the end of the silver structural deficit marks the end of one phase and the beginning of another, potentially much more bullish phase. Just how bullish this new phase in silver will be is hard for me to describe without going over the top. It marks a phase none of us has ever experienced. It marks the beginning of a true free market in silver. Sure, phases that span many decades don’t end abruptly on a specific day, they evolve. Sure, we still must contend with the naked short selling manipulation on the COMEX, but just like the structural deficit, its days are also numbered. For the long term silver investor, the magical phase, the age of real prosperity, is about to begin. Sell-offs should be welcomed for the opportunities they present.
commodity bull cycle.
After The Deficit
By: Theodore Butler
-- Posted 20 March, 2007
Subject: Mr. Butler's end of structural deficit
At the bottom of the first page of your Mid-February 2007 issue, Mr. Butler clearly states that in his opinion the structural deficit has ended. This is an extremely significant happening! From what I have been reading from Mr. Butler before, an unexpected event to me. Over the past few years it looked like the overall consumption rate and the production rates were fairly constant and not easily changeable. I believe your entire readership should receive a detailed explanation by Mr. Butler as to how the structural deficit has ended. A listing of estimated annual productions and consumptions for the last few years would be very enlightening. An explanation of how the deficit was reduced would be helpful. What brought an end to the drawdown; and from a timeline standpoint how did it progress? The importance of this happening demands a thoughtful and detailed discussion.
Sincerely, Richard B.
Richard raises a valid point, namely, that a more detailed explanation should be given by me for what is a very significant event, the ending of the structural silver deficit, which has existed for more than 60 years. After all, I have stated on numerous occasions that a commodity deficit (more consumption than current production) is the most bullish circumstance possible and guarantees an eventual price rise to end the deficit. I can see where it would be easy to assume that I am now saying that the most bullish circumstance possible in silver, the structural deficit, has been terminated, and along with it the most bullish prop to prices. That assumption, however, would be wrong, as I am saying something else completely. Please allow me to explain.
As I have also written previously, commodity deficits are always temporary affairs. Surpluses (in which production exceeds consumption, creating growing inventories) can last for extended periods of time as producers can produce below the cost of production longer than expected, due to a variety of factors (such as government incentives to preserve employment). But deficits (where consumption exceeds production, draining previously-produced inventories) can only exist until inventories are drawn down completely. Once inventories, which are finite in nature, are exhausted, the deficit must end, forcing the price alone to balance consumption and production. This is also the point at which prices can surge dramatically higher and is the very essence of the law of supply and demand. There is no limit as to how high inventories can be built up in a surplus, but there is a very real limit as to how low inventories can be drawn down in a deficit. It is impossible to go below zero inventories.
In simple terms, I am of the opinion that the structural silver deficit of the past 60 years is over, because that which enabled the deficit to last so long, the accumulated inventory of thousands of years has been effectively exhausted. In other words, I am not saying the world is suddenly producing silver in surplus amounts, I am saying we have just about run out of available inventories to sustain a continued long-term deficit.
There are only two variations for how a commodity deficit can end. One, prices rise high enough, before inventories are effectively exhausted, and demand is discouraged and production is encouraged in sufficient quantity so that inventories can begin to be restored again. Prices peak near the bottom of inventory liquidations, and prices bottom at inventory peaks. This is the normal cycle of the law of supply and demand that we all understand and hope our children learn to understand.
But there is another variation for how commodity deficits end that not only do we hope our children never learn or experience, but that we have enacted laws against. This second type of variation is very rare and is the type I am referring to in the end of the silver structural deficit.
Sometimes, a commodity inventory can be exhausted before the law of supply and demand and price are allowed to take effect. These occurrences are usually temporary and local in nature. As an example, we have and probably will experience this in South Florida in the event of a hurricane. Everyone rushes out to buy gas and ice and batteries and foodstuffs. Most supermarkets and gas stations (due to price-gouging laws and good will) don’t ration their inventories by price, charging much more in response to the surge in demand. They simply sell at their regular prices until they run out of supplies. Then everyone must wait for the inventories to be replenished. This is clearly a case of the law of supply and demand being subverted and altered temporarily by a very visible extraordinary event – an act of nature.
While these acts of nature occur from time to time in geographically limited areas, it is very rare for a commodity to exhaust inventories on a worldwide basis before a price peak. That’s because many tens of thousands of individuals (producers, users, analysts and investors) are involved in monitoring all major world commodities. It’s hard to imagine world inventories of any major commodity being exhausted before a price peak under all their watching eyes. While it may be very rare, that is precisely what I am suggesting is the case in silver. Besides, it’s not unprecedented.
Before I give you my rationale for silver, let me first site an example of a world commodity exhausting its inventory long before a price peak – the metal nickel. (Please see my article "First Nickel, Then Silver?" http://www.investmentrarities.com/08-21-06.html). Last August, nickel inventories on the London Metal Exchange (LME) had fallen roughly 90% in just 8 months, with the price climbing by 250% in that time. More than six months later, inventories remain the same (effectively near zero), while prices have climbed a further 50%. Someone from another planet would look at this and conclude that the law of supply and demand didn’t exist. After all, how could record nickel prices not ration demand and encourage production before inventories were exhausted? How could six full months go by without any build in inventories? How could so many thousands of producers and users and analysts and investors be caught off-guard by this event? The answer is right in front of us.
The answer is that the law of supply and demand and price only applies to free markets, not controlled or manipulated markets. Clearly, nickel was not a free market. It is impossible to run out of world inventories before a price peak in a free market. There can only be a price peak long after an inventory nadir in a manipulated market, because free markets anticipate and discount (except in sudden and shocking events, which did not exist in nickel.) Besides, when the LME defaulted on its nickel contract and absolved the concentrated naked short sellers of the obligation to deliver that which they had sold short, that act certified to the whole world that nickel was a manipulated market. The fact that the price of nickel has climbed sharply after inventories were long-exhausted just proves how manipulated the nickel market was. The default was just the proof in the pudding.
What about silver? There are some remarkable similarities between silver and nickel, as well as some notable differences. Both are important industrial metals, vital to the needs of a growing world economy. Both have witnessed their world inventories decline by 90%, nickel over the past year, silver over the past 60 years. Both have been clearly subject to manipulation, nickel on the LME, silver on the COMEX and CBOT. It is precisely the price manipulation in each that has resulted in the dramatic draw down in inventories.
The differences are more striking. Nickel’s manipulation should be obvious in hindsight, with price peaks after inventory lows and the LME default. Further, it is possible that nickel is now in a free market state, although the low level of transparency on the LME makes that impossible to determine. Silver’s manipulation, while real as rain, is not yet obvious to all and any possible default lies in the future. Due to a verifiable and current concentrated short position on the COMEX, it is not possible that silver is a free market. Simply put, silver will be a true free market when the concentrated short position no longer exists.
But the major difference between nickel and silver is that nickel was never a true investment asset. It is a very valuable and vital industrial metal, but not an investment asset. Silver, in addition to being a vital industrial metal, is very much an investment asset, hopefully held by every reader of these words.
It is this dual role of silver that sets it apart from any other investment asset, in very practical terms. No other industrial commodity can be practically owned and held in one’s personal possession by large numbers of the world’s population. (Not even platinum and palladium). Gold can certainly be held, but gold is not largely used industrially, given its high price. It’s kind of funny to hear many speak somewhat disparagingly of silver’s dual role as an industrial and investment asset, implying silver can’t quite make up its mind which it is. That’s downright silly. It is precisely this dual role that makes silver so special. No other industrial commodity can possibly be subjected to a worldwide grassroots clamoring for actual ownership. And this is central to the question of the end of the structural silver deficit.
Sixty years ago, there were roughly 10 billion ounces in world silver inventories, with the US Government holding about half of that total. Today, most analysts quote a world inventory measured in the hundreds of millions of ounces. I try to be conservative and use a higher number of one billion ounces of silver bullion equivalent (bullion plus junk coins). Whatever the number, we are down 90%, or 9 billion ounces, from what we formerly had, thanks to the structural silver deficit.
You don’t have to be a rocket scientist to conclude that we can’t take another 9 billion ounces from inventory in order to balance the silver deficit, since we have no more, and quite possibly much less, than one billion ounces remaining. This is the reason I say the silver structural deficit is a largely a thing of the past. But this raises two points.
One, what about the hundreds of millions, or one billion, ounces that remain? Won’t they be consumed, like the 9 billion ounces of inventory was consumed in the past 60 years? Maybe, but not at artificially depressed prices. This is a key point in my thinking. The 9 billion ounces of inventory previously consumed were basically dumped on the market, principally by the US and other governments. Those hoards of silver are almost all gone. Therefore, no more dumping. The remaining silver inventory is almost entirely privately owned. This means that silver will only come to the market when economically enticed. In other words, at much higher prices, not dumped uneconomically by bureaucrats.
Two, I am not saying silver deficits are forever a thing of the past. I am saying that the silver structural deficit is a thing of the past. This may sound like a word game, but that is not my intention. Since the inventory that enabled the silver structural deficit is gone, the silver structural deficit is gone. That’s different from any deficit in silver. Like any market, if there is more consumption than current production, there is a deficit. This can (and probably will) happen in silver in the future. Only in the future, when silver consumption exceeds silver current production, there will be no big release of government owned silver at uneconomic prices. The only silver inventory available will be silver that is economically sensitive, that is, silver available at only sharply higher prices.
Thus, my conclusion is that the end of the silver structural deficit marks the end of one phase and the beginning of another, potentially much more bullish phase. Just how bullish this new phase in silver will be is hard for me to describe without going over the top. It marks a phase none of us has ever experienced. It marks the beginning of a true free market in silver. Sure, phases that span many decades don’t end abruptly on a specific day, they evolve. Sure, we still must contend with the naked short selling manipulation on the COMEX, but just like the structural deficit, its days are also numbered. For the long term silver investor, the magical phase, the age of real prosperity, is about to begin. Sell-offs should be welcomed for the opportunities they present.
Wednesday, March 21, 2007
Hey Fox!! Where Is The Fair and Balanced?
I'm a frequent viewer of Fox News. I'm often amused at the Liberal left's constant carping about it. They have CBS, NBC & ABC yet scream all the time about Fox's legitimacy. Whoo-Haa. (Those other news outlets are jealous they don't have Courtney Friel!)
But I am quite upset that Fox News isn't trumpeting Ron Paul's Presidential bid from the ramparts. The rest of the GOP field is a quagmire of masquerading Democrats (that's you Mitt), Neo-Cons (Sorry John, it fits you nicely) and a bunch of no-name n'er do wells (the rest of you form a line to the rear). Ron Paul is the ONLY LEGITIMATE CONSTITUTIONAL CONSERVATIVE that America can elect by choice. I fear his past flirtation with the Libertarian Party (OF Which I am a card-carrying member) has marred his chances of national recognition, but a man can hope! Can't he?
But I am quite upset that Fox News isn't trumpeting Ron Paul's Presidential bid from the ramparts. The rest of the GOP field is a quagmire of masquerading Democrats (that's you Mitt), Neo-Cons (Sorry John, it fits you nicely) and a bunch of no-name n'er do wells (the rest of you form a line to the rear). Ron Paul is the ONLY LEGITIMATE CONSTITUTIONAL CONSERVATIVE that America can elect by choice. I fear his past flirtation with the Libertarian Party (OF Which I am a card-carrying member) has marred his chances of national recognition, but a man can hope! Can't he?
What's Really Going On
(I read Anthony Wile and he is by far one of the more intelligent writers dealing with the workings of the Global Elite. He's certainly not some wingnut conspiracy theorist, but a financial insider who has seen the machinations behind the headlines. His book "HIGH ALERT," is at the top of Pillar Of Autumn's recommended reading list.)
Water Promotion by Anthony Wile
The next great promotion of the monetary elite has to do with water and food. That's my speculation, anyway. It's being set up right now via global warming, and the insistence of the world's most important international bodies that global warming is going to damage the planet's infrastructure and put food and water at a premium.There are plenty of legitimate reasons to argue that global warming - if it exists - is a natural occurrence. But not according to the United Nations. Here's what the United Nations had to say recently, according to an Reuters article, U.N. Agency Pressures Ban on Climate Crisis Summit."The U.N. environment agency pressured Secretary-General Ban Ki-moon on Tuesday to call an emergency climate summit amid dire reports about the risks from global warming. A summit, tentatively planned for September, would focus on the hunt for a successor to the Kyoto Protocol on cutting greenhouse gases widely blamed for forecasts of more heatwaves, floods, droughts and rising sea levels. U.N. environment agencies are lobbying Ban to play a leading role in helping governments battle climate change after Kyoto expires in 2012. But he stopped short on Tuesday of endorsing his officials' proposal for a summit of some 20 key leaders. ... Ban discussed the summit plans in Nairobi with Achim Steiner, executive director of the U.N. Environment Program (UNEP). Earlier this month Ban also met Yvo de Boer, head of the U.N. Climate Secretariat. "This is a critical year and we must bring developed and developing countries together toward a conclusion," said Steiner's spokesman Nick Nuttall. On Friday, the broadest scientific study of the human effect on the climate is set to conclude there is at least a 90 percent chance that human activities, mainly burning fossil fuels, are to blame for most of the warming in the last 50 years."Click Here
The United Nations is a great promotional device for the monetary and power elite. They can make virtually any argument, scientific or not, and count on it receiving the imprimatur of serious mainstream journalism and even scientific approbation via a galaxy of scientists who receive government stipends and will perform on demand. No promotion is any good without a way to capitalize on it, and now the "other shoe" may be falling. An article reported on by the AFP, entitled "Climate change means hunger and thirst for billions" suggests the following:"Billions of people will suffer water shortages and the number of hungry will grow by hundreds of millions by 2080 as global temperatures rise, scientists warn in a new report. The report estimates that between 1.1 billion and 3.2 billion people will be suffering from water scarcity problems by 2080 and between 200 million and 600 million more people will be going hungry. The assessment is contained in a draft of a major international report by the UN Intergovernmental Panel on Climate Change (IPCC) to be released later this year, Australia's The Age newspaper said. Rising sea levels could flood seven million more homes, while Australia's famed Great Barrier Reef, treasured as the world's largest living organism, could be dead within decades, the scientists warn, the newspaper said. The Age said it had obtained a copy of the report, believed to be one of three prepared for release by the IPCC, which is highly regarded for its neutrality and caution. Some 500 experts are meeting in Paris this week ahead of the release on Friday of the IPCC's first report since 2001 on the state of scientific knowledge on global warming. The report will be followed in April by volumes focusing on the impacts of climate change and on the social-economic costs of reducing the emission of greenhouse gases blamed for global warming." Click HereIs this hooey? Who can tell. Weather forecasters can't get tomorrow's weather right, but the United Nations - which can't get to the bottom of the oil-for-food-scandal - is part of a forward-looking team of globe-spanning entities that can figure out where the world will be in 80 years. Of course, if the world were in a good place, we wouldn't need the alphabet soup of agencies that clog the media with cries of doom and despair.It's not very complicated at root. Take the bird-flu hysteria. Now, bird flu may or may not mutate into something that will actually kill many humans, but right now you have a better chance of falling down the stairs and breaking your neck than dieing of bird flu. Yet bird flu has served a purpose. Pharmaceutical companies are getting rich peddling various "potential remedies." Most egregious, of course, is the Tamiflu rip off. FMNN itself helped break the story in a 2005 article entitled, Tamiflu Gilead Chair Was ... Rummy, as follows:"Readers can be helpful, and one just wrote in to inform us of a link that we had never imagined - Donald Rumsfeld, until he resigned and joined the Bush Administration, was the chairman of something called Gilead which just happened to make something called Tamiflu. Now anyone who hasn't been on Mars for the last month or two, knows that there were only two things that were going to stop the human version of bird flu. One was a bird flu vaccine (which probably would work better if you were a bird) and the other was something called Tamiflu. Yes, that Tamiflu. In such short supply that the hundreds of millions of orders that have been pouring into Gilead probably won't be filled for another 12 months or so. But everyone has got to have it because somehow or other it became established that Tamiflu really worked. This was the party line, anyway, for about a week, until word began trickling back in that maybe Tamiflu didn't work. In fact, the word on Tamiflu has always been positive at first and then eventually negative. It's a kind of pattern. We even find corroboration of it here on the Democrats.com, in what appears to be either a chat room or news roundup as follows, 'Rummy was CEO of Gilead Sciences until named to the Bush cabinet and, like Cheney, still has ties that bind to the 'old company.' Now isn't it an "amazing coincidence" that the drug Tamiflu patented by Gilead Sciences is being pushed by the National Institutes of Allergies and Infectious Diseases as the NUMBER ONE choice for flu, which, wonder of wonders, is sweeping through in one epidemic after another.'"Click Here
As we recall, the United States has purchased billions of dollars worth of ineffective Tamiflu as an antidote for bird flu - which has killed a lot of birds but no humans.The point is, these are all promotions. The idea is to use these international agencies - and domestic government entities as well - to whip up hysteria over the doom du jour. Once people are scared enough, the big cash out begins.You see it over and over again. People can't conceive that they are being manipulated on this level. But they are. International agencies are not the public-spirited entities they seem. Sure, the people in them may be well meaning but the reason for their existence has little to do with their purported purpose. They are vehicles meant to benefit the well-connected and super-rich.That's why I can say with some certainty that one of the next big promotions is going to center around food and water. Where does the cash out begin? Take a look at this report from alternative 'Net journalist Wayne Madsen:"WMR's Paraguayan sources have confirmed that George W. Bush recently bought 42,000 hectares (over 100,000 acres) of land in Paraguay's northern "Chaco" region. The land sits atop huge natural gas reserves, according to sources in Asuncion. Moreover, the land deal was consummated in a dinner meeting between Bush's daughter Jenna and Paraguayan President Nicanor Duarte. Although Jenna, who was in Paraguay under the cover of a 10-day UNICEF trip to visit child welfare projects, put the Bush family seal of approval on the land deal, the actual legal papers were worked out by Bush family lawyers and business representatives. Jenna Bush is supposedly working for UNICEF in Panama City. The Bush land is close to a new U.S. military installation, the Mariscal Estigarribia Air Base. It is also nearby a huge tract of land purchased by Sun Myung Moon that sits astride Latin America's largest water aquifer, the Guarani aquifer."Click Here
Meanwhile, we read this from Reuters - California May Ban Lightbulbs"A California lawmaker wants to make his state the first to ban incandescent lightbulbs as part of California's groundbreaking initiatives to reduce energy use and greenhouse gases blamed for global warming. The "How Many Legislators Does it Take to Change a Lightbulb Act" would ban incandescent lightbulbs by 2012 in favor of energy-saving compact fluorescent lightbulbs. "Incandescent lightbulbs were first developed almost 125 years ago, and since that time they have undergone no major modifications," California Assemblyman Lloyd Levine said on Tuesday".Click HereThe madness is only beginning, I suppose. But it is a man made madness. And if you want to understand the truth of the world in the 21st century, you have to do what old-fashioned reporters used to do - follow the money. Wherever there is a prophecy of doom, there is also a cash out. Bird flu, peak oil, global warming, the war against terrorism - these are tales shaped with a purpose. Yes, they are nightmarish. But if we do not wish to be as children, we will wake up from our slumbers and see them for what they really are.
Water Promotion by Anthony Wile
The next great promotion of the monetary elite has to do with water and food. That's my speculation, anyway. It's being set up right now via global warming, and the insistence of the world's most important international bodies that global warming is going to damage the planet's infrastructure and put food and water at a premium.There are plenty of legitimate reasons to argue that global warming - if it exists - is a natural occurrence. But not according to the United Nations. Here's what the United Nations had to say recently, according to an Reuters article, U.N. Agency Pressures Ban on Climate Crisis Summit."The U.N. environment agency pressured Secretary-General Ban Ki-moon on Tuesday to call an emergency climate summit amid dire reports about the risks from global warming. A summit, tentatively planned for September, would focus on the hunt for a successor to the Kyoto Protocol on cutting greenhouse gases widely blamed for forecasts of more heatwaves, floods, droughts and rising sea levels. U.N. environment agencies are lobbying Ban to play a leading role in helping governments battle climate change after Kyoto expires in 2012. But he stopped short on Tuesday of endorsing his officials' proposal for a summit of some 20 key leaders. ... Ban discussed the summit plans in Nairobi with Achim Steiner, executive director of the U.N. Environment Program (UNEP). Earlier this month Ban also met Yvo de Boer, head of the U.N. Climate Secretariat. "This is a critical year and we must bring developed and developing countries together toward a conclusion," said Steiner's spokesman Nick Nuttall. On Friday, the broadest scientific study of the human effect on the climate is set to conclude there is at least a 90 percent chance that human activities, mainly burning fossil fuels, are to blame for most of the warming in the last 50 years."Click Here
The United Nations is a great promotional device for the monetary and power elite. They can make virtually any argument, scientific or not, and count on it receiving the imprimatur of serious mainstream journalism and even scientific approbation via a galaxy of scientists who receive government stipends and will perform on demand. No promotion is any good without a way to capitalize on it, and now the "other shoe" may be falling. An article reported on by the AFP, entitled "Climate change means hunger and thirst for billions" suggests the following:"Billions of people will suffer water shortages and the number of hungry will grow by hundreds of millions by 2080 as global temperatures rise, scientists warn in a new report. The report estimates that between 1.1 billion and 3.2 billion people will be suffering from water scarcity problems by 2080 and between 200 million and 600 million more people will be going hungry. The assessment is contained in a draft of a major international report by the UN Intergovernmental Panel on Climate Change (IPCC) to be released later this year, Australia's The Age newspaper said. Rising sea levels could flood seven million more homes, while Australia's famed Great Barrier Reef, treasured as the world's largest living organism, could be dead within decades, the scientists warn, the newspaper said. The Age said it had obtained a copy of the report, believed to be one of three prepared for release by the IPCC, which is highly regarded for its neutrality and caution. Some 500 experts are meeting in Paris this week ahead of the release on Friday of the IPCC's first report since 2001 on the state of scientific knowledge on global warming. The report will be followed in April by volumes focusing on the impacts of climate change and on the social-economic costs of reducing the emission of greenhouse gases blamed for global warming." Click HereIs this hooey? Who can tell. Weather forecasters can't get tomorrow's weather right, but the United Nations - which can't get to the bottom of the oil-for-food-scandal - is part of a forward-looking team of globe-spanning entities that can figure out where the world will be in 80 years. Of course, if the world were in a good place, we wouldn't need the alphabet soup of agencies that clog the media with cries of doom and despair.It's not very complicated at root. Take the bird-flu hysteria. Now, bird flu may or may not mutate into something that will actually kill many humans, but right now you have a better chance of falling down the stairs and breaking your neck than dieing of bird flu. Yet bird flu has served a purpose. Pharmaceutical companies are getting rich peddling various "potential remedies." Most egregious, of course, is the Tamiflu rip off. FMNN itself helped break the story in a 2005 article entitled, Tamiflu Gilead Chair Was ... Rummy, as follows:"Readers can be helpful, and one just wrote in to inform us of a link that we had never imagined - Donald Rumsfeld, until he resigned and joined the Bush Administration, was the chairman of something called Gilead which just happened to make something called Tamiflu. Now anyone who hasn't been on Mars for the last month or two, knows that there were only two things that were going to stop the human version of bird flu. One was a bird flu vaccine (which probably would work better if you were a bird) and the other was something called Tamiflu. Yes, that Tamiflu. In such short supply that the hundreds of millions of orders that have been pouring into Gilead probably won't be filled for another 12 months or so. But everyone has got to have it because somehow or other it became established that Tamiflu really worked. This was the party line, anyway, for about a week, until word began trickling back in that maybe Tamiflu didn't work. In fact, the word on Tamiflu has always been positive at first and then eventually negative. It's a kind of pattern. We even find corroboration of it here on the Democrats.com, in what appears to be either a chat room or news roundup as follows, 'Rummy was CEO of Gilead Sciences until named to the Bush cabinet and, like Cheney, still has ties that bind to the 'old company.' Now isn't it an "amazing coincidence" that the drug Tamiflu patented by Gilead Sciences is being pushed by the National Institutes of Allergies and Infectious Diseases as the NUMBER ONE choice for flu, which, wonder of wonders, is sweeping through in one epidemic after another.'"Click Here
As we recall, the United States has purchased billions of dollars worth of ineffective Tamiflu as an antidote for bird flu - which has killed a lot of birds but no humans.The point is, these are all promotions. The idea is to use these international agencies - and domestic government entities as well - to whip up hysteria over the doom du jour. Once people are scared enough, the big cash out begins.You see it over and over again. People can't conceive that they are being manipulated on this level. But they are. International agencies are not the public-spirited entities they seem. Sure, the people in them may be well meaning but the reason for their existence has little to do with their purported purpose. They are vehicles meant to benefit the well-connected and super-rich.That's why I can say with some certainty that one of the next big promotions is going to center around food and water. Where does the cash out begin? Take a look at this report from alternative 'Net journalist Wayne Madsen:"WMR's Paraguayan sources have confirmed that George W. Bush recently bought 42,000 hectares (over 100,000 acres) of land in Paraguay's northern "Chaco" region. The land sits atop huge natural gas reserves, according to sources in Asuncion. Moreover, the land deal was consummated in a dinner meeting between Bush's daughter Jenna and Paraguayan President Nicanor Duarte. Although Jenna, who was in Paraguay under the cover of a 10-day UNICEF trip to visit child welfare projects, put the Bush family seal of approval on the land deal, the actual legal papers were worked out by Bush family lawyers and business representatives. Jenna Bush is supposedly working for UNICEF in Panama City. The Bush land is close to a new U.S. military installation, the Mariscal Estigarribia Air Base. It is also nearby a huge tract of land purchased by Sun Myung Moon that sits astride Latin America's largest water aquifer, the Guarani aquifer."Click Here
Meanwhile, we read this from Reuters - California May Ban Lightbulbs"A California lawmaker wants to make his state the first to ban incandescent lightbulbs as part of California's groundbreaking initiatives to reduce energy use and greenhouse gases blamed for global warming. The "How Many Legislators Does it Take to Change a Lightbulb Act" would ban incandescent lightbulbs by 2012 in favor of energy-saving compact fluorescent lightbulbs. "Incandescent lightbulbs were first developed almost 125 years ago, and since that time they have undergone no major modifications," California Assemblyman Lloyd Levine said on Tuesday".Click HereThe madness is only beginning, I suppose. But it is a man made madness. And if you want to understand the truth of the world in the 21st century, you have to do what old-fashioned reporters used to do - follow the money. Wherever there is a prophecy of doom, there is also a cash out. Bird flu, peak oil, global warming, the war against terrorism - these are tales shaped with a purpose. Yes, they are nightmarish. But if we do not wish to be as children, we will wake up from our slumbers and see them for what they really are.
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