Ron Paul Has Warned Us Time & Time Again.............

Letter from Ron Paul: Time is Running Out
Wednesday, 24 September 2008

Dear Friends,
Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.
The events of the past week are no exception.

The bailout package that is about to be rammed down Congress' throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! "This is welfare for the rich," he said. "This is socialism for the rich. It's bailing out the financiers, the banks, the Wall Streeters."
That describes the current bailout package to a T. And we're being told it's unavoidable.
The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!
• The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.
• Financial institutions are "designated as financial agents of the Government." This is the New Deal to end all New Deals.
• Then there's this: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.
There goes your country.
Even some so-called free-market economists are calling all this "sadly necessary." Sad, yes. Necessary? Don't make me laugh.
Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we're supposedly presented with this November: yes or yes. Now, with a backlash brewing, they're not quite sure what their views are. A sad display, really.
Although the present bailout package is almost certainly not the end of the political atrocities we'll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.
The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?
When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?
Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.
In liberty,
Ron Paul

Hey, remember When We Made Fun Of Chinese Banks?

China banks told to halt lending to US banks-SCMP
Wed Sep 24, 2008 9:52pm EDT
BEIJING, Sept 25 (Reuters) - Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.
The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.
"The decree appears to be Beijing's first attempt to erect defences against the deepening U.S. financial meltdown after the mainland's major lenders reported billions of U.S. dollars in exposure to the credit crisis," the SCMP said.

Chuck Baldwin (Constitution Party) Has The Right Idea For The Bailout

NO AMNESTY FOR WALL STREET


By Chuck Baldwin

September 26, 2008
At the time of this writing, the U.S. House and Senate are poised to pass a $700 billion bailout to Wall Street. At the behest of President George W. Bush, the U.S. taxpayers are going to be on the hook for what can only be referred to as the biggest fraud in U.S. history.
Virtually our entire financial system is based on an illusion. We spend more than we earn, we consume more than we produce, we borrow more than we save, and we cling to the fantasy that this can go on forever. The glue that holds this crumbling scheme together is a fiat currency known as the Federal Reserve Note, which was created out of thin air by an international banking cartel called the Federal Reserve.
According to Congressman Ron Paul, in the last three years, the Federal Reserve has created over $4 trillion in new money. The result of all this "money-out-of-thin-air" fraud is never-ending inflation. And the more prices rise, the more the dollar collapses. Folks, this is not sustainable.
Already, Bear Stearns was awarded a $29 billion bailout, followed quickly by the bailout of Freddie and Fannie that will cost the taxpayers up to $200 billion. Then the Fed announced the bailout of AIG to the tune of $85 billion. Mind you, AIG is an enormous global entity with assets totaling more than $1.1 trillion. Moreover, the Feds agreed to pump $180 billion into global money markets. And the Treasury Department promised $50 billion to insure the holdings of money market mutual funds for a year. Now, taxpayers are being asked to provide $700 billion to Wall Street. (I hope readers are aware that, not only will American banks be bailed out, but foreign banks will also be bailed out. Then again, at least half of the Federal Reserve is comprised of foreign banks, anyway.) In other words, the Federal Reserve is preparing to spend upwards of $1 trillion or more. Remember again, this is fiat money, meaning it is money printed out of thin air.
All of this began when the U.S. Congress abrogated its responsibility to maintain sound money principles on behalf of the American people (as required by the Constitution) and created the Federal Reserve. This took place in 1913. The President was Woodrow Wilson. (I strongly encourage readers to buy G. Edward Griffin's book, The Creature from Jekyll Island.) Since then, the U.S. economy has suffered through one Great Depression and several recessions--all of which have been orchestrated by this international banking cartel. Now, we are facing total economic collapse.
But don't worry: the international bankers will lose nothing--not even their bonuses. They will maintain their mansions, yachts, private jets, and Swiss bank accounts. No matter how bad it gets on Main Street, the banksters on Wall Street will still have the best of it--President Bush and the Congress will make sure of that. This is one thing Republicans and Democrats can agree on.
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America's founders were rightfully skeptical of granting too much power to bankers. Thomas Jefferson said, "If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."
Jefferson also believed that "banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."
Daniel Webster warned, "Of all the contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deludes them with paper money."
Webster also said, "We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no, Sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors, and a ruined people."
Our first and greatest President George Washington said, "Paper money has had the effect in your State [Rhode Island] that it ever will have, to ruin commerce--oppress the honest, and open the door to every species of fraud and injustice."
If George W. Bush, John McCain, or Barack Obama had any honesty and integrity, they would approach the current banking malady in much the same way that President Andrew Jackson did. In discussing the Bank Renewal bill with a delegation of bankers in 1832, Jackson said, "Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out."

What President Andrew Jackson said to the bankers in 1832 is exactly what an American President should say to these criminal international bankers today. But what George Bush, John McCain, and Barack Obama want to do is provide amnesty for the international bankers, just as they want to provide amnesty for illegal aliens. I say, No amnesty for Wall Street, and no amnesty for illegal aliens, either. Instead of sending these banksters on extended vacations to the Bahamas with millions of taxpayer dollars in their pockets, we should be sending them straight to jail!

The only way to fix this economic mess that the international bankers have created is to return America to sound money principles, as prescribed in the U.S. Constitution. This means dismantling the Federal Reserve and the Internal Revenue Service, overturning the 16th Amendment and the personal income tax, and returning the American monetary system to hard assets: gold and silver. Anything short of this will only delay and worsen the inevitable collapse that has already begun.

Maybe The Germans Will Be Right About One Thing......

U.S. will lose financial superpower status: Germany
Thu Sep 25, 2008 6:08am EDT
By Noah Barkin
BERLIN (Reuters) - Germany blamed the United States on Thursday for spawning the global financial crisis with a blind drive for higher profits and said it would now have to accept greater market regulation and a loss of its financial superpower status.
In some of the toughest language since the crisis worsened earlier this month, German Finance Minister Peer Steinbrueck told parliament the financial turmoil would leave "deep marks" but was primarily an American problem.
"The world will never be as it was before the crisis," Steinbrueck, a deputy leader of the center-left Social Democrats, told the Bundestag lower house.
"The United States will lose its superpower status in the world financial system. The world financial system will become more multi-polar."
Steinbrueck, whose efforts to secure greater transparency on hedge funds during Germany's G8 presidency last year collapsed amid objections from Washington and London, attacked what he called an Anglo-Saxon drive for double-digit profits and massive bonuses for bankers and company executives.
"Investment bankers and politicians in New York, Washington and London were not willing to give these up," he said.
He proposed eight measures to address the crisis, including an international ban on "purely speculative" short-selling and an increase in capital requirements for banks in order to offset credit risks.
The collapse of U.S. investment bank Lehman Brothers and financial woes of other financial institutions like insurer AIG have prompted the U.S. government to propose a $700 billion rescue package for the country's financial sector.
AMERICAN PROBLEM
Steinbrueck welcomed U.S. efforts to stem the crisis but said it was neither necessary nor wise for Germany to replicate the U.S. plan for its own institutions, which are under pressure but do not face the same risks as their U.S. counterparts.
The German Bundesbank said earlier this week that the financial market turbulence would hit the earnings of Germany's big commercial lenders, its publicly-owned Landesbanks and its cooperative banks.
Tighter credit in the wake of the crisis could also constrain household consumption and corporate investment, increasing the likelihood the German economy will fall into recession this year.
But Steinbrueck said German regulator Bafin believed German banks could cope with losses and ensure the safety of private savings, calling the turmoil primarily an American problem.
"The financial crisis is above all an American problem. The other G7 financial ministers in continental Europe share this opinion," he said.
"This system, which is to a large degree insufficiently regulated, is now collapsing -- with far-reaching consequences for the U.S. financial market and considerable contagion effects for the rest of the world," Steinbrueck added.
He advocated stronger, internationally coordinated regulation, saying the crisis showed that national action was not enough.
"The International Monetary Fund should become the controlling authority for the application of worldwide financial market standards," he said.

Nicely Said.............

"Each person killed by Uncle Sam's terrible swift sword has had family and friends, and they are not happy. Decade after decade, the federal government's enemies have accumulated, and today they surely number in the hundreds of millions." -Richard Maybury

Mogambo Rants

Cower Before the Great and Powerful Paulson
"My God! This is beyond belief! The Secretary of the Treasury will be above the law! My God! I was going to wax loudly indignant, as should all thinking people, when Mr. Sorkin eclipsed me…"
by The Mogambo Guru
I gotta admit that I am getting Really, Really, Really Freaked Out (RRFO) here lately, and I spend too, too, too much time whining and crying about it. As a result, I desperately seek the solace of gold, silver, oil and large-caliber guns while safely ensconced in the Big, Beautiful Mogambo Bunker (BBMB).
In fact, it was while I was in there that I learned that the new Leading, Coincident and Lagging Indicators came out, and it was just more bad news; the Leading Indicator (economic activity a year from now) was down, the Coincident Indicator (economic conditions right now) was down, while the Lagging Indicator (burdens and inflation) was up! Yikes! Stagflation, the worst of all worlds!
Perhaps this is why Andrew Ross Sorkin of the New York Times is as chilled as the rest of us by the fact that "the Treasury secretary - whoever that may be in a few months - will be…vested with perhaps the most incredible powers ever bestowed on one person over the economic and financial life of the nation", as the Troubled Asset Relief Program, popularly known as TARP, gives Mr. Paulson a massive $700 billion bailout that Mr. Sorkin says shows "the lack of transparency and oversight that got our financial system in trouble in the first place", and which actually "seems written directly into the proposed bill."
He says to look at the original draft of the bill, as first presented to Congress, and you will see such unbelievable horrors as "The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this act without regard to any other provision of law regarding public contracts", and that "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."
My God! This is beyond belief! The Secretary of the Treasury will be above the law! My God! I was going to wax loudly indignant, as should all thinking people, when Mr. Sorkin eclipsed me by characterizing it as "Treasury Secretary Henry M. Paulson Jr.'s $700 billion proposal to bail out Wall Street is both the biggest rescue and the most amazing power grab in the history of the American economy."
Naturally, this precipitated the now-delayed Mogambo Loud Harangue Of Outrage (MLHOO), wherein I paraded down Central Avenue wearing the cutest little ballerina tutu and tiara, shouting through a bullhorn "Meet and greet your doom, you miserable lowlife bastards! $700 billion of new taxpayer money at the total discretion of the same corrupt idiots who got us into this damn mess is just for openers! It will get worse and worse, and you should buy gold, silver and oil right now, because the dollar is freaking toast because the brains of the people running the show are likewise burned to a crisp, probably by rays from the Russian Mafia and the CIA, or aliens from outer space!"
Well, I did not get all that far along on my heroic Paul Revere mission to inform the populace at every Middlesex village and farm that "The red ink is coming! The red ink is coming!", as was I was soon apprehended, as one should expect from the ubiquitous police state that has become the American economy.
Like I said; I was already really, really, really getting freaked out when I got an email from Junior Mogambo Ranger (JMR) John H., who made sure that I got the startling news reported in the New York Times that "With little notice, regulators at four agencies that oversee the nation's banks and savings associations proposed a significant change in accounting rules to bolster banks and encourage widespread industry consolidation by making them more attractive to prospective purchasers."
Being naturally curious, suspicious, and paranoid, we ask ourselves "How to do this?" The answer is: By doing more of the same! Hahaha! Too much! The article goes on, without any evidence of deliberate sarcasm or irony, "The regulators and the Bush administration have decided to resort to further loosening of the accounting rules to try to get the industry through problems that some experts have attributed in large part to years of deregulation." Hahaha! Deregulate to solve the problems caused by deregulation! Hahahaha!
And what "accounting rules" are they suspending? "The action by the four banking agencies provides more favorable accounting treatment of so-called goodwill, an intangible asset that reflects the difference between the market value and selling price of a bank."
In short, a good name and a swell reputation of a company is its goodwill, and is reflected as a premium built into the valuation of the company. Adam Levitin at Credit Slips admits that "Goodwill is a very problematic asset - it doesn't have much (if any) liquidation value and can't be sold by itself."
So what is it, exactly, that these "regulators" are going to do with goodwill? "Under the proposal issued this week, the regulators would permit buyers of banks and thrifts to count some of the goodwill toward meeting their regulatory capital requirements."
Initially staggered at the unfathomable corruption involved in letting "reputation replace money" as capital reserves against deposits, I soon felt that maybe I had made a mistake in laughing, as this new concept is actually a wonderful invention! I love this!
No longer will I even be required to put real IOUs in the employee pension fund when I dip into it to satisfy my need for a little extra cash, and instead my reputation as a good guy is, alone, now enough to cover the debt! I love this!
I'm surprised I haven't heard of it before this, as The Times notes "we've been here before - in the S&L crisis, when the Federal Home Loan Bank Board (now OTS) permitted thrifts to count goodwill toward regulatory capital. The results weren't pretty, as counting goodwill toward capital masked institutional insolvency and permitted thrifts to get even more leveraged relative to real assets." Hahaha!
So it is the same old wheeze: The government used reputation-as-money as a smokescreen to let the S&Ls get into worse trouble!
I look into your eyes. You look into my eyes. We both look at gold and silver. We both know what the other is thinking.
P.S. In a previous edition of the Mogambo Guru newsletter (mott "Each issue more stupid and worse than the last!"), I made a series of mistakes concerning Jon Nadler of Kitco.com, the first of which is that I misspelled his name as "John", which I was hoping was the result of my computer's spell-checker "correcting" the name "Jon" into "John", but I now see that that ain't what happened.
And then I discovered that you can't cover it up by taking "Jon" out of the computer's internal spell-checker dictionary so that it WILL change "Jon" to "John", either! Damn! Why is everything always against me? It's not fair!
The second mistake is that there seems to be some mix-up between what Mr. Nadler actually said versus what he was quoting Mark Hulbert as actually having said. My Official Mogambo Plea (OMP) is, of course, "Not guilty, your Honor!", and I blame everything on…(looking around the courtroom for a victim)…Greg, my editor.
Unofficially, and this is just between you and me, I am sure that it was a confluence of my own problems, starting in 2nd grade when we first learned that little Mogambo "Does not read with comprehension" (which is just for openers, and the tally finally ends with "Does not get along well with others", even though I maintain that I would have gotten along with them if they weren't such morons, but they were, so to hell with them!).
Now, combine that natural incompetence, suspected brain damage and a pathological lazy-yet-superficial attitude about everything that does not involve food, sex or new ways to hit a golf ball 300 yards right up the middle, with the sheer tonnage of medications I am taking these days, two of which specifically warn "may cause confusion", which is, unfortunately, only one of the entire freaking constellation of side effects stemming from each of them, and all of them interacting with one another, including emergent multiple personalities and hearing voices that demand "Burn! Burn everything!", but when I go back to the doctor and say, "Hey, man! You gotta do something about all these pills making me dizzy, tired, achy and spaced out! I think I can see through time, for God's sake!" he gives me another prescription for another pill that will mask the symptoms. Damn!
Anyway, my apologies to Jon Nadler for the confusion, my apologies to anybody who actually thought I have a clue about what I am yammering about, but I will strongly insist on my First Amendment rights under the Constitution, and thus I stand proudly and say "Not Guilty! It was Greg! Greg did it!"

Bush and the Bailout Bandits

We don't believe W's ascription to free enterprise
Posted: September 26, 20081:00 am Eastern
By Ilana Mercer
"If this threat is permitted to fully and suddenly emerge, all actions, all words and all recriminations would come too late. Trusting in the sanity and restraint of Saddam Hussein is not a strategy, and it is not an option."
That was Bush on Jan. 28, 2003.
Cut to Bush of Sept. 24, 2008: "The government's top economic experts warn that, without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold."
In 2003, Bush and Cheney cowed a cowardly Congress into authorizing war against Iraq. Congress's vote was a mere formality.
In 2008, Bush (minus the manic grin) and King Henry (Paulson) are hectoring the same creeps into authorizing $700 billion of taxpayer funds for firms who've funded bad mortgages.
The latest calamity, like the first, is, as I write, being rammed through at breakneck speed before the November elections.

Unmentioned by the bumbling Bush is that the U.S. Treasury is broke. Bernanke will likely monetize the debt, which means minting money in the basement. In the process, the dollar will further devalue, and the national debt will be driven above 70 percent of gross domestic product!
All the same, the teletwits insist that borrowing or forging funny money in order to buy, for a pretty price, assets whose value the market has pegged at zero will be a boon to taxpayers. But in the unlikely event that money is made, it'll flow not to the taxpayer, but into the insatiable maw of the feds.
Bush lobbed his financial WMD first by nationalizing the heavily socialized Fannie Mae and Freddie Mac, another formality. The administration then handed $85 billion to AIG. Mercifully, the moribund Lehman Brothers was allowed to expire, marking the largest bankruptcy in U.S. history, but not before an attempt was made at resuscitating Bear Stearns.
Ludwig von Mises, the greatest economist ever, was never wrong: The road to socializing the means of production is paved with interventionism.
Buried in Bush's blather was a tacit acknowledgment that government's deep infiltration of the mortgage and homeownership markets encouraged a laissez faire attitude toward lending and borrowing.
Obama "thinks" – my tongue is firmly in my cheek here – that the crisis is due to too little government meddling. McCain doesn't think. The natural laws of economics consistently show that State subsidies and subventions are what enervate markets.
"Because [Fannie and Freddie] were chartered by Congress," confessed Bush, "many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk."
Fannie and Freddie's "charter" partners Bush exonerated.
Moreover, nowhere did Bush come clean about the continual expansion of credit by the central and commercial banks. Loose monetary policy has caused interest rates to fall below the natural market rate, and has precipitated an artificial stimulation of economic activity reflected in the colossal malinvestment and misallocation of resources witnessed in the housing market.
Consider another pesky piece of the puzzle: This government – and previous administrations – has eliminated the risks of mortgage lending. The sub-prime fiasco, in a nutshell, is a consequence of extending credit to the un-creditworthy, chief of whom are minorities. "The Diversity Recession" is how VDARE.com commentator Steve Sailer has aptly dubbed the mortgage misadventure.
You had the Federal Housing Administration colluding with the U.S. Department of Housing and Urban Development to provide taxpayer-subsidized home loans to illegal immigrants, no questions asked.
You had the 1974 Equal Credit Opportunity Act, the 1975 Home Mortgage Disclosure Act, and the U.S. Fair Housing Act – all arrows in the quiver of the federal government and the Department of Justice, aimed at forcing banks to throw good money after bad by lending it to those with low credit ranking. Mainly minorities.
Under the guise of remedying (alleged endemic) root-and-branch racism, the State has legislatively removed the risks of mortgage lending, thus precipitating the housing bubble.
Bush's ownership society, built as it was on quicksand, has metamorphosed into the bailout society.
"I'm a strong believer in free enterprise," declared Dubya the dirigiste, "so my natural instinct is to oppose government intervention."
Don't believe him; oppose him.
If he favored markets, he'd let them work. And that means, as the only congressman with any economic acumen has counseled, not propping them up, and allowing the liquidation of bad debt and worthless, illiquid assets at prices set by the market, not manufactured by government.
Above all, a crisis that was created by cheap credit must be corrected by less of the same.
How does a bankrupt person become solvent? He ceases to borrow and spend, pays down what he owes and lives within his means. But Bush and the bailout bandits (here I include Obama and McCain, who're down with destroying the economy too) would like you to believe such eternal verities do not apply in macroeconomics.
Bush's idea of a correction is thus to "free banks to resume the flow of credit to American families and businesses." In the man's own crazed words!
Those who buy the Bush bailout are – to use the incomparable Paul Gottfried's coinage – "at least as dumb as turkeys, the mouths of which have to be shut when it rains, lest they swallow too much water and drown."
An unlovely snapshot of candidates Obama and McCain.