CLASSIC: Ron Paul vs. Paul Krugman on Bloomberg TV - April 30, 2012

Farrakhan on Ron Paul & Exposing the Federal Reserve and International Bankers

Europe’s Sovereign Debt Crisis and Germany’s Historic Economic Conundrum

I have been giving the global economic crisis a considerable amount of thought. If you have been reading my essay’s on this blog for any considerable length of time, you are aware of my predictions as early as 2007, with respect to how the US, Greek, French, Spanish, and Italian economies would falter as a function of unsustainable fractional banking practices of central and private banks, poorly formulated and conceived economic political policy, the incessant propensity to employ Keynesian economic philosophy to provide the fasade of short-term solutions to providing economic growth, and how these problems are not due to a liquidity issue but rather a massive debt contraction in which printing and disseminating additional paper money only makes things worse (quantitative easing).

The predicament that Germany finds itself in is unique and historically explains why they have taken the position they have. Many western nations including the US and its major European counterparts have been giving Germany the business for not want to bailout nations heavily burden by debt in which their citizens receive big pension pay outs so that they can retire before age 50 and live club-med life styles.

Since the times of Bismarck, Germany has been considered a threat to the rest of Europe. : This both economically and militarily. Ever since Prussia defeated France in the war of 1870-71, this has been the case. Even after the war, Germany did not really rebound economically until 1895. By the time they did, around 20 years later the First World War had started and in-between that time the British government, among others was taking a page from Napoleon and the US Civil War to destroy German economic growth via an extensive counterfeiting operation.

Unlike the European nations who are in dire economic straits and begging for Germany to take on their massive debt burden, they remember how the Allies dictated the harsh terms in the armistice signed at Compiegne, France. The reparations imposed as a function of the Treaty of Versailles led to hyperinflation in 1923 which only got worse when the depression hit the world in 1929 which resulted in massive deflation. The treaty resulted in Germany giving up an eight of its territory which equaled near 7 million people, all of its international investments and it colonies outside of Europe. Leaving the nation with close to 150 billion Marks in debt.

Neither the European Union nor the US has a Dr. Hjalmar Schact to assist them in this present crisis. It was Schact who revived the 1920s Weimar Republic of Germany from post WW 1 hyperinflation. A period before then which saw a currency exchange rate of 1 trillion Marks for 1 US dollar. German as well as the rest of Europe knows this recent fix is short term and is equal to using dental floss to splint a compound fractured leg. Just today banks in Britain still acknowledge that the euro zone crisis was the biggest threat to the UK's banking system. This is why Germany is reluctant to assist in the massive Euro zone bailout in which they would assume most of the exposure. German foreign minister Guido Westerwelle has rejected the notion that the debt deal agreed in Brussels recently could be renegotiated to give Greece more generous terms while he was speaking in Istanbul.

This is why the World’s central banks (led by the US Federal Reserve) reduced rates to prop up the broken legged Euro zone economy once again. “The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank (ECB), the United States Federal Reserve and the Swiss National Bank on Wednesday announced a coordinated attempt to provide liquidity support to the global financial system to avert further global financial distress.”

The Federal Reserve, in a morning press release, said that it will take measures to provide easier access for European banks that hold dollar-denominated currencies for dollar loans to U.S. currency. This translates simple into Washington politicians from Obama to the Congress made easy millions by buying stocks knowing they were to bail out some countries in Europe.

The bottomline truth about today's Federal Reserve-led coordinated effort by developed worlds' central banks to ease the liquidity problems of European banks is this: It doesn't change anything. European leaders still have the same tough decision to make. Either impose even stricter austerity measures on Europe's struggling nations or force Germany and other stronger European nations to come forward with an even bigger bailout, or, of course, kiss the Euro good-bye. Germany keeps all of this in perspective and in the back of their collective unconscious, they have to remember the Treaty of WW 1 and the hardships of hyper-inflation suffered them and after WW 2. Thus it is no wonder they are hesitant to help the very nations who destroyed their economy. The parliament remembers because they suggest that German participation in bailout process violates limits of acceptable integration within the EU, interfering in sovereign affairs of other member states. This even if Angela Merkel and the German courts do not. The reality is that no matter the German court ruling, its decision has little to do with saving the euro in the long term. The state of Europe will eventually show it’s jaundiced and gangrene infected economic limbs and do as all bacterial infected cells do, and Germany will survive waiting in the wind while the rest of Europe remains helpless.

If I can recall of this history, surely the Germans can and the rest of Europe. But as to the Us Federal Reserve and President Obama, I doubt it and this really scares me about the economic prospect for Americans long-term future, one in which we are trying to create with short-term and temporary fixes.

Shame on You, Washington Politicians

My America is land of the free and home of the brave. But this is only in theory. The actual truth is that the bravest folk in our great nation are those who think, read, who are of the middle and lower classes have no insurance or jobs and tend to be in the military. Yes this is the back bone of our great nation and all of the rest seem to be holding on milking other for their ride.

Take for example our politicians. All I can say is “shame on you.” You cannot do the work of the people and tend to only do what is best for your wealthy associates regardless of party affiliation for the simple truth in policy, action, and money there is no distinction between any politicians in Washington. Last I heard Obama was just as bellicose as Dick Cheney and has dropped more bombs from drones than Donald Rumsfeld ever did.

What if any, additional evidence do we need to see that our political system is completely broken? These super committee fools couldn’t even come up with at least $1.2 trillion in deficit cuts over the next decade in a two month period. Meanwhile back at the ranch, the U.S. national debt has passed the $15 trillion dollar mark and we are facing trillion dollar deficits – can you say national financial disaster. Now we are going to have automatically triggered budget cuts of $1.2 trillion in starting in 2013. And we will have to wait and see because mathematically, we may not have even this many in cuts since they include almost $170 million in savings projected to occur as a function of reduced interest cost on our national debt.

Yep folks, shame on them, they are too weak, ductile and fleecy to roll up their sleeves and do some actual work. They are not brave enough to do what needs to be done and should be ashamed since our men and women fighting over seas in wars they did not ask for are the epitome of bravery.

But what can we expect, my America is a nation that gives a single mother more time in federal prison for lying on her food stamp application than anyone involved in the Wall Street mortgage fraud, sub-prime lending or complex paper schemes that help produce Americas and the worlds debt based conundrums. Last week, U.S. District Judge Henry Wingate sentenced Anita McLemore, 47, the mother of two teenage children, to three years in prison. The mother of two pleaded guilty in July to one count of submitting a false claim to the U.S. Department of Agriculture Temporary Assistance and Food Stamps program.

Ms. McLemore, received $4,367 in benefits. This in comparison to six defendants in two related mortgage fraud cases involving fraudulent loans totaling about $5.8 million received sentences ranging from house arrest to 30 months in prison. In addition to the three-year sentence, Wingate fined McLemore $250 and placed her on supervised release for three years after serving her sentence.

These fools obviously do not get it, from Obama to the Congress, they do not have a clue; they cannot see that as a nation, there is a very good chance that we will suffer another major credit downgrade on U.S. debt. And if this happens, a large proportion of the financial transactions that occur worldwide would not be able to happen if that takes place. No one with the exception of Ron Paul (this is a must see video of Dr. Paul in 11/19/11). He would end the Federal Reserve and starts issuing debt-free money, and move to cut our budget deficits. All these folks on TV want to do is fix a broken system, without out acknowledging that it became broke in 1913, prior to the passage of the Federal Reserve Act, the national debt was only about $2.9 billion.

We are in the last days of the Euro and the Union possibly and we are no better as a nation. According to U.S. Representative Betty Sutton, America has lost an average of 15 manufacturing facilities a day over the last 10 years and last year alone, as a nation we lost an average of 23 manufacturing facilities a day . Data reported by the Economic Policy Institute, notes that our economy loses more than 9000 jobs for every $1 billion of goods that are imported from overseas.

And what do we have to show for it? A dysfunctional Supper Committee, a dysfunctional Congress and a dysfunction White House Administration. I am sorry but shame on all of you Washington, DC politicians. We are suffering, we see the problems, but you don’t and will not listen to us. But why should they? The average net worth for a member of Congress is now approximately 3.8 million dollars and more than 50 percent of the members of the U.S. Congress are millionaires.

Obama and the Congress: Returning America to Hooverville

Riddle me this, what will it take for Obama groupies to take their heads out the sphincter of the President and what will it take for Tea party groupies to take their heads out of the same opening of the Tea Party? Is it just me or am I the only one who see that no matter what, Obamafied folk hate all the Tea party supporters and the Tea Baggers hate without though or question, all who support President Obama. The least common denominator both conglomerates fail to observe is that regardless of republican or democrat, male or female, gay or straight, or black or white, these people all represent the same thing from their K-street lobbyist influence to wealthy campaign donors. Yes, republicans and democrats are the same inside the beltway political party crooks. Some may take issue with this and their feeble thought processes may still wish to make delineations between the two but the math will prove unflappable.

Just this week, employers announced plans to shed 115,730 workers from their payrolls in September, making it the worst job cut month in over two years.Telling me if this is September, and what we know from history, which the President and the Congress seem not to be able to learn from, it is only going downhill from here given the federal government penchant for across-the-board cuts in spending put in place by President Obama and the congress during their debt ceiling debate. September job cuts were 126% higher than the 51,114 announced in August and 212% higher than September 2010, making it the highest since April 2009. Telling us regular no politician and non-wealthy political party donors what we already know – it’s hard out here. But what does the president do? He wants Congress to make it easier for private debt collectors to robo-call the cellphones of consumers delinquent on student loans and other billions owed the federal government via a hidden clause in his $3 trillion deficit-reduction plan Obama submitted to Congress. It should have been expected given how close the President is to campaign funders including the private debt collection industry – strange since he wanted Elizabeth Warren to fight these same folk, ACA International (the collection industry trade association).

It is apparent that neither Obama nor the congress care to solve our present economic crisis nor are they adult enough to tell the American people the truth regarding the severity of what we encounter from an economic perspective. Instead, they would prefer to bicker and move our nation towards Hooverville.

During the great depression of the 1930s, camps of dispossessed and destitute people grew across the nation after the stock market crash of 1929. These camps, comprised of homeless men, women and children who were forced to take up residence in shacks as a result of the Great Depression became known as Hooverville's in honor of President Herbert Hoover.
Policies of the federal government were so inept and out of touch with the seriousness of the economic forlornness most of America was experiencing (as now) that the little resources that the federal government made available often did not go to the hungry and homeless but rather to corrupt politicians and corporations who and kept those valuable resources to themselves (Wall Street Bailout and loans for big corporations).

As the economy continued to get worse, more people and families were impoverished due to rising unemployment and mortgage foreclosures. In fact estimates suggest that between 1929 and 1933, more than 100,000 businesses failed across the nation. Like Obama currently, by the end of President Hoover tenure in 1933, there were at least 13 million unemployed (around 25% of America's work force).

The Obama Administration and the congress are heading toward turning America into a country of Hooverville’s. The stock market crash in October 1929 helped trigger a devastating depression that led to massive homelessness and joblessness once the economy began to crumble in the early 1930s, resulting in these make shift shanty towns springing up across the nation. Seattle's main Hooverville covered nine acres and lasted from 1931 to 1941. One of the largest Hooverville's in the U.S. sprouted along the banks of the Mississippi River in St. Louis, Missouri in 1930. In New York City’s Central Park, a Hooverville existed from 1931-33. There was even one in Washington, D.C. on the Anacostia flats south of the Capitol in the spring and summer of 1932.

The problems were similar to now. As today, during the Great Depression the Federal Government’s did not deal head on in terms of their response to the economic collapse since all of their Depression-era policies failed to alleviate unemployment and address the social crisis led to the creation of Hooverville’s. The real problem was the Federal Reserve banks and their practice of fractional banking.

Prior to 1913, there had only been two other times the Unites States had a federal reserve bank. The first central bank was created in 1791 amidst major dissent against such in the Congress and chartered for 20 years. Like the Federal Reserve Bank of today, it used its control of the currency to defraud the public and establish a legal form of usury. Its practice of fractional lending at a 10:1 rate (ten dollars of loans for each dollar they had on deposit) caused so much public outrage that the charter was not renewed and the bank ceased to exist in 1811.

The second central bank of the US came to fruition after the war of 1812. European and American bankers used this tumultuous time to influence Congress to charter the Second Bank of the United States in 1816. President Andrew Jackson won the presidency in 1828 with the promise to end the national debt and eliminate the Second Bank of the United States and during his second term as President he withdrew all government funds from the bank and on January 8, 1835, paid off the national debt allowing the charter to end in 1836.

The Federal Reserve Act of December 23, 1913 was designed “to provide for the establishment of Federal Reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.” The tricky part was the “for other purposes,” which basically meant it could create money from nothing and collect interest on it.

The Federal Reserve Act, which was passed without discussion during the Christmas recess, transferred all the rights and profits from the creation of money from the citizens and the U.S. Government to private banks. Basically giving private banks the right to create money out of thin air and turn us regular folks into slaves of debt. This debt is the result of fractional banking. Fractional banking or fractional lending is the ability to create money from nothing, lend it to the government or someone else and charge interest.

It is clear that President Obama, his administration and the congress do not understand our problems as a nation and ergo do not see the negative role the Federal Reserve Bank and it fractional banking approaches have played in what we are experiencing now.

Historically we have seen banks deciding on their own to shut off the debt/money, citing the need to control inflation resulting in massive bankruptcies, unemployment and foreclosures. They singularly have the power to engender both prosperity and depression. All wealth that is created in America is eventually transferred to the central bank and becomes what we poor folks view as a process of consolidating the wealth. The basic math is that the FRB creates inflation, and then restricts credit and the market’s collapse while the rich get richer – just look out ours and across the pond in Europe.

When we as a nation did not have a central bank to manipulate the supply of money, the US experienced unprecedented growth for 60 or 70 years. Consequently in 1910 Senator Nelson Aldrich (originator of the Sixteenth Amendment - income tax), then Chairman of the National Monetary Commission, in collusion with representatives of the European central banks, devised a plan to pressure and “deceive Congress into enacting legislation that would covertly establish a private central bank.”

Obama and congress are in the pockets of the wealth oligarch of Wall Street. They have jobs and benefits. Their wages continue to increase while ours do not. They are not interested in how we are supposed to live and survive. All they want to do is allow the Federal Reserve Banks to print more money so we can sell the only thing we make – weapons. To grow our economy it is simple, end the Federal Reserve and bring production back to America. We must end fractional banking system. There was time when a person could walk into a bank and exchange a dollar for gold. We can’t do such any more. They President and congress will bailout banks to the tune of billions but not us. Soon there will be no middle class.

Thomas Jefferson said, "If the America people ever allow private banks to control the issuance of their currencies, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered." Sad thing is nothing will change because we too stupid to see this. Nothing that is until we get money out of politics in the form of the Koch Brothers, George Soros and warren Buffet and end the fractional banking practices that got us in this mess. But like I said it is against the interest of the wealthy, even those in politics from Obama to Ryan. They will be better served financially when America once again becomes a country of Hooverville’s.

What Obama Can Learn From Mugabe that Ron Paul Did

Hard to imagine it was just four years ago that pundits across the globe were slinging harsh and vilifying attacks against Zimbabwe’s President Robert Mugabe. They asserted that Mugabe under the banner of populism and black sovereignty had run and was continuing to run the country's economy into the ground. Inflation's was at an unimaginable rate of 100,000 percent which eventually grew to 231 million percent.The shelves of many stores were almost empty and prices were constantly increasing due to hyperinflation. For the general population, it was estimated that four out of five people were unemployed and that the situation was so bad that about 3,000 people a day were reported to be crossing Zimbabwe's borders into neighboring countries.

This no longer is the case, thanks namely to policies put in place and established by the same supposedly villainous Robert Mugabe. No longer does the African nation suffer with the highest rate of inflation in the world. Now just a few years’ latter goods are back on the shelves of local stores. Why, because of the government's decision to replace the Zimbabwe dollar with the South African rand and the US dollar.

The Zimbabwe's economy has produced economic growth for two successive years due to positive policies and strong commodity prices, and this according to the International Monetary Fund. Although this southern African country's economy was beaten down by hyperinflation (drops in value) which reached 500 billion percent in 2008 and grew 5.7 percent in 2009, now as it stands, Zimbabwe has a budget surplus and demonstrates additional signs of improvement. The economy of Zimbabwe grew close to 8 percent in 2010 is expected to grow near 10 percent this year.

The question for many remains how did this happen after being vilified by the United States and Europe just 5 years ago for not doing enough to improve the economy and the nation’s policy for land redistribution from Europeans to native Zimbabweans? How is this possible when once the rest of the world was saying that the people of Zimbabwe were not capable of self-government? First higher gold and platinum prices have boosted exports and government revenues in 2010. In addition, not being the victim of severe droughts as other African nations around the horn have resulted in conditions contributed that have led to increase in agricultural output. The policies of Mugabe targeted several areas including but not limited to reducing rigid labor market constraints, establishing security of land tenure, clarifying ownership requirements under the indigenization legislation, and addressing concerns about governance in the diamond sector. They also implemented other reforms including actions that have resulted in a more than 50 % increase of livestock folds across the country. Last but not least, there were the strict reforms imposed in the banking system.

Given all of the aforementioned, I often wonder why have these occurrences in Zimbabwe and imposed by President Mugabe received vapid coverage in mainstream western media and not openly discussed and acknowledged by President Obama? After all it was just last year when the nation‘s central bank introduced a $50 billion note (at the time enough to buy just two loaves of bread). It was implemented to avoid cash shortages because like our dollar, theirs was virtually worthless. The simple lesson for the President should be to learn from what we observe transpire in Zimbabwe, but he will not. Some economist have suggested that with the Federal Reserve Bank incessant use of quantitative easing (printing fiat money willy nily), that the U.S. economy will enter “hyperinflation” similar to what we saw in Zimbabwe. Why because no matter what, the artificiality of the US economy will be subjected to the reluctance of the Federal Reserve to raise interest rates. We are already seeing large increases in everything from commodities to basic goods and with government debt growing so much, inflation has to start to accelerate at a dangerous rate.

From a policy approach it is obvious that Obama doesn’t comprehend, understand or believe the aforementioned as being a tenable outcome. Dr. Ron Paul does since he understands and states that “a thriving economy is not the but the result of a free people.” The actions of the President and a House that currently only serves to manage economic forces in an effort to mandate how business should be conducted, fail to egage the larger picture. Although not completely flawless, Dr. Paul’s economic principles rest on the idea that humans have the right to choose how to interact with one another. The clearest example concerns how we conduct foreign policy as nation and how these actions inherently impact our potential for economic growth negatively. For him, there is no reason to provide $3 billion to Israel annually while at the same time give their Arab neighbors and enemies and $12. Paul is the only current politician who has stated the reality of the US economy being considerably in worse shape than Europe.

First we owe Japan more than a trillion dollars, not to mention we are in worse shape than Japan, even after their natural disasters since they do have major exports to lean on and higher rates of savings available. The question should be why are US politicians from the President on down not addressing the citizens of this nation honestly about our economic conundrum? What are we doing to maintain our competitive edge in the world while all other nations are acting? Nothing, we fuss and bicker and Obama doesn’t show the will or ability to work on this from a serious purview and neither do Republicans. While Zimbabwe is going through with their plans for a gold-backed currency and China Becomes World’s Largest Gold Buyer, our economy is slowing down and we applaud an artificial stock bubble like it means we are back on track. Things that Paul openly supports.

As opposed to trying to solve our problems, our federal government only attempts to spends, borrow, and print money our-way out of debt so much that the dollar is null. Why, because our politicians figure the best way to grow (which isn’t growth) our economy is by printing new money to pay its debts, and borrows hundreds of billions abroad in the form of Treasury obligations that someday must be paid. All of this even when they know such is in contradiction to the laws of economics. From what has been said and written, it is pellucid that Dr. Paul understands this as well as Robert Mugabe. The query is does or can President Obama and can he learn from them both?

No Uncle Tom, But Paul over Obama Any Day

I like Obama. He is smart, promotes the values of family and what it means to be a father and a husband, but his policies leave a lot to be questioned. I am not fond of the republicans, or the Democratic Party, especially the true GOP candidates trying to become the next President of the United States. But I do like and respect Dr. Ron Paul – libertarian like me, who has been reduced to run under the Republican banner when the Republican Party hates him with avarice and conviction. So if it came down to it, I would select Dr. Paul over Barack Obama, Esquire anyway and let me tell you why.

To start off, more than five years ago, before any of the current slate of GOP hopefuls or prior democratic contenders, he saw and said what would happen if government continued on its fatuous ways. Even before Obama, he described the current state of America’s Federal government as a philosophical danger that only represents the status quo. He described it as immoral because both republicans and democrats in the executive and legislative branches of government were destroying our personal and economic liberties. Five years ago he stated that they believe in internationalism over the constitution and that banking, the military industrial complex, the prison industrial complex, medical industry, the insurance industry and pharmaceutical industry interest are placed before the interest of the American people in the name of profits.

Many of us, as ill-informed as we are, forget that the austerity measures via stimulus as pronounced by Bush and Obama, and countries in Europe, are not what is needed to deal with the problems resulting from the financial crisis of 2007 but instead aid the speculators who brought the crisis in the first place. Paul is the only person who addresses this.

He speaks openly how the UN uses America to act against its own interest and how they took us to war after WW II in Korea and that we have been there ever since. He points out how our major trade agreements including NAFTA and our involvement with the IMF, WTO and World Bank drain US economic resources for other nations and not ours. He is against internationalism and believes most government should be local as well as speaks openly how democrats and republicans alike are weak on immigration and do not care about the nation’s borders based on past inaction.

To bring our budget under control he notes we needs to stop spending. Unlike Republicans, he will not cut domestic programs to do this but rather stop all foreign aid abroad, close all of our military bases abroad, and bring home all of our troops. If we don’t take such measure, not only will our sovereignty be questionable, but we will have an even bigger financial crisis and a collapse of the dollar is his view.

His observations are well supported as both democrats and republican administrations amass massive deficits that continue to grow annually. He attacks republicans for when Bush was elected, he doubled the size of the Department of Education, increased entitlements and implemented a prescription drug program, none of which were paid for.

He says that the federal government spends too much, tax too much, borrow too much and print too much. This has resulted in a currency and sovereign debt crisis. He would end the IRS and not replace it with anything using history as a framework saying that the nation lived without an IRS until 1913 when it was established (16th amendment). He would prefer tariffs and similar fees.

What makes him different from the Republican candidates and Obama is his understanding and approach to foreign policy. A common example of his is showing how Osama bin Laden and Saddam Hussein used to be our allies and then became our enemies. Our aid t these nations and our presence in Saudi Arabia for example fuel their hate. We give billions to Israel annually and three times as much to Arab states because of our global policeman stance and desire to want in roads to Middle Eastern oil. Cutting foreign aid alone would save hundreds of billions annually and would be sensible foreign policy if taking care of America was more important than policing the world putting military lives at risk. For as Paul ask, who do US troops in Germany and Japan help America’s defense and protect our national interest? As it stands, the US military is in 130 countries and have more than 700 bases around the world at a staggering annual cost.

He believes we should become energy dependent, drill at home and develop alternative fuels here in our own backyard. Government from his perspective should not give any global multi-national corporation loan guarantees because it fosters malinvestment and obviates free-market. Why because from his perspective, welfarism and corporatism create more and more poor and hungry people.

Last but not least, unlike Obama or the GOP, Paul believes in legalizing freedom of choice to the extent of legalizing marijuana. His position is that it should be obviated from the jurisdiction of the federal government and that states should be left to decide to regulate it as was the case before 1937. This is both a 10^th amendment and free market issue from his perspective.

Now I could speak more on his desire to get citizens to understand the importance of monetary policy to how the Federal Reserve is responsible for job destruction in the nation through fixing interest rates and expanding money, and not liquidating debt to let prices fall subsequently propping up bad debt, but I doubt if most folks take their politics to the same level as I do prior to selecting a candidate. Another reason why I like Paul over Obama, he is the only candidate talking about a return of the Gold standard since history shows us all great nations who went off the Gold standard eventually failed.

Bottom line is based on policy and position alone, Dr. Paul is what I desire in a President more so than any of the GOP fanatics and President Obama. I do not select a person because he looks like me or is the same color or race. The way I see it a rapist, black or white is still a rapist. Unlike many black folks in America, I study the issues and do not vote based on trivial pursuits or because someone tells me I should. I am no Uncle Tom but for me it is Dr. Paul over Obama any day. Im just saying - so call in tonight and let us know what u think.

"2012 BARACK OBAMA vs RON PAUL" hosted by @RDBRadio LIVE Sept 8th 10 PM EDT #BlogTalkRadio call-in (347)324-5722

Is 9 TRILLION Dollars Missing from Federal Reserve?

If I were a Conspiracy – The French Connection

One thing that ticks me off is the notion of conspiracy theory. Frankly, I do not know what this means. When it is used, it is often in an attempt to vilify another’s radically different use of observation and reason to formulate a tenable answer to some conundrum. In simple terms, a conspiracy is a secret plan or agreement to carry out an illegal or harmful act which is usually grounded in some form of political motivation.


Now, I would ask if any remember reading the Book “The French Connection” by Robin Moore but doing such would only date me. I read the book in the mid 70s, around the time I was in Junior High School and found it fascinating. Based on a true story, eventually it would become a movie about the criminal underworld of the drug trade. It was such a god read. And in this age of internationalism and global economics, it doesn’t seem improbably that a man can be tricked and set up based on personal habits alone.

This week in Manhattan, the Chief of the International Monetary Fund (IMF) Dominique Strauss-Kahn on charges of attempted Rape. Now if you listen to my blog talk radio show, you are aware that I reference the World Bank, IMF and the Federal Reserve Banks frequently; as well as to specific individuals and policy positions. Now as a scientist, I like to produce all possible reasons for an outcome and this entire fiasco holds up red flags.

See Strauss-Kahn aint the typical international big banking mogul rich mutha fuca, no he is the Socialist Party of France leading Presidential candidate. He by many estimates had a great chance to replace Mr. Sarkozy and placing his party back on top of French Politics. But this may be over. It was well known by reading the French dailies like Le’ Figaro or Les echos, it was obvious that he was aware of his hurdles. Less than three weeks ago, Dominique Strauss-Kahn met with two journalists from the daily Libération.

He indicated that the biggest issues he would confront in attempting to become president were “women, money and being Jewish.” Regarding women he said, "Yes I like women, so what?" he asked. "For years, there's been talk of photos of a giant orgy, but I've never seen them come out." He also seemingly prophetically proffered a hypothetical situation of something that could destroy his efforts: "A woman raped in a parking lot who is promised half a million Euros to make up her story."

Now I am not saying that he is guilty or innocent, but the timing, the methods and the circumstances are extremely convenient and coincidental. Not to mention there are a host of folks who would benefit from his being incontinently occupied in the US criminal justice system.

Sarkozy: If you follow French politics or even read an online version of their major papers, it was no secret that the current President was in the market for collecting any information or dirt that could be used to discredit Strauss-Kahn. And given the well sustained notion that he loved the ladies, his affair with an IMF economist (Piroska Nagy) and alleged assault on writer Tristane Banon, fabricating an assault based on past events could be easily accomplished, especially with the resources and connection one gets as President of France. Not to mention no telling what he discussed with President Obama when President Sarkozy and his wife, Carla Bruni-Sarkozy, were having that cozy dinner in the White House last year. It should also be remembered that it was president Obama who helped France assume a more prominent role in NATO’s military command structure.

China, Brazil or Turkey: When we think of the IMF, what is known is that traditionally, the head, just as Mr. Strauss-Kahn is a European. The number two is most always and American. With the increasing wealth and might of once developing nations like China and Brazil, the pressure has been growing for the next leader to be from one of these emerging market economies. And as with Sarkozy, with the resources and connections as the above have economically, anything is possible. Lipsky, the American in the number two spot has indicated that he planned to leave the IMF before the year is out meaning, both the top two positions may be open. We must recall that it was earlier this year when the IMF via the number 2 man John Lipsky said that China, Brazil and other fast-growing nations were “growing too fast.” Brazil and some other nations in return raised taxes on foreign investors attempting to slow inflows of investment money and ward off inflationary pressures. This position was reiterated last week by IMF Western Hemisphere Department deputy director Miguel Savastano. No doubt anyone of these nations would love to see Mr. Strauss-Kahn out of the way.

JP Morgan: Now JP Morgan is a metaphor for US banking interest and can stand to represent Goldman Sachs or Merrill Lynch as well. As I noted prior, the number two is an American and the current Yankee in this position if former JP Morgan banker and US Treasury executive John Lipsky. Like I said, Lipsky said he was leaving, but if he doesn’t he may move up front and have his fingers on the bailouts established by Strauss-Khan for Greece, Ireland and Portugal. Many in America thought that Strauss-Khan showed too much favoritism to Greece. Maybe some big bankers on Wall Street hoped that the arrest of Strauss-Kahn would derail the current austerity approaches the IMF has implemented across Europe. We know where the American banking Industry and Wall Street stand – neither has ever said anything complimentary of the IMF’s bailout, especially related to Greece. Just last week The Wall Street Journal reported that a new $86.1 billion bailout from the European Union and the IMF would be given to the Greek to continue assisting in the nations efforts to restructure its debts.

In summary, all I am saying is that this has the potential to be one of the biggest political gadfly’s ever. The entire world of global finance and French politics were aware of Strauss-Kahn's weakness – his affinity for women. Strauss-Kahn denies the charges. Truth is in France both consensual extramarital sex and having a mistress isn’t big news. But I do know that this is all too easy with the facts thus far which are:

• A Woman who said Mr. Strauss-Kahn sexually assaulted him selected him
  Out of a line up.
• The alleged victim, a 32 year-old African Immigrant was led out of
  Police headquarters with a blanket over her head
• Mr. Strauss-Kahn called to see if he left his cell phone (which he had not)
• Police coached person taking the call and instructed them to falsely
  State that his phone was indeed at the Sofitel.
• All involved were coached by police, workers of the Sofitel
  

Now Im just thinking outloud, with shows like NCSI and criminal Minds on televison, who am I to say a set up, based on a well documented history of behavior by a one Dominique Strauss-kahn could not be accomplished. I mean any maid, if they were in his room, has acess to DNA if he was or was not in the rom at the time. It is just as easy for a woman to swipe hairs off of the sink, floor, or lay in the bed or even take semen from a condom in a garbage can. Now I offered a few folk who may be interested in a frame up of dude, but more importantly, Im saying I find all of this dificult to believe - I have seen the true life shows where one hair with DNA can send a man to jail for life, even if innocent. Again connubial issues aside, this just don’t seem right – I’m just saying.

America: The Best Government Money Can Buy

These gas prices are kicking all of us in the rear end. Many blame the President, others commodity market speculators and still others OPEC. But they all are off from the way I see the issue. The real issue and the culprit is the US dollar. Specifically, its reduced value and purchasing power.

It seems almost intentional, avoiding the declining value of the dollar for the pricing increases we are seeing in everything from oil to food to gas. Politicians seem to just want to exploit the issue by appealing to popular sentiment. The fact is that the US dollar continues to hit record lows against all major foreign currencies especially the yuan, Euro and the Yen. Add to that the recent IMF findings that China’s economy will surpass that of America in 2016, it is more that meets the eye when speaking about the rising cost of gas. Why? Because we are not going through a recovery as the government suggest but rather a debt spending boom based on the home buying explosion of years past.

Truth is US household debt reached a high in June of $8.7 trillion, and with rising unemployment and no economic growth, it is reflected in the reduced value of the dollar. Such impacts negatively US Treasuries especially since now the Japanese government will need to sell its US Treasuries to deal with and pay for cleaning up and rebuilding after the Earthquake. Add to this gumbo China, which has the largest dollar surplus in the world, saw it foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March.

Now back to oil and gas. In simple terms, the weakness in the US dollar is causing everything to go up. This in an environment in which the rate of new debt growth among families is growing and the overall US manufacturing economy declines. This inherently impacts the dollar since what politicians ignore in their budget and deficit battles is the fact that US trade deficits and the Dollar System are connected.

Historically, in 1944 the Bretton Woods agreement solidified the dollar as the preeminent world reserve currency, defining the dollar in value to be 1/35th of an ounce of gold. In 1971, when President Nixon refused to pay out any of our remaining 280 million ounces of gold, he made the dollar what is today.

Oil is a critical economic and strategic resource and since it is traded in US$, when the US$ weakens, in terms of any other major foreign currency, the countries exporting oil get less. Thus when the dollar goes down in buying power they ask for more US$ for a barrel of oil. This gets even trickier since there is no shortage of oil via production currently. But what they see is our economy, let us say compared to a China which by estimates will expand from $11.2 trillion this year to $19 trillion in 2016, while the U.S. economy will rise from $15.2 trillion to $18.8 trillion. Strange, since it was just a decade ago when the U.S. economy was three times the size of China’s.

All I am trying to say is that the America we once knew with the all powerful dollar bill isn’t the same. The fact is that we have a surplus of oil and that we are not refining gasoline/ In addition, what we are seeing is the impact of a weaker dollar on oil demand in non-dollar economies. Oil producers sell their products in dollars. The dollars they get are used to buy other stuff around the globe. If it cost them more dollars to do so then they have to sell their oil for more dollars.

And as long as the U.S. Dollar is continuously devalued (inflated) by Federal Reserve and U.S. government monetary policies, oil producing nations will lose money if they don’t raise the price.

Yep the problem is our government and our monetary policies. The dollar may never be the same. Yet all the time wall street, big oil companies and politicians are getting richer as the sell all that made America great away to corporations and other nations through our monetary policy. Yep, that’s America; the greatest and best government money can buy.

Constipated Now Nows

While many of us continue our habitual over zealous consumption of stuff and things of no real economic value, two events have occurred since the November mid-term election that may be of critical economic importance regarding the future of America, three if one includes the proposal presented this week by President Obama’s National Commission on Fiscal Responsibility and Reform.

The first was the announcement by the U.S. Federal Reserve this week of $600 billion of extra money being put in the economy. Specifically they will use the loot created out of thin air and computer virtual reality to buy $600 billion of long-term Treasury bonds (about $75 billion a month) through March 2011. They call this “quantitative easing.” In theory, this can be defined as a willy nilly, hocus pocus way to promote a stronger pace of economic growth and recovery. By my math, in addition to the pronouncement made by the New York Federal Reserve Bank to reinvest maturing mortgage securities owned by the Fed in Treasury bonds, that projects to approximately $900 billion of Federal bond purchases in the next six months or almost half the loot issued to finance this year's federal deficit.

The second is the meeting of the G-20 in South Korea. We know that most of the attention during this meeting will be directed towards the global economy. Particularly, monetary and currency policy and international trade. This will be an up hill battle for the US, since most of what we see that is jacked-up economically is our fault. I mean since the time of Nixon, we as a nation encouraged all of this, when we decided to get cheap stuff abroad via Chinese, Vietnamese and Latin American labor and taking the dollar off the gold standard.

Yes, once upon a time there was a gold standard in which the monetary unit is a fixed weight of gold. This came about via the Bretton Woods agreement put in place after World War II, allowing several countries to base their exchange rates to the U.S. dollar. But like I said previously, this ended in 1971 when President Richard Nixon ended the dollar-gold peg, leading to what we have now - floating exchange rates. Even stranger is that at this time, Alan Greenspan, who arrived in Washington in 1967, as a campaign advisor to Richard Nixon, wanted to reshape the economic landscape of America via deregulate, But I digress.


The China/US relationship is a clear example of what I am trying to say. They have pegged their currency to the dollar, which keeps the value of the Yuan artificially low, thus giving them the ability to flood the US market with cheap products. The consequence was that it gave China the ability to use the dollars they earned to buy US debt, which let us live way above our incomes. Unfortunate for us, this created a trade imbalance between the two nations, growing dollar reserves in China and creating a trade surplus (just as what we see with Germany).

Chinese dollar reserves currently are estimated at about $2 trillion. If the Feds puts too much money into circulation, these reserves may be devalued. And if China isn’t happy, and their value is decreased because the dollar is reduced in strength by the Feds actions, a trade war and a worldwide recession would not be far fetched as a probably outcome. Funny thing is we complain about china keeping the value of the Yuan fixed, but the actions the US central bank is doing by flooding billions in the world market, is the same thing, only via monetary policy.

What the federal Reserve has done is to take more risk with respect to our economy, an untested risk, which could not have come at a more dangerous time globally for the US. Banks already have about $3 trillion in cash, they just are hoarding as opposed to lending or spending. Thus such actions seems to increase the risks of higher inflation sooner than latter, especially now since the places we used to get cheap labor from is outcompeting us and holding our economic growth stagnant.

Now, other wealthy nations are super critical of the US economic policy as were of theirs 30 years ago, with the clout being on their side now. Especially the German and Chinese with respect to the Feds actions and overall macroeconomic policies. I just don’t get it, what will buying bonds do to encourage job creation? We still spend too much. On December 31, 2010, the Obama stimulus package, will end and thing will really be up in the air.

I do not know what the end game will be but I can say from our actions at home and our buddies around the world. And on the real the U.S. needs to generate at least a million plus jobs annually to keep up with new workers entering the job market alone. From the actions of the G20 summit there are several things we see. First is obvious, that no one wants to be in any paper currency. This may be why a former banker at Goldman Sachs and deputy secretary of state under George H. W. Bush, suggested a return to a modified gold standard. Second, that we are not in a position to tell other nations how large of a surplus or deficit they can run. And last, Unfortunately neither individual folk or our government have learned anything from the last 6 to 10 years of economic disarray. It is very obvious that folks still think and behave the same and still have not taken responsibility and just spend as much loot as they brought in – Governments included. Foir even with this second round of “quantitative easing," Amercia sure feels constipated to me. And may require Funkadelic - Promentalshitbackwashpsychosis Enema Squad.

Keynesian Economics is on Life Support and I wish it would die

In less than two weeks on November 3rd, the Federal Reserve next policy committee will end. It is suspected, if Chairman Ben Bernanke is true to his word, the central bank will attempt to drive down interest rates even lower. This if true, since traditionally the Federal Reserve bank usually cuts short term interest rates to spur economic activity, will show their traditional advocacy of Keynesian approach to economic growth. Unfortunately this is also problematic if trying to avoid inflation is of any importance.

John Maynard Keynes is the father if what many refer to as Keynesian Economic Theory. Keynesian economics is a theory that promotes the view that total spending or aggregate demand is essential to dealing with improving economic outputs and inflation. Its premise is based on the assumption that economic activity is influenced mainly by public sector decisions – mainly monetary and tax policy. The main output from this perspective is employment and not prices. This since monetary and tax policy cannot impact employment if prices or cost are not rigid entities. One reason why KET is obsolete, for if wages, if measured in terms of dollars, will not be able to define real or actual purchasing power at the individual consumer level.

Another unfortunate aspect of KET is that all economic solutions are designed and targeted directly to deal with the business cycle versus the individual worker or wage owner. Mostly due to the observation that there will always be a delay between when economic policy takes effect and when the individuals in charge, like the government actually recognize that an economic problem exists and the time it will really takes to impact the economy.

These methods are opposite to the prior approaches to economics that pushed for more of a Laissez-fair capitalism, which in its simple nature excludes the public sector in the market unlike Keynes. In fact, Keynes advocated for a central bank to be used to expand money supply, which assumes that putting more loot in folks hands would result in an increase of consumer confidence, which would result in people spending more since Keynes believed that putting money into the hands of the people would eventually go to the wage earnings of another.
But history has proven this wrong, although Bernanke, Obama and all the presidents and Fed Chairmen before both of the aforementioned act otherwise. First history is not equal to theory, which it is obvious Keynes could not comprehend. Second, the belief that massive deficit spending will flood the economy with money is equal to accepting that the Easter Bunny is a real creature that lays colored chicken eggs. The truth is that the economy is not starved for money. Thanks to the bailout, Tarp and prior bank rescues, their reserves have actually increased via the structurally built-in deficit spending under the guise of Keynes. Subsequently, allowing the Federal Reserve to release as much loot as they want for them to use to buy up unlimited amounts of bonds, commodities and securities unlike we the common person. That is now since the government can’t print money but rather have to borrow it from the Central bank.

This all with the applause of the Rothschild’s, Rockefellers and Warburg’s and the forced yet illegal Federal Reserve Act of 1913 – but that’s another story.

I mean tell me if I am wrong, but all the US Central bank does is lend loot interest free to banks that gamble, I mean invest it on Wall Street without any risk – cab you say savings and loan? Because all the banks they lend to is not for them to lend to others or extend and free up the flow of credit, but used to buy up all the assets and infrastructure in America. They got money they just don’t lend it or provide credit – they instead use it to make themselves rich – an assumption that Keynes never considered in his public sector government central bank spending to help the economy models. After all TARP, with the approval of congress gave banks the unfettered authority to seize all the property they desire, while at the same time decreasing the value of the dollar, making all that us regular folk buy more expensive.

All I am saying is that KET as has been practiced historically and currently promulgated by Obama and Bernanke has a troubling impact on mostly us main street folk who lived on fixed incomes. The stimulus to be honest about it was too little too late, not to mention the folks it was designed to help were the banks that CAUSED this recession. The fact still remains that the Federal Reserve Bank is a private corporation and no more apart of the US Government than Waffle House.

Thomas Jefferson spoke of such and said it best when he wrote: "If the America people ever allow private banks to control the issuance of their currencies, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered."

Mr. President, Keynesian economics doesn’t work and is on life support due the idiot Wall Street bankers you take economic advice from. Please do not necessitate it.

Economic News You Wont See on TV

1] JP Morgan and the Federal Reserve Are Selling Paper Gold and Buying Physical Gold.

2] The Uber Rich Are Buying Gold by the Ton.

3] The United States Mint announced it has run out of 1-ounce, 24-karat American Buffalo gold bullion coins and that it will not be selling any more in 2010.

4] How can anyone explain the unusually high option volume that we are witnessing currently?

5] Federal regulators announced a $30 billion bailout of the U.S. wholesale credit union system.

6] FED, ECB Throwing World into Economic Chaos according to Nobel Winner Joseph Stiglitz.

7. Some very large investors are making massive bets that the S&P 500 is going to take a serious tumble during the month of October.

Mr. President: Recession hitting us folk hard

The recession is crushing African American communities in major urban centers like Detroit and Memphis. Since the collapse of the auto industry and housing market, Detroit’s population has dropped to under a million from 1.8 million.

Today it is possible to buy a three-bedroom home in Detroit for around $10,000, however there are no buyers. Given this predicament, Mayor Dave Bing, a former NBA star, has suggested reducing the size of the metropolitan area in hopes of reducing the city’s expenses.

Bing’s proposal would require the city to demolish nearly 40,000 homes over the next several years. Poverty rates in Detroit are far above the national average. Some have asserted that such draconian approaches border on being a form of "ethnic cleansing." The fact is that almost a third of the city's 139 square miles is uninhabited.

Foreclosure procedures have been initiated against 1.7 million of the nation’s households, with the average borrower in foreclosure being delinquent for more than 400 days before actually being evicted. More than 650,000 households had not made a mortgage payment in 18 months.

In cities such as Memphis, the recession is having a similar effect due to rising unemployment and growing foreclosures. The median income of black homeowners in Memphis has dropped to pre-1990 levels. The unemployment rates for African Americans in the city is approaching 20 percent when it was below 10 percent just two years ago.

The recession is creating an ever-widening economic gap between whites and African Americans across the nation. Several studies have documented this disheartening trend.

The Economic Policy Institute notes that as of December 2009, median white and African American wealth fell 34 percent and 77 percent, respectively. A study conducted by the Institute on Assets and Social Policy at Brandeis University concluded that for each dollar of wealth owned by a white family, a black family owns just 16 cents, based on Federal Reserve numbers.

The recession is real and it may take several years before any progress or improvement is noticed or felt at the community level. So for the time being, African American families will have to deal with rising unemployment and foreclosure rates and manage to survive the best way they can.

this aint Zimbabwe

Ok, you know me, its all about the economy folk. I have been looking over the back of Geithner and Obama, at least as much as I can suppurate from their statements and documented economic proposals. My problem remains the same – it cannot work with increasing unemployment, inflation, believing that some corporations are too big to fail and more importantly, having no policy designed to stabilize and or empower the US dollar.

The future I see is one of massive government-debt defaults and increased poverty. Yep, poverty. Especially since the debt we have amassed as a nation will eventually be passed on to the US Treasury, Federal Reserve Bank and us regular folk. You can call me crazy if you like but logic and reason remains. Firstly, 1% of Americans own more than 90% of the nation’s wealth, not to mention our debt over the past two years has moved from 11 trillion dollars to almost 25 trillion dollars.

This years annual report on hunger released by the United States Department of Agriculture reported 49.1 million Americans in 17 million households lacked dependable access to food in 2008. This is close to 17 percent of the US population. This tells me more people are below the official poverty level – maybe about 80 million folk. This is not impractical an estimate since the US Census Bureau announced last September that real median household income in the United States fell about 4 percent between 2007 and 2008 alone.

True, I am not an economist but I am no idiot either. The declining state of the US economy is regressing as so at the pace of an avalanche. I suggest we start to watch oil and commodity prices as the real indicator of what is anticipated for the future. I mean you think we don’t have jobs now, there will be less and less if inflation continues to rise, which means prices will increase and folk will be spending less. I hope the President is on to of this, I mean I know he was just in China meeting with our debtors to ensure them that they can keep lending us money. Don’t know if he discussed the dollar for at this rate it will be virtual worthless. This means inflation will only continue as indicated by the recent consumer price index. This suggest to me that if we keep adding to the debt, folk may loose faith in the markets and stop investing all together making this current recession palpable in comparison what may follow. Maybe we need to consider ending floating exchange rates in this country. It is worth a try because in simple terms, money is only worth what folks are willing to exchange for it. This aint Zimbabwe but we may be soon.

money in the bank?

I have often wondered if it was in the best interest of America for our President or any President to bite off or do more than they can chew. I say this not to point fingers but rather because I feel as if we have not really addressed the seriousness of our current economic conundrum. Last year I made a prediction that about 100 more banks would fail this year, so fare more than 80 have and there are four more months left until 2010. This past Friday, two banks and one thrift failed. These included Bradford Bank of Baltimore, Main Street Bank of Forest Lake, Minn. and Affinity Bank of Ventura, Calif. Just the week before four banks failed including ebank of Atlanta, First Coweta Bank of Newnan, Ga., CapitalSouth Bank of Birmingham, Ala. Guaranty Bank of Austin, Texas (which the FDIC sold all of the bank's retail deposits to the main U.S. subsidiary of Banco Bilbao Vizcaya Argentaria).

This is somewhat unsettling, especially given all this spending of a so-called stimulus that only seems to get allocated in New York on Wall Street as well as the suggestion that over the next 2 years maybe an additional 1000 banking institutions are anticipated to fail. The issue for me is that it appears that none of the Bear Stearns folk like Sumner, or the current Fed Chairman are interested in Main Street as much as they say. It is obvious giving loot to New York Banks ain’t helping anyone since most failed banks tend to be smaller and private, which makes things even worse for small business owners such as me.

It makes me think that the current administration, the Federal Reserve and the FDIC are all in this together to stump out small business and engender the death of we the people for big corporations and the K street lobby. The Federal Insurance Deposit Corporation recently just implemented new restrictions on private equity firms that are trying to purchase failed institutions. It may be a little to late since they no longer have the funds available in insure all of the account holders in America and because they have allowed the over zealous and aggressive practices to occur unmitigated with respect to buying failed institutions.

What I can see is that even with all this, things will only get worse and that the FDIC and Federal Reserve are still not ready, prepared or able to deal with the impending wave of bank failures to come. Not to mention that they still aint figured out what to do with the billions of dollars of troubled assets it has stuck some where on its books. Plus the fact that its pockets have been depleted with reports of the $52.8 billion it had on hand last year has been reduced to about $13 billion.

The future of our economic system is only getting bleaker unlike what is reported in our media. The market is artificially inflated with the help of crooks the likes of Lawrence Summers, Robert Rubin and Ben Shalom Bernanke will be the death of America and main street and Obama cant even see it coming, but I know they do for the got money in the bank and will be sitting pretty living high off the hog as the rest of us suffer. Maybe this is why they are pushing for control of the internet, so folk like me cant spread the word they way things did in Iran during their recent election - just a guess.