Friday, February 26, 2010

Expect Declaration State of Emergency In US Soon.


The twisted thinking of people high up in US government and the refusal to rein in spending is clearly visible by reading this article of Reuters: Good ol' Hillary Clinton declares the US deficit a security issue and bites off the head of Alan Greenspan because of his stance that "debt really does not matter" on the one side and on the other side she refuses to cancel the cost for 1 US$ Billion Glass Cube designer US Embassy in London. She says that the costs can be offset by savings on rent for satellite offices that embassy personnel must now use. "I believe I can make the case that we're not asking for new money," she said.

No Hillary, cancel the Palace in London and go for budget offices.

More proof that debt is like cocaine, an addiction and America is a junkie with withdrawal symptoms.






UPDATE:
1. CNN Poll: Majority says government is threat to citizens' right.
2. Mainstream senator warns of financial meltdown risk
3. Berkeley riot: Fire, Destruction
4. Head of IMF proposes new global currency as alternative to US$

US Deficit Is Now A Security Issue


Reuters

WASHINGTON, Feb 25 (Reuters) - Secretary of State Hillary Clinton on Thursday said "outrageous" advice from former Federal Reserve Chairman Alan Greenspan helped create record U.S. budget deficits that put national security at risk.

Appearing before congressional panels to defend the State Department's $52.8 billion budget request for 2011, Clinton said the massive U.S. foreign debt had sapped U.S. strength around the world.

"It breaks my heart that 10 years ago we had a balanced budget, that we were on the way of paying down the debt of the United States of America," Clinton said.

"I served on the budget committee in the Senate, and I remember as vividly as if it were yesterday when we had a hearing in which Alan Greenspan came and justified increasing spending and cutting taxes, saying that we didn't really need to pay down the debt -- outrageous in my view," she said.

Though she did not give a date, that hearing must have taken place during the presidency of George W. Bush, who authored a massive tax cut while spending billions on wars in Iraq and Afghanistan and sponsoring a major expansion of the Medicare health program for seniors.

Clinton urged lawmakers to tackle the federal budget deficit, which reached a record $1.4 trillion for the fiscal year that ended last September.

"We have to address this deficit and the debt of the United States as a matter of national security not only as a matter of economics," Clinton said. "I do not like to be in a position where the United States is a debtor nation to the extent that we are."

Having to rely on foreign creditors hit "our ability to protect our security, to manage difficult problems and to show the leadership that we deserve," she said.

"The moment of reckoning cannot be put off forever," she said. "I really honestly wish I could turn the clock back."

Though she did not mention it, China's portfolio of some $755 billion in U.S. Treasury bonds has become a concern for some U.S. policymakers. They worry that Beijing's creditor status could create leverage to influence U.S. policy.

FALL OF THE ORACLE

Clinton's swipe at Greenspan symbolized the way the former central bank chief's reputation has fallen since he left the job in 2006.

First named to the office by President Ronald Reagan in 1987, Greenspan served throughout the presidency of Clinton's husband, former President Bill Clinton. He was regarded as economic oracle whose cryptic pronouncements were searched for inner meaning and regularly moved financial markets.

Now, he has become a handy whipping boy blamed for helping inflate a housing bubble that eventually burst, setting off a grave financial crisis and plunging the economy into the worst recession in decades.

Greenspan, known as a deficit hawk, late last year endorsed a proposed bipartisan commission to help make tough calls needed to bring U.S. debt under control.

Clinton noted that the 2011 budget request for the State Department and the U.S. Agency for International Development represented a $4.9 billion increase over 2010, most of which would fund work in the "frontline states" of Iraq, Pakistan and Afghanistan.

"We are now assuming so many of the post-conflict responsibilities, and that is the bulk of our increase," Clinton said.

Republican Representative Ron Paul, who has helped lead congressional efforts to rein in the deficit, pressed Clinton on U.S. diplomatic spending including a plan for an expensive new U.S. embassy building in London

Clinton said the costs of the proposed modernist glass cube would be offset by savings on rent for satellite offices that embassy personnel must now use. "I believe I can make the case that we're not asking for new money," she said.


Monday, February 22, 2010

Citigroup Warns Customers It May Refuse To Allow Withdrawals

And of course Citigroup denied to have such plans.

"I did not have sexual relations with that woman". Bill Clinton 1998




Citigroup Warns Customers It May Refuse To Allow Withdrawals

John Carney
Business Insider
Sunday, February 21, 2010

The image of banks locking their doors to keep customers from making withdrawals during a bank run is what immediately came to mind when we heard that Citigroup was telling customers it has the right to prevent any withdrawals from checking accounts for seven days.

“Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change,” Citigroup said on statements received by customers all over the country.

What’s going on? It seems that this is something of an error. The seven day notice policy only applies to customers in Texas, Ira Stoll reports at The Future of Capitalism. It was accidentally included on customer statements nationwide.

Update: “Whatever the explanation, it doesn’t exactly inspire confidence in Citi,” Stoll writes. “But it’s hard to believe a bank would be sending out a notice like that on its statements.”

Update: Citibank has now released the following statement by way of explanation: "When Citibank moved to unlimited FDIC coverage in 2009, we had to reclassify many checking accounts to allow for immediate withdrawals in order to ensure all customers qualified for the additional coverage. When we moved back to standard FDIC coverage with most major banks in 2010, Citibank decided to reclassify those accounts back to make them eligible again for promotional incentives. To do so, Federal Reserve Reg D requires these accounts, called NOW accounts, to reserve the right to require a 7-day notice of withdrawal. We recently communicated this technical requirement to our customers. However, we have never exercised this right and have no plans to do so in the future."

Sunday, February 21, 2010

A Fed Audit Will Show Massive Gold Fraud.


Fort Knox: "Sorry guys , the gold's gone!"













Gold is at the epicentre of the American empire and the motive behind the fraud works more or less like this:

  • The American Empire is strong and has the trust of the people.
  • Trust equals a strong dollar
  • A strong dollar needs a strong dollar policy
  • To show strength, a strong dollar policy must result in a low gold price. Hence, a high gold price is not acceptable as this would mean investors would flee out of the Dollar thereby showing distrust.
  • Therefore, the State's only motive to own gold, being a currency, is to suppress the gold price.
  • They do this by secretly selling or leasing physical gold to the open market via banks as well as by creating as much paper gold as possible resulting in a disconnect between the physical and the (easily manipulated) paper gold market.
  • Fourty, fifty years of secret gold price suppression schemes means there is hardly any gold left in the vaults of Central Banks, especially the vaults of the USA. Did you know, the last time Fort Knox was independently audited was 1937!
  • Call it swindle or fraud, The Story of the American Empire is based on "make-believe" .
The present economic crisis is the result of over-confidence of the economist and the fraudulent financial engineering of markets, resulting in misjudging risk.

We are coming back home, we must, and the road will be terrible. People will lose trust in politicians and currencies and demand the return of some sort of gold standard, far removed from the manipulative claws of the financial and political elite.

The Fed & US Treasury Department, together with other Central Banks will rather burn in hell than being subjected to an audit. An audit will destroy the credibility of the ruling class, exposure of the swindle and end of the American Empire.

Central Banks Are On the Defensive

lewrockwell.com


All over the Western world, central banks are under pressure from their governments to inflate. Governments are not satisfied with short-term interest rates at historic lows, such as a federal funds rate of 0% to 0.25% in the United States. Politicians want rapid economic growth, and they are convinced that this is possible after a major recession only with more fiat money. In short, they have accurately understood the message of their college-level textbooks. This is what textbooks have been saying for over 50 years. This is the new, improved Keynesianism. Keynes focused on the need for large government deficits and increased government spending, not monetary inflation. The new Keynesianism wants large government deficits and lots of fiat money.

These twin pillars of neo-Keynesian policy are not working anywhere in the West. They are working for now in China, which has become the world's bubble economy, but not in the popped-bubble economies of the West.

THE BANK OF JAPAN

On February 18, Bloomberg ran a story on a statement by the governor of the Bank of Japan, who warned against government interference. The government is running a large budget deficit. It is pressuring the Bank of Japan to inflate. The Bank has refused.

Interest rates are low today because commercial bankers still refuse to lend. This has been Japan's problem for two decades. Investors still buy the Treasury securities of their governments. The central banks initially pushed rates down through monetary inflation (more reserve money to supply the commercial banks), but today, rates are low because lenders are frightened of the private sector, and the private sector is afraid of more debt. The central banks are not inflating, yet short-term government debt rates are extremely low. The economic boom is nowhere to be seen. The recovery is slow.

Traditional Keynesian textbooks say that to keep short-term rates this low, there must be rapid monetary inflation. But these rates are low today without monetary inflation. This fact conflicts with textbook Keynesianism. The policy-makers are in disarray, both in the government and the central banks.

We can see this in a Bloomberg report on Japan.

Feb. 18 (Bloomberg) – Bank of Japan Governor Masaaki Shirakawa countered government pressure by suggesting it should develop a plan to contain the world's largest public debt.

"It's important to gain trust of financial markets by showing a path for fiscal consolidation," Shirakawa said in Tokyo today after his policy board kept interest rates at 0.1 percent and refrained from expanding monetary easing steps.

As Hans Sennholz used to say, "Wait a minute!" If the Bank of Japan "kept interest rates at 0.1%," how did it do this?

The governor is protesting government pressure to inflate. The official textbook explanation for the boom-producing effects of monetary inflation is that this policy will lower interest rates. But the bank rate has been one-tenth of one percent. Japan's central bank did not "keep" the rate this low this week, or last week, or last year, or last decade. It has done approximately nothing for 15 years, yet the rate stayed this low.

The Bank of Japan has barely inflated the money supply since 1994. M2 has rarely increased above 3% per annum. As a result, there has been little price deflation in Japan since 1994. Consumer prices fell slightly in a few years: about 1%. In other years, consumer prices rose a little.

So, the story of Japan's long-term price deflation is a complete myth.

The Bank of Japan is not keeping the rate low. The free market is. Lenders want safety. They will pay for this: low interest rates on government debt. The rate on 10-year Japanese bonds is 1.3%. With consumer prices falling at a rate of 2% per annum – the first time they have fallen this much – 1.3% is a real rate of return of a little over 3%. Not much.

Private borrowers want safety, too – by not taking on more debt. So, rates stay low.

The Bank of Japan can of course expand its purchases of government debt. But why should it do this? The government can sell its debt at low rates. What will more fiat money do for the government's ability to sell its debt? Nothing.

The Bloomberg story goes on to say that the governor insisted that the central bank needs independence from the government. This is the cry of central bankers at all times, in all places.

Have you ever read of the senior tenured bureaucrat in any government-protected, semi-private monopoly agency recommending that the nation's Congress or Parliament take over the operations of his agency, because government protection has made the agency unresponsive to the public good? The next time will be the first.

In his strongest warning yet on the country's growing debt burden, Shirakawa said governments need to "respect" that monetary policy isn't aimed at funding fiscal spending. His remarks came after Finance Minister Naoto Kan earlier this week stepped up heat on the central bank to fight deflation by saying Japan needs an inflation target of at least 1 percent. . . .

"Monetary policy isn't aimed at fiscal funding," Shirakawa said at the news briefing. "It's aimed at achieving sustainable growth under stable prices. It's important that governments respect this stance and markets have faith in it."

He is not alone in his protest against government interference.

"ACCOUNTABILITY IS AUTONOMY"

On February 17, the President of the Federal Reserve Bank of Philadelphia gave a speech to the Philadelphia chapter of the World Affairs Council. Whenever an official gives a speech to a WAC chapter, we can be sure that the official regards this as an important speech.

The media do not talk about the World Affairs Council. There may be an occasional report about a speech at a WAC chapter, but there will be nothing said about the WAC: what it is, who belongs, and what influence it possesses.

The WAC has an important social function. It is the single most important membership organization for the nation's senior elite Establishment to communicate the latest perspective to the nation's elite.

According to the brief entry on Wikipedia, the WAC has 535,000 members in 89 separate councils in 39 states. There are 175 million adults in the United States. This means the WAC's membership is a little over three-tenths of one percent of the adult population. I call this an elite.

The WAC was founded in 1918, three years before the Council on Foreign Relations was founded. Like the CFR, the WAC officially is concerned with international affairs. Also like the CFR, the WAC deals with domestic issues as well.

The President of the Philadelphia FED, Charles Plosser, titled his speech, "The Federal Reserve System: Balancing Independence and Accountability." This sounds boring. For those who understand the function of the Federal Reserve and its influence, the speech is not boring to read.

The target of the first half of the speech was Ron Paul. It was a warning against Ron Paul's bill in the House of Representatives that would authorize the Government Accountability Office to audit the FED. The House's leadership has kept the bill from coming to the floor for a vote, despite the fact that a majority of the membership has officially supported it, and despite the fact that a majority of the House Financial Services Committee voted for it, 43 to 26, in November 2009.

The FED has consistently opposed this bill. The official explanation is that this would in some way constitute interference with the FED's policy-making. This argument has never been clear. The fact that the General Accountability Office will verify the numbers in no way constitutes interference with FED policy, unless FED policy has been carried on under false numbers.

Nobody at the FED will say what is really at stake: an independent audit of the government's gold holdings, which are officially held for the government by the FED for safekeeping. If the gold is gone, or if there are legal claims against it by foreign central banks as a result of FED swaps, this would constitute fraud on a massive scale.

The real power in the FED has always been the Federal Reserve Bank of New York. In all textbook accounts of the years leading up to the Great Depression, the focus is on Benjamin Strong, the President of the New York FED. He set policy, not the Board of Governors.

The bulk of the world's gold holdings are stored in the vault of the New York FED. This includes most of the deliverable gold (99.9% fine) owned by the FED as trustee of the U.S. government's gold. The gold at Ft. Knox (probably coin melt, 90% fine) constitutes a second holding area, said to be 20% of the nation's gold. No one knows. It has not been audited since the early 1950's, not even by the private accounting firms that audit the FED on an annual rotation basis.

The FED demands secrecy. It proclaims that it pursues transparency, but it does not on any issue of substance.

Bloomberg News in November 2008 sued the Board of Governors under the Freedom of Information Act to find out which institutions received how much money in the October 2008 bailouts. The Board of Governors refused to comply on this legal basis: this would expose trade secrets of the recipient banks.

Even though a district Federal judge in August 2009 ruled that the New York FED must turn over these records, the FED refused to comply. She gave the FED five days to comply. It did nothing for six months.

Anyone who thinks that the Federal courts have operational authority over the Federal Reserve System is ignorant of the last century of American history.

The Board of Governors appealed the ruling on January 11, 2010. A ruling will not come down for months. A recent summary of this bizarre story appeared in the New York Times. In a rare form of candor, the writer added this observation, deep down in the bowels of his article:

The Federal Reserve has wrapped itself in secrecy since the turn of the 20th century, when a select group of financiers met at the private Jekyll Island Club off the eastern coast of Georgia and, forgoing last names to preserve their anonymity among the staff, drafted legislation to create a central bank. Its secrecy, of course, persists today, with Ben S. Bernanke, the Federal Reserve chairman, refusing to tell even Congress which banks received government money under the bailout.

"SECRECY IS TRANSPARENCY"

Mr. Plosser gave the usual reasons for opposing the audit.

So, our uniquely American form of a central bank strikes a balance between centralization and decentralization; between the public and private sectors; and among Washington, Wall Street, and Main Street. The result is a central bank that achieves a delicate balance: it permits policymakers a good deal of independence when conducting monetary policy but in return requires transparency and accountability to the American people.

Why does setting monetary policy require this degree of secrecy? Officially, the FED is rather vague on the answer. It is all about accountability, the FED says. You see, transparency and accountability to the American people require secrecy, so that Congress is kept in the dark. You understand this, don't you?

The elite at the World Affairs Council did not bat an eye. "Of course, of course." There was no response comparable to a town hall meeting in a Congressman's district over the bailouts. There were no catcalls. There was polite acceptance.

From the point of view of economic analysis – the pursuit of self-interest – secrecy by the FED is required because the FED is the administrator of a cartel of government-protected commercial banks. The government has created barriers to entry, thus creating the cartel. Bankers do not want the government to police the cartel. They want their own agency to do this. They nominate the Presidents of the 12 Federal Reserve Banks. The big banks want to milk the cartel for all they can. They got the bailout money, and in their view, that ended any legitimate interest Congress may have in pursuing the matter. So, Mr. Plosser said this:

Another frequently mentioned proposal under consideration would politicize the governance of the 12 Reserve Banks by making the chairs of the boards of directors, or the Reserve Bank presidents, political appointees. Other legislators have suggested eliminating the votes of Reserve Bank presidents on the Federal Open Market Committee.

As I hope I've explained, such changes would weaken the regional and decentralized structure of the Federal Reserve System and lead to a more centralized and political institution and less effective policy. Were regional Reserve Bank presidents or chairs to become political appointees, they might be more attuned to the political process in Washington that selected them, rather than having a public interest in the broad economic health of the nation and the Reserve Districts in which they reside. Politicizing these important positions might also discourage some talented, public-spirited individuals to serve as part of our nation's central bank.

The hearts of World Affairs Council members must have swelled with pride. "Yes, yes, we understand. Far be it from us to discourage some talented, public-spirited individuals to serve as part of our nation's central bank."

The message was clear: we must keep politics out of the most powerful cartel in the country. No audit! No control over who gets to be President of a regional FED bank!

Central bank independence means that the central bank can make monetary policy decisions without fear of direct political interference. It does not mean that the central bank is not accountable for its policies.

Allow me to summarize:

  1. Autonomy is accountability.
  2. Secrecy is transparency.

George Orwell saw it coming. Newspeak is alive and well inside the FED.

CONCLUSION

For the first time since 1914, the Federal Reserve System is under serious attack. The attackers are not members of the World Affairs Council. The attackers are from the hinterlands. The bailouts angered them in October 2008. The bailouts confirmed Ron Paul's warnings in his Presidential campaign. The Web has made it possible for the troops to get mobilized.

The FED has never had to deal with anything like this. It does not know how to respond. Mr. Plosser's speech is an indication of just how little the FED understands public relations. A minority of critics have seen through the Wizard of Oz's smoke and mirrors. The Web has given these people access to information that could be concealed before.

The genie will not go back into the bottle. Opposition to the FED will spread, no matter how many speeches that high-level FED officials deliver to local chapters of the World Affairs Council.


Tuesday, February 16, 2010

Graph: House Prices Heerengracht Amsterdam Inflation corrected (1650-2008)


House prices Heerengracht Amsterdam, inflation corrected from 1650-2008 and you see what the future is going to bring. Draw your own conclusions!


(Click on the pic for a bigger image)


Translations & explanations:
  1. Highest house prices in almost 3 centuries
  2. Graph in Euro for a house on the Heerengracht Amsterdam which costs now 2,6 Million euro

Translation wording on graph from left to right:
  • Third English War, "disaster year" (1672-1674)
  • Previous price record (1736)
  • Fourth English war (1780-1784)
  • Napoleon closes the harbour of Amsterdam (1795)
  • Start Industrial revolution (1850)
  • First World War (1914-1918)
  • Second Oil Crisis (1979)
  • New record







Saturday, February 13, 2010

The Bureaucrats To The Rescue!


Beware! Geeks and Nerds sitting behind a 19" screen are going to watch over the world in order to avoid a terrible terrorist attack. They will of course see to it that the red alert button will be pushed the moment you type certain highly, highly suspicious words like: Obama, Osama, coockie jar, dog poo and cigarette lighter. These well trained, highly intelligent and remarkable people will then send a F-16 to you and nuke your place immediately as they have your IP address. The Department of home Security (Big Brother for normal people), is asking for hundreds of millions of US$ to protect a failed state, called the USA. Remember, the military and intelligence apparatus of the USA trembled and the USA was brought on their knees in 2001 by 12 bored young guys from Saudi Arabia with box cutters. But do not be afraid: with more money for the Department of Home security you will be safe! Big joke!


During the Olympics, The Feds Will Be Reading Your Tweets – And the Blotte

DHS Is Monitoring Social Media and Web Sites for Terror and Disaster Info

ABC

As the winter Olympics begin, the Department of Homeland Security has disclosed that it will be monitoring the comments and posts on websites and social media like Twitter for information on possible terror threats. Among the sites listed in a privacy impact statement filed Friday afternoon by DHS are the Drudge Report, the Huffington Post, Twitter, Google and this web site, the Blotter.

The National Operations Center of DHS will watch the web for information, according to the statement, to "provide situational awareness" in the event of natural disaster, an "act of terrorism, or other manmade disaster."

"The Olympics are a potential target for such events," said the statement. The statement did not list all web sites and social media that the NOC will monitor, but provided 31 examples, many of them, like the Blotter, sites that cover breaking news, security, or terror.

DHS officials say they will not be monitoring the web sites extensively, but would use the sites as a reference and open source tool in the event of an incident or emergency. DHS officials also used the monitoring of social media sites in the aftermath of the Haiti earthquake to aid rescue efforts.

n one instance a DHS employee noticed a message on a web site about a person trapped under rubble in Port-au-Prince and was able to direct a State Department team to help in the rescue.

One official told ABC News that monitoring the web sites during an emergency is like watching "a canary in a coal mine," since social media sites can have real-time information. The official said the raw information that is available on the sites can help first responders and law enforcement officials make quick assessments to help in their response to events.

Tuesday, February 9, 2010

Iran anniversary 'punch' will stun West: Khamenei


The bets are on and mine is that the Iranians are going to ask for settlement for the purchase of oil in physical gold instead of the US Dollar.
Iran is the only country not invaded by the tentacles of "the squid" (Goldman Sachs), sucking out every penny the population makes. This power vacuum is also the reason the US wants to bomb Iran with Israel as the front man.
A demand for gold settlement will create some fun, send he US$ downwards and markets haywire.
Update: February 11th: Iran a nuclear state. What's new? Zzzzzzz.

Breitbart.com

Supreme leader Ayatollah Ali Khamenei said on Monday that Iran is set to deliver a "punch" that will stun world powers during this week's 31st anniversary of the Islamic revolution.

"The Iranian nation, with its unity and God's grace, will punch the arrogance (Western powers) on the 22nd of Bahman (February 11) in a way that will leave them stunned," Khamenei, who is also Iran's commander-in-chief, told a gathering of air force personnel.

The country's top cleric was marking the occasion when Iran's air force gave its support to revolutionary leader Ayatollah Ruhollah Khomeini, a key event which led to the toppling of the US-backed shah on February 11, 1979.

His comments came as Iran said it would begin to produce higher enriched uranium from Tuesday, in defiance of Western powers trying to ensure the country's nuclear drive is peaceful.

This year's anniversary is expected to become a flashpoint between security forces and supporters of opposition leaders Mir Hossein Mousavi and Mehdi Karroubi, who charge that the June re-election of President Mahmoud Ahmadinejad was rigged.

Opposition supporters are expected to stage anti-government protests on Thursday when the traditional regime-sponsored marches to mark the revolution take place across the country.

Mousavi renewed his call for demonstrations on the February 11 anniversary.

Just over a week ago, he and Karroubi had implicitly called for a gathering of their supporters.

"The 22nd of Bahman is upon us, truly it should be called the day of gathering," Mousavi said on his Kaleme.org website Monday.

"I feel we have to participate while maintaining the collective spirit as well as our identity and leave an impression," Mousavi said.

"Anger and bitterness should not take our control away.

"The clerics should know that since imprisonment, beatings, and other confrontational methods are done in the name of Islam and the Islamic regime, it is hurting Islam and we all should try to stop," he added.

Anti-government protests were first triggered after the June 12 presidential election won by Ahmadinejad.

Over the past eight months, several thousand people were arrested. Some were released and others were given hefty prison terms, among them politicians, journalists and human rights activists.

Two protesters were tried, convicted and hanged in the aftermath of the election.

Khamenei told the air force personnel the "most important aim of the sedition after the election was to create a rift within the Iranian nation, but it was unable to do so and our nation's unity remained a thorn in its eyes."

Wednesday, February 3, 2010

Ron Paul Warns Of Coming Social And Political Chaos




There is no free lunch! Ron Paul


A must see video for anyone asking questions like: "what the heck is going on"?

At the end of the video, Ron Paul says: "This is what we must do:

  1. Balance the budget by reducing spending
  2. Change our foreign policies to that of non-intervention
  3. Audit the Fed and abolish it.
  4. Legalise competition to US$ with competing currencies.
  5. Regain respect for privacy and civil liberties; reign in the CIA
  6. Abolish crony capitalism, No subsidies, No bail outs,no protection for the powerful, especially the military complex.
  7. Eliminate income tax, inheritance tax and taxes on savings and dividends"

Ron Paul is the only clear and consistent voice in the USA with a plan that will work. Where are the other senators? Well, consider them bought.

The USA is now on a tipping point.