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Gold and Silver • Re: Banking giant predicts gold price collapse
I wonder how much that clown got paid to make those statements. Most of what is in this article is total B.S.I wonder if they think they can lead people back down the garden path with press releases like this since I don’t think the big selloff they engineered 10 -14 days ago never really panned out.Pepole flocked to gold and were buying physical hand over fist as the paper market dropped like a rock.I’ve heard several rumors now that the CRIMEX is bankrupt. If gold does go to $800.00 like the forecast where are they going to find the physical to fill the demand? The paper price maybe $800.00 but the really price wont be ,not in today’s dollars.
Statistics: Posted by DIGGER DAN — Mon Apr 29, 2013 10:42 pm
View full post on opinions.caduceusx.com
Business • US retail giant Wal-Mart ‘bribed Mexicans to open shops’
US retail giant Wal-Mart ‘bribed Mexicans to open shops’
TIM WALKER LOS ANGELES WEDNESDAY 19 DECEMBER 2012
Wal-Mart, the US retail giant, could face fines of billions of dollars, as allegations emerged its Mexican affiliate paid officials to speed up store openings.
In a report published this week, The New York Times claimed the world’s biggest retailer opened at least 19 stores in Mexico after paying bribes worth hundreds of thousands of dollars so as to ignore local regulations. If the company were found guilty under the US Foreign Corrupt Practices Act, its settlement could dwarf the $800m paid by Siemens in 2008, the biggest FCPA pay-out to date.
The Times investigation uncovered evidence that in 2003, Wal-Mart de Mexico was blocked from building a supermarket in an alfalfa field in San Juan Teotihuacan. The company paid an official $52,000, and the store was built – within sight of the famous Teotihuacan pyramids. Teotihuacan’s mayor, Guillermo Rodriguez, told investigators his 2004 salary was $47,000 and that he had no savings, yet in the same year he bought a $30,300 ranch in cash, and spent a further $47,700 on refurbishments.
With the help of an alleged $765,000 in bribes, the company also constructed a refrigerated distribution centre in an “environmentally fragile” area, where other, smaller developers had been denied similar opportunities. When archaeologists found ancient ruins on Wal-Mart’s Teotihuacan site, including an altar, a plaza and nine graves, construction was halted, but only temporarily. The store opened in November 2004.
http://www.independent.co.uk/news/world … 26200.html
Statistics: Posted by yoda — Thu Dec 20, 2012 1:27 am
View full post on opinions.caduceusx.com
Passing of a Conservative Legal Giant
Ilya Shapiro
While libertarians have many disagreements with Robert Bork, it’s undeniable that the man had an outsized impact on law and legal policy that included fomenting the pushback against the progressive excesses of the Warren Court. Best known to the public as the prickly arch-conservative who (illegally) fired the special Watergate prosecutor and was rejected for the Supreme Court—after a nomination that set the bitter stage for modern confirmation battles—Bork’s enduring legacy lies elsewhere. His work on antitrust law, in line with the nascent law-and-economics movement, transformed the field into one focused on consumer welfare rather than government management of industry and continues to influence legal doctrine and jurisprudence. His pioneering development of originalism as the one coherent method of constitutional interpretation led to a revival of the once-quaint idea that constitutional text, structure, and history matter more than the subjective policy views of particular judges.
Bork was certainly, inexcusably wrong in emphasizing judicial restraint over getting the law right—John Roberts’s vote in the Obamacare case was a fruit of that poisonous tree—and in reading unenumerated natural rights out of the Constitution (famously likening the Ninth Amendment to “an ink blot”). He also misunderstood the “Madisonian dilemma” of judges making unpopular rulings, positing that majorities are entitled to rule in wide swaths of life, with limited exceptions for individual freedom—that’s exactly backwards! And he, like Justice Scalia, too easily made peace with the New Deal’s abandonment of the doctrine of enumerated powers, which resulted in the government getting the benefit of the doubt not much less than from liberal jurists. In the end, however, we should remember him as an intellectual powerhouse who nearly single-handedly fought the progressive hijacking of the law until better reinforcements could arrive. R.I.P.
View full post on Cato @ Liberty
The Giant Currency Superstorm That Is Coming To The Shores Of America When The Dollar Dies
By recklessly printing, borrowing and spending money, our authorities are absolutely shredding confidence in the U.S. dollar. The rest of the world is watching this nonsense, and at some point they are going to give up on the U.S. dollar and throw their hands up in the air. When that happens, it is going to be absolutely catastrophic for the U.S. economy. Right now, we export a lot of our inflation. Each year, we buy far more from the rest of the world than they buy from us, and so the rest of the world ends up with giant piles of U.S. dollars. This works out pretty well for them, because the U.S. dollar is the primary reserve currency of the world and is used in international trade far more than any other currency is. Back in 1999, the percentage of foreign exchange reserves in U.S. dollars peaked at 71 percent, and since then it has slid back to 62.2 percent. But that is still an overwhelming amount. We can print, borrow and spend like crazy because the rest of the world is there to soak up our excess dollars because they need them to trade with one another. But what will happen someday if the rest of the world decides to reject the U.S. dollar? At that point we would see a tsunami of U.S. dollars come flooding back to this country. Just take a moment and think of the worst superstorm that you can possibly imagine, and then replace every drop of rain with a dollar bill. The giant currency superstorm that will eventually hit this nation will be far worse than that.
Most Americans don’t realize that there are far more dollars in use in the rest of the world than in the United States itself. The following is from a scholarly article by Linda Goldberg…
The dollar is a major form of cash currency around the world. The majority of dollar banknotes are estimated to be held outside the US. More than 70% of hundred-dollar notes and nearly 60% of twenty- and fifty-dollar notes are held abroad, while two-thirds of all US banknotes have been in circulation outside the country since 1990
For decades we have been exporting gigantic quantities of our currency.
So what would happen if that process suddenly reversed and massive piles of dollars started coming back into the country?
It is frightening to think about.
Well, I guess the key is to get the rest of the world to continue to have confidence in the U.S. dollar so that will never happen, right?
Unfortunately, there are lots of signs that the rest of the world is accelerating their move away from the U.S. dollar.
For example, it was recently announced that the BRICS countries are developing their own version of the World Bank…
The BRICS (Brazil, Russia, India, China and South Africa) bloc has begun planning its own development bank and a new bailout fund which would be created by pooling together an estimated $240 billion in foreign exchange reserves, according to diplomatic sources. To get a sense of how significant the proposed fund would be, the fund would be larger than the combined Gross Domestic Product (GDP) of about 150 countries, according to Russia and India Report.
And as I noted in a previous article, over the past few years there have been a whole host of new international currency agreements that encourage the use of national currencies over the U.S. dollar. The following are just a few examples…
1. China and Germany (See Here)
2. China and Russia (See Here)
3. China and Brazil (See Here)
4. China and Australia (See Here)
5. China and Japan (See Here)
6. India and Japan (See Here)
7. Iran and Russia (See Here)
8. China and Chile (See Here)
9. China and the United Arab Emirates (See Here)
10. China, Brazil, Russia, India and South Africa (See Here)
Will this movement soon become a stampede away from the U.S. dollar?
That is a very important question.
But you don’t hear anything about this in the U.S. media and our politicians are not talking about this at all.
Meanwhile, our “leaders” seem to be doing everything that they can to destroy confidence in the U.S. dollar. The Federal Reserve is printing money like there is no tomorrow, and the federal government continues to run up trillion dollar deficits year after year.
They do not seem to understand that they are systematically destroying the U.S. financial system.
Other world leaders get it. For example, Russian President Vladimir Putin once said the following…
“Unreasonable expansion of the budget deficit, accumulation of the national debt – are as destructive as an adventurous stock market game.During the time of the Soviet Union the role of the state in economy was made absolute, which eventually lead to the total non-competitiveness of the economy. That lesson cost us very dearly. I am sure no one would want history to repeat itself.”
Wow.
Why can’t most of our politicians see how destructive debt is?
What the federal government continues to do is absolutely insane. The national debt increased by more than 24 billion dollars on the day after Thanksgiving this year. But utter disaster has not struck yet, and most Americans are not really that concerned about the debt. So things just keep rolling along.
And of course our national debt of $16,309,738,056,362.44 is nothing when compared to the future liabilities that our federal government is facing. Just check out what a recent article in the Wall Street Journal had to say about all this…
The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.
Other economists paint an even gloomier picture. According to economist Niall Ferguson, the U.S. government is facing future unfunded liabilities of 238 trillion dollars.
So where are we going to get all that money?
Well, why don’t we just print more money than ever before so that the U.S. government can borrow and spend more money than ever before?
Don’t laugh. That is actually what some of the top economists in the country are actually recommending.
The most famous economic journalist in the entire country, Paul Krugman of the New York Times, is boldly proclaiming that the solution to all of our problems is to print, borrow and spend a lot more money. He insists that there is no reason to fear that the giant mountain of debt that we are accumulating will someday collapse the system…
For we have our own currency — and almost all of our debt, both private and public, is denominated in dollars. So our government, unlike the Greek government, literally can’t run out of money. After all, it can print the stuff. So there’s almost no risk that America will default on its debt — I’d say no risk at all if it weren’t for the possibility that Republicans would once again try to hold the nation hostage over the debt ceiling.
But if the U.S. government prints money to pay its bills, won’t that lead to inflation? No, not if the economy is still depressed.
Now, it’s true that investors might start to expect higher inflation some years down the road. They might also push down the value of the dollar. Both of these things, however, would actually help rather than hurt the U.S. economy right now: expected inflation would discourage corporations and families from sitting on cash, while a weaker dollar would make our exports more competitive.
Of course what he is prescribing is complete and utter madness.
At some point this con game is going to collapse and the rest of the world is going to say a big, fat, resounding “NO” to the U.S. dollar.
Why should they continue to use a currency that is becoming extremely unstable and that is constantly being manipulated?
And when the rest of the world rejects the U.S. dollar, the value of the dollar will drop like a rock because there will be far less global demand for it.
In addition, if the rest of the world is not using the U.S. dollar for trade any longer, other nations will cease to soak up our excess currency and huge mountains of our currency that are floating around out there will start flooding back to our shores.
At that point we will be looking at inflation unlike anything we have ever seen before. The era of cheap imports will be over and we will pay far more for everything from oil to the foreign-made plastic trinkets that we buy at Wal-Mart.
Most Americans don’t even know what a “reserve currency” is, but when the U.S. dollar loses reserve currency status it is going to unleash a nightmare that most economists cannot even imagine.
So enjoy this holiday season while you can. There are still lots and lots of cheap imports filling the shelves of our stores.
Once the coming giant currency superstorm strikes, we will dearly wish for the good old days of 2012.
Yes, the U.S. dollar is alive and ticking for now. But at the pace that our authorities are abusing it, I would not say that things are looking good for a long and healthy lifespan.
View full post on The Economic Collapse
Health • Drugs giant Roche accused of sitting on trial data for flu
Drugs giant Roche accused of sitting on trial data for flu treatment
Doubts remain about efficacy and safety of Tamiflu, stockpiled for use in pandemics
JEREMY LAURANCE WEDNESDAY 31 OCTOBER 2012
The pharmaceutical giant Roche is being accused of irresponsibly withholding key trial data about a vital flu drug on which governments around the world have spent billions of pounds.
The anti-flu drug Tamiflu has been stockpiled by countries against the outbreak of a flu pandemic since 2004. The UK alone has spent £500m.
Yesterday, the British Medical Journal launched a campaign to persuade Roche to give doctors and patients the full data on Tamiflu, three years after doubts about its safety and efficacy emerged.
In 2009, researchers from the Cochrane Collaboration found that results of eight out of 10 key trials of Tamiflu were never fully published and concluded there was "insufficient data" to show it reduced complications – a vital factor in a pandemic which could save lives.
Roche promised to release the full data, but then reneged on its promise, according to the BMJ. The journal’s editor, Fiona Godlee, published an open letter to Sir John Bell, the Regius Professor of Medicine at Oxford University and a board member of Roche, in which she appeals to him to use his influence to persuade the company to release the data "for independent scrutiny".
The two trials that have been published, she says, "were funded by Roche and authored by Roche employees and Roche-paid external experts" and "could not be relied on".
There have now been 123 trials of Tamiflu but 60 per cent of the patient data "remains unpublished", she says. "I am appealing to you as an internationally respected scientist and clinician and a leader of clinical research in the UK to bring your influence to bear," she writes.
"In refusing to release these data of enormous public interest, you [the company's directors] put Roche outside the circle of responsible pharmaceutical companies. Billions of pounds of public money have been spent on [Tamiflu] and yet the evidence on its effectiveness and safety remains hidden from appropriate and necessary independent scrutiny."
The European Medicines Agency announced last week that it was investigating Roche’s alleged failure to report side-effects of some of its drugs in as many as 80,000 patients, following a review by the UK Medicines and Health Products Regulatory Agency. If found guilty, the company could be fined up to 5 per cent of its sales in the EU – which amounted to 8.2bn Swiss francs (£5.4bn) in 2011.
In the Commons, the Conservative MP Sarah Wollaston, a GP, called last week for drug companies to publish all clinical trial results, saying it was "vitally important for patient safety" and would give a "completely different evidence base for medicine."
The UK was among the first countries to place bulk orders for Tamiflu (and smaller amounts of Relenza, a rival drug made by GlaxoSmithKline) for stockpiling when fears about a possible avian flu pandemic emerged in 2003 and 2004.
The stockpile was used during the swine flu outbreak of 2009, but because the illness was mild in most people demand remained low.
Dr Godlee said yesterday: "Tamiflu was licensed over 10 years ago and has been in widespread use since. Once a drug is licensed it becomes a drug on which public money is spent and lives may be put at risk. Inevitably if there is information we are not allowed to see we wonder what is in there. There is a legitimate scientific question [about its safety and efficacy] which can only be answered by looking at the data. It is just shocking."
A spokesman for Roche said: "Roche provided the Cochrane group with access to 3,200 pages of very detailed information, enabling their questions to be answered. Roche stands behind the robustness and integrity of our data supporting the efficacy and safety of Tamiflu."
Sir John Bell was not available for comment yesterday.
http://www.independent.co.uk/life-style … 62319.html
Statistics: Posted by yoda — Wed Oct 31, 2012 12:14 am
View full post on opinions.caduceusx.com
Agriculture • Australia clears Chinese bid for giant cotton farm
China, whose quest for foreign farmland has stirred debate worldwide, came a step nearer control of nearly 1,000 square kilometres of Australia when it gained consent for the purchase of a huge cotton grower.
Wayne Swan, Australia’s treasurer, on Friday approved a request by a consortium led by China-based textiles giant Shandong Ruyi to buy Cubbie Station, a Queensland enterprise which has been run in administration since financial collapse in 2009 under Aus$320m of debts.
The approval clears the way for Shandong Ruyi and Australia-based Lempriere, the minority partner in the consortium, to bid for Cubbie Station, which has been valued at up to Aus$500m, although the groups are believed to be considering an offer of below Aus$300m.
But it comes amid a growing concern at Chinese interest in acquiring foreign farms, deals which, given the country’s huge needs for imports of crops such as cotton and soybeans, have prompted some governments, such as Brazil’s, to curb foreign ownership of land.
In Australia, where China’s Shanghai Zhongfu Group is bidding for a 15,000-hectare farm Ord East Kimberley Expansion project in the Western Australian outback, opposition politicians have called for tighter controls on farm purchases by foreigners, and for a register of land ownership.
However, relations with China are of great importance for Canberra, given that the country is an important trade partner, and large importer of Australian raw materials such as iron ore besides, in 2011-12, wheat too.
Small print
Mr Swan listed a series of conditions for approving Shandong Ruyi’s bid, including that the Shandong-based group – which booked 15.3bn yuan ($2.4bn) of revenues last year – cuts its ownership from 80%, as envisaged in the consortium set-up, to 51% within three years.
Lempriere, "part of an Australian family-owned group of companies", will be responsible for running the Cubbie operations "in conjunction with the existing management team," Mr Swan said, placing limits on the business’s crop sales strategy too.
"All cotton will be sold on arms-length terms in line with international benchmarks and standard market practices."
Furthermore, the consortium would be limited in its use of the property’s huge water reserves, which amount to rights over 537,000 mega litres of water.
Political debate
The approval comes ahead of the findings of a probe by Australia’s Senate into land ownership which are expected to be reported next month, and expected to add press on the government to tighten up ownership rules.
Australian opposition politicians have proposed a cut to Aus$15m in the threshold for foreign purchases of land requiring approval.
Australia’s Foreign Investment Review Board, which estimates that less than 1% of investment from abroad in 2010-11 went into agriculture, is currently obliged to consider only deals valued at Aus$244m or more.
http://www.agrimoney.com/news/australia … -4936.html
Statistics: Posted by yoda — Fri Aug 31, 2012 9:50 am
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Other • The west has just become a giant banana republic
The west has just become a giant banana republic
Simon Black on AUGUST 16, 2012
August 16, 2012
Carthage, Tunisia
Wikileaks founder Julian Assange has made an admirable habit of enraging western governments over the last few years, particularly the United States.
Most notably, his release of classified diplomatic documents in 2010 proved ruthlessly embarrassing, shining a spotlight on the absurd,
petty little world of international relations.
Ever since, the US government has done everything it can to stop him. Short of assassination. They shut down his website, but mirror sites instantly popped up. They sought legal action, but their efforts have been impeded by the bureaucratic deftness of his attorneys. They froze his bank accounts… but donations have poured in from all over the world.
Along the way, Uncle Sam co-opted a number of allied nations to set aside their principles for the sake of US interests–
Switzerland rolled over immediately and shuttered Assange’s bank accounts.
Australia (his home country) has remained conspicuously silent on the matter, raising not a single word of protest in his defense. One high ranking Aussie politician even publicly suggested that Assange should be killed.
Sweden has happily played along, trumping up dubious allegations about Assange and issuing an international arrest warrant.
And now there’s the UK, where Assange has been based. The British government located and arrested him, yet after his legal team was able to secure bail and delay extradition, Assange sought refuge at the Ecuadoran embassy in London. He’s been living there for two months in violation of his bail.
Assange knows that, if extradited to Sweden, he’ll be shipped off to face the death penalty in the US… so the stakes are clearly high. He even petitioned Ecuador’s president Rafael Correa for political asylum, and just hours ago, Correa agreed.
Swarms of British police have now descended on the Ecuadoran embassy in London. This, on the heels of the British Foreign Ministry issuing a warning letter to Ecuador’s government threatening to “take actions in order to arrest Mr. Assange in the current premises of the [Ecuadoran] embassy.”
Such a move would be appalling, to say the least.
Embassies are hallowed sovereign ground, not to be trespassed. Ever. This is the most sacrosanct, fundamental, inviolable principle of international relations, explicitly codified in both the Vienna Convention on Diplomatic Relations (1961) and the Vienna Convention on
Consular Relations (1963).
Article 27 of the latter, for example, states that “the receiving State [the UK in this case] shall, even in case of armed conflict, respect and protect the consular premises, together with the property of the consular post and the consular archives.”
International law seems pretty obvious here. Yet British police stand ready to storm the embassy, arrest Assange, and tear down decades of diplomatic precedent.
In a way this is almost poetic. Assange is the man who exposed western diplomacy for the fraud that it is. That he would be sent to his death by an egregious violation of its most fundamental principle seems strangely appropriate.
Regardless, the whole affair is perhaps the foulest example that western governments will ignore their own laws, or selectively apply them, whenever they see fit.
Legal precedent means nothing. Rule of law means nothing. Free speech means nothing. Their own treaties mean nothing. It’s unbelievable. Anyone in the west who honestly thinks he’s still living in a free society is either a fool or completely out of touch.
If that seems too radical an idea, consider that ECUADOR is now the only nation which stands to defend freedom and human rights against an assault from the United States, the United Kingdom, and their spineless allies.
The west has just become a giant banana republic. Have you hit your breaking point yet? If not now… when?
http://www.sovereignman.com/expat/the-w … blic-8497/
Statistics: Posted by yoda — Thu Aug 16, 2012 10:07 am
View full post on opinions.caduceusx.com
Where Does Money Come From? The Giant Federal Reserve Scam That Most Americans Do Not Understand
How is money created? If you ask average people on the street this question, most of them have absolutely no idea. This is rather odd, because we all use money constantly. You would think that it would only be natural for all of us to know where it comes from. So where does money come from? A lot of people assume that the federal government creates our money, but that is not the case. If the federal government could just print and spend more money whenever it wanted to, our national debt would be zero. But instead, our national debt is now nearly 16 trillion dollars. So why does our government (or any sovereign government for that matter) have to borrow money from anybody? That is a very good question. The truth is that in theory the U.S. government does not have to borrow a single penny from anyone. But under the Federal Reserve system, the U.S. government has purposely allowed itself to be subjugated to a financial system in which it will be constantly borrowing larger and larger amounts of money. In fact, this is how it works in the vast majority of the countries on the planet at this point. As you will see, this kind of system is not sustainable and the structural problems caused by such a system are at the very heart of our debt problems today.
So where does money come from? In the United States, it comes from the Federal Reserve.
When the U.S. government decides that it wants to spend another billion dollars that it does not have, it does not print up a billion dollars.
Rather, the U.S. government creates a bunch of U.S. Treasury bonds (debt) and takes them over to the Federal Reserve.
The Federal Reserve creates a billion dollars out of thin air and exchanges them for the U.S. Treasury bonds.
So why does the U.S. government go to all this trouble? Why doesn’t the U.S. government create the money itself?
Those are very good questions.
One of the primary reasons why our system is structured this way is so that wealthy people can get even wealthier by lending money to the U.S. government and other national governments.
For example, last year the U.S. government spent more than 454 billion dollars just on interest on the national debt.
Over the centuries, the ultra-wealthy have found lending to national governments to be a very, very profitable enterprise.
The U.S. Treasury bonds that the Federal Reserve receives in exchange for the money it has created out of nothing are auctioned off through the Federal Reserve system.
But wait.
There is a problem.
Because the U.S. government must pay interest on the Treasury bonds, the amount of debt that has been created by this transaction is greater than the amount of money that has been created.
So where will the U.S. government get the money to pay that debt?
Well, the theory is that we can get money to circulate through the economy really, really fast and tax it at a high enough rate that the government will be able to collect enough taxes to pay the debt.
But that never actually happens, does it?
And the creators of the Federal Reserve understood this as well. They understood that the U.S. government would not have enough money to both run the government and service the national debt. They knew that the U.S. government would have to keep borrowing even more money in an attempt to keep up with the game.
That is why I call the Federal Reserve a perpetual debt machine. The Federal Reserve was created to trap the U.S. government in an endlessly expanding debt spiral from which there is no escape.
And the Federal Reserve is doing a great job at what it was designed to do. Today, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.
Another way that money comes into existence in our economy is through the process of fractional reserve banking.
I originally pulled the following simplified explanation of fractional reserve banking off of the website of the Federal Reserve Bank of New York, but it has been pulled down since then. But I still think it is helpful in understanding the basics of how fractional reserve banking works….
“If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+…=$1,000).”
When you put your money into the bank, it does not say there. The bank only keeps a relatively small amount of money sitting around to satisfy the withdrawal demands of account holders. If all of us went down to the banks right now and demanded our money, that would create a major problem.
If I put 100 dollars into the bank and the bank lends out 90 of those dollars to you, now it looks like there are 190 dollars floating around. I have “100 dollars” in my bank account and you have “90 dollars” that you just borrowed.
The new debt that you have taken on (90 dollars) has “created” more money. But of course you are going to end up paying back more than 90 dollars to the bank, so more debt has been created than the amount of money that has been created.
And that is one of the big problems with our financial system. It is designed so that the amount of debt and the amount of money are supposed to be perpetually expanding, and the amount of debt created is always greater than the amount of money that is created.
So is it any wonder that our society is swamped with nearly 55 trillion dollars of total debt at this point?
A debt-based financial system is unsustainable by nature because it will always create debt bubbles that will inevitably burst.
Are you starting to see why so many Americans are saying that we need to abolish the Federal Reserve system?
Our founding fathers never intended for our financial system to work this way.
According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is supposed to have the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”.
So why has this authority been given to a private institution that is dominated by the big Wall Street banks and that has actually argued in court that it is “not an agency” of the federal government?
Thomas Jefferson once said that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing….
I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.
But instead, we have become enslaved to a system where government borrowing actually creates our money.
The borrower is the servant of the lender, and we have allowed our government to enslave us to the tune of nearly 16 trillion dollars.
There are alternatives to this system. Things do not have to work this way.
Unfortunately, the vast majority of our politicians consider the Federal Reserve to be good for America and steadfastly refuse to do anything to change the status quo.
So if you are waiting for “solutions” to these problems on the national level you are going to be waiting for a very long time.
The debt problems that the United States and Europe are experiencing did not come into existence by accident. They are the result of fundamental structural problems with the financial system.
A debt-based financial system is always going to fail in the long run. Unfortunately, most Americans still do not understand this and so we will all get to suffer the consequences.
View full post on The Economic Collapse
American • The Giant Federal Reserve Scam That Most Americans Do Not
Where Does Money Come From? The Giant Federal Reserve Scam That Most Americans Do Not Understand
How is money created? If you ask average people on the street this question, most of them have absolutely no idea. This is rather odd, because we all use money constantly. You would think that it would only be natural for all of us to know where it comes from. So where does money come from? A lot of people assume that the federal government creates our money, but that is not the case. If the federal government could just print and spend more money whenever it wanted to, our national debt would be zero. But instead, our national debt is now nearly 16 trillion dollars. So why does our government (or any sovereign government for that matter) have to borrow money from anybody? That is a very good question. The truth is that in theory the U.S. government does not have to borrow a single penny from anyone. But under the Federal Reserve system, the U.S. government has purposely allowed itself to be subjugated to a financial system in which it will be constantly borrowing larger and larger amounts of money. In fact, this is how it works in the vast majority of the countries on the planet at this point. As you will see, this kind of system is not sustainable and the structural problems caused by such a system are at the very heart of our debt problems today.
So where does money come from? In the United States, it comes from the Federal Reserve.
When the U.S. government decides that it wants to spend another billion dollars that it does not have, it does not print up a billion dollars.
Rather, the U.S. government creates a bunch of U.S. Treasury bonds (debt) and takes them over to the Federal Reserve.
The Federal Reserve creates a billion dollars out of thin air and exchanges them for the U.S. Treasury bonds.
So why does the U.S. government go to all this trouble? Why doesn’t the U.S. government create the money itself?
Those are very good questions.
One of the primary reasons why our system is structured this way is so that wealthy people can get even wealthier by lending money to the U.S. government and other national governments.
For example, last year the U.S. government spent more than 454 billion dollars just on interest on the national debt.
Over the centuries, the ultra-wealthy have found lending to national governments to be a very, very profitable enterprise.
The U.S. Treasury bonds that the Federal Reserve receives in exchange for the money it has created out of nothing are auctioned off through the Federal Reserve system.
But wait.
There is a problem.
Because the U.S. government must pay interest on the Treasury bonds, the amount of debt that has been created by this transaction is greater than the amount of money that has been created.
So where will the U.S. government get the money to pay that debt?
Well, the theory is that we can get money to circulate through the economy really, really fast and tax it at a high enough rate that the government will be able to collect enough taxes to pay the debt.
But that never actually happens, does it?
And the creators of the Federal Reserve understood this as well. They understood that the U.S. government would not have enough money to both run the government and service the national debt. They knew that the U.S. government would have to keep borrowing even more money in an attempt to keep up with the game.
That is why I call the Federal Reserve a perpetual debt machine. The Federal Reserve was created to trap the U.S. government in an endlessly expanding debt spiral from which there is no escape.
And the Federal Reserve is doing a great job at what it was designed to do. Today, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.
Another way that money comes into existence in our economy is through the process of fractional reserve banking.
I originally pulled the following simplified explanation of fractional reserve banking off of the website of the Federal Reserve Bank of New York, but it has been pulled down since then. But I still think it is helpful in understanding the basics of how fractional reserve banking works….
"If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+…=$1,000)."
When you put your money into the bank, it does not say there. The bank only keeps a relatively small amount of money sitting around to satisfy the withdrawal demands of account holders. If all of us went down to the banks right now and demanded our money, that would create a major problem.
If I put 100 dollars into the bank and the bank lends out 90 of those dollars to you, now it looks like there are 190 dollars floating around. I have "100 dollars" in my bank account and you have "90 dollars" that you just borrowed.
The new debt that you have taken on (90 dollars) has "created" more money. But of course you are going to end up paying back more than 90 dollars to the bank, so more debt has been created than the amount of money that has been created.
And that is one of the big problems with our financial system. It is designed so that the amount of debt and the amount of money are supposed to be perpetually expanding, and the amount of debt created is always greater than the amount of money that is created.
So is it any wonder that our society is swamped with nearly 55 trillion dollars of total debt at this point?
A debt-based financial system is unsustainable by nature because it will always create debt bubbles that will inevitably burst.
Are you starting to see why so many Americans are saying that we need to abolish the Federal Reserve system?
Our founding fathers never intended for our financial system to work this way.
According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is supposed to have the authority to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures".
So why has this authority been given to a private institution that is dominated by the big Wall Street banks and that has actually argued in court that it is "not an agency" of the federal government?
Thomas Jefferson once said that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing….
I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.
But instead, we have become enslaved to a system where government borrowing actually creates our money.
The borrower is the servant of the lender, and we have allowed our government to enslave us to the tune of nearly 16 trillion dollars.
There are alternatives to this system. Things do not have to work this way.
Unfortunately, the vast majority of our politicians consider the Federal Reserve to be good for America and steadfastly refuse to do anything to change the status quo.
So if you are waiting for "solutions" to these problems on the national level you are going to be waiting for a very long time.
The debt problems that the United States and Europe are experiencing did not come into existence by accident. They are the result of fundamental structural problems with the financial system.
A debt-based financial system is always going to fail in the long run. Unfortunately, most Americans still do not understand this and so we will all get to suffer the consequences.
http://theeconomiccollapseblog.com/arch … understand
Statistics: Posted by yoda — Tue Jun 26, 2012 5:04 pm
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International News • Giant Lender in Spain Asks for Billions to Fend Off Collapse
Giant Lender in Spain Asks for Billions to Fend Off Collapse
http://www.nytimes.com/2012/05/26/busin … 2&emc=eta1
MADRID — Spain’s banking crisis worsened Friday as the board of Bankia, the country’s biggest mortgage lender, warned that it would need an additional 19 billion euros ($23.88 billion), far beyond what the government estimated when it seized the bank and its portfolio of delinquent real estate loans earlier this month.
When Spain seized Bankia May 9, Luís de Guindos, the Spanish economy minister, said it would need at least $11 billion.
The government is trying to head off a collapse of the bank, which could threaten the Spanish banking industry and reverberate through the financial centers of Europe and beyond. The fear is that it will not have the money to save its banks, and their $1.25 trillion in deposits, and will need a rescue by the rest of Europe — even as political and financial leaders struggle to resolve Greece’s debt debacle.
Bankia’s announcement came as Standard & Poor’s, the credit ratings agency, downgraded Bankia and two other banks, Banco Popular and Bankinter, to junk status and lowered the ratings of two other Spanish banks also staggered by mounting bad loans. A junk rating could make it even harder for Bankia to borrow its way out of trouble.
The rising fear now is that the recent steady outflow of deposits from Spain’s banks, which are suffering from the bursting of Spain’s real estate bubble, to institutions outside the country could eventually turn into the sort of bank run that almost brought the financial world to its knees after the collapse of Lehman Brothers in 2008.
Spain’s debt crisis is also playing out on another front. As its banks shudder, heavily indebted regional governments are also running out of money. On Friday, the government of the Catalonia region warned that it might no longer be able to finance its debts and called on the central government for help. While other regions have also sounded budget alarms, Catalonia is the biggest so far; it represents nearly one-fifth of Spain’s economy.
The central government, facing its own mounting debt, may soon be in no position to provide help to either the banks or the regions. And with an economy in recession and unemployment at the highest level in the euro zone, Madrid is falling further behind in meeting the deficit-reduction targets it has agreed to with the European Union.
Nicholas Spiro, managing director of Spiro Sovereign Strategy, a London consulting firm that assesses sovereign debt risk, said the regional governments had become the “Achilles’ heel of Spanish fiscal policy.”
He added: “Catalonia’s request for financial support from Madrid underscores the idiosyncratic risks in Spain, which make it much more difficult for the central government to enforce fiscal discipline and implement economic reforms.”
The government has also come under criticism for its failure to confine the banking problems earlier.
In February, Luís de Guindos, the Spanish economy minister, ordered banks to set aside 50 billion euros in additional provisions to cover fully their exposure to doubtful loans. This month he told them to add another 30 billion euros.
Shortly after Spain seized control of Bankia on May 9, as a first step toward recapitalizing the company, Mr. Guindos told lawmakers that the total cost of cleaning up the bank would be at least 9 billion euros. Instead, after reviewing its most recent losses, Bankia’s board estimated Friday that the total would be 23.5 billion euros — the 4.5 billion euro emergency loan previously granted to the bank and the additional 19 billion euros sought on Friday.
Besides now being responsible for Bankia, the government could also find itself saddled with three other troubled savings banks — CatalunyaCaixa, Novacaixagalicia and Banco de Valencia — that have been put up for sale, with no buyers so far.“If nobody shows up for these auctions, the government could very well follow the same path as with Bankia,” said Juan José Toribio, a professor at the IESE Business School. Mr. Toribio said it was unclear how the government could now finance Bankia’s rescue, adding that asking for European money was a possibility.
“Spanish bank restructuring is a moving target — the deeper the downturn, the greater the scope for a further deterioration in banks’ asset quality,” Mr. Spiro said. “This is easier said than done.”
Regional governments are responsible for half of public spending in Spain — including health care and education — and many have fallen far behind in payments to their suppliers. The regions are struggling under the budgetary constraints set by Madrid and also facing debt maturities that will total nearly 36 billion euros this year. To stay afloat, Valencia, home to Spain’s third-largest city behind Madrid and Barcelona, was forced this month to issue six-month debt at the high interest rate of 7 percent.
Artur Mas, president of the Catalonian regional government, suggested Friday that regions should be allowed to issue bonds jointly to help reduce their financing cost. “We do not care which mechanism is used, as long as it yields enough funds to meet our obligations, and meet them on time, because we have bills to pay at the end of the month,” he told reporters.
Tomás Navarro, finance director of Diagnostica Longwood, a Spanish distributor of diagnostics products to state hospitals, said his company, which has annual revenue of 4 million euros, was awaiting 2 million euros in late payments, as well as sitting on 750,000 euros of bank debt. “Every company has become very worried about what will happen with our banks and the euro,” he said. “But the most pressing concern for us and so many others in Spain is not exchange rate risk but the massive shortage of liquidity.”
Bankia, whose formation was the result of a seven-way merger in 2010, was meant to be a model for the government’s effort to strengthen Spain’s savings banks, or cajas, through consolidation. But now, the increasingly costly nationalization of Bankia has prompted broader concerns among investors about how to finance the rescue of other Spanish banks. Otherwise, depositors might start pulling their money out of the country’s banks, threatening a collapse of Spain’s entire banking system.
As for Spanish individual investors, “their stress level has just soared in the last 15 days,” said Iñigo Susaeta, a managing partner of the wealth advisory firm Arcano.
While the richest Spaniards probably started diversifying their assets and currency mix two years ago, when Greece first asked for a bailout, Mr. Susaeta said second-tier wealthy individuals had much more recently started to look at every possible alternative. In many cases, he said, they are “simply opening whatever new accounts overseas and in other currencies that are easiest to have,” whether in Luxembourg, Canada or Norway.
Statistics: Posted by DIGGER DAN — Sun May 27, 2012 2:21 am
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