Canadian Economist Summarizes America's Collapse: "Everyone Takes, Nobody Makes, Money Is Free, And Money Is Worthless"

On this lackluster Boxing Day dominated by illiquid moves in every asset class, we thought a few succinct minutes spent comprehending the US and European government policies of social welfare and their outcomes was time well spent. Canadian MP Pierre Poilievre delivers a rather epic speech destroying the myths of US and European 'wealth' noting that "Once the US citizen is in debt, the US government encourages them to stay in debt," noting that "the US government encouraged millions of Americans to spend money they did not have on homes they could not afford using loans they could never repay and then gave them a tax incentive never to repay it." His message, delivered seamlessly, notes the inordinate rise in the cost of all this borrowing, adding that "through debt interest alone, soon the US taxpayer will be funding 100% of the Chinese Military complex." From Dependence to Debt to the Welfare State and back to Dependence, this presentation puts incredible context on the false hope so many believe in the US and Europe. Must watch.

"By 2020, the US Government will be spending more annually on debt interest than the total combined military budgets of China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey, and Israel."

"Through government spending the indulgence of one is the burden of another; through government borrowing, the excess of one generation becomes the yoke of the next; through international bailouts, one nation's extravagance becomes another nation's debt"

"Everyone takes, nobody makes, work doesn't pay, indulgence doesn't cost, money is free, and money is worthless."

http://www.zerohedge.com/news/2012-12-26/canadian-summarizes-americas-collapse-everyone-takes-nobody-makes-money-free-and-mon

Tokyo Almost As Irradiated As Fukushima

We’ve documented the spread of radiation from Fukushima to Tokyo for a year and a half.  See this, this, this, this, this and this.
Unfortunately, as the following recent headlines from Ene News show, things are only getting worse:

• Tokyo area turned out to be as contaminated as Fukushima -Kyoto Professor

• Tokyo Bay cesium even higher than levels reported off Fukushima — Nearly entire sea floor contaminated by 2014

• Tokyo getting 5 times more radioactive fallout than prefectures closer to Fukushima

• Japan Times: Time bomb in Tokyo metropolitan area — Experts warn of accumulating Fukushima contamination — Potential disaster at Japan’s 2nd largest lake

• Tokyo soil so hot it should be sent to nuclear waste dump — Really severe releases hit city

• Japanese Legal Expert: “Even residents of Tokyo are evacuating” — More and more people fleeing Fukushima

• People from Tokyo area report thyroid cysts and nodules — Japanese doctors laughing at patients

• Japan Scientists: Radiation dose has been “significantly increased” around Tokyo metropolitan area after Fukushima

And we’ve previously noted that the radiation will spread worldwide (by water and air). For example:

• California Slammed With Fukushima Radiation

• “Absolutely Every One” – 15 Out of 15 – Bluefin Tuna Tested In California Waters Contaminated with Fukushima Radiation

• Fukushima Radiation: Japan Irradiates the West Coast of North America

A new study says that the West Coast will get slammed with radioactive cesium starting in 2015 

But surely the Japanese government and Tepco are on top of things now …
Not exactly:

• CNN notes that experts call Japan cleanup effort meaningless … an endless task that’s simply spreading around radiation

• Tepco has taken extraordinary steps to hide radiation by blocking radiation monitors with thick metal and other foreign objects.  And see this

• Officials have made use of contaminated Fukushima rice in school lunches mandatory

http://www.zerohedge.com/contributed/2012-12-27/tokyo-almost-irradiated-fukushima

Irreconcilable Differences?

By John Stark

A friend of mine was talking to an old (now ex) friend of his. The woman, a Democrat, was gloating over the fraud of Obama (imagine, a Democrat not only believing in but approving of Obama stealing the election with fraudulent votes) , and chuckling over how great "socialism was going to be for her".  He mentioned to her that even though neither he or his wife really grossed that much income, he was now “the rich” that would be taxed more heavily and would be paying for her, against his will.  He mentioned the fact that the government taking his earnings from him "by force" left him little reason to aspire to greatness.

She said something about "well, you should use your time for more personal pursuits and just enjoy the handouts".  He asked her who would pay for her healthcare after he (and others like him) just quit?  There was dead silence.  She had no answer.  

She then told him that she felt like he was "attacking her personally".  He told her essentially:  That is because it is personal:  She used your vote to apply the threat of force to him and his family to pay for her "beyond-her-means" spending. 

And that was it.  No more friend.  He says that is OK.  At this point it is morally necessary to separate from people like that.

Do Democrats and Republicans have irreconcilable differences?

The debate is not about liberal social policies, but about conservative fiscal policies.  But the democrats can't seem to understand that.

This is a typical rhetoric, attitude and idealism of a liberal government dependent.  Emotional and needy rather than logical and deductive.  Any opinion that differs from heirs is a personal attack, or must be racist and hateful.  They are afraid of the truth - That they are now slaves.  They have given up their vote and freedoms for a downward spiral of dependency.  Just like any drug addiction, this can not end well unless you rehabilitate yourself.

They need to understand that self sufficiency and individual preparation and support are our patriotic duties.  Keeping yourself off the government welfare role helps the strength of the nation, not detracts from it.  Entrepreneurs and business owners, High income earners, preppers, and those with strong work ethic are not the enemy, government dependents are.  They are collapsing the economy from within.

But they never will get it.  the only "education" that they receive is from biased MSM sources who want them to stay dependent, captured voters.

Let us pray that these are not truely Irreconcilable Differences, and that the country can be healed both emotionally, socially and fiscally before it's citizens start screaming for political divorce.

New nanny state program extends government tracking to watch your personal spending.

Surely there are better ways to find individuals who may be avoiding taxes by  money in overseas accounts than by tracking the daily spending habits of every single citizen!

Like maybe simply profiling the top 10,000 richest people in the country and monitoring just them?  Heck, most of them are politicians anyway.  Oh wait, they are probably immune from this tracking... LOL

Tax hitmen to track your spending

Up to two million people are to have their credit files secretly checked under a crackdown on tax evasion to be unveiled by George Osborne to help raise another £10 billion.

HMRC will today unveil the “successful” results of a pilot programme involving about 20,000 people which will now be extended nationally

By Robert Winnett

Credit reference agencies will cross-check details of the income people declare on their tax returns against their spending patterns to identify “high” and “medium” risks of both illegal and legal tax avoidance.

People identified to HM Revenue and Customs will then be subject to more detailed investigations. About two million people are expected to be scrutinised under the programme, which may lead to privacy concerns.

HMRC will today unveil the “successful” results of a pilot programme involving about 20,000 people which will now be extended nationally.

Many of those who are expected to be identified are likely to be self-employed workers who have under-declared their income to the authorities.

However, those who have benefited from secret windfalls – such as an inheritance or a bonus – and people with secret offshore accounts could also be highlighted.

Mr Osborne is preparing to deliver the Autumn Statement on Wednesday, in which he is expected to announce another extension to the Government’s austerity programme. Spending cuts and tax rises are now expected to last until at least 2018.

The Chancellor indicated yesterday that he was preparing a new round of welfare cuts – and tax rises for the wealthy – this week. The renewed crackdown on avoidance is also expected to play a key role.

Treasury sources said that “hundreds of millions” are expected to be raised from the greater use of third-party data, such as that supplied by credit reference agencies.
 
Ministers also wish to encourage more whistle-blowers to come forward with details of offshore bank accounts.

Mr Osborne said: “While most taxpayers are doing their bit to help us balance the books, it is unacceptable for a minority to avoid paying their fair share.”

Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, added: “It is simply not fair that at a time when most people are making a contribution to balancing the nation’s books, there is a small minority of taxpayers who try to escape their responsibility.”

The Chancellor will this week extend the austerity programme after admitting it is “clearly taking longer” to deal with the country’s debts than “anyone would have hoped”.

The credit-reference scheme is among a series of initiatives to be outlined today to reduce tax avoidance and evasion among wealthy Britons and multinational companies.

Mr Osborne will also announce an agreement with Switzerland which will give the British authorities access to the details of the offshore savings of thousands of Britons.

Information will also be routinely shared between the British and American authorities.

The Treasury is to provide an extra £77 million a year to HMRC over the next two years to increase its investigative capability. The “affluent unit” which targets the wealthy is to take on 100 extra staff.

Meanwhile, a parliamentary committee will today attack HMRC for being “way too lenient” in its treatment of multinational companies.

The public accounts committee will accuse international firms of “insulting” ordinary Britons by funnelling profits off shore.

Yesterday, Starbucks announced it had entered talks with HMRC about paying more tax in the UK following reports it had paid just £8.5 million tax on its British profits since 1998.

http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/9717894/Tax-hitmen-to-track-your-spending.html

Are we living in the Hunger Games?

By Glenn Harlan Reynolds

 You know the story: While the provinces starve, the Capital City lives it up, its wheeler-dealer bigshots growing fat on the tribute extracted from the rest of the country.

We don't live in The Hunger Games yet, but I'm not the first to notice that Washington, D.C., is doing a lot better than the rest of the country. Even in upscale parts of L.A. or New York, you see boarded up storefronts and other signs that the economy isn't what it used to be. But not so much in the Washington area, where housing prices are going up, fancy restaurants advertise $92 Wagyu steaks, and the Tyson's Corner mall outshines -- as I can attest from firsthand experience -- even Beverly Hills' famed Rodeo Drive.

Meanwhile, elsewhere, the contrast is even starker. As Adam Davidson recently wrote in The New York Times, riding the Amtrak between New York and D.C. exposes stark contrasts between the "haves" of the capital and the have-nots outside the Beltway. And he correctly assigns this to the importance of power.
Washington is rich not because it makes valuable things, but because it is powerful.

With virtually everything subject to regulation, it pays to spend money influencing the regulators. As P.J. O'Rourke famously observed: "When buying and selling are controlled by legislation, the first things to be bought and sold are legislators." But it's not just bags-of-cash style corruption. Most of the D.C. boom is from lobbyists and PR people, and others who are retained to influence what the government does. It's a cold calculation: You're likely to get a much better return from an investment of $1 million on lobbying than on a similar investment in, say, a new factory or better worker training.

So Washington gets fat, and it does so on money taken from the rest of the country: Either directly, in the form of taxes, or indirectly in the form of money that otherwise would have gone to that factory or training program.

I'm not the only one to notice this, or even to make the Hunger Games analogy. As Ross Douthat wrote, "There aren't tributes from Michigan and New Mexico fighting to the death in Dupont Circle just yet. But it doesn't seem like a sign of national health that America's political capital is suddenly richer than our capitals of manufacturing and technology and finance, or that our leaders are more insulated than ever from the trends buffeting the people they're supposed to serve."

No, it's not a sign of health. And it's no coincidence that our lawmakers have weathered the recession better than America has.

It's a sign of illness. And it's exactly the illness that federalism and limited national government -- something I wrote about in the context of secession-talk last week -- was designed to prevent. The reason this approach isn't working any more is that we're not following it.

Under the original Constitutional plan, the federal government's powers were to be few, and mostly concerned with external relations. Under those circumstances, the risk of corruption was comparatively low. Nearly all regulation would come from state governments. They might be corrupted -- since they'd be the only ones worth corrupting -- but problems would be compartmentalized (corruption in Rhode Island wouldn't have much effect on Connecticut, much less Utah) and disciplined by competition with other states.
Well, it's been quite a while since things worked that way; things started go go downhill with the federal expansion under the New Deal, and then really took off after the "regulatory explosion" under President Nixon, who created such entities as the Environmental Protection Agency and Occupational Safety & Health Administration.

It's no coincidence that as the federal government morphed from an entity that did a few highly visible things well, to one that did a whole lot of not-so-visible things less well, respect for the federal government plummeted even as the political class' wealth climbed.

That's where we are now, with a capital city that looks more and more like that of an imperial power where courtiers and influence-peddlers abound. Want to do something about it? Don't secede. Return to the Constitution.

http://www.usatoday.com/story/opinion/2012/11/26/hunger-games-washington-economy-glenn-reynolds/1725783/

Your government dollars at work - twisting the facts and changing history.

Texas Schools Teaching Boston Tea Party As Terrorist Act

HOUSTON (CBS Houston) – The most historical instance of protesting against taxation without representation is now being taught in Texas schools as a terrorist act.

As recently as January of this year, the Texas Education Service Center Curriculum Collaborative included a lesson plan that depicted the Boston Tea Party, an event that helped ignite the American Revolution, as an act of terrorism. TheBlaze reports that in a lesson promoted on the TESCCC site as recently as January, a world history/social studies class plan depicted the Boston Tea Party as being anything but patriotic, causing many people to become upset with the lack of transparency and review for lessons.

“A local militia, believed to be a terrorist organization, attacked the property of private citizens today at our nation’s busiest port,” wrote the teachers in charge of organizing the curriculum about the Boston Tea Party. “Although no one was injured in the attack, a large quantity of merchandise, considered to be valuable to its owners and loathsome to the perpetrators, was destroyed. The terrorists, dressed in disguise and apparently intoxicated, were able to escape into the night with the help of local citizens who harbor these fugitives and conceal their identities from the authorities.

“It is believed that the terrorist attack was a response to the policies enacted by the occupying country’s government. Even stronger policies are anticipated by the local citizens.”

The controversial TESCCC lesson is a product of CSCOPE, a well known non-profit whose media centers that help teach the curriculum received $25 million in funding last year, according to TheBlaze. Supporters of the program indicate that the lesson hadn’t been taught in Texas schools since August 2010, but the lesson plan remained on CSCOPE’s website until at least January of this year.

The news of the curriculum in some Texas schools comes about a month shy of the 239^th anniversary of the Boston Tea Party.

http://houston.cbslocal.com/2012/11/23/texas-schools-teaching-boston-tea-party-as-terrorist-act/

Zombieland, take 2

Reports of Fistfights, Guns Drawn, Nat'l Guard

Widespread reports about fistfights and people bringing guns to gas stations, thanks to gas shortages in New York and New Jersey. Some also reporting that law enforcement has been stationed around many gas stations to prevent incidents.

http://www.breitbart.com/Big-Government/2012/11/01/reports-fistfights-guns-gas-stations-shortages-Sandy

Zombieland, take 1

Homes and businesses in the Lower East Side and East Village are still without power and under water. Residents began dumpster diving outside a Key Food supermarket Thursday, looking for whatever food they can take.

Watch Video:
http://www.nbcnewyork.com/video/#!/on-air/as-seen-on/Sandy-Starved-New-Yorkers-Dumpster-Dive/176839571

The USA is the next Greece

Comment from a ZeroHedge article:

“I was just in Greece last week (On Cruise).  I went to the parliament building where all of this shit takes place (Thanks to ZH for educating me and giving us the live riot feeds).  Pictures do not show how fucked up this country is.  Every building is tagged with Graffiti saying "F*** Merkel", and "Hows this Capitalism working for you now?".  Most of it is in Greek, but the paint in English is truly scary.  Again..most buildings and ANY free walls are tagged and tagged again.  The city is ruined.  Even the windows of businesses are tagged from top to bottom.  Bank windows are cracked and broken.  I was there the day after Merkel was there so no riot photos.  I tried to take a photo with the police with machine guns and riot gear hiding around town but they would not let me.  I now see why there are "Riot Dogs" also.  Stray dogs and cats all around.  You guys will really appreciate what I am about to say.....We were in a taxi going back to the cruise ship, and I asked the female taxi driver "What do you think of Merkel?". She said "We all hate her" in a broken Greek accent.  I asked "Why?".  She said "I have 4 children, and I have always received my checks to help me pay for my kids, and now that b**** Merkel took my checks away."  I was astounded to hear this type of thinking....so I tried to rationalize her comment by saying "Angela Merkel didn't take your checks, your government overspent, and Merkel is trying to help and your government has to pay Germany back as they agreed for the borrowed money right?"  She said "We don't have to pay anything back....Germany still owes us big time for the war.!!"  I just sat back in the cab and listened to her rant for the remaining 5 minutes of our trek back to the ship..... As you can see from this type of thinking....they are s******.  All they want is more Free S***.....sounds very familiar with another country.  After hearing this type of thought process explained to me in person over and over in Greece first hand, it shows me that these people in the streets have no clue.  It is either "I get more free stuff, or we riot in the streets".  There is no compromise.  It is a 100% "All Me" society.  Thanks ZeroHedge for waking me up.  Just ordered some more Buckets of food from Costco...take a look.  I feel a lot better having some of these under my belt. I don't post much, but I sure do read all of your guys comments.  Thanks.  Oh  before I finish gas is $12 a gallon and they will not touch the US dollar no matter what.  Tried to give the cab driver a $5 tip because I was out of Euros and she just gave it back and said "We don't take that".  I had already paid for the cab with my remaining Euros....Yikes.”

Sure, this is only anecdotal, but wow – if this is true and represents the beliefs of even a sliver of the Greek population, they’re in deep s***.  I can only hope that US citizens are smarter than that.

http://www.zerohedge.com/news/2012-10-18/athens-full-day-strike-turns-violent-tears-gas-petrol-bombs-exchanged

 

Breaking: Prepper Put on No-Fly List, Stranded in Hawaii

By Melissa Melton

What does it take to get your name on the no-fly list in America? Apparently you only need to be classified as a “prepper.”

When 34-year-old U.S. citizen and Mississippi resident Wade Hicks boarded a military flight to visit his wife, a Navy lieutenant stationed in Okinawa, Japan, he did not think it would be a one-way trip. Stopping off in Hawaii to refuel, upon reboarding the plane, Hicks was quickly escorted back off again by armed guards. He was then taken to a secure interrogation room where Hicks was informed he would not be flying anywhere because he turned up on the no-fly list.

Hicks has since been stranded on the island state without a way home.

As seen below in a bombshell double interview on Infowars Nightly News, private investigator and founder of the Northeast Intelligence Network Douglas Hagmann revealed that Hicks not only passed through TSA screening at his original departure point in San Francisco, but he has also passed a criminal background check and an FBI screening for an enhanced concealed carry permit in his home state.

In addition, Hicks holds a TWIC card, or Transportation Worker Identification Credential, granted by none other than the TSA. Hicks has also held classified clearances as a defense contractor for the U.S. military. His passport is valid and has not been revoked.

What was it Hicks did, then, to be added to the U.S. government’s no-fly list maintained by the FBI’s Terrorist Screening Center?

“I asked [Hicks] ‘Could you have been mistaken for a person with the same surname?’” Hagmann said. “The people who were acting on behalf of the TSA and DHS had told him his social security number, his date of birth, his name, and they said, ‘No, there is no mistake, this is you, you’re on this no-fly list.’”

After being asked to get off the plane, “It started out like something fairly routine,” Hicks said in his interview with Infowars. “About 15-20 minutes later, two heavily armed Air Force security forces guys showed up.”
It was then Hicks was told he would not be flying anywhere. There is no indication as to why Hicks was able to first fly from San Francisco to Hawaii without being notified he was supposedly on the list.

Seemingly the only “crime” Hicks has committed that would end in revocation of his ability to fly is his affiliation with the Mississippi Preparedness Project, a prepper organization. Although prepping is not illegal, the FBI has been cracking down on preppers for awhile now, with everything from spying on people who visit prepper websites to straight up stripping preppers of their Second Amendment rights.

Hicks revealed to Infowars that a supposed disabled veteran claiming to be a Navy Seal had joined his prepper group earlier in the year, but Hicks felt the man’s story seemed suspicious. Through a Freedom of Information Act request, Hicks learned the man had never been in the military even though he possessed an authentic military ID. Sometime later while out driving, Hicks saw the man’s car and ended up tailing him to a Mississippi Department of Homeland Security branch office where the man parked his car.

When asked if he thought his affiliation with a prepper group caused him to get detained, Hicks responded, “If it does, that’s a pretty sad situation.”

In the meantime, Hicks has contacted his Senator, and he has received a call back that the Senator’s office is currently working to help him get home.

This is not the first time our out-of-control government has trampled someone’s rights with the no-fly list. Stories of natural born U.S. citizens being barred from flight because their name mysteriously shows up on the list have become all too common.

Earlier this year, a California grad student on the list had to fly from Costa Rica to Mexico and walk across the U.S. border to get home, and a muslim man from Virginia had to get an FBI waiver after being stuck in Cairo for nearly two months before he could return to America. TSA agents even pulled an eighteen-month-old baby off a Jet Blue flight last spring for being considered a suspected terrorist on the no-fly list.
As previously reported by Infowars, the list more than doubled in 2011, and the government still refuses to release the names on the list or even any details as to how or why these people have been chosen. No one is given due process when they are added, completely bypassing the Fifth Amendment for each and every American citizen put on it.

Once you’re on the no-fly list, it is unclear how to get off, either.

These kinds of egregious trespasses on our liberties are becoming an everyday occurence. The federal government is obviously prepping for something, purchasing billions of rounds of ammunition and buying dehydrated food in bulk. Apparently the average U.S. citizen who wants to prep is, instead, supposed to fear government retribution through potentially being stranded hundreds or even thousands of miles away from home every time he or she steps foot on an airplane

http://www.infowars.com/prepper-put-on-no-fly-list-stranded-in-hawaii/

Radiation Continues Spreading and Spiking Across USA

Oct 10, 2012 reporting from Honolulu

We noted in a prior post that "Something Happened around September 17"  and radiation spiked high in a number of US cities, but especially the Pacific Northwest.

These are the areas that were the hardest hit by Fukushima the first time around, as the jet stream usually makes a beeline for them.

I was hoping that would be a week or so spike, and then back to normal, but that is not the case, and the radiation continues to spread east and south.  Disturbingly, over half of the Radnet data has gone black, especially in the bigger cities.   Your tinfoil hat won't protect you from this radiation fallout, no matter how thick. 

This is time to alert your friends and neighbors, anything over 100 Clicks Per Minute (CPM) is time to get concerned, and now there are MANY places up over 100, some at 500.  Exposure to 100CPM for a year gives you a significantly increased chance of cancer....and that is just from getting hit externally with the radiation.    If you breath it in, it can be 20 times worse.    Exposure to 500 CPM for 90 days gives you a significantly increased chance of cancer.

Please review this handy Cheat Sheet on radiation.   Nuke Pro blog made this summary sheet in order to send a Geiger to Japan for local testing by Japanese families.

http://nukeprofessional.blogspot.com/2012/04/geiger-counter-interpretation.html

Source data for the charts is here, check it out, see how many have gone black

 http://blog.alexanderhiggins.com/net2/Spokane-WA-Real-Time-US-Radiation-Monitoring-Graph.aspx

http://nukeprofessional.blogspot.com/2012/10/radiation-continues-spreading-and.html

The Magnitude of the Mess We're In

By George P. Shultz, Michael J. Boskin, John F. Cogan, Allan H. Meltzer and John B. Taylor

 

The next Treasury secretary will confront problems so daunting that even Alexander Hamilton would have trouble preserving the full faith and credit of the United States.

 

Did you know that annual spending by the federal government now exceeds the 2007 level by about $1 trillion? With a slow economy, revenues are little changed. The result is an unprecedented string of federal budget deficits, $1.4 trillion in 2009, $1.3 trillion in 2010, $1.3 trillion in 2011, and another $1.2 trillion on the way this year. The four-year increase in borrowing amounts to $55,000 per U.S. household.

The amount of debt is one thing. The burden of interest payments is another. The Treasury now has a preponderance of its debt issued in very short-term durations, to take advantage of low short-term interest rates. It must frequently refinance this debt which, when added to the current deficit, means Treasury must raise $4 trillion this year alone. So the debt burden will explode when interest rates go up.

The government has to get the money to finance its spending by taxing or borrowing. While it might be tempting to conclude that we can just tax upper-income people, did you know that the U.S. income tax system is already very progressive? The top 1% pay 37% of all income taxes and 50% pay none.
Did you know that, during the last fiscal year, around three-quarters of the deficit was financed by the Federal Reserve? Foreign governments accounted for most of the rest, as American citizens' and institutions' purchases and sales netted to about zero. The Fed now owns one in six dollars of the national debt, the largest percentage of GDP in history, larger than even at the end of World War II.

The Fed has effectively replaced the entire interbank money market and large segments of other markets with itself. It determines the interest rate by declaring what it will pay on reserve balances at the Fed without regard for the supply and demand of money. By replacing large decentralized markets with centralized control by a few government officials, the Fed is distorting incentives and interfering with price discovery with unintended economic consequences.

Did you know that the Federal Reserve is now giving money to banks, effectively circumventing the appropriations process? To pay for quantitative easing—the purchase of government debt, mortgage-backed securities, etc.—the Fed credits banks with electronic deposits that are reserve balances at the Federal Reserve. These reserve balances have exploded to $1.5 trillion from $8 billion in September 2008.
The Fed now pays 0.25% interest on reserves it holds. So the Fed is paying the banks almost $4 billion a year. If interest rates rise to 2%, and the Federal Reserve raises the rate it pays on reserves correspondingly, the payment rises to $30 billion a year. Would Congress appropriate that kind of money to give—not lend—to banks?

The Fed's policy of keeping interest rates so low for so long means that the real rate (after accounting for inflation) is negative, thereby cutting significantly the real income of those who have saved for retirement over their lifetime.

The Consumer Financial Protection Bureau is also being financed by the Federal Reserve rather than by appropriations, severing the checks and balances needed for good government. And the Fed's Operation Twist, buying long-term and selling short-term debt, is substituting for the Treasury's traditional debt management.

This large expansion of reserves creates two-sided risks. If it is not unwound, the reserves could pour into the economy, causing inflation. In that event, the Fed will have effectively turned the government debt and mortgage-backed securities it purchased into money that will have an explosive impact. If reserves are unwound too quickly, banks may find it hard to adjust and pull back on loans. Unwinding would be hard to manage now, but will become ever harder the more the balance sheet rises.

The issue is not merely how much we spend, but how wisely, how effectively. Did you know that the federal government had 46 separate job-training programs? Yet a 47th for green jobs was added, and the success rate was so poor that the Department of Labor inspector general said it should be shut down. We need to get much better results from current programs, serving a more carefully targeted set of people with more effective programs that increase their opportunities.

Did you know that funding for federal regulatory agencies and their employment levels are at all-time highs? In 2010, the number of Federal Register pages devoted to proposed new rules broke its previous all-time record for the second consecutive year. It's up by 25% compared to 2008. These regulations alone will impose large costs and create heightened uncertainty for business and especially small business.

This is all bad enough, but where we are headed is even worse.

READ MORE: 

http://online.wsj.com/article/SB10001424052702303561504577497442109193610.html#printMode

Dictatorship USA - only one penstroke away

By Executive Order, Barack Hussein Obama completely bypassed the U.S. Constitution and powers of Congress and bestowed upon himself the power to impose a brutal version of Martial Law.

Through Presidential Executive Order, Barack Obama gave himself massive powers that allow himself to instantly bring about socialism in America and create a Soviet-like statist regime–whenever he wants.

He can now:
-Raise gas prices
-fix any food prices
-cut back on health care for citizens
-reduce our pay
-bail out any person or company he wants
-halt consumer production and replace it with government work
-hike up airfares
-force the production of electric cars
-break existing labor contracts
-and much more

READ MORE:
http://www.westernjournalism.com/when-exactly-did-america-cease-to-be-a-republic/

Coming soon: Planned Economic Collapse Caused by a War of Financial Weapons

Earlier today we casually wondered whether the US stands to lose more by supporting China or Japan in their escalating diplomatic spat, considering the threat of a US Treasury sell off is certainly not negligible, a dilemma complicated by the fact that as today's TIC data indicated both nations own almost the same amount of US paper, just over $1.1 trillion. In a stunning turn of events, it appears that China has taken our thought experiment a step further and as the Telegraph's Ambrose Evans-Pritchard reports, based on a recommendation by Jin Baisong from the Chinese Academy of International Trade (a branch of the commerce ministry) China is actively considering "using its power as Japan’s biggest creditor with $230bn (£141bn) of bonds to "impose sanctions on Japan in the most effective manner" and bring Tokyo’s festering fiscal crisis to a head." I.e., dump Japan's bonds en masse.

Should this stunning recommendation be enacted, not only would it be the first time in world history that insurmountable credit is used as a weapon of retaliation, it would mark a clear phase transition in the evolution of modern warfare: from outright military incursions, to FX wars, to trade wars, culminating with "bond wars" which could in the span of minutes cripple the entire Japanese fiscal house of cards still standing solely due to the myth that unserviceable debt can be pushed off into perpetuity (as previously discussed here).

Not needing further explanation is the reality that should China commence a wholesale Japanese bond dump, it may well lead to that long anticipated Japanese bond market collapse, as creditor after creditor proceeds to sell into a market in which the BOJ is the buyer of only resort in the best case, and into a bidless market in the worst.

The immediate outcome would be soaring inflation as the BOJ is forced to monetize debt for dear life, buying up first hundreds of billions, then trillions in the secondary market to avoid a complete rout, matched by trillions of reserves created out of thin air which may or may not be halted by the Japanese deflationary gate, and which most certainly could waterfall into the economy especially if Japanese citizens take this as an all clear signal that the Japanese economy is about to be crippled in all out economic warfare with the most dangerous such opponent, and one which just defected from the "global insolvent creditor" game of Mutual Assured Destruction.

Further complicating things is that Japan has no clear means of retaliation: it owns no Chinese bonds of its own it can dump as a containment measure. Instead, Japan is at best left with the threat of damages incurred on the Chinese economy should Japan be lost as a trading parting. It appears, however, that to China such a gambit is no longer a major concern.

Ironically, this terminal bond war escalation would also mean that Japan's last ditch alternative is to threaten the US with dumping America's bonds in turn if the US i) does not step up on behalf of Japan and ii) if Japan is forced to promptly convert debt from one denomination into another. The fallout effect would be most dramatic.




http://www.zerohedge.com/news/bond-wars-chinese-advisor-calls-japanese-bond-dump

Fukushima USA? NRC says YES. And 100 times more likely to happen!

Nuclear Regulatory Commission Engineers Charge Government Coverup: Reactor Meltdown “Absolute Certainty” If Dam Fails … 100s of Times More Likely than Tsunami that Hit Fukushima

An engineer with the Nuclear Regulatory Commission (NRC) says the agency has withheld documents showing reactor sites downstream of dams are vulnerable to flooding, and an elevated risk to the public’s safety.

Richard Perkins, an NRC reliability and risk engineer, was the lead author on a July 2011 NRC report detailing flood preparedness. He said the NRC blocked information from the public regarding the potential for upstream dam failures to damage nuclear sites.

Perkins, in a letter submitted Friday with the NRC Office of Inspector General, said that the NRC “intentionally mischaracterized relevant and noteworthy safety information as sensitive, security information in an effort to conceal the information from the public.”
The engineer is among several nuclear experts who remain particularly concerned about the Oconee plant in South Carolina, which sits on Lake Keowee, 11 miles downstream from the Jocassee Reservoir. Among the redacted findings in the July 2011 report — and what has been known at the NRC for years, the engineer said — is that the Oconee facility, which is operated by Duke Energy, would suffer almost certain core damage if the Jocassee dam were to fail. And the odds of it failing sometime over the next 20 years, the engineer said, are far greater than the odds of a freak tsunami taking out the defenses of a nuclear plant in Japan.

“The probability of Jocassee Dam catastrophically failing is hundreds of times greater than a 51 foot wall of water hitting Fukushima Daiichi,” the engineer said. “And, like the tsunami in Japan, the man‐made ‘tsunami’ resulting from the failure of the Jocassee Dam will –- with absolute certainty –- result in the failure of three reactor plants along with their containment structures.

“Although it is not a given that Jocassee Dam will fail in the next 20 years,” the engineer added, “it is a given that if it does fail, the three reactor plants will melt down and release their radionuclides into the environment.”


READ MORE:
http://www.washingtonsblog.com/2012/09/nuclear-regulartory-commission-engineers-charge-government-coverup-reactor-meltdown-absolute-certainty-if-dam-fails-100s-of-times-more-likely-than-tsunami-that-hit-fukushima.html

The Coming Economic Apocalypse

Bob Woodward has yet another book coming out and the consummate Washington insider provides us with a glimpse of what’s in it. In doing so, he inadvertently confirms what so many internet pundits have been warning about — an economic catastrophe of unimaginable proportions.

In the article in the Washington Post Woodward describes the debt-ceiling confrontation between Congress and the President. It is likely that Mr. Woodward or most other political types do not recognize the admissions contained within the article. For these people, politics is a game of winners and losers. That is where the drama and excitement is.

For these folks, economics is a sideshow. To them, economics is to politics like the Toledo Mud Hens are to the New York Yankees. If the Mud Hens send someone to the majors then these people consider how it might affect the Yankees chances of winning the World Series.

It is Woodward’s fascination with the interplay of politics and politicians that dominate his article. The title of the article evidences this Beltway fixation: Inside story of Obama’s struggle to keep Congress from controlling outcome of debt ceiling crisis. The real story is missed. That is the admission of the hopeless condition of the US economy.

Anyone concerned with the impending economic collapse will find Woodward’s account fascinating, although not for the reasons he did. He stumbled into truth, important truth, and seems to have missed it entirely. What follows is an excerpt from the article with the emboldening added by me:

Another possible outcome, Geithner said, was perhaps worse. “Suppose we have an auction and no one shows up?”

The cascading impact would be unknowable. The world could decide to dump U.S. Treasuries. Prices would plummet, interest rates would skyrocket. The one pillar of stability, the United States, the rock in the global economy, could collapse.

“So,” the president said, “if we give $1.2 trillion now in spending cuts” — the amount in the House bill to get the first increase in the debt ceiling for about six to nine months — “what happens next time?” The Republicans would then come back next year, in the middle of the presidential campaign, and impose more conditions on the next debt ceiling increase. He could not give the Republicans that kind of leverage, that kind of weapon. It was hostage taking. It was blackmail. “This will forever change the relationship between the presidency and the Congress.

“Imagine if, when Nancy Pelosi had become speaker, she had said to George W. Bush, ‘End the Iraq war, or I’m going to cause a global financial crisis.’ ”

So, Obama said, they had to break the Republicans on this. Otherwise, they would be back whenever it suited them politically.

They were out of options, Geithner said. The only one might be accepting the House bill, loathsome as it might be. “The 2008 financial crisis will be seen as a minor blip if we default,” he said.

The president said, “The Republicans are forcing the risk of a default on us. I can’t stop them from doing that. We can have the fight now, or we can have the fight later on, but the fight is coming to us.”

So, no, Obama said, he was not going to cave. Period. He said good night, got up and left. He was very agitated.
Geithner thought there was one other consideration. He did not mention it to anyone, not even the president, but he had thought about it a great deal. It was not just that Obama faced an economic choice or a political choice. He faced a moral choice.

The president should not put himself in the position of saying unequivocally that he would veto, Geithner concluded, for one simple reason: No one could be sure how to put the American or the global economy back together again. The impact would be calamitous.

“And the people who would bear the pain of that would be the people less prepared,” Geithner told others, “less able to absorb that cost. It would be something you could not cure. It is not something you can come back and say, a week later, ‘Oh, we fixed it.’ It would be indelible, incurable. It would last for generations.”

"Turbo Timmy" Geithner confesses the desperate nature of the situation. The government is broke.  Geithner fears the world knows this when he says: “Suppose we have an auction and no one shows up?” Geithner knows that we cannot finance our deficits using traditional credit markets. The deficits are too large and the government has no credibility regarding the required spending cuts. Geithner was admitting that markets would not allow the US government to continue its profligate ways. That admission is major news, although not to Woodward and his politically-oriented audience.

Credit markets have (or nearly have) stopped US government debt financing. That’s why we have the Federal Reserve, the counterfeiter of last resort. If government can raise the debt limit, then it would be legal for the Treasury to issue new debt. The Treasury’s sibling, the Fed, would buy it by printing new money. That would allow the government to pay its bills for a while longer.

One must wonder about the intelligence and stewardship of Timmy and the other attendees of this meeting. When Geithner declares:  ”It would be indelible, incurable. It would last for generations,” he is stating the inevitable. Raising the debt limit does nothing to change the US condition other than temporarily postpone his predicted outcome.

The two emboldened sentences of Geithner’s reveal what the American people need to know. No one will buy US Treasuries other than the Federal Reserve. Raising the debt limit only puts the government more hopelessly in debt, ensuring that Treasuries will be even more difficult to sell. Without intending it, Geithner admits that Bernanke will be printing money until the electricity is shut off or until hyperinflation shuts everything economic down. In either case, we reach his “indelible, incurable” situation which will “last for generations.”

Now, don’t you feel better knowing Woodward’s inside account of what is going on. These geniuses were rearranging the chairs on the Titanic instead of addressing the iceberg that will sink the country. At least Woodward seemed to enjoy the political intrigue.

http://www.economicnoise.com/2012/09/10/bob-woodward-inadvertently-confirms-the-coming-economic-apocalypse/