Written by admin on May 21st, 2011

that is required is an ever increasing trade deficit with the difference made up by Treasury IOU’s. Does this sound familiar? Do this for 10 years and China builds up a trillion dollars of $ US Treasuries.


In fundamental terms, real savings (unconsumed goods) are needed. This is a necessary prerequisite for investment and economic growth. But our country and its people have no savings to speak of. We have been spending our savings and what’s worse, consuming our capital.


In fundamental terms, interest is a payment made to an owner of capital in return for giving up control or use of that capital for a specific period of time. But the U.S. government has chosen to alter this situation by mandating that this currency is “elastic” and can be stretched at will to meet the needs of government and business. A free market is where people come together to voluntarily exchange the fruits of their labor. When you begin to regulate, free markets end. Governments cannot abolish economic law, no matter how many times Mr. Obama says, “Yes we can.” Most people see the government and its control of the economy as a necessary prerequisite to their own well being. In reality–the OPPOSITE is the case.


Again talking reality, the U.S. Government is bankrupt, just like Citigroup, AIG, Fannie Mae, Freddie Mac and others. They are being kept afloat by the auspices of the U.S. Government. The Government has no assets. All they have is borrowing and taxing power, the former being based on the latter. But the taxing powers of government become useless during a severe economic contraction. Furthermore, instead of reporting capital gains, people will be reporting capital losses, and asking for tax refunds. The Government’s huge spending spree is coinciding with a tremendous fall in tax revenue. Rather than adopt austerity measures as common sense would dictate, the government is doing the exact opposite–spending beyond their means and increasing the indebtedness of their citizenry even more. The massive bailouts and deficits incurred to “save” the financial system will be a HUGE anchor on economic growth for years to come, even if the depression I call for were to end tomorrow. If there is no real savings (capital), then the depression will continue.


When this average person finally catches on, it is going to be very serious.


There are .4 TRILLION (VALUE) in Alternate A Mortgages that are due for re-setting directly ahead of us. The resets will be much higher and we are going to have more abandoned properties and foreclosures. In addition, banks are holding foreclosures off the market to avoid an all out glut. Commercial mortgages will start to default in greater numbers. According to Shadow Statistics, there are 21 million now unemployed. Nothing is over. When are people going to stop believing the media and do the math???


                                          THE DEATH OF SMALL BUSINESS


The small business wreckage is staggering. It is the lifeblood of American Enterprise. It is the biggest reason for growth of the middle class and is now becoming a national tragedy. Gross neglect is part of the equation. Small business is vital to any recovery, but many are going bankrupt. Businesses are born, people are hired, equipment is purchased, sales are then generated, deliveries are made, services are rendered and then taxes are paid. If you did not know it, 50% of the GDP and fully 90% of job creation comes from Small Business. Of the famous TARP funds, less than 1% has gone to small business. All the Federal Programs support the lumbering, inefficient big business, fully bent on failure. Commercial bankruptcies are surging. Fewer small businesses are forming: Since January, 350 businesses filed for bankruptcy on a daily basis, which is an increase of 240% from 2006. Thus to claim an economic recovery is a total LIE. Small Business is the backbone of the US Economy and it is crumbling. For the most part, there are no jobs for College Graduates.


The American People Are Tapped Out: They are losing their jobs and they have no savings. Then, they are losing their homes which are being foreclosed on.  They also have no collateral left against which to borrow. And the various banks will not lend to them because so many are losing their jobs and because the banks want to rebuild their collateral base. The banks prefer to lend to the government because the loan is guaranteed by the government and these loans require no excess reserves.


Since our government knows that the American people cannot spend, they see themselves as having to do the spending for them, while the collection of taxes has dropped by 40%. All G-7 governments and especially ours have reached the point of facing cutting spending or going broke.–and this choice stares directly at the seats of power. The lower levels of government–the state, local, and municipal governments are already laying off staff, reducing employment, having forced furloughs  and thus cutting both spending and services. It is only the Federal Governments- which still insist on conducting their affairs as usual. What this really means is that FEDERAL COST is no object when political power is at stake. What is at stake is how long these governments can get away with spending endless money. Because of this, I am in direct opposition to the present buying of any tax free bonds of any kind, as we are no where near the elimination of multiple crises.


This situation is not the same as the Great Depression, where most municipalities paid their interest. Perhaps 5% defaulted. It is much worse. California just borrowed billion from J.P. Morgan (which is really the US Treasury) and must pay 8% interest after a period of time. They also are paying out 80 million a day for unemployment insurance. They owe 26 billion in all and growing. I do not see an end here. Owning bonds of a state not in trouble?? Maybe, but not me. 


I am well aware that most people need income, especially retired people.  I have recommended KMP and ENB which are MLP’s paying decent income, tax deferred. Their income is kind of assured for years to come. They are pipelines that transport and store oil and natural gas.


                         Do you feel something tightening around your neck?


Either this present system is going to recover or the people will reject the attempt to recover because THEY WAKE UP TO THE FACT that Socialism has never worked. That really is the choice that everyone is facing, whether you realize this or not. The more you choose for government to take over everything, the less freedom you are going to have. Every sign of increased lending backed by the POWER to tax future generations is presented to you as a false sign of “recovery”. Every government injection of “capital “which allows the financial corpse to continue to trade on the paper stock markets is presented to the reader as a sign of “recovery.” I am talking about Citigroup, AIG, Fannie Mae, Freddie Mac and so many more. They are really all corpses kept alive by a feeding tube from the US Treasury (the Public). And every government statistic (doctored) which is not quite as bad as the previous one is presented to you as a sign of “recovery.” Every step that your government takes that literally tightens the noose around your neck and those still striving for self-sufficiency is presented to you as a sign of recovery. Do you feel the noose tightening? Is it hard for you to breathe?


So where is this recovery going? It is aimed at the retention of political power over the lives and property of those who are expected to finance that power. And they cannot run the economy without controlling the individuals who do not run the economy, but who merely participate in it by cooperating with their fellows. Ultimate political power cannot rely on cooperation, it never has. It relies on force and nothing else.


There are two opposing forces here which is the fundamental issue. Namely, the recovery of political governance or having the people reclaim political freedom. The next two to three years will tell. What is taking place now in the economy will not be over for at least three years and maybe more. We are going into a period of very high spending; most investments are based upon greed of one kind or another. Investing in GOLD is primarily based on FEAR and there will be much to fear in the coming three years. Greed comes later: And as I explained to you many times before: There is nothing more powerful than a Bull Market fueled by both GREED and FEAR. The kind of Bull Market that only GOLD can command. 


Lies and deception are increasingly clear, regarding price inflation, the benefits of inflation as a policy, the attack on savings for which there is no yield, even implicit encouragement of gambling with life savings and pension funds. The ruling Elite control the banks, which control the creation of money. They are aided by intellectuals like Greenspan and Bernanke, Paulson and Geithner, Jamie Dimon and Lawrence Summers, Martin Feldstein Bill Gross and Warren Buffett and Robert Rubin who preach the ideological dogma that has ultimately destroyed the system along with our industry and our investments” unquote.


THE U.S. DOLLAR IS EXTREMELY VULNERABLE: The U.S. dollar breakdown is now in progress: The .50 level has been broken as of this writing and now is at .30 on the U.S. dollar index of currencies. Although the Technical signals now point to a

Pages: 1 2 3

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a Reply