Police Supt. Weis: National Guard isn't solution to city's gun violence
State Reps. Fritchey and Ford want National Guard's help fighting crime
April 25, 2010
BY KIM JANSSEN AND FRANCINE KNOWLES Staff Reporters
Chicago Police Supt. Jody Weis today spoke out against a request for the Illinois National Guard to be to deployed on Chicago’s streets to help tackle gun violence.
Stopping just short of outright rejecting the request from state lawmakers Rep. John Fritchey and Rep. LaShawn Ford, Weis said “I don't think the National Guard is the solution.”
Chicago Police Supt. Jody Weis told the media this afternoon that he doesn't think deploying the Illinois National Guard on Chicago's streets is the solution to the city's gun violence.
(Jean Lachat/Sun-Times)
At a press conference earlier Sunday, Fritchey and Ford had called on Gov. Quinn and Mayor Daley to deploy troops. The action, in coordination with Weis, should be taken as soon as possible to help get guns and criminals off the street, they said.
The two Chicago Democrats noted National Guard members are now working side-by-side with U.S. troops to fight wars in Iraq and Afghanistan, while another deadly war is taking place in Chicago neighborhoods.
“Is calling for National Guard deployment a drastic action? Of course it is,” said Fritchey. “Is it warranted under these circumstances? Without question. If we can bring (the National Guard) in to help fill sandbags for flooding... to deal with tornado debris, we can bring them in to save lives.”
So far this year, 113 people have been killed across Chicago — precisely the same number as the number of U.S. troops killed in Iraq and Afghanistan combined during the same time period, the legislators noted.
"U.S. troops have been winning the hearts and minds (of people) in Iraq," Ford said. “They’ve stabilized those communities. They made those communities much better. Now those communities are safe. That’s what we want right here in Illinois, for the National Guard to come in and stabilize these communities.”
Monday, April 26, 2010
Sunday, April 25, 2010
Food inflation
Article about how the price of food is beginning to rise; according to this article food prices took their biggest jump in 26 years.
The Bureau of Labor Statistics (BLS) today released their Producer Price Index (PPI) report for March 2010 and the latest numbers are shocking. Food prices for the month rose by 2.4%, its sixth consecutive monthly increase and the largest jump in over 26 years. NIA believes that a major breakout in food inflation could be imminent, similar to what is currently being experienced in India.
http://www.cnbc.com/id/36720622
Inflation has gone up 26% overall since 2000. Check out this inflation calculator; fun to play around with, but it's kind of depressing...
http://www.usinflationcalculator.com/
The Bureau of Labor Statistics (BLS) today released their Producer Price Index (PPI) report for March 2010 and the latest numbers are shocking. Food prices for the month rose by 2.4%, its sixth consecutive monthly increase and the largest jump in over 26 years. NIA believes that a major breakout in food inflation could be imminent, similar to what is currently being experienced in India.
http://www.cnbc.com/id/36720622
Inflation has gone up 26% overall since 2000. Check out this inflation calculator; fun to play around with, but it's kind of depressing...
http://www.usinflationcalculator.com/
Who Stole Joe Public's Lunch?
I have recently realized just how divergent our opinions are - even among members of this forum - in regard to just who is to blame for the insolvency which resulted in the "Recession of 2008". Some point to the government. Some claim it was corporations. A few point to the banks. Still others blame the American people. But while all of these institutions share a bit of responsibility, many of them are simply used to shroud the largest and initial cause of that insolvency, the central banking system. And the insolvency it has perpetuated is no mistake.
The Federal Reserve. Unfortunately, most Americans are ignorant of the fact that the Federal Reserve is neither federal, nor reserve. It is a private banking system, established by private bankers, and sold to Congress and the American people as a measure of stability for the US Economy (despite having presided over the market crash of 1921, the Great Depression, and seven other major recessions). Although the Fed is subject to some restrictive legislations (including one that enables the Senate to approve its chairmen), it is privately managed and administrated. The bank officially claims to not be private, but it is certainly not federal or governmental. Yet surprisingly, this non-governmental bank has been granted the sole authority to issue the official money of the United States.
Creation of the Federal Reserve. The Federal Reserve was created by the world's leading private bankers. Among them were Paul Warburg, representative of the Rothschild banking dynasty; Frank Vanderlip, president of the National City Bank of New York; and three senior executive officers of J.P. Morgan. The bank was brought online in a time when larger banks (such as J.P. Morgan) were experiencing increased competition from smaller, emerging US banks. The Federal Reserve System was a carefully devised smokescreen to create a central bank to which all of these smaller banks would be regulated and taxed by.
The Environment That Enabled The Federal Reserve Act. Possibly the single largest political issue of the day in the earliest part of the 20th Century, was a shared disdain for a central bank (such as the Bank of England) by the American people. A central bank had been an experiment exactly two times, and was each time dissolved. But this time around, the idea of a central bank was hidden behind a clever naming convention (which avoided either the notion of "central" or "bank"), a system of regional banks that provided a smokescreen for centralization, and the idea that the system was actually a governmental mechanism to protect the people. The system was carefully devised, the fear of the people after the panic of 1907 was played upon, and legislation was passed in 1913.
What resulted was literally a bank with monopolistic power over the US money supply. Ultimately, the Fed fought and earned the ability to make the money supply "elastic", which is to say that they could print it at will in order to lend more, earning more and more interest. It also had a measure of control over all of the other banks in the US, legislated to it by the Senate. Local banks were forced to buy shares in the regional federal reserve banks, which made up the Federal Reserve.
But with authority to issue money, the Fed enabled these member banks to create money that cost them nothing. Of course, the member banks were required to borrow that money from the Fed with interest, but it could be lent to other borrowers at a much higher interest. The lenders would not only pay the money back, but with a handsome amount of interest. Again, these loans cost the central bank nothing, because it didn't even have to own the gold it initially represented.
In addition, the idea of the loans costing the central bank nothing was even more prolific when money eventually became based on nothing. So in sum, the central bank had the sole power to print money, which was based on nothing, and convert it to valuable assets by lending it to borrowers on interest. So even when a borrower defaults, the Federal Reserve sustains no real loss, because the money it lent actually cost it nothing to begin with. (However, default isn't "good" per se, because that loan ceases to be an asset). And the central bank could even collect a tax by all of the smaller banks who were enabled by the central bank to make those same loans.
But just how the bank makes their money is what is most terrifying. Because the asset is the loan itself due to the interest that it yields, the bank doesn't really want the loan to be ever fully repaid. They want the loan to remain on the books and the interest payments to continue. What this means is that while the banks make some money on private loans, the most is made on corporations, and even more on governments. This is due to the inability of governments to balance their budgets. Very few governments have EVER repaid their debts in full, so loans to governments represent an asset that may potentially pay forever. So the best result FOR THE PRIVATE BANKS WHO ACTUALLY CONTROL THE MONEY SUPPLY, is for those loans to remain outstanding.
Treasury Notes As A Debt Instrument. Because the US Government cannot balance its budget, it is forced to borrow. No surprise here. But the means in which it borrows is by selling Treasury Securities. These T-notes, T-bonds, and T-bills are essentially IOUs, issued to "lenders", and are repaid with interest.
Now enter the Federal Reserve. The Federal Reserve, using money it creates from nothing, purchases an enormous amount of these securities from the US Gov, essentially loaning it money. In 2007, the Federal Reserve held about $800 billion in Treasury Securities - equal to the total amount of the US money supply at that time. After two major bailouts, funded mostly with new US T-notes, bills, and bonds; that number is much higher. So essentially, the US Government is heavily indebted to the Federal Reserve Bank.
Perpetuation of Debt. Because the central banking institution wants to maintain its interest payments (chiefly by governments and mega-corporations), it will work very hard to prevent them from defaulting. Usually, this is done by lending more money. In the case of governments, the Federal Reserve loans more money by purchasing more debt (T-notes, bills, and bonds). So the debt is sustained, much to the joy and prosperity of the regional reserve banks. If a nation or corporation edges on default, the Federal Reserve will simply loan it more money, further entreanching this debt relationship.
Rescheduling of Debts. When the total revenue of a corporation or tax income of a government becomes tied up in simply paying interest, the notion of default becomes more and more enticing. But the central banking system wants to reatin their assets (interest-paying loans), so it does something called debt rescheduling. This is where the interest payments are reduced, but for a lengthened loan term. Again, this further cements the debt relationship, and eventually creates the perception of insolvency when even this agreement becomes untenable.
Bailouts, the Most Clever of the Fed's Strategies. Because the Federal Reserve was sold to the American people as a measure of monetary stability, it still holds a degree of misplaced trust among both individuals and government (although that level of trust is diminishing). As such, when borrowers become INSOLVENT as we saw wholesale in 2007, the Federal Reserve goes to Congress and asks for more free money to "bail out" involvent borrowers.
The Fed, still erroneously viewed as a government entity, plays on fears by warning of economic disaster if "liquidity" is not regained. So Congress approves "bailouts", which enable the Fed to create more money out of nothing. Most of this money in 2008 and 2009 went to the regional Federal Reserve Banks, giving them more free money to create more loans (interest-producing assets). The rest of it went to the Federal government to bail out... drumroll.... the nation's major member banks and even some mega-corporations.
It needs to be remembered that the nature of the economic turmoil in 2007-2008 was an inability to repay debts. Individuals were unable to repay mortgages, and then those major financial corporations were unable to repay the moneys owed to the regional reserve banks. What is interesting then, is where that new money from the bailouts was injected. It very well could have been injected at the American taxpayer level, but it was in fact injected at the mega-bank level (Merrill Lynch, J.P. Morgan, Bear Stearns, etc.). That's because these are the institutions who get their liquidity by borrowing from the Federal Reserve, and as such, pay the interest to the Federal Reserve.
These bailouts become increasingly costly to the American people. Ultimately, once the market adjusts by realizing this revaluation of currency based on a massively inflated supply of money; costs will increase. But increased costs are simply a devaluation of the dollar. So cleverly, all costs sustained by bailing out these major corporations and banks was shifted from the banks (who who profit from it) to the American people.
Even more cleverly, the entire package is blamed on corporate America for their "greed". Of course corporations are "greedy". That's what keeps them in business. Of course corporate excesses and corruption should be prosecuted, but instead we perpetuated it by bailing them out. In short, corporations contributed to America's economic turmoil, but merely revealed a massively unsustainable debt system that was created by a private, central banking system.
This post is based on readings from the following works:
Heal The Money System Heal Society by Suzanne Phillips
The Creature From Jekyll Island by G. Edward Griffin
"What Has Government Done To Our Money?" Murray N. Rothbard
http://www.survivalistboards.com/showthread.php?t=107488
The Federal Reserve. Unfortunately, most Americans are ignorant of the fact that the Federal Reserve is neither federal, nor reserve. It is a private banking system, established by private bankers, and sold to Congress and the American people as a measure of stability for the US Economy (despite having presided over the market crash of 1921, the Great Depression, and seven other major recessions). Although the Fed is subject to some restrictive legislations (including one that enables the Senate to approve its chairmen), it is privately managed and administrated. The bank officially claims to not be private, but it is certainly not federal or governmental. Yet surprisingly, this non-governmental bank has been granted the sole authority to issue the official money of the United States.
Creation of the Federal Reserve. The Federal Reserve was created by the world's leading private bankers. Among them were Paul Warburg, representative of the Rothschild banking dynasty; Frank Vanderlip, president of the National City Bank of New York; and three senior executive officers of J.P. Morgan. The bank was brought online in a time when larger banks (such as J.P. Morgan) were experiencing increased competition from smaller, emerging US banks. The Federal Reserve System was a carefully devised smokescreen to create a central bank to which all of these smaller banks would be regulated and taxed by.
The Environment That Enabled The Federal Reserve Act. Possibly the single largest political issue of the day in the earliest part of the 20th Century, was a shared disdain for a central bank (such as the Bank of England) by the American people. A central bank had been an experiment exactly two times, and was each time dissolved. But this time around, the idea of a central bank was hidden behind a clever naming convention (which avoided either the notion of "central" or "bank"), a system of regional banks that provided a smokescreen for centralization, and the idea that the system was actually a governmental mechanism to protect the people. The system was carefully devised, the fear of the people after the panic of 1907 was played upon, and legislation was passed in 1913.
What resulted was literally a bank with monopolistic power over the US money supply. Ultimately, the Fed fought and earned the ability to make the money supply "elastic", which is to say that they could print it at will in order to lend more, earning more and more interest. It also had a measure of control over all of the other banks in the US, legislated to it by the Senate. Local banks were forced to buy shares in the regional federal reserve banks, which made up the Federal Reserve.
But with authority to issue money, the Fed enabled these member banks to create money that cost them nothing. Of course, the member banks were required to borrow that money from the Fed with interest, but it could be lent to other borrowers at a much higher interest. The lenders would not only pay the money back, but with a handsome amount of interest. Again, these loans cost the central bank nothing, because it didn't even have to own the gold it initially represented.
In addition, the idea of the loans costing the central bank nothing was even more prolific when money eventually became based on nothing. So in sum, the central bank had the sole power to print money, which was based on nothing, and convert it to valuable assets by lending it to borrowers on interest. So even when a borrower defaults, the Federal Reserve sustains no real loss, because the money it lent actually cost it nothing to begin with. (However, default isn't "good" per se, because that loan ceases to be an asset). And the central bank could even collect a tax by all of the smaller banks who were enabled by the central bank to make those same loans.
But just how the bank makes their money is what is most terrifying. Because the asset is the loan itself due to the interest that it yields, the bank doesn't really want the loan to be ever fully repaid. They want the loan to remain on the books and the interest payments to continue. What this means is that while the banks make some money on private loans, the most is made on corporations, and even more on governments. This is due to the inability of governments to balance their budgets. Very few governments have EVER repaid their debts in full, so loans to governments represent an asset that may potentially pay forever. So the best result FOR THE PRIVATE BANKS WHO ACTUALLY CONTROL THE MONEY SUPPLY, is for those loans to remain outstanding.
Treasury Notes As A Debt Instrument. Because the US Government cannot balance its budget, it is forced to borrow. No surprise here. But the means in which it borrows is by selling Treasury Securities. These T-notes, T-bonds, and T-bills are essentially IOUs, issued to "lenders", and are repaid with interest.
Now enter the Federal Reserve. The Federal Reserve, using money it creates from nothing, purchases an enormous amount of these securities from the US Gov, essentially loaning it money. In 2007, the Federal Reserve held about $800 billion in Treasury Securities - equal to the total amount of the US money supply at that time. After two major bailouts, funded mostly with new US T-notes, bills, and bonds; that number is much higher. So essentially, the US Government is heavily indebted to the Federal Reserve Bank.
Perpetuation of Debt. Because the central banking institution wants to maintain its interest payments (chiefly by governments and mega-corporations), it will work very hard to prevent them from defaulting. Usually, this is done by lending more money. In the case of governments, the Federal Reserve loans more money by purchasing more debt (T-notes, bills, and bonds). So the debt is sustained, much to the joy and prosperity of the regional reserve banks. If a nation or corporation edges on default, the Federal Reserve will simply loan it more money, further entreanching this debt relationship.
Rescheduling of Debts. When the total revenue of a corporation or tax income of a government becomes tied up in simply paying interest, the notion of default becomes more and more enticing. But the central banking system wants to reatin their assets (interest-paying loans), so it does something called debt rescheduling. This is where the interest payments are reduced, but for a lengthened loan term. Again, this further cements the debt relationship, and eventually creates the perception of insolvency when even this agreement becomes untenable.
Bailouts, the Most Clever of the Fed's Strategies. Because the Federal Reserve was sold to the American people as a measure of monetary stability, it still holds a degree of misplaced trust among both individuals and government (although that level of trust is diminishing). As such, when borrowers become INSOLVENT as we saw wholesale in 2007, the Federal Reserve goes to Congress and asks for more free money to "bail out" involvent borrowers.
The Fed, still erroneously viewed as a government entity, plays on fears by warning of economic disaster if "liquidity" is not regained. So Congress approves "bailouts", which enable the Fed to create more money out of nothing. Most of this money in 2008 and 2009 went to the regional Federal Reserve Banks, giving them more free money to create more loans (interest-producing assets). The rest of it went to the Federal government to bail out... drumroll.... the nation's major member banks and even some mega-corporations.
It needs to be remembered that the nature of the economic turmoil in 2007-2008 was an inability to repay debts. Individuals were unable to repay mortgages, and then those major financial corporations were unable to repay the moneys owed to the regional reserve banks. What is interesting then, is where that new money from the bailouts was injected. It very well could have been injected at the American taxpayer level, but it was in fact injected at the mega-bank level (Merrill Lynch, J.P. Morgan, Bear Stearns, etc.). That's because these are the institutions who get their liquidity by borrowing from the Federal Reserve, and as such, pay the interest to the Federal Reserve.
These bailouts become increasingly costly to the American people. Ultimately, once the market adjusts by realizing this revaluation of currency based on a massively inflated supply of money; costs will increase. But increased costs are simply a devaluation of the dollar. So cleverly, all costs sustained by bailing out these major corporations and banks was shifted from the banks (who who profit from it) to the American people.
Even more cleverly, the entire package is blamed on corporate America for their "greed". Of course corporations are "greedy". That's what keeps them in business. Of course corporate excesses and corruption should be prosecuted, but instead we perpetuated it by bailing them out. In short, corporations contributed to America's economic turmoil, but merely revealed a massively unsustainable debt system that was created by a private, central banking system.
This post is based on readings from the following works:
Heal The Money System Heal Society by Suzanne Phillips
The Creature From Jekyll Island by G. Edward Griffin
"What Has Government Done To Our Money?" Murray N. Rothbard
http://www.survivalistboards.com/showthread.php?t=107488
Saturday, April 24, 2010
Doug Noland: “There Is No Concern For Short-Term Funding Issues”
Doug Noland: “There Is No Concern For Short-Term Funding Issues”
by John Rubino on April 24, 2010
Prudent Bear’s Doug Noland was a must-read in the years leading up to the bursting of the housing bubble. Almost alone out there, he got not just the fact that we were heading off a cliff, but the exact mechanism of our demise: “Wall Street alchemy” was creating unlimited amounts of artificial securities that the marketplace was treating like money, which sent the effective global money supply through the roof and fueled a series of ever-bigger bubbles.
Once the crash came, Noland reined it in a bit and his articles fell off my automatic “Best of the Web” list. But now the bubble is back and so is Noland. His latest post dissects the current “recovery” and explains why we’re headed back into interesting times:
Deficits and Private Sector Credit
The bullish contingent is these days increasingly confident that there is much more to the recovery than a mere stimulus-induced “sugar high.” The marketplace now comfortably disregards bearish developments – and becomes further emboldened by “market resiliency”. The market this week brushed aside issues with Greece, China, Goldman and financial reform.
Complacency abounds, in true Bubble fashion. The U.S. stock market dismisses that there could be meaningful ramifications from the unfolding Greek debt crisis. Chinese authorities’ recent determination to restrict mortgage Credit barely garners a headline. And while the Goldman allegations generate great interest and discussion, few believe they will have much general market impact. Financial reform, well, it’s an afterthought when the market is open. Market participants are enamored with the notion that the securities markets and real economy are now conjoined in the initial phase of a big bull cycle.
Count me a subscriber of the “sugar high” thesis. The combination of double-digit (to GDP) deficits, protracted near-zero rates, and the Fed’s unprecedented Trillion-plus monetization has worked wonders. Government stimulus stabilized the Credit system, asset prices, system incomes and economic output. The bulls today believe that a new expansionary cycle has commenced, and fundamentals and prospects couldn’t be much more encouraging from their point of view. Surging stock prices have the optimists disregarding the possibility of a systemic addiction to massive government spending, ultra-low rates, and overabundant marketplace liquidity. Potential issues in the area of risk intermediation are not on the radar screen.
Yet, the sustainability of this recovery will be determined by private sector Credit – eventually. The markets assume private Credit growth will snap back after its long recuperation – as it always has in the past. But, mostly, analysts expend little energy pondering this issue. Deficits of about 10% of GDP, rapid expansion of government-backed Credit (MBS, “build America bonds,” student loans, bank deposits, etc.), and near-zero rates have created a recovery backdrop where minimal private-sector growth has sufficed. This won’t always be the case.
Greek Credit default protection began December at 176 bps. Not many months ago there was little fear of a debt Crisis and no worry of default. Yet here we are today with Greece 2-year debt yielding 11% and annual default protection priced at about 600 bps. Markets fear insolvency and debt restructuring.
The U.S. Treasury borrows these days for three months at 15 bps and for two years at 1.02%. No one dares contemplate how dramatically the world would change if fear injected itself into the equation. While there is certainly more recognition of the structural debt issues confronting our government borrowers (local, state and federal), there is no concern for short-term funding issues. There was an important aspect of the Wall Street/mortgage finance Bubble that receives little attention: The explosion of Credit provided an enormous boost to governmental receipts. Especially in the case of federal debt ratios, boom-related revenues reduced borrowing requirements and distorted debt-to-GDP ratios.
At about 70% of GDP, outstanding Treasury debt is not on the surface overly alarming. Obviously, if one throws in GSE liabilities and the massive future spending obligations related to social security, healthcare, pensions, etc., things are much worse. Yet it is conventional wisdom that the U.S. has the luxury of several years to get its fiscal house in order. And there is today great faith that economic recovery will, as it always does, lead a revival of government receipts and ensure rapidly declining deficits. Count me skeptical. The previous Bubble helped disguise underlying structural debt issues at the state, local and federal levels. Going forward it’s payback time.
…The unfolding Greek debt crisis, China Bubble vulnerability, and more intense scrutiny of Wall Street risk intermediation now work in confluence to increase the probability for a negative surprise in our risk markets. Sure, the equities bulls have become intoxicated by some incredible stock and sector performance. But equity market reflation must be approaching the point of unnerving the bond market. And it can’t help sentiment that, as reported today by CNBC’s Steve Liesman, a rising number of FOMC members support a timely sale of assets and a removal of the Fed’s extraordinary liquidity measures. More bearish fundamentals for the private-sector Credit mechanism gladly ignored by a stock market Bubble.
Some thoughts:
Exactly. We’ve replaced the housing bubble with a government debt bubble, and there’s no way to transition back to private sector-led growth. The amount of debt needed to fuel an economy this unbalanced is simply too great.
Some kind of serious negative event is virtually a lock in the coming year. It might be the spread of Wall Street lawsuits or a PIGS country default. Or the bond market might simply decide it’s eaten enough and get up from the table. No way to know what it will be, but we’ve created the conditions for another nasty “surprise”.
by John Rubino on April 24, 2010
Prudent Bear’s Doug Noland was a must-read in the years leading up to the bursting of the housing bubble. Almost alone out there, he got not just the fact that we were heading off a cliff, but the exact mechanism of our demise: “Wall Street alchemy” was creating unlimited amounts of artificial securities that the marketplace was treating like money, which sent the effective global money supply through the roof and fueled a series of ever-bigger bubbles.
Once the crash came, Noland reined it in a bit and his articles fell off my automatic “Best of the Web” list. But now the bubble is back and so is Noland. His latest post dissects the current “recovery” and explains why we’re headed back into interesting times:
Deficits and Private Sector Credit
The bullish contingent is these days increasingly confident that there is much more to the recovery than a mere stimulus-induced “sugar high.” The marketplace now comfortably disregards bearish developments – and becomes further emboldened by “market resiliency”. The market this week brushed aside issues with Greece, China, Goldman and financial reform.
Complacency abounds, in true Bubble fashion. The U.S. stock market dismisses that there could be meaningful ramifications from the unfolding Greek debt crisis. Chinese authorities’ recent determination to restrict mortgage Credit barely garners a headline. And while the Goldman allegations generate great interest and discussion, few believe they will have much general market impact. Financial reform, well, it’s an afterthought when the market is open. Market participants are enamored with the notion that the securities markets and real economy are now conjoined in the initial phase of a big bull cycle.
Count me a subscriber of the “sugar high” thesis. The combination of double-digit (to GDP) deficits, protracted near-zero rates, and the Fed’s unprecedented Trillion-plus monetization has worked wonders. Government stimulus stabilized the Credit system, asset prices, system incomes and economic output. The bulls today believe that a new expansionary cycle has commenced, and fundamentals and prospects couldn’t be much more encouraging from their point of view. Surging stock prices have the optimists disregarding the possibility of a systemic addiction to massive government spending, ultra-low rates, and overabundant marketplace liquidity. Potential issues in the area of risk intermediation are not on the radar screen.
Yet, the sustainability of this recovery will be determined by private sector Credit – eventually. The markets assume private Credit growth will snap back after its long recuperation – as it always has in the past. But, mostly, analysts expend little energy pondering this issue. Deficits of about 10% of GDP, rapid expansion of government-backed Credit (MBS, “build America bonds,” student loans, bank deposits, etc.), and near-zero rates have created a recovery backdrop where minimal private-sector growth has sufficed. This won’t always be the case.
Greek Credit default protection began December at 176 bps. Not many months ago there was little fear of a debt Crisis and no worry of default. Yet here we are today with Greece 2-year debt yielding 11% and annual default protection priced at about 600 bps. Markets fear insolvency and debt restructuring.
The U.S. Treasury borrows these days for three months at 15 bps and for two years at 1.02%. No one dares contemplate how dramatically the world would change if fear injected itself into the equation. While there is certainly more recognition of the structural debt issues confronting our government borrowers (local, state and federal), there is no concern for short-term funding issues. There was an important aspect of the Wall Street/mortgage finance Bubble that receives little attention: The explosion of Credit provided an enormous boost to governmental receipts. Especially in the case of federal debt ratios, boom-related revenues reduced borrowing requirements and distorted debt-to-GDP ratios.
At about 70% of GDP, outstanding Treasury debt is not on the surface overly alarming. Obviously, if one throws in GSE liabilities and the massive future spending obligations related to social security, healthcare, pensions, etc., things are much worse. Yet it is conventional wisdom that the U.S. has the luxury of several years to get its fiscal house in order. And there is today great faith that economic recovery will, as it always does, lead a revival of government receipts and ensure rapidly declining deficits. Count me skeptical. The previous Bubble helped disguise underlying structural debt issues at the state, local and federal levels. Going forward it’s payback time.
…The unfolding Greek debt crisis, China Bubble vulnerability, and more intense scrutiny of Wall Street risk intermediation now work in confluence to increase the probability for a negative surprise in our risk markets. Sure, the equities bulls have become intoxicated by some incredible stock and sector performance. But equity market reflation must be approaching the point of unnerving the bond market. And it can’t help sentiment that, as reported today by CNBC’s Steve Liesman, a rising number of FOMC members support a timely sale of assets and a removal of the Fed’s extraordinary liquidity measures. More bearish fundamentals for the private-sector Credit mechanism gladly ignored by a stock market Bubble.
Some thoughts:
Exactly. We’ve replaced the housing bubble with a government debt bubble, and there’s no way to transition back to private sector-led growth. The amount of debt needed to fuel an economy this unbalanced is simply too great.
Some kind of serious negative event is virtually a lock in the coming year. It might be the spread of Wall Street lawsuits or a PIGS country default. Or the bond market might simply decide it’s eaten enough and get up from the table. No way to know what it will be, but we’ve created the conditions for another nasty “surprise”.
Wednesday, April 14, 2010
More Future Tax Dollars Will Go to Pay Off Old Bills and Promises
http://congress.blogs.foxnews.com/2010/04/13/more-future-tax-dollars-will-go-to-pay-off-old-bills-and-promises/
Taxpayers have a nasty surprise coming. More and more future tax dollars will go to pay off old bills and old promises the federal government made, but couldn’t pay.
The money borrowed by the federal government will result in a national debt of some $20 trillion by the end of this decade and taxpayers will have to pay almost $1 trillion a year, just in interest.
Taxpayers have a nasty surprise coming. More and more future tax dollars will go to pay off old bills and old promises the federal government made, but couldn’t pay.
The money borrowed by the federal government will result in a national debt of some $20 trillion by the end of this decade and taxpayers will have to pay almost $1 trillion a year, just in interest.
Sovereign Survivalism
Dear Reader,
This morning, listening to the BBC news as I drove home from my Tuesday torture class down at the gym, I was treated to a discussion of the political manifestos published by the ruling Labor party and the opposition Conservatives ahead of the upcoming British elections, to be held in early May.
(Remarkably, the entire British election cycle lasts just four weeks – I’ll have to add that to my Christmas wish list.)
According to the BBC analysis, the Labor party of Gordon Brown wants the government to do even more to smooth the daily travails of the citizenry, while the Conservatives under David Cameron want all of the citizenry to “join the government.” Whatever that means.
But neither manifesto provides even a scintilla of a plan as to how that country’s future government might wiggle out of its cripplingly expensive social contract, or more specifically, the spending that contract calls for – spending that has left the British in the worst financial shape of any of the G-20 nations.
The lack of detail is not an accident but rather a reflection of reality. The UK is broke and much of the populace hanging on by tender hooks. Should the government cancel the social contract – a contract that calls for the steady provision of free or low-cost council housing, food, education, hard cash and healthcare – the natives will almost certainly grow restless.
Of course, the Brits are not the only ones in the soup. Bobbing along aside of them are most of the world’s nations – and I’m not just talking about the second-raters. An article from businessinsider.com yesterday provides a good overview of the hot miso broth that Japan, the world’s second largest economy, now finds itself in.
How long will it be before investors begin demanding higher yields on Japanese debt? And what will higher rates do to their debt problems?
I’ll have just a bit more on Japan in a moment, but the key point that every investor needs to understand at this point is that the problems of excessive sovereign debt will be a driving force – and maybe the driving force – for the global economy for the next decade. And because the global economy has become incredibly politicized, sovereign debt will drive politics as well.
On a personal level, the political calculations and machinations that will be undertaken in an attempt to deal with the debt – and to do so without angering a majority of the voting public – means higher taxes for the productive and, through increased business taxes, on the unsuspecting masses as well.
We expect to see a VAT imposed here in the U.S., and we expect to see the imposition of carbon taxes – not because it’s the right thing to do (it’s not), but because it’s anticipated as an important revenue source in the administration’s forward-looking budget.
Tax enforcement, which in the U.S. is already the most systematic and stringent in the world, will only get tougher. With a special focus on the wealthy or those who look to move assets overseas– the same people who already pay the vast majority of the nation’s tax revenue. Fair share be damned. From here on out, if you’ve got any fleece left, it’s getting sheared.
My dear partner and friend Doug Casey has warned of a government takeover of retirement accounts (the most likely path being a requirement that some large percentage be invested in government paper, or withdrawn and taxes paid)… of exchange controls and… of course, a serious inflation that will allow the sovereignty to pay off today’s debt with a currency worth considerably less tomorrow.
In the new world of sovereign survivalism, those actions – and others as desperate – are a certainty.
Is there anything you can do to protect yourself from becoming a victim of the survivalist state?
The answer rests with your individual circumstances. If you have the funds – and it can cost a lot less to live elsewhere – then consider diversifying your life internationally. At the least, keep one foot in your home country while settling the other firmly elsewhere. Then, if things go as now seems inevitable, you’ll be ready to pick the one foot up.
As an American, that won’t protect you from the confiscatory taxation – but there’s much to be said about being one step removed from a government that looks upon you as a tax slave. (More on our own version of Galt’s Gulch can be found here.)
If you don’t have the ability to move, then consider working on skills that you can use in barter. And consider not living in a city, if you do. While I don’t think that we’re headed toward a nation of Detroits – which is to say, the world of Mad Max – in hard times, the fewer of your fellow citizens you need to rub up against, the better.
And, of course, accumulate gold and silver to protect your purchasing power.
In cautious quantities, the best of the best mining stocks can offer life-changing returns. In the blow-off phase of the last secular gold bull market, the top-performing junior resource stocks provided returns of as much as 10,000% to 20,000%. While rare, that a $1,000 investment has the potential to turn into $200,000 is nothing to sniff at.
Could the struggling sovereigns decide to follow Roosevelt’s lead and confiscate gold? Of course. But we should see straws in the wind before that happens and so have time to react (a linking of gold with international terrorists would be a big red flag).
How we got to this spot between a rock and a hard place is a topic we have covered in great depth over the years, and so I won’t rehash the story in detail here and now.
But I will say, in the simplest of terms, that we are here because of political incrementalism – decades of politically motivated decisions of mostly small and medium impact, but periodically of major consequence (Medicare, Social Security, etc.) – that has drained the public coffers while simultaneously ratcheting up “non-discretionary” spending.
A popular tune by the Rolling Stones includes the memorable line, “You can't always get what you want. But if you try sometimes, well, you might find you'll get what you need.”
At this point, what the masses want and what they need have become conflated, with the only certainty being that if you as an individual have assets, the politicians want them.
So how it is that the stock market, that useful albeit unsteady barometer of economic health, is not viewing the intractable debt problem and running for the exits?
To help answer that, I will dip into the archives of The Casey Report…
Does QE Lead to a Dead-Cat Bounce?
While no two economic situations are identical, one likes to think that, all things being somewhat equal, if the monetary authorities do “A,” then “B” should result. For example, if you massively inflate the money supply, then history has shown time and time again that a serious price inflation is almost certain to follow.
Likewise, if the politicians decide to turn on the monetary taps to help soften the blow of a crash, one should not be surprised if the stock market begins to recover. Especially, as has been the case in the current crisis in the U.S., when much of the money has flowed into the financial sector. As discussed yesterday, that sector has shown the biggest bounce in profits.
Looking for answers, we might restate the question thus: “Does quantitative easing result in a stock market bounce?”
With that, I would like to enter into evidence the following chart from the January 2009 edition of The Casey Report. As you can see, with their first experiment in quantitative easing, the Japanese were able to buy a bounce that helped the Nikkei crawl about halfway back toward its pre-crash high.
But what happens once the monetary props are removed?
As you can also see in the chart, when the QE ended – and it ended because, like the America of today, the piling of debt on top of debt was speeding the country toward bankruptcy -- the stock market ran out of steam and plummeted to its crash lows.
So, where do things stand here and now in these United States?
I don’t have the time and the resources – our Mr. Wood is taking a much-needed holiday, and I am running late anyway – to duplicate that chart for the U.S., but a back-of-the-envelope calculation shows that from its 2007 peak, the S&P fell about 875 points, to a low of about 675.
If, as was the case in Japan, “B” followed the “A” of QE, then we would expect the U.S. market to rebound by about 437 points, which would take it back up to the area of 1,112 before hitting a plateau. That is the general level of where it is now trading.
And once the government pulled the plug on the quantitative easing – which it is making noise about doing – then we would expect the market to retest the low of 675.
Now, as you don’t need me to tell you, there is nothing scientific about that analysis (ergo the “back of the envelope” caveat). And there’s no question the situation in Japan then was different from that in the U.S. today. For one thing, the Japanese have run a trade surplus throughout the period, whereas the U.S. has run year after year of massive trade deficits. Even so, I think a certain amount of logic supports the basic premise.
If the premise is correct, then today’s stock market is running on vapors – the vapors emanating from the government’s burning of stimulus dollars. In time, for political reasons, if no others, the quantitative easing is going to have to moderate – at which point, watch out below.
And with that, dear readers, I must sign off for the day.
As I do, I would like to leave you with a final bit of homework, a press release just out of the International Monetary Fund regarding a ten-fold increase in its lending facilities. Why, if the world economy were on the mend, would the IMF look to increase its lending capabilities ten-fold?
The answer, I strongly suspect, is because they see what we see – and what anyone paying attention is now seeing: that the worst of the sovereign debt problems are still ahead.
Until tomorrow, thanks for reading and for subscribing to a Casey Research service!
This morning, listening to the BBC news as I drove home from my Tuesday torture class down at the gym, I was treated to a discussion of the political manifestos published by the ruling Labor party and the opposition Conservatives ahead of the upcoming British elections, to be held in early May.
(Remarkably, the entire British election cycle lasts just four weeks – I’ll have to add that to my Christmas wish list.)
According to the BBC analysis, the Labor party of Gordon Brown wants the government to do even more to smooth the daily travails of the citizenry, while the Conservatives under David Cameron want all of the citizenry to “join the government.” Whatever that means.
But neither manifesto provides even a scintilla of a plan as to how that country’s future government might wiggle out of its cripplingly expensive social contract, or more specifically, the spending that contract calls for – spending that has left the British in the worst financial shape of any of the G-20 nations.
The lack of detail is not an accident but rather a reflection of reality. The UK is broke and much of the populace hanging on by tender hooks. Should the government cancel the social contract – a contract that calls for the steady provision of free or low-cost council housing, food, education, hard cash and healthcare – the natives will almost certainly grow restless.
Of course, the Brits are not the only ones in the soup. Bobbing along aside of them are most of the world’s nations – and I’m not just talking about the second-raters. An article from businessinsider.com yesterday provides a good overview of the hot miso broth that Japan, the world’s second largest economy, now finds itself in.
How long will it be before investors begin demanding higher yields on Japanese debt? And what will higher rates do to their debt problems?
I’ll have just a bit more on Japan in a moment, but the key point that every investor needs to understand at this point is that the problems of excessive sovereign debt will be a driving force – and maybe the driving force – for the global economy for the next decade. And because the global economy has become incredibly politicized, sovereign debt will drive politics as well.
On a personal level, the political calculations and machinations that will be undertaken in an attempt to deal with the debt – and to do so without angering a majority of the voting public – means higher taxes for the productive and, through increased business taxes, on the unsuspecting masses as well.
We expect to see a VAT imposed here in the U.S., and we expect to see the imposition of carbon taxes – not because it’s the right thing to do (it’s not), but because it’s anticipated as an important revenue source in the administration’s forward-looking budget.
Tax enforcement, which in the U.S. is already the most systematic and stringent in the world, will only get tougher. With a special focus on the wealthy or those who look to move assets overseas– the same people who already pay the vast majority of the nation’s tax revenue. Fair share be damned. From here on out, if you’ve got any fleece left, it’s getting sheared.
My dear partner and friend Doug Casey has warned of a government takeover of retirement accounts (the most likely path being a requirement that some large percentage be invested in government paper, or withdrawn and taxes paid)… of exchange controls and… of course, a serious inflation that will allow the sovereignty to pay off today’s debt with a currency worth considerably less tomorrow.
In the new world of sovereign survivalism, those actions – and others as desperate – are a certainty.
Is there anything you can do to protect yourself from becoming a victim of the survivalist state?
The answer rests with your individual circumstances. If you have the funds – and it can cost a lot less to live elsewhere – then consider diversifying your life internationally. At the least, keep one foot in your home country while settling the other firmly elsewhere. Then, if things go as now seems inevitable, you’ll be ready to pick the one foot up.
As an American, that won’t protect you from the confiscatory taxation – but there’s much to be said about being one step removed from a government that looks upon you as a tax slave. (More on our own version of Galt’s Gulch can be found here.)
If you don’t have the ability to move, then consider working on skills that you can use in barter. And consider not living in a city, if you do. While I don’t think that we’re headed toward a nation of Detroits – which is to say, the world of Mad Max – in hard times, the fewer of your fellow citizens you need to rub up against, the better.
And, of course, accumulate gold and silver to protect your purchasing power.
In cautious quantities, the best of the best mining stocks can offer life-changing returns. In the blow-off phase of the last secular gold bull market, the top-performing junior resource stocks provided returns of as much as 10,000% to 20,000%. While rare, that a $1,000 investment has the potential to turn into $200,000 is nothing to sniff at.
Could the struggling sovereigns decide to follow Roosevelt’s lead and confiscate gold? Of course. But we should see straws in the wind before that happens and so have time to react (a linking of gold with international terrorists would be a big red flag).
How we got to this spot between a rock and a hard place is a topic we have covered in great depth over the years, and so I won’t rehash the story in detail here and now.
But I will say, in the simplest of terms, that we are here because of political incrementalism – decades of politically motivated decisions of mostly small and medium impact, but periodically of major consequence (Medicare, Social Security, etc.) – that has drained the public coffers while simultaneously ratcheting up “non-discretionary” spending.
A popular tune by the Rolling Stones includes the memorable line, “You can't always get what you want. But if you try sometimes, well, you might find you'll get what you need.”
At this point, what the masses want and what they need have become conflated, with the only certainty being that if you as an individual have assets, the politicians want them.
So how it is that the stock market, that useful albeit unsteady barometer of economic health, is not viewing the intractable debt problem and running for the exits?
To help answer that, I will dip into the archives of The Casey Report…
Does QE Lead to a Dead-Cat Bounce?
While no two economic situations are identical, one likes to think that, all things being somewhat equal, if the monetary authorities do “A,” then “B” should result. For example, if you massively inflate the money supply, then history has shown time and time again that a serious price inflation is almost certain to follow.
Likewise, if the politicians decide to turn on the monetary taps to help soften the blow of a crash, one should not be surprised if the stock market begins to recover. Especially, as has been the case in the current crisis in the U.S., when much of the money has flowed into the financial sector. As discussed yesterday, that sector has shown the biggest bounce in profits.
Looking for answers, we might restate the question thus: “Does quantitative easing result in a stock market bounce?”
With that, I would like to enter into evidence the following chart from the January 2009 edition of The Casey Report. As you can see, with their first experiment in quantitative easing, the Japanese were able to buy a bounce that helped the Nikkei crawl about halfway back toward its pre-crash high.
But what happens once the monetary props are removed?
As you can also see in the chart, when the QE ended – and it ended because, like the America of today, the piling of debt on top of debt was speeding the country toward bankruptcy -- the stock market ran out of steam and plummeted to its crash lows.
So, where do things stand here and now in these United States?
I don’t have the time and the resources – our Mr. Wood is taking a much-needed holiday, and I am running late anyway – to duplicate that chart for the U.S., but a back-of-the-envelope calculation shows that from its 2007 peak, the S&P fell about 875 points, to a low of about 675.
If, as was the case in Japan, “B” followed the “A” of QE, then we would expect the U.S. market to rebound by about 437 points, which would take it back up to the area of 1,112 before hitting a plateau. That is the general level of where it is now trading.
And once the government pulled the plug on the quantitative easing – which it is making noise about doing – then we would expect the market to retest the low of 675.
Now, as you don’t need me to tell you, there is nothing scientific about that analysis (ergo the “back of the envelope” caveat). And there’s no question the situation in Japan then was different from that in the U.S. today. For one thing, the Japanese have run a trade surplus throughout the period, whereas the U.S. has run year after year of massive trade deficits. Even so, I think a certain amount of logic supports the basic premise.
If the premise is correct, then today’s stock market is running on vapors – the vapors emanating from the government’s burning of stimulus dollars. In time, for political reasons, if no others, the quantitative easing is going to have to moderate – at which point, watch out below.
And with that, dear readers, I must sign off for the day.
As I do, I would like to leave you with a final bit of homework, a press release just out of the International Monetary Fund regarding a ten-fold increase in its lending facilities. Why, if the world economy were on the mend, would the IMF look to increase its lending capabilities ten-fold?
The answer, I strongly suspect, is because they see what we see – and what anyone paying attention is now seeing: that the worst of the sovereign debt problems are still ahead.
Until tomorrow, thanks for reading and for subscribing to a Casey Research service!
Cap and Trade: A License Required for your Home
We encourage you to read the provisions of the Cap and Trade Bill that has passed the House of Representatives and being considered by the Senate. We are ready to join the next march on Washington!
This Congress and whoever on their staffs that write this junk are truly out to destroy the middle class of the USA....
A License Required for your house
Thinking about selling your house - A look at H.R. 2454 (Cap and trade bill) This is unbelievable!
Only the beginning from this administration! Home owners take note & tell your friends and relatives who are home owners!
Beginning 1 year after enactment of the Cap and Trade Act, you won't be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the "Cap & Trade" bill passed by the House of Representatives, if also passed by the Senate, will be the largest tax increase any of us has ever experienced.
The Congressional Budget Office (supposedly non-partisan) estimates that in just a few years the average cost to every family of four will be $6,800 per year.
* No one is excluded.
However, once the lower classes feel the pinch in their wallets, you can be sure these voters get a tax refund (even if they pay no taxes at all) to offset this new cost. Thus, you Mr. and Mrs. Middle Class America will have to pay even more since additional tax dollars will be needed to bail out everyone else.
But wait. This awful bill (that no one in Congress has actually read) has many more surprises in it. Probably the worst one is this:
* A year from now you won't be able to sell your house. Yes, you read that right.
The caveat is (there always is a caveat) that if you have enough money to make required major upgrades to your home, then you can sell it. But, if not, then forget it. Even pre-fabricated homes ("mobile homes") are included.
* In effect, this bill prevents you from selling your home without the permission of the EPA administrator.
* To get this permission, you will have to have the energy efficiency of your home measured.
* Then the government will tell you what your new energy efficiency requirement is and you will be forced to make modifications to your home under the retrofit provisions of this Act to comply with the new energy and water efficiency requirements.
* Then you will have to get your home measured again and get a license (called a "label" in the Act) that must be posted on your property to show what your efficiency rating is; sort of like the Energy Star efficiency rating label on your refrigerator or air conditioner.
* If you don't get a high enough rating, you can't sell. And, the EPA administrator is authorized to raise the standards every year, even above the automatic energy efficiency increases built into the Act.
The EPA administrator, appointed by the President, will run the Cap & Trade program (AKA the "American Clean Energy and Security Act of 2009") and is authorized to make any future changes to the regulations and standards he alone determines to be in the government's best interest. Requirements are set low initial y so the bill will pass Congress; then the Administrator can set much tougher new standards every year.
* The Act itself contains annual required increases in energy efficiency for private and commercial residences and buildings.
* However, the EPA administrator can set higher standards at any time.
Sect. 202:
Building Retrofit Program mandates a national retrofit program to increase the energy efficiency of all existing homes across America .
Beginning 1 year after enactment of the Act, you won't be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act.
You had better sell soon, because the standards will be raised each year and will be really hard (i.e., ex$pen$ive) to meet in a few years. Oh, goody! The Act allows the government to give you a grant of several thousand dollars to comply with the retrofit program requirements if you meet certain energy efficiency levels. But, wait, the State can set additional requirements on who qualifies to receive the grants.
You should expect requirements such as "can't have an income of more than $50K per year", "home selling price can't be more than $125K", or anything else to target the upper middle class (and that's YOU) and prevent them from qualifying for the grants.
Most of us won't get a dime and will have to pay the entire cost of the retrofit out of our own pockets. More transfer of wealth, more "change you can believe in."
Sect. 204:
Building Energy Performance Labeling Program establishes a labeling program that for each individual residence will identify the achieved energy efficiency performance for "at least 90 percent of the residential market within 5 years after the date of the enactment of this Act."
This means that within 5 years 90% of all residential homes in the U.S. must be measured and labeled. The EPA administrator will get $50M each year to enforce the labeling program. The Secretary of the Department of Energy will get an additional $20M each year to help enforce the labeling program. Some of this money will, of course, be spent on coming up with tougher standards each year.
Oh, the label will be like a license for your car. You will be required to post the label in a conspicuous location in your home and will not be allowed to sell your home without having this label.
And, just like your car license, you will probably be required to get a new label every so often - maybe every year.
But, the government estimates the cost of measuring the energy efficiency of your home should only cost about $200 each time.
Remember what they said about the auto smog inspections when they first started: that in California it would only cost $15. That was when the program started. Now the cost is about $50 for the inspection and certificate; a 333% increase. Expect the same from the home labeling program.
Sect. 304:
Greater Energy Efficiency in Building Codes establishes new energy efficiency guidelines for the National Building Code and mandates at 304(d), Application of National Code to State and Local Jurisdictions, that 1 year after enactment of this Act, all state and local jurisdictions must adopt the National Building Code energy efficiency provisions or must obtain a certification from the federal government that their state and/or local codes have been brought into full compliance with the National Building Code energy efficiency standards.
a license required for your home - Google Search
H.R. 2454: American Clean Energy and Security Act of 2009 (GovTrack.us)
This Congress and whoever on their staffs that write this junk are truly out to destroy the middle class of the USA....
A License Required for your house
Thinking about selling your house - A look at H.R. 2454 (Cap and trade bill) This is unbelievable!
Only the beginning from this administration! Home owners take note & tell your friends and relatives who are home owners!
Beginning 1 year after enactment of the Cap and Trade Act, you won't be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the "Cap & Trade" bill passed by the House of Representatives, if also passed by the Senate, will be the largest tax increase any of us has ever experienced.
The Congressional Budget Office (supposedly non-partisan) estimates that in just a few years the average cost to every family of four will be $6,800 per year.
* No one is excluded.
However, once the lower classes feel the pinch in their wallets, you can be sure these voters get a tax refund (even if they pay no taxes at all) to offset this new cost. Thus, you Mr. and Mrs. Middle Class America will have to pay even more since additional tax dollars will be needed to bail out everyone else.
But wait. This awful bill (that no one in Congress has actually read) has many more surprises in it. Probably the worst one is this:
* A year from now you won't be able to sell your house. Yes, you read that right.
The caveat is (there always is a caveat) that if you have enough money to make required major upgrades to your home, then you can sell it. But, if not, then forget it. Even pre-fabricated homes ("mobile homes") are included.
* In effect, this bill prevents you from selling your home without the permission of the EPA administrator.
* To get this permission, you will have to have the energy efficiency of your home measured.
* Then the government will tell you what your new energy efficiency requirement is and you will be forced to make modifications to your home under the retrofit provisions of this Act to comply with the new energy and water efficiency requirements.
* Then you will have to get your home measured again and get a license (called a "label" in the Act) that must be posted on your property to show what your efficiency rating is; sort of like the Energy Star efficiency rating label on your refrigerator or air conditioner.
* If you don't get a high enough rating, you can't sell. And, the EPA administrator is authorized to raise the standards every year, even above the automatic energy efficiency increases built into the Act.
The EPA administrator, appointed by the President, will run the Cap & Trade program (AKA the "American Clean Energy and Security Act of 2009") and is authorized to make any future changes to the regulations and standards he alone determines to be in the government's best interest. Requirements are set low initial y so the bill will pass Congress; then the Administrator can set much tougher new standards every year.
* The Act itself contains annual required increases in energy efficiency for private and commercial residences and buildings.
* However, the EPA administrator can set higher standards at any time.
Sect. 202:
Building Retrofit Program mandates a national retrofit program to increase the energy efficiency of all existing homes across America .
Beginning 1 year after enactment of the Act, you won't be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act.
You had better sell soon, because the standards will be raised each year and will be really hard (i.e., ex$pen$ive) to meet in a few years. Oh, goody! The Act allows the government to give you a grant of several thousand dollars to comply with the retrofit program requirements if you meet certain energy efficiency levels. But, wait, the State can set additional requirements on who qualifies to receive the grants.
You should expect requirements such as "can't have an income of more than $50K per year", "home selling price can't be more than $125K", or anything else to target the upper middle class (and that's YOU) and prevent them from qualifying for the grants.
Most of us won't get a dime and will have to pay the entire cost of the retrofit out of our own pockets. More transfer of wealth, more "change you can believe in."
Sect. 204:
Building Energy Performance Labeling Program establishes a labeling program that for each individual residence will identify the achieved energy efficiency performance for "at least 90 percent of the residential market within 5 years after the date of the enactment of this Act."
This means that within 5 years 90% of all residential homes in the U.S. must be measured and labeled. The EPA administrator will get $50M each year to enforce the labeling program. The Secretary of the Department of Energy will get an additional $20M each year to help enforce the labeling program. Some of this money will, of course, be spent on coming up with tougher standards each year.
Oh, the label will be like a license for your car. You will be required to post the label in a conspicuous location in your home and will not be allowed to sell your home without having this label.
And, just like your car license, you will probably be required to get a new label every so often - maybe every year.
But, the government estimates the cost of measuring the energy efficiency of your home should only cost about $200 each time.
Remember what they said about the auto smog inspections when they first started: that in California it would only cost $15. That was when the program started. Now the cost is about $50 for the inspection and certificate; a 333% increase. Expect the same from the home labeling program.
Sect. 304:
Greater Energy Efficiency in Building Codes establishes new energy efficiency guidelines for the National Building Code and mandates at 304(d), Application of National Code to State and Local Jurisdictions, that 1 year after enactment of this Act, all state and local jurisdictions must adopt the National Building Code energy efficiency provisions or must obtain a certification from the federal government that their state and/or local codes have been brought into full compliance with the National Building Code energy efficiency standards.
a license required for your home - Google Search
H.R. 2454: American Clean Energy and Security Act of 2009 (GovTrack.us)
Thursday, April 8, 2010
Detroit Bankruptcy Looms with Deficit of $446 Million in Budget of $1.6 Billion
http://globaleconomicanalysis.blogspot.com/2010/04/detroit-bankruptcy-looms-with-deficit.html
Detroit has hit the end of the line. It's budget deficit is between $446 million and $466 million (28% to 29%) of $1.6 billion with few ways other than drastic cuts in wages and benefits to address the problem.If unions will not give in (and they won't), Detroit Faces Bankruptcy.
Detroit has hit the end of the line. It's budget deficit is between $446 million and $466 million (28% to 29%) of $1.6 billion with few ways other than drastic cuts in wages and benefits to address the problem.If unions will not give in (and they won't), Detroit Faces Bankruptcy.
The Global Economic Crisis: Riots, Rebellion and Revolution
Moody’s is a major ratings agency, which performs financial research and analysis on governments and commercial entities and ranks the credit-worthiness of borrowers. On March 15, Moody’s warned that the US, the UK, Germany, France, and Spain “are all at risk of soaring debt costs and will have to implement austerity plans that threaten ‘social cohesion’.” Further, Moody’s warned that such ‘austerity’ measures increase the potential for ‘social unrest’:
http://www.marketoracle.co.uk/Article18450.html
http://www.marketoracle.co.uk/Article18450.html
Villaraigosa calls for shutting down some city departments amid budget crisis
Los Angeles Mayor Antonio Villaraigosa called Tuesday for all city agencies -- except for police, other public safety and revenue-generating departments -- to close for two days a week starting April 12 because of the city's continuing budget crisis.
"We have to act, and we have to act quickly," Villaraigosa said at a press conference.The mayor said he would direct the city's chief administrative officer to immediately begin planning to set the shutdown in motion.Villaraigosa's call comes one day after executives with the city's Department of Water and Power said they would recommend not sending a promised $73.5-million contribution to the city's beleaguered treasury because the City Council recently declined to grant a desired electricity rate increase.
That action prompted City Controller Wendy Greuel to warn that Los Angeles could run out of cash to pay employees and business vendors within four weeks.
http://latimesblogs.latimes.com/lanow/2010/04/villaraigosa-calls-for-shutting-down-some-city-departments-amid-budget-crisis.html
"We have to act, and we have to act quickly," Villaraigosa said at a press conference.The mayor said he would direct the city's chief administrative officer to immediately begin planning to set the shutdown in motion.Villaraigosa's call comes one day after executives with the city's Department of Water and Power said they would recommend not sending a promised $73.5-million contribution to the city's beleaguered treasury because the City Council recently declined to grant a desired electricity rate increase.
That action prompted City Controller Wendy Greuel to warn that Los Angeles could run out of cash to pay employees and business vendors within four weeks.
http://latimesblogs.latimes.com/lanow/2010/04/villaraigosa-calls-for-shutting-down-some-city-departments-amid-budget-crisis.html
Federal Reserve Chairman Ben Bernanke sounds a warning on growing deficit
http://www.washingtonpost.com/wp-dyn/content/article/2010/04/07/AR2010040703116.html?wprss=rss_print
By Neil Irwin and Lori Montgomery
Washington Post Staff Writer
Thursday, April 8, 2010
Federal Reserve Chairman Ben S. Bernanke warned Wednesday that Americans may have to accept higher taxes or changes in cherished entitlements such as Medicare and Social Security if the nation is to avoid staggering budget deficits that threaten to choke off economic growth
By Neil Irwin and Lori Montgomery
Washington Post Staff Writer
Thursday, April 8, 2010
Federal Reserve Chairman Ben S. Bernanke warned Wednesday that Americans may have to accept higher taxes or changes in cherished entitlements such as Medicare and Social Security if the nation is to avoid staggering budget deficits that threaten to choke off economic growth
US Government Prints 605.9 Million Notes in March 2010
The US government printed more money in March than in any previous month in 2010, according to the agency responsible for manufacturing US currency. The value of the notes printed also peaked.Combined, the BEP produced 605,952,000 banknotes that had a total value of $22,138,240,000. In contrast, February figures came in at 504.476 million notes for just over $14.098 billion while January registered 487 million notes worth just above $14.1 billion.
http://www.coinnews.net/2010/04/05/us-government-prints-605-9-million-notes-in-march-2010/
http://www.coinnews.net/2010/04/05/us-government-prints-605-9-million-notes-in-march-2010/
Saturday, April 3, 2010
Too important to not post
http://timiacono.com/index.php/2010/04/01/gold-silver-the-cftc-conspiracy-theories/
Every one in the gold and silver markets needs to see this, when you buy gold or silver(which unless you have a lot of money to protect, i would go with silver. It's cheaper and easier to trade and make change for.) take possion of it, dont use the paper gold/silver markets.
I will be switching over to more survival topics and ideals from sites i go too. Most people already realize something is wrong, they can either except that it will all collapse, prepare for it and hopefully live thru it, or they can act like things will be back to normal, not prepare and they can be assured they wont live thru it.
I wont go into the reasons why some people will never get it, only with an open mind and proper research can you find those anwser's, but i would be willing to share them with anyone with an open mind.
suffice to say that if you prepare your chances of survival go up a lot, even if the collapse never comes in your life, the self sustaining lifestyle is something we should all work towards. But fear not fellow patriots, the collapse will happen, and time is running short.
DO NOT WAIT TO GET PREPARED!
If you have anyone who depends on you to protect them and care for them, then do your duty and at least look at the research with an open mind, take the time out of your busy life to one day ensure your survival and your family's survival.
Dont you owe it to them to spend an hour or so everyday looking into whats going on, and how you can prepare?
I have a toddler aged daughter and if i thought the economy collapsing had a 2% chance of happening i would still prepare.
Well i have a pretty good bead on the economy collapsing in my lifetime, i would say 100%, but in my mind, i think it could be as soon as 2-5 years, i will be ready in under 1 myself.
I will still post interesting economic posts i run across, or my own ramblings from time to time.
Thanks for reading, as always, remarks,insults and the such go in the comments section.
Happy Easter!!
Every one in the gold and silver markets needs to see this, when you buy gold or silver(which unless you have a lot of money to protect, i would go with silver. It's cheaper and easier to trade and make change for.) take possion of it, dont use the paper gold/silver markets.
I will be switching over to more survival topics and ideals from sites i go too. Most people already realize something is wrong, they can either except that it will all collapse, prepare for it and hopefully live thru it, or they can act like things will be back to normal, not prepare and they can be assured they wont live thru it.
I wont go into the reasons why some people will never get it, only with an open mind and proper research can you find those anwser's, but i would be willing to share them with anyone with an open mind.
suffice to say that if you prepare your chances of survival go up a lot, even if the collapse never comes in your life, the self sustaining lifestyle is something we should all work towards. But fear not fellow patriots, the collapse will happen, and time is running short.
DO NOT WAIT TO GET PREPARED!
If you have anyone who depends on you to protect them and care for them, then do your duty and at least look at the research with an open mind, take the time out of your busy life to one day ensure your survival and your family's survival.
Dont you owe it to them to spend an hour or so everyday looking into whats going on, and how you can prepare?
I have a toddler aged daughter and if i thought the economy collapsing had a 2% chance of happening i would still prepare.
Well i have a pretty good bead on the economy collapsing in my lifetime, i would say 100%, but in my mind, i think it could be as soon as 2-5 years, i will be ready in under 1 myself.
I will still post interesting economic posts i run across, or my own ramblings from time to time.
Thanks for reading, as always, remarks,insults and the such go in the comments section.
Happy Easter!!
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