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Friday, May 26, 2006 12:40:05 AM
Kuwait has revalued the dinar for the first time in 17 months, which sparked a rally in regional currencies and intense market speculation that Saudi Arabia would follow. The devaluation is against the US dollar against which the dinar is pegged. That is a sterilization process to combat inflation. Two weeks ago the Iranian government said it would soon open its oil bourse. There is no question our government, England and Israel are engaged in a secret war against Iran that is similar to the part played in Afghanistan when the Soviets occupied that country. This time it’s covert operations involve the Kurdish militias and rebel Iranian elements. This harks back to our CIA’s creation and employment of Osama bin Laden. Our elitist Neocons are doing everything possible to foment war with Iran. At the same time the G-7 said they were giving the job to the IMF of bringing about a soft landing for the dollar. Since then the dollar has plummeted from 90 on the dollar index to 84, and the Euro has climbed from $1.21 to $1.29. The reality of the matter is the Neocons couldn’t find an excuse quick enough to invade Iran. Iran will trade oil in euros and after a few months that will put pressure on the dollar. It means that countries that have lots of dollars can sell dollars and buy more euros or gold. It will also end the era of the US dollar as the world’s reserve currency. The dollar will correct 60%. The dollar index should fall to about 50 and the Euro should rise to about $1.60 to $1.90. This event will transpire over the next two to three years and cause a crisis bigger than the depression of the 1930s. Two weeks ago the Iranian government said it would soon open its oil bourse. Generally speaking very few people know of this event and its ramifications. Our media has blacked it out. Foreign central banks hold two-thirds of their reserves in dollars so they will face severe losses as well. There is no question in our minds that the US will go bankrupt and there will be a debt workout of something like $0.30 on the dollar. Our country has been stripped of its ability to compete. We cannot compete with slave labor. Out of the social, financial and economic chaos that awaits us the Illuminists, our enemies, intend to impose a New World Order. This corporatist fascist movement came into being in 1980, and it plans to deliver America into slavery in the next ten years. All advanced in age, the trillionaire titans of conspiracy, want to see success before they meet their demise. We’ll get into this in depth later.
Analysts have said that two factions are coordinating over the shape of the future Fascist New World Order. One faction, represented in the Republic party, are the Nazis (remember, the Bush Dynastry traded with the Nazis) and the other faction, represented in the Democratic party, are the Communists (remember, the Rothschild and Rockefeller banks also funded the Communists). They are of course working for the same Rothschild/Vatican-Jesuit/Masonic dynasties, using the rest of the World’s peoples as their pawns. Now, let’s see what some of these guys are upto lately towards their drive to create the U.S.S.A. modeled on the U.S.S.R./Nazism with more details from the International Forecaster.
THE INTERNATIONAL FORECASTER
MAY 2006 (#3) Vol. 10 No. 5-3, P. O. Box 510518, Punta Gorda, FL 33951-0518
An international financial, economic, political and social commentary. Published and Edited by: Bob Chapman
E-mail Address International_forecaster@yahoo.com www.theinternationalforecaster.com
There is no question in our minds that Vice President Dick Cheney believes he is the reincarnation of Herman Goring. 9/11 was the elitist version of the Reichstag fire and it was the operative event that was used to introduce forms of dictatorship that had been formulated years before when Mr. Cheney was Secretary of Defense under George H. W. Bush. The vehicle for total control of the American people was the USA Patriot Act and following legislation.
After that was accomplished military and intelligence operations were taken out of the hands of government and into the control of private and public corporations. This was the transition to the corporatist fascist state. After George H. W. Bush was defeated for a second presidential term Mr. Cheney took over as CEO of Halliburton. Later he and George P. Schultz, who was the CEO of Bechtel, formed the Bush-Cheney team for the presidency. We know what transpired and after in office with Cheney crony, Don Rumsfeld, the lies began and at the same time military and intelligence was in part turned over to Halliburton, Bechtel, Carlyle and other crony companies. This is when this triumvirate took over the entire American intelligence operation.
What has followed is the worst corruption in modern times. Not only the stealing, but also the spying on Americans, privatized torture, abuse and murder and holding people without charges for years and kidnapping them off the streets of the world in violation of the sovereign laws of other countries. This is what murderous dictators do.
Through globalization, private mercenary armies, private secret police forces all run by firms such as Halliburton and Bechtel, anyone who speaks out is hunted down and silenced or murdered. Via globalization, which is the elimination of the nation-state, power is transferred from the nation state to elitist transnational corporate cartels. The system becomes totally predatory. First it’s the elimination of whole industries, then public investments, then governments and then the world.
The table is set by the creation of perpetual war for perpetual peace. The masses are eventually against the wars but are powerless to stop them. The wars are theatre devised as distraction to keep the citizens focused on what is a stage play, as the globalists steal your freedom, livelihood and your entire way of life. This is to be the recreation of Imperial Rome via the financer oligarchy and the control of America’s vast military machine. A world system of interlocking syndicates, which rule people, not governments. This is how we know financial collapse is in process. It has been used many times before albeit unsuccessfully. This is a threat to civilized life, as we have known it. Justice is first perverted and then destroyed. You cannot defend your rights against the state if they own the system. Power is being transferred from the nation-state to the international financial interests. This is not only treason; it is the destruction of our laws and culture. This has to be reversed and the only way to affect that legally is to take over Congress in the next election, voting almost all of the participants out of office and then impeaching our President and Vice President. If we are unsuccessful in doing that, then the only resort left will be revolution.
One of the top priorities on the Illuminists’ agenda is the privatization of national security, better known as the Princeton Project. It is to affect the expansion of the privatization of military functions through private military companies, or private mercenary armies.
This is funded in part by the Ford Foundation and is co-chaired by George Schultz of Bechtel and Felix Rohatyn, a powerful financier and strong backer of Israel. This group is attempting to eliminate the sovereign nation-state, by outsourcing to multinational corporations, virtually all national security and military functions, including all non-combat as well as core combat functions of the military itself.
This transfer in power, privatization, will be justified by the perpetual global war on terrorism. It will be readily acceptable to the public because their children won’t be drafted into the military. Those who choose the profession will eliminate the need for that. This process has already begun as quasi-private bands of commandos are sent around the world with a license to kill, and domestically to spy on American citizens. The personnel for these operations come from Delta Force, Navy Seals, Green Berets and other special military units. They are given temporary leave to work for private contractors and later can return to active duty with no loss of rank or service time. When killed on mission they are not counted among US casualties. In finality there is no difference between military and mercenary. This marks America’s slide back into feudalism. Needless to say, the public doesn’t have a clue that this is what is being done to them.
It is the intention to carry this kind of privatization beyond security services. Thus, our military will be run for profit by transnational conglomerates that have a vested interest in perpetual warfare for profit. This movement started with the demise of the Soviet Union, but the insider relationships go back to the 1960s. In fact, Schultz, Rohatyn and Kissinger were the key planners of the CIA overthrow and murder of Chilean President Salvador Allende, and the installation of the military junta of Augusto Pinochet, whom they later threw to the dogs. This is a key part of America’s elite, those who hold all our institutions and people in contempt.
This is the beginning of the formation of an SS similar to that of Nazi Germany, Men and women who swear allegiance to corporations and not to America. These will be organizations in service to the state, which will be made part of the budget of the Defense Department and have special legal status. These mercenaries operate beyond the law and totally apart from what will serve as the American Army. Once all is in place we will have dictatorial government.
In Iraq, these mercenary armies have received $150 million and $200 million additional that cannot be accounted for. These are overcharges by the contractors. We have already had massive privatization of military functions, logistical support, combat engineering, intelligence and interrogations not to mention combat. These contracts are so well entrenched that they already control our military. There are more than 150,0000 contractors in Iraq alone. That really means we have 300,000 personnel in Iraq, not 150,000.
One of the most freighting aspects is the DOD Counterintelligence Field activity whose mission is to develop and manage DOD counterintelligence programs, technology, critical infrastructure, economic security and US interests, against foreign influence and manipulation as well as to detect and neutralize espionage against the department is that it operates secretly. Its budget is classified and all we know is that there are 1,000 employees and that 70% of its work is contracted out. Their mission includes roving patrols around military bases and facilities to surveillance of potentially threatening people or organizations inside the US. It also identifies and assesses threats from foreign intelligence services, terrorists, and other clandestine or covert entities. They have psychologists for support as well as a team of renowned forensic psychologists who are engaged in risk assessments of the Guantanamo detainees. They are also used to direct torture. Talon, another arm, is engaged in a massive domestic surveillance program, targeting antiwar groups and other political activists, with no al Qaeda or other terrorist link. That is you and us. This is achieved in part by data mining, the cross-grid scores of government and commercial databases, containing credit information, employment records, and other personal data on millions of law-abiding Americans. This is a legacy of Adm. John Poindexter, who probably still is connected to CIFA.
The global association of mercenaries has its own association to promote the privatization of war, the International Peace Operations Association. That name is right out of Orwell’s 1984. These are nothing more than murders for hire. The cabal has been successful so far. They are now supplying 50% of the personnel for war. The profits are giant and usually on no bid-contracts. This is where our country is headed and we had better stop it. If we do not, we’ll all end up in internment camps.
There is nothing random or unlucky about the coming fall of the dollar. Economic and financial policies in place for years guaranteed that we would have a dollar crisis. It has arrived and the carnage will be spectacular after all is said and done. Since 1971, the dollar has been a salvage operation. Bailout after bailout: 1974, 1982, 1990, 2000 and today. It’s a wonder the dollar has held up as the world’s reserve currency as long as it has. The dollar bubble has been pricked and it is headed down. The elitists cannot force the nations who continually revalue their currencies to stop. There are more than 150 currencies doing it led by China. The US rather than implement tariffs are devaluing the dollar. The problem is that will solve very little. The global savings glut as it is called is about to end. Nations won’t have to borrow or buy dollars to keep their currencies weak. The dollar is officially going to devalue. In that process two-thirds of international reserves that are in dollars will suffer major losses. We would also expect the $2.6 billion in dollar flow each day will eventually cease and that problem will have to be solved by the Federal Reserve buying U.S. Treasury securities and monetizing them, which is highly inflationary. This is one reason why it’s been so easy for us to predict interest rates. If the dollar is falling, higher interest rates are not going to help much. Investors are finally starting to catch on and they are bailing out of dollar-denominated assets. Next they’ll be joined by small countries and then large countries. This will take two years and the fallout will be gruesome. This is why gold, silver and commodities are over performing and will continue to do so. Investors are saying where do I go that is relatively safe and that I can offset world inflation? They have no other alternative than gold and silver and commodities. We have been long gold and silver assets for six years and our subscribers are doing very well, but we are the exception.
International elitists and Fed policy now demand a weaker dollar; weakening as slowly as possible to avoid a panic. Those who believe the decline will be orderly are mistaken. The root of the problem has not been solved and that is excessive dollar liquidity creation and an incessant outbound flow. That creation of excess liquidity has not stopped; it has gotten worse. Look at our weekly statistics. It’s no wonder M3 was terminated. Now we have an official policy of dollar devaluation and at the same time massive creation of monetary aggregates. A hyperinflationary depression is on the way and it is being aided and abetted by other major central banks that are raising interest rates like the Fed and at the same time increasing monetary aggregates by more than 10%. No one wants to be left out of the upside action while it lasts, because it won’t last much longer. One of the reasons for this continued great outpouring of liquidity is that the US real estate market is dead and falling. All those cash-out and equity loans are history – at least as we have known it. In order to support and liquefy the economy, now that mortgage borrowing is going to be history, Americans have to be forced deeper into debt with freely accessible money. The consequence of a lower dollar is higher import prices and higher inflation. That will be accompanied by ever-greater volatility and more as more money and credit enters the system. That means world stock, bond and real estate prices will fall. As we just saw last week, import prices are moving aggressively higher. The G-7, IMF, “Plaza-lite” Accord will be anything but lite. This will be a blood bath. Even if the dollar decline is “orderly” it will none the less be nasty. All the central banks are doing is buying time.
This past week we saw the first trial balloon on the campaign of Jeb Bush to become the next Republican nominee for president. The neocons have been accumulating funds for Jeb for six years in an attempt to extend the dynasty. We are sure the voting fix is being prepared as well. Jeb Bush is far more dangerous than his lunatic brother because he’s smarter. George’s comment was prepared. These people only speak when it is to their advantage. This was no off-the-cuff remark.
The neocon Gestapo marches on. A Cleveland woman was manhandled and charged with two felonies for trying to display anti-Bush posters. She was then jailed in a psychiatric unit, which was highly unusual and outrageous. The judge said she suffered from mental problems and that her opposition to Bush makes her delusional. Off to the gulag Soviet style. Only in America.
Former NSA staffer Russell Tice will testify to the Senate Armed Services Committee this week that not only do employees at the agency believe the activities they are being asked to perform are unlawful, but that what has been disclosed so far is only the tip of the iceberg. He says former NSA head Gen. Michael Hayden, Bush’s nominee to be the next CIA Director, oversaw more illegal activity that has yet to be disclosed. Tice will tell the NSA conducted illegal and unconstitutional surveillance of US citizens while he was there with the knowledge of Hayden. We suspect he’ll go into the Echelon program, which is a massive system designed to intercept virtually all electronic communications throughout the world. Phone calls, fax traffic and e-mails are analyzed despite laws in every country banning such activity, including the US. The system was developed in 1947, and was taken over by the NSA in 1953. The operations at Fort Meade worked from Men with Hill in England. It was used during the Cold War era to keep an eye on the Soviet Union. We also had stations for all kinds of electronic intercepts throughout the world, we know we were there and we were involved in it. We can only remember of two instances in which we were aware of spying on others than the Soviet Union and its satellites - once on our own field units and other times on British and French aircraft.
Echelon was designed primarily for non-military targets: governments, organizations, and business in every country. It can also be considered industrial espionage. The analysis was based on key works like money, stocks, drugs, etc. We did not work on Echelon but we knew all about it. Echelon concentrated on foreign nations up until 1985 and it then started monitoring Americans.
As we all now know, tens of millions of phone calls by US citizens and others in the US have been monitored by the government since 2001. The phone companies now must answer for this invasion of privacy and explain their willingness to violate the Constitutional protections of the Fourth Amendment, in addition to violating provisions of the 1978 law governing spying on US citizens. The bottom line is our government is at war with its citizens and we have our own government as our enemy. The corporate fascist interests that run our country want to establish unilateral control over everyone and everything, and if you expose the truth about what they are doing you are the enemy. We are the victims of state terrorism.
Two weeks ago the Iranian government said it would soon open its oil bourse. At the same time the G-7 said they were giving the job to the IMF of bringing about a soft landing for the dollar. Since then the dollar has plummeted from 90 on the dollar index to 84, and the euro has climbed from $1.21 to $1.29. The reality of the matter is the neocons couldn’t find an excuse quick enough to invade Iran. Iran will trade oil in euros and after a few months that will put pressure on the dollar. It means that countries that have lots of dollars can sell dollars and buy more euros or gold. It will also end the era of the US dollar as the world’s reserve currency. The dollar will correct 60%. The dollar index should fall to about 50 and the euro should rise to about $1.60 to $1.90. This event will transpire over the next two to three years and cause a crisis bigger than the depression of the 1930s.
Generally speaking very few people know of this event and its ramifications. Our media has blacked it out. Foreign central banks hold two-thirds of their reserves in dollars so they will face severe losses as well. There is no question in our minds that the US will go bankrupt and there will be a debt workout of something like $0.30 on the dollar. Our country has been stripped of its ability to compete due to WTO, NAFTA, CAFTA and almost the complete destruction of our manufacturing capability. In order to revive our economy protective tariffs will have to be put in place because otherwise there will never be a recovery. We cannot compete with slave labor and we have not been able to do so since the inception of our country. Once the dollar falls we won’t be able to service our debt in spite of hyperinflation and the bottom will fall out. That is when the new World Order elitists will use worldwide depression to seize assets and implement a police state. This is why you have to get out of debt and into gold and silver related assets.
From time to time we hear about Non-Governmental Organizations, NGO’s, many of which have gotten themselves in hot water and rightly so. Some countries now require them to register. George Soros’ fronts, the “Open Society Institute” affiliates, have been shut down in Eastern Europe; and Venezuela has charged the Súmate NGO leaders with treason. These are the heirs of the missionaries who served as scouts for corporations and governments. Today NGO’s may be international organizations or grassroots groups. Some of the funders are American Express Foundation, Carnegie Endowment for International Peace, AID, Canadian International Development Agency, Bristol Myers Squibb, Ford Foundation, Harvard, Oxfam and the UN Development Programs, all controlled by the elitists to do what they cannot do under government auspices, like foment revolution or radical change. They, under the guise of bringing democracy, open the door for foreign capital and business, resource extraction and military adventurism or training.
Then there is the US National Endowment for Democracy, created by Congress in 1983 to do openly what the CIA had been doing during the Cold War as covert activities. Used as pass-throughs, under covert funding, are the NEA, American Newspaper Guild, the National Student Association Act and a myriad of other phony foundations, groups and corporations. You can include as well the Chamber of Commerce, AFL-CIO, the National Democratic Institute for International Affairs and the International Republican Institute. There are hundreds more funded by taxpayers or by the sale of narcotics. We must not leave out the Mott Foundation, Smith-Richardson and Mellon-Scaife Foundations.
The list goes on and on and the US and Canada are not alone in using fronts to further their interests. Germany, France, the Netherlands, Greece, Italy and Sweden fund their political parties foundations. Then there is the EU, UNICEF, WHO, UNESCO, UNDP and FAO, all propaganda fronts for international socialism. Even the World Bank, WTO, IMF AND NAFTA.
There are extensive grant programs from Rotary [Masonic], American Friends Service Committee and Oxfam, American Federation of Teachers Fund and Boeing Employees Fund.
These public and privately financed fronts, called NGO’s, have worked together for years – fund and direct violent and non-violent overthrows of governments and assist in assassinations. In the late 1950s we read a book entitled, “The Ugly American.” It was about how USAID worked in Asia and was made into a movie, so this is nothing new.
The specialty of almost all of these organizations is destabilization, the creation of mobs preventing elected governments from ruling, stuffing ballot boxes, chaos and violence. They funded the civic Forum in Czechoslovakia, Solidarity in Poland, Union of Democratic Forces in Bulgaria, Otpor, groups within the USSR and the Orange Revolution in Ukraine.
The NED, Rockefeller, Ford and Soros groups move professional dissidents from one country to another fomenting problems. Wherever there is an opening these elitists’ fronts step into fray and take advantage of the situation to further globalization or control. So when you hear NGO take a hard look because anything they are doing is not in your best interests.
Our Vice President Dick Cheney has just spit in our face again. He does the outrageous and hopes to get away with it. He continues to argue that NSA should intercept purely domestic telephone calls and e-mail messages without warrants in the hunt for terrorists. This in spite of the fact that the majority of Americans are against such violations of their personal rights. In actuality this program was designed and promoted by Gen. Michael V. Hayden when he ran the NSA in 2001. This man was the principal architect of the plan, so now they want to put him in charge of the CIA. Hayden really believes the spy program is legal. This man has to be a fascist sociopath. It is illegal for the NSA to violate FISA and it’s as simple as that. In fact, it isn’t even within his venue or job to defend such a program in behalf of the Neocons. If this man runs the CIA we all have much to fear. He is as crazy as the rest of the cabal in the White House.
Kuwait has revalued the dinar for the first time in 17 months, which sparked a rally in regional currencies and intense market speculation that Saudi Arabia would follow. The devaluation is against the US dollar against which the dinar is pegged. That is a sterilization process to combat inflation.
The Democrats won’t attempt to impeach President Bush and VP Cheney. They don’t want the issue as an impediment as they try to remove Republicans from office in November. In addition, many Democrats have been compromised or bought off. It is incredible that they can say they won’t impeach even after the November election.
The Army Corp of Engineers has cancelled the work remaining on a $70 million project to refurbish 20 hospitals in Iraq, deepening a dispute with Parsons Engineering, one of Americans largest contractors operating in Iraq. That leaves 8 hospitals to be completed by another operator. There were 150 that were supposed to be completed.
As we write this on Sunday we see versus the dollar over the last month the Yen is up 7.48%, the Euro 6.09%, the British pound 7.86% and gold moved up 19.33%. What would you expect when the Fed intonates that they’ll have one or two more interest rate increases and the G-7 says the dollar has to be managed downward. Fed Chairman Bernanke has two choices, increase rates and have a slowly descending dollar, and a slowly descending economy, or keep rates the same and see the dollar plunge. Whatever the choice and we believe it will be higher rates, it will be a long time before rates can be cut. Every business day the US economy needs $3.5 billion of new net flow of money from foreigners to finance the current account deficit. If it stops the dollar plunges and perhaps the US slides into bankruptcy and the dollar is no longer the world’s reserve currency. The world’s other central bankers are sending a message as well, they sold a net $14.4 billion in US assets this month and we still have two weeks to go. That is the most since 8/98, which is significant. These banks cannot be aggressive. They do not want to drive the dollar lower if they can help it because their foreign exchange reserves are 45% to 63% in US dollars. This means the dollar can go nowhere but down, as we have predicted for some time.
Sir Alan Greenspan ducked out after he increased M3 $4.3 trillion in six years of the Bush neocon administration. That is about $717 billion a year. This of course is in part what is keeping the stock market at current levels and that credit and money Bernanke keeps pouring only adds fuel to the inflationary fire in an attempt to keep the US economy from deflating. Why would any sane person want to hold dollars? The trade deficit will be $800 billion and we believe foreigners have finally had enough of US monetary, fiscal and personal profligacy. It took them six years to catch on. Let’s hope it doesn’t take six years for them to discover their salvation, the only real currency gold and gold related assets. The kindness of strangers is at an end. US debt is increasing at five times GDP, as household debt knows no end, increasing 12%. As interest rates rise and house prices fall there will not be $640 billion available to spend from home equity like there was in 2005. Consumption will fall from 71% of GDP to 64.5% or less. That $2 trillion taken out of home equity over the past five years will no longer be available again. In the first quarter, 88% of loans that were financed were done at least 5% above their previous mortgages. This is the most since 9/90, when the last real estate collapse occurred. All the money has been spent, there is no savings and personal debt is colossal. Bernanke is still feeding the monster - just look at the credit expansion figures every week. They are out of sight. Credit of all types averages about 14% and the money supply is climbing at 9 1/2% to 10%. If you middle them you have 12% and most major countries are doing the same thing. The amount of money borrowed by Americans is far beyond sanity. It’s like the one last big fling. No one, including government, seems to care as mortgage foreclosures jump 72% in the first quarter. As rates go higher foreclosures will mount exponentially. Home sales are off more than 2%, inventories have doubled in months and prices are down nationwide almost 4%. The market has topped and is descending as real estate loans expand 11%. What can they conceivably be thinking of? The economy has topped out and there is only one way to go and that is down. Wait until the rest of the home equity is gone. You will hear a great thud just like you heard in California in 1990.
These catastrophic circumstances are going to affect the entire world. None is going to escape unless they are in gold and silver. We are a year or two away from major bank failures. There has been no turning back for five years. The great purging has begun and it will last for a number of years. You have no idea how bad this is going to get. You must prepare yourselves. You must be in gold and silver assets.
The current war in Iraq is destroying America’s finances - $440 billion for 2007 - a budget for war bigger than the next 25 nations combined, spending this year will be more than $600 billion. This is a sure way to bankruptcy. It is no wonder the idiot in the White House has a 29% approval rating. The only positive side is Congress has a rating 5-points lower. The Democrats offer no alternatives. Then the only alternative left is, with minor exception, vote them all out of office. Both parties want to continue the war, but the Democrats say they know how to fight the war better – how stupid is that.
The American and British military are in deep trouble in Iraq and each day loses more control as the war escalates.
The LA Times says 75% of the people on Los Angeles’ Most Wanted list are illegal aliens. Nearly 25% of all inmates in California detention centers are illegal aliens and 29% of those in federal prisons are illegal aliens. Half of all gang members in LA are illegal aliens and that is true nationwide.
Now we learn our government is aiding and abetting the Mexican government in the illegal export of its citizens and worse yet, they are telling the Mexicans where our Border Patrols are stationed and where the private citizens (Minutemen) are stationed. That is as treasonous as it gets.
We told you of China’s $15.5 billion surplus, but didn’t include other important numbers. March also saw a trade deficit for the US with Japan - $7.5 billion, up from $7.1 billion in February. The deficit with OPEC was -$8 billion, up from -$7.3 billion and with the EU -$10.1 versus -$8.3. Those are poor results with our largest trading partners. [but OPEC is saving us by recycling their Petro-Dollars into the Federal Reserve System by buying US Treasury Bills]
It looks like Laura Bush is back on the weed. She says she does not believe opinion polls showing her husband’s approval ratings at a new low of 29. Is it drugs, denial or insanity? It doesn’t much matter She has to be real dumb to get quoted in such a way.
Net flows of capital into the US assets fell to $69.8 billion in March, which was sufficient to cover the trade deficit of $62 billion. International investors slowed purchases of US securities, as foreign central banks were net sellers of treasury notes for the first time in six months. In February, net purchases were $90.5 billion. There is no question there is a trend in the making. Experts expected the inflow to be $79.9 billion.
Purchases of Treasury securities rose a net $3.07 billion, down from $21.9 billion in February. Foreign central banks cut their holdings by $6.3 billion, as demand for Agency debt increased by a net $19 billion.
The UK, China and OPEC all increased their holdings again led by the US and Caribbean banking centers, which is a mixture of hedge funds and Treasury monetization purchases. They boosted holdings by $7.3 billion. Corporate bond holdings rose $48.1 billion.
Japan continues to be a small seller, selling $18.2 billion and it holds a total of $640.1 billion. China bought a net $1.6 billion in US debt in March and holds $321.4 billion.
UK holdings, which include investments from Middle East oil economies, recycled through British banks, rose in March by $16.8 billion to a total $171.5 billion. For almost a year the bulk of the buying has come out of the Middle East.
Although it is no laughing matter, we still had to laugh when VP Cheney said while in Russia that Mr. Putin’s government in many areas of civil society from religion and the news media to advocacy groups and political parties, that the government has unfairly and improperly restricted the rights of people, and he warned the Kremlin against using oil as a tool to achieve political ends. No legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation or attempt to monopolize transportation. Mr. Putin ignored Mr. Cheney’s comments in the name of diplomacy. What he should have told Mr. Cheney was that the Patriot Acts are unconstitutional as is wiretapping and torturing and murdering people. We are not pro-Russian. We are pro-fairness and Russia is no less democratic than America. The difference is approach.
Cheney than went on to Kazakhstan where he attempted a thinly veiled snow job. He wants the Kazak oil. [he was actually bribing the Kazak politicians]. He attacked Russian oil monopolization when only seven companies control our oil supply. Is there any difference? What about all the other countries that have nationalized oil – we don’t see Cheney attacking them. The Kazak’s await an offer from Cheney for a pipeline the US would run to Europe bypassing Russia through pipelines under the Caspian Sea. Kazak President Nazarbayev wants the offer so he can get more money for his oil from Russia.
After all too many years in Eastern Europe and West Asia the US demanded what it wanted. That game is over like it or not and in spite of large war making skills.
A lawsuit is in a federal court to order President Bush, the NSA and Verizon to end a secret snooping program. The suite contends such spying violates the Constitutional right to privacy and federal law. That is $1,000 violation and a $50 billion bill for Verizon.
Democrats are asking House Speaker Dennis Hastert about the mysterious disappearance earlier this month of legislation that would stop the sale of private telephone records over the Internet. The bill, which had cleared the Energy & Commerce Committee with unanimous support had been slated for an airing before the full House on 6/12. Republicans removed it from the House floor schedule and told no one. This is what passes for Democracy today. It is thought intelligence agencies had it killed. This is probably true because an exemption had been sought for intelligence gathering activities. What the spies want is our telephone records because they are building a profile on everyone in America.
US industrial production rose 0.8% in April led by business equipment. Capacity utilization rose to 81.9%, the highest since 2002, from 81.4% in March. Further to foreign net capital flows, net foreign purchases of US Treasuries fell a large 86% to only $3.1 billion, a new 3-year low. Foreign central banks, doing something they had not done in three years, sold, net, $6.3 billion in securities. This is an ongoing reduction in foreign participation and in their exposure to US debt securities. They only bought 30% of last week’s 10-year Treasury note auction. It was their lowest participation in 15 months. In this month’s 3-year note auction they only took 24%, that’s down from 45% participation in 2004. The 2-year best month had only a 24% participation, the worst since 11/04, and the 5-year had only a 21% foreign participation rate, the worst for that security since 10/03. It is now very obvious that foreign central banks are not going to accumulate further US assets and that means monetization and inflation.
The National Association of Home Builders Index fell six points to 45 in May, an 11-year low.
More and more school systems are going to a two-tiered diploma system. This bifurcated system would have one diploma for those who pass a Comprehensive Assessment System Test and those who don’t pass that test, but do pass all their required subjects, would get a general high school diploma. Often some very bright students do not pass the state test, which we believe is ridiculous. Students with the general diploma, who obviously in part were taking up space, cannot attend college, serve in the military, or find a job that pays a living wage. Many become criminals, as do many high school dropouts. The educational systems are a total mess and getting worse. Graduates are generally an intellectual waste and we only see progress in home schooling. In California, graduates have to pass 8th grade math and 10th grade English. That’s because good teachers are so hard to find for the amount of money taxpayers are willing to pay them.
New housing construction fell for the third month in a row with starts falling 7.4%.
The PPI, Producer Price Index, rose 0.9% in March. The pundits found this acceptable, but understandably no one said that’s more than 10% a year.
The madness never ceases. Mexico says it will file lawsuits in US courts if National Guard troops on the border become directly involved in detaining migrants. We could be moving toward Martial law as a result of future rioting when illegal aliens do not get what they want.
Each day we become more appalled at the stupidity of most all people throughout the world. In America, the dumbed-down capital of the world the people sit idly by as enemies within their Republic destroy all that has been accomplished since this country’s inception. The question really is who is more corrupt, Congress or our President and his henchmen?
Out of the social, financial and economic chaos that awaits us the Illuminists, our enemies, intend to impose a New World Order. This corporatist fascist movement came into being in 1980, and it plans to deliver America into slavery in the next ten years. All advanced in age, the titans of conspiracy, want to see success before they meet their demise. We’ll get into this in depth later.
One of the hottest real estate markets in the country, San Diego, saw a 60% jump in foreclosures in the first quarter, which was the largest since 1992. We believe in the coming year home equity will melt like sugar cubes dropped into a hot coffee cup. There are 241 foreclosures in San Diego County in the first quarter.
Nationally, 323,102 properties entered some stage of foreclosure, a 38% increase from the fourth quarter and a 72% y-o-y increase. Riverside County, California had a 64% increase in default notices over the past year. The statewide increase was 29%.
The $500 billion deficit in just major company retirement plans is about to affect corporate bond investors. Thousands of companies are delinquent in contributing to pensions and they will have to disclose more information about retirement funds and health care costs in financial statements later this year. Congress is debating a new law that will force companies to start plugging the gaps in their pension plans.
New rules may require companies to use cash or borrow to meet obligations to millions of pensioners. Fixing the retirement funds could cause bond losses of $24 billion, based on investor reaction. Legislators are not going to allow the taxpayer to bail out corporate malfeasance. Our estimate for under funding is move than $1 trillion. The Pension Benefit Guaranty Corp. insurer for companies with unfunded pensions, assumed responsibility for 120 plans with 235,000 members already and they are in debt some $28 billion. The plans will be fully funded, but almost all companies will abandon them now that they cannot screw their employees any longer.
Home prices rose 10.3% in the first quarter as the median sales price for an existing single-family home hit $217,900. In the fourth quarter prices rose 13.6% y-o-y. Unfortunately, we take many statistics today with a grain of salt. These numbers come from the National Association of Realtors. Some markets that hadn’t moved up in the past moved higher and some major markets fell lower, such as Boston –1.5%, Cleveland –3% and Cincinnati –1.5%. Sixteen markets saw price falls. Thirty-nine percent of banks said demand for mortgages was weaker and 42% said they were about the same. Only 17% said demand was higher, 11% said they’d eased home mortgage lending standards, while only 1.9% said they’d tighten them. Meanwhile, 21% of banks said demand for commercial real estate loans got stronger over the past quarter. Only 16% reported weaker demand, while 63% remained the same, 8.8% tightened standards while 7% eased standards.
It is small wonder the public holds Congress in such low esteem, only six months away from election, with a federal budget deficit out of control, a war that is a disaster in every sense of the word, with military spending totally out of control and with public services being slashed, Congress gives us $70 billion in tax cuts, mostly for the rich. This comes as middle-income workers face sky-high fuel prices, soaring health costs, and variable-rate mortgage payments that are going through the roof. Not only is the tax cut politically and fiscally irresponsible, but it is obscene. We have to include the two-year extension of capital gains and dividend cuts and a one-year extension of relief from the AMT. Eighty-seven percent of the benefits of tax cuts will go to 14% of households earning above $100,000 a year; 22% of the benefits go to the richest two-thirds of 1% of households earning more than $1 million a year. Why do wealthy Americans need a tax cut? That is when the gap between rich and poor is wider than it’s been in a century. The rich now pay a smaller percentage of income in taxes than at any time in the last 75 years. We no longer have a graduated income tax, and the trickle down theory doesn’t work. The rate of new investment during this recovery has trailed the rate of investment during the three previous recoveries. Almost nothing has trickled down. Productivity is up marginally, but the current median wage of about $35,000 is what it was five years ago due to offshoring and outsourcing. While top executives are raking in 7 and 8 digit compensation packages, middle-class workers are getting screwed. Remember, all this in November, and except for a handful throw every one of these Congressmen and women out of office.
Morgan Stanley’s Stephen Roach has done a 180-degree turn. First he tells us the world financial situation is going to be just fine, now he tells us we have a commodities bubble. If he is wrong on these two issues, and he will be, his reputation will be destroyed. As we have said often, economists are captive to corporate and governmental interests and they cannot tell you the truth if they wanted too. Prices of commodities are up 200% over the past five years and they have to double again just to catch up with inflation. Mr. Roach seems to have overlooked that or the fact that inventories are at all-time lows. That doesn’t matter though. When Morgan Stanley tells him to change his tune, he changes it.
Thus, Mr. Roach tells us that, purely from the standpoint of global macro we have a bubble. Did it ever occur to this economist that all government statistics are bogus, particularly those of the CPI and unemployment? He obviously hasn’t grasped that as yet. His masters, employers, could very well be short the commodities. He doesn’t tell us whether they are or are not. If he doesn’t know we suggest he find out. As per usual, he probably doesn’t want to know.
As Mr. Roach tells us the basic premise of this new era of globalization has unleashed a powerful strain of commodity-intensive global growth that has caught a supply-constrained world largely by surprise. He is right but fails to add that this same globalization is gutting the former industrialized world and that inflation is over 10% annually in spite of lower wages. The problem is the demand has run loose and the elitists cannot contain it. If they shut off the fiat money and credit the whole system collapses. This is not a bubble. The demand is there and the supply and inventory is not there. In the case of gold and silver, it is the same but they are also driven as the only real currencies. All these nations to varying degree have cheapened the value of their currencies and so there is a flight from these currencies into real unfettered assets such as gold and silver.
Mr. Roach tells us to play the commodity bubble at your own peril, yet we see no similar admonition regarding a stock market Mr. Roach has to know is rigged. He is not dumb, so he knows. Thus again, we are treated with elitist propaganda with no one in the mainstream media or among newsletter writers who dares challenge his fallacies.
There is no question our government, England and Israel are engaged in a secret war against Iran that is similar to the part played in Afghanistan when the Soviets occupied that country. This time it’s covert operations involve the Kurdish militias and rebel Iranian elements. This harks back to our creation and employment of Osama bin Laden. Our elitist neocons are doing everything possible to foment war with Iran.
Venezuela is considering selling its fleet of US-made F-16 fighter jets to another country, perhaps Iran, in response to a US ban on arms sales to Venezuela. It has already been a long time since sensitive upgrades and replacement parts were supplied by the US. We expect Mr. Chavez to purchase new jets from Russia or China shortly. George and the Neocons say Venezuela is not cooperating. What that means is Mr. Chavez is not lying down before the Illuminist masters in Washington and London. This means prohibition on all commercial arms sales and licensing of defense articles and services to Venezuela. The excuse is Venezuela is harboring and providing a safe haven to FARC and the National Liberation Army. There is no proof of that. We would expect that once all the Citgo interests in the US are sold off that Mr. Chavez will then wean the US off Venezuelan oil.
The Washington Post-ABC News Poll tells us 69% of our citizens believe our nation is now off track, 56% say they’d prefer to see Democrats in control of Congress after the elections. When asked if they were inclined to reelect their current representative to Congress, 55% said they would look for a change. That is almost the same percentage when the Republicans took control in 1994. Democrats have an edge, but 52% said Democrats offered no sharp contrast. That in turn leaves the door open to Independents and challengers. This poll shows Bush’s approval rating at 33%, down 5% in barely a month and a new low in this poll. Bush’s disapproval ratings among Republicans has nearly doubled in the past month from 16% to 30% while his approval rating fell below 70%. Ninety percent of Democrats and 70% of Independents do not like the job Bush is doing. Only 37% believe Iraq has been worth the cost, the lowest ever, and 63% believe the war has not been worth it – a view shared by 80% of Democrats, 70% of Independents and 33% of Republicans.
Forty-six percent said Iraq was the main reason for Bush’s disapproval. They found 33% approved of the job Congress is doing. This is in stark comparison to other polls that have Congress at 25% approval – 49% of Republicans approve while 47% disapproved, whereas 70% of Democrats and Independents disapprove. Only 39% approve of the job Democrats are doing, while 58% disapprove. Sixty-two percent said they approve of the way their representative is doing their job, up from 59% last month.
Democrats hold an advantage of 52% to 40% when voters were asked whether they plan to vote for the Republican or Democratic candidate in their House district. Democrats had a double-digit lead over Republicans on 9 of 10 issues. By 2 to 1, or better, the public preferred Democrats to handle gas prices and health care. And, by double-digit margins, they preferred Democrats to handle (by 23%) education, by (18%) the economy, privacy by (15%) and by 14% Iraq, immigration and taxes.
Instead of enriching the seven major oil companies [“Seven Sisters”] we should be buying gasoline from Venezuela-owned Citgo, which helps provide medical care, food, housing and education for the poor of Venezuela. You will also be helping Citgo’s 14,000 American employees.
The bottom line on the Medicare Drug Program is that the program will eventually replace existing public and private spending on drugs with the taxpayer footing the entire bill. Once that is completed, all of medicine will be nationalized and we’ll have the nightmare that Canada now has. Seventy-five percent of seniors already had some form of prescription drug coverage even before the hugely expensive Medical Drug Bill was passed in 2003. Eventually doctors and other healthcare professionals will become little more than employers of the state.All Congress had to do was target assistance to low-income seniors who needed the most help. Instead most of the Medicare beneficiaries enrolled in the drug program were enrolled automatically, whether by employers who are getting huge taxpayer subsidies, or through the new Medicare Advantage plans. About 6.4 million Medicare beneficiaries also eligible for Medicaid had no choice at all in the matter: They were simply transferred, en masse, into the new Medicare drug program. Congress created a universal entitlement, and a universal entitlement will eventually crowd out most alternative coverage, including employer-based coverage.
While all this transpires, 75 year unfunded liabilities of the Medicare program have reached $32.4 trillion, $8 trillion from the drug entitlement alone. The hit will be heavy in 2011, when baby boomers start to retire. The answer is take everyone making over $50,000 a year and with more than $250,000 in assets off of Medicare. That will help save the system. Remember, that is us that will be cut off.
Consumer prices rose 0.6% in April led by higher energy prices. Higher rents finally figured in the increase. Year-on-year, CPI is up 3.5%, up from March y-o-y of 3.4%. For the first four months of the year, inflation is running at a 5.1% annual rate versus 3.4% in 2004. Our figures still show annualized inflation up over 10% annually for the past six years.
The Army Reserve, tapped heavily to provide soldiers for wars in Iraq and Afghanistan, is degenerating into a broken force due to dysfunctional military policies says Army Reserve Chief Lt. Gen. James Helmly. 52,000 reservists are on active duty with 17,000 in Iraq and 2,000 in Afghanistan.
The Senate voted to build 370 miles of triple-layered fencing along the Mexican border. The vote was 83 to 16 to add fencing and 500 miles of vehicle barriers. In the legislation was language that would allow citizenship for millions of illegal aliens. As this went on in the Senate, thousands of illegals and others demonstrated demanding citizenship for all the illegals. The measure doesn’t stand a ghost of a chance in the House. It’s all just politics. We have been projecting amnesty for 20 million illegals would bring in 100 million relatives and now the Heritage Foundation says the number could be as high as 200 million. That would change the entire makeup of America, as we have known it. Two-thirds of the population would be Latino.
More than a decade after US troops withdrew from Somalia, following a disastrous military intervention, the administration is secretly supporting secular [criminal] warlords who have been waging fierce battles against Islamic groups for the control of the capital, Mogadishu. If nothing else this looks like payback. The Islamic government wants the US involved in a more constructive way, but that is not going to happen. The administration refuses to answer any questions on the issue. We hear the justification for backing rebel [gangsters] warlords is to save Somalia from al Qaeda. Do they really expect us to believe that?
The Japanese yen is rallying again and is now trading in the 109 to 110 area, which all those who did not close their yen carry-trade positions are getting hurt. This could be why the US and other stock markets are getting hit hard as borrowers are forced to liquidate positions and pay loans back in yen. We believe there is billions of dollars still involved in the carry-trade and billions of dollars will be lost as a result of the trade. The door is being slammed in their face. The yen will break 109 and head toward 100 and the losses will be grievous.
PIMCO’s Bill gross really blew it on projections of the 10-year US Treasury yields. His prior range was 3% to 4.5%, which we called him on when he made the projection. We made ours 5 1/4%. He just upgraded to 4% to 5.5%. How very convenient. He had lots of excuses, but that is a very bad major call. He also tells us that global inflation remains benign, averaging 1-3% and believes dollar bases assets and the dollar should under-perform global alternatives. It is absolutely incredible that a man who controls billions of dollars in US Treasuries, via his funds, can continually lie about the economy. How can a professional miss the interest rate rise structure by 1% or 25%? Worse yet, he knows the BLS figures are bogus, yet tells us inflation will only be 3% or less. He knows inflation is considerably higher. This shows you the tremendous pressure that is placed upon money managers. These projections make Gross look like an absolute fool.
An estimated $2 trillion in home loans nationwide is expected to adjust upward in 2006-07. In Colorado, 28.5% of homeowners have 5% or less equity in their homes, and 47% have 15% or less. Only Tennessee homeowners, on average, have less equity. Increasingly, people who locked in 3-year ARMS with rates in the 4% range are finding loan rates rising by 50% or more.
Next, the downward spiral begins: They cannot afford the higher payment, they cannot sell their homes for profit, or they cannot refinance because they have little or no equity in their houses, or they’re precluded from refinancing because of pre-payment penalties. They believed housing prices would go up forever. When you combine ARMS, 100% financing, negative amortization, seller-paid closing costs, rising rates, falling prices, rising inventory and a continuing sluggish economy, you have a recipe for 1988 to 1992 revisited and then some.
A typical borrower who took out a 3-year ARM in 2003 at 4.18% could see that loan rise to 6.18% in 2006 and 7.625% in 2007. The first rise would move the payment to $1,699, a $528 increase from the initial amount, a 45% increase. Even worse, some have “Option ARMS” which gives consumers the choice of making minimum payments, minimum payments with interest, or payments with interest and principal. They can choose whether to amortize the loans on a 15-year or 30-year basis. Sometimes the rates change every month. If you don’t pay the minimum payment it is added to your loan and it is called negative amortization, which means the loan can grow with every payment. The only regions that might get a break are those that didn’t rise in value.
7.7 million borrowers took out $1.88 trillion in ARMS in 2004-2005, $368.3 billion of that amount are “loans with equity difficulty,” that are at risk of going into default. It is thought 5% could default or $550 billion of $11 trillion of home equity in the US. That means lower prices and less consumption. We contend these loans should have never been made in the first place. The piper has to be paid.
Emerging-market stocks are falling for the biggest losses in two years, on speculation that rising interest rates will cause bond yields to climb and reduce demand for assets in developing countries such as South Korea and Russia. If the Fed keeps raising rates, money will start flowing back into US Treasuries. There is also the added factor of the yen carry-trade, which is going to deprive these markets of money for investment as the trade ends.
Manufacturing activity in the New York area continued to expand in May, but at its slowest pace in almost a year. The NY Fed’s Empire State Manufacturing Index fell to 12.4 in May from 15.8 in April. This is the lowest since 10.2 in June 2005. The New Orders Index increased to 16.4 from 14.1 in April. Shipments rose to 17.3 in May from 14 in April, while the Unfilled-Orders Index rose to 2.1 from minus 2.9 in the previous month. Inventories fell to 0.8 in May from 1.6 in April. The Prices-Paid Index rose to 42.6 in May from 37.9 in April and the prices received held steady at 14.8 from 14.5. Expectations of price increases six months ahead jumped to 59.8 in May from 50 in April. That means higher inflation or less profits ahead.
Existing home sales are down more than 15% in five states that have the hottest housing markets. Down 22.2% y-o-y in Arizona, 19.2% in California, 18.2% in District of Columbia, 15.7% in Florida, and 15% in Nevada. Nationally sales fell 2.1% y-o-y in the first quarter. Price appreciation has slowed in the nation’s metro areas to 10.3% y-o-y from 13.6% in the fourth quarter. Prices fell in 15 metro areas. Of the 149 metro areas, prices are up by double-digit percentages in 60.
Homebuilders have turned negative on the housing market for the first time since just after 9/11. The NAHB/Wells Forgo Housing Market Index, a builders sentiment gauge, fell 6-points in May from a 51 to 45, the lowest level since June 1995. The index shows more builders say the market is poor than say it is good. The index has fallen 23-points in the last seven months. A year ago the index was 70.
The NAHB now expects new home sales to fall 12% this year and they expect housing starts to fall about 7%. Builders in the West remained most confident with a 60. The index fell 3-points in the Northeast to 47, two-points in the Midwest to 30 and six-points in the South to 51.
In May, builders’ assessment of current single-family home sales fell to 50 from 55. Future sales dropped to 54 from 59. The traffic of prospective buyers dropped to 32 from 39. All three sub-indexes were at their lowest levels since mid-1995.
We have more than 300 Border Patrol officers from Texas serving in Iraq. Why doesn’t President Bush bring them home to do the job they were trained to do? Bush says 6,000 guard troops will be deployed along the border for at least a year to help operate surveillance systems, analyze intelligence, install fences, build patrol roads and to train. Guard units will be reduced as the Border Patrol gains strength. They will not be directly involved in law enforcement.
First time applications for jobless benefits surged 42,000 to 367,000 in the week ended 5/13. This is due to the financial crisis in Puerto Rico.
The SEC said actions it is planning to reduce the costs of complying with the Sarbanes-Oxley corporate governance law will not include an exemption for small public companies. This is another political sellout. Now companies will go private, not form businesses, or go out of business. This is an idiotic, expensive, dreadful law.
Two out of three students who graduated in 2004 from an undergraduate college or university in New York had to borrow money to pay for college, some $20,838, more than $1,000 higher than the national average of $19,200. Then there is credit card debt. It’s not an easy life anymore. Almost all these students cannot get summer jobs because illegal aliens have taken them all.
Orbital Sciences Corp., Chandler, Arizona plant has fired 100 workers due to a sales slowdown.
The NY Fed says credit derivative dealer banks risk weakening the financial system by allowing hedge funds to borrow too aggressively. They said underlying credit exposures totaling more than $17 trillion can throw up negative surprises.
Visa USA, the largest US credit card association said its cardholders sent $318.2 billion in the first quarter, 17.4% more than a year earlier. The number of cards outstanding grew by 9.8% y-o-y. Credit card volume rose 10.1% and check card by 17.6%. Commercial and small business card volume grew 27.4%.
Moody’s is rolling out a new system later this year, which will raise credit ratings on most of the $1.2 trillion loans it monitors, potentially saving borrowers as much as $4.6 billion a year in interest. The perverse thinking is that loans deserve higher ratings because lenders usually get paid more than twice as much as bondholders when companies default on their debt or go bankrupt. If that is the case, why didn’t we make the change 100 years ago? This move is simply to shore up corporate balance sheets for spurious reasons because of looming hyperinflation and recession. They must think we are dumb.
The MBA says weekly mortgage applications rose 4.6% last week from the previous week. Year-on-year they are down 14.7%. Apps for purchases rose 2.4%, while refinancings increased 8.4%. Refinancings accounted for 35% of all loans, up from 33.8% the previous week. ARMS accounted for 29.9% of loans, up from 28.5%.
The failure of FTAA, thanks to Venezuelan President Hugo Chavez Frias, forced George and the neocons to end run FTAA and secure separate individual trade pacts. These bilateral pacts have forced Canada, China and Europe to seek their own separate deal at the expense of the WTO. The result is a number of conflicting agreements that will do more harm than good. This is shooting WTO, NAFTA and CAFTA full of holes and we are happy about that. The US tact of competitive liberalization is dead and that signals the beginning of the end of free trade and globalization, as we have known it. The failure of the Doha Round was the first step in the direction of failure. Another signal of failure was the appointment of a technocrat, Susan Schwab as US Trade Representative. She’s a lightweight, which is another signal there will be a change in direction. These bilateral trade agreements won’t stand up to any negative financial or economic pressure that a larger agreement like FTAA could insure.
The Neocons have implemented trade agreements with eight countries so far and it’s seeking nine more. The answer for us is an end to WTO, NAFTA and CAFTA.
The Conference Board tells us the economy is cooling off. The index of leading economic indicators fell 0.1% in April, with only 3 of the 10 indicators improving. The coincident index rose 0.2%, while the lagging index rose 0.3%. Before we commit to slowdown we want to see May and June’s numbers.
There is no question in our minds that the dollar’s days as a reserve currency are coming to an end, and there really isn’t a viable replacement as world reserve currency. The Euro cannot do it. One interest rate fits all doesn’t work, and the EU still doesn’t have a Constitution and we don’t believe they’ll ever get one. They did things backward. It should have been the Constitution first and then the Euro, but greed and the quest for world government got in the way. That leaves the lone contender as the world’s new currency to gold. Gold doesn’t have to address a declining population, major unassimable immigration- both legal and illegals – cultural dislocation, enormous country fiscal debt, social unrest and different forms of welfare statism.
Gold owes no one anything. It has been a store of value for centuries, a safe haven in a political, economic or financial storm. It can be used as an anchor for other currencies. The gold solution is simple – a no brainer. The opposition is the elitists, central bankers and politicians. They want the ability to create fiat currency. The excuse is in today’s global economy a gold standard is too restrictive. They want leverage and gold doesn’t allow that. We have already witnessed what shambles fiat currencies have led to in our monetary systems. Central banks cannot be trusted to apply the precepts of sound money effectively. They have already demonstrated that. We need transparency and direct financial responsibility for failure. We do not want to hear sorry about that and the culprits walk off into the sunset. A gold standard system has to be policed by private interests, not government hacks. Government bailouts have to end, and the US government either has to settle now with creditors or go bankrupt before venturing a gold standard. Fixed exchange rates will be official and operated by private interest. They would also declare devaluations. This way everyone knows where they are at all the time. It’s easy, painful and fully achievable and it will happen, but only under the worst of circumstances.
Judith Miller, former NY Times reporter, who released information on Valerie Plame Wilson, says an anonymous White House source told her in July 2001, that an NSA intelligence report predicted a large al Qaeda [funded and planned by CIA/Mossad] attack, possibly on the US. That was 7/4/01. She and her editor Stephen Engelberg decided not to do the story, which today they regret. She suspects people in counter-terrorism were trying to get the word to the President through the press because they were not able to get listened to themselves. The State Department citing the AIPAC leak case as basis are denying employees of AIPAC with dual citizenship security clearances.
The Neocons are trying to scare India into not doing a natural gas pipeline deal with Iran. The US said Tehran was unpredictable. They made the Indian government aware of US legislation that might affect any investments in Iran. The US said they would help India with its energy needs, not only with the civil nuclear cooperation, but with other agreements, such as clean-coal technology, expanding efficiency of power transmissions, solar, wind, all of these things.
James Tobin, 45, President Bush’s reelection campaign advisor was convicted on two telephone harassment charges. He could get two years. The Republican Party paid his $2.5 million in legal fees. Tobin made over 800 hang-up calls.
The Fed of Philadelphia’s index of general economic conditions for May rose to 14.4 from 13.2 in April.
Rents, a large part of the CPI, rather than house prices, that lay dormant for six years are rising and so is the CPI, until, of course, they change the formulas again, which they do frequently. Rents in Los Angeles were up 7% last year, double the rate of increases of recent years. The occupancy rate is 97%. Two-bedrooms in Hollywood are $1,900 a month and in West LA it’s $2,460. This situation will add to inflation for the next three years.
We want to comment again because it’s so important, on Rep. James Sensenbrenner’s (R-WI) Internet Stopping Adults Facilitating the Exploitation of Today’s Youth Act – or Internet Safety Act. If it becomes law it will be only a matter of time before the International Forecaster will no longer be able to publish. The proposal is that ISP’s be required to record information about Americans online activities so that the police can spy on anyone on the net more easily to conduct criminal investigations. Sensenbrenner has deliberately written legislation that is deliberately vague; so that any agency of the government and law enforcement can do anything they please to invade your privacy. The very minimum is a collection of user names, physical addresses, Internet Protocol addresses and subscribers’ telephone numbers have to be retained. That would allow our Attorney General to order Internet providers to retain records of e-mail correspondents, Web pages visited, and contents of the communications. So-called law enforcement takes total precedence over the rights of citizens. You will be spied upon 24/7. Furthermore anyone who publishes the truth will be regarded as an enemy of the state – a terrorist. If ISPS’ don’t comply they will be fined and imprisoned for up to one year. The supposed reason for the law is to catch child pornographers and pedophiles. If they want to do that all they have to do for openers is go to the White House or see George H.W. Bush and Henry Kissinger. The European Parliament has already approved such legislation for the Internet, telephone and voice over Internet Protocol (VOLP). The law opens the door to government fishing expeditions and unbounded data collecting. The first thing on Sensenbrenner’s agenda is to go after all alternative news sources and get them off the Internet so the public cannot access the truth. It is very important this bill is defeated. Please send this message on to others, and you and they contact everyone in Congress to stop this monstrosity. Yes, and remove Sensenbrenner from Congress.
Early signs are emerging that many people are unable to keep up with their monthly mortgage payments. There is a rising delinquency rate on home mortgages that were just issued last year. Lax lending standards encouraged by the Fed, Treasury and Fannie Mae and Freddie Mac have buried many homeowners. The main culprit is Sir Alan Greenspan. He’s long gone making speeches, consulting and joining elitist corporate boards making tens of millions of dollars a year. Loans made three years ago are to some extent protected by home equity unless it’s been withdrawn. The loans two years old are very vulnerable and those made last year are super vulnerable; 29% of borrowers who took out mortgages last year have no equity in their homes or owe more than the house is worth.
Borrowers who used adjustable rate mortgages in 2005 were three times more likely to be delinquent on their payments after the first year than those who took out ARMS in 2003 and 2004. Buyers who were delinquent were more likely to have lower credit scores and to have taken out piggyback mortgages, which combine a mortgage with a home equity line of credit. Delinquency rates are shooting up in California, where only 14% can qualify for a 30% year fixed mortgage. Excluding the results of Katrina, delinquencies in the fourth quarter were 4.55%. With Katrina they were 4.7%. The next three years will be nasty in the real estate market.
Last week the G-7 told us that the IMF would handle a soft landing for the dollar. We said they have never done anything right. Now, IMF Managing Director Rodrigo Rato has named a panel of advisers, such as Sir Alan Greenspan and ECB President Jean-Claude Trichet to evaluate how to finance IMF operations. They want to buy $8.7 billion in bonds for income to operate. They would have had that income but Argentina and Brazil paid off their debt and the IMF lost $110 million in income. Incidentally, they have $200 billion available to lend. Other advisers are Andrew Crockett, President of JP Morgan Chase International; Mohamed El-Erian, President and CEO of Harvard University’s management company; Tito Mboweni, Governor of the Reserve Bank of South Africa, who is plain dumb; Guillermo Garcia of the Bank of Mexico; Hamad Al-Sayari, Governor of the Saudi Arabian agency and Zhou Xiaochuan, governor of the People’s Bank of China.
Japan wants to hike interest rates as the economy booms. GDP is up 1.9% far more than the 1.1% expected. The BofJ cannot hike rates or global stock markets will be in chaos. They have to pick an easy spot and there is none. In the meantime, their inflation is headed straight up.
Mortgage rates this week hit their highest level in four years, as we predicted they would. Freddie Mac says the 30-year fixed rate mortgage was 6.60%, up from 6.58% the previous week. The 15’s rose to 6.20% from 6.17% and the one-year ARM was 5.62% unchanged.
Scott Silverman, chairman of the Board of VeriChip Corp., has alarmed civil libertarians by promoting the company’s subcutaneous human tracking device as a way to identify illegal aliens, immigrants and guest workers. Sorry, we’ll find a better way Scott. Once they finished working on that group we’d be next. This we can promise you is something the government is seriously considering. They are presently considering chipping our troops with RFID chips to replace dog tags and to deposit medical records within the solder.
The president says Congress can oversight security. This maneuver is just a method of letting a toothless and impotent Congress save face. The terms on which they receive the information he lets them have will include a promise not to publicly criticize its limitations. That will be deftly embedded in a general nondisclosure agreement. The threats are prosecution and jail if anyone breaks the promise, plus revocation of the entire oversight agreements for all persons. This and NSA spying is serious, but the administration is about to give itself permission to make an all-out attack on Iran. We’ll see if it will materialize.
On Friday, the Fed added $5.5 billion in repurchase agreements, again causing the repo pool to remain unchanged at $110.115 billion. The Fed obviously finds this sufficient.
Taxpayers will soon get a surprise bill that could exceed $1 trillion for the cost of paying future medical benefits for state and local workers who retire. They have set aside $2.5 trillion to help pay for 190 million civil servants and 7 million retirees, but they have set aside almost nothing to pay for retiree medical benefits.
We anticipate a taxpayer revolt. The burdens on local government are so great that we’ll probably end up with national health care. If that happens, like in Canada, most of the best health professionals will leave.
As an example, NYC’s liability is $50 billion and the city’s entire budget last year was $53 billion.
The federal government also has a $2.3 trillion unfunded liability for medical and disability benefits promised to civil servants and military personnel who retire. The shortfalls in Medicare is $33.4 trillion and in Social Security $4.6 trillion. It doesn’t look good.
Despite the median price for single-family homes rising in the nine San Francisco Bay area counties to $664,000, up less than 7% from a year ago, sales tumbled to their lowest level in five years, down 25% in April. Summer, the biggest sales period of the year, should be interesting to say the least.
Our Senate voted English our national language, but not our official language.
At the Senate intelligence hearing this week, Sen. Dianne Feinstein asked General Michael Hayden is “waterboarding” an acceptable interrogation technique. He replies let me defer that to closed session. A new face, old evasion and obfuscation.
The global derivatives market expanded to a record $298 trillion in the second half of 2005, led by a 34% increase in contracts to insure debt payment, says the BIS, Bank for International Settlements. Total credit-default swaps rose to $13.7 trillion.
Sir Alan Greenspan says, “Home sales are off, applications are off, everything is going in the same direction. The boom is over, and you can say that with a fairly strong degree of confidence.” No kidding Dick Tracy – we forecast the fall last June and it began last September. As always, Alan was one-year behind the curve. What Alan is really saying is prepare for the great dark pit, which I planned for you.
They are at it again. The Justice Department is accusing Abbott Laboratories of vastly inflating prices of its drugs as a part of a fraudulent billing scheme alleged to have cost government health programs more than $175 million over 10 years. They raised the price of the intravenous antibiotic Vancomycin as much as 18 times what it charged, knowing that the Medicare and Medicaid programs would reimburse the providers based on the manufacturer’s price. This is a whistle-blower claim. Their greed has no boundaries.
Venezuelan President Hugo Chavez Frias says he will consider putting the sale of oil in Euros. He said in London he felt the EU had made a great contribution with the euro. Since last October, Venezuela has transferred a large portion of its $30.4 billion of foreign reserves out of US Treasures and into banks and other financial instruments in Europe.
The Dow had a bad week – off 2% and S&P fell 1.9%. The 2-year Treasury yields declined 4 bps to 4.96%, the 5’s fell 12 bps to 4.96% and the 10’s fell 14 bps to 5.06% as the Fed strongly bought bonds to buoy the market.
The MBA Purchase Application Index gained 2.4% last week. Purchase applications fell 8.6% y-o-y with dollar volume off 4.1%. Refi applications gained 8.4%. The average new purchase mortgage jumped to $238,000, while the average ARM was little changed at $346,700.
It is absolutely no wonder the Fed doesn’t want to publish M3. Bank credit surged $43.3 billion to a record $7.890 trillion, with a y-t-d of $384 billion or 14% annualized. Year-on-Year its up 11.3%. Securities credit was up $8.6 billion. Loans and leases jumped $34.7 billion for the week which is out of sight, with a y-t-d gain of $121 billion or 11%. Commercial and industrial loans have expanded at a 16.5% rate y-t-d and 14.5% y-o-y. Real estate loans rose $9.4 billion, up 10.5% y-t-d and up 12.8% y-o-y. Consumer loans were up $1.2 billion and securities loans expanded $16.9 billion. Other loans were up $7.3 billion. Large time deposits gained $1.6 billion. M2 dropped $23.9 billion to $6.770 trillion. Year-on-year its up 4.4% and y-t-d 3.3%. Money market fund assets jumped $13.4 billion to $2.058 trillion. Total commercial paper jumped $8.1 billion to $1.767 trillion. Total CP is up 18.6% y-t-d and 16.6% y-o-y. Asset Backed Securities, ABS issuance, was up $17 billion. Year-to-date total ABS issuance of $261 billion is slightly ahead of 2005’s record pace, with y-t-d home equity loan ABS sales of $184 billion, 10% above last year. Fed foreign holdings of Treasury paper and Agency securities increased $3.4 billion to $1.624 trillion. Custody holdings were up $105 billion y-t-d, or 18.0% annualized and $220 billion or 15.7% y-o-y.
The head of a group of Federal Air Marshals says the service is badly broken. Right now they cannot protect the public. It’s not that they are not proficient, but because the Department of Fatherland Security, won’t let them do their jobs. Air Marshals are not able to work undercover because check-in and boarding procedures at airports make it impossible for them to maintain their anonymity. Everyone on the plane ends up knowing who they are. They have pursued the matter for three years and there has been retaliation by the service. What a government.
Former Tyco CEO Dennis Kozlowski, now serving time for stealing hundreds of millions of dollars has agreed to settle tax charges for $21 million to the State of New York.
Boeing will pay $615 million to end federal investigations into its illegal hiring of a high-ranking Air Force official. This is the largest penalty ever paid by a defense contractor. As usual, the connected elitists don’t go to jail.
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Analysts have said that two factions are coordinating over the shape of the future Fascist New World Order. One faction, represented in the Republic party, are the Nazis (remember, the Bush Dynastry traded with the Nazis) and the other faction, represented in the Democratic party, are the Communists (remember, the Rothschild and Rockefeller banks also funded the Communists). They are of course working for the same Rothschild/Vatican-Jesuit/Masonic dynasties, using the rest of the World’s peoples as their pawns. Now, let’s see what some of these guys are upto lately towards their drive to create the U.S.S.A. modeled on the U.S.S.R./Nazism with more details from the International Forecaster.
THE INTERNATIONAL FORECASTER
MAY 2006 (#3) Vol. 10 No. 5-3, P. O. Box 510518, Punta Gorda, FL 33951-0518
An international financial, economic, political and social commentary. Published and Edited by: Bob Chapman
E-mail Address International_forecaster@yahoo.com www.theinternationalforecaster.com
There is no question in our minds that Vice President Dick Cheney believes he is the reincarnation of Herman Goring. 9/11 was the elitist version of the Reichstag fire and it was the operative event that was used to introduce forms of dictatorship that had been formulated years before when Mr. Cheney was Secretary of Defense under George H. W. Bush. The vehicle for total control of the American people was the USA Patriot Act and following legislation.
After that was accomplished military and intelligence operations were taken out of the hands of government and into the control of private and public corporations. This was the transition to the corporatist fascist state. After George H. W. Bush was defeated for a second presidential term Mr. Cheney took over as CEO of Halliburton. Later he and George P. Schultz, who was the CEO of Bechtel, formed the Bush-Cheney team for the presidency. We know what transpired and after in office with Cheney crony, Don Rumsfeld, the lies began and at the same time military and intelligence was in part turned over to Halliburton, Bechtel, Carlyle and other crony companies. This is when this triumvirate took over the entire American intelligence operation.
What has followed is the worst corruption in modern times. Not only the stealing, but also the spying on Americans, privatized torture, abuse and murder and holding people without charges for years and kidnapping them off the streets of the world in violation of the sovereign laws of other countries. This is what murderous dictators do.
Through globalization, private mercenary armies, private secret police forces all run by firms such as Halliburton and Bechtel, anyone who speaks out is hunted down and silenced or murdered. Via globalization, which is the elimination of the nation-state, power is transferred from the nation state to elitist transnational corporate cartels. The system becomes totally predatory. First it’s the elimination of whole industries, then public investments, then governments and then the world.
The table is set by the creation of perpetual war for perpetual peace. The masses are eventually against the wars but are powerless to stop them. The wars are theatre devised as distraction to keep the citizens focused on what is a stage play, as the globalists steal your freedom, livelihood and your entire way of life. This is to be the recreation of Imperial Rome via the financer oligarchy and the control of America’s vast military machine. A world system of interlocking syndicates, which rule people, not governments. This is how we know financial collapse is in process. It has been used many times before albeit unsuccessfully. This is a threat to civilized life, as we have known it. Justice is first perverted and then destroyed. You cannot defend your rights against the state if they own the system. Power is being transferred from the nation-state to the international financial interests. This is not only treason; it is the destruction of our laws and culture. This has to be reversed and the only way to affect that legally is to take over Congress in the next election, voting almost all of the participants out of office and then impeaching our President and Vice President. If we are unsuccessful in doing that, then the only resort left will be revolution.
One of the top priorities on the Illuminists’ agenda is the privatization of national security, better known as the Princeton Project. It is to affect the expansion of the privatization of military functions through private military companies, or private mercenary armies.
This is funded in part by the Ford Foundation and is co-chaired by George Schultz of Bechtel and Felix Rohatyn, a powerful financier and strong backer of Israel. This group is attempting to eliminate the sovereign nation-state, by outsourcing to multinational corporations, virtually all national security and military functions, including all non-combat as well as core combat functions of the military itself.
This transfer in power, privatization, will be justified by the perpetual global war on terrorism. It will be readily acceptable to the public because their children won’t be drafted into the military. Those who choose the profession will eliminate the need for that. This process has already begun as quasi-private bands of commandos are sent around the world with a license to kill, and domestically to spy on American citizens. The personnel for these operations come from Delta Force, Navy Seals, Green Berets and other special military units. They are given temporary leave to work for private contractors and later can return to active duty with no loss of rank or service time. When killed on mission they are not counted among US casualties. In finality there is no difference between military and mercenary. This marks America’s slide back into feudalism. Needless to say, the public doesn’t have a clue that this is what is being done to them.
It is the intention to carry this kind of privatization beyond security services. Thus, our military will be run for profit by transnational conglomerates that have a vested interest in perpetual warfare for profit. This movement started with the demise of the Soviet Union, but the insider relationships go back to the 1960s. In fact, Schultz, Rohatyn and Kissinger were the key planners of the CIA overthrow and murder of Chilean President Salvador Allende, and the installation of the military junta of Augusto Pinochet, whom they later threw to the dogs. This is a key part of America’s elite, those who hold all our institutions and people in contempt.
This is the beginning of the formation of an SS similar to that of Nazi Germany, Men and women who swear allegiance to corporations and not to America. These will be organizations in service to the state, which will be made part of the budget of the Defense Department and have special legal status. These mercenaries operate beyond the law and totally apart from what will serve as the American Army. Once all is in place we will have dictatorial government.
In Iraq, these mercenary armies have received $150 million and $200 million additional that cannot be accounted for. These are overcharges by the contractors. We have already had massive privatization of military functions, logistical support, combat engineering, intelligence and interrogations not to mention combat. These contracts are so well entrenched that they already control our military. There are more than 150,0000 contractors in Iraq alone. That really means we have 300,000 personnel in Iraq, not 150,000.
One of the most freighting aspects is the DOD Counterintelligence Field activity whose mission is to develop and manage DOD counterintelligence programs, technology, critical infrastructure, economic security and US interests, against foreign influence and manipulation as well as to detect and neutralize espionage against the department is that it operates secretly. Its budget is classified and all we know is that there are 1,000 employees and that 70% of its work is contracted out. Their mission includes roving patrols around military bases and facilities to surveillance of potentially threatening people or organizations inside the US. It also identifies and assesses threats from foreign intelligence services, terrorists, and other clandestine or covert entities. They have psychologists for support as well as a team of renowned forensic psychologists who are engaged in risk assessments of the Guantanamo detainees. They are also used to direct torture. Talon, another arm, is engaged in a massive domestic surveillance program, targeting antiwar groups and other political activists, with no al Qaeda or other terrorist link. That is you and us. This is achieved in part by data mining, the cross-grid scores of government and commercial databases, containing credit information, employment records, and other personal data on millions of law-abiding Americans. This is a legacy of Adm. John Poindexter, who probably still is connected to CIFA.
The global association of mercenaries has its own association to promote the privatization of war, the International Peace Operations Association. That name is right out of Orwell’s 1984. These are nothing more than murders for hire. The cabal has been successful so far. They are now supplying 50% of the personnel for war. The profits are giant and usually on no bid-contracts. This is where our country is headed and we had better stop it. If we do not, we’ll all end up in internment camps.
There is nothing random or unlucky about the coming fall of the dollar. Economic and financial policies in place for years guaranteed that we would have a dollar crisis. It has arrived and the carnage will be spectacular after all is said and done. Since 1971, the dollar has been a salvage operation. Bailout after bailout: 1974, 1982, 1990, 2000 and today. It’s a wonder the dollar has held up as the world’s reserve currency as long as it has. The dollar bubble has been pricked and it is headed down. The elitists cannot force the nations who continually revalue their currencies to stop. There are more than 150 currencies doing it led by China. The US rather than implement tariffs are devaluing the dollar. The problem is that will solve very little. The global savings glut as it is called is about to end. Nations won’t have to borrow or buy dollars to keep their currencies weak. The dollar is officially going to devalue. In that process two-thirds of international reserves that are in dollars will suffer major losses. We would also expect the $2.6 billion in dollar flow each day will eventually cease and that problem will have to be solved by the Federal Reserve buying U.S. Treasury securities and monetizing them, which is highly inflationary. This is one reason why it’s been so easy for us to predict interest rates. If the dollar is falling, higher interest rates are not going to help much. Investors are finally starting to catch on and they are bailing out of dollar-denominated assets. Next they’ll be joined by small countries and then large countries. This will take two years and the fallout will be gruesome. This is why gold, silver and commodities are over performing and will continue to do so. Investors are saying where do I go that is relatively safe and that I can offset world inflation? They have no other alternative than gold and silver and commodities. We have been long gold and silver assets for six years and our subscribers are doing very well, but we are the exception.
International elitists and Fed policy now demand a weaker dollar; weakening as slowly as possible to avoid a panic. Those who believe the decline will be orderly are mistaken. The root of the problem has not been solved and that is excessive dollar liquidity creation and an incessant outbound flow. That creation of excess liquidity has not stopped; it has gotten worse. Look at our weekly statistics. It’s no wonder M3 was terminated. Now we have an official policy of dollar devaluation and at the same time massive creation of monetary aggregates. A hyperinflationary depression is on the way and it is being aided and abetted by other major central banks that are raising interest rates like the Fed and at the same time increasing monetary aggregates by more than 10%. No one wants to be left out of the upside action while it lasts, because it won’t last much longer. One of the reasons for this continued great outpouring of liquidity is that the US real estate market is dead and falling. All those cash-out and equity loans are history – at least as we have known it. In order to support and liquefy the economy, now that mortgage borrowing is going to be history, Americans have to be forced deeper into debt with freely accessible money. The consequence of a lower dollar is higher import prices and higher inflation. That will be accompanied by ever-greater volatility and more as more money and credit enters the system. That means world stock, bond and real estate prices will fall. As we just saw last week, import prices are moving aggressively higher. The G-7, IMF, “Plaza-lite” Accord will be anything but lite. This will be a blood bath. Even if the dollar decline is “orderly” it will none the less be nasty. All the central banks are doing is buying time.
This past week we saw the first trial balloon on the campaign of Jeb Bush to become the next Republican nominee for president. The neocons have been accumulating funds for Jeb for six years in an attempt to extend the dynasty. We are sure the voting fix is being prepared as well. Jeb Bush is far more dangerous than his lunatic brother because he’s smarter. George’s comment was prepared. These people only speak when it is to their advantage. This was no off-the-cuff remark.
The neocon Gestapo marches on. A Cleveland woman was manhandled and charged with two felonies for trying to display anti-Bush posters. She was then jailed in a psychiatric unit, which was highly unusual and outrageous. The judge said she suffered from mental problems and that her opposition to Bush makes her delusional. Off to the gulag Soviet style. Only in America.
Former NSA staffer Russell Tice will testify to the Senate Armed Services Committee this week that not only do employees at the agency believe the activities they are being asked to perform are unlawful, but that what has been disclosed so far is only the tip of the iceberg. He says former NSA head Gen. Michael Hayden, Bush’s nominee to be the next CIA Director, oversaw more illegal activity that has yet to be disclosed. Tice will tell the NSA conducted illegal and unconstitutional surveillance of US citizens while he was there with the knowledge of Hayden. We suspect he’ll go into the Echelon program, which is a massive system designed to intercept virtually all electronic communications throughout the world. Phone calls, fax traffic and e-mails are analyzed despite laws in every country banning such activity, including the US. The system was developed in 1947, and was taken over by the NSA in 1953. The operations at Fort Meade worked from Men with Hill in England. It was used during the Cold War era to keep an eye on the Soviet Union. We also had stations for all kinds of electronic intercepts throughout the world, we know we were there and we were involved in it. We can only remember of two instances in which we were aware of spying on others than the Soviet Union and its satellites - once on our own field units and other times on British and French aircraft.
Echelon was designed primarily for non-military targets: governments, organizations, and business in every country. It can also be considered industrial espionage. The analysis was based on key works like money, stocks, drugs, etc. We did not work on Echelon but we knew all about it. Echelon concentrated on foreign nations up until 1985 and it then started monitoring Americans.
As we all now know, tens of millions of phone calls by US citizens and others in the US have been monitored by the government since 2001. The phone companies now must answer for this invasion of privacy and explain their willingness to violate the Constitutional protections of the Fourth Amendment, in addition to violating provisions of the 1978 law governing spying on US citizens. The bottom line is our government is at war with its citizens and we have our own government as our enemy. The corporate fascist interests that run our country want to establish unilateral control over everyone and everything, and if you expose the truth about what they are doing you are the enemy. We are the victims of state terrorism.
Two weeks ago the Iranian government said it would soon open its oil bourse. At the same time the G-7 said they were giving the job to the IMF of bringing about a soft landing for the dollar. Since then the dollar has plummeted from 90 on the dollar index to 84, and the euro has climbed from $1.21 to $1.29. The reality of the matter is the neocons couldn’t find an excuse quick enough to invade Iran. Iran will trade oil in euros and after a few months that will put pressure on the dollar. It means that countries that have lots of dollars can sell dollars and buy more euros or gold. It will also end the era of the US dollar as the world’s reserve currency. The dollar will correct 60%. The dollar index should fall to about 50 and the euro should rise to about $1.60 to $1.90. This event will transpire over the next two to three years and cause a crisis bigger than the depression of the 1930s.
Generally speaking very few people know of this event and its ramifications. Our media has blacked it out. Foreign central banks hold two-thirds of their reserves in dollars so they will face severe losses as well. There is no question in our minds that the US will go bankrupt and there will be a debt workout of something like $0.30 on the dollar. Our country has been stripped of its ability to compete due to WTO, NAFTA, CAFTA and almost the complete destruction of our manufacturing capability. In order to revive our economy protective tariffs will have to be put in place because otherwise there will never be a recovery. We cannot compete with slave labor and we have not been able to do so since the inception of our country. Once the dollar falls we won’t be able to service our debt in spite of hyperinflation and the bottom will fall out. That is when the new World Order elitists will use worldwide depression to seize assets and implement a police state. This is why you have to get out of debt and into gold and silver related assets.
From time to time we hear about Non-Governmental Organizations, NGO’s, many of which have gotten themselves in hot water and rightly so. Some countries now require them to register. George Soros’ fronts, the “Open Society Institute” affiliates, have been shut down in Eastern Europe; and Venezuela has charged the Súmate NGO leaders with treason. These are the heirs of the missionaries who served as scouts for corporations and governments. Today NGO’s may be international organizations or grassroots groups. Some of the funders are American Express Foundation, Carnegie Endowment for International Peace, AID, Canadian International Development Agency, Bristol Myers Squibb, Ford Foundation, Harvard, Oxfam and the UN Development Programs, all controlled by the elitists to do what they cannot do under government auspices, like foment revolution or radical change. They, under the guise of bringing democracy, open the door for foreign capital and business, resource extraction and military adventurism or training.
Then there is the US National Endowment for Democracy, created by Congress in 1983 to do openly what the CIA had been doing during the Cold War as covert activities. Used as pass-throughs, under covert funding, are the NEA, American Newspaper Guild, the National Student Association Act and a myriad of other phony foundations, groups and corporations. You can include as well the Chamber of Commerce, AFL-CIO, the National Democratic Institute for International Affairs and the International Republican Institute. There are hundreds more funded by taxpayers or by the sale of narcotics. We must not leave out the Mott Foundation, Smith-Richardson and Mellon-Scaife Foundations.
The list goes on and on and the US and Canada are not alone in using fronts to further their interests. Germany, France, the Netherlands, Greece, Italy and Sweden fund their political parties foundations. Then there is the EU, UNICEF, WHO, UNESCO, UNDP and FAO, all propaganda fronts for international socialism. Even the World Bank, WTO, IMF AND NAFTA.
There are extensive grant programs from Rotary [Masonic], American Friends Service Committee and Oxfam, American Federation of Teachers Fund and Boeing Employees Fund.
These public and privately financed fronts, called NGO’s, have worked together for years – fund and direct violent and non-violent overthrows of governments and assist in assassinations. In the late 1950s we read a book entitled, “The Ugly American.” It was about how USAID worked in Asia and was made into a movie, so this is nothing new.
The specialty of almost all of these organizations is destabilization, the creation of mobs preventing elected governments from ruling, stuffing ballot boxes, chaos and violence. They funded the civic Forum in Czechoslovakia, Solidarity in Poland, Union of Democratic Forces in Bulgaria, Otpor, groups within the USSR and the Orange Revolution in Ukraine.
The NED, Rockefeller, Ford and Soros groups move professional dissidents from one country to another fomenting problems. Wherever there is an opening these elitists’ fronts step into fray and take advantage of the situation to further globalization or control. So when you hear NGO take a hard look because anything they are doing is not in your best interests.
Our Vice President Dick Cheney has just spit in our face again. He does the outrageous and hopes to get away with it. He continues to argue that NSA should intercept purely domestic telephone calls and e-mail messages without warrants in the hunt for terrorists. This in spite of the fact that the majority of Americans are against such violations of their personal rights. In actuality this program was designed and promoted by Gen. Michael V. Hayden when he ran the NSA in 2001. This man was the principal architect of the plan, so now they want to put him in charge of the CIA. Hayden really believes the spy program is legal. This man has to be a fascist sociopath. It is illegal for the NSA to violate FISA and it’s as simple as that. In fact, it isn’t even within his venue or job to defend such a program in behalf of the Neocons. If this man runs the CIA we all have much to fear. He is as crazy as the rest of the cabal in the White House.
Kuwait has revalued the dinar for the first time in 17 months, which sparked a rally in regional currencies and intense market speculation that Saudi Arabia would follow. The devaluation is against the US dollar against which the dinar is pegged. That is a sterilization process to combat inflation.
The Democrats won’t attempt to impeach President Bush and VP Cheney. They don’t want the issue as an impediment as they try to remove Republicans from office in November. In addition, many Democrats have been compromised or bought off. It is incredible that they can say they won’t impeach even after the November election.
The Army Corp of Engineers has cancelled the work remaining on a $70 million project to refurbish 20 hospitals in Iraq, deepening a dispute with Parsons Engineering, one of Americans largest contractors operating in Iraq. That leaves 8 hospitals to be completed by another operator. There were 150 that were supposed to be completed.
As we write this on Sunday we see versus the dollar over the last month the Yen is up 7.48%, the Euro 6.09%, the British pound 7.86% and gold moved up 19.33%. What would you expect when the Fed intonates that they’ll have one or two more interest rate increases and the G-7 says the dollar has to be managed downward. Fed Chairman Bernanke has two choices, increase rates and have a slowly descending dollar, and a slowly descending economy, or keep rates the same and see the dollar plunge. Whatever the choice and we believe it will be higher rates, it will be a long time before rates can be cut. Every business day the US economy needs $3.5 billion of new net flow of money from foreigners to finance the current account deficit. If it stops the dollar plunges and perhaps the US slides into bankruptcy and the dollar is no longer the world’s reserve currency. The world’s other central bankers are sending a message as well, they sold a net $14.4 billion in US assets this month and we still have two weeks to go. That is the most since 8/98, which is significant. These banks cannot be aggressive. They do not want to drive the dollar lower if they can help it because their foreign exchange reserves are 45% to 63% in US dollars. This means the dollar can go nowhere but down, as we have predicted for some time.
Sir Alan Greenspan ducked out after he increased M3 $4.3 trillion in six years of the Bush neocon administration. That is about $717 billion a year. This of course is in part what is keeping the stock market at current levels and that credit and money Bernanke keeps pouring only adds fuel to the inflationary fire in an attempt to keep the US economy from deflating. Why would any sane person want to hold dollars? The trade deficit will be $800 billion and we believe foreigners have finally had enough of US monetary, fiscal and personal profligacy. It took them six years to catch on. Let’s hope it doesn’t take six years for them to discover their salvation, the only real currency gold and gold related assets. The kindness of strangers is at an end. US debt is increasing at five times GDP, as household debt knows no end, increasing 12%. As interest rates rise and house prices fall there will not be $640 billion available to spend from home equity like there was in 2005. Consumption will fall from 71% of GDP to 64.5% or less. That $2 trillion taken out of home equity over the past five years will no longer be available again. In the first quarter, 88% of loans that were financed were done at least 5% above their previous mortgages. This is the most since 9/90, when the last real estate collapse occurred. All the money has been spent, there is no savings and personal debt is colossal. Bernanke is still feeding the monster - just look at the credit expansion figures every week. They are out of sight. Credit of all types averages about 14% and the money supply is climbing at 9 1/2% to 10%. If you middle them you have 12% and most major countries are doing the same thing. The amount of money borrowed by Americans is far beyond sanity. It’s like the one last big fling. No one, including government, seems to care as mortgage foreclosures jump 72% in the first quarter. As rates go higher foreclosures will mount exponentially. Home sales are off more than 2%, inventories have doubled in months and prices are down nationwide almost 4%. The market has topped and is descending as real estate loans expand 11%. What can they conceivably be thinking of? The economy has topped out and there is only one way to go and that is down. Wait until the rest of the home equity is gone. You will hear a great thud just like you heard in California in 1990.
These catastrophic circumstances are going to affect the entire world. None is going to escape unless they are in gold and silver. We are a year or two away from major bank failures. There has been no turning back for five years. The great purging has begun and it will last for a number of years. You have no idea how bad this is going to get. You must prepare yourselves. You must be in gold and silver assets.
The current war in Iraq is destroying America’s finances - $440 billion for 2007 - a budget for war bigger than the next 25 nations combined, spending this year will be more than $600 billion. This is a sure way to bankruptcy. It is no wonder the idiot in the White House has a 29% approval rating. The only positive side is Congress has a rating 5-points lower. The Democrats offer no alternatives. Then the only alternative left is, with minor exception, vote them all out of office. Both parties want to continue the war, but the Democrats say they know how to fight the war better – how stupid is that.
The American and British military are in deep trouble in Iraq and each day loses more control as the war escalates.
The LA Times says 75% of the people on Los Angeles’ Most Wanted list are illegal aliens. Nearly 25% of all inmates in California detention centers are illegal aliens and 29% of those in federal prisons are illegal aliens. Half of all gang members in LA are illegal aliens and that is true nationwide.
Now we learn our government is aiding and abetting the Mexican government in the illegal export of its citizens and worse yet, they are telling the Mexicans where our Border Patrols are stationed and where the private citizens (Minutemen) are stationed. That is as treasonous as it gets.
We told you of China’s $15.5 billion surplus, but didn’t include other important numbers. March also saw a trade deficit for the US with Japan - $7.5 billion, up from $7.1 billion in February. The deficit with OPEC was -$8 billion, up from -$7.3 billion and with the EU -$10.1 versus -$8.3. Those are poor results with our largest trading partners. [but OPEC is saving us by recycling their Petro-Dollars into the Federal Reserve System by buying US Treasury Bills]
It looks like Laura Bush is back on the weed. She says she does not believe opinion polls showing her husband’s approval ratings at a new low of 29. Is it drugs, denial or insanity? It doesn’t much matter She has to be real dumb to get quoted in such a way.
Net flows of capital into the US assets fell to $69.8 billion in March, which was sufficient to cover the trade deficit of $62 billion. International investors slowed purchases of US securities, as foreign central banks were net sellers of treasury notes for the first time in six months. In February, net purchases were $90.5 billion. There is no question there is a trend in the making. Experts expected the inflow to be $79.9 billion.
Purchases of Treasury securities rose a net $3.07 billion, down from $21.9 billion in February. Foreign central banks cut their holdings by $6.3 billion, as demand for Agency debt increased by a net $19 billion.
The UK, China and OPEC all increased their holdings again led by the US and Caribbean banking centers, which is a mixture of hedge funds and Treasury monetization purchases. They boosted holdings by $7.3 billion. Corporate bond holdings rose $48.1 billion.
Japan continues to be a small seller, selling $18.2 billion and it holds a total of $640.1 billion. China bought a net $1.6 billion in US debt in March and holds $321.4 billion.
UK holdings, which include investments from Middle East oil economies, recycled through British banks, rose in March by $16.8 billion to a total $171.5 billion. For almost a year the bulk of the buying has come out of the Middle East.
Although it is no laughing matter, we still had to laugh when VP Cheney said while in Russia that Mr. Putin’s government in many areas of civil society from religion and the news media to advocacy groups and political parties, that the government has unfairly and improperly restricted the rights of people, and he warned the Kremlin against using oil as a tool to achieve political ends. No legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation or attempt to monopolize transportation. Mr. Putin ignored Mr. Cheney’s comments in the name of diplomacy. What he should have told Mr. Cheney was that the Patriot Acts are unconstitutional as is wiretapping and torturing and murdering people. We are not pro-Russian. We are pro-fairness and Russia is no less democratic than America. The difference is approach.
Cheney than went on to Kazakhstan where he attempted a thinly veiled snow job. He wants the Kazak oil. [he was actually bribing the Kazak politicians]. He attacked Russian oil monopolization when only seven companies control our oil supply. Is there any difference? What about all the other countries that have nationalized oil – we don’t see Cheney attacking them. The Kazak’s await an offer from Cheney for a pipeline the US would run to Europe bypassing Russia through pipelines under the Caspian Sea. Kazak President Nazarbayev wants the offer so he can get more money for his oil from Russia.
After all too many years in Eastern Europe and West Asia the US demanded what it wanted. That game is over like it or not and in spite of large war making skills.
A lawsuit is in a federal court to order President Bush, the NSA and Verizon to end a secret snooping program. The suite contends such spying violates the Constitutional right to privacy and federal law. That is $1,000 violation and a $50 billion bill for Verizon.
Democrats are asking House Speaker Dennis Hastert about the mysterious disappearance earlier this month of legislation that would stop the sale of private telephone records over the Internet. The bill, which had cleared the Energy & Commerce Committee with unanimous support had been slated for an airing before the full House on 6/12. Republicans removed it from the House floor schedule and told no one. This is what passes for Democracy today. It is thought intelligence agencies had it killed. This is probably true because an exemption had been sought for intelligence gathering activities. What the spies want is our telephone records because they are building a profile on everyone in America.
US industrial production rose 0.8% in April led by business equipment. Capacity utilization rose to 81.9%, the highest since 2002, from 81.4% in March. Further to foreign net capital flows, net foreign purchases of US Treasuries fell a large 86% to only $3.1 billion, a new 3-year low. Foreign central banks, doing something they had not done in three years, sold, net, $6.3 billion in securities. This is an ongoing reduction in foreign participation and in their exposure to US debt securities. They only bought 30% of last week’s 10-year Treasury note auction. It was their lowest participation in 15 months. In this month’s 3-year note auction they only took 24%, that’s down from 45% participation in 2004. The 2-year best month had only a 24% participation, the worst since 11/04, and the 5-year had only a 21% foreign participation rate, the worst for that security since 10/03. It is now very obvious that foreign central banks are not going to accumulate further US assets and that means monetization and inflation.
The National Association of Home Builders Index fell six points to 45 in May, an 11-year low.
More and more school systems are going to a two-tiered diploma system. This bifurcated system would have one diploma for those who pass a Comprehensive Assessment System Test and those who don’t pass that test, but do pass all their required subjects, would get a general high school diploma. Often some very bright students do not pass the state test, which we believe is ridiculous. Students with the general diploma, who obviously in part were taking up space, cannot attend college, serve in the military, or find a job that pays a living wage. Many become criminals, as do many high school dropouts. The educational systems are a total mess and getting worse. Graduates are generally an intellectual waste and we only see progress in home schooling. In California, graduates have to pass 8th grade math and 10th grade English. That’s because good teachers are so hard to find for the amount of money taxpayers are willing to pay them.
New housing construction fell for the third month in a row with starts falling 7.4%.
The PPI, Producer Price Index, rose 0.9% in March. The pundits found this acceptable, but understandably no one said that’s more than 10% a year.
The madness never ceases. Mexico says it will file lawsuits in US courts if National Guard troops on the border become directly involved in detaining migrants. We could be moving toward Martial law as a result of future rioting when illegal aliens do not get what they want.
Each day we become more appalled at the stupidity of most all people throughout the world. In America, the dumbed-down capital of the world the people sit idly by as enemies within their Republic destroy all that has been accomplished since this country’s inception. The question really is who is more corrupt, Congress or our President and his henchmen?
Out of the social, financial and economic chaos that awaits us the Illuminists, our enemies, intend to impose a New World Order. This corporatist fascist movement came into being in 1980, and it plans to deliver America into slavery in the next ten years. All advanced in age, the titans of conspiracy, want to see success before they meet their demise. We’ll get into this in depth later.
One of the hottest real estate markets in the country, San Diego, saw a 60% jump in foreclosures in the first quarter, which was the largest since 1992. We believe in the coming year home equity will melt like sugar cubes dropped into a hot coffee cup. There are 241 foreclosures in San Diego County in the first quarter.
Nationally, 323,102 properties entered some stage of foreclosure, a 38% increase from the fourth quarter and a 72% y-o-y increase. Riverside County, California had a 64% increase in default notices over the past year. The statewide increase was 29%.
The $500 billion deficit in just major company retirement plans is about to affect corporate bond investors. Thousands of companies are delinquent in contributing to pensions and they will have to disclose more information about retirement funds and health care costs in financial statements later this year. Congress is debating a new law that will force companies to start plugging the gaps in their pension plans.
New rules may require companies to use cash or borrow to meet obligations to millions of pensioners. Fixing the retirement funds could cause bond losses of $24 billion, based on investor reaction. Legislators are not going to allow the taxpayer to bail out corporate malfeasance. Our estimate for under funding is move than $1 trillion. The Pension Benefit Guaranty Corp. insurer for companies with unfunded pensions, assumed responsibility for 120 plans with 235,000 members already and they are in debt some $28 billion. The plans will be fully funded, but almost all companies will abandon them now that they cannot screw their employees any longer.
Home prices rose 10.3% in the first quarter as the median sales price for an existing single-family home hit $217,900. In the fourth quarter prices rose 13.6% y-o-y. Unfortunately, we take many statistics today with a grain of salt. These numbers come from the National Association of Realtors. Some markets that hadn’t moved up in the past moved higher and some major markets fell lower, such as Boston –1.5%, Cleveland –3% and Cincinnati –1.5%. Sixteen markets saw price falls. Thirty-nine percent of banks said demand for mortgages was weaker and 42% said they were about the same. Only 17% said demand was higher, 11% said they’d eased home mortgage lending standards, while only 1.9% said they’d tighten them. Meanwhile, 21% of banks said demand for commercial real estate loans got stronger over the past quarter. Only 16% reported weaker demand, while 63% remained the same, 8.8% tightened standards while 7% eased standards.
It is small wonder the public holds Congress in such low esteem, only six months away from election, with a federal budget deficit out of control, a war that is a disaster in every sense of the word, with military spending totally out of control and with public services being slashed, Congress gives us $70 billion in tax cuts, mostly for the rich. This comes as middle-income workers face sky-high fuel prices, soaring health costs, and variable-rate mortgage payments that are going through the roof. Not only is the tax cut politically and fiscally irresponsible, but it is obscene. We have to include the two-year extension of capital gains and dividend cuts and a one-year extension of relief from the AMT. Eighty-seven percent of the benefits of tax cuts will go to 14% of households earning above $100,000 a year; 22% of the benefits go to the richest two-thirds of 1% of households earning more than $1 million a year. Why do wealthy Americans need a tax cut? That is when the gap between rich and poor is wider than it’s been in a century. The rich now pay a smaller percentage of income in taxes than at any time in the last 75 years. We no longer have a graduated income tax, and the trickle down theory doesn’t work. The rate of new investment during this recovery has trailed the rate of investment during the three previous recoveries. Almost nothing has trickled down. Productivity is up marginally, but the current median wage of about $35,000 is what it was five years ago due to offshoring and outsourcing. While top executives are raking in 7 and 8 digit compensation packages, middle-class workers are getting screwed. Remember, all this in November, and except for a handful throw every one of these Congressmen and women out of office.
Morgan Stanley’s Stephen Roach has done a 180-degree turn. First he tells us the world financial situation is going to be just fine, now he tells us we have a commodities bubble. If he is wrong on these two issues, and he will be, his reputation will be destroyed. As we have said often, economists are captive to corporate and governmental interests and they cannot tell you the truth if they wanted too. Prices of commodities are up 200% over the past five years and they have to double again just to catch up with inflation. Mr. Roach seems to have overlooked that or the fact that inventories are at all-time lows. That doesn’t matter though. When Morgan Stanley tells him to change his tune, he changes it.
Thus, Mr. Roach tells us that, purely from the standpoint of global macro we have a bubble. Did it ever occur to this economist that all government statistics are bogus, particularly those of the CPI and unemployment? He obviously hasn’t grasped that as yet. His masters, employers, could very well be short the commodities. He doesn’t tell us whether they are or are not. If he doesn’t know we suggest he find out. As per usual, he probably doesn’t want to know.
As Mr. Roach tells us the basic premise of this new era of globalization has unleashed a powerful strain of commodity-intensive global growth that has caught a supply-constrained world largely by surprise. He is right but fails to add that this same globalization is gutting the former industrialized world and that inflation is over 10% annually in spite of lower wages. The problem is the demand has run loose and the elitists cannot contain it. If they shut off the fiat money and credit the whole system collapses. This is not a bubble. The demand is there and the supply and inventory is not there. In the case of gold and silver, it is the same but they are also driven as the only real currencies. All these nations to varying degree have cheapened the value of their currencies and so there is a flight from these currencies into real unfettered assets such as gold and silver.
Mr. Roach tells us to play the commodity bubble at your own peril, yet we see no similar admonition regarding a stock market Mr. Roach has to know is rigged. He is not dumb, so he knows. Thus again, we are treated with elitist propaganda with no one in the mainstream media or among newsletter writers who dares challenge his fallacies.
There is no question our government, England and Israel are engaged in a secret war against Iran that is similar to the part played in Afghanistan when the Soviets occupied that country. This time it’s covert operations involve the Kurdish militias and rebel Iranian elements. This harks back to our creation and employment of Osama bin Laden. Our elitist neocons are doing everything possible to foment war with Iran.
Venezuela is considering selling its fleet of US-made F-16 fighter jets to another country, perhaps Iran, in response to a US ban on arms sales to Venezuela. It has already been a long time since sensitive upgrades and replacement parts were supplied by the US. We expect Mr. Chavez to purchase new jets from Russia or China shortly. George and the Neocons say Venezuela is not cooperating. What that means is Mr. Chavez is not lying down before the Illuminist masters in Washington and London. This means prohibition on all commercial arms sales and licensing of defense articles and services to Venezuela. The excuse is Venezuela is harboring and providing a safe haven to FARC and the National Liberation Army. There is no proof of that. We would expect that once all the Citgo interests in the US are sold off that Mr. Chavez will then wean the US off Venezuelan oil.
The Washington Post-ABC News Poll tells us 69% of our citizens believe our nation is now off track, 56% say they’d prefer to see Democrats in control of Congress after the elections. When asked if they were inclined to reelect their current representative to Congress, 55% said they would look for a change. That is almost the same percentage when the Republicans took control in 1994. Democrats have an edge, but 52% said Democrats offered no sharp contrast. That in turn leaves the door open to Independents and challengers. This poll shows Bush’s approval rating at 33%, down 5% in barely a month and a new low in this poll. Bush’s disapproval ratings among Republicans has nearly doubled in the past month from 16% to 30% while his approval rating fell below 70%. Ninety percent of Democrats and 70% of Independents do not like the job Bush is doing. Only 37% believe Iraq has been worth the cost, the lowest ever, and 63% believe the war has not been worth it – a view shared by 80% of Democrats, 70% of Independents and 33% of Republicans.
Forty-six percent said Iraq was the main reason for Bush’s disapproval. They found 33% approved of the job Congress is doing. This is in stark comparison to other polls that have Congress at 25% approval – 49% of Republicans approve while 47% disapproved, whereas 70% of Democrats and Independents disapprove. Only 39% approve of the job Democrats are doing, while 58% disapprove. Sixty-two percent said they approve of the way their representative is doing their job, up from 59% last month.
Democrats hold an advantage of 52% to 40% when voters were asked whether they plan to vote for the Republican or Democratic candidate in their House district. Democrats had a double-digit lead over Republicans on 9 of 10 issues. By 2 to 1, or better, the public preferred Democrats to handle gas prices and health care. And, by double-digit margins, they preferred Democrats to handle (by 23%) education, by (18%) the economy, privacy by (15%) and by 14% Iraq, immigration and taxes.
Instead of enriching the seven major oil companies [“Seven Sisters”] we should be buying gasoline from Venezuela-owned Citgo, which helps provide medical care, food, housing and education for the poor of Venezuela. You will also be helping Citgo’s 14,000 American employees.
The bottom line on the Medicare Drug Program is that the program will eventually replace existing public and private spending on drugs with the taxpayer footing the entire bill. Once that is completed, all of medicine will be nationalized and we’ll have the nightmare that Canada now has. Seventy-five percent of seniors already had some form of prescription drug coverage even before the hugely expensive Medical Drug Bill was passed in 2003. Eventually doctors and other healthcare professionals will become little more than employers of the state.All Congress had to do was target assistance to low-income seniors who needed the most help. Instead most of the Medicare beneficiaries enrolled in the drug program were enrolled automatically, whether by employers who are getting huge taxpayer subsidies, or through the new Medicare Advantage plans. About 6.4 million Medicare beneficiaries also eligible for Medicaid had no choice at all in the matter: They were simply transferred, en masse, into the new Medicare drug program. Congress created a universal entitlement, and a universal entitlement will eventually crowd out most alternative coverage, including employer-based coverage.
While all this transpires, 75 year unfunded liabilities of the Medicare program have reached $32.4 trillion, $8 trillion from the drug entitlement alone. The hit will be heavy in 2011, when baby boomers start to retire. The answer is take everyone making over $50,000 a year and with more than $250,000 in assets off of Medicare. That will help save the system. Remember, that is us that will be cut off.
Consumer prices rose 0.6% in April led by higher energy prices. Higher rents finally figured in the increase. Year-on-year, CPI is up 3.5%, up from March y-o-y of 3.4%. For the first four months of the year, inflation is running at a 5.1% annual rate versus 3.4% in 2004. Our figures still show annualized inflation up over 10% annually for the past six years.
The Army Reserve, tapped heavily to provide soldiers for wars in Iraq and Afghanistan, is degenerating into a broken force due to dysfunctional military policies says Army Reserve Chief Lt. Gen. James Helmly. 52,000 reservists are on active duty with 17,000 in Iraq and 2,000 in Afghanistan.
The Senate voted to build 370 miles of triple-layered fencing along the Mexican border. The vote was 83 to 16 to add fencing and 500 miles of vehicle barriers. In the legislation was language that would allow citizenship for millions of illegal aliens. As this went on in the Senate, thousands of illegals and others demonstrated demanding citizenship for all the illegals. The measure doesn’t stand a ghost of a chance in the House. It’s all just politics. We have been projecting amnesty for 20 million illegals would bring in 100 million relatives and now the Heritage Foundation says the number could be as high as 200 million. That would change the entire makeup of America, as we have known it. Two-thirds of the population would be Latino.
More than a decade after US troops withdrew from Somalia, following a disastrous military intervention, the administration is secretly supporting secular [criminal] warlords who have been waging fierce battles against Islamic groups for the control of the capital, Mogadishu. If nothing else this looks like payback. The Islamic government wants the US involved in a more constructive way, but that is not going to happen. The administration refuses to answer any questions on the issue. We hear the justification for backing rebel [gangsters] warlords is to save Somalia from al Qaeda. Do they really expect us to believe that?
The Japanese yen is rallying again and is now trading in the 109 to 110 area, which all those who did not close their yen carry-trade positions are getting hurt. This could be why the US and other stock markets are getting hit hard as borrowers are forced to liquidate positions and pay loans back in yen. We believe there is billions of dollars still involved in the carry-trade and billions of dollars will be lost as a result of the trade. The door is being slammed in their face. The yen will break 109 and head toward 100 and the losses will be grievous.
PIMCO’s Bill gross really blew it on projections of the 10-year US Treasury yields. His prior range was 3% to 4.5%, which we called him on when he made the projection. We made ours 5 1/4%. He just upgraded to 4% to 5.5%. How very convenient. He had lots of excuses, but that is a very bad major call. He also tells us that global inflation remains benign, averaging 1-3% and believes dollar bases assets and the dollar should under-perform global alternatives. It is absolutely incredible that a man who controls billions of dollars in US Treasuries, via his funds, can continually lie about the economy. How can a professional miss the interest rate rise structure by 1% or 25%? Worse yet, he knows the BLS figures are bogus, yet tells us inflation will only be 3% or less. He knows inflation is considerably higher. This shows you the tremendous pressure that is placed upon money managers. These projections make Gross look like an absolute fool.
An estimated $2 trillion in home loans nationwide is expected to adjust upward in 2006-07. In Colorado, 28.5% of homeowners have 5% or less equity in their homes, and 47% have 15% or less. Only Tennessee homeowners, on average, have less equity. Increasingly, people who locked in 3-year ARMS with rates in the 4% range are finding loan rates rising by 50% or more.
Next, the downward spiral begins: They cannot afford the higher payment, they cannot sell their homes for profit, or they cannot refinance because they have little or no equity in their houses, or they’re precluded from refinancing because of pre-payment penalties. They believed housing prices would go up forever. When you combine ARMS, 100% financing, negative amortization, seller-paid closing costs, rising rates, falling prices, rising inventory and a continuing sluggish economy, you have a recipe for 1988 to 1992 revisited and then some.
A typical borrower who took out a 3-year ARM in 2003 at 4.18% could see that loan rise to 6.18% in 2006 and 7.625% in 2007. The first rise would move the payment to $1,699, a $528 increase from the initial amount, a 45% increase. Even worse, some have “Option ARMS” which gives consumers the choice of making minimum payments, minimum payments with interest, or payments with interest and principal. They can choose whether to amortize the loans on a 15-year or 30-year basis. Sometimes the rates change every month. If you don’t pay the minimum payment it is added to your loan and it is called negative amortization, which means the loan can grow with every payment. The only regions that might get a break are those that didn’t rise in value.
7.7 million borrowers took out $1.88 trillion in ARMS in 2004-2005, $368.3 billion of that amount are “loans with equity difficulty,” that are at risk of going into default. It is thought 5% could default or $550 billion of $11 trillion of home equity in the US. That means lower prices and less consumption. We contend these loans should have never been made in the first place. The piper has to be paid.
Emerging-market stocks are falling for the biggest losses in two years, on speculation that rising interest rates will cause bond yields to climb and reduce demand for assets in developing countries such as South Korea and Russia. If the Fed keeps raising rates, money will start flowing back into US Treasuries. There is also the added factor of the yen carry-trade, which is going to deprive these markets of money for investment as the trade ends.
Manufacturing activity in the New York area continued to expand in May, but at its slowest pace in almost a year. The NY Fed’s Empire State Manufacturing Index fell to 12.4 in May from 15.8 in April. This is the lowest since 10.2 in June 2005. The New Orders Index increased to 16.4 from 14.1 in April. Shipments rose to 17.3 in May from 14 in April, while the Unfilled-Orders Index rose to 2.1 from minus 2.9 in the previous month. Inventories fell to 0.8 in May from 1.6 in April. The Prices-Paid Index rose to 42.6 in May from 37.9 in April and the prices received held steady at 14.8 from 14.5. Expectations of price increases six months ahead jumped to 59.8 in May from 50 in April. That means higher inflation or less profits ahead.
Existing home sales are down more than 15% in five states that have the hottest housing markets. Down 22.2% y-o-y in Arizona, 19.2% in California, 18.2% in District of Columbia, 15.7% in Florida, and 15% in Nevada. Nationally sales fell 2.1% y-o-y in the first quarter. Price appreciation has slowed in the nation’s metro areas to 10.3% y-o-y from 13.6% in the fourth quarter. Prices fell in 15 metro areas. Of the 149 metro areas, prices are up by double-digit percentages in 60.
Homebuilders have turned negative on the housing market for the first time since just after 9/11. The NAHB/Wells Forgo Housing Market Index, a builders sentiment gauge, fell 6-points in May from a 51 to 45, the lowest level since June 1995. The index shows more builders say the market is poor than say it is good. The index has fallen 23-points in the last seven months. A year ago the index was 70.
The NAHB now expects new home sales to fall 12% this year and they expect housing starts to fall about 7%. Builders in the West remained most confident with a 60. The index fell 3-points in the Northeast to 47, two-points in the Midwest to 30 and six-points in the South to 51.
In May, builders’ assessment of current single-family home sales fell to 50 from 55. Future sales dropped to 54 from 59. The traffic of prospective buyers dropped to 32 from 39. All three sub-indexes were at their lowest levels since mid-1995.
We have more than 300 Border Patrol officers from Texas serving in Iraq. Why doesn’t President Bush bring them home to do the job they were trained to do? Bush says 6,000 guard troops will be deployed along the border for at least a year to help operate surveillance systems, analyze intelligence, install fences, build patrol roads and to train. Guard units will be reduced as the Border Patrol gains strength. They will not be directly involved in law enforcement.
First time applications for jobless benefits surged 42,000 to 367,000 in the week ended 5/13. This is due to the financial crisis in Puerto Rico.
The SEC said actions it is planning to reduce the costs of complying with the Sarbanes-Oxley corporate governance law will not include an exemption for small public companies. This is another political sellout. Now companies will go private, not form businesses, or go out of business. This is an idiotic, expensive, dreadful law.
Two out of three students who graduated in 2004 from an undergraduate college or university in New York had to borrow money to pay for college, some $20,838, more than $1,000 higher than the national average of $19,200. Then there is credit card debt. It’s not an easy life anymore. Almost all these students cannot get summer jobs because illegal aliens have taken them all.
Orbital Sciences Corp., Chandler, Arizona plant has fired 100 workers due to a sales slowdown.
The NY Fed says credit derivative dealer banks risk weakening the financial system by allowing hedge funds to borrow too aggressively. They said underlying credit exposures totaling more than $17 trillion can throw up negative surprises.
Visa USA, the largest US credit card association said its cardholders sent $318.2 billion in the first quarter, 17.4% more than a year earlier. The number of cards outstanding grew by 9.8% y-o-y. Credit card volume rose 10.1% and check card by 17.6%. Commercial and small business card volume grew 27.4%.
Moody’s is rolling out a new system later this year, which will raise credit ratings on most of the $1.2 trillion loans it monitors, potentially saving borrowers as much as $4.6 billion a year in interest. The perverse thinking is that loans deserve higher ratings because lenders usually get paid more than twice as much as bondholders when companies default on their debt or go bankrupt. If that is the case, why didn’t we make the change 100 years ago? This move is simply to shore up corporate balance sheets for spurious reasons because of looming hyperinflation and recession. They must think we are dumb.
The MBA says weekly mortgage applications rose 4.6% last week from the previous week. Year-on-year they are down 14.7%. Apps for purchases rose 2.4%, while refinancings increased 8.4%. Refinancings accounted for 35% of all loans, up from 33.8% the previous week. ARMS accounted for 29.9% of loans, up from 28.5%.
The failure of FTAA, thanks to Venezuelan President Hugo Chavez Frias, forced George and the neocons to end run FTAA and secure separate individual trade pacts. These bilateral pacts have forced Canada, China and Europe to seek their own separate deal at the expense of the WTO. The result is a number of conflicting agreements that will do more harm than good. This is shooting WTO, NAFTA and CAFTA full of holes and we are happy about that. The US tact of competitive liberalization is dead and that signals the beginning of the end of free trade and globalization, as we have known it. The failure of the Doha Round was the first step in the direction of failure. Another signal of failure was the appointment of a technocrat, Susan Schwab as US Trade Representative. She’s a lightweight, which is another signal there will be a change in direction. These bilateral trade agreements won’t stand up to any negative financial or economic pressure that a larger agreement like FTAA could insure.
The Neocons have implemented trade agreements with eight countries so far and it’s seeking nine more. The answer for us is an end to WTO, NAFTA and CAFTA.
The Conference Board tells us the economy is cooling off. The index of leading economic indicators fell 0.1% in April, with only 3 of the 10 indicators improving. The coincident index rose 0.2%, while the lagging index rose 0.3%. Before we commit to slowdown we want to see May and June’s numbers.
There is no question in our minds that the dollar’s days as a reserve currency are coming to an end, and there really isn’t a viable replacement as world reserve currency. The Euro cannot do it. One interest rate fits all doesn’t work, and the EU still doesn’t have a Constitution and we don’t believe they’ll ever get one. They did things backward. It should have been the Constitution first and then the Euro, but greed and the quest for world government got in the way. That leaves the lone contender as the world’s new currency to gold. Gold doesn’t have to address a declining population, major unassimable immigration- both legal and illegals – cultural dislocation, enormous country fiscal debt, social unrest and different forms of welfare statism.
Gold owes no one anything. It has been a store of value for centuries, a safe haven in a political, economic or financial storm. It can be used as an anchor for other currencies. The gold solution is simple – a no brainer. The opposition is the elitists, central bankers and politicians. They want the ability to create fiat currency. The excuse is in today’s global economy a gold standard is too restrictive. They want leverage and gold doesn’t allow that. We have already witnessed what shambles fiat currencies have led to in our monetary systems. Central banks cannot be trusted to apply the precepts of sound money effectively. They have already demonstrated that. We need transparency and direct financial responsibility for failure. We do not want to hear sorry about that and the culprits walk off into the sunset. A gold standard system has to be policed by private interests, not government hacks. Government bailouts have to end, and the US government either has to settle now with creditors or go bankrupt before venturing a gold standard. Fixed exchange rates will be official and operated by private interest. They would also declare devaluations. This way everyone knows where they are at all the time. It’s easy, painful and fully achievable and it will happen, but only under the worst of circumstances.
Judith Miller, former NY Times reporter, who released information on Valerie Plame Wilson, says an anonymous White House source told her in July 2001, that an NSA intelligence report predicted a large al Qaeda [funded and planned by CIA/Mossad] attack, possibly on the US. That was 7/4/01. She and her editor Stephen Engelberg decided not to do the story, which today they regret. She suspects people in counter-terrorism were trying to get the word to the President through the press because they were not able to get listened to themselves. The State Department citing the AIPAC leak case as basis are denying employees of AIPAC with dual citizenship security clearances.
The Neocons are trying to scare India into not doing a natural gas pipeline deal with Iran. The US said Tehran was unpredictable. They made the Indian government aware of US legislation that might affect any investments in Iran. The US said they would help India with its energy needs, not only with the civil nuclear cooperation, but with other agreements, such as clean-coal technology, expanding efficiency of power transmissions, solar, wind, all of these things.
James Tobin, 45, President Bush’s reelection campaign advisor was convicted on two telephone harassment charges. He could get two years. The Republican Party paid his $2.5 million in legal fees. Tobin made over 800 hang-up calls.
The Fed of Philadelphia’s index of general economic conditions for May rose to 14.4 from 13.2 in April.
Rents, a large part of the CPI, rather than house prices, that lay dormant for six years are rising and so is the CPI, until, of course, they change the formulas again, which they do frequently. Rents in Los Angeles were up 7% last year, double the rate of increases of recent years. The occupancy rate is 97%. Two-bedrooms in Hollywood are $1,900 a month and in West LA it’s $2,460. This situation will add to inflation for the next three years.
We want to comment again because it’s so important, on Rep. James Sensenbrenner’s (R-WI) Internet Stopping Adults Facilitating the Exploitation of Today’s Youth Act – or Internet Safety Act. If it becomes law it will be only a matter of time before the International Forecaster will no longer be able to publish. The proposal is that ISP’s be required to record information about Americans online activities so that the police can spy on anyone on the net more easily to conduct criminal investigations. Sensenbrenner has deliberately written legislation that is deliberately vague; so that any agency of the government and law enforcement can do anything they please to invade your privacy. The very minimum is a collection of user names, physical addresses, Internet Protocol addresses and subscribers’ telephone numbers have to be retained. That would allow our Attorney General to order Internet providers to retain records of e-mail correspondents, Web pages visited, and contents of the communications. So-called law enforcement takes total precedence over the rights of citizens. You will be spied upon 24/7. Furthermore anyone who publishes the truth will be regarded as an enemy of the state – a terrorist. If ISPS’ don’t comply they will be fined and imprisoned for up to one year. The supposed reason for the law is to catch child pornographers and pedophiles. If they want to do that all they have to do for openers is go to the White House or see George H.W. Bush and Henry Kissinger. The European Parliament has already approved such legislation for the Internet, telephone and voice over Internet Protocol (VOLP). The law opens the door to government fishing expeditions and unbounded data collecting. The first thing on Sensenbrenner’s agenda is to go after all alternative news sources and get them off the Internet so the public cannot access the truth. It is very important this bill is defeated. Please send this message on to others, and you and they contact everyone in Congress to stop this monstrosity. Yes, and remove Sensenbrenner from Congress.
Early signs are emerging that many people are unable to keep up with their monthly mortgage payments. There is a rising delinquency rate on home mortgages that were just issued last year. Lax lending standards encouraged by the Fed, Treasury and Fannie Mae and Freddie Mac have buried many homeowners. The main culprit is Sir Alan Greenspan. He’s long gone making speeches, consulting and joining elitist corporate boards making tens of millions of dollars a year. Loans made three years ago are to some extent protected by home equity unless it’s been withdrawn. The loans two years old are very vulnerable and those made last year are super vulnerable; 29% of borrowers who took out mortgages last year have no equity in their homes or owe more than the house is worth.
Borrowers who used adjustable rate mortgages in 2005 were three times more likely to be delinquent on their payments after the first year than those who took out ARMS in 2003 and 2004. Buyers who were delinquent were more likely to have lower credit scores and to have taken out piggyback mortgages, which combine a mortgage with a home equity line of credit. Delinquency rates are shooting up in California, where only 14% can qualify for a 30% year fixed mortgage. Excluding the results of Katrina, delinquencies in the fourth quarter were 4.55%. With Katrina they were 4.7%. The next three years will be nasty in the real estate market.
Last week the G-7 told us that the IMF would handle a soft landing for the dollar. We said they have never done anything right. Now, IMF Managing Director Rodrigo Rato has named a panel of advisers, such as Sir Alan Greenspan and ECB President Jean-Claude Trichet to evaluate how to finance IMF operations. They want to buy $8.7 billion in bonds for income to operate. They would have had that income but Argentina and Brazil paid off their debt and the IMF lost $110 million in income. Incidentally, they have $200 billion available to lend. Other advisers are Andrew Crockett, President of JP Morgan Chase International; Mohamed El-Erian, President and CEO of Harvard University’s management company; Tito Mboweni, Governor of the Reserve Bank of South Africa, who is plain dumb; Guillermo Garcia of the Bank of Mexico; Hamad Al-Sayari, Governor of the Saudi Arabian agency and Zhou Xiaochuan, governor of the People’s Bank of China.
Japan wants to hike interest rates as the economy booms. GDP is up 1.9% far more than the 1.1% expected. The BofJ cannot hike rates or global stock markets will be in chaos. They have to pick an easy spot and there is none. In the meantime, their inflation is headed straight up.
Mortgage rates this week hit their highest level in four years, as we predicted they would. Freddie Mac says the 30-year fixed rate mortgage was 6.60%, up from 6.58% the previous week. The 15’s rose to 6.20% from 6.17% and the one-year ARM was 5.62% unchanged.
Scott Silverman, chairman of the Board of VeriChip Corp., has alarmed civil libertarians by promoting the company’s subcutaneous human tracking device as a way to identify illegal aliens, immigrants and guest workers. Sorry, we’ll find a better way Scott. Once they finished working on that group we’d be next. This we can promise you is something the government is seriously considering. They are presently considering chipping our troops with RFID chips to replace dog tags and to deposit medical records within the solder.
The president says Congress can oversight security. This maneuver is just a method of letting a toothless and impotent Congress save face. The terms on which they receive the information he lets them have will include a promise not to publicly criticize its limitations. That will be deftly embedded in a general nondisclosure agreement. The threats are prosecution and jail if anyone breaks the promise, plus revocation of the entire oversight agreements for all persons. This and NSA spying is serious, but the administration is about to give itself permission to make an all-out attack on Iran. We’ll see if it will materialize.
On Friday, the Fed added $5.5 billion in repurchase agreements, again causing the repo pool to remain unchanged at $110.115 billion. The Fed obviously finds this sufficient.
Taxpayers will soon get a surprise bill that could exceed $1 trillion for the cost of paying future medical benefits for state and local workers who retire. They have set aside $2.5 trillion to help pay for 190 million civil servants and 7 million retirees, but they have set aside almost nothing to pay for retiree medical benefits.
We anticipate a taxpayer revolt. The burdens on local government are so great that we’ll probably end up with national health care. If that happens, like in Canada, most of the best health professionals will leave.
As an example, NYC’s liability is $50 billion and the city’s entire budget last year was $53 billion.
The federal government also has a $2.3 trillion unfunded liability for medical and disability benefits promised to civil servants and military personnel who retire. The shortfalls in Medicare is $33.4 trillion and in Social Security $4.6 trillion. It doesn’t look good.
Despite the median price for single-family homes rising in the nine San Francisco Bay area counties to $664,000, up less than 7% from a year ago, sales tumbled to their lowest level in five years, down 25% in April. Summer, the biggest sales period of the year, should be interesting to say the least.
Our Senate voted English our national language, but not our official language.
At the Senate intelligence hearing this week, Sen. Dianne Feinstein asked General Michael Hayden is “waterboarding” an acceptable interrogation technique. He replies let me defer that to closed session. A new face, old evasion and obfuscation.
The global derivatives market expanded to a record $298 trillion in the second half of 2005, led by a 34% increase in contracts to insure debt payment, says the BIS, Bank for International Settlements. Total credit-default swaps rose to $13.7 trillion.
Sir Alan Greenspan says, “Home sales are off, applications are off, everything is going in the same direction. The boom is over, and you can say that with a fairly strong degree of confidence.” No kidding Dick Tracy – we forecast the fall last June and it began last September. As always, Alan was one-year behind the curve. What Alan is really saying is prepare for the great dark pit, which I planned for you.
They are at it again. The Justice Department is accusing Abbott Laboratories of vastly inflating prices of its drugs as a part of a fraudulent billing scheme alleged to have cost government health programs more than $175 million over 10 years. They raised the price of the intravenous antibiotic Vancomycin as much as 18 times what it charged, knowing that the Medicare and Medicaid programs would reimburse the providers based on the manufacturer’s price. This is a whistle-blower claim. Their greed has no boundaries.
Venezuelan President Hugo Chavez Frias says he will consider putting the sale of oil in Euros. He said in London he felt the EU had made a great contribution with the euro. Since last October, Venezuela has transferred a large portion of its $30.4 billion of foreign reserves out of US Treasures and into banks and other financial instruments in Europe.
The Dow had a bad week – off 2% and S&P fell 1.9%. The 2-year Treasury yields declined 4 bps to 4.96%, the 5’s fell 12 bps to 4.96% and the 10’s fell 14 bps to 5.06% as the Fed strongly bought bonds to buoy the market.
The MBA Purchase Application Index gained 2.4% last week. Purchase applications fell 8.6% y-o-y with dollar volume off 4.1%. Refi applications gained 8.4%. The average new purchase mortgage jumped to $238,000, while the average ARM was little changed at $346,700.
It is absolutely no wonder the Fed doesn’t want to publish M3. Bank credit surged $43.3 billion to a record $7.890 trillion, with a y-t-d of $384 billion or 14% annualized. Year-on-Year its up 11.3%. Securities credit was up $8.6 billion. Loans and leases jumped $34.7 billion for the week which is out of sight, with a y-t-d gain of $121 billion or 11%. Commercial and industrial loans have expanded at a 16.5% rate y-t-d and 14.5% y-o-y. Real estate loans rose $9.4 billion, up 10.5% y-t-d and up 12.8% y-o-y. Consumer loans were up $1.2 billion and securities loans expanded $16.9 billion. Other loans were up $7.3 billion. Large time deposits gained $1.6 billion. M2 dropped $23.9 billion to $6.770 trillion. Year-on-year its up 4.4% and y-t-d 3.3%. Money market fund assets jumped $13.4 billion to $2.058 trillion. Total commercial paper jumped $8.1 billion to $1.767 trillion. Total CP is up 18.6% y-t-d and 16.6% y-o-y. Asset Backed Securities, ABS issuance, was up $17 billion. Year-to-date total ABS issuance of $261 billion is slightly ahead of 2005’s record pace, with y-t-d home equity loan ABS sales of $184 billion, 10% above last year. Fed foreign holdings of Treasury paper and Agency securities increased $3.4 billion to $1.624 trillion. Custody holdings were up $105 billion y-t-d, or 18.0% annualized and $220 billion or 15.7% y-o-y.
The head of a group of Federal Air Marshals says the service is badly broken. Right now they cannot protect the public. It’s not that they are not proficient, but because the Department of Fatherland Security, won’t let them do their jobs. Air Marshals are not able to work undercover because check-in and boarding procedures at airports make it impossible for them to maintain their anonymity. Everyone on the plane ends up knowing who they are. They have pursued the matter for three years and there has been retaliation by the service. What a government.
Former Tyco CEO Dennis Kozlowski, now serving time for stealing hundreds of millions of dollars has agreed to settle tax charges for $21 million to the State of New York.
Boeing will pay $615 million to end federal investigations into its illegal hiring of a high-ranking Air Force official. This is the largest penalty ever paid by a defense contractor. As usual, the connected elitists don’t go to jail.
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"All truth passes through three states," wrote Arthur Schopenhauer. "First it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."
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