Friday, March 22, 2013

The sky IS FALLING (in graphs)

The NCAA tournament isn’t over yet but we know its coming to an end in exactly 16 days. If I was to tell you it’s not over yet, I would be correct. But does change the fact that is will end? Of course it doesn’t. For many people, because we haven’t seen bread lines or riots in the streets the “sky isn’t falling” yet. Does that change the reality that our economy is on the downside of the bell curve?

When the FED dropped interest rates back in ’07 the idea was that it would incur borrowing from the public & private business; therefore creating new/bigger business and in the process creating jobs or at least not hemorrhaging more than the economy was already in the process of doing. Then the rates kept dropping and dropping and wont go up until the very least 2014 and then what? Go up? The debt will explode in a hyperbolic fashion.

This graph shows we paid MORE in interest on our debt in 2008 (10,024,724,896,912.49) then we did in 2012 (16,066,241,407,385.89). How do you pay LESS interest on six trillion more in principal? There is only one solution; you pay substantial less interest. 

As we know, unemployment has dropped from its high of 10.0% back in ’09 to 7.7% as of last month but at what cost?

GDP has only seen moderate gains during the last five years and in fact, as you can see below, the last quarter actually seen our GDP in decline; despite the fact that private GDP rose in the same period. 

Some people will point to the cuts in defense spending as the main culprit and they would be correct (as defense have seen a 22% drop in spending) but if running nothing short of an empire and that is how we are keeping afloat in the first place, well… 

Mortgage rates are now at their lowest rate in recorded history and this has been a yearly trend these last few years. Only now in March of 2013, are we beginning to see signs of the real estate market coming back to life; despite a plummet in interest rates the last six years that were supposed to (as said in my opening) entice borrowers. Was it worth it?

Was it worth it and at what cost are the two questions I pose to you today. At what cost and is it worth it to live for today at the expense of tomorrow?

The CBO estimates of this nation’s debt keep getting worse, study after study. This is a quite simple process: the interest rates remain low, the debt piles up and the economy barley moves. These projections below are based on current conditions. Remember, zero is the end game; there isn’t much that can be done after that. We are basically at zero interest rates now.  

These examples I gave are just the tip of the iceberg and they are all interconnected. And that iceberg is the general public of this nation being so inundated in debt, so much so that we are getting to the point where offers of basically free money can’t move the needle any longer. These last four years of record low interest rates with barley a crawl until four, five sometimes six years later illustrates this quite luminously.

With wages not keeping up with real inflation (not the phony government statistics) and the globalization of the market, incomes for the average American (an overwhelming majority of) are stagnated; if not in decline. Is there any way that changes? Of course not, this is the new reality.

So to keep up, for most Americans, debt is the only logical solution. Afterall, we know saving via the conventional bank route is futile with rates being under 1%. And as we know debt = money, so when the economy can’t jump start and the FED’s QE programs don’t jump start growth; what else can the FED do? It’s been said by Bernanke that the quick death of deflation will not occur, so that only leaves one alternative; go to zero and close its eyes. Then hold on for limb and life as the decent to a slow death via hyperinflation begins.

The political process here has become a joke. A crooked game ran by self-serving lawyers and career politicians hell bent on seeing who can kick the can down the road the furthest. What was once a calling of statesmen has been replace by a bloodthirsty pack of statists. Republicans blame Democrats for not cutting spending despite having no solution themselves and god-damn you if you want to cut a bloated defense budget! Democrats want to actually ADD to the problem with a monstrosity addition to healthcare. While both “sides” will tell you it’s the other guys fault. Then all the puppets and zombies watching/reading the propaganda will parrot it. You think this is going to change?

At this moment, under these terms we are watching the beginning of the end finally become visible before our very eyes. Americans and their distractions have reached the crescendo. They can no longer afford them. The sky isn’t falling, but our economy is. It’s circling the drain, not as fast as Greece or Spain but its circling nonetheless. So move over American Idol, the freak show isn’t just in your living room its right outside your window. Get ya’ popcorn ready.

Sunday, March 17, 2013

The chequeing scheme, where micro meets macro

This is about as a rounded and admittedly loose connection as one can make but a connection nonetheless. Let me get straight to the back story.

My lady friend of 18 years & counting refuses to use a debit card. She despises credit. She also prefers to not use cash either. She's still the mindset of 20 years ago when everything revolves around cheques. Now, in her defense there is a practical reason behind it. She feels if you really want to buy something that added step of writing it out reduces impulse buying and judging by her sterling accounting of our finances; I offer no debate.

A few weeks ago she unexpectedly ran out of cheques. Unfortunately this coincided with the long Martin Luther King Day weekend thus the banks were closed. So with no ability to access her money, she had two choices: use credit or dont buy what she needed until the next day. As we were just one day from our annual winter getaway to Florida... I enter with option three: me picking up the tab. And being the loving spouse I am, I chose to use my cheques. One part out of respect for her and partly because I just haven't written one in so long. At the same time, I felt it would make it an interesting exercise to practice my cursive. 

So a few transactions and a few chicken scratches later, we were on our way. When we got back home is when it got interesting. It seems due to inactivity and I moving my direct deposit out of that bank, my account was closed. Unbeknownst to me, I had written three cheques without having an account at all. I quickly made contact with the vendors and paid in cash the amount + fees. This suddenly made me remember why I stopped using cheques over a decade ago: overdrafts.

Now at this point It was behind us. One week later came the letters from collection agencies demanding the funds to cover said cheques. So, I called to explain to them the situation. A manager on duty of the collection service then hit me with this...

"Sir, if you dont have proof you made good on these cheques we require a payment to take care of that. We except two forms of payment. Western Union and Cheque by phone."

Cheque by phone, I asked? I told her I wrote a bad cheque, why would they accept another cheque? She then begins to tell me it happens all the time. That people knowingly write bad cheques and then make payments to the collection agencies with more bad cheques. If this process seems completely irrational and made up; its only the same exact thing that our government does (and gets away with) regarding the dollar.

Now I did say it was a loose connection and you made it this far so bare with me.

We effectively print dollars with no tangible backing whatsoever, just "confidence" that the dollar will not crash and that in turn will not lead to a run on the bank. Remember, due to the modern practice of fractional reserve banking, bank's tend to only keep a small fraction in liquid reserves. Thus any major fluctuation of withdrawals in a one day period can make things very interesting for a bank.

Now with that said, after the banks make these monopoly based dollars, they just sit back and operate the biggest shakedown modern civilization has ever seen.

By way of OPEC taking only US dollars for its oil (thank you President Nixon and King Faisal), it forces oil buying nations (read the entire world) to naturally obtain US dollars so they can obtain the OPEC oil (which holds about 2/3 of the worlds oil supply). OPEC then takes those US dollars and reinvests them into US banks further strengthening our place as the preferred empire of the world over.

So, like a guy armed with a closed chequing account and a fistful of cheques, you too can play the game of tangible assets/commodities for nothing too. Buy the goods and services with cheques that, like our dollar, are essentially worthless paper backed by nothing; THEN use the same cheques to pay off the creditors! You come out with goods and everyone else is stuck holding worthless paper. Then rinse & repeat.

The difference between the guy running that scheme with a closed chequing account is eventually the jig will be up. Unless you’re real slippery and willing to constantly move and change your name quite often; it will all come to an end. But what about the US petrol-dollar scheme? How long before that hustle is over? When you think about it, from the US point of view, it’s paramount that the US remains the reserve currency for oil. For if not, we can expect a lot of dollars coming back home and when I say a lot, I am talking the SHIT-TON of quantities.

If that happens our standard of living (even at a declining rate) will all but disappear. This will create instant hyperinflation and eventually a sell-off so large that the immigration issues on the borders wont be commonly known from Mexican people trying to get as they are today but instead it will be American citizens trying to get out.

Its pretty obvious the lengths our leaders will go to keep this asset bubble propped up. So, what happens if you don't agree with this petrodollar recycling scheme? What if you are in favor of, say a more "open competition" regarding how to pay for oil? As I stated last year in this piece; it usually doesn’t end well for you.

Now with Iraq and Afghanistan wrapping up, all the sabers are waving towards Iran and they are running out of time. Friday, President Obama put them on notice Friday saying:
"Right now, we think it would take over a year or so for Iran to actually develop a nuclear weapon"

Then eloquently added:  "but obviously we don’t want to cut it too close.”

The President then went on to call a nuclear Iran "a red line". You have less than a year Iran. Less then a year before you continue or end your nuclear program. But remember, the nuclear program is a guise. The real threat remains the precedent you are making with disrespect for the dollar. So, close your oil bourse and fall back in line or else.

Now picture that guy again with the cheques and the false chequing account. Hes cashing cheques and receiving goods and when you want to collect or end the scheme he shows up at your place of business with an army and guns and tells you if you dont change your ad's or paint your store Tropicana yellow hes gonna shoot the place up and remove you. You like your job dont you? Your kids eat waffles dont they? You need money to buy waffles. The American hegemony alive and well; Tony Soprano don’t have nothin’ on us. 

Sunday, March 10, 2013

The Droning of America

“The condition that an operational leader present an ‘imminent’ threat of violent attack against the United States does not require the United States to have clear evidence that a specific attack on U.S. persons and interests will take place in the immediate future.”

This was a quote from a Department of Justice (DOJ) memo landed by NBC’s Michael Isikoff last month. In this white paper memo it’s clear the backdrop has been set; completely trampling over the 4th, 5th & 14th amendments in one fell swoop. The Executive branch will wage its war on your freedoms under the guise of “terror” not just in your backyard in the Middle East but your front yard and everywhere in between.

Per the FAA’s website, they have granted over 1,400 licenses or better known as Certificates of Authorization (COA) to some corporations but mostly government agencies to allow unmanned aircraft systems (UAS) to occupy US airspace. Congress, despite its miserable record of futility and utter failure managed to pass a bill that set a September 2015 deadline for “full integration” of UAS into the national airspace.

When the powers that be want to torture and cannot do so because it’s the Eighth Amendment of the United States Constitution, they get “creative”. They just rename it. So "torture" becomes "enhanced interrogation techniques". That’s what these politicians think of your intellect. They just rename an act like your mom used to do when you were four; calling cabbage apple pie.  

When they want to take away your 1st amendment right of free speech and assembly they deem you a terrorist or an enemy combatant. 

The 2011 drone strike in Yemen that killed two alleged al-Qaida operatives Samir Khan and Anwar al-Awlaki were both U.S. citizens. Lest not forget al-Awlaki’s 16 year old son also an American who was also killed in the attack. Neither men (and of course neither was a minor) were indicted nor charged by the US Government for any crimes. Instead they were put onto a list without due process and executed by a remote control airplane in a desert thousands of miles away; the same remote control airplanes we will have patrolling our skies here in the states.  

Some of you might say, but both men were al-Qaida, but how do we know? How do we know what they did if there was no charges or trial? If they are American citizens they are guaranteed their rights by our constitution. The same constitution that each elected representative is sworn to uphold and protect. So how can these elected representatives by the people for the people have the audacity to kill American citizens without a trial or even charge? 

The answer is simple. Americans are too quick to trade freedom for security.

Isikoff also notes a speech from Attorney General Eric Holder in March of 2012 where he endorsed the constitutionality of targeted killings of Americans. Just like seen in the recently discovered DOJ white paper, the narrative is consistent, as Holder states they (those on the kill list) could be legal and justified kills if government officials determine the target poses “an imminent threat of violent attack.”

There is that pesky phrase again: “an imminent threat of violent attack”. How do you go about deciding how imminent a threat is? This falls into the hands of a judge or a jury of ones peers, right? Normally, yes, but in today’s brave new world, it’s just not the case.

No, the President and his appointed Attorney General play both jury and judge. While they give the thumbs up or down on who is to be killed; the Joint Special Operations Command (JSOC) and an army of drones play executioner. This wording is very vague and ambiguous (i sense a trend here) thus the interpretation of these words and how they apply to citizens must be dealt with accordingly. Allowing this power to rest in one mans hands and his attorney general is the way of a monarch or dictatorship not a republic.

If this sounds like something out of communist Russia or Nazi German; it's only because it is.

This JSOC falls under the command of the President making in nothing more than a Gestapo. A force that's militarily superiority is only matched by its geo-political carte blanche. Bound not by borders, sovereignty, neither international nor domestic laws but simply the decision then subsequent command of one man. This is not democracy. This is why we have a constitution. Is it any wonder those in power go at lengths to undermine it?

So, when Rand Paul in epic fashion brings about a filibuster last week to protest the nomination of war monger & drone whore John Brennan, to head the CIA, you can bet he was met with considerable disdain. And this was not just from the usual suspects (namely the President and his minions) but from the likes of none other than neo-con hawks John McCain and Lindsey Graham. Two career politicians dressed up as republican senators who sold their soul long ago to K-Street and two mouth breathers who will do anything to defend their corporate masters in the military industrial complex.

Your rights via the constitution get in the way of those in power. War’s and chasing bogeymen in the sands of Arabia funnel obscene profits to those in power both at the elected and private level. Anyone and I mean ANYONE who defends drones strikes on American soil while promoting endless wars against an “enemy” that’s about as dangerous as street gang in Omaha… is the enemy. They are an enemy to our republic and they are an THE “imminent threat” to our natural born rights as American citizens. Know thy enemy.