Bad News: Dollar value is now in full swing decline

Ron Paul knew it, I knew it, and every Conservative and Libertarian Blogger knew it.

The U.S. dollar’s thrashing on Thursday after a last-minute European deal to contain the debt crisis may have sealed the currency’s fate.

And it is all downhill from here.

The European agreement, which involves a 50 percent write-down of Greek debt and boosting the euro zone’s bailout fund to as much as 1 trillion euros, has averted a collapse in Europe and spurred a rush to risky currencies and assets once again at the expense of the dollar.

Add in to the mix: a suddenly revitalized U.S. economy that a few weeks ago was teetering on the verge of recession and had fueled speculation about another round of quantitative easing. Almost overnight it leaves a whole new global outlook that appears a little more encouraging.

via Dollar Decline in Full Swing in Risk-On Environment – CNBC.

This is what happens when the Federal Reserve prints money for Countries to bail out their debt crises.  Ron Paul has said this for years and he is right —- about that anyway.  This in turn devalues our currency and causes the prices of everything to go up.  This also causes everyone to run to go Gold, which drives the prices through the roof, causing a bubble.  The problem is, when the inflation goes back down, and Gold collapses, people lose money — unless of course, they have other investments to transfer that wealthy into, so they do not lose their money.  If we could at least get control of the fed, this sort of stuff would not happen.

Another thing too, this right here ought to be the prime example of why Keynesian Economics does not work at all.  Taxing and spending a way out of recession is just not the way to do it.  Printing money out of thin air does not solve the problem; it only makes that problem worse.  It does that by devaluing the currency that is being mass printed.  I know, I am repeating myself; this is why I do not talk about the sort of stuff often, which is because I detest repeating myself repeatedly.  I figure my little blog is not going to stop the world from plunging into madness, so why bother.

 

The Federal Reserve Explained Part 3

I covered parts one and two of this series and here is part three.

Robert Prechter Explains The Fed, Part III
The world’s foremost Elliott wave expert goes “behind the scenes” on the Federal Reserve
October 26, 2011

By Elliott Wave International

This is Part III, the final part of our series “Robert Prechter Explains The Fed.” (Here are Part I and Part II.)

Money, Credit and the Federal Reserve Banking System
Conquer the Crash, Chapter 10
By Robert Prechter

How the Federal Reserve Has Encouraged the Growth of Credit

Congress authorized the Fed not only to create money for the government but also to “smooth out” the economy by manipulating credit (which also happens to be a re-election tool for incumbents). Politics being what they are, this manipulation has been almost exclusively in the direction of making credit easy to obtain. The Fed used to make more credit available to the banking system by monetizing federal debt, that is, by creating money. Under the structure of our “fractional reserve” system, banks were authorized to employ that new money as “reserves” against which they could make new loans. Thus, new money meant new credit.

It meant a lot of new credit because banks were allowed by regulation to lend out 90 percent of their deposits, which meant that banks had to keep 10 percent of deposits on hand (“in reserve”) to cover withdrawals. When the Fed increased a bank’s reserves, that bank could lend 90 percent of those new dollars. Those dollars, in turn, would make their way to other banks as new deposits. Those other banks could lend 90 percent of those deposits, and so on. The expansion of reserves and deposits throughout the banking system this way is called the “multiplier effect.” This process expanded the supply of credit well beyond the supply of money.

Because of competition from money market funds, banks began using fancy financial manipulation to get around reserve requirements. In the early 1990s, the Federal Reserve Board under Chairman Alan Greenspan took a controversial step and removed banks’ reserve requirements almost entirely. To do so, it first lowered to zero the reserve requirement on all accounts other than checking accounts. Then it let banks pretend that they have almost no checking account balances by allowing them to “sweep” those deposits into various savings accounts and money market funds at the end of each business day. Magically, when monitors check the banks’ balances at night, they find the value of checking accounts artificially understated by hundreds of billions of dollars. The net result is that banks today conveniently meet their nominally required reserves (currently about $45b.) with the cash in their vaults that they need to hold for everyday transactions anyway. [1st edition of Prechter's Conquer the Crash was published in 2002 -- Ed.]

By this change in regulation, the Fed essentially removed itself from the businesses of requiring banks to hold reserves and of manipulating the level of those reserves. This move took place during a recession and while S&P earnings per share were undergoing their biggest drop since the 1940s. The temporary cure for that economic contraction was the ultimate in “easy money.”

We still have a fractional reserve system on the books, but we do not have one in actuality. Now banks can lend out virtually all of their deposits. In fact, they can lend out more than all of their deposits, because banks’ parent companies can issue stock, bonds, commercial paper or any financial instrument and lend the proceeds to their subsidiary banks, upon which assets the banks can make new loans. In other words, to a limited degree, banks can arrange to create their own new money for lending purposes.

Today, U.S. banks have extended 25 percent more total credit than they have in total deposits ($5.4 trillion vs. $4.3 trillion). Since all banks do not engage in this practice, others must be quite aggressive at it. For more on this theme, see Chapter 19 [of Conquer the Crash].

Recall that when banks lend money, it gets deposited in other banks, which can lend it out again. Without a reserve requirement, the multiplier effect is no longer restricted to ten times deposits; it is virtually unlimited. Every new dollar deposited can be lent over and over throughout the system: A deposit becomes a loan becomes a deposit becomes a loan, and so on.

As you can see, the fiat money system has encouraged inflation via both money creation and the expansion of credit. This dual growth has been the monetary engine of the historic uptrend of stock prices in wave (V) from 1932. The stupendous growth in bank credit since 1975 (see graphs in Chapter 11 [of Conquer the Crash]) has provided the monetary fuel for its final advance, wave V. The effective elimination of reserve requirements a decade ago extended that trend to one of historic proportion.

The Net Effect of Monetization

Although the Fed has almost wholly withdrawn from the role of holding book-entry reserves for banks, it has not retired its holdings of Treasury bonds. Because the Fed is legally bound to back its notes (greenback currency) with government securities, today almost all of the Fed’s Treasury bond assets are held as reserves against a nearly equal dollar value of Federal Reserve notes in circulation around the world. Thus, the net result of the Fed’s 89 years of money inflating is that the Fed has turned $600 billion worth of U.S. Treasury and foreign obligations into Federal Reserve notes.

Today the Fed’s production of currency is passive, in response to orders from domestic and foreign banks, which in turn respond to demand from the public. Under current policy, banks must pay for that currency with any remaining reserve balances. If they don’t have any, they borrow to cover the cost and pay back that loan as they collect interest on their own loans. Thus, as things stand, the Fed no longer considers itself in the business of “printing money” for the government. Rather, it facilitates the expansion of credit to satisfy the lending policies of government and banks.

If banks and the Treasury were to become strapped for cash in a monetary crisis, policies could change. The unencumbered production of banknotes could become deliberate Fed or government policy, as we have seen happen in other countries throughout history. At this point, there is no indication that the Fed has entertained any such policy. Nevertheless, Chapters 13 and 22 [of Conquer the Crash] address this possibility.

Read the rest of this eye-opening report online now, free!

Understanding the Fed: How to protect yourself from the common and misleading myths about the U.S. Federal Reserve

It’s time to pull back the curtain on the Federal Reserve system. In this revealing 34-page ebook, you’ll learn how the Federal Reserve controls the money supply, you’ll pin-point a few critical points in Federal Reserve history, and you’ll uncover several important myths and misconceptions, like who owns the Federal Reserve Bank.

Representing more than 10 years of research by financial analyst Robert Prechter, this free report goes beyond Federal Reserve history and it’s government mandate and digs into the Fed’s real motivations for being the United States’ “lender of last resort.”

Take this important step toward understanding the Federal Reserve system — Download this FREE 34-page ebook now >>

The Federal Reserve Bank explained, Part 2

Just a follow up to the first part of this series. Be sure to click the link and sign up for a membership. It helps me out greatly! Thanks!

Robert Prechter Explains The Fed, Part II
The world’s foremost Elliott wave expert goes “behind the scenes” on the Federal Reserve
October 18, 2011

By Elliott Wave International

This is Part II of our three-part series, “Robert Prechter Explains The Fed.” You can read Part I here.


Money, Credit and the Federal Reserve Banking System
Conquer the Crash, Chapter 10
By Robert Prechter

… Let’s attempt to define what gives the dollar objective value. As we will see in the next section, the dollar is “backed” primarily by government bonds, which are promises to pay dollars. So today, the dollar is a promise backed by a promise to pay an identical promise. What is the nature of each promise? If the Treasury will not give you anything tangible for your dollar, then the dollar is a promise to pay nothing. The Treasury should have no trouble keeping this promise.

In Chapter 9 [of Conquer the Crash], I called the dollar “money.” By the definition given there, it is. I used that definition and explanation because it makes the whole picture comprehensible. But the truth is that since the dollar is backed by debt, it is actually a credit, not money. It is a credit against what the government owes, denoted in dollars and backed by nothing. So although we may use the term “money” in referring to dollars, there is no longer any real money in the U.S. financial system; there is nothing but credit and debt.

As you can see, defining the dollar, and therefore the terms money, credit, inflation and deflation, today is a challenge, to say the least. Despite that challenge, we can still use these terms because people’s minds have conferred meaning and value upon these ethereal concepts.

Understanding this fact, we will now proceed with a discussion of how money and credit expand in today’s financial system.

How the Federal Reserve System Manufactures Money

Over the years, the Federal Reserve Bank has transferred purchasing power from all other dollar holders primarily to the U.S. Treasury by a complex series of machinations. The U.S. Treasury borrows money by selling bonds in the open market. The Fed is said to “buy” the Treasury’s bonds from banks and other financial institutions, but in actuality, it is allowed by law simply to fabricate a new checking account for the seller in exchange for the bonds. It holds the Treasury’s bonds as assets against — as “backing” for — that new money. Now the seller is whole (he was just a middleman), the Fed has the bonds, and the Treasury has the new money.

This transactional train is a long route to a simple alchemy (called “monetizing” the debt) in which the Fed turns government bonds into money. The net result is as if the government had simply fabricated its own checking account, although it pays the Fed a portion of the bonds’ interest for providing the service surreptitiously. To date (1st edition of Prechter’s Conquer the Crash was published in 2002 — Ed.), the Fed has monetized about $600 billion worth of Treasury obligations. This process expands the supply of money.

In 1980, Congress gave the Fed the legal authority to monetize any agency’s debt. In other words, it can exchange the bonds of a government, bank or other institution for a checking account denominated in dollars. This mechanism gives the President, through the Treasury, a mechanism for “bailing out” debt-troubled governments, banks or other institutions that can no longer get financing anywhere else. Such decisions are made for political reasons, and the Fed can go along or refuse, at least as the relationship currently stands. Today, the Fed has about $36 billion worth of foreign debt on its books. The power to grant or refuse such largesse is unprecedented.

Each new Fed account denominated in dollars is new money, but contrary to common inference, it is not new value. The new account has value, but that value comes from a reduction in the value of all other outstanding accounts denominated in dollars. That reduction takes place as the favored institution spends the newly credited dollars, driving up the dollar-denominated demand for goods and thus their prices. All other dollar holders still hold the same number of dollars, but now there are more dollars in circulation, and each one purchases less in the way of goods and services. The old dollars lose value to the extent that the new account gains value.

The net result is a transfer of value to the receiver’s account from those of all other dollar holders. This fact is not readily obvious because the unit of account throughout the financial system does not change even though its value changes.

It is important to understand exactly what the Fed has the power to do in this context: It has legal permission to transfer wealth from dollar savers to certain debtors without the permission of the savers. The effect on the money supply is exactly the same as if the money had been counterfeited and slipped into circulation.

In the old days, governments would inflate the money supply by diluting their coins with base metal or printing notes directly. Now the same old game is much less obvious. On the other hand, there is also far more to it. This section has described the Fed’s secondary role. The Fed’s main occupation is not creating money but facilitating credit. This crucial difference will eventually bring us to why deflation is possible.


Read the rest of this eye-opening report online now, free!

Understanding the Fed: How to protect yourself from the common and misleading myths about the U.S. Federal Reserve

It’s time to pull back the curtain on the Federal Reserve system. In this revealing 34-page ebook, you’ll learn how the Federal Reserve controls the money supply, you’ll pin-point a few critical points in Federal Reserve history, and you’ll uncover several important myths and misconceptions, like who owns the Federal Reserve Bank.

Representing more than 10 years of research by financial analyst Robert Prechter, this free report goes beyond Federal Reserve history and it’s government mandate and digs into the Fed’s real motivations for being the United States’ “lender of last resort.”

Take this important step toward understanding the Federal Reserve system — Download this FREE 34-page ebook now >>

Interesting Reading: Explaining the Federal Reserve Bank — Part 1

The world’s foremost Elliott wave expert goes “behind the scenes” on the Federal Reserve

October 13, 2011

By Elliott Wave International

The ongoing economic problems have made the central bank’s decisions — interest rates, quantitative easing, monetary stimulus, etc. — a permanent fixture on six-o’clock news.

Yet many of us don’t truly understand the role of the Federal Reserve.

For answers, let’s turn to someone who has spent a considerable amount of time studying the Fed and its functions: EWI president Robert Prechter.

Today we begin a 3-part series that, we believe, will help you understand the Fed as well as Prechter does. (Excerpted from Prechter’s Conquer the Crash and the free Club EWI report, “Understanding the Federal Reserve System.”)

Here is Part I; come back next week for Part II.


Money, Credit and the Federal Reserve Banking System
By Robert Prechter

An argument for deflation is not to be offered lightly because, given the nature of today’s money, certain aspects of money and credit creation cannot be forecast, only surmised. Before we can discuss these issues, we have to understand how money and credit come into being. This is a difficult chapter, but if you can assimilate what it says, you will have knowledge of the banking system that not one person in 10,000 has.

The Origin of Intangible Money

Originally, money was a tangible good freely chosen by society. For millennia, gold or silver provided this function, although sometimes other tangible goods (such as copper, brass and seashells) did. Originally, credit was the right to access that tangible money, whether by an ownership certificate or by borrowing.

Today, almost all money is intangible. It is not, nor does it even represent, a physical good. How it got that way is a long, complicated, disturbing story, which would take a full book to relate properly. It began about 300 years ago, when an English financier conceived the idea of a national central bank. Governments have often outlawed free-market determinations of what constitutes money and imposed their own versions upon society by law, but earlier schemes usually involved coinage. Under central banking, a government forces its citizens to accept its debt as the only form of legal tender. The Federal Reserve System assumed this monopoly role in the United States in 1913.

What Is a Dollar?

Originally, a dollar was defined as a certain amount of gold. Dollar bills and notes were promises to pay lawful money, which was gold. Anyone could present dollars to a bank and receive gold in exchange, and banks could get gold from the U.S. Treasury for dollar bills.

In 1933, President Roosevelt and Congress outlawed U.S. gold ownership and nullified and prohibited all domestic contracts denoted in gold, making Federal Reserve notes the legal tender of the land. In 1971, President Nixon halted gold payments from the U.S. Treasury to foreigners in exchange for dollars. Today, the Treasury will not give anyone anything tangible in exchange for a dollar. Even though Federal Reserve notes are defined as “obligations of the United States,” they are not obligations to do anything. Although a dollar is labeled a “note,” which means a debt contract, it is not a note for anything.

Congress claims that the dollar is “legally” 1/42.22 of an ounce of gold. Can you buy gold for $42.22 an ounce? No. This definition is bogus, and everyone knows it. If you bring a dollar to the U.S. Treasury, you will not collect any tangible good, much less 1/42.22 of an ounce of gold. You will be sent home.

Some authorities were quietly amazed that when the government progressively removed the tangible backing for the dollar, the currency continued to function. If you bring a dollar to the marketplace, you can still buy goods with it because the government says (by “fiat”) that it is money and because its long history of use has lulled people into accepting it as such. The volume of goods you can buy with it fluctuates according to the total volume of dollars — in both cash and credit — and their holders’ level of confidence that those values will remain intact.

Exactly what a dollar is and what backs it are difficult questions to answer because no official entity will provide a satisfying answer. It has no simultaneous actuality and definition. It may be defined as 1/42.22 of an ounce of gold, but it is not actually that. Whatever it actually is (if anything) may not be definable. To the extent that its physical backing, if any, may be officially definable in actuality, no one is talking.


Read the rest of this eye-opening report online now, free!

Understanding the Fed: How to protect yourself from the common and misleading myths about the U.S. Federal Reserve

It’s time to pull back the curtain on the Federal Reserve system. In this revealing 34-page ebook, you’ll learn how the Federal Reserve controls the money supply, you’ll pin-point a few critical points in Federal Reserve history, and you’ll uncover several important myths and misconceptions, like who owns the Federal Reserve Bank.

Representing more than 10 years of research by financial analyst Robert Prechter, this free report goes beyond Federal Reserve history and it’s government mandate and digs into the Fed’s real motivations for being the United States’ “lender of last resort.”

Take this important step toward understanding the Federal Reserve system — Download this FREE 34-page ebook now >>

RINO John McCain hearts the #OccupyWallStreet protesters

You are a #OccupyWallStreet protester and you are a confirmed leftist — all down with Mao and all that. Is this who you want being your spokesman?

The Occupy Wall Street movement is getting sympathy from an unlikely person: Sen. John McCain (R-Ariz.).

The 2008 GOP presidential nominee said he understands the growing protest movement’s concerns over Washington bailouts of major financial institutions.

“Down in Arizona today, Maricopa County has the highest number of homes underwater of any place in this country,” he told reporters Wednesday. “And it’s disgraceful that we took care of the financial institutions, and we did nothing about the housing crisis. So I understand their frustration.”

He later quipped that he may be the “only” Republican does.

via John McCain feels protesters’ pain – On Congress – POLITICO.com.

No John, we should have not taken care of either. We should have let the banks fail, that were failing and we should have not messed with the housing market either; as both would have corrected themselves. This proves that which I and many others like me have believed for years, that John McCain is nothing more than a two-bit big government conservative or as we call them, Republican in Name Only or RINO.

Others: Weasel Zippers, The Gateway Pundit and Michelle Malkin

Welcome to my World: 6 Million people age 25-34 live with parents, up 25%

I’m 39 and I still live at home and yes, it sucks. You know, I’ve been called a leech, a shit stain and alot of other names. But honestly? Is it my fault? No, it’s the economy around here and leaders in Washington D.C. that have screwed the Country into the ground.

I saw this via Drudge:

WASHINGTON — Call it the recession’s lost generation.

In record-setting numbers, young adults struggling to find work are shunning long-distance moves to live with Mom and Dad, delaying marriage and buying fewer homes, often raising kids out of wedlock. They suffer from the highest unemployment since World War II and risk living in poverty more than others — nearly 1 in 5.

New 2010 census data released Thursday show the wrenching impact of a recession that officially ended in mid-2009. It highlights the missed opportunities and dim prospects for a generation of mostly 20-somethings and 30-somethings coming of age in a prolonged slump with high unemployment.

“We have a monster jobs problem, and young people are the biggest losers,” said Andrew Sum, an economist and director of the Center for Labor Market Studies at Northeastern University. He noted that for recent college grads now getting by with waitressing, bartending and odd jobs, they will have to compete with new graduates for entry-level career positions when the job market eventually does improve.

“Their really high levels of underemployment and unemployment will haunt young people for at least another decade,” Sum said.

via Recession yields a lost generation of workers – Business – Stocks & economy – msnbc.com.

Honestly though, my folks do not mind me living here; they like the help and I am an only child; so, there is not another brother or anything, who can help. So, I live here, until this economy recovers. Another thing too, in 2004, I filed for bankruptcy and I did start over. I made the stupid mistake of getting into a lot of debt, when I was younger with a credit card. Needless to say, I learned my lesson there. I have a debit card now, and if I zap that back account, I am screwed. So, I have the motivation to not screw that up!

On a related note, on the economy; the man who came to fix our A/C here, told me that he is lucky if he gets like 25 hours a week with the company he is with. Now keep in mind, this is not a trainee or anything that, this dude was certified in A/C and Heating. He has the license and everything; and he is not even getting 40 hours a week of work. That, my friends, is how screwed up our economy truly is. :(

Those who have a job are lucky to get enough money to put food on the table, and those of us, who cannot find a job are basically left out in the cold. This is why I have such a big problem with all this union protectionism crap that the left is touting. I respect the Unions at all and what they fought for, many years ago. But, we are living in a different would and the prosperity of that era; which the unions took advantage of, is gone for good.

So, that is why, when I see stuff like this here; my heart breaks, because it is not the wealthy people who are going to suffer. It is going to be the working class people and the poor; who are going to suffer the most. The thing to remember is this; it all trickles down, sooner or later. The wealthy lose, the jobs dry up and people suffer. The bad part is, Government cannot fix it. it has to fix itself. The sad part is, it usually takes a LONG time for it to fix itself.

This, is the folly of Progressivism; the belief that Government can fix something that it did not break, in the first place.

 

Proving that Alan Greenspan is a farking dolt

It isn’t everyday that I agree with Lew Rockwell… But this time, I do.

Former Federal Reserve Chairman Alan Greenspan on Sunday ruled out the chance of a US default following S&P’s decision to downgrade America’s credit rating.

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default” said Greenspan on NBC’s Meet the Press

“What I think the S&P thing did was to hit a nerve that there’s something basically bad going on, and it’s hit the self-esteem of the United States, the psyche” said Greenspan.

via No Chance of Default, US Can Print Money: Greenspan – CNBC.

:shock:

Wow….Just wow... :roll:

Bill Anderson writing over at Lew’s Blog says:

Granted, because I am in the Austrian camp, I don’t know anything about economics and money, but I still think my question should be asked: Is not the very act of paying a debt using newly-printed money in itself an act of default? Or, maybe I should be asking a more pertinent question: What has Greenspan been smoking?

I dunno, but between and that guy and the current idiot that is running the Federal Reserve, I do believe we are seriously screwed, tattooed and boo boo’ed. :shock:

….and yes, I do know his ethnic background and the current Fed chairman’s background too. It means nothing; stupid is not restricted to we rednecks, that is for sure! :D

Others: NewsBusters.org, Weasel Zippers

Great: The United States is now borrowing more than the GDP

This is unreal… :roll:

US debt shot up $238 billion to reach 100 percent of gross domestic project after the government’s debt ceiling was lifted, Treasury figures showed Wednesday.

Treasury borrowing jumped Tuesday, the data showed, immediately after President Barack Obama signed into law an increase in the debt ceiling as the country’s spending commitments reached a breaking point and it threatened to default on its debt.

The new borrowing took total public debt to $14.58 trillion, over end-2010 GDP of $14.53 trillion, and putting it in a league with highly indebted countries like Italy and Belgium.

Public debt subject to the official debt limit — a slightly tighter definition — was $14.53 trillion as of the end of Tuesday, rising from the previous official cap of $14.29 trillion a day earlier.

Treasury had used extraordinary measures to hold under the $14.29 trillion cap since reaching it on May 16, while politicians battled over it and over addressing the country’s bloating deficit.

The official limit was hiked $400 billion on Tuesday and will be increased in stages over the next 18 months.

via US borrowing tops 100% of GDP: Treasury – Yahoo! News.

Chew on that one for a few seconds or longer. The USA is borrowing more money from China, that the United States makes as a whole. For the reading up on the GDP, click here. I also recommend that you read up on the Gross National Product and Gross Domestic Income. All of that above, factors into our economy; and believe me when I tell you — we are circling the drain my friends.

There is a bunch more on this subject; and for what it is worth, I do not claim to be an expert on this stuff at all — So, I recommend you read following related articles:

U.S. debt shoots up $239 billion -- in one day!
Gov't will borrow $72B next week...
Obama, Bernanke out of ammo to boost jobs, growth...
Scary Market Chart Pattern Suggests More Selling on Way...
Economy struggles to find footing...
Gold at $2,000 by year-end...

Speaking of Gold, this would be a good time to get into investing in Gold, It would also be good to stock up on  Guns and Ammo!

What I will tell you is; because I am an honest blogger and not some partisan shill for a particular party – is this here.  Many on the right wing Blogosphere will be quick to put this entire situation on President Obama.  I cannot and will not do that; the truth is folks, we did have and still do have two wars that we are fighting; and those cost money too.  We also did have the bailout of the banks and tarp bailouts, the trap loans to the big three, being a fraction of the total cost.

Truth is my friends; we are here because of foolishness of our elected leaders — Republican and Democratic Party.  Both sides have steered this Nation over a cliff.  President Obama tried and ultimately failed to bring an economic revival to the Country.  Now we have to pay the proverbial piper.  It is going to be a painful process; the tap is turned off and we are now going to have embrace austerity.

It is a horrible thing to endure, but it is something that we are going to have to endure — if we are going to continue as a Country, as we know it now.

Update: This is now a Memeorandum Thread: Others covering: Washington Times, Scared Monkeys, Conservatives4Palin, Pajamas Media, Weasel Zippers, Fausta’s Blog, Power Line and The Lonely Conservative

In case you thought I was kidding about buying Gold

Here we go!

Remember when I said to buy Gold?

I was not kidding.

Check this out from the U.K. Telegraph:


As the twin pillars of international monetary system threaten to come tumbling down in unison, gold has reclaimed its ancient status as the anchor of stability. The spot price surged to an all-time high of $1,594 an ounce in London, lifting silver to $39 in its train.

On one side of the Atlantic, the eurozone debt crisis has spread to the countries that may be too big to save – Spain and Italy – though RBS thinks a €3.5 trillion rescue fund would ensure survival of Europe’s currency union.

On the other side, the recovery has sputtered out and the printing presses are being oiled again. Brinkmanship between the Congress and the White House over the US debt ceiling has compelled Moody’s to warn of a “very small but rising risk” that the world’s paramount power may default within two weeks. “The unthinkable is now thinkable,” said Ross Norman, director of thebulliondesk.com.

Fed chair Ben Bernanke confessed to Congress that growth has failed to gain traction. “Deflationary risks might re-emerge, implying a need for additional policy support,” he said.

The bar to QE3 – yet more bond purchases – is even lower than markets had thought. The new intake of hard-money men on the voting committee has not shifted Fed thinking, despite global anger at dollar debasement under QE2.

•snip•

“One of the big US banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money.”

•snip•

Step by step, the world is edging towards a revived Gold Standard as it becomes clearer that Japan and the West have reached debt saturation. World Bank chief Robert Zoellick said it was time to “consider employing gold as an international reference point.” The Swiss parliament is to hold hearings on a parallel “Gold Franc”. Utah has recognised gold as legal tender for tax payments.

A new Gold Standard would probably be based on a variant of the ‘Bancor’ proposed by Keynes in the late 1940s. This was a basket of 30 commodities intended to be less deflationary than pure gold, which had compounded in the Great Depression. The idea was revived by China’s central bank chief Zhou Xiaochuan two years ago as a way of curbing the “credit-based” excess.

Mr Bernanke himself was grilled by Congress this week on the role of gold. Why do people by gold? “As protection against of what we call tail risks: really, really bad outcomes,” he replied.

Indeed.

 

My friends, if this is not the time to buy gold; I really do not know what is.

Click this link to find out how to get into gold today

A Reminder: Go Gold

Just a follow up to yesterday’s posting; it would seem that this would be a good time to invest in gold, even if you cannot afford the expensive stuff, a small investment in the cheaper stuff would be smart.

As you know I am an affiliate for GoldSilver.com  and they offer some great coins and bullion for those who wish to invest in that sort of the thing.

GoldSilver.com offers

You can also check out their Silver Products Here

Want more proof? Check out this video from Russian TV:

I think it is time to invest in Gold. I mean, when the fed chairman says he does not believe that Gold is money; something is horribly wrong.

Jobs report bleak, Democrats still clueless as ever

Now I see why Rick Santelli is ranting and raving!

First of all, here is the lovely report via the NYT:

For the second month in a row, employers added a dismally small number of jobs, showing that the United States economy is barely creaking along despite being two years into the official recovery.

With all levels of government laying off workers, the Labor Department reported that employers eked out just 18,000 new nonfarm payroll jobs in June. The already low number of jobs created in May was also revised downward to just 25,000, less than half what was originally reported last month.

Even as the government’s survey of employers showed that they were adding an anemic number of jobs, a survey of households showed that more people were out of work, causing the unemployment rate to rise to 9.2 percent.

Economists were stunned since they had been expecting June to show stronger job creation as oil prices eased and supply disruptions receded in the aftermath of the Japanese tsunami and earthquake. Instead, the government’s monthly snapshot of the labor market showed that several sectors, including construction, finance and temporary services, actually shed workers. At the same time, leading indicators like wages and the length of the average workweek, which tend to grow before employers begin adding more jobs, actually contracted.

“Even the wild-eyed optimists out there have nothing to grasp onto in this report except to say, ‘Ah, this too shall pass,’ ” said Joshua Shapiro, chief United States economist at MFR Inc.

Meanwhile the stupidity continues on the left. A perfect example is found over at The Hill:

President Obama’s senior political adviser David Plouffe said Wednesday that people won’t vote in 2012 based on the unemployment rate.

Plouffe should probably hope that’s the case, since dismal job figures aren’t expected to get any better for Obama and the economy on Friday.

Most economists expect a report from the Bureau of Labor Statistics to show that the nation added about 100,000 jobs in June. That’s not enough to keep up with population growth, let alone lower the unemployment rate or make a dent in the 9 million jobs lost during the so called Great Recession.

[UPDATED: The jobs report released on Friday showed the economy added only 18,000 jobs, much less than anticipated. The unemployment rate creeped up to 9.2 percent.]

It’s looking more and more like Obama will have to do something no president has done since Franklin Roosevelt: Win reelection with unemployment around 8 percent.

I have a sinking feeling that Plouffe is making a seriously stupid miscalculation ; and one that the Republican Party is going to take full advantage of, come November 2012.

The stupidity continues over at the NYT, again with the stupidest Economist ever to be allowed to write for a paper:

Ugh. That was a seriously ugly jobs report. Almost no job creation, with slow private-sector growth offset by falling public-sector employment; a falling employment-population ratio; and (I don’t know how many people have picked this up), an actual decline in wages, albeit a small one.

Let me emphasize that last point. My bottom line on the inflation-deflation issue has always been to look at wages; you can’t have a wage-price spiral if wages ain’t spiraling. And they aren’t, to say the least.

It’s important to realize, by the way, that stagnant wages are NOT good for recovery; all they do is ensure that the burden of debt relative to income remains high, keeping demand and employment down.

The situation cries out for aggressively expansionary monetary and fiscal policy. Instead, however, all the political push is in the opposite direction.

The underlined part and the part above it; is where the stupidity really kicks in here. That stupidity above, is why this damned Nation is in the place that it is now. Because of stupid people like Krugman. These idiots, in a sane World, would be tossed out of this Country for causing one of the most horrible economic collapses in this Nation, since the great depression, which caused many Americans; Conservative and Liberal, to lose money that they rightly earned or invested in and profited from.

This is not to say that the Republican was not to blame; they too stood by and did nothing and for that they paid a price during the 2006 and 2008 election cycles. However, America was not fooled the Democrats proceeded to make some of, if not more, of the same mistakes that the Republican Party made, while in power. For this, they paid in 2010 and will pay again in 2012.

Further more, it was the DEMOCRATS, not the Republicans, who sought to game the housing market, with the Community Reinvestment act of 1973. Of which the Democrats added the sub-prime cause, which caused the Housing Market to become unstable; which essentially caused the markets to collapse. Yes, regulation was ripped out; but it was the adding of the sub-prime clause that caused the major problems that set the housing market up for a horrible downfall. I know, I watched it all happen here, in real-time, while blogging it all.

In fairness, I will say this; because I am not an overly partisan blogger. It also was the Neo-Conservatives, with their one war, that was totally unjustified in their idiotic visions of a Democratic middle east and the quagmire that it created, not to mention the millions spent and the lives lost; that also created this mess as well. If we would have fought the Afghanistan properly and not like we did Iraq; the war would have been much shorter and would have cost us much less money.

Others: The Atlantic Online, Hot Air, Washington Monthly, Firedoglake, The Huffington Post, Washington Post, The Nation, Calculated Risk, New Deal 2.0, Booman Tribune, Freakonomics, Economix, Free exchange, Speaker, AmSpecBlog, JustOneMinute, Oliver Willis, Gothamist, Hugh Hewitt’s TownHall Blog, Economist’s View, Shakesville, Lynn Sweet, ThinkProgress, Daily Kos, Truthdig, Emptywheel, AMERICAblog News, Lawyers, Guns & Money, FrumForumThe Huffington Post, The Note, The Hill, And So it Goes in Shreveport, AMERICAblog News, Hot Air, Taylor Marsh, Pajamas Media, Scared Monkeys, Outside the Beltway, NetRight Daily, The Western Experience, GOP 12, Le·gal In·sur·rec· tion, National Review, The Lonely Conservative, americanthinker.com, msnbc.com and FrumForum and more via Memeorandum

Video: This is why I like Rick Santelli

No, he is not crazy……Just slightly animated.

(via Mediate)

Updated: Gold headed to 5K an ounce? Video added

This is where I start sound like Ron Paul. (oh dear…)

This report via CNBC even raised my eyebrows a bit:

An exhaustive report by Standard Chartered predicts that gold [ GCCV1 1524.40 +8.80 (+0.58%) ] will more than triple to $5,000 an ounce because of a lack of supply, not just because of a surge in demand that most bullion bugs cite in their bullish calls.

“There are very few large gold mines set to commence operation in the next five years,” said Standard’s analyst Yan Chen in a report Monday. “The limited new supply comes at a time when central banks have turned from being net sellers to significant net buyers of gold. The result, in our view, will be a gold market in deficit, even assuming flat growth in demand. With the supply-demand balance so out of kilter, we see the gold price potentially going to US$5,000/oz.”

The London-based firm is among the first to focus on the supply-side of the gold equation amid the many bullish forecasts out there on the metal. After analyzing 345 gold mines and 30 copper/base metal gold mines around the globe, the team estimates annual gold production will be just 3.6 percent over the next five years.

“They make a pretty compelling argument, especially when it comes to mine supply,” said Brian Kelly, head of Brian Kelly Capital and a ‘Fast Money’ trader. “Most analysis focuses on demand from China and India, which of course can disappear as quickly as it materialized.”

In some respects, this could be a good thing for those already invested; and in some ways this can be a bad thing. Because of there is a massive rush to buy, because of a blow up in the money supply; this could spell trouble for last minute buyers.

My suggestion to everyone who reads here, is to invest now to avoid the rush. Please, check out the links on the right, top sidebar on this blog. You mobile users will have to go your laptops to do that; or if there is a gold ad at the top, on your mobile device, click to take advantage of that offer.

Being smart, and buying early; can save much headaches later.

Update: This video here will give you some good reasoning as to why investing with Gold is such a good idea.

Why I am not blogging about Anthony Weiner

If you have come looking for any and all postings related to this idiotic so-called scandal by Anthony Weiner.  Let me stop you here, there are none on here anymore —well, except for this posting here.  Why you ask?

Because I pulled the posting —- really, it was nothing anyhow, just a casual mention of it.  I also mentioned it one of my “Daily Rant!” videos.  I stated on there, that I thought he was guilty as sin.  I officially retract that statement.

Why the change all of a sudden towards this story?

Simple.

I do not wish to be one of the hoards of people in on the persecution of this man.

Folks, I have mentioned here in the past, it has been a while; but I do need to mention it again.  I am not, nor have I ever been a hyper-partisan or a partisan blogger at all —- period, end of story.  Corruption exists on both sides of the aisle.  There are corrupt Republicans and there are corrupt Democrats.  I do not buy into that whole idea that somehow or another that Democrats are more corrupt than Republicans are.  That is partisan nonsense and I simply do not play that game, at all.

It is obvious to the writer of this article; that this persecution of this man is of a partisan base.  Anything that Andrew Breitbart is involved in is purely of a partisan nature.  I will never give Breitbart, that vulgar piece of human excrement, any more attention or bandwidth than this man really honestly deserves.

The second reason why I am not allowing myself to become involved in such idiocy is the following:

I am a former “Left of center” person and blogger, who now finds himself in a happy place between the camps of Classic LiberalPaleo-Conservativelibertarian.  Because I have an opinion on the Zionist Movement, and on Neo-Conservatism and its foreign policy idiocy, I have been branded by some as an Anti-Semite and by liberals as being a racist bigot and by some as a white nationalist.

Because of this, I have decided that this “scandal” is not worth my time or trouble.  The way I feel about it, is this; If Anthony Weiner is even remotely as guilty as some are making him out to be, this whole thing will, as they put it, “Come out in the wash.”  What I do not support is the pathetic continual hounding of the man.  It is ridiculous!

Right now, our Nation is facing some serious issues.  Unemployment is at an ultimate high; our Nation’s debt is also at an ultimate high.  We have a President and a federal reserve bank that is literally ruining our money supply by pumping more currency into the money supply, thereby creating hyperinflation.  We also have a President that is more interested in importing oil from Brazil than he is drilling here and now; which sending gas prices over four dollars a gallon.  We are in the midst of all this and the best thing my fellow Conservative bloggers can do is fret and worry whether some idiot Democrat in congress tweeted a picture of his penis in a pair of men’s briefs?  Are you people damned Serious?!

Do you mental giants realize that this whole thing could blow up in our faces and that Conservatives, Republican Party, Tea Party (Pick a damn name!) could be perceived by those who are just mildly paying attention as Anti-Semites who are on the hunt for a Jewish politico to mess up, so that we can go after them?  Do you really what to know what the fallout from this all blowing up in your faces could be?  How about four more years of Barack Obama, you damned ninnies! —  Forget Sarah Palin, Forget even being taken seriously again; forget the damned Tea Party —- none of it will even matter, if this blows up and you all are proven to be wrong.

Because I will issue a hallow warning to the Republican Party and to every damned blogger who dared to cover this silly story.  If you think that, the Democrats will not use this little situation against the Republican Party in the 2012 election cycle, think again.  The Democrats will, they have no honor and in election cycles, perception is 90% of the rule and the socialist liberals will use their unlimited resources to drill this moron story in the sub-conscience of the Country; believe me when I tell you this.

If you want to return to the Bush-era of being perceived as downright evil, fine, do so.  However, do so at your own peril and possibly not being able to take the White House until 2016 —- or later.

If this is not a recession, then what is?

Why can’t they just call this what it is?

The Commerce Department reports that Durable goods orders dropped 3.6% in April, some of the highlights: (H/T HotAir)

New orders for manufactured durable goods in April decreased $7.1 billion or 3.6 percent to $189.9 billion, the U.S. Census Bureau announced today.  This decrease, down two of the last three months, followed a 4.4 percent March increase.  Excluding transportation, new orders decreased 1.5 percent.  Excluding defense, new orders decreased 3.6 percent.  Transportation equipment, also down two of the last three months, had the largest decrease, $4.9 billion or 9.5 percent to $46.7 billion.

Then there is this lovely bit of news:

Inventories of manufactured durable goods in April, up sixteen consecutive months, increased $3.2 billion or 0.9 percent to $350.5 billion.  This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 1.7 percent March increase.  Transportation equipment, also up sixteen consecutive months, had the largest increase, $1.0 billion or 1.0 percent to $106.1 billion.  This was also at the highest level since the series was first published on a NAICS basis in 1992 and followed a 2.4 percent March increase.

The only thing I can say, without repeating myself; which cannot stand doing, is that Ron Paul might be crazy on Foreign Policy, but Ron Paul is absolutely right, when it comes to fiscal policy.

Here I go, repeating myself…..again!

The fact is, for the millionth time; Whenever excessive currency is injected into the money supply, that money supply becomes devalued, that is inflation. That causes the cost of everything to rise, which causes Businesses bottom line to rise, which causes them to either rid themselves of excess labor costs (read: JOBS) or not take on any new labor costs. That, in turn, causes what you see above. People buy stuff, when they have money; and right now, nobody has any money and the ones who do are hanging on to it for dear life. That is what happens when a bubble bursts and when an Economy collapses.

So, why not call it, for what it really is, a recession? It makes zero sense to continue to deceive the American people.

David Morgan and Chris Vermeulen talk about Metals Trading

[video src="http://www.netcastdaily.com/broadcast/fsn2011-0520-1.mp3" width="400" height="300" ]

I do these posts here to help with the financial situation around here, or in my case; a lack of it. As it does say, up in that top left hand corner box on here; I have no had a “real job” since 2005.  So, if you would please click on the links and sign up for the newsletters. I get a nice referral fee, if you do. This is for those who do not like or do not trust Paypal. Every little bit helps! So, if you want to help a unemployed “right of center” type of guy, who has a blog, this is the time to do it. Thanks so much!

-Pat

—-

The Audio:

 http://www.netcastdaily.com/broadcast/fsn2011-0520-1.mp3

| Open Player in New Window

More info Here

You can also see Chris Vermeulen’s last forecast, where he nailed the prediction on what Silver would do in the markets.

 

Video: Fox News’s Sean Hannity surprisingly treats Representative Ron Paul with respect

I found this to be very shocking… Sean Hannity was respectful to Representative Ron Paul:

Now here, when I saw the lead in to this segment, I thought “Oh boy, here we go… Hannity is going to cream this guy…” and you know what? Hannity just ribbed him about it and you could tell, it was just a gentle ribbing.

Now, I will say this about Ron Paul, he did stick to his guns on foriegn policy and in this day and age of wishy-washy politicians and flip-floppers; it is a refreshing change to see a guy stick to his guns, even when he knows it will not popular with the person interviewing him. I also commend Sean Hannity for not keeping on and on about it. Hannity made his point and Ron Paul made his and that was good enough, I thought.

Unlike some on the Neo-Con right, I will not treat this announcement dismissively. I think if Ron Paul could overcome some of stuff that the left likes to bring up and maybe hire a damn speech writer! He could very well win the Presidency; and right now, I would vote for Ron Paul over say, Bachmann, Palin, Trump or even Romney. The rest of the crowd, I either do not know, or think is too weak of a person to seriously be considered.

Could the DOW Could Fall 6,000 Points??!?!

Someone thinks so… (H/T GoldSilver.com)

Video:

The Story via Business Insider:

There’s a distinct possibility the U.S. stock market could plunge as much as 6,000 points if the U.S. continues to rack up record amounts of debt, causing the dollar to lose its reserve currency status, says Daily Ticker favorite Howard Davidowitz. (See video below)

“The dollar has never been at greater risk,” he tells Henry in the accompanying clip. Davidowitz is confident that if Washington doesn’t cool its spending habits, interest rates will spike and inflation will soar. Look at the value of the dollar, and the crisis is already brewing, with foreigners and sovereign nations diversifying away from dollar-denominated assets, he says.

What’s an investor to do in this scenario?

Buy hard assets, he suggests. Davidowitz says investors should own physical gold, silver and diamonds. He also thinks land is a winning bet, even suggesting young adults buy and work farmland. “I think investment in farmland with water on it is a great investment. Finance will be less important,” in the future, he says.

Sounds like a good time to buy gold to me!

It all goes back to the Federal Reserve

I thought I would share this one with you all.

It seems that food prices are going up. I spotted this blog posting over at HotAir.com; which is, a Neo-Conservative Blog. Anyhow, Ed Morrissey points out that food prices are going up. Ed points to this story by the AP:

WASHINGTON (AP) — Wholesale prices jumped last month by the most in nearly two years due to higher energy costs and the steepest rise in food prices in 36 years. Excluding those volatile categories, inflation was tame.

The Labor Department said Wednesday that the Producer Price Index rose a seasonally adjusted 1.6 percent in February — double the 0.8 percent rise in the previous month. Outside of food and energy costs, the core index ticked up 0.2 percent, less than January’s 0.5 percent rise.

Food prices soared 3.9 percent last month, the biggest gain since November 1974. Most of that increase was due to a sharp rise in vegetable costs, which increased nearly 50 percent. That was the most in almost a year. Meat and dairy products also rose.

Energy prices rose 3.3 percent last month, led by a 3.7 percent increase in gasoline costs.

Separately, the Commerce Department said home construction plunged to a seasonally adjusted 479,000 homes last month, down 22.5 percent from the previous month. It was lowest level since April 2009, and the second-lowest on records dating back more than a half-century.

The building pace is far below the 1.2 million units a year that economists consider healthy.

There was little sign of inflationary pressures outside of food and energy. Core prices have increased 1.8 percent in the past 12 months.

Still consumers are paying more for the basic necessities.

Why is it that prices are going up? Well, I can tell you why…. It’s called inflation. Something this guy here has been talking about for years:

Of course, Ed Morrissey, tries to credit the shrieking harpy and two bit phony Sarah Palin for this; but we thinking Americans know better. Sarah Palin most likely cannot even program her own VCR, much less understand the workings of the Federal Reserve. Ron Paul was saying this sort of stuff, when Sarah Palin was still playing with dolls and dreaming of being someone in politics as a child.

Scott Johnson over at Powerline, smartly and very accurately points to the federal reserve bank for this rise in food costs, he also points to a Wall Street Journal Op-Ed that warned of this sort of a thing happening. Yes, I know, Powerline Blog is decidedly Neo-Conservative; but when it comes to this sort of stuff, those guys are in the right frame of mind. I just wish I could convince them that imperialism is a sad mistake —- As are unconstitutionally declared wars.

It also turns out, that the Federal Reserve Bank is not the only part of the Federal Government that is a danger to it’s citizens. There is also other things that we should be, as citizens, worried about; like the ill-conceived and improperly named “Patriot Act.” As this video shows, that act is being used against citizens in a very bad way: (H/T RTR.Org)

The part about the raid on Walter Reddy, the founder of the modern Committees of Safety is in this video. I do encourage you all to watch it. If this man’s story is true. If someone does not like you; they can go to your local police department and makes up actual lies about you and cause the police to conduct a raid on your home. That my friends, is insanity.

As you might expect, I post this video with a disclaimer; Just because I post this, does not mean that endorse the products being sold or the overall conspiratorial tone of the video. I simply post this for informational purposes only.

Update: Mark this on your calendars; this one of the rare times, when I actually agree with Lew Rockwell.

The Reality Report: Toll Booth Tyranny

Disclaimer: The posting of this video should not be considered an endorsement of the views and editorial position of the makers of this video. Further more, The posting of this video, should not be considered an endorsement of the advertisers in this video presentation. It is being posted for informational purposes only.

Signed,

Patrick

Owner

politicalbyline.com

———————-

Synopsis:

http://RTR.org | http://RealityReport.TV | This is one report you do not want to miss. Americans are being detained for using cash! Gary Franchi presents the investigation into the Florida Department of Transportation. Filmmaker and radio host Jason Bermas joins the cast for his new segment called Punk Rock Politics. Also this week we present the special report on Project Gunrunner, how the BATF facilitated ‘straw purchase’ firearm sales that resulted in the death of one of our own. We’ll also present a viral video explains Goldman Sachs is getting double dip profits off the Tax Payer’s backs. Nina returns to present the top stories of the week and as always, we dip into the mailbag, present last week’s poll results and brand another enemy of the state.

Video:

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MONEY BOMB! March 12th
http://MadAsHellMoneyBomb.com

 

Video: Las Vegas Boom & Bust – A Preview for Singapore & China?

This comes via GoldSiver.com:

Wouldn’t it be a good time to invest in Gold and Silver and beat the rush?

Video: The Reality Report: Taking the Neo-Conservatives to the mat!

In this space, before I post this video; I usually post a disclaimer, because usually, I do not agree with some of the content and ideas presented in this Video report.  However, this week, I am going to forgo the disclaimer. Because a good ninety percent of what is presented here, I absolutely agree with and besides, nothing gives me more joy, than to watch freedom-loving Americans making Neo-Conservative fascists look like the damn fools that they are. Yes, it warms the cackles of my stone cold heart to see those who wish to sell our freedoms out to the altar of “Security” made to look like buffoons.

Very well done gents, very, very, well done. :D

Having said all that —- here is the synopsis and Video….

Synopsis: In this special CPAC expanded edition of the Reality Report, we go face to face with Donald Rumsfeld, Dick Cheney and Newt Gingrich and present the highlights (and lowlights)! ; Gary Franchi runs into former Saturday Night Live star, Victoria Jackson, and interviews CPAC Chair David Keene about the Defender of the Constitution Award. Gary also meets with Jesse Benton, Ron Paul’s Communications Director, to give you the inside scoop on the Ron Paul 2012 Presidential campaign. Jeff Frazee from Young Americans for Liberty joins the show to tell us how he got turned on to Ron Paul’s message. We meet with Congresswoman Nan Hayworth from New York’s 19th district to ask her about her vote for the Patriot Act. We also ask Ron Paul supporters what it is about his message that inspires them. We also take you to the Jordan Page after party for the release of his new album titled “Liberty”. Angie returns to deliver the headlines with a special report on the Young Americans for Freedom and Truth Squad.TV’s confrontation. We’ll read your email, review last week’s poll results and brand a new enemy of the state.

The Video:

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Video: Ron Paul’s CPAC speech

Via Fire Andrea Mitchell, who compares Ron Paul to Obama; which is typical of the Neo-Con Ilk.

Video: The Reality Report: Bypassing the Obama Kill Switch

Please Note: The posting of this video does not constitute an endorsement of views presented in this video. It is simply posted for information purposes only.

—-

In this issue of the reality report: The Egyptian Revolution triggered a government shutdown of the web. Could it happen here? Is the internet kill switch back on the congressional table? If the Feds shut down the web in the United States how could “We the People” get around the internet blackout? Gary Franchi reveals what tools you need to bypass a Government sponsored internet blockade. In this edition, Ron Paul explains the how the Federal Reserve works outside of congress’ constitutional framework. We also look at Senator Chuck Schumer failing miserably while explaining the three branches of government. Beautiful words are uttered from the lips of the Florida attorney general about Obamacare. President and founder of Freedom Law School, Peymon Montehedeh, gives us the details on this years’ Freedom Conference, and we announce a new action taking place in March. We’ll take a dip into the mailbag, deliver the results of last week’s poll, a viewer brands a new Enemy of the State… and Nina returns to deliver the Headlines from the new Reality Report News Room.

http://RTR.org | http://RealityReport.TV

Trading Advice: What Most People Don’t Realize About The Fed’s Superpowers

Bob Prechter’s Conquer The Crash reveals whether the Fed really can rescue the US economy
January 27, 2011

By Elliott Wave International

Since its creation in 1913, the primary intended role of the U.S. Federal Reserve Bank has been that of protector. In theory, the central bank was bestowed with the power to shape monetary policy in a way that would keep both booms and busts in check. The two main tools at its disposal — interest rates and money creation — would provide a “ceiling of normalcy” above expansions AND a “net of safety” below contractions.

To this day, the financial mainstream holds great faith in the Fed’s ability to fulfill its save-the-day duties — as these recent news items make plain:

  • “Why Raising Fed Funds Rate Is Positive For Equities.” (Seeking Alpha)
  • “Fed’s Moves Lift All Asset Classes.” (Associated Press)
  • “US Stocks Erasing Losses: The aggressive moves of the Fed have been an important driver for the stabilization of stock prices.” (Bloomberg)

But of all the variables the Fed creators took into account, there’s one glaring factor they neglected to consider: Namely, it cannot force consumers to spend, creditors to lend, or businesses to borrow. The events of 2007-2009 “credit crunch” and the subsequent “Great Recession” made that obvious. Remember how the government was upset at banks for sitting on the bailout funds instead of lending them out to consumers? And consumers weren’t exactly lining up on the street to get a loan, either.

The Fed’s inability to change social mood is the central theme in Chapter 13 of EWI President Bob Prechter’s NY Times business bestseller book Conquer the Crash. There, Bob describes the Fed’s strategy of lowering the federal funds rate to stimulate spending to be as effective as “pushing on a string.” Writes Bob:

“The primary basis for today’s belief in perpetual prosperity and inflation with an occasional recession is what I call the ‘Potent Directors Fallacy.’ It is nearly impossible to find a treatise on macroeconomics today that does not assert or assume that the Federal Reserve Board has learned to control both our money and our economy. Many believe that it also possesses the immense power to manipulate the stock market. The very idea that it can do these things is false.”

And so begins one of the most groundbreaking studies into the very real INABILITY of the Fed to fell the great bears of economic declines, or to feed the great bulls of economic vigor.

The best part is, you can read Chapter 13 of Conquer the Crash in its entirety FREE via a Club EWI resource “You Can Survive And Prosper In A Deflationary Depression.” The free report also includes SEVEN other chapters of Conquer the Crash that shed equal light on some of the most misleading notions of mainstream economic wisdom.

Don’t stay in the dark. Read all 8 chapters today by joining the rapidly expanding free Club EWI community today. Here’s what you’ll learn:

  • Chapter 10: Money, Credit and the Federal Reserve Banking System
  • Chapter 13: Can the Fed Stop Deflation?
  • Chapter 23: What To Do With Your Pension Plan
  • Chapter 28: How to Identify a Safe Haven
  • Chapter 29: Calling in Loans and Paying off Debt
  • Chapter 30: What You Should Do If You Run a Business
  • Chapter 32: Should You Rely on Government to Protect You?
  • Chapter 33: A Short List of Imperative “Do’s” and Crucial “Don’ts”

Keep reading this free report now — all you need to do is create a free Club EWI profile.