A screaming alert to the wise

Bernanke is now joining Rosenberg, Ferguson and Faber, Edwards, Grice and many others in warning that the debt crisis rearing its head in Greece may spread to America, causing  U.S. interest rates to climb.

As the Washington Times wrote yesterday:

With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.

Recent events in Europe, where Greece and other nations with large, unsustainable deficits like the United States are having increasing trouble selling their debt to investors, show that the U.S. is vulnerable to a sudden reversal of fortunes that would force taxpayers to pay higher interest rates on the debt, Mr. Bernanke said.

"It's not something that is 10 years away. It affects the markets currently," he told the House Financial Services Committee. "It is possible that bond markets will become worried about the sustainability [of yearly deficits over $1 trillion], and we may find ourselves facing higher interest rates even today."

I know I repeat myself, but THE SKY IS FALLING.  Some ideas, please add any:

1.  Get out of all bonds, anything that has a fixed dividend.  Just do it.

2.  The market and metals will go down when interest starts.  Eventually, metals will return to favor.

3.  Buy all the stuff you can, now.  If you are not scared, but on a fixed loan.  Even a fixed home mortgage will be an investment, as long as you can pay it.

4.  Get ready to grow food, might as well get into it.  If you can store food, buy it now.

5.  I think there is another clunker for crap program, to buy energy equipment.  If you need anything, get it now.  Get the clunker benefit, beat inflation, and lower your energy use.

Any ideas?  

----

Note the Washington Times reported on this.  Where are the leftists?  What are they thinking?  We can ignore reality and make Obama look good?

 

Warning from exiting Senator

Financial Times interview, thanks to Irene, is below.


Just another sad warning of the inevitable. I suppose I enter these bits to show I am not a lone wolf, crying in a little, tiny beer from the Olde Saratoge Brewerye. It is easy to understand why no one would believe me straight up. 


I have a condo under a volcano, overlooking the former capital of Monsterrat and decided not to accept the offer to be first IS for Sprint in Toronto.  I have given away cars and a computer that are collector's items and told my dad, as a young poli sci kid, that a job in the State Department in Europe didn't seem interesting.  I can understand widespread concern. 


I am a bit sad, myself, as Greg Judd is probably the only person I named in this blog as a good candidate for President.  Maybe, running is his plan. 


All that said, I hereby declare myself a candidate for President or whatever.  I have a birth certificate from New York City with my name, place, and date of birth on it and the words:   Birth Certificate.   There are no other pages involved. This is the only qualification I need as someone who would not be running as a Democrat. On the downside, my father was a patriot whose work to keep us safe remains secret and my mother, who cared for her family, didn't pose in the nude, between education camps. 


Once I decide where I actually live, I will set up my campaign headquarters there.  I am not sure if one can do that from Chile. 


Then, I will have to start a national party, I suppose, to nominate me. Colin says I am not really a Federalist and he is probably right, but the name sounds good.  I think a Federalist today would look like a state rights person.  I liked the Whigs, but you can't call youself a wig. 


Following the European tradition, I could be a "Former Christian Democrat."  To run in California, I should be an "Actualized Buddhist Progressive." 


In the meantime, send checks to me, better yet, send silver. I am not a 501 (c) (3) corporation, and banning such things is one platform, so you can't deduct anything.  PLEASE don't tell the government you sent me silver coins or where to find me.


You have to go to the blog or click on the title to get to a video that works. 

US senator warns of ‘financial meltdown’ risk

By Edward Luce in Washington

Published: February 25 2010 22:30 | Last updated: February 25 2010 22:30

The US is heading for a debt-driven “financial meltdown” within five to seven years, according to Judd Gregg, the outgoing Republican senator for New Hampshire.

In a robust and at times testy video interview for the Financial Times’s View from DC series, Mr Gregg also complimented China for showing rising alarm about the US’s mounting levels of public debt.

“We have had China say that they are looking for other places to put their reserves and that is probably a smart decision on their part,” said Mr Gregg, who will not seek re-election in November. “So the warning signs are pretty clear and the path is unsustainable and, at this point, unless we take different actions, unavoidable.”

EDITOR’S CHOICE

Crisis panel to call back bank chiefs - Feb-25

In depth: Financial crisis inquiry commission - Jan-14

In depth: Obama and Wall Street - Feb-03

But the senator, who was the most high-profile Repub lican invited by Barack Obama, the president, to join his administration last year, an offer Mr Gregg accepted and then turned down, said he doubted that the two parties would get together to tackle it.

Last month 16 Republicans and 37 Democrats voted to establish a fiscal commission – seven votes short of what was needed to prevent a filibuster.

Mr Gregg also played down prospects for the non-statutory fiscal commission that Mr Obama set up by executive order last week. “It was just an edict that came from a Democratic president,” he said, adding, that “it’s the only game in town right now”.

Mr Gregg also disputed non-partisan economic studies that showed last year’s $787bn (€585bn, £520bn) stimulus cushioned the impact of the recession. “The facts are wrong,” he said. “I can understand how a Keynesian would make that argument. I find them absurd on their face....”

ETC ETC ETC.  

Eve of Destruction: Real Estate

In the 1930's banks loaned money to home buyers, but the loans were all what we call "balloon."  That is, only interest was paid and the balance was all due in, say, five years. This was very attractive to the buyer, who it turns out was really a renter.

The banks had an overt, clever plan to take advantage of people so the banks could take the real estate. Yes, as I say to clients:  the bank is NOT your friend.

When financial trouble hit, this best laid plan backfired. Since the "owners" had no capital in the house and there was no concern about TRW, they dropped off the keys on the way to California.

It has been said that we cannot have another great depression, like the last one, because of the current amortizing mortgage system - people will not just walk away because they have serious equity in their homes, hence a reason to stay and fight.

This is a reasonable observation, but read the article below, then consider that housing demand will continue down and who knows what will happen to the dollar.  (Consider deflation:  your house could decreases in value 50% when your mortgage does not and your taxes go up, for a while.)

A report covered in yesterday's news noted in the last quarter of 2009 the housing market was down the greatest amount in its record keeping history.  (Usually followed by: "... but the market was up [HAPPY FACE] on the Fed's advice that it would not raise rates soon...." I am thinking journalistic schools are competing with educational colleges for challenged students.)

By Rex Nutting, 

WASHINGTON (MarketWatch) -- More than 11.3 million homeowners -- nearly one-fourth of all Americans with a mortgage -- owe more on their loan than their home is now worth, according to a report released Tuesday by FirstAmerican CoreLogic.

More than 10% of people with mortgages owe 25% more than their home is worth.

The number of underwater mortgages increased by about 620,000 from the third quarter, the firm said. Another 2.3 million mortgages had less than 5% equity in their home, which could be wiped out if home prices fall further.

In the fourth quarter, national home prices fell 1.1% compared with the third quarter, Standard & Poor's reported in a separate report on Tuesday. See full story on Case-Shiller home price index.

Once the mortgage is underwater, owners cannot easily sell their home or refinance their loan.

Underwater mortgages are concentrated in few states: California, Florida, Nevada, Arizona, Michigan and Georgia. In Nevada, 70% of mortgages were underwater. In California, more than a third of mortgages were underwater.

"The rise in negative equity is closely tied to increases in pre-foreclosure activity," CoreLogic said. Once a homeowner owes 25% more than the house is worth, foreclosure rates rise sharply.

Negative equity exceeded 25% in six states and topped 20% in six others.

Rex Nutting is Washington bureau chief of MarketWatch.

A little more from Realty Track:

Foreclosure Activity Hits Record High in Third Quarter

U.S. Foreclosure Activity Sets New Quarterly Record, Up 23 Percent From Q3 2008

IRVINE, Calif. – Oct. 15, 2009 — RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for Q3 2009, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 937,840 properties in the third quarter, a 5 percent increase from the previous quarter and an increase of nearly 23 percent from Q3 2008. One in every 136 U.S. housing units received a foreclosure filing during the quarter — the highest quarterly foreclosure rate since RealtyTrac began issuing its report in the first quarter of 2005.

Foreclosure filings were reported on 343,638 properties in September, a 4 percent decrease from the previous month but a 29 percent increase from September 2008. Despite the monthly decrease, September’s total was still the third highest monthly total since the RealtyTrac report began in January 2005, behind only July and August of this year.

“Bank repossessions, or REOs, jumped 21 percent from the second quarter to the third quarter, corresponding to jumps in defaults and scheduled auctions in the previous two quarters,” said James J. Saccacio, chief executive officer of RealtyTrac. “REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties.”

 I would think even a bottom fishing buyer will want to wait.  The bubble is shrinking fast.  There will be few buyers, uncertainty, higher taxes, less income, and no lending.  


Now tell me, over and over again....

Tick, Tick, Tick: 130%

Greg sent in an article I won't recap, just tighten.  Basically, while we are all concerned that our Debt to GDP may reach the crisis mark of 90% in a year or two, it is actually 130% now.  Greece is only 124%. This is a brave new world for the U.S. and we are facing draconian events.  High inflation is certain; a deflation is becoming probable.  Either way, life as we deluded ourselves to accept as normal is coming to an end.

This is a tough scenario.  IF we are looking at high inflation, you want silver or Canadian dollars and be out of the USD.  If we are looking at deflation, you want cash in the freezer because prices will move quickly decrease.  I suppose we have to entertain both notions and monitor what is happening.  I suspect metals will go down some 20%, unless Israel bombs Iran, and then take off in the last quarter, as we approach January 1 of the new future.

I thought oil may work as an investment, but as Greg noted, if deflation hits, the demand and price of oil will also deteriorate.

Note:  stock companies will be forcing income into this year, rather than have it taxed at next year's rates.  In addition, older people, who are smart, are reducing their estate now as the estate tax rate next year will be very high.  Now, it is 0%.  (If this concerns you, start giving away your money to your heirs, now, or set up a trust.)  So, there will be news factoids about how we have turned the corner, don't believe it.  Pick up Art Laffer's new book.

The government doesn't want you to have a realistic anticipation, as that will blunt their games, and the media/broker community is filled with hacks.  There appears breathing room for the time being;  on the other hand, the shoe of crisis isn't dropped slowly - it explodes on your foot

Of course, food and ammunition are always a good buy.

Republicans Pushing To Count GSE Debt Toward Statutory Debt Limit May Be Surprised To Find Real Debt-To-GDP Ratio Is 130%, And That Greece Is Amateur Hour

Submitted by Tyler Durden on 02/22/2010 18:49 -0500

• Congressional Budget Office
 
• Debt Ceiling
 
• Department of the Treasury
 
• Fannie Mae
 
• Freddie Mac
 
• Great Depression
 
• Greece
• Gross Domestic Product
 
• Joseph Stiglitz
 
• Proposed Legislation
 
• Sovereign Debt
 
• Sovereign Default
 
• Stress Test
 

A new proposal by House Republicans, lead by Rep. Scott Garrett (R., N.J.), is seeking to address changes to Fannie and Freddie accounting, along the lines of what has been previously proposed by Zero Hedge, and to not only include the GSE's losses as part of the Federal budget, but to also count the debt from the two mortgage zombies toward the nation's total statutory debt limit. As we stated previously, it is only semantics at this point which distinguish the GSE obligations from other Treasury obligations. Yet it is not just us, but the administration's very own Peter Orzsag who was pushing for consolidated GSE accounting two years ago. Yet with GSE debt most recently at $6.3 trillion, or about half of the existing Treasury debt, this would mean total US debt would not only explode by 50% overnight, but the recently  increased debt ceiling would be immediately breached and America would find itself in technical default (where it really is right now for all technical purposes).

Dow Jones has more:

A memo written by Garrett's office, which was released Monday, states that "now that the federal government has explicitly backed the operations of the GSEs, there should no longer be a distinction between their debt ... and the debt issued by the Department of the Treasury."

The proposed legislation highlights the current uncertainty surrounding the two firms, which have been under government control since September 2008. Federal officials were expected to provide some guidance as to their future plans for Fannie Mae and Freddie Mac in the fiscal 2011 budget released earlier this month, but that information wasn't included.

The Office of Management and Budget, which compiles the White House's annual budget request, did acknowledge in the budget the different ways the government currently accounts for the two firms. The Congressional Budget Office accounts for the two firms "on budget," treating them like any other federal agency. OMB, meanwhile, treats them "off budget," considering them to be private companies.

As we observed some time ago, "It would seem a little presumptuous that an amount representing more than half of the total US sovereign debt is conveniently swept under the rug." Luckily, there are people like Garrett to remind Obama and his henchmen that not every person in America is a zombified purchasing cretin with 10 credit cards and a limitless Centurion in the mail, who couldn't care less about America's sovereign default until 3 days after the fact. ... 

Pop quiz: what is the full faith and credit of a bankrupt entity?

And just in case you were confused, and have yet to recognzie the idiocy of the OMB, and the ruling class in general, here is a paper written in 2002, in which authors Joseph Stiglitz (a Nobel winner no less), and Jonathan and Peter Orzsag, whose opinions rotate by 180 degrees more often than a magnetic needle above true north, claim the following OMB-referential piece of unparalleled garbage:

...This implies that if Fannie Mae and Freddie Mac hold sufficient capital to withstand the riskbased capital scenario, they would likely fare well under any conceivable economic environment.

Ah, the OMB, which less than 10 years ago said the probability of a GSE default was close to zero. With such lunatics in charge of making the decision of whether the GSEs should or should not be considered Treasury debt, can we please just fast forward 10 years to the post nuclear war holocaust already. The constant barrage of daily bullshit is really getting tiring.

The audience knows what to expect and that is all they are prepared to believe,,,

The NRO has a blog that I placed below after dumping most of the eye wash.  The NRO is no fan of Al Gore, but this is a straight story you can check, if you are dubious.

The title is key line from  Tom Stoppard in Rosencranz and Guildenstern are Dead .  Richard Dreyfus said it twice, I recall. I suppose the title is the theme of my Footnotes' blog. 

The story below is about another one of the thousands of shoes dropping these days.  As I said a long time ago, scientists, especially who are being identified, will have no choice but to cover their asses. Short term money and careers have to give way to long-term reputation for the more serious of scientists.

The hack academics just go along to get along, but the reputable folks, if they have lost their objecivity, will pull back to the middle line when they see their evil ways, such as Sidall, below.  Once the hacks see the pendulum going the other way, they will try to run agead of it. 

Me, I am worried about global cooling, I think the false panic of 1976 had it right.  We need only wait two years to see if matters.

In all events,  Rosencranz and Guildenstern are Dead, which I rate it as a top 10 of all time, is a film you should own (but you still should see it.)  If you are not up on Hamlet, the play may be abstract, so first see Hamlet with Mel Gibson, who I believe got it right.  Yes, it is the same Mel Gibson.  In this version, as I recall, some scenes are moved about to provide a more linear story to the audience, as that is what they expect.

In the photo is Gary Oldman, one of the best, and the "Lie to Me" guy who is also superb.  Oldman played Lee Harvey Oswald to give you a sense of his range.  Charlton Heston was powerful in a role that didn't involve monsters, chariots, and so on.

”This above all: to thine ownself be true,
 And it must follow, as the night the day,
 Thou canst not then be false to any man.”

Sunday, February 21, 2010

Paper Reinforcing IPCC on Sea-Level Rise Retracted   [Daniel Foster]

A pair of scientists have formally retracted a paper that purported to back up IPCC conclusions about sea-level rise over the next 100 years. The paper concluded that sea levels would rise between seven centimeters and 82 centimeters by 2100. But a pair of mistakes were caught that undermined that conclusion:

Announcing the formal retraction of the paper from the journal, Siddall said: "It's one of those things that happens. People make mistakes and mistakes happen in science."...

The paper – entitled "Constraints on future sea-level rise from past sea-level change" – used fossil coral data and temperature records derived from ice-core measurements to reconstruct how sea level has fluctuated with temperature since the peak of the last ice age, and to project how it would rise with warming over the next few decades.

In a statement the authors of the paper said: "Since publication of our paper we have become aware of two mistakes which impact the detailed estimation of future sea level rise. This means that we can no longer draw firm conclusions regarding 21st century sea level rise from this study without further work.

"One mistake was a miscalculation; the other was not to allow fully for temperature change over the past 2,000 years. Because of these issues we have retracted the paper and will now invest in the further work needed to correct these mistakes.",,,,

Yup, just as the man said, it was just one of those things that happens. 

This episode is an opportunity to see that "science" does not mean "facts." In today's use, to my mind, it means the procedure and tools used to examine and use what we call facts.  In a way, science is a noun which encapuslates verbs.  Greeks thought in terms of studying facts to determine causes, which remains close to a modern understanding, though they were far more philosophical. 

The point being, there is no "science" that means "facts."  There are assumptions, methods, and conclusions.  These may provide new assumptions.  There are hardly any real "facts," but my sophistry is showing.  As Einstein took pains to explain, really strong hypotheses are not facts. As he noted, geometry is not "truth."

So, if anyone tells you science says anything, recall this makes no sense at all.  It is like saying "economics" or "religion" says....  To permit such use is to permit others' opinions to parade as fact.   Indeed, similarly the fraud of others will be championed.  The idea of science is to overcome such illusion.

In the forests of the night

Doesn't it seem as though news departments of various television and radio outlets meet to discuss what stories to run?  The world is in chaos, there are wars and bombings everywhere, our nation is being dismantled at a quickening pace, as the citizens are catching on, yet the same six stories are covered, all with no substance.

The other day, no matter how quickly I used the remote channel changer, there was snide gossip about Tiger Woods.  His tale was the lead story, even ahead of the dog show.  Righteous indignation for the drooling masses.

Frankly, watching such coverage should make one uncomfortable.  Who watches gossip? Who decides a personal melt down is news?  Why put so many women, who look at Woods as a soap opera character, on TV to express outrage?  We are have become the gossip nation.

World wide coverage of a discovered personal failing does not recommend us to the Federation of Panets.

Put aside, now, this disconcerting notion that people all around you are shallow. Look at what lesson has been revealed. There is a very clear one, if you look.

In Wood's speech, his media apology for who knows what - for upsetting his image is what I got, Mr Woods said he was having therapy and it was there he was reminded of the spiritual life.

That is the lesson, do you see it?

In today's world someone can divest moral responsibility to a word that exists outside the person.  We are told immorality is a disease.  Some virus done it, no me.

Simply, Mr. Woods had no moral center regarding marriage and preferred not to have one, thank you very much.  It is as simple as that. This is not a sexual addiction, some made up term for a person who sees no reason not to engage in rabbit sex, but who needs a cover.  He got caught and, now, sees the light, allelujah.  He has been reminded of his spiritual side.

Woods does not have a mature understanding of being married, as opposed to being mated.  Because he was rich, famous, and nice guy, women presented themselves.  There are plenty of them whose career is "soft hooking," as I once heard it described - by a woman. These people have no moral center either.  This was the norm in the Hollywood I saw.  Rabbits all. There is a rabbit social contract that is  easily breached for money.

So presented with  ways to be a jack rabbit, Woods took the opportunities.  It was fun and the attention flattered his ego. He explained:  he felt he earned this activity.

What he was really saying is:  I made money and was famous, so morality does not apply to someone above the masses.  Like I say, this is Hollywood; it is Washington D.C.

He had no first assumptions about trust and his faithfulness, so what the hell. The game is to not get caught. He lost that game and, gee, everyone around him was serious about their morality.

Marriage for Wood was finding a social front, locking in a nice soft-hooker, and enjoying family life, as a moral cripple would define it. Here we come to the many definitions of love. Can we say he "loved" his wife?  Your answer defines you.



Woods was arrogant, a pathological narcissist, another nice term for being selfish. He was a teenager confronted with rules he pretended to accept while doing what he wanted.  I wonder if the rules of golf would have been honored if no one was watching.

Here we are at the important point:  are we programmed creatures guilty of nothing (B. F. Skinner) or are we adults able to discern meaning and responsibility?  Most will answer quickly to the latter, but I wonder.

We are quick to go to all manner of therapy, to be exorcised of whatever devil can be found. The Bible has all manner of names for these spirits, though far fewer than the names of psychology texts. Most of us need an outside force to blame, rather than be honest and say we invited the devil in for tea. In the end, ether we are not responsible for anything, responsible for our actions, or responsible for not examine outselves, a serious flaw.

To admit that we caused a problem would mean we are morally responsible. Mr. Woods does not see that, though he is in distress. He is trying to manage people and the world, rather than himself.  He won't find his answers in therapy where the spiritual life is discussed.

Pride is the greatest sin of all.

William Blake. 1757–1827

489. The Tiger

TIGER, tiger, burning bright    
In the forests of the night,    
What immortal hand or eye    
Could frame thy fearful symmetry?    

In what distant deeps or skies             5
Burnt the fire of thine eyes?    
On what wings dare he aspire?    
What the hand dare seize the fire?    

And what shoulder and what art    
Could twist the sinews of thy heart?      10
And when thy heart began to beat,    
What dread hand and what dread feet?    

What the hammer? what the chain?    
In what furnace was thy brain?    
What the anvil? What dread grasp      15
Dare its deadly terrors clasp?    

When the stars threw down their spears,    
And water'd heaven with their tears,    
Did He smile His work to see?    
Did He who made the lamb make thee?      20

Tiger, tiger, burning bright    
In the forests of the night,    
What immortal hand or eye    
Dare frame thy fearful symmetry?

Get out of your 401k, now. Take a penalty.

An article Greg sent in on the 401k being the next target of the socialists. I mentioned this a few months ago, which I highlight, here, to demonstrate I am not crazy.  

 

When I report on the few things I see that are going on, they sound so bizarre to many as to violate the "normalcy bias,"  i.e. just more conspiracy worries from Gene.  Put a post-it on your refrigerator:  these are not normal times.

The ultimate plan is to FORCE you to invest 5% of your salary into a retirement fund.  Recall, the forcedsocial security confiscations were put into a "trust fund" for your protection.  The trust fund was pushed aside and money taken.  There is no trust fund.  

The administrator of the proposed national retirement plan is, you guessed it, the Social Security Adminsitration.  The illusion being, again, that some trust fund will be created for your benefit, whereas the money will be used to pay for the Marxist programs. You see, all these obligations are guaranteed by the U.S.  Sure. Your heart medicine is not guaranteed.

Percentage of personal income taken by Social Security (combined and self employed):   15.3%

Average tax burden, for now, state and federal:  30.6%

Proposed 5% for forced investment in T Bills:       5%

Loss of income, right off the top:                         51.9%

Add sales tax, mortgage, insurance and you are a serf enjoying indebted servitude. Oh, you want to eat, get medical and home insurance?  We have been suffering so long, we don't remember that people used to have money at the end of the month, that people started new businesses and, not that long ago, could afford domestic help if they were upper middle class.  Now, the high income earners show off their new stove.

Real estate was always thought of the great investment, where your money was safe and grew.  If you still think that, get out a piece of paper and a pencil.

Ohhmmmm.  Happy people live longer, so I am going off for a coffee whilst smiling and humming. ...

In July 2008 the Office of the Chief Actuary of the Social Security Administration calculated an unfunded obligation of $13.6 trillion for the Social Security program....(Wiki)

It is time to get out of any plan the government can grab. I would suggest taking your penalty, if any, and putting your assets in something that will not deteriorate if it is in dollars.  You will be better off even with the penalty.  You will get that back very quickly if you are out of dollars and free of the black hand of the Marx. If you think you should stay the course to be a good citizen, you are a chump.  Oohhmmmm.

The key is what to do with the money.  One apparently reasonable place to put cash is in TIPS which are supposed to be indexed to protect you against inflation, but you have to trust the government.  I will look into where to put money and report back.   

A better post-it:  DECOUPLE NOW.  It can be done, but it is like kicking a drug habit to get away from the pusher.  It won't be easy, but what it the alternative to dying a worker bee?

Class Warfare's Next Target: 401(k) Savings

By NEWT GINGRICH AND PETER FERRARA Posted 02/17/2010 06:52 PM ET

You did the responsible thing. You saved in your IRA or 401(k) to support your retirement, when you could have spent that money on another vacation, or an upscale car, or fancier clothes and jewelry. But now Washington is developing plans for your retirement savings.

BusinessWeek reports that the Treasury and Labor departments are asking for public comment on "the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams."

In plain English, the idea is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years.

They will tell you that you are "investing" your money in U.S. Treasury bonds. But they will use your money immediately to pay for their unprecedented trillion-dollar budget deficits, leaving nothing to back up their political promises, just as they have raided the Social Security trust funds.

As former British Prime Minister Margaret Thatcher said, "The trouble with socialism is you run out of other people's money to spend." 

This "conversion" may start out as an optional choice, though you are already free to buy Treasury bonds whenever you want. But as Karl Denninger of the Market Ticker Web site reports: "'Choices' have a funny way of turning into mandates, and this looks to me like a raw admission that Treasury knows it will not be able to sell its debt in the open market — so they will effectively tax you by forcing your 'retirement' money to buy them."

Moreover, benefits based on Treasury bond interest rates may be woefully inadequate compensation for your years of savings. As Denninger adds, "What's even worse is that the government has intentionally suppressed Treasury yields during this crisis (and will keep doing so by various means, including manipulating the CPI inflation index) so as to guarantee that you lose over time compared to actual purchasing power."

This proposal follows hearings held last fall by House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., of the Ways and Means Committee focusing on "redirecting (IRA and 401k) tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute," as reported by InvestmentNews.com.

The hearings examined a proposal from professor Teresa Ghilarducci of the New School for Social Research in New York to give all workers "a $600 annual inflation-adjusted subsidy from the U.S. government" in return for requiring workers "to invest 5% of their pay into a guaranteed retirement account administered by the Social Security Administration."

Argentina provided a precedent in 2008, taking over that country's private retirement accounts for forced investment in government bonds to cover spiraling deficits. Ambrose Evans-Pritchard editorialized at the time in Britain's Daily Telegraph that this may be "a foretaste of what may happen across the world as governments discover .. . that the bond markets are unwilling to plug the (deficit) gap. . .. My fear is that governments in the U.S., Britain and Europe will display similar reflexes."

This is just the latest chapter in what is developing into a war by the left on America's seniors. All that class-war rhetoric about "the rich" ends up targeting seniors, who tend to have accumulated the most in savings and investment on average because they have been around the longest.

President Obama, House Speaker Pelosi and Senate Majority Leader Reid targeted seniors for hundreds of billions in Medicare cuts to finance expanded Medicaid for the poor and other new entitlements in the ObamaCare health care takeover legislation. If you liked your health insurance, you were supposed to be able to keep it, except for the 25% of seniors who had chosen Medicare Advantage private health plans for their Medicare coverage.

Even the Medicare actuaries estimated that most of those seniors would lose their Medicare Advantage coverage because of all the ObamaCare cuts for those plans. Obama has even begun rationing for seniors under Medicare by slashing payments to heart and cancer specialists serving seniors under that program.

All of this reflects a fundamental problem underlying socialist economic policies. If the government keeps punishing responsibility and rewarding failure, society ends up with a lot less responsibility and a lot more failure, destroying prosperity in the process.

As former British Prime Minister Margaret Thatcher said, "The trouble with socialism is you run out of other people's money to spend." And now they want to spend our retirement savings.

Congressional Republicans should introduce legislation to block the government from ever proceeding with anything like this. Call it the "Keep Your Hands Off My 401(k) Act of 2010."

• Gingrich is former speaker of the House.

• Ferrara is director of entitlement and budget policy for the Institute for Policy Innovation.

Hey Beth, Read this: United States of Toast

Bob, our resident trust officer, gave me a copy of the Gold Stock Adviser to read this morning.  The bottom line of David Skarica's report was take advantage of a current price jump in the U.S. dollar, the result of short covering and, perhaps, some movement of money away from the EU as Greece melts down. 

After this period, which will not be too long, the dollar will continue its collapse and gold will move in the opposite direction, not so much as an increase in its real value but as a reflection of the falling dollar.   I have talked about this, so I figure David is a genius. 

One comment I will take to heart is don't fuss over the details of the gold price right now (silver too).  Just get out of the dollar. We are not in a normal cycle, so don't try to play it.  You may want to spread this entry around.

Here are some interesting data (yes, its plural):

1990: the federal government spent 1.25 trillion as against 1.03 trillion in revenue.
   
     Deficit of 221 billion or 3.81% of GDP


2000 the amount spent was 1.79 trillion while revenues increased 2.03 trillion.
    
     Surplus:  2.42%

Now, that all sounds good and we hear about the good old Clinton days, but look closer. 

This "surplus" was a government sponsored bubble, a basis for more spending, as spending went up 97.1% from 1990 to 2000.  Revenues increased by 43.9%.  Congressional saliva was running down the steps of the Capitol and there was precious little difference between the parties.  The GOP had prattled on about being more financially sound than the evil Democrats. A pox on both their houses.

Note the inflation in the 1990s was 31.8%.  Spending, thus, increased a bit more than inflation, but revenue was 2.5 times faster than inflation.  Again, this is not the way to analyze what was done to us. We didn't do anything new other than push a ponzi game.  Inflation was rampant and our revenue was based on a bubble the government fostered.

There was, as George Soros puts it, a "super bubble" being created.  During this time, no one addressed medicare or social security.  Madoff was in charge of the ATM. 

2000 saw the technology mini-bubble, but the government kept the super bubble going.  Fannie Mae and friends were directed by the government to fuel the fire storm.  No one took to fixing anything. Investment banks fed the greedy and made billions.

By 2009 revenues were 2.11 trillion, not much of a rise from 2000, see above, but the expenses were 3.52 trillion,

     Deficit of 1.42 trillion

 Government more than DOUBLED since 1990 and bubble revenue turned flat. 

The deficit was 12% for 2009.  According to the the Rule of 72s, if the 12 percent were NOT increased, the entire deficit would DOUBLE in six years, then doubled again in another six years. 

The current estimate is that up to $9 TRILLION more will be spent in the next 10 years and the mad people in D.C. want to add cap and trade along with a medical spending plan.  Just wait, you will see even more of the rats resign and head for cover.

We are, as a nation, done. Let it sink in.  Idiots have killed us and they are still kicking the fallen body. 

We did not want to be a fallen empire; we did not want to be any empire.  Perhaps, it is just as well we will no longer be responsible for the world, but it is going to seriously hurt as our "friends" decouple and our dollar vanishes.  A new currency is likely and I would not rule out confiscation of gold.

We have two choices:  inflate the curency to pay bills and lose foreign investors and the status of the dollar ( =  more inflation) or declare bankruptcy.  You decide on what will be done.  Hint:  there is not enough money made in the U.S. to pay down the debts.

I can't say it any simpler.  If you didn't follow all this, please reread or let me know and I can revist the prose.  Here is another way to look at things:

*  The total of all governmental debt, today, is 110.8% of the U.S. GDP. 
*  If you include consumer debt the total is 350% of GDP, double our WWII rate.

Let's say your home mortgage is 110% of your income AND your credit cards and insurance are another 240%.  How long will you be able to carry on? 

The only reason no one has foreclosed on the U.S. is YOU and the husbandry of generations of prior Americans.  Our oligarchs have used you.  Our investment bankers used you.  Now, it is all coming to an end and we are being asked to buck up.  For my part, to helll with that.

So, we are done.  Accept this and prepare.  Get out the back, Jack.  Before Europe and Asia decouple from the dollar, YOU DO IT.  You can be in this country, but not of it.

We are not about to leave a war economy ending in 1945 where things were built, factories created, inventions perfected, young people wanted homes and educations, where the church provided stength.  We are not leaving anything; we are falling deeper into government sponsored debt, which we permitted, ultimately. and we still have wars going on. We have precious little in the way of hard industry, though as we fall toward third world status, our prices will be attractive.

Probably, this financial madness is purposeful so that a facist government can now step in to quel the coming chaos, a North American Union can be established.  To my mind, this seems likely because grown ups in government and investment banks can't be as stupid as they act. 

Skarica thinks gold and gold stocks will help you preserve your cash - warning: get out of the dollar immediately in this recent run up.  He assumes a stable political environment.  David is Canadian. He probably thinks a little make-believe socialism is a good thing, but our mess is nothing like the Canadian system, for now.

He did mention a few Canadian gold stocks worth looking into. I will see if I can buy them using a Canadian account.  In the meantime, I continue to suggest US silver coins pre 1965.  Buy some on this weakness, then bury them. Do not participate in the government-banking complex.  Become invisible. 

Your homes, 401Ks, bank accounts, interest income, estate, and car are all targets. Think carefully about blowing your money on good colleges unless you can get a long loan.

If Congress is purged this year, I am still not confident that anyone can fix this mess. Assume you are toast and act accordingly. We need a few more months of blizzards in D.C.Skarica

For update click on title below:  

U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 16 Feb 2010 at 09:00:11 PM GMT is:

The estimated population of the United States is 307,851,808
so each citizen's share of this debt is $40,171.52.
The National Debt has continued to increase an average of
$3.85 billion per day since September 28, 2007!
Concerned? Then tell Congress and the White House!

A final concept to keep at hand:  The progressive rally cry that we should tax wealth is a misdirection to quiet the masses.  Wealth is not taxed, income is taxed. John Kerry will be fine, but not a truck driver. The oligarchs will protect themselves and set you up.

Seek assets, real ones like land, silver, food.  Convert your financial assets into real wealth. Do not leave them in the intermediary dollar form.  We will all learn soon enough that the dollar is a piece of paper.

US Report on EMP

From Irene, who doesn't like my wise crack regarding the EMP site in my prior blog. Below is the full US report, that was published the same day as the 9/11 report.  You wonder if that was on purpose. 

Below is an executive summary of 48 pages and a full report of 190 pages.  Only the government could have a 48 page executive summary. 

Report of the Commission to assess the Threat to the United States
from Electromagnetic Pulse (EMP) Attack. 48 pages.

http://www.empcommission.org/docs/empc_exec_rpt.pdf

The full report: Approx. 190 pages.

http://www.empcommission.org/docs/A2473-EMP_Commission-7MB.pdf

Just a bit on EMP

It is a beautiful day and you may be feeling pretty good, so let me mention two items to ruin you day: 

1.  One is a site dedicated to preparing for EMP attacks Irene sent along.  The site is more of a "Oh MY God, you better send me money" affair, but you may feel that my warnings are less the ranting of a disgruntled curmudgeon than a fair concern of a disgruntled curmudgeon. 

Speaking of curmudgeons, Greg isn't so worried about the EMP problem because we can track trawlers, etc.  He also says the military is ready for it which is of no solace.

Even if we could track a bad guy or vessel, I don't trust morons.  Could you see any member of the administration saying, "Sure, take out that trawler."  No, there would be days of meetings and, then, a law barring the prevention of attacks without a grand jury indictment.

The EMP attack is the only viable one that can take us out and requires very little in the way of preparation. It is the type of thing that would appeal to sneaks who threaten to wipe out nations and has no care of killing off its own people as the time has come for the kuku bird, or whatever, to come with and provide millions of virgins.  I wonder who fits that?  Indeed, a Russia or China could be behind the attack and make us think it was Iran.

I suggest a car without any computer that gets good gas mileage, like a 1965 VW.


2.  The latest "green" hype is the creation of a smart grid, which, of course, will take a generation to even get work started, but shhhh, don't let on.  Part of the new grid system is the electro mechanical elements of the grid will be replaced by digital stuff.  This is so that an EMP can completely eliminate our grid.  But wait, there is more...

The problem with a huge volume of current (I am thinking you can say capacity) is less building super-cooled lines, which we can do and are testing in the grid in Menands, than stopping the current in the event of problems.  If ten times the electricity suddenly has no where to, a power company plant in its wat won't sustain a few boxes blowing up, the entire station will blow up and a bit of the town around it.  We are planning on introducing a system that will be easy to cripple, resulting in massive explosions that will prevent the repair of the grid for many years.  (Think about it: recreate the electric infrastrucure without electricity and, for a long time, gas or oil.

I wonder if being a lineman for the county is a green job.

Call To Action: Codex Alimentarius is descending upon us

Back in my Tech Valley Times days I wrote an article about Doctor Rima Laibow.  I had met her and General Stubblebine (Ret) a few times and worked on a business matter. Great people.  He is the former director of the DIA which, I think, means he was my father's boss.

She is an M.D. maverick who practices medicine outside the norm;  she is concerned with health as opposed to fixing.  She looks into foods, supplements, and we even talked about treatments by frequency.

Even then, she was going to D.C. to fight the Codex Alimentarius  - for many years.  She has warned us and needs help.

I learned a new term, yesterday, the "normalcy bias."  This term describes why people don't act when confronted with a crisis.  There is a tendency in 80% of the people to not see the crisis coming, then become disoriented waiting for direction.  This is exactly what the left is banking on.  Will we agree to Big Brother when a good  nap will do?

Of note, the term is mentioned in a book about why some people survive and others don't.  The survivors have "situational awareness" and know what to do in a crisis, having paid attention.

“How fortunate for leaders that men do not think.” - Adolf Hitler

WATCH and SPREAD


I urge you to get a piece of pie, a big one, and listen to the lecture I posted. In this time of one apparent, but not, crazy laws dropping like rain, the Codex appears mundane - trust me it is not.  If it is not stopped, you will not be able to get Vitamin C or Niacin or anything without a prescription.

Two years ago, I refused to take rat poison (medical grade:  Warfarin) and started myself on niacin, Aregenine, aspirin, serrapeptase, and nattokinase.  I am still here and my preference for vitamin K  over rat poison has prevented heart problems and cost next to nothing.  I am doing very well, to the confusion of some doctors.  I fired one doctor and another decided he did not want me.  Imagine if I had no option but to ask doctors for a worm enzyme.  (Actually, some pharmacy company will be able to sell it for 50 times the current cost and it will be promoted by cute salesgirls. This will reduce medical costs, if I understand the Democrats.)

As Rima notes the father of the Codex was the father of the gaz used in concentration camps and who was sentenced at Nuremberg.  Of course, being an ex-Nazi animal, he hooked up with the U.N. and the WTO which are behind this "harmonization" of member nations to the Codex which, by the way, is a "trade" item and has nothing to do with health.  It seeks to control all food and supplements - period.  Recall the founder of the Bildebergers was also a convicted NAZI.  Anyone catching on?

Senator McCain recently introduced a bill to accept the Codex, pushed by the drug companies who are exempt, thereby proving the need for supplements for dementia.  INFO  At that site, there is action you can take.  [One blog says McCain is pushing this because of the need to protect athletes from evil supplements.  If he really believes that, we need a recall.]

This new Codex gambit is very quiet and very dangerous.  We are losing the battle to each what we want.  One comment I read is that Hayworth is not much better on this.  I don't know.  Here is another:

Regarding Codex, there is a site out there (can't find it, maybe someone else can or knows about it?) that has what Codex actually does and when it really starts. If I remember correctly, it begins sometime in 2012 and it is a "safety" measure, but it isn't as draconian as some have made it out to be. Remember December 31, 2009? Well, I still get my supplements . Additionally, HR 2749 needs to pass for it to be implemented.

It may be our nation is lost to the Marxists and oligarchs, but part of the blame goes to the Republicans for nominating a troll who couldn't even think up a good question to ask Obama.  If anyone, anywhere, including the press, actually contested Obama, we would not be in looking for exits.  The fix is in.

We have lost the battle to protect our property and are losing our freedom.  If things gets too bad, you can always just leave, but where do you get your food?

In any event, watch this subject.  If it becomes law, buy vitamins and so on in bulk next year.

=====

PS - does anyone know why spell check seems to have vanished from Blogger?  Did I do something?

Who needs Big Brother

Ken sent this in.  The small reactors being used now are evolving into the one here that will be produced in 2013.  It is the size of a golf cart (the picture below seems out of proportion)  and can power 20,000 homes for 7 - 10 years, all for a merely $50 million. 

No pollution, no UN, no meltdown, no staff,   

No, they don't need or want any investment money. It only takes a few years for it to cool off after its life is over. I haven't seen information about expected spent fuel; the small reactors, today, don't have the fuel problem of the huge ones of the 1960s.  Short half life, less fuel. 

Click on the title for their web page. 

Hyperion reveals design details of its 25 MW reactor

by Dan Yurman on 11/17/2009 22:20   2 comments , 1003 views
Categories: Electricity Grid, Nuclear Power, Energy
Tags: nuclear regulatory commission, hyperion, american nuclear society

Firm kicks-off effort to prepare a submission to the NRC for safety review

Hyperion Power Generation, which is designing a small, 25 MWe, nuclear reactor, revealed design details Nov 18 (slides) about the company's product at the winter meeting of the American Nuclear Society taking place in Washington, DC.

This is the first release of reactor design information by the company. It marks the kick-off of the firm’s pre-application process with the NRC for safety analysis review that leads to a reactor design certification decision by the agency.

No matter where, globally, Hyperion plans to build their reactor, the NRC certification is a critical success factor because the agency’s regulatory review is considered to be the “gold standard” by other countries.

According to John Grizz Deal, Hyperion CEO, the firm plans to submit its design to the NRC in late 2010 or early 2011. Hyperion technical staff said the NRC learning curve is a challenge since it is not a light water reactor.

“We hope that it will not be too hard for them to understand our design. We choose technologies for fuel and fuel cladding that are well understood from a safety perspective.”

Design details

The sealed core, which is good for up to 10 years, does not require refueling at the customer site. Instead, the entire mechanism is replaced by a new one. The first use of the reactor at a customer site will be to produce electricity. The planned output of the reactor will be 25 MWe. Other applications include process heat and power for remote military applications. The company claims to have numerous customers lined up to buy the units.

Features include;

* Each unit will generate approximately 70MWt and 25MWe – enough to power 20,000 average American homes.

* The temperature of the secondary loop is 450-500 F. The secondary loop is a liquid metal circuit to produce steam so that there is no contact between the primary reactor and water in any form.

* Overnight costs are estimated by the firm to be $2,000 - $3,000 per KW capacity. The bottom line market goal is to generate electricity for < US$0.10 per kWh anywhere in the world.

* The reactor, which measures 1.5 x 2.5 meters, can be transported by truck to a customer site. Connections to a secondary loop, turbine, and transmission lines increases the footprint, but not by much.

Hyperion Reactor Information

* Operation is limited to reactivity adjustments to maintain constant temperature output and it has much fewer in-core components than a light water reactor. Hyperion claims that operational reliability is enhanced by the reduction of moving mechanical parts. Staffing will be at least two people at all times to comply with NRC requirements.

The reactor is intended to meet requirements for dedicated power by hospitals, factories, foundries, government centers, water treatment, or irrigation and desalinization. Resource intensive uses at remote sites include mining and oil production & refining. Military facilities that cannot compromise tactical readiness relative to having enough electricity may find the small footprint of the reactor and ease of transport to be of interest.

Safe shutdown

The reactor has two shutdown systems which provides redundancy. In event of a problem, there is a space in the center of the core into which the operator can rapidly dumped marble size boron pellets which will lead to rapid shutdown of the reactor.

Hyperion Plan Review of Active Core

Once reactor comes to end of fuel cycle, in about 5-10 years, it takes two years to cool down via air circulation. Then the entire reactor can be removed for disposition. Ideally, a customer will have two setups for these reactors so that one slot is empty at startup of the first one. When it’s done, you put the new one in the empty space, and let the old one cool off in place for two years. Then the customer can arrange for Hyperion to remove it. It gives new meaning to the term “plug and play.”

Future fuel fabrication plans

Fuel will be enriched to between 15-19.6% because this small reactor needs more highly enriched fuel to get power levels to point of economic value. Fuel is a uranium nitride alloy. No fuel has been fabricated or tested so far. A system engineer at Hyperion said in an interview INL’s ATR is an option for testing fuel. Other international sites (unnamed) are also interested if ATR is not available. The firm’s goal is to verify that fuel meets requirements for higher burn-up rates.

Hyperion said in October it plans to build a factor to make the reactors in the UK. CEO Deal is making a simultaneous announcement about design details this week.

Prior coverage on this blog