Depression2.tv
Interactive

Peace Plane Derailed

September 22, 2004


cat.gif

What happened? Yusuf Islam, aka Cat Stevens was refused entry to the U.S. on "national security grounds." His plane from London to Washington DC was was diverted, the passengers lied to (told they were stopping for 'refueling'), and they took the Cat into custody. See the article here: US refuses entry to Cat Stevens

Come on now. Aren't things getting a little out of hand with this government? The true terrorists are in Washington. They are the ones who are taking away our freedom, not the so called "terrorists." Now is the time to stop them, and the best opportunity we have is coming up in November.

SAY NO TO TERRORISM.

Comments? In the mean time, investigate the truth with your own eyes and brain from that cat's own website: http://www.yusufislam.org.uk/ And while you think it over, read over the lyrics to his best song, "Peace Train." It can't help but make you happy, and give you the confidence to say no to all this nonsense coming out of Washington:

PEACE TRAIN

Now I've been happy lately, thinking about the good things to come
And I believe it could be, something good has begun

Oh I've been smiling lately, dreaming about the world as one
And I believe it could be, some day it's going to come

Cause out on the edge of darkness, there rides a peace train
Oh peace train take this country, come take me home again

Now I've been smiling lately, thinking about the good things to come
And I believe it could be, something good has begun

Oh peace train sounding louder
Glide on the peace train
Come on now peace train
Yes, peace train holy roller

Everyone jump upon the peace train
Come on now peace train

Get your bags together, go bring your good friends too
Cause it's getting nearer, it soon will be with you

Now come and join the living, it's not so far from you
And it's getting nearer, soon it will all be true

Now I've been crying lately, thinking about the world as it is
Why must we go on hating, why can't we live in bliss

Cause out on the edge of darkness, there rides a peace train
Oh peace train take this country, come take me home again

Posted by manystrom at 05:13 PM | Comments (22)

No Choice But Skull and Bones

September 21, 2004

Do your homework, and then decide.

Posted by manystrom at 06:09 PM | Comments (3)

What Have We Wrought?

September 16, 2004

hummer.jpg

Commentary from Juan Cole:

Now you have a burning Bradley fighting vehicle sitting there in the street, and a crowd gathers, many of them boys, to jeer and dance. Some of the young men haul out a banner of the Tawhid and Jihad terrorist group and hang it from a barrel sticking out of the vehicle.

Alarmed that the Bradley would now be looted for weapons and ammunition (and, some reports say, "sensitive equipment"), US troops now call in helicopter gunships. They arrive, but claim they took small arms fire from the area around the burning Bradley.

Now the tragedy unfolds. The helicopters fire repeatedly on the crowd gathered around the Bradley, killing 13 persons and wounding 61. [...]

I don't know if the helicopters actually took fire from the crowd or not. It is plausible, but given that mostly civilians appear to have been struck, it wouldn't be strange if the US side tried to put the best possible face on the matter.

It would also be interesting to know what exactly was in that burning Bradley that was so important it was worth 13 lives and scores of wounded.

Posted by manystrom at 02:07 AM | Comments (15)

A Great Nation is Like a Great Man

September 15, 2004

Tao Te Ching, 61:

When a country obtains great power,
it becomes like the sea:
all streams run downward into it.
The more powerful it grows,
the greater the need for humility.
Humility means trusting the Tao,
thus never needing to be defensive.

A great nation is like a great man:
When he makes a mistake, he realizes it.
Having realized it, he admits it.
Having admitted it, he corrects it.
He considers those who point out his faults
as his most benevolent teachers.
He thinks of his enemy as the shadow that he himself casts.

If a nation is centered in the Tao,
if it nourishes its own people
and doesn't meddle in the affairs of others,
it will be a light to all nations in the world.

quoted from: http://www.mindfully.org/Tao-Te-Ching-Lao-tzu.htm

Posted by manystrom at 08:33 AM

Speeches Ignore Impending U.S. Debt Disaster

September 14, 2004

No mention of fiscal gap estimated as high as $72 trillion

by Carolyn Lochhead, SF Chronicle Washington Bureau

Washington -- The first of the 77 million-strong Baby Boom generation will begin to retire in just four years. The economic consequences of this fact -- as scary as they are foreseeable -- are all but ignored by President Bush and Democratic challenger John Kerry, who discuss just about everything but the biggest fiscal challenge of modern times.

Yet whoever wins the 2004 race will become the first U.S. president to confront what sober-minded experts across the political spectrum describe as an impending "fiscal catastrophe" lying right around the corner.

Astronomical federal debt, coming due as the Baby Boom generation collects Medicare, Medicaid and Social Security, is enormous enough to swamp the promises both candidates are making to voters, whether for tax cuts, health care, 40,000 more troops or anything else.

"Chilling" is the word U.S. Comptroller General David Walker uses to describe the budget outlook.

"The long-term budget projections are just horrifying," added Leonard Burman, co-director of tax policy for the Urban Institute. "I've got four children and it really disturbs me. I just think it's irresponsible what we're doing to them."

What these numbers portend are crippling tax increases on workers, slashed benefits for retirees, gutted budgets for homeland security, highways, research and everything else, and an economic decline or a financial collapse that devastates the middle class, as happened recently in debt-strapped Argentina. Eventually, analysts insist, someone -- today's children or tomorrow's elderly or both -- will pay this debt.

Traditional budget measures used by politicians and the press give what Walker and many others call a highly misleading view of the U.S. debt. These focus on publicly held debt already incurred, now at $4.5 trillion, or 10-year budget forecasts like the one released last week by the Congressional Budget Office showing a record $422 billion deficit this year and a $2.3 trillion 10- year deficit.

'Fiscal gap' in the trillions

But these figures, worrisome enough, are deceptive because they ignore future liabilities such as Social Security and Medicare payments to the Baby Boomers. An array of government and private analysts put the actual U.S. "fiscal gap," which means all future receipts minus all future obligations, at $40 trillion (Government Accountability Office) to $72 trillion (Social Security Board of Trustees).

These are not sums, but present-value figures, heavily discounted to show in today's dollars what it would cost to pay off the debt immediately. The International Monetary Fund estimates the gap at $47 trillion, the Brookings Institution at $60 trillion.

"To give you idea how big the problem is," said Laurence Kotlikoff, economics chairman at Boston University, who has written extensively on the subject, to close a $51 trillion fiscal gap, "you'd have to have an immediate and permanent 78 percent hike in the federal income tax."

These obligations are not imaginary. And unlike the 1980s and 1990s, economic growth cannot bail out the government because the Baby Boom retirement is at hand. Those born in 1946 will reach age 62 in 2008, allowing them to take early retirement and receive Social Security benefits.

"It's a number that's so large that people find it implausible, and so they don't think about it," said Alan Auerbach, a UC Berkeley economist who studies the issue and consults for the Kerry campaign. "But it's based simply on the projections we have for Social Security and Medicare. People aren't making these numbers up."

A pathbreaking study by Jagadeesh Gokhale of the Federal Reserve Bank of Cleveland and Kent Smetters, a former deputy assistant secretary at the Treasury -- commissioned by former Treasury Secretary Paul O'Neill -- estimated a $44 trillion fiscal gap. It laid out a few painful options on how to meet the liabilities:

-- More than double the payroll tax, immediately and forever, from 15.3 percent of wages to nearly 32 percent;

-- Raise income taxes by two-thirds, immediately and forever;

-- Cut Social Security and Medicare benefits by 45 percent, immediately and forever;

-- Or eliminate forever all discretionary spending, which includes the military, homeland security, highways, courts, national parks and most of what the federal government does outside of the transfer of payments to the elderly.

Such corrective actions grow more severe each year. Waiting just until 2008, the end of the next presidency, would mean raising the payroll tax to 33. 5 percent instead of 32 percent, the study found.

Gokhale said that fresh numbers from the Medicare trustees show the fiscal gap has since grown to $72 trillion, $10 trillion of that for Social Security and an astonishing $62 trillion for Medicare, the government health care program for the elderly.

"The long-term picture is pretty bad," Gokhale said.

Election's absent issue

These numbers are seldom discussed, least of all in the 2004 presidential race. Ironically, as the Baby Boom retirement has neared -- and the remedies grow more painful -- political discussion has faded. Gone is Ross Perot's anti-deficit crusade. Gone is Newt Gingrich's call for Medicare restraint. Gone is Al Gore's "lockbox" for the Social Security surplus.

Instead, Kerry and Bush promise only to halve the current deficit in four years -- "both (of them) relying on pretty imaginative accounting to get there" said Burman -- while promising more spending and more tax cuts.

Yet today's deficit is a tiny fraction of the government's actual liabilities, which are so daunting they promise to make Bush's tax cuts a distant memory and Kerry's health care plan a fantasy.

While Bush and Kerry propose to address parts of the problem, "the numbers don't add up on either side," Walker said.

Medicare makes up the bulk of these liabilities, driven mainly by the expanding elderly population and rapidly rising health costs. Social Security, more often discussed as a looming problem, actually accounts for far less in future debt.

While Congress squabbles over whether the administration hid the new prescription drug benefit's 10-year cost -- pegged by the White House at $534 billion versus CBO's $395 billion -- the actual liability incurred by the new drug benefit is estimated at $8 trillion to $12 trillion.

Kerry and Democrats call the drug benefit inadequate. They would do little to restrain Medicare costs other than allowing the importation of price- controlled drugs from Canada.

Bush and Republicans added the drug benefit along with costly subsidies to providers. Even optimists do not expect their modest market reforms to cut costs.

Promises, promises

Kerry has promised not to cut Social Security. "I will not cut benefits," he said recently. "I will not raise the retirement age."

Democrats generally cite "trust fund" numbers that show Social Security - - and Medicare to a lesser extent -- remaining solvent for decades, even though government officials repeatedly call the numbers an accounting fiction. CBO director Douglas Holzt-Eakin last week said the funds contain nothing but "electronic chits" that measure government obligations to itself.

Bush proposes adding private accounts to Social Security for younger workers, which could reduce future government obligations, but would do so by diverting a portion of the payroll tax, adding $1 trillion to the short-term deficit. That might have been feasible when Bush took office in 2000 facing a projected $5.6 trillion surplus, but the surplus is gone. Similar plans in Congress that instead rely more on benefit cuts have gone nowhere.

"The country's absolutely broke, and both Bush and Kerry are being irresponsible in not addressing this problem," Kotlikoff said. "This administration and previous administrations have set us up for a major financial crisis on the order of what Argentina experienced a couple of years ago."

If this sounds far-fetched, former Bush Treasury Undersecretary Peter Fisher and former Clinton Treasury Secretary Robert Rubin both alluded to such a scenario at a June budget forum in Washington.

"Having been involved in markets for a long, long time," Rubin said, "I can tell you these things can change unexpectedly and without warning," referring to potential financial market reactions to the U.S. fiscal position.

Fisher warned of a "pivot point" when "the collective wisdom of bond traders thinks that the deficit horizon has turned," adding, "Both Bob and I are nervous."

The world has seen fiscal imbalances of this sort before, in Asia and Russia in the late 1990s and more recently in South America. Such financial panics can be triggered by any number of events -- a flight from Treasury bonds by the foreigners who buy much of the U.S. debt, for example -- if investors' views of the market, which are focused on the short term, suddenly change.

"If you look at financial crises, they occur seemingly overnight," said Kotlikoff. "More and more pieces of straw drop on the camel's back, and all of a sudden, the camel collapses. ... Nobody knew exactly what day Argentina was going to go south or exactly what day Russia was going to default. The timing is up for grabs."

But early signs of a problem are now appearing, analysts said, starting with the mounting deficits under Bush caused not just by the recession and terrorist attacks, but also by enormous spending increases and tax cuts. The brief window of surpluses that appeared during the late 1990s economic boom offered a chance to address long-range liabilities, but those surpluses now are gone.

"Maybe the public doesn't want to hear it," Kotlikoff said. "Maybe politicians think ... the American public can't understand the truth or hear the truth or bear the truth. I think this is garbage. I think that people care about their kids and grandchildren and need to know the dangers facing them -- and us."

Posted by manystrom at 03:17 PM

The Silent Swing Votes

September 12, 2004

OverseasVote - Press Release - September 9, 2004

Key absentee registration sites:

www.overseasvote.com, launched Feb 04, registered >38,000
www.overseasvote2004.com, launched late July 04, registered >20,000
www.tellanamericantovote.com, launched Mar 04, registered >5,000

3,000+ US citizens per day from over 150 countries are registering through these democratically-oriented sites…and this appears to be the tip of the iceberg.

All voters, regardless of political perspective may use the sites, but data suggest more than 95% of registrants at these sites support Kerry.
Since June, month-to-month registration growth exceeds 120%.

According to Federal Voting Assistance Program figures, 340,000 absentee ballot requests had been received as of July 1, 2004 – already 90,000 more than the total number of absentee ballots in 2000. More than 80% of OverseasVote’s registrations occurred after July 1, implying that the total number of potential overseas voters will exceed 1.8 million – an increase of 625%.

These overseas Americans are the ‘silent swing’ voters that at present are not reflected in any state or national poll numbers. They may well decide many swing states’ elections, and have a substantial impact on which party will control Congress and the White House.

State-by-state projection of likely absentee votes, based on OverseasVote site data:

California 260,000
New York 162,000
Florida 77,000
Texas 76,000
Massachusetts 64,000
Illinois 64,000
Pennsylvania 61,000
Michigan 58,000
Washington 55,000
Virginia 46,000
Ohio 45,000
Colorado 42,000
Minnesota 38,000
Oregon 35,000
North Carolina 29,000
Wisconsin 22,000

For more information: press@overseasvote.com
Voting enquiries: vote@overseasvote.com

Video news release is available

+852 2574 4293 or +852 9151 2316

Brett Rierson
______________

Regime change, one vote at a time...

US Citizens, register to vote at www.overseasvote.com

+852 9151 2316
+852 2574 4293

Posted by manystrom at 08:59 AM | Comments (0)

Gold Charts R Us Snippet

Gold Charts R Us

Welcome to GCRU #128 on Sept 8. Nothing very bad is happening but also nothing very good, a stagnant pool. It’s the fault of the US$ of course, threatening to break up from a symmetrical triangle dating from mid-July. A rise to 90.50 (basis Dec futures) in $-Index & above would be black cloud for gold. A fall to 87.70 would be bright yellow cloud for gold. So watch those numbers daily. ••Under these circumstances I can’t advise buying dips this time as a $-rise would send many golds to the bottom of their trading ranges & we’d need to see if they hold. Safest strategy is to buy on 1 day closes over nearby peaks—which would happen if the $ drops. ••Meantime, the world is holding its breath. The euro typifies the action, also poised in a symmetrical triangle, but also burdened by a H&S top pattern which is scary--& troublesome for gold if it breaks under the 120 neckline. Gold is still in the trading range we outlined long ago, aprox 380-425. But indiv gold stks are still doing their own thing, as happens in all trading ranges. Note the bullish wedges & flags to spot the movers. •••While we wait for gold to break & the $ to drop, we have the energy stocks to keep our cash registers ringing bells. Thank goodness, we diversified. And they are outperforming crude oil. Yesterday, with oil down sharply, most energy stks were mixed, & half rose! See below for new recom. ••••GCRU BREAKING NEWS: Buy & Hold clearly doesn’t pay off.

Yet daily trading or even daily monitoring is not easy for everyone. So, how about invest-&-exit via trends? Yes—for the non-daily trader (short or medium term). I’ve coined a word for this approach of Investing with Trends: Trendvestors (T/V’s). It’s the middle ground between buy/hold & daily/trades. So, GCRU is going to offer 1-2 pages of each issue of GCRU for the Trendvestors. The recom on this/these pages will be a blessing for those who simply can’t find the time to trade or even monitor every day. For some, a weekly monitoring via GCRU may be enough. T/V’s can’t make as much profit as daily traders, but far more than the buy&hold crowd. And it may be the only answer for those with busy schedules or learner-drivers. Some will probably play both sides of the street, some daily-acting, some trend-acting. And both groups benefit from looking at the GCRU charts, especially the US$ (a compass) plus bullion, the A/D & SGI. We’ll launch this new Trendvesting either next wk or the following week, after we test it & get the bugs out. The new T/V section will be greatly simplified, extremely easy to follow, yet still offer learner-drivers the opportunity to compare those guidelines with those to traders & study the indiv gold charts. It’s win-win-win for U. More work-work-work for us, but the need seems apparent. ••••In addition to the energy stks I’ve recom here for many wks, all of which are acting well, I found some new ones. Have a look at these: Denbury Res. (DNR); Westmoreland Coal (WLB); True Energy (TUI-T); Petrel Res.(LSE) (London); Centurion Energy (LSE); Transocean Inc (RIG) & Noble Corp (NE). Gamblers buy toehold longs at mkt; others buy on pullbacks to support. I haven’t space & time to fine-tune the exact entry&stop prices but IMO they are medium term buys with small downside risk. U can find the charts on Bigcharts.com & determine your own entry & stop prices. The point is: energy & gold are the only clear bull mkts today. U shud have feet in both pools. If the $ breaks upside, gold will drop but energy stks will rise faster than present pace, IMO. So, diversification should pay now, as it always has. •••••••Whew, lots of input, eh? God speed. From your alchemist gold guru,
Uncle Harry


AngloAmern09.07.04.gif

Anglo American (Nasdaq: AAUK) daily chart; US$: Buy recom:
GCRU’s bot at 22.25; stop: 20.75. If out, wait for strength after dip that holds on/above 21.40-22.00 support. Or, buy bit on 1-dc over 23.30;
stop: 21.40. Profit/sell targets: 24.95 &/or 26.00. Basis weekly chart: neutral. Comment: sym triangle after breakout from trading range.
Spinner neg. Monitor May uptrend.

Iamgold09.07.04.gif

Iamgold Int’l African (Toronto: IMG; Amex: IAG) daily chart (L/O/C); CAD$: Trade recom: GCRU’s bot bit at 9.15. If out, wait to buy
strength after dip that holds on/above 8.60 support. Or, buy 1-dc over 10.00; stop: 8.50. Profit/sell targets: 9.85 (if buy low) 10.45 &/or 11.95. Basis weekly chart: neutral/bullish. Comment: Spinner neutral. Poss reverse H&S base likely to offer low risk buy on pullback. Good R/S.

More Info on GCRU

Posted by manystrom at 08:49 AM | Comments (0)

Monster Budget Deficit

September 09, 2004

compare.gif

By Alan Fram, Associated Press | September 8, 2004

WASHINGTON -- The Congressional Budget Office is projecting this election-year's federal deficit will reach a record $422 billion, congressional aides said yesterday. The figure, provided by aides who spoke on condition of anonymity, is sure to provide political fodder for both parties during the remaining two months of the presidential and congressional campaigns.

''This is by far the biggest deficit in American history," said Thomas Kahn, Democratic staff director of the House Budget Committee. ''There is no credible way Republicans can portray the record deficits they have created as good news."

But Sean Spicer, Republican spokesman for the committee, said: ''Deficits are going down, jobs are going up, the economy continues to improve. I don't see how you can't be happy with that news."

The number was being released later yesterday in the annual summertime forecast issued by the nonpartisan Congressional Budget Office.

The projection by Congress's nonpartisan budget analysts would surpass last year's $375 billion shortfall, the current record.

The Budget Office report also said next year's deficit would shrink to $348 billion, which would be the third largest ever in dollar terms. That would be $15 billion less than it projected last March, but $17 billion higher than the White House estimated in July.

Yesterday's Budget Office estimate should prove fairly accurate because the federal budget year, which runs through Sept. 30, has less than a month to go. But it does not include the $2 billion in aid for repairing hurricane damage in Florida that President Bush requested Monday.

The government is expected to spend $2.3 trillion this year, which means it will be borrowing about one of every five dollars it spends.

The $422 billion projection for 2004 echoed a preliminary estimate the budget office made last month. It was an improvement from its $477 billion forecast in January, a revision the office attributed mostly to stronger than anticipated revenue collections.

Just last month, the White House forecast a $445 billion deficit for this year, though administration officials acknowledged the figure could be too high because of overestimates for spending.

After a fleeting four-year return to annual budget surpluses under President Clinton, deficits have returned under Bush.

Republicans who spent the 1980s and 1990s railing against shortfalls have argued that fighting wars in Iraq and Afghanistan, battling terrorism, and righting the economy are higher priorities.

They also argue that today's deficits are no reason for panic because as a percentage of the overall economy, they are smaller than the largest shortfalls under President Reagan. Many economists consider that ratio the most significant measure of the harm deficits can cause.

Democrats say the shortfalls are forcing policy makers to restrain spending for schools, domestic security, and other priorities, while driving up the government's borrowing costs. They say deficits have worsened because of the price tag of the tax cuts that Bush and his GOP allies have pushed through Congress.

Most analysts agree the budget picture will worsen considerably within a decade. That is when the huge baby boom generation will begin relying increasingly on Social Security and Medicare, driving those programs' costs upward.

© Copyright 2004 Globe Newspaper Company.

Posted by manystrom at 07:08 AM | Comments (0)

WHY CREATE A DEPRESSION?

September 08, 2004

By Bill Clinton, George W. Bush, and Alan Greenspan
(Satire)

We apologize for the depression we have orchestrated to begin by year 2010 or sooner. We recognize this course is the only means by which to cleanse the excesses of monetary intervention, overcapacity, malinvestment, regulations, and government largesse, and return to principles of freedom that created our Republic over 200 years ago. We planned this course to save the Republic and trust history will recognize this bold effort many years from today. Additionally, it is the only alternative that will return us to a gold-based monetary standard, which should prevent the US fiscal and monetary systems from slowly destroying the Republic for generations hence. Had we delayed our initiatives any longer, we feared a greater likelihood of tyranny soon after the US dollar reaches its inevitable collapse. We concluded the alternative of attempting a piecemeal approach in returning to freedom in a Western democracy is impossible.

Our goal was to create a massive economic “wedge” where on the one hand we had to encourage the acceleration of debt at every level (international, federal, state, company, & individual) such that a reduction to a simple sustainable linear increase would dramatically collapse demand. On the other hand we had to encourage an unsustainable level of consumption without savings to ensure the debt acceleration cycle that sustained the consumption was firmly in place. We knew debt and consumption were very seductive and easily sold to the short-term, “sound-bite” oriented American public. We were able to accomplish this by creating equity, bond, and real estate asset illusions via expansionist monetary policy.

TIMING WAS EVERYTHING…
It began in 1971 with the abandonment of any semblance of a gold standard. Thus, the “train” veered off the track. Beginning in 1995 we pushed the “train” completely off the cliff into freefall when we began to consistently address any “mini” crisis with a flood of liquidity or “re-structuring” (see INTERNATIONAL section below). In 2003 we jettisoned the emergency chute from the “train” by flooding the globe with liquidity in support of our anti-deflation campaign.

It was very important that we had the ability and power to artificially suppress interest rates and flood markets with liquidity both before and after the greatest contrived stock market bubble of all time. We needed time to integrate extreme low interest rate levels along with massive “accommodative” monetary expansion to systemically and thoroughly immerse the artificially low interest rate across the housing and financial industries. The greater the artificial vs natural rate spread and the greater the period of time, then the greater will be the magnitude of collapse when the suppressed rates unwind. GSE’s (esp. Fannie Mae and Freddie Mac) proved to be very useful in this effort.

Thankfully, the public bought heavily into the artificial suppression of rates following the equity semi-bust in 2000-2002, which enabled our massive credit expansion to inflate Real Estate and bond values far beyond CPI levels. The massive increase of real estate and bond valuation completely mitigated the $8+ trillion perceived loss in the equity market, thus enabling our total asset illusion plan to continue intact.

We had to time it very carefully such that the Baby Boomers would “buy into” the asset illusions just before retirement. We knew the ultimate trigger for collapse would be the demands of the Boomers as they begin to retire in 2008 and attempt to cash in on the illusory assets. By 2010 or sooner the musical chairs syndrome will be in full effect… All illusions will become visible and there will be a chaotic race to seek real rather than fiat money.

COMPANIES…
We had to ensure we reached extreme growth stress levels in companies directly or indirectly dependent upon sub-natural interest rates. We needed to ensure masses of talent were enticed to these dangerously leveraged companies. It was important to achieve the greatest proportion of dangerously leveraged companies relative to healthy companies, such that the ultimate correction (or, unfortunately, over-correction) would create maximum labor disruption. The Austrian economists refer to this as malinvestment and resource misallocation.

During my first term (Bill C.) in discussions with Alan I realized the earlier creation of GSEs would ultimately lead to a systemic breakdown as they represented an unprecedented vehicle available to disperse liquidity with little or no resistance and enjoyed the implied backing of the Federal Government. These organizations had to be destroyed. Our course included rapid expansion of these enterprises such that during the ensuing collapse they would become clearly visible as key vehicles that empowered the liquidity explosion under the false pretense of helping homebuyers and shifted risks away from Banks to hapless bond and equity holders.

It became obvious that rapid monetary expansion indirectly contributed to the artificial explosion of financial asset values. So, we had to orchestrate a plausible spin that could encourage this excess to an extreme so history would easily be able to identify the root cause post collapse. As seasoned political masters (Bill and George W.) we were supreme in this effort.

As asset prices expanded and Ponzi schemes became rampant (i.e. technical momentum; increase begets increase) we knew that CEOs of these companies would receive extreme disproportionately large salaries, bonuses, and options compared to their employees because corporate boardrooms associate stock price with their work contribution thus poured out the undeserved rewards. Our plan ensured significant visibility of this excess along with their creative schemes to generate earnings illusions. This sub-strategy succeeded beyond our wildest dreams. The fever even spread peripherally to our NYSE regulatory board rewarding the Chairman in excess of $200 million. Imagine that….! The root cause (FED monetary expansion) of these excesses would certainly become another target for true correction during the ensuing depression.

INDIVIDUALS…
Further, we needed to encourage the same for our consumers hooked upon excessive debt to income ratios. We knew it would be important eventually to shift ostracizing those who are prudent and save today over to those promoting and partaking in the excess goods saved by responsible people.

GOVERNMENT…
Government debt expansion was relatively easy. It was more within our control so we did not view that as a major obstacle to achieve.

We encouraged passage of significant government programs that would become beacons of largess, thus becoming certain targets to remove while in the thick of the depression.

INTERNATIONAL…We needed their support. It was very important to expand liquidity as rapidly as possible internationally to prevent any true monetary or economic correction efforts by our international friends. Fortunately, by teaching and partnering with numerous others we were able to create “mini” crises (i.e. The Mexican Peso, Asian, Russian default, LTC, Y2K, 9-11-01, and finally domestic anti-deflation in 2002-03). These crises helped engage the world into our strategic plan without even revealing the end goal.

The seductive slogan of “investing in America” was an extremely successful campaign to orchestrate the massive undermining of US manufacturing. The asset Ponzi scheme success ensured an artificially strong dollar, which created the one-way “investment” gradient exchanging their Goods for our “paper” rather than Goods in return. Timing of the Japanese and Chinese Boomer’s retirement will coincide with the US Boomers, thus will initiate or reinforce the illusion discovery and subsequent collapse. The double whammy of an overvalued dollar and overvalued US assets will fill foreign investors with a terrible resolve to dump US assets regardless of the impact upon the market for their products.

HOW EXTREME DID IT NEED TO BE??…
The magnitude of the illusion was critical for success. If the overvaluation gap (the difference between the non-inflated asset market value vs. the perceived value broadly recorded today) was less than 10-15% we might have had the ability to diffuse the overvaluation and excesses via inflation. By accomplishing a gross 25-35% asset overvaluation (approx. $20 trillion) culminating with our last major 2003-2004 thrust in equities, we ensured maximum shock impact when any anecdotal newsworthy catalyst finally triggers the collapse of the massive asset illusion we worked so feverishly to build. Fear and lack of confidence in leadership will become the primary drivers that push all valuations far below normalcy.

FINALLY…Thus, the forming of the New Republic will begin by arming our citizens with maximum motivation. We are now handing off the country to you for a new beginning…..!

Sincerely,
Bill Clinton, George W. Bush, and Alan Greenspan.

Email the actual author

Posted by manystrom at 03:55 PM | Comments (12)

An Economy That Turns American Values Upside Down

September 06, 2004

By BOB HERBERT
Op-Ed, NY Times
Published: September 6, 2004

http://www.nytimes.com/2004/09/06/opinion/06herbert.html

The Labor Department reported last week that 144,000 payroll jobs were created in August. Let's put that in perspective.

The number was below market forecasts. It was also below the number of jobs needed to accommodate the growth in the employment-aged population. In short, this was not good news. It's only by the diminished job-creation standards that have prevailed since the last recession that any positive spin could be put on last month's performance.

As the Economic Policy Institute tells us, in a book-length report it is releasing today: "The United States has been tracking employment statistics since 1939, and never in history has it taken this long to regain the jobs lost over a downturn."

In "The State of Working America 2004/2005," the institute shows in tremendous detail how those lost jobs and other disappointing aspects of the recovery are taking a severe economic toll on working families.

According to the institute:

"After almost three years of recovery, our job market is still too weak to broadly distribute the benefits of the growing economy. Unemployment is essentially unchanged, job growth has stalled, and real wages have started to fall behind inflation. Today's picture is a stark contrast to the full employment period before the recession, when the tight labor market ensured that the benefits of growth were broadly shared.

"Prolonged weakness in the labor market has left the nation with over a million fewer jobs than when the recession began. This is a worse position, in terms of recouping lost jobs, than any business cycle since the 1930's."

What is happening is nothing less than a deterioration in the standard of living in the United States. Despite the statistical growth in the economy, the continued slack in the labor market has resulted in declining real wages for anxious American workers and a marked deterioration in job quality.

From 2000 through 2003 the median household income fell by $1,500 (in 2003 dollars) - a significant 3.4 percent decrease. That information becomes startling when you consider that during the same period there was a strong 12 percent increase in productivity among U.S. workers. Economists will tell you that productivity increases go hand-in-hand with increases in the standard of living. But not this time. Here we have a 3.4 percent loss in real income juxtaposed with a big jump in productivity.

"So the economic pie is growing gangbusters and the typical household is falling behind," said Jared Bernstein, the institute's senior economist and a co-author of the new book.

This is the part of the story that spotlights the unfairness at the heart of the current economic setup in the U.S. While workers have been remarkably productive in recent years, they have not participated in the benefits of their own increased productivity. That doesn't sound very much like the American way.

According to the institute, "Between 1947 and 1973 productivity and real median family income both grew 104 percent, a golden age of growth for both variables." That parallel relationship began to break down in the 1970's, but it is only recently that it fell apart altogether, leaving us with the following evidence of unrestrained inequity:

"In the 2000-03 period income shifted extremely rapidly and extensively from labor compensation to capital income (profits and interest)," so that the "benefits of faster productivity growth" went overwhelmingly to capital.

American workers are in an increasingly defensive position. In a tight labor market, when jobs are plentiful, workers have leverage and can demand increased wages and benefits. But today's workers have lost power in many different ways - through the slack labor market, government policies that favor corporate interests, the weakening of unions, the growth of lower-paying service industries, global trade, capital mobility, the declining real value of the minimum wage, immigration and so on.

The end result of all this is a portrait of American families struggling just to hang on, rather than to get ahead. The benefits of productivity gains and economic growth are flowing to profits, not worker compensation. The fat cats are getting fatter, while workers, at least for the time being, are watching the curtain come down on the heralded American dream.

Posted by manystrom at 05:47 PM | Comments (4)

Auto Sales Crash

September 02, 2004


auto-sales.jpg

Uh oh. And they're cutting production further: More details:


http://www.washingtonpost.com/wp-dyn/articles/A54798-2004Sep1.html

Posted by manystrom at 07:11 AM
Recent Entries
Archives by Category
Blog
Depression 2
Economy
Gold
Politics
War
Archives by Date

News
Links

Powered by
Movable Type 2.64