Archive for 2009

Is the Dollar a Ponzi Scheme?

December 31st, 2009 2:54 pm  |  by  |  Published in Banking, Economics, Federal Reserve, inflation, Jake Towne, Liberty, Market Regulation, Money, Politics  |  1

Ponzi schemea fraudulent investment operation that returns assets to the defrauded from assets they previously loaned to the scheme’s operators or assets paid by subsequent newer “investors” rather than from any actual profit earned

Originally published December 31, 2009 at http://towneforcongress.com/economy/is-the-dollar-a-ponzi-scheme-1

While it is (comparatively) well-known that the US dollar, while a currency, is a solely an instrument of credit issued by the Federal Reserve. All holders of dollars – including myself and most readers of this article – are in debt to the Federal Reserve.  Now, this debt is really phantom debt, but the key really is printed on each dollar, more properly known as a Federal Reserve Note:  ”This note is legal tender for all debts, public and private.” (1)

The total federal debt issued was $11.933 trillion dollars at the end of fiscal year 2009 in September per the Treasury Department, an increase of $1.9 trillion from 2008. (page 37/123) This debt will continue to increase every year until the monetary system collapses due (just in part) to the compounding “miracle” of interest rates.  Federal debt is bought at auction by primary dealers (Goldman Sachs, JP Morgan Chase, etc.) and “resold” to the FED, which then inflates the money supply by creating new dollars, or “injecting liquidity.”  The FED can also “inject liquidity” by purchasing assets, such as toxic mortgage debt or even company stock like AIG or GM.  Individual community banks, whether Citibank, Bank of America, or small local banks and credit unions, can also create new dollars with the fractional reserve system, which is can be viewed graphically here.  However, a proof I wrote demonstrates that fractional reserve banking broke down years ago, and can be more aptly named as the “no-reserve lending” system.

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GATA Sues the Federal Reserve & Alleges Manipulation of the Gold Market

December 30th, 2009 11:51 pm  |  by  |  Published in Economics, Federal Reserve, gold, inflation, Liberty, Money, Politics, precious metals, silver  |  2 Responses

Originally published December 30, 2009 at http://towneforcongress.com/economy/gata-sues-the-federal-reserve-alleges-manipulation-of-the-gold-market-1

Today, GATA (the Gold Anti-Trust Action Committee) filed a lawsuit suing the Federal Reserveafter its separate FOIA request was denied.  For a decade, GATA has amassed enormous amounts of evidence that charges that the FED colludes with other central banks and bullion dealers to secretly suppress the market price of gold in order to make their own paper currencies look better.  The last time the central banks secretly manipulated the gold price was from 1961 to 1968, and ended with the violent collapse of the London Gold Pool and the bankruptcy of the post-WWII Bretton Woods global monetary system.

A year ago, Bloomberg L.P., a major financial news firm, filed a FOIA (Freedom of Information Request) from the Federal Reserve to disclose over $2 trillion in off-the-balance sheet emergency loans – funds that Congress and the President to this day have no idea how the nation’s quasi-private central bank spent.  Despite a momentary court ruling commanding the FED to release this information to the public, the FED has effectively evaded the motion.   Read More »

A Hell of a Decade

December 30th, 2009 3:55 pm  |  by  |  Published in Economics, Federal Reserve, Foreign Policy, inflation, Money, Peter Schiff, Politics, War  |  Comments Off

by Peter Schiff, president of Euro Pacific Capital and author of Crash Proof 2.0: How to Profit from the Economic Collapse

In its recent look back on the first ten years of the century, Time Magazine proclaimed the period to be “the decade from hell.” The editors made their case based on what they saw as the signature events of the last ten years, notably the ravages of terrorism, failed wars, and a global financial crisis. Taken together, these factors produced an era that Time is convinced will be remembered as one of the low points in our history.

As the media hates to dwell on the negative, the commentary was rife with notes of optimism about pending recovery. It could hardly be accidental that in the very next issue, Fed Chairman Ben Bernanke was named “Man of the Year” for his supposedly Herculean efforts to keep the economy afloat as we departed the Naughty Aughties. Although Time takes pains that to point out that the “Person of the Year” honor reflects impact rather than adulation, its profile of the Chairman was triumphant.

Even if you believe the “survived the worst/turned the corner” narrative offered by Time, it still should strike anyone as ironic that Chairman Bernanke, a chief architect of the economic problems that surfaced in 2007, should be held in such high esteem.

Apart from its misplaced reverence for the Fed Chairman, I would take issue with Time’s entire characterization of what has now become history.

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Obama, Napolitano blind to the real answer in fighting terror

December 29th, 2009 6:09 pm  |  by  |  Published in Big Government, Blowback, Civil Liberties, Commentary, Individual Responsibility, Liberty, Maven Commentary, privacy, terrorism  |  Comments Off

Obama has now made some comments regarding the thwarted terrorist that hid a bomb in his underwear. Naturally, he’s rather misguided with his choice of words.

He said the following (from CNN):

“A systemic failure has occurred and I consider that totally unacceptable,” Obama said, adding that the breakdown was “a mix of human and systemic failure.”

What he’s describing are the symptoms of a disease called government.

Rather than look down upon the “systemic failure” why not consider what did work? Once again, individuals on the plane were successful in thwarting the attack. This has happened many times in the years following September 11th, private citizens acting in their own self-interest working together to fight terrorism.

When it comes to these terrorist attack attempts, for every government failure there is an individual (or group of individuals) success. The fact that these successes occur in an era when the government promises us protection, gives us a false sense of security, and then disarms our ability to defend/protect ourselves should be all the evidence we need. The best path to security is more individual freedom, not less.

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Congress says it’s Constitutional. Do you agree?

December 29th, 2009 10:38 am  |  by  |  Published in Activism, Big Government, congress, Constitution, Economics, Health Care, Politics  |  Comments Off

D o w n s i z e r – D i s p a t c h


The Enumerated Powers Act (EPA) requires that every bill must specify its source of Constitutional authority. This would prove very embarrassing to Congress, because there is no Constitutional authority for most of what they pass.

Good news!

Two more House members have co-sponored EPA over the past month, bringing the toal to 56. Sadly, the Senate is still stuck at 22 co-sponsors. You can find . . .

* The House co-sponsors here: http://www.govtrack.us/congress/bill.xpd?bill=h111-450
* And the Senate co-sponsors here: http://www.govtrack.us/congress/bill.xpd?bill=s111-1319

Let’s flood Congress with letters demanding that every member co-sponsor the Enumerated Powers Act. https://secure.downsizedc.org/etp/campaigns/87

Here is what I wrote in my letter . . .    Read More »

Ben Stein calls Ron Paul antisemitic on Larry King

December 28th, 2009 10:34 pm  |  by  |  Published in Foreign Policy, Liberty, Ron Paul, terrorism, War  |  184 Responses

Ron Paul appeared on Larry King Live on CNN this evening along with Ben Stein and Sheila Jackson Lee to discuss the recent thwarted terrorist attack. After Paul gives his now famous view that they “attack us because we are over there” Ben Stein calls Paul antisemitic which solicits a demand for an apology by Paul. Paul characterizes it as a “vicious attack”.

Stein’s reaction is quite reminiscent of Rudy Giuliani’s reaction during that first debate back in 2007.

The two continue arguing over one another for nearly the rest of the entire segment. King ends by saying they will all be back for tomorrow evening’s show.

It’s about your liberty, not your party

December 28th, 2009 10:56 am  |  by  |  Published in Big Government, congress, DownsizeDC.org, Health Care, law, Liberty, Market Regulation, Politics  |  6 Responses

D o w n s i z e r – D i s p a t c h


As you know, the Senate voted to pass Harry Reid’s boondoggle healthcare bill. You can see how your Senators voted here: http://tinyurl.com/yku2upu

But this isn’t over. There are still differences between the House and Senate healthcare bills that can derail the entire project.

And so we continue the fight. Today, let’s remind Congress that we oppose this healthcare bill because we believe in liberty. https://secure.downsizedc.org/etp/campaigns/114

Here is my letter with talking points you may want to use . . .     Read More »

The United States of Two Americas

December 27th, 2009 1:00 pm  |  by  |  Published in Big Government, Humor, Politics, Respite From The Norm  |  7 Responses

by Clyde James Aragon

As the difference between Republicans and Democrats intensifies, as their arguments become shriller, as the national deficit approaches critical mass, it’s obvious we’ve reached the point where conservatives and liberals simply can’t live together. We bicker endlessly over taxation, government control, school prayer, and the Second Amendment. We don’t even speak the same language these days. For instance:

Liberal: The land belongs to the people, man. It’s social justice that allows us to walk freely upon the earth.

Conservative: Get off my lawn, damnit!

However, rather than partition America and try to divide its property evenly, there is one way we could still coexist. That is, create separate national corporate entities and activities apart from each other which would meet the wants and needs of each group. We would have separate sales buildings and work and play areas all well-lit and properly demarcated so that no one would accidentally enter and be offended by what he or she saw. Here’s what we would find in a new America:

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Duly elected gods

December 26th, 2009 11:21 pm  |  by  |  Published in Big Government, History, Liberty, Politics  |  2 Responses

My consulting work at the Westin Grand in Georgetown absorbed each of five December days until early evening, so I thought I wouldn’t get to see much of D.C. on this trip. The first three nights I took long walks down M Street, enjoying the 40 degree air, such a contrast with L.A. (in the high 70’s that same week) and the holiday bustle in the shops. It wasn’t until Thursday, my last full day in D.C., that I realized that the National Mall was a short 20 minute walk to the south, straight down 23rd street, and off I went.

Shortly past George Washington University and down a gentle slope loomed the Lincoln Memorial, huge and compelling even from blocks away. I had been there years ago in the daytime, mingling with crowds, and was somewhat impressed, but I had not anticipated the nighttime effect. Approaching the broad steps, I started to feel some unusual, primal emotions as the visual impact took hold. The structure atop the mound is a faithful copy of a Doric temple, not unlike a restored Parthenon. The exterior is illuminated with floodlights, and there is somehow a dark interior contrast to the emanations of the shining white marble statue of Lincoln within, which seemed to me to glow with power, like a captured being of fire, and to reach out between the spaces of the 36 massive columns. I realized that ancient psychoactive architectural techniques had been used with impressive effect. In fact, designer Henry Bacon had used as his general model the Temple of Zeus in Olympia. On the steps were light crowds, laughing and lively, but people became silent within. The sheer size of the statue in its huge vault would be enough to engender reverence, whether it were of Zeus or a politician.

For a while it was enough to stand and gaze at the figure in silence. Then I started reading the inscriptions on the walls. First, the second inaugural address on the north wall, then the Gettysburg Address on the south wall. Finally I returned to the statue and read the inscription directly above Lincoln’s head (written by Royal Cortissoz, American art historian and art critic):

IN THIS TEMPLE
AS IN THE HEARTS OF THE PEOPLE
FOR WHOM HE SAVED THE UNION
THE MEMORY OF ABRAHAM LINCOLN
IS ENSHRINED FOREVER

A temple! Here’s a quick review of what a temple is, per Webster: “ A building devoted to the worship, or regarded as the dwelling place, of a god or gods or other objects of religious reverence.”

I was almost dizzy at the implication: the unstated purpose of the Lincoln Memorial was to deify Lincoln. Was this kosher? I wondered. Certainly it went against the concept that “all men are created equal,” and separation of church and state, and the founding fathers’ break with monarchy, with its divine right of kings.

The Lincoln Memorial was dedicated in 1922, when the Civil War was still a living memory for many. Was deification of Lincoln a means to solidify the North’s victory, the unification of the country and the emancipation of the slaves?

I pondered the other well known presidential memorials.

The Jefferson memorial, completed in 1943, was patterned by its designer, John Russell Pope, after the Roman Pantheon, a temple dedicated to all the gods.

The Washington Monument was built by Freemasons in the 1880’s to be, in part, a “shrine of the ancient craft.” Webster on the original meaning of “shrine”: “A place regarded as holy because of its associations with a divinity or a sacred person or relic.” Washington, himself a Freemason, is referred to as a “Worshipful Master,” though the Freemasons go to lengths to explain that the epithet “worshipful master” does not deify a person, which would be blasphemous, but only designates him as “venerable.” Dan Brown’s elaborations aside, the oft noted phallic nature of the Washington Monument might be a more productive approach. The world’s biggest lingam stone!

Anyway, the question is: With all the importance we place on our humanistic origins, where do we get off sneaking in deification of our mortal politicians?

From a governance point of view, deification seems practical. We are a gigantic republic, and we often have to use whatever is handy to keep our people together and somewhat obedient. Certainly if our founding leaders are now gods, then national cohesion would behoove us.

What about modern practice? Do we still deify presidents? Perhaps all the pomp and expense surrounding presidents while they’re alive is a form of deification. If so, that would be a modern version. In 1840, Edgar Allen Poe is said to have knocked on the White House door to discuss a government job with President John Tyler. He did meet with the president, though he, Poe, was drunk and the appointment did not ensue. Can you imagine a drunken poet knocking on the White House door today, asking to see the president and then seeing him? Well actually, you’d probably have to be a drunken poet to try it. We have made the president into the most important person in the country, with his own fiercely guarded giant mansion, jet plane, fleet of limos and the rest, when in fact he’s just our top bureaucrat. Perhaps we need to believe in an exaggerated importance of leaders for the sake of national identity, but that’s a weakness in the state, not a strength.

I don’t know if we need a second American revolution to bring us back to our original humanistic concepts. Revolutions stray notoriously far from their stated intentions. We’d probably end up deifying the people who led the charge, analogous to encasing the likeness of secularist Jefferson in a pantheon.

Would it be too much to hope, though, that an American president now and then could personally dispense with the excessive trappings and just do his job? Of course, the downside might be that if he were at all successful we’d probably deify him.

Doug Lasken is a retired L.A. high school English teacher and freelancer. Write to him at doug.lasken@gmail.com

Pennsylvania’s Pension Crisis Approaches

December 26th, 2009 2:09 pm  |  by  |  Published in Economics, Federal Reserve, inflation, Liberty, Money, Politics  |  Comments Off

While I certainly wish everyone happy holidays, a very merry Christmas, and a prosperous 2010, I instead hope that many will take a moment from their holiday schedule to read a warning on pensions. As a consequence of the financial meltdown created by the money-printing of the Federal Reserve and Congress, pensions nationwide will be entering into crisis in the coming years. Throughout 2010, the danger will become more apparent, and there are consequences for all – not just those retiring with pensions.

This month, the Associated Press reports that Pennsylvania’s “teachers’ pension fund fell from $67.2 billion in mid-2007 to $46 billion at the end of September [2009]. The state workers’ fund, which had a market value of nearly $36 billion in 2007, was less than $24 billion by Sept. 30.” This, frankly speaking, is quite alarming as the stock market rally (in nominal dollars) this year has ended.

In July 2009, I warned about the upcoming pension crisis, and note that CalPERS, the nation’s largest pension fund, had plummetted from $239 billion to $181 billion. While recent reports have it bouncing back to $198 billion with the stock market rally, it is important to note that the fund was already underfunded in 2007.

It is also noteworthy to remark that the purchasing power of the dollar is on a base of quicksand, and is not a reliable unit of account.  401k plans are not exempt from troubles, and if you are unaware of the details in how your pension plan is invested, how and when you can withdrawal funds, I suggest that it is only a matter of prudence to educate yourself.

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