Liberty Maven

This week let’s start off with some interesting comments by radio talk show host Jason Lewis. A caller discusses the now infamous New Hampshire Town Hall gunman’s appearance on Hardball with Chris Matthews. Lewis uses the opportunity to bluntly say that the gunman identified himself as a Ron Paul supporter and is the Ron Paul supporters who are “leading the charge on taking the country back.” Listen to the excerpt below.

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The Left is attempting to minimize the dissent running rampant at “town halls” across the country. Now a chain email has been initiated by the White House to debunk what they call “lies” about health reform efforts. To this I ask what happens when these so-called lies turn out to be true? Haven’t we had enough denying economic reality? Supporters of this kind of health reform argue that it’s not a single payer plan and that the government’s public option will compete fairly with private insurance companies.

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by John Browne – Senior Market Strategist, Euro Pacific Capital

The monstrous typhoon that pounded away at coastal areas of the Pacific last weekend certainly qualified as a disaster for anyone who happened to be in its path. But for those of us safely in bed, the storm not only provided some remarkable meteorological footage, but also a stealth lesson in economics.

The most dramatic image, which involved a water torrent sucking away the sand beneath a stoutly built six-story hotel, struck me as an apt metaphor for the current economic environment. As the hotel’s foundations became exposed, the building toppled over like a massive domino. It was a vivid reminder that no structure, no matter how mighty, is safe if its foundation is weak.

Since the financial deluge erupted last year, the authorities, at least in the United States, have concentrated their repair efforts on the upper floors of our economy, and have virtually ignored the rotting foundation beneath.

Since 1971, when President Nixon broke the last link between gold and the U.S. dollar, American politicians have unleashed an ever-increasing number of entitlement projects designed to boost consumerism. With some 70 percent of our economy now based on consumption, we can safely say they accomplished their aim.

Following Alan Greenspan’s financing of the largest asset boom in the history of the Fed, America now faces massive deleveraging and a severe recession. However, it is becoming increasingly clear that neither the Obama Administration nor Congress have the slightest appetite for the political costs of deleveraging. Instead, the government has decided to lavish unprecedented trillions more of borrowed dollars on preventing a natural deleveraging from taking place.

Today, the official U.S. Treasury debt stands at a shocking $13 trillion, or 100 percent of the (declining) total wealth created in the United States each year (GDP). But total federal debt amounts to an almost unimaginable $56 trillion, or 4.3 times GDP.

Notwithstanding this precarious state of affairs, the government intends to spend trillions more dollars on wealth-consuming entitlement projects such as education, health care, auto sales, and the pursuit of fruitless wars in Iraq and Afghanistan.

America still has the largest economy in the world, but that doesn’t mean that it is the richest. Although Americans enjoy one of the world’s highest standards of living, they are also its largest debtors. As a result of the debt, which is subtracted from output, the worldwide rank of U.S. GDP is not first, as most would expect, but fifteenth!

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Ron Paul was interviewed on “The Ed Show” yesterday to discuss the New Hampshire man open carrying his firearm outside Obama’s New Hampshire Town Hall meeting.

The man mentioned that he voted for Ron Paul when he was interviewed by Chris Matthews so Ed wanted to get Ron Paul’s perspective on the “incident”.

http://www.youtube.com/watch?v=_YpM60Kvwmk

For more information on the event they are discussing see “An Invisible Footnote on the Second Amendment.”

A man who had the gall to exercise his Constitutional right to bear arms has come under fire, so to speak. The man, William Kostric, chose to open carry his handgun in a leg holster while holding up a sign prior to an Obama Town Hall meeting in New Hampshire the other day. What the hell was this guy thinking? Let’s find out…

See the following video from MSNBC reporting the story while it was happening:

The sign he happens to be holding doesn’t help calm fears about this man’s intentions, but think about it. If he were intending to do harm to anyone why would he be advertising that he has a weapon? He attempts to clear things up a bit when he was a guest on Hardball later in the day.

It seems to me that Chris Matthews comes off looking more crazy than the guy with the gun in this segment.

Some have suggested Kostric was doing it just to provoke. I agree, and I think that is a wonderful thing. If it takes this kind of peaceful provocation to open eyes and minds then I’m all for it.

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Since the 1990s, the FED has change accounting rules so even the loose ~10% fractional reserve requirement could be thwarted. We live in an era of paper tickets.

Originally published August 12, 2009 at http://towneforcongress.com/economy/yes-virginia-there-are-no-reserve-requirements-part-22-1

In Part 1, Fractional Reserve Banking in Pictures, we saw how the banking system creates fraudulent money by creating new money on top of old. The reserve requirement limit used in the example, 10%, is the figure usually given, which means that from a $10 deposit the banking system could generate $90 of new money. Also, the FED uses Open Market Operations to create new money by writing a check upon itself.

This article will demonstrate that reserve requirements are effectively not in existence and easily avoided by accounting tricks in the U.S. banking system. In my view, the evidence is unrefutable as the sources are from the FED and documentation from Citigroup. Although I have tried my best to keep the following simple and source my data, please feel free to comment or question and I will do my best to reply.

The first chart is from the FED’s latest Purposes and Functions from 2005 on page 51 of 146.

As can be seen, “net transaction accounts” have a 10% reserve requirement when over $45 million at a depository institution. Net transaction accounts are checking accounts, demand deposit accounts, NOW (negotiable order of withdrawal) accounts, or credit union share draft accounts (p. 135/146)

“Nonpersonal time deposits” are defined (p 129/146) as a “time deposit held by a depositor other than an individual” such as certificates of deposits, or CDs. These have no reserve requirement.

Now what about savings accounts and certificates of deposits? These are termed “nontransaction accounts” by the FED since they do not meet the requirements of a transaction account (CFR 204.2). See our next chart, taken from page 21/21 in this 1993 article from the Federal Reserve Board’s Division of Monetary Affairs. Personal savings accounts, CDs, or money market accounts are NOT reservable liabilities since December 1990 as stated directly by the FED in 1993 and indirectly by their non-inclusion here. So, there are NO reserve requirements for personal savings accounts and CDs.

The above leave us only with checking/NOW (or “net transaction”) accounts. Here’s the text for the “two sub-accounts” trick done for “accounting purposes” by Citibank.

“For accounting purposes, all Citibank consumer checking accounts (Regular Checking, Citigold Interest Checking, Interest Checking and Basic Banking Account) consist of two sub-accounts; a transaction sub-account to which all financial transactions are posted; and a holding sub-account into which available balances above a pre-set level are transferred daily. Funds will be transferred to your transaction sub-account to meet your transactional needs. For Regular Checking and Basic Banking Account, both sub-accounts are non-interest bearing. For Citigold Interest Checking and Interest Checking, both sub-accounts pay the same interest rate. Transfers can occur on any business day. Transfers to the holding sub-account will be made whenever available balances in the transaction sub-account exceed a preset level. Transfers from the holding subaccount to the transaction sub-account will be made whenever transaction sub-account balances fall below a predetermined level. Because banking regulations limit the number of transfers between these types of subaccounts, all balances in the holding sub-account will be transferred to the transaction sub-account in the sixth transfer in any calendar month. Both sub-accounts are treated as a single account for purposes of the client’s deposits and withdrawals, access and information, tax reporting, fees, etc.” (Citibank Client Manual p. 19-20/33)]

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D o w n s i z e r – D i s p a t c h

Quote of the Day: “Even in the best economic times, you won’t find an investment with a greater payoff than what these companies have been getting.” — Sheila Krumholz, Executive Director of The Center for Responsive politics

In case you’ve forgotten . . .

* T.A.R.P. stands for Toxic Asset Relief Program
* The T.A.R.P. was supposed to spend $700 billion buying so-called toxic assets from institutions that were supposedly too big to fail, but . . .
* After Congress said yes to this proposal the Treasury Department instead used the funds to buy stock in major banks
* In other words, The Toxic Asset Relief Program ended up having nothing to do with toxic assets

It get’s worse. According to Wikipedia . . . .

“On February 5, 2009, Elizabeth Warren, chairperson of the Congressional Oversight Panel, told the Senate Banking Committee that during 2008, the federal government paid $254 billion for assets that were worth only $176 billion.”

And even worse . . .

“During 2008, the companies that received bailout money had spent $114 million on lobbying and campaign contributions. These companies received $295 billion in bailout money.”

Thus, our quote of the day. Spending $114 million on lobbying to gain $295 billion dollars from the taxpayers is a hell of a deal. Many thoughts flow from this . . .

* Those who told us that strong campaign finance laws would curtail corruption were wrong
* Those who tell us we need Big Government to control evil corporations overlook the fact that big corporations want big government, because they benefit from it, and largely control it
* The same kind of lobbying and corporate control is behind the scheme for increased government involvement in health care
* And the $800 billion stimulus bill was another heaping helping of corporate welfare too

Sadly, this isn’t a new development. President Obama and the Democratic Congress are just continuing the policies of President Bush and the Republican Congress . . .

* Go back and scratch beneath the surface of Bush’s prescription drug program and you’ll find that it was mostly a corporate welfare scheme for Big Pharma.
* In addition, T.A.R.P. was passed under Bush and the Republican Congress.

As long as partisan loyalists continue to believe that their particular political party, and their particular political savior (be it Obama, Bush, whoever) is somehow different, we’ll continue to be victims of the same insanity. And at some point we might as well change the country’s name to . . .

The United States of Corporate Welfare

Here’s the bottom line . . .

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Making the 2nd Amendment applicable to the States as referenced in this article from the other day was discussed in a bit more detail on Guntalk over the weekend.

The host Tom Gresham interviewed The Second Amendment Foundation’s Alan Gottlieb about the 9th Circuit Court’s decision to re-hear the case where it decided that the 2nd Amendment is incorporated to the states.

Gottlieb discusses the ramifications of the 9th’s decision. Interestingly enough he suggests it may not be a bad thing and he suspects the Supreme Court will take up the 2nd Amendment Incorporation question regardless of what the 9th does.

Listen to the audio below.

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D o w n s i z e r – D i s p a t c h

Quote of the Day: “The law will never make men free; it is men who have got to make the law free.” — Henry David Thoreau (1817-1862) Source: Slavery in Massachusetts (1854)

When we last reported to you the bill had 32 co-sponsors in the House. Now it has 48.

Better yet, there’s now a companion bill in the Senate (S. 1319), and it already has 21 co-sponsors!

We think DC Downsizers have played a big role in making this happen. You have constantly asked for new co-sponsors on this legislation, and the number of co-sponsors has constantly grown. Let’s keep pushing.

First, check the lists below to see if one or more members of your Congressional delegation is already co-sponsoring this legislation. Then, use our Educate the Powerful System (sm) to write a letter to your delegation, thanking or requesting participation, as the case may be.

Here’s the list of House co-sponsors of HR 450 . . .

Bachmann, Michele [MN-6] — Barrett, J. Gresham [SC-3] — Bilbray, Brian P. [CA-50] — Bilirakis, Gus M. [FL-9] — Bishop, Rob [UT-1] — Blackburn, Marsha [TN-7] — Rep Boozman, John [AR-3] — Broun, Paul C. [GA-10] — Conaway, K. Michael [TX-11] — Culberson, John Abney [TX-7] — Davis, Geoff [KY-4] — Deal, Nathan [GA-9] — Flake, Jeff [AZ-6] — Forbes, J. Randy [VA-4] — Foxx, Virginia [NC-5] — Franks, Trent [AZ-2] — Garrett, Scott [NJ-5] — Gohmert, Louie [TX-1] — Goodlatte, Bob [VA-6] — Heller, Dean [NV-2] — Herger, Wally [CA-2] — Hoekstra, Peter [MI-2] — Hunter, Duncan D. [CA-52] — Johnson, Sam [TX-3] — Kline, John [MN-2] — Lamborn, Doug [CO-5] — Mack, Connie [FL-14] — McCaul, Michael T. [TX-10] — McCotter, Thaddeus G. [MI-11] — McHenry, Patrick T. [NC-10] — Miller, Jeff [FL-1] — Moran, Jerry [KS-1] — Myrick, Sue Wilkins [NC-9] — Neugebauer, Randy [TX-19] — Olson, Pete [TX-22] — Paul, Ron [TX-14] — Poe, Ted [TX-2] — Posey, Bil l [FL-15] — Price, Tom [GA-6] — Roe, David P. [TN-1] — Ryan, Paul [WI-1] — Sessions, Pete [TX-32] — Smith, Lamar [TX-21] — Terry, Lee [NE-2] — Thompson, Glenn [PA-5] — Wamp, Zach [TN-3] — Westmoreland, Lynn A. [GA-3] — Wittman, Robert J. [VA-1]

Here’s the list of Senate co-sponsors for S. 1319 . . .

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“I wanted you to see what real courage is, instead of getting the idea that courage is a man with a gun in his hand. It’s when you know you’re licked before you begin but you begin anyway and you see it through no matter what. You rarely win, but sometimes you do.” – Harper Lee from “To Kill a Mockingbird”

Originally published August 10, 2009 at http://towneforcongress.com/economy/health-care-an-open-letter-to-flagwhitehousegov

Not satisfied with merely writing a letter to my Republican opponent concerning his plans to implement socialized medicine, Towne for Congress also issued a letter to flag@whitehouse.gov today.

Dear Sir or Madam,
A supporter alerted me to this post entitled “Facts Are Stubborn Things” at your website, whitehouse.gov. Therein it is stated:

“There is a lot of disinformation about health insurance reform out there, spanning from control of personal finances to end of life care. These rumors often travel just below the surface via chain emails or through casual conversation. Since we can’t keep track of all of them here at the White House, we’re asking for your help. If you get an email or see something on the web about health insurance reform that seems fishy, send it to flag@whitehouse.gov.”

As a U.S. House congressional candidate unaffiliated with any parties, I would like to welcome you to view my campaign’s platform on health care and you may debate or leave civil comments in the space below. You may notice how I have carefully noted facts throughout.

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D o w n s i z e r – D i s p a t c h

Quote of the Day: “PASS Act is REAL ID 2.0″ — Electronic Privacy Information Center

“A bill to repeal title II of the REAL ID Act of 2005 and amend title II of the Homeland Security Act of 2002 to better protect the security, confidentiality, and integrity of personally identifiable information collected by States when issuing driver’s licenses and identification documents, and for other purposes.”

That doesn’t really tell you much does it? It sounds like the PASS Act is designed to protect you from identity theft. Some people could also assume that the REAL ID Act is being repealed, but in reality . . .

* The PASS Act is similar to the REAL ID scheme for a national identity card
* The PASS Act could make identity theft easier because of it’s reliance on centralized databases and RFID chips that can be read at a distance

Our politicians are nothing if not tenacious. They don’t quit, so we can’t quit either. We must show them that we have more staying power than they do. It’s time to ask, once again, that Congress repeal the REAL ID Act and kill the PASS Act. You can send a letter to your Congressional employees using our Educate the Powerful System (sm).

Here’s what I’m saying in my personal comments to my House rep., and to my two Senators . . .

“I’ve asked you repeatedly to repeal the REAL ID Act. Please be aware that I know you have the power to introduce legislation to accomplish this goal. You do not need permission from anyone to draft and introduce such legislation. Just do it, so that others can follow the banner you raise. Neither I, nor the vast majority of the American people, want either the REAL ID Act or its proposed replacement, the so-called PASS Act. You can earn major brownie points with me by introducing legislation to repeal REAL ID, but you will earn major demerits if you do not introduce such legislation. I am paying attention.”

Use DownsizeDC.org’s “Repeal REAL ID” campaign to send your letter to Congress.

In addition, if one of your Senators appears in the following list of co-sponsors of the PASS Act (S.1261) please call them and say the following: “I’m disappointed that my Senator is co-sponsoring the PASS Act. I would much prefer that he introduce legislation repeal the REAL ID Act.”

Here’s the list:

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