Archive for December, 2010

Understanding Congressional Trickery

December 13th, 2010 1:12 pm  |  by  |  Published in Activism, congress, DownsizeDC.org, Liberty, Politics  |  4 Responses

Quotes of the Day:

“All that is necessary for the triumph of evil is that good men do nothing.” — attributed to Edmund Burke

“All that is necessary for the triumph of evil is that good men do the wrong thing.” — Michael Cloud

The so-called food safety bill passed. It took corrupt procedural tricks to do it.

We told you last week that the Senate made a mistake when they passed their version of the Food Safety Bill (S.510). Under the Constitution only the House can introduce revenue measures. The Senate trampled on this prerogative, and the House leadership wouldn’t stand for it.

Because of this . . .

We thought the so-called food safety bill was dead, and that we had won. Not so. Instead, we lost. Badly.

I’ll tell you how this happened, and what we can do about it. You’ll need to be motivated, smart, and intuitive to understand what’s been done to you, and that there IS a way to defeat these bastards.

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Wall Street Gives Uncle Sam Too Much Credit

December 13th, 2010 11:41 am  |  by  |  Published in Banking, Big Government, Debt, Economics, Federal Reserve, Liberty, unemployment  |  Comments Off

by Michael Pento, Senior Economist at Euro Pacific Capital (www.europac.net)

Despite the fact that the S&P is up over 80% in the last 21 months, US financial firms are currently tripping over each other in their zeal to raise their S&P 500 and GDP targets for 2011. JPMorgan’s chief US equities strategist, Thomas Lee, came out on December 3rd with a target of 1425 on the S&P for 2011, which would be a 15 percent gain. Barclays Capital last Thursday released a 1420 estimate. Not to be outdone, Goldman Sachs also recently released its forecast, and it sees a more-than-20 percent increase next year, to 1450. Meanwhile, PIMCO’s idea of a “new normal” has translated into a 2011 GDP forecast raised from 2-2.5% to 3-3.5% due to “massive” government stimulus.

In the midst of this collective ‘hurrah,’ very little attention is being paid to what is going on over in the bond market. With my due condolences to Fed Chairman Bernanke, the yield on the 10-year Treasury note has increased from 2.33% on October 8th to 3.29% today. And, if there is any notice at all given to that recent run-up in yields, it is merely explained away as a sign of robust growth returning to the economy.

In reality, growth doesn’t cause an increase in interest rates; it is either lack of savings or inflation that is responsible. To refute the ‘robust growth’ reasoning, turn your attention to the fact that the spike in yields just happened to coincide with the news that the unemployment rate jumped to 9.8% in November.

A slightly broader explanation for the surge in borrowing costs might be the failure of the Bowles-Simpson deficit commission to implement any cost cutting measures. Or, perhaps it was the intimation from Bernanke himself that QE III may already be under construction in his infamous interview on 60 Minutes. Or, maybe it is the fact that the $150.4 billion November budget deficit was the highest total for that month… ever, and was the 26th straight month of red ink! I often wonder to myself, where in the midst of all this good news do I summon a bearish attitude?

I think it’s pretty clear that ‘robust growth’ is going the way of ‘green shoots’ and knickers – right into the dustbin of history.

So, what will the increase in interest rates – ignored by all of Wall Street – actually mean for the economy in 2011?

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Washington Orders Another Free Lunch

December 10th, 2010 2:24 pm  |  by  |  Published in Economics, Federal Reserve, government spending, national debt, Peter Schiff, Politics, Taxes  |  1

by Peter Schiff, president of Euro Pacific Capital, and host of The Peter Schiff Show, broadcasting live from WSTC Norwalk CT from 6pm – 8pm Eastern time every weeknight, and streaming at www.schiffradio.com

This week Washington displayed the kind of “bipartisanship” that will bankrupt our country and wreck our currency.  Coming at a time when both parties say they want to address our long-term fiscal imbalances, the compromise extension of the Bush era tax cuts should be a wake-up call to anyone who somehow expected the American leadership to ever have an “adult conversation” about the country’s long term economic health.

The administration and Congress are prepared to take the bold political move of not raising some taxes while significantly lowering others and greatly expanding Federal benefits. The entire cost of the $900 billion package will be financed entirely by adding to the national debt. Talk about tough love. While other countries consider ways to live within their means, Washington is intent on devising ever more creative ways to delay the day of reckoning.

While Democrats wanted more government spending,they were unwilling to vote for broad-based middle class tax increases to pay for it.  Instead they want what Democrats have always wanted: higher taxes on the “rich.” Republicans want lower taxes, but as has become typical, they were unwilling to cut government spending to enable it.By running up the deficit both sides get what they want without any political sacrifice.Sure, they break their campaign promise to cut the deficit, but the political fallout that results will be far less costly than voting for the tax hikes or spending cuts.

In truth however, there are no real tax cuts in this proposal. The true burden of government is not measured by how much it taxes but how much it spends. Since this deal ensures that government will be more expensive next year than it was this year, American citizens will have to shoulder the added cost. Just because Congress has decided to deliver the bill with debt rather than current taxes does not mean that the spending will not be paid for. The only thing the plan accomplishes is to alter the means by which government spending is financed.

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7 Reasons to Oppose the “Food Safety” Bill

December 8th, 2010 2:13 pm  |  by  |  Published in Activism, Big Government, congress, DownsizeDC.org, Individual Responsibility, law, Liberty, Market Regulation, Politics  |  1

We told you on Monday that the Senate violated Constitutional procedures when they passed S.510, the dangerous “food safety” bill.

To get around this, House Democrats plan to add the text of this bill into a “catch-all” budget bill.

Please tell Congress to oppose ANY bill that includes food safety legislation.

You may borrow from or copy this letter . . .

Gregory Conko (http://bit.ly/dVv8cZ) and Mike Adams (http://bit.ly/g3DUJl) provide many reasons you should oppose S.510. Here are just seven:

1. Increased inspections and paperwork won’t actually detect microbial pathogens
2. Costly risk-reduction rules (HACCP) are outdated and will stifle innovation
3. Even if the smallest producers are exempt, S.510 will still crush tens of thousands of small and mid-sized farms
4. By replacing the words “credible evidence” with “reason to believe,” S.510 gives the FDA power to outlaw foods based on opinion rather than science
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Two Flawed Currencies

December 7th, 2010 9:09 pm  |  by  |  Published in Bailouts, Banking, Debt, Economics, Federal Reserve, Liberty, national debt, Taxes  |  Comments Off

by John Browne, Senior Market Strategist at Euro Pacific Capital

Despite America’s economic problems, the US dollar has maintained its respected status the world over – and has even managed to maintain value in comparison to other currencies. It appears that the dollar will likely finish 2010 at the same levels that it started. Even today’s announcement of more tax cuts and stimulus, which will guarantee widening federal deficits for years to come, could not put a dent in the dollar. The dollar’s charmed life stands in strong contrast to the euro, which is currently suffering from its internal flaws and the Europeans’ unfortunate recognition of reality.

Given Washington’s monetary irresponsibility over the past decade and a half, many market observers have wondered if the euro could one day become the world’s top currency. In the early to mid-2000s, when the euro surged more than 60% against the dollar, this was in fact a popular view. But unlike all other currencies on the planet, the euro is not a sovereign currency managed by a single country. It is dependent on the collective political will of the leaders of the European Union (EU).

In the bust that followed the Greenspan/Bernanke dollar-based boom, the US economy started to deleverage significantly. Unwilling to accept the political cost of a possible failure of its banking system, the Federal Reserve decided to re-inflate out of deflation and devalue the US dollar. Meanwhile, the European Central Bank (ECB), heavily influenced by Germany, decided that deflation was necessary and inevitable. As painful as it was likely to prove, the Europeans had appeared until recently ready to face the music and delever their economies.

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Bernanke: 60 Minutes, 2 Big Lies

December 7th, 2010 1:15 pm  |  by  |  Published in Banking, Economics, Federal Reserve, inflation, Liberty, Money  |  Comments Off

by Michael Pento, Senior Economist at Euro Pacific Capital (www.europac.net)

This past Sunday on the CBS program “60 Minutes”, Americans received a massive dose of mendacity from our Fed Chairman. Mr. Bernanke’s shaky delivery, and even shakier logic may cause faith in America’s economic leadership to evaporate faster than the value of our dollar. In particular, Bernanke delivered two massive distortions:Lie #1The Fed isn’t printing money. Bernanke stated: “The amount of currency in circulation is not changing…the money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying Treasury securities.” Given that it is the Treasury Department’s Bureau of Engraving and Printing, not the Fed, that actually prints paper money, his statement is technically correct while substantively false. However, Bernanke is buying bank assets with Fed credit. With such an arrangement, printing becomes unnecessary.

According to gentle Ben, credit created to buy something should not be considered money and has no affect on asset prices? But if that’s true, why is he concentrating his buying in the middle of the Treasury yield curve. His stated purpose is to boost bond prices and lower yields in order to stimulate borrowing and aggregate demand. So pushing up bond prices is an act of inflation. Bernanke similarly contradicts himself by saying that he isn’t creating inflation, while at the same time claiming that his easing campaign is designed to boost asset prices to combat the phantom of deflation.

And by the way, the Fed is causing money supply to increase significantly. The compounded annual growth rate of M2 is over 7% in the last quarter. Apparently in the eyes of the Chairman, a 7% annualized increase in the broad money supply isn’t considered significant.

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The 12 Gold Bugs of Christmas

December 7th, 2010 1:12 pm  |  by  |  Published in Banking, Debt, Economics, government spending, inflation, Liberty, national debt, precious metals  |  Comments Off

by Jeff Clark of Casey Research

Warren Buffett recently remarked that you can’t value gold like an oil company or farmland, so we should forget gold and buy equities. But he misses the point! Gold doesn’t produce value because it is value; in other words, gold is money.

It’s sad to see Mr. Buffett go to the dark side. But, as I’m about to show, he’s losing company when it comes to his views on gold.

It’s difficult to fathom why a professional money manager – someone who looks at markets all day long and tries to make money for his clients – doesn’t see the in-your-face arguments for buying precious metals. It’s borderline irresponsible. You may think that’s a strong statement, but I ask: what would you do if you were responsible for investing other people’s money and found yourself in the following investment environment:

  • The US government had printed more money in the past two years than at any other time in world history. Then, they printed more.
  • Government spending exceeded revenues by obscene margins, and, in the most recent year, the US ran a budget deficit of $1.4 trillion.
  • Interest rates were at 40-year lows.

Anti Ron Paul Neocon, Richard Deekbag Wants His Junk Checked For Wikileaks

December 4th, 2010 1:05 am  |  by  |  Published in Big Government, Blowback, Civil Liberties, Commentary, Constitution, Foreign Policy, Humor, Maven Commentary, Neo-con, privacy, Ron Paul, rule of law, terrorism  |  12 Responses

Editor’s Note: After a long hiatus, we’ve just received another article submission from Richard Deekbag. His previous submission was posted here in an effort to represent a perspective opposite of Liberty Maven’s typical material. You can read that previous article, Why Ron Paul is wrong on every damn thing!, here. This new submission is being posted for the same reason. Remember, he’s an anti-Ron Paul neocon who runs the following website (we apologize for the length of the URL):

http://ohmygodronpaulwilleatallofourbabiesandourbabiesbabiesandtheirbabiesbabiesuntiltherearenobabiesleft.com/

————————–

By Richard Deekbag

What a joke! All these idiots complaining about their junk being touched by the TSA. I say we should just stand there and take it like real men. I say, “If it’s for national security then TOUCH MY JUNK, PLEASE!!” It’s the patriotic thing to do. If you opt-out of the junk-touching then the terrorists win, pure and simple. If you opt-out of the junk-touching then you hate America!!

I do think there is room for the TSA to improve this process though. It appears that all females get to be felt up by female TSA agents and all males get to be fondled by male TSA agents. This is a discriminatory practice. The TSA should ask the traveler if he or she is a homosexual. If the answer is affirmative then the traveler should be appropriately touched by a member of the opposite sex.

Yes, all touching in the name of national security is appropriate. Other than that small change I applaud the great work of the TSA over the past few weeks. The skies are infinitely safer and there can be no one who says they aren’t friendlier with this policy in place. In fact, they just published a children’s book to help children adapt to the new policy. Here’s is the cover:

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More Stimulus Means Fewer Jobs

December 3rd, 2010 1:18 pm  |  by  |  Published in Big Government, Debt, Economics, jobs, Liberty, national debt, Peter Schiff, unemployment  |  Comments Off

by Peter Schiff, president of Euro Pacific Capital, and host of The Peter Schiff Show

Today’s payroll report severely disappointed on the downside and left economists scratching their heads to explain the weakness. The explanation, however, is plain as day. As I have been saying for years, the US economy will not create jobs as long as the Fed keeps interest rates artificially low, and Congress keeps stimulating spending and consumer debt, punishing employers with mandates, regulations, and taxes, crowding out private investment with massive government borrowing, and preventing market forces from restructuring our out-of-balance economy.As new data comes in that continues to bolster my hypothesis, the politicians in Washington continue to follow the wrong diagnosis, while ignoring evidence that their policy prescription has failed. Rather than reassessing the effectiveness of their remedy, they are merely prescribing more of the same.

No doubt the 9.8% unemployment rate (17% when counting the under-employed or discouraged workers) will spark another extension of unemployment benefits, which will provide yet additional incentives for the unemployed not to work. In addition, we will likely get another round of stimulus – paid for with higher budget deficits – that will further hinder the capital investment and business formation necessary to produce sustainable jobs. Then, the inflation created by the Fed to finance those deficits will send consumer prices higher, making life that much harder for all Americans, regardless of their employment status.

All the talk in Washington that demand must be stimulated to create jobs is farcical. The news reports of mobs of shoppers trampling over each other to fill their carts shows there is plenty of demand. What is truly lacking in our economy is supply. Those mobs are still filling their carts almost exclusively with imported products. If it were true that demand creates jobs, we would be at full employment right now, but the truth is that demand is meaningless without the productive means to supply the goods.

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The Confiscation Con

December 2nd, 2010 8:13 pm  |  by  |  Published in gold, Liberty, Peter Schiff, Politics, precious metals  |  Comments Off

by Peter Schiff

If you’ve spent enough time in the gold community, you might be under the impression that the most imminent threat to the average American isn’t terrorism or unemployment, but rather gold confiscation. Starting with the fact that FDR confiscated gold during the last Great Depression, and continuing to the quite accurate forecast that we are headed into an even Greater Depression, unscrupulous coin dealers have been pushing investors to buy expensive “numismatic” or “collectible” coins that they claim would be protected from government seizure. The only problems are that the original motive for confiscation no longer applies and the “protection” offered by major coin dealers wouldn’t actually help you keep your gold.

THE TYRANT’S ORDER

In 1933, President Roosevelt issued Executive Order 6102, prohibiting the private holding of gold and requiring US citizens to turn over their gold bullion or face a $10,000 fine ($167,700 in today’s dollars) or 10 years imprisonment.

For private citizens, the order listed the following exemption:
Gold coin and gold certificates in an amount not exceeding in the aggregate $100 [about 5 troy ounces at that time] belonging to any one person; and gold coins having a recognized special value to collectors of rare and unusual coins.

Seizing on this “rare and unusual” language, many coin dealers try to convince unsuspecting customers that regular bullion coins are not safe, and that it is worthwhile to pay extra for “numismatic” or “collectible” coins that would be exempt from a Roosevelt-style confiscation.

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