Feeds:
Posts
Comments

Archive for the ‘economic’ Category

Painting a happy face on this taxmageddon is just putting lip stick on a pig. It’s just 45 days away until the US falls off the fiscal cliff and around $600 billion or 4% of Gross domestic product goes into the black hole of deficit spending from $450 billion in higher taxes on everyone not just the rich and an automatic $150 billion in spending cuts for a total of $600 billion shift in economic activity. For those with poor math skills pay attention to this, the taxes are not a plus to the GDP it is taken from existing GDP wages to employees and profits of companies

 

The current GDP growth rate is only 1.7% so far in 2012 and 4% of that will shift into the oblivion of deficit spending and deficit reduction and still leave us with an additional shortfall of $600 Billion in deficit spending. The CBO – congressional budget office has stated in their testimony to congress that just an increase in taxes on the rich of an estimated $80 Billion in tax increases will force a lose in jobs of 700,000 and a negative .5% GDP (½%) and or a recession. Now that number is just on the wealthiest and business owners has doubled to $160 billion a year in higher taxes to the wealthiest since the election and the simple math is negative -1% GDP and 1.5 million jobs lost just from taxing the rich not the taxmageddon that will tax the crap out of everyone and everything which is 3 times that number if they don’t do anything.

 

If you allow the bush tax cuts to expire January 1, 2013 than taxes go up on everyone including 25 million low-income Americans that don’t pay any federal tax at all will pay taxes. This is what the democrats voted for on November 6 2012 and all this will at the very least cause a decline in real terms of GDP gone missing of a negative – 2.5% of the GDP growth rate figured strate line without the projection of how businesses will react or how the spending habits of people will change and they will change dramatically more negative than a -2.5% growth rate decline.

 

The dollar amount lost by doing nothing and allowing current law to expire on January 1, 2013 and then tax rates go up 5% on every one who works and or pays taxes. it will cost the American workers and the rich $450 billion total and 150 billion in spending cuts totaling $600 billion then my estimate of job losses of 5 times the 700,000 jobs or 3.5 million jobs lost and the job losses will happen as fast as the money disappears from paychecks every week. The moneys just not there anymore for us to spend or save as it is taxed away at a rate of $1.2 billion a day from higher taxes to everyone. I want to repeat this part and make this clear, this is already the law, congress doesn’t have to vote on anything the existing laws will allow this to happen January 1, 2013 and congress doesn’t need to vote on anything it’s automatic. Next is why a deal will not be made and everyone working will get the 5% tax increase unless you move out of the country or your state succeeds from the union which neither is likely.

 

The political blame games and the real goals of the Democratic Party are why no deals will be made and why we will go off this fiscal Clift or so-called taxmageddon. This will be once again blamed on the republicans for what the democrats did. (There’s a 100 year history of this) The progressive, liberal democratic parties goal has been and still is to destroy the constitutional America we know and change us into a socialist dictatorship (I believe all the evidence shows we are already a socialist dictatorship and have been the last 3 years and 10 months and even possibly the last 12 years) and doing away with the constitution and replacing it with a communist constitution and this taxmageddon is exactly what the democrats need to do that and they will try to make it look like the republicans fault (this is already being done) and the lame stream liberal progressive socialist media will help them do it with their normal lies and disinformation.

 

Here is what to expect in the next 47 days. A lot of grand standing by democrats telling you conservatives economic policies are why the economies is so bad and its Bush’s fault even know the democrats have controlled congress for almost the last 6 years.

 

It’s at this point I want to inform and or remind everyone who reads this. The democrats have now controlled congress for 5 years and 10 months the reason the economy went off the Clift and the banks collapsed in 2008 was under the control of the Democratic Party for 21 months it was not the Republicans it was the democrat controlled congress that did it by their actions or lack of actions. To believe otherwise means you have been misinformed and you believe the lies of the liberal progressive news media.

 

The democrats didn’t inherit this economic mess they caused it. http://wp.me/pO1Ho-9w 

 

So if you still think this was all done by Bush your eating the little balls of crap the liberal media has been feeding you for your entire life and the last 6 years. All you need to do is a search for congress January 2007 to 2012 and you will see the democrats have controlled everything for the whole time period and then blames republicans and Bush for what they did. To say well that’s just politics does not make it right and it doesn’t fix the mess we are in. If they are getting away with these lies it’s because some Americans like those voting in democrat party for the democratic party are allowing them to get away with it. I don’t get my news from fox I seek the truth always this is the real no spin zone. I go to the federal record and look at the numbers and if you really want the truth it’s in the numbers not the news media they all sound like parrots to me spinning their stories as they see the truth with 10 different versions or opinions about the same story and none of them are right.

 

Facts compared to opinion and views. The glass is half full or is it half empty? No matter what you opinion or view is; the same amount of water resides in the glass. its math and math is not an opinion or a view. This goes to the next part the historical events of the past that can give us a clear picture of the possibilities and the near term effects of economic events like taxmageddon.

 

I have seen many economist discuss this $450 billion tax increase like it’s a good thing and the value of the dollar will increase because the deficit would shrink and that’s would be a good thing under normal text-book economic conditions it would be, except for the facts they seem to forget that we would definitely go into a very deep recession or depression from a $450 billion tax increase and while we have a deficit of $16.4 trillion hanging over our heads that’s not good for bonds or the value of the dollar if we are borrowing $600 billion while the economy is shrinking at a rate of 3% and could quickly go 6% negative GDP  it is likely under these conditions no one will loan us any money and people who hold our bonds would sell them very fast causing a panic sell off or a crash in the bond markets.

 

This has happened before in 1980. I can tell you right now when the economy starts to decline and go into a recession under the new much higher tax rates that what the economist are telling you say it’s a good thing is idiotic and that’s being kind. As the whole dynamics of the entire economy changes very quickly in economic declines the stock markets and bond markets will change and go into a severe decline and bond markets will be up for a few days maybe and then be sold off to cover losses in other stock markets and commodities markets this is always a worldwide event and everything will all change dramatically as well. None of it will be good. It will all be bad news (do you have a 401-K) and even before the first dollar in higher taxes is stolen away from the rich, the middle class and working poor this will unfold and become history. When this happens and it will, the economists college degrees can all be thrown out the window or used as toilet paper because nothing works in severe declines. I have been in 3 severe economic declines or crashes as a business owner and an investor.

 

Currently what gives the dollars or the bonds the value they do have is the confidence that the government can pay the interest on the debt and that confidence level all changes if we go into a recession. Confidence is nothing more than a thought and as quick as we can change our minds or in one day that confidence could disipere and this could cause a second bond market collapse worse than the one in 1980 because the debt is 32 times larger than in 1980

 

The Bond Market Collapse of February 1980 The time is November, 1979; the place, the White House. Like in November 2012, a dark financial cloud hovers over Washington — not only fiscal troubles, but also the threat of hyperinflation.

 

President Jimmy Carter and Congress have been gridlocked for months, unable to deal with the brewing storm. Unlike November 2012, the next presidential election is a year away. But investors don’t wait for the ballots. Nor do they have to. They begin issuing their sell orders immediately, venting their wrath primarily in the U.S. bond market by dumping medium and long-term U.S. Treasury securities. Treasury bond prices collapse, while interest rates surge. (We are set up for this perfect storm once again triggered by taxmageddon)

 

The tipping point comes on February 5, 1980. That’s when Treasury bond prices fall so far that their yields surge above the 11% level the all-time peak reached during the Civil War. “Faced with a prolonged buyer’s strike,” says one bond market pro, “we decided to throw in the towel and get yields up to a level where some cash buyers might be shocked off the sidelines.” But the next day, panicky bondholders begin unloading bonds at any price … and there are still few takers even at record interest rates everyone is still selling. The selling is so intense that all except two of the largest, best-capitalized bond dealers on Wall Street Merrill Lynch and Solomon Brothers effectively abandon their market-making role.

 

Now, it’s no longer merely a case of a price collapse. It’s a market collapse in the literal sense of the word: The dealers themselves are packing up and going home! By February 19, the collapse gathers even more momentum, as Treasury bonds lose over 5% of their face value in a single trading day!

 

Investors aren’t just shouting their protests from the rooftops. They are shutting down the market for U.S. Treasury securities, making it impossible for the U.S. government to borrow the money it needs to stay alive — and to avoid defaults on maturing debts. 

 

Result: With Paul Volcker (idiot) at his side, President Carter (another idiot) acts, announcing an anti-inflation bombshell: An unprecedented package of CREDIT CONTROLS that clamps down on virtually all forms of credit. (Dodd-Frank bank regulations will have same effects) The U.S. economy is pushed over a cliff and into a tailspin. Carter’s chances for re-election are doomed. But the bond market recovers and the U.S. Treasury is able to resume borrowing. 

 

But this all happened when the total of all federal deficits was about $ 500 Billion and now its $16.4 trillion anything even ½ of that historical recount would destroy the country and the dollar. Inflation ran between 12% and 15% in that period from 1977 to 1982 and bonds sold are governments borrowing money to finance the spending of money they don’t have. Just imagine if this only in part happens in such a weak economy and with borrowed money amounts $16.4 trillion and a need for a least and additional $50 billion a month after taxmageddon. While at the same time the economy is in a steep decline with a president that’s adverse to business. (The perfect economic storm that will end America) This also really screws up all the CBO estimates of the impact of the recession caused by taxmageddon and things will get a lot worse than there projected declines. The economy is always a moving target.

 

It was massive deficits of that time period that caused this to happen and those deficits were only $50 billion to $75 billion a year and now there over $1 trillion a year. This extremely high 16% interest rate at the peak is what the market set is the sacrifice that investors demanded in order to kill the threat of hyperinflation or the extreme devaluation of a currency. It really never worked but they won’t tell you this because it makes both Carter and Volker look like the idiots they are. Inflation remained high and the higher interest rate had only one purpose atract money to finance deficit spending. The higher interest rates fueled inflation in higher cost to barrow money that doest reduce cost it increases cost thus inflation increases. Liberal progressives always get it backwards. This is what Washington ultimately delivered. That at least in part will happen with taxmageddon coming in just 7 weeks. (Merry Christmas)

 

The general notion here is that, given the root causes of our economic distemper, rampant financialization, over-leverage and over-indebtedness, a politically dominant parasitic banking sector, an aging population, over promised entitlements, a financial business model based on fraud, Federal Reserve monetizing of debt, and a dysfunctional political system, to mention only the top of the list how can the USD appreciate in real terms? It cannot! It only has one way to go and that’s down. There only needs to be a trigger to set this whole decline into motion and I believe its taxmageddon.

 

This is how investors play the markets and why the dramatic decline or a crash will become obvious in the next 45 days or less. Businesses and market players make their decisions based on future projections of business activity and profits or the lack of profits. All market investment is determined by future projections or guesses of economic activity 6 months before they accrue not afterwards. You can expect a crash or at least a major correction of a few thousand points in the next few weeks and up to the week before January 1, 2013. Just like the decline after the banks collapsed in September 2008 this decline will continue well into 2013 just like the one in 2008.

 

Either way whatever happens in Congress the democrats will not make a deal because they want the economic collapse. They want the crash and they need it because democrats want the country to end as we know it so they can abolish the constitution. Making a deal with the democrats and Obama will not happen and their actions and the long history of changing constitutional law through the Supreme Court in the last 100 years and especially the last 4 years of ignoring constitutional law and playing dictator or King at every turn should prove that to people who have been paying attention Democrats hate the constitution.

 

Liberal progressive democrats have worked hard to circumvent the constitution and make unconstitutional law legal through the courts. It’s a term called judicial activism. This entire deal making process will be like trying to negotiate with a terrorist that wants to kill you, it’s a useless endeavor. Democrats’ have a long history of behavior that never changes in the liberal progressive Democratic Party. So why would any sane reasonable person expect that to suddenly change now? Liberal, progressive, Democrats want an economic collapse.

 

The conservative media will keep doing what they always do giving the benefit of the doubt to the liberal democrats and they will hope and or wish that Obama and the democrats will find a middle ground or a compromise with republicans, but the last 4 years of their actions shows that doesn’t fit Obama’s or the democrats play book. It’s always their way or the highway anything else is just imaginings and hopeful thinking so far hope has gotten us into this horrible position. The only compromises made have gotten us to the current fiscal Clift otherwise known as taxmageddon everything else has been my way or the highway with the democrat’s control of the senate and Obama. I think the democrats set America up perfectly for total economic destruction with an expiration date January 1, 2013

 

You can’t make a deal with the devil and expect anything good to come from it. I don’t think John Bonner will make a deal with the devil and if he does there’s a price to pay either way all Americans will lose no matter what our politics are.

 

What you are about to witness few weeks and months no one alive has ever seen before. This will be way worse than the great depression or the civil war. Hell on earth is what is coming and it’s not years away it’s only a matter of weeks and months and I repeat it’s not years away. To think this destructive pattern of the democrats’ and Obama can continue and Americas economy can survive 4 more years is just wishful thinking.

 

You can Hope I am wrong as I really hope I am wrong, but I said in back in 2004 and in my book 2012 that came out in November 2009 this president Obama would be the last president of the United States and so far I was right. From 40 years of observing politics and studying political history. I understand how a liberal thinks and they don’t use logic. This lack of logic is why all their ideas and policies always fail it is a form of insanity and that’s why what I say here may not make any sense to a sane person but their is no logic to there thinking it is insanity.

 

We don’t have 4 more years under any president or any dictator. The book 2012 explains it all. I said in 2009 it would either happen in 2012 or by the middle of 2013 and now we are just weeks away. You will see this unfold in the next 6 to 7 weeks in the stock markets as I expect a 2500 point correction from the September highs and so far it 1000 points down with 1500 to go and it will get a lot worse in early 2013.

 

I really hope I am wrong and I know you do too.

 

By the way very soon after taxmageddon and I mean very soon after we fall apart, the real Armageddon between Israel and Iran will start. First it will be conventional weapons but it will escalate quickly after other Arab countries join Iran in an all out WAR and an attack on Israel. Israel is surrounded by nothing but enemies with combined armies in the millions and with no allies. Regardless of what Democrats say or Obama he will not back Israel, Obama is a Muslim he will side with the Muslims. If attacked by multiple countries at one time Israel will have only one choice and that’s nuclear weapons = Armageddon. Israel has claimed 80 nuclear weapons and that’s enough to destroy all the Arab or Muslim countries major cities. The deadline for this is March 2013 set by Israeli Prime Minister Benjamin Netanyahu. Here it comes! 200 million dead in one day is very possible with 80 nuclear weapons and the real sh-t hits the fan.

Read Full Post »

 Democrats won control of Congress in the November 2006 elections. Democrats took majority control in January of 2007 and they exploded federal government spending by $1 trillion in just two years or the 2008 and 2009 budget years. This was all done before the bank collapse of September 18, 2008 read on and I will show the proof. Using the federal records from the Department of labor and statistics, the U.S. Treasury department and the Congressional budget office I will prove by federal documents that the democrats intentionally collapsed the system.
 
This is not circumstantial evidence, it is factual and it is exactly what happened to the country’s economy and why the whole world’s bank’s collapsed and this is what I aim to prove. The economy was intentionally collapse by the Democratic Party for political gain to make George Bush look bad so they could get a democratic president in the 2008 elections and it worked and thus we now have B. O. as president. If this is so and it is what took place the entire democratic party is guilty of seditious treason. See the law as it is written at the bottom of the page.
 

There are only 2 possibilities 

After looking at the federal off budget and on budget spending records from January 2007 to September 2008 as soon as the democrats took majority control of congress they exploded the deficit spending and created the problems we now have in 2011. There are only 2 possibilities one is they don’t have any understanding of economics at all and they are so stupid they don’t belong in control of changing a liter box for the cat as they are much to incompetent for that duty.

 The other is they do know exactly what they’re doing and there intentionally trying to destroy the country by destroying it economically in the same way Osama bin laden was trying to destroy the country and if that’s the case and it is what happened there guilty of seditious treason.

This is a year to year record of deficit spending and as you can see the republicans were bringing spending under control when the democrats won the election in November 2006 and took control by majority in January of 2007. The 2007 budget was voted on in early 2006 by the Republican Party who then controlled Congress by a thin margin. Notice the deficit was only $161 Billion and the media was screaming bloody murder about that. Now you hardly hear a peep about it unless there blaming the republicans for the current deficit and the deficit is going to be 1.6 trillion for 2011. This is 10 times what it was under republican majority.

Table one: Federal Government spending yearly 2001 to 2013

yearly Oct.1,  Sept. 30 controlling majority votes Deficits billion dollars Gov. Total Spending Total accumulative Deficit Federal tax Collected.
2001 REP -128.2 1,863.2 5,807.5 1,991
2002 REP 157.8 2,011.2 6,228.2 1,853
2003 REP 377.6 2,160.1 6,783.2 1,782
2004 REP 412.7 2,293.0 7,379.1 1,880
2005 REP 318.3 2,472.2 7,932.7 2,153
2006 REP 248.2 2,655.4 8,507.0 2,406
2007 REP 160.9 2,728.9 9,007.7 2,568
2008 DEM 458.6* 2,982.6 9,986.1 2,523
2009 DEM 1,412.7* 3,517.7 11,875.9 2,104
2010 DEM 1,555.6* 3,720.7 13,528.8 2,165
2011 DEM 1,645.1* 3,818.8 15,476.2 2,567
2012 REP/DEM 1,215.2 3,728.7   16,654.3 2,926 Est.
2013 REP/DEM   767.5 3,915.4 17,750.5 3,188 Est.
2014 UNKNOWN        
2015 UNKNOWN        

 http://www.usgovernmentspending.com/federal_deficit_chart.html

Once the Democrats got controlled Congress it was all downhill from there. Pay special attention to the 2010 total accumulated deficit up to  fiscal year 2011 which ends September 30, 2011. There is a $1.948 trillion expansion of the total deficit for fiscal 2011 this has to do with approximately $300 billion off budget deficit spending. By my calculations and estimates I believe the 2011 budget deficit will come very close to $2. trillion by September 30 of 2011 and here is why. I have been watching off budget deficits since the 1980s and they have always been larger than the year before. Since this number always seems to grow we can expect it to continue to grow or at least be the same. Also with gas prices going sky-high I believe tax collections for 2011 and 2012 will be very disappointing and they will get a lot less than they are calculating. Their calculations are counting $360 billion in additional taxes collected and GDP growth is only expected to be $600 billion and the tax revenue is figured at 55% and the top tax bracket is only 35% and they only collect taxes on net profits not on gross dollars. They need to rethink their 2011 and 2012 tax revenue estimates.

The first six years George W. Bush was president and the Republican Party controlled the House and the Senate and in this six-year period the on budget deficit spending only totaled $1.5 trillion. In 2009, 2010 and 2011 each of those years each exceeds $1.5 trillion or total of $4.5 trillion in just three years while the Democrats control the House of Representatives, the Senate and the presidency.

The January 2007 budget is the one created by the republican controlled congress, passed by April 15 th of 2006 and the budget deficit for the whole fiscal year of 2007 was only $163 Billion or an average of $13 billion a month. We are now running budget deficit at 10 times that amount at $1.6 trillion a year for 2011 and this is only the on budget amount it does not include off budget spending. This on budget deficit alone amounts to $133 billion a month or 10 times what it was once the democrats got control of congress on January 4th of 2007. The off budget deficit adds another $334 Billion for 2011 and that brings the total to $1.9 trillion and that’s $158 Billion every month in new debt.

 Don’t get exited or upset about off budget deficits this started in the early 1970s. Off budget deficits are not reported with regular deficits spending but doing a little math and taking the on budget numbers and deducting it from the total public debt will give us the off budget deficit for each year. Since I can’t find a public record of the off budget monthly deficits. I will have to use a monthly average to show or prove how the democrats intentionally exploded spending both on budget and off budget deficits and this also came from all borrowed money that’s why it is part of the total national debt. For the total current national debt as it changes every second see the national debt clock. By the way we are one week away from reaching the debt ceiling of $14.3 trillion on or about the end of April 2011.

 http://www.usdebtclock.org/

This is the monthly deficit spending from the time the democrats took control of congress in January 2007. Take note that they started with a republican budget that extended to september 30th 2007.  Also note job creation stayed positive untill government deficits started to dry up the banking system in early 2008.

Table two: Federal Government deficits monthly 2007 to 2008

Date Fed. Deficit   $ Billions Off budget $ Billions   Total   deficits billions Job creation lost jobs Housing sales Yearly
01/2007 Surplus   40 -28.15   +111,000 937,000
02/2007 Deficit – 123 -28.15    +97,000 848,000,
03/2007 Deficit    -95 -28.15   +180,000 858,000
04/2007 Surplus  178 -28.15    +88,000 981,000
05/2007 Deficit    -68 -28.15   +157,000 915,000
06/2007 Surplus 27 -28.15   +132,000 834,000
07/2007 Deficit -36 -28.15    +93,000 870,000
08/2007 Deficit -115 -28.15    +89,000 795,000
09/2007 Surplus 113 -28.15 500.7 +110,000 770,000
10/2007* Deficit -56 -43.33   +166,000 728,000
11/2007* Deficit -98 -43.33    +94,000 647,000
12/2007* Surplus 48 -43.33    +18,000 604,000
01/2008* Surplus 18 -43.33     -14,000 588,000
02/2008* deficit -176 -43.33     -132,000* 590,000
03/2008* Deficit -48 -43.33     -397,000* 526,000

This table is continued below to show all of 2008 and into 2009.

The * in the date column is when the very first democrat budget started in full effect and supposed to be voted on and passed just 4 months after they took control of congress or by April 15, 2007 for fiscal 2008 budget from October 1, 2007 to September 31, 2008. This is the budget that collapsed the whole worlds banking system. In the 2008 budget we spent on and off budget a total of $978 billion and borrowing that much money took every available dollar in the world banking system out of the system and the result was a collapsed banking system.

 The unemployment rate was 4.5% when the democrats took control of congress in January of 2007. I made this chart to show how the democrat’s deficit spending dried up the money supply in the worlds banking system not just the United States and the Democrats caused and crashed the worlds banking system and the real-estate markets, it was not Wall Street and the banks but they did make a very good wiping boy for the democratic party and they still do. The people and the Politicians always blame the rich people and this comes from a human flaw called jealousy or lust. The democrats use this human flaw to gain the favor of the people or the common man and their constituents and this always works. Isn’t that what you want to believe?

 The actions of the Democratic Party created the poor jobs market that has existed way before the banks collapsed and has continued now for over 3 years from December 2007 to 2011. The democrats spend and tax policies have put us right where we are. If deficit spending or Government spending did in fact create jobs, we should or would be adding hundreds of thousands of jobs every month but we are not. If deficit spending or Government spending stimulated the economy it would be booming right now as we are borrowing and spending $1.5 trillion a year average and getting zero results other than an artificially bloated GDP number. The democrats and the liberals think we should do more rather than less and that’s insane. 

The federal government recorded a total budget deficit of $455 billion in fiscal year 2008, $293 billion more than the deficit incurred in 2007. The federal deficit rose as a share of the nation’s gross domestic product (GDP) from 1.2 percent in 2007 to 3.2 percent in 2008. Also notice that most of this deficit took place in the months just before the banks collapsed, From May to September of 2008. The federal government borrowed $413 billion of on budget deficit spending in just 5 months. This never happened before as the debt had never even come close to this amount in a 5 month period, all just before the banks collapsed in September of 2008. Up to that time the record deficit spending for an entire year was $412 billion in 2005 when the economy was strong and still growing at a rapid pace. We were creating the department of homeland security and fighting 2 wars in 2 different countries at the time so it was not just wasteful spending on turtle tunnels like we have now. 

Under the last republican budget of 2007 the deficit was $163 Billion and that was 1.2% of GDP and under the current 2011 budget year done by the democrats its more than 11% of GDP at the latest estimate of $1.6 trillion in deficit spending in a $15.2 trillion economy. This has been the general condition of federal government deficit spending for the last 3 years October 2008 to 2011, with federal deficits running above 10% of GDP every year since the democrats got control of the budget in April 2007. This mess was not created by the republican controlled congress it was all done under a democrat controlled congress. The federal budget originates in the House of Representatives, not in the white house. Presidents have very little control over the actual budget process. It was not George Bush’s fault as the news media continues to report and so does B.O.

Pay careful attention to the following months after the surplus from April 15th 2008 which is tax collection month, that’s the only reason there’s a surplus for April. The period from 05/2008 to 09/2008 if you add up the money borrowed from the world banking system in that 5 month period prior to the bank collapse, use both on budget and off budget deficits and its $683 billion and that’s $136.6 billion average each month. Don’t you find it odd that it’s almost exactly the same amount of monthly deficits we have now in 2011 or almost 4 years later? So is this by accident or is it on purpose?

 My conclusion is this started way before September 18th 2008. It started as soon as the first federal budget that the democrats voted into law on April 15, 2007 for the fiscal year starting October 1, 2007 to September 30th 2008 and it didn’t take long to collapse the world banking system with the democrats in control of the budget process. The budget passed by a democrat controlled House of Representatives and the senate was by design intentionally meant to destroy the economy for political reasons so they could blame it on George Bush and that’s exactly what happened and that’s exactly how we got B.O. This was their plan, this is what happened, this is what they did, this was all done by the Democratic Party that did control congress; this is seditious treason by its legal definition or are they above the law?

 Housing sales peaked in 2005 at 2.1 million units average per year, look ware we are now in February 2011 at 250.000 housing units per year, that’s an all time record low and an 800% drop in home building sector from its peak and they keep talking it up like its improving.

 End of fiscal year 2008 was 09/30/2008 the first democrat full year budget and ended the month the whole world’s banks collapsed.

 The number of unemployed is always in the millions as people are always losing jobs, getting fired, companies going out of business and so on, but there are usually jobs to be found to replace the old ones except when economic conditions turn negative for whatever the reasons. In this jobs creation column I show the progression of how jobs turned negative as the government spending went up jobs disappear as the banks had no money to lend for business expansion or home mortgage loans and this is because the deficit spending of the democratic controlled house and senate dried up the banks of all available money in the system. These numbers are taken from the yearend report with the revisions to the headline number which were much lower than the actual number of jobs being lost. The * in the unemployment column are from year-end revisions and this is to show the true state of unemployment as the banks were dried up, as the headline numbers are very inaccurate when they are first released. 

http://www.bls.gov/news.release/archives/empsit_01092009.pdf

Table three: Federal deficits monthly 2008 to 2009

Date Fed. Deficit   $ Billions Off budget $ Billions Total   deficits billions  Job creation New Housing sales yearly
04/2008* Surplus 160 -43.33 +117   +145,000* 526,000
05/2008* Deficit -166 -43.33 -209   -861,000* 512,000
06/2008* Deficit -33 -43.33 -76   -126,000* 530,000
07/2008* Deficit -102 -43.33 -145   -248,000* 515,000
08/2008* Deficit -112 -43.33 -165  -640,000* 460,000
09/2008* Deficit  -45 -43.33 -88/-978  -403,000* 464,000
10/2008* Deficit -155 -39.6 -194  -320,000* 433,000
11/2008* Deficit -171 -39.6 -210  -533,000* 407,000
12/2008* Deficit  -83 -39.6 -122  -524,000* 331,000
01/2009* Deficit -63 -39.6 -102  -598,000* 309,000
02/2009* Deficit -193 -39.6 -232  -651,000 337,000
03/2009* Deficit -191 -39.6 -230  -663,000 356,000
04/2009* Deficit – 21 -39.6 -60  -539,000 352,000
05/2009* deficit 189 -39.6  -228  -345,000   342,000
02/2011* Much worse  2011 est.  $1.6 trillion   -N/A  270,000

 A combination of the deficit spending forcing the Federal Reserve to raise interest rates and an ever-growing need to barrow more and more in the world financial markets forced the collapse of the real estate market and thus the worlds banking system. In the last column I jump ahead to February 2011 to show that it’s just as bad and even worse as the Federal Reserve barrows, prints or digitized money to cover the $188 billion in March of 2011 an all time record high. The most current yearly estimate of the 2011 on budget deficit is $1.6 trillion and an additional off budget deficit of $330 Billion this gives us a total of $1.93 trillion for 2011. The overall situation has gotten a whole lot worse and no one is reporting this. Don’t any of these people reporting the news own a calculator?

 Only 33% of the current deficit is from a lack of taxes being collected from a drop in economic activity as 66% of the current on budget deficit was created by dramatically increasing the spending of the federal government ran by the democrats’ or about $1.1 trillion of the $1.6 trillion for 2011. They did almost all this new spending from the budgets of April 15 of 2007 for fiscal 2008 and exploded spending even higher by April 15 of 2008 for the budget year of 2009. This of course was way before the banks collapsed. This was obviously done on purpose, how could it be by accident? This was an intentionally created train wreck by sabotage for political purposes!

 The current job situation numbers can no longer be counted as accurate, in January of 2011 the department of labor started counting self-employed as being employees or employed. There’s no way to accurately determine the true state of unemployment after that January 2011 change to include self-employed as being employed. This new way of calculating the number of jobs being created will greatly exaggerate the true job situation until they run out of self-employed to add to the total number of employed and that should come in July or august of 2011. This is why the low monthly numbers of 30,000 jobs created all of a sudden jumps to 180,000 and 210,000 and no one is reporting this anomaly either. This was in the body of the employment report dated February 4, 2011 and here it is for download.

 http://www.bls.gov/news.release/archives/empsit_02042011.pdf

 Looking back at some history over the 12 month period from October of 2007 to September of 2008 the number of unemployed persons had increased by 2.2 million people and the unemployment rate has risen by 1.4 percentage points. It was up to the democrats who controlled congress to correct this problem but nothing was done. They had 21 months in power before the banking system collapsed to fix whatever was causing the economic problems but they were too busy blaming everyone else and especially George Bush for what was intentionally created by the democrat’s deficit spending and thereby drying up all the available money in the worlds banking system.

 They did this for absolute power and political gain and it worked. So the democrats could continue to destroy the value of the dollar with their continued deficit spending, push up the price of crude oil and thus gasoline and there by destroy the country economically to get them to save us from them, (but they will blame the republicans) and we will get a dictatorship style government under a socialist style system and a new constitution of their making. They may as well do so since they pay no attention to the one we have.

 This is the part of the law that makes them Guilty. The full text of seditious treason law is below; it describes what the liberal, progressive democrats have done and continue to do.  Whoever knowingly or willfully advocates, abets, advises, or teaches the duty, necessity, desirability, or propriety of overthrowing or destroying the government of the United States.  

From 2007 and up to the end of 2011, the democrats will have added deficit spending of $6.47 trillion. They should get a badge of some kind or several badges. One badge should be for spending more on budget deficits in one year then the republicans did in six years. Another badge should be for increasing the total federal debt by 71% in the last 4 years. They should get another one for the record time as it took 93 years to get to $9 trillion in total deficits and it only took the democrats 4 years to get it to $15.5 trillion. At that rate it will double in 2 more years and that brings us to $18 trillion or by 2013. How many ways can I say the currency is screwed and so are the people and in the next 20 months, not years: your dollars will be next to worthless.

 All the numbers come from: Department of labor and statistics: The U.S. Treasury department: Congressional budget office

 http://www.bls.gov/

 http://www.treasury.gov/Pages/default.aspx

http://www.cbo.gov/

This is the exact law describing seditious treason.

Whoever knowingly or willfully advocates, abets, advises, or teaches the duty, necessity, desirability, or propriety of overthrowing or destroying the government of the United States or the government of any State, Territory, District or Possession thereof, or the government of any political subdivision therein, by force or violence, or by the assassination of any officer of any such government;

or Whoever, with intent to cause the overthrow or destruction of any such government, prints, publishes, edits, issues, circulates, sells, distributes, or publicly displays any written or printed matter advocating, advising, or teaching the duty, necessity, desirability, or propriety of overthrowing

or destroying any government in the United States by force or violence, or attempts to do so; or Whoever organizes or helps or attempts to organize any society, group, or assembly of persons who teach, advocate, or encourage the overthrow or destruction of any such government by force or violence;

or becomes or is a member of, or affiliates with, any such society, group, or assembly of persons, knowing the purposes thereof – Shall be fined under this title or imprisoned not more than twenty years, or both, and shall be ineligible for employment by the United States or any department or agency thereof, for the five years next following his conviction. If two or more persons conspire to commit any offense named in this section, each shall be fined under this title or imprisoned not more than twenty years, or both, and shall be ineligible for employment by the United States or any department or agency thereof, for the five years next following his conviction.

As used in this section, the terms “organizes” and “organize”, with respect to any society, group, or assembly of persons, include the recruiting of new members, the forming of new units, and the regrouping or expansion of existing clubs, classes, and other units of such society, group, or assembly of persons.

–18 U.S.C. § 2385: US Code – Section 2385: Advocating overthrow of Government

http://codes.lp.findlaw.com/uscode/18/I/115/2385

EFFECTIVE DATE OF 1956 AMENDMENT

Amendments by act July 24, 1956, as applicable only with respect to offenses committed on and after July 24, 1956, see section 3 of act July 24, 1956, set out as a note under section 2384 of this title.

From Section 6 – 1:  of the U.S. Constitution

 They shall in all Cases, except Treason, Felony and Breach of the Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses.

We the people should arrest all the democrats immediately for the crime of seditious treason as constitutional law allows for it

I do not seek to over through the government only to expose the Democratic Party for the high crime of seditious treason.

A summary: These records show that once the Democrats took control of Congress they intentionally drove deficits up and dried up the world banking system of all available money to finance their crazy out-of-control spending. I include the 2007 spending budget done by the Republican Party to show how quickly federal spending went from an average of $13 billion month to an average of $34 billion month as soon as the Democrats took control of Congress. Off budget deficits were even higher than on budget deficit spending. A large portion of the off budget deficit spending in the 2007 budget year was emergency spending bills enacted by the democrats and voted against by the minority republicans. Most of the off budget spending in the 2007 budget year was done by the democrat party with emergency spending bills on pork barrel projects and unnecessary actions to social spending. So the huge on and off budget deficit of $500 billion in 2007 was the faut of the democrats not the republicans.

What do you think about the charge of seditious treason are they guilty? Please leave a comment.

Read Full Post »

Hyperinflation is a condition in which prices increase rapidly as a currency loses its value. Formal definitions vary from a cumulative inflation rate over three years approaching 100% to “inflation exceeding 50% a month.” In informal usage the term is often applied to much lower rates. As a rule of thumb, normal inflation is reported per year, but hyperinflation is often reported for much shorter intervals, often per month.

The definition used by most economists is “an inflationary cycle without any tendency toward equilibrium.” A vicious circle is created in which more and more inflation is created with each iteration of the cycle. Although there is a great deal of debate about the root causes of hyperinflation, it becomes visible when there is an unchecked increase in the money supply or drastic debasement of coinage, and is often associated with wars (or their aftermath), economic depressions, and political or social upheavals.

The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services. This results in an imbalance between the supply and demand for the money including currency and bank deposits accompanied by a complete loss of confidence in the money, similar to a bank run. Enactment of legal tender laws and price controls to prevent discounting the value of paper money relative to gold, silver, hard currency, or commodities, fails to force acceptance of a paper money which lacks intrinsic value. If the entity responsible for printing a currency promotes excessive money printing, with other factors contributing a reinforcing effect, hyperinflation usually continues. Often the body responsible for printing the currency cannot physically print paper currency faster than the rate at which it is devaluing, thus neutralizing their attempts to stimulate the economy.

Hyperinflation is generally associated with paper money because this can easily be used to increase the money supply: add more zeros to the plates and print, or even stamp old notes with new numbers. Historically there have been numerous episodes of hyperinflation in various countries, followed by a return to “hard money”. Older economies would revert to hard currency and barter when the circulating medium became excessively devalued, generally following a “run” on the store of value.

Hyperinflation effectively wipes out the purchasing power of private and public savings, distorts the economy in favor of extreme consumption and hoarding of real assets, causes the monetary base, whether specie or hard currency, to flee the country, and makes the afflicted area anathema to investment. Hyperinflation is met with drastic remedies, such as imposing the shock therapy of slashing government expenditures or altering the currency basis. An example of the latter occurred in Bosnia-Herzegovina in 2005, when the central bank was only allowed to print as much money as it had in foreign currency reserves. Another example was the dollarization in Ecuador, initiated in September 2000 in response to a massive 75% loss of value of the Sucre currency in early January 2000. Dollarization is the use of a foreign currency (not necessarily the U.S. dollar) as a national unit of currency.

The aftermath of hyperinflation is equally complex. As hyperinflation has always been a traumatic experience for the area which suffers it, the next policy regime almost always enacts policies to prevent its recurrence. Often this means making the central bank very aggressive about maintaining price stability, as is the case with the German Bundesbank, or moving to some hard basis of currency such as a currency board. Many governments have enacted extremely stiff wage and price controls in the wake of hyperinflation, which is, in effect, a form of forced savings. Because it allows them to hide their spending and avoid an obvious tax increase, governments have frequently resorted to printing money to meet their expenses. However, during hyperinflation, the monetary authorities fail to fund government expenses from taxes or by other means, because:

(1) during the time between recording or levying taxable transactions and collecting the taxes due, the value of the taxes collected falls in real value to a small fraction of the original taxes receivable; (2) government debt issues fail to find buyers except at very deep discounts

Theories of hyperinflation generally look for a relationship between seigniorage and the inflation tax. In both Cagan’s model and the neo-classical models, a crucial point is when the increase in money supply or the drop in basic money stock makes it impossible for a government to improve its financial position. Thus when fiat money is printed, government obligations that are not denominated in money increase in cost by more than the value of the money created.

From this, it might be wondered why any rational government would engage in actions that cause or continue hyperinflation. One reason for such actions is that often the alternative to hyperinflation is either depression or military defeat. In late 2001, the Argentine peso collapsed in value. Rather than printing sufficient cash for the public to carry, which they feared would start a run on the banks, the government took the peso off its dollar peg. Many international economists predicted that they would have to get a new loan from the IMF and impose shock therapy in order to avoid hyperinflation. Currency controls were imposed, tariffs were instituted, and the economy was allowed to fall into a severe recession during which unemployment hit 25%, homelessness and crime spiraled upwards, and the poverty rate peaked at over 50%.

The root cause is a matter of more disputes. In both classical economics and monetarism, it is always the result of the monetary authority irresponsibly borrowing money to pay all its expenses. These models focus on the unrestrained seigniorage of the monetary authority, and the gains from the inflation tax. In Neoliberalism, hyperinflation is considered to be the result of a crisis of confidence. The monetary base of the country flees, producing widespread fear that individuals will not be able to convert local currency to some more transportable form, such as gold or an internationally recognized hard currency. This is a quantity theory of hyperinflation.

In neo-classical economic theory, hyperinflation is rooted in a deterioration of the monetary base that is the confidence that there is a store of value which the currency will be able to command later. In this model, the perceived risk of holding currency rises dramatically, and sellers demand increasingly high premiums to accept the currency. This in turn leads to a greater fear that the currency will collapse, causing even higher premiums. One example of this is during periods of warfare, civil war, or intense internal conflict of other kinds: governments need to do whatever is necessary to continue fighting, since the alternative is defeat. Expenses cannot be cut significantly since the main outlay is armaments. Further, a civil war may make it difficult to raise taxes or to collect existing taxes. While in peacetime the deficit is financed by selling bonds, during a war it is typically difficult and expensive to borrow, especially if the war is going poorly for the government in question. The banking authorities, whether central or not, “monetize” the deficit, printing money to pay for the government’s efforts to survive. The hyperinflation under the Chinese Nationalists from 1939-1945 is a classic example of a government printing money to pay civil war costs. By the end, currency was flown in over the Himalaya, and then old currency was flown out to be destroyed.

Hyperinflation is regarded as a complex phenomenon and one explanation may not be applicable to all cases. However, in both of these models, whether loss of confidence comes first, or central bank seigniorage, the other phase is ignited. In the case of rapid expansion of the money supply, prices rise rapidly in response to the increased supply of money relative to the supply of goods and services, and in the case of loss of confidence, the monetary authority responds to the risk premiums it has to pay by “running the printing presses.”

In the United States of America, hyperinflation was seen during the Revolutionary War and during the Civil War, especially on the Confederate side. Many other cases of extreme social conflict encouraging hyperinflation can be seen, as in Germany after World War I, Hungary at the end of World War II and in Yugoslavia in the late 1980s just before breakup of the country.

Less commonly, inflation may occur when there is debasement of the coinage — wherein coins are consistently shaved of some of their silver and gold, increasing the circulating medium and reducing the value of the currency. The “shaved” specie is then often restruck into coins with lower weight of gold or silver. Historical examples include Ancient Rome, China during the Song Dynasty, and the United States beginning in 1933. When “token” coins begin circulating, it is possible for the minting authority to engage in fiat creation of currency.

As noted, in countries experiencing hyperinflation, the central bank often prints money in larger and larger denominations as the smaller denomination notes become worthless. This can result in the production of some interesting banknotes, including those denominated in amounts of 1,000,000,000 or more.

* By late 1923, the Weimar Republic of Germany was issuing fifty-million Mark banknotes and postage stamps with a face value of fifty billion Mark. The highest value banknote issued by the Weimar government’s Reichsbank had a face value of 100 trillion Mark (100,000,000,000,000; 100 billion on the long scale).One of the firms printing these notes submitted an invoice for the work to the Reichsbank for 32,776,899,763,734,490,417.05 (3.28×1019, or 33 quintillion) Marks.

* The largest denomination banknote ever officially issued for circulation was in 1946 by the Hungarian National Bank for the amount of 100 quintillion pengo (100,000,000,000,000,000,000, or 1020; 100 trillion on the long scale). image (There was even a banknote worth 10 times more, i.e. 1021 pengo, printed, but not issued image.) The banknotes however didn’t depict the number, making the 500,000,000,000 Yugoslav dinar banknote the world’s leader when it comes to depicted zeros on banknotes.

* The Z$100 billion agro cheque, issued in Zimbabwe on July 21, 2008, shares the record for depicted zeroes (11) with the 500 billion Yugoslav dinar banknote.

* The Post-WWII hyperinflation of Hungary holds the record for the most extreme monthly inflation rate ever — 41,900,000,000,000,000% (4.19 × 1016%) for July, 1946, amounting to prices doubling every fifteen hours.

One way to avoid the use of large numbers is by declaring a new unit of currency (an example being, instead of 10,000,000,000 Dollars, a bank might set 1 new dollar = 1,000,000,000 old dollars, so the new note would read “10 new dollars”.) An example of this would be Turkey’s revaluation of the Lira on January 1, 2005, when the old Turkish lira (TRL) was converted to the New Turkish lira (YTL) at a rate of 1,000,000 old to 1 new Turkish Lira. While this does not lessen the actual value of a currency, it is called redenomination or revaluation and also happens over time in countries with standard inflation levels. During hyper inflation, currency inflation happens so quickly that bills reach large numbers before revaluation.

Some banknotes were stamped to indicate changes of denomination. This is because it would take too long to print new notes. By time the new notes would be printed, they would be obsolete (that is, they would be of too low a denomination to be useful).

Metallic coins were rapid casualties of hyperinflation, as the scrap value of metal enormously exceeded the face value. Massive amounts of coinage were melted down, usually illicitly, and exported for hard currency. Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

* Outright lying in official statistics such as money supply, inflation or reserves.

* Suppression of publication of money supply statistics, or inflation indices.

* Price and wage controls.

* Forced savings schemes, designed to suck up excess liquidity. These savings schemes may be described as pensions schemes, emergency funds, war funds, or something similar.

* Adjusting the components of the Consumer price index, to remove those items whose prices are rising the fastest.

None of these actions address the root causes of inflation, and in fact, if discovered, tend to further undermine trust in the currency, causing further increases in inflation. Price controls will generally result in hoarding and extremely high demand for the controlled goods, resulting in shortages and disruptions of the supply chain. Products available to consumers may diminish or disappear as businesses no longer find it sufficiently profitable (or may be operating at a loss) to continue producing and/or distributing such goods, further exacerbating the problem.
 
Hyperinflation chart gold to mark in 1919 to 1923

The chart shows set price for German marks to buy one ounce of gold. Lets do the math to figure the percentage of hyperinflation and to see how quickly once it starts how fast money can devalue. From January of 1919 to September of 1919 the paper currency had an inflation rate of 293%. This is in just 9 months; just imagine that happening to the Dollar. The price of a gallon of gasoline is now at $2.80 with a 293% inflation rate would go up to $8.20 a gallon.

From September of 1919 to January of 1920 or just three months later the hyperinflation for that one year period of 1919 was 788%. The price of a gallon of gasoline now in April of 2010 at $2.80 with a 788% hyperinflation rate would go up to $22.40 a gallon. To put 20 gallons of gas in your truck would cost $448.00. That’s probably your entire take home pay. What about food? Let’s do the math on that if you now spend $150.00 a week with a 788% hyperinflation rate it will cost you $1,182.00 to buy one week’s worth of food. It should be obvious that except for the wealthiest people in the country or the top 10% of the wage earners. No one can afford this kind of hyperinflation and wages will not be able to adjust fast enough to save anyone from this scenario. Also what about all you’re other bills like rent, electricity and credit cards? They will go unpaid and the financial system will collapse very quickly as we are talking about 90% of the population will not be able to pay their bills.

We as a people can’t afford even a 100% inflation in a 12 month period. My purpose here is to show the public how quickly things can go wrong. I believe this is exactly what will happen in 2012. Allow me to explain further why this happens so quickly once it starts. First it’s our foreign trading partners where we get 70% of all our products and commodities from and they lose confidence in our paper currency. Our foreign trading partners demand more paper for their products. This forces prices up and inflation rises by that amount and very soon they start charging at an anticipated inflation rate above its current value for holding the currency until they can spend it. It’s that expectation of future inflation that forces the inflation to accelerate. Take any calculator and hit the keys 2 x 2 a few times and see how fast it gets to one thousand. Hyperinflation works just like that. Once hyperinflation starts its impossible to stop until the currency becomes worthless. This is what Americans have to prepare for. I could show ten other examples but they all work the same way for the same reasons.

Here is the bigger problem this hyperinflation will cause all our governments to collapse, both the federal government and the states local governments as they both use the same worthless currency. This is the part that the liberal progressives never bothered to figure out once they collapse the economic system. We have a $1.6 trillion federal deficit for the year 2010 and in 2011 it’s supposed to be $1.3 trillion. At just a 100% inflation rate that $1.3 trillion goes to $2.6 trillion and if hyperinflation is higher than the $2.6 trillion deficits number just gets that much bigger. Government spending is not immune to inflation. Government collects more in taxes but they get 25 % while everything costs 100% more. This is part of what forces the acceleration of money creation and its the cause of higher and higher hyperinflation to sustain the governments and the countries needs of fuel and other necessary products.

The big question is where would we get $2.6 trillion from? We will not be able to barrow one cent of it. No one will be willing to lend us money under these circumstances and only a complete idiot would even think about it. This is the current situation in April of 2010. So we will just print up the paper money. This is what we are doing now but there not telling you. This is exactly what makes it even worse month by month. This is what will collapse our currency and the government and this will take a lot of explaining of exactly how it will happen. For that you will have to buy the book 2012 what’s really going to happen in 2012.
2012 What's really going to happen in 2012

Read Full Post »

In the next 18 months there will be many very obvious signs that everyone will be able to see and follow our currencies demise. The evidence will be found in the two most noticeable commodities we purchase every week and that’s the price of Gasoline and food. While the governments’ bureau of labor and statistics is telling us we have no inflation reported to be 1.1% the cost of Gasoline and food will be skyrocketing upward.

 In the last report out December 15, 2010 the headline number on inflation came out at .8% or 8/10 of one percent. These numbers are calculated on a monthly bases and it seems no one ever looks at what’s in the reports. Here is the increased cost of the two most important items in America. The CPI report shows the last 12 month gasoline has increased 9.5%. Then if we look at food over the 12 month period we get 1.4% increase in price. The total of all items in all categories clams’ inflation is running at 1.1% per year. I think we all know that something is not right with these numbers. The cost of gasoline in just the last 3 months is up 20% where I live and I have seen that in other areas of the country is a lot higher.

 But the November Producer Price Index (PPI) for finished goods surged 0.8 percent is doubles most economists’ estimates. Moreover, the inflation is not stemming just from rising energy prices. Overall, the cost of food rose 1 full percentage point in November, which is equivalent to 12 percent annual inflation rate. Egg prices led the way higher, jumping 23 percent in November, while the price of fruit jumped an astounding 14 percent. Think these are one-time, freak price jumps? Think again, because since the first of this month… the price of corn is up more than 3 percent … coffee is up more than 8 percent … sugar is up 8.49 percent … oats are up nearly 6 percent … while cotton prices are up more than 16 percent — all of this in just 15 days!

 The consumer price index hasn’t started jumping yet. But just like night follows day, it will as companies pass on higher wholesale costs. The Fed SAID it would continue its QE2 policy, saying it would “promote a stronger pace of economic recovery” … But that reckless policy is driving interest rates skyward! In fact, two-year Treasury yields have doubled in 29 trading days. Five-year yields have surged 102 basis points, or 1.02 percentage points, while 10-year yields just hit a seven-month high. Thirty-year municipal bond yields soared to a 16-month high, as thirty-year mortgage rates jumped to the highest since the tail end of the spring home buying season.

 So not only is the Fed failing to promote recovery by driving borrowing costs down It’s actually hindering the recovery by driving costs up. Yet in the Fed’s fantasy world, everything is peachy keen! With interest rates rising and the Fed continuing to print money and buy bonds, despite a zero percent success rate so far, here comes hyperinflation!

 The price of gasoline has gone from under $2.50 a gallon to $3.00 that is a 20% increase in just 3 months. I do my own shopping and I believe food has gone up more than 1.4% in the last year. Any way my point is what we really need to buy every week is climbing at a much greater rate than the reports show. This is nothing new as I have notice this to be the case all my years of running a business. But in the following months because of the intentional devaluation of the dollar, the cost of petroleum products and food will increase as the dollar devalues against all other currencies. This is what happens when a country intentionally devalues its currency. Ben Bernanke has said we need to create some inflation because it’s to low at 1.1%.

 So here is what’s taking place right now and it’s the truth. I will explain how this will get out of control real fast. We will start with what the news media is referring to as QE-2 which translated means quantitative easing. The amount of money they are going to print or digitize is $600 Billion. Bernanke claims the purpose is to create liquidity in the banking system. The true reason is to finance the federal deficit of $110 billion a month. There are just moving digits from one Colum of a computer program and moving the digits to another Colum, there not even printing the money anymore. This has to be added to the federal deficit spending for all of 2008 and up to the end of 2010 and that dollar amount is around $3.9 trillion. Now we are adding $600 Billion for a total of $4.5 trillion. The money is getting into the streets with monthly government spending on entitlement programs.

 This QE-2 money will run out buy April of 2011, so what happens next? QE-3 will be another $600 billion and Ben Bernanke said this would be the case if needed and it will be needed. There’s no end in sight with the federal budget deficits of 1.55 trillion for 2011. That’s $129 billion on average added each month to finance the gap between government revenue and government spending. The QE-3 will run out by September 2011. So what comes next? QE-4, 5 and 6 there is no end in sight.

 Why does this matter and why should you care? As the Federal Reserve keeps propping up federal spending deficits over the short period of the next 18 months we will destroy what confidence is left in our paper currency. This means the prices of crude oil from were ever we do import it from will continue to rise with the continued intentional devaluation of the dollar. We import 72% of all the crude oil we use and we are not in control of the price. American oil companies only control 3% of the world oil supplies. Well why does this matter? For every dollar a gallon the price goes up it takes $27 billion each month out of Americans pockets they would otherwise spend on something else. We are not buying additional product we are just paying a lot more for it. $4.00 a gallon gasoline by July of 2008 is part of what caused the last recession or the one we are still in that lead to a worldwide bank collapse. That recession started in December of 2007. If you find a chart of the price of gasoline and a chart for unemployment as the cost of gas went up so did unemployment. They move in lockstep for the following reasons.

 On a yearly base $1 in additional cost to a gallon of gas is about $300 billion that goes missing for other purchases. I believe the threshold for decline in other economic activity due to the price of gas is $2.50 a gallon and once we get above that we start to lose jobs because all that money goes missing. There is also the secondary affect the higher price of crude pushes up the cost of food and all other energy related categories. There is also another problem and its ethanol that is added to the gasoline. This comes from corn and corn is also the main food use for cattle chickens and all farm animals. As we burn ethanol up we are forcing the cost up for farmers to feed their animals and this has a direct affect on the cost of all our food supply on top of the higher price from the higher cost of crude oil.

 In 2011 we can look for much higher Gasoline prices and much higher food prices. It will look like this by the end of 2011, gasoline will double to $5.00 a gallon and food will be up about 30%. The Bureau of labor and statistics will be telling us we have just 5% inflation. This is exactly what they were telling us in July of 2008 when gasoline was $4.00 a gallon in most parts of the country and in Crazy left coast California gasoline was over $5.00 a gallon. Most of the price increase in 2008 was from January to July or in just 7 months. That was all from speculation in the commodities market, not from the intentional devaluation of the dollar.

 The inflation of the currency has a quantitative number of jobs losses that will come from the money gone missing from the higher gas prices. Based on my numbers and numbers from the department of labor, I have calculated that for every $1.00 a gallon or $27 billion each month the job cost is 183,828 jobs that disappear with the money. On yearly bases that is 2,205,936 lost jobs and this doesn’t count all the income lost from the jobs incomes that no longer exist that will forces even more job losses. This is already happening in October and November of 2010 the last two unemployment reports have shown in the body of the report not the headline number, we have lost 503,000 jobs from the total number of jobs in the economic system. This coincides with the rising price of crude oil as it has crept up for the last three months. The headline numbers were positive, but just like all government reports they have diluted them in such a way the true state of the economy doesn’t show up until 3 to 6 months later, if it shows up at all. The interior of the reports show a decline in the number of people with jobs was negative 330,000 for October and 173,000 for November. So get ready for a wild ride as prices go back to $4.00 and then to $5.00 by the end of 2011

 The higher cost of food has the same results as the higher price of gas. Food has to be replenished on weekly bases we eat it and it disappears and if it cost more for the same amount of product the money just disappears. The money doesn’t exist anymore to purchase other products and the economy slows even more and even more jobs are lost. Currently the unemployment rate is at 9.8 % for November 2010. I expect at the very least we will lose at least another 6 million jobs by the end of 2011 if the above scenario plays out. This will put the unemployment rate at around 13% to 14% by early 2012, which will be catastrophic. The value of the dollar will have its ups and downs because of Europe’s economic problems but the long term direction over the next 18 months will be the same, a severe devaluation of the dollar. So what happens next?

 If you want to know the whole story on how we got into this position and were all this will take us and our country you have to buy my book called 2012: what’s really going to happen in 2012. There are no prophecies in the book, it’s not about wizards or any hocus pocus codes. It’s about sound economic practices that we have ignored within our own governments policies and how the very government we expect to protect the country has planned our demise and why. I show the proof based on simple math, a little common sense and the current history of the last 10 years to get us right where we are. 

http://tiny.cc/ns56s

2012 What's really going to happen in 2012

Read Full Post »

What is a lobbyist and why do they exist? Lobbyists petition congressmen to prevent government from passing laws that will hurt their industry. On the other hand they petition congressmen to vote for laws that give them an advantage over competitors. This is a vicious cycle that never ends. First of all it’s a violation of the constitution to pass laws that restrict commerce. Secondly it would therefore be an obstruction of commerce to give one business favor over another by legislation that would restrict the free flow of commerce. This is also why under constitutional law we are not under a Nazi, Fascist socialist or Communist economic system. At least were not supposed to be.

But they do it anyway and here is why. This stated after the First World War and got a lot worse after the Second World War. The politicians learned they could make millions in campaign contributions, using first the threat of regulation on particular industries and then getting bribed or paid in the form of contributions not to pass those restrictive regulations. This is really illegal under the founding rules of our government, but congress has changed the original laws and made new ones to fit their greedy needs. Now we have the problems that we have on account of it. It is no more than legalized bribing of a politician. This as most know is also illegal. So what this all boils down to is we have a bunch of crooks in Washington running the country. But it has been made legal by the politicians.

At the same time the public blames the corrupt corporations for all their problems and the real truth is it’s the corrupt government that creates all the problems. The politicians and the unions are always blaming big business for why things are so hard on you. But I have asked many people who were on a rant about how it’s the corrupt corporations this question. I asked them to name one time you have been ripped off and had something taken away or stolen by a corporation. They had no answer. They were however smart enough to realize after a few seconds of thought that they never had lost anything to a corporation and that’s what their unions that told them all their problems were from the greedy corporations. Others said that’s what they had read it in an article. No one I had ever ask that question could answer, not one.

 This is a big part of the disinformation game of the politicians shifting blame. Everyone else is at fault and it’s never the politicians fault. The most recent example is the healthcare bill 2,700 pages of new regulation. It’s those greedy insurance companies and they are the cause of all your healthcare expense problems. But in fact it is the regulation on the healthcare industry over the past 40 years that makes the healthcare cost goes up a rate of 7 to 10% every year. But since you pay the insurance companies you believe they are the bad guys. It’s a giant shell game of shifting the blame and always hiding the truth from you. This is the case in every industry in the country. They are only trying to survive as a business. They provide jobs for 80% of the working public. How can they really be the bad guys?

 If government was not constantly passing new regulations or laws to restrict business in some way there would be no business for the lobbyists and if there no demand for an industry like the lobbyists then it would just disappear. The corruption is built into the system we now have. Since Washington has become nothing more than a law factory this will not change. If you don’t play the game, you don’t get the bribes or payoffs in the guise of contributions and you don’t have the money to get reelected. This has created a very corrupt political system and there seems to be no way to correct the problem. The only way we could possibly change it, is if we could get 535 new congressmen and women to promise in a written contract to stop it and that’s not going to happen.

2012 What's really going to happen in 2012

Read Full Post »

 • A new 3.6% tax on all investment income including capital gains. That means that the capital gains tax rate (including California state tax) will rise to 33.9%. The tax on dividend income will rise from 15% today to 53.7% including California tax.

 • Additional Medicare tax on self employment income and wages. This removes the current cap on wages subject to this tax and it will effectively move the top income tax rate from 35% to 43.4% within a couple of years. Add in the California tax again and would then be close to a 54% marginal tax rate. I believe that this is the highest of any major industrialized country. But because spending is so high we would still have $1 trillion-dollar annual deficits even after this tax.

 • There is a 2.9% tax on all medical “devices”, which basically means everything used in a doctor’s office or hospital. Including gowns, syringes, and the like. This will increase health care costs for everyone who does not get free government insurance.

 • The deduction for Medical expenses is currently limited to those expenses that exceed 7.5% or your income. This will be raised to a threshold of 10% of your income. This means that fewer people will get any tax relief from medical expenses they pay for themselves.

 • There are various taxes on anything a person might do to pay for their own medical expenses. Things like Health Savings Accounts, Cafeteria Plans, and Flexible Savings Accounts are ways for people to save their OWN money for their OWN medical care on a pre-tax basis will be limited and taxed. This is all part of the way that President Obama gets to government-run health care by making it illegal or costly to pay for your own care so you have to go to the government.

 • A 10% tax on tanning services. I call this the “Jersey Shore tax”. This one has to be really upsetting to ‘The Situation’, Snookie, and Pauly D.

 • A tax on self-insured health plans. This is another penalty on those who try to pay for their own health care.

 • A new tax on pharmaceutical manufacturers. This will raise the price of drugs for everyone who does not get them from the government for free.

 • A new tax on “Cadillac” health plans. This is an up to 55% tax on any health insurance that costs over about $800 per month including employee and employer contributions. This tax does not apply if you are a union member or your plan is from AARP or Blue Cross Blue Shield of Michigan. These are major Democratic constituencies and they exempted them. For everyone else, this discourages comprehensive health coverage. Isn’t that what the President says he is trying to achieve? Like most of what the President says, his actions are not even close to his words.

  There is a new tax on all ‘for-profit’ health insurance companies (except for a few favored ones). This will also raise the costs of premiums for everyone not getting free care from the government.

 • If you don’t buy health insurance (as dictated acceptable by a new federal czar), you will be fined up to 2.5% of your income even if you pay all of your medical expenses yourself. If your company does not provide said health insurance to all employees, the company will be fined up to $2,000 per employee.

  61% of Americans (including both Democrats and Republicans) are against the bill, those for it the majority have no idea about the taxes included in it. The 2300 page bill was finally released to Republicans TODAY and will be voted on in less than 48 hours.

 2012 What's really going to happen in 2012

Read Full Post »

Inflation comes from the government of any country printing up money or borrowing money in large enough quantities to expand the money supply. The expanded money supply allows for prices to be bid higher. The more money made available through the printing of money the worse the inflation becomes. An example would be the housing market from 2002 to 2006 as the banks would give anyone with a heartbeat a mortgage loan they flooded the housing market with trillions in easy money and that allowed the price of a home to more than double or the equivalent of a 100% inflation rate in just 4 years. That’s not the only cause of inflation as there are many.

 Another cause of inflation in a paper currency is the confidence that people have in the value of that paper currency. If a country like the United States is borrowing trillions of dollars as we are. The confidence can be lost, not by our own citizens but by our foreign trading partners. In our case we are borrowing currently at an average rate of 133 billion every month. The money is unearned there is no wealth being created with the money. In our case 100% of our borrowed money is going to our social systems. This over time can cause a huge devaluation in the buying power of our paper money. Where this shows up is in the cost of all imported products. As our trading partners lose confidence they demand more dollars in exchange for their products. This is the kind of inflation that will show up most noticeable in the cost of gasoline. But it shows up in all products and since we import 70% of all the products we purchase, this can become a huge problem very quickly.

 Inflation can be much worse than an increased income tax. In the late 1970s and in the early 1980s we had what was called runaway inflation rate of 15%. If that happens now with the already high prices we have on all products, it would have a much greater effect and much faster than 30 years ago. Inflation is like a thief that steals from the money you have sitting in a bank account or in any investment. If you had $10,000.00 in a savings account with 15% inflation, in just one year your money would lose $1,500.00 in buying power. I expect something far worse will happen in 2012. Never before in our history or in the history of the world has any country printed or digitized so much unearned money out of thin air in such a short period of time. Europe set up a 1 trillion euro fund to bail out several of their member countries but we have been printing many trillions of dollars to pay for entitlement programs each year for the last three years. If you want to know whats going to happen next get the book 2012. It will scare you and you should be very scared of what comes next.

2012 What's really going to happen in 2012

Read Full Post »

Older Posts »