Is the economy recovering or just shored up for the second wave

Possibly one of the most damning articles about the current state of affairs that I have read recently is an from Matthias Chang of Future FastForward. Here are a few excerpts:

“Some two decades ago, it was decided by the global financial elites that the framework for the global economy shall consist of:

1) A global derivative-based financial system, controlled by the US Federal Reserve Bank and its associate global banks in the developed countries.

2) The re-location from the West to the East in the production of goods, principally to China and India to “feed” the developed economies.

The entire system was built on a simple principle, that of a FED-controlled global reserve currency which will be the engine for growth for the global economy. It is essentially an imperialist economic principle.

Once we grasp this fundamental truth, Bernanke’s boast that the “US can produce as many US dollars as it wishes at no cost” takes on a different dimension.

I have talked to so many economists and when asked what is the crux of the present financial problem, they all respond in unison, “it is the global imbalances… the West consumes too much while the East saves too much and consumes not enough”. This is exemplified by the huge US trade deficits on the one part and China’s massive surpluses on the other.”

—– Snip —–

“When losses are in the US$ trillions and whatever assets / capital remaining are in the US$ billions, we have a huge problem – a financial black-hole.

The preferred remedy by the financial masterminds at Goldman Sachs was to create another hoax – that if the big global banks were to fail triggering a systemic collapse, there would be Armageddon. These “too big to fail” banks must be injected with massive amount of virtual monies to recapitalize and get rid of the toxic assets on their balance sheet. The major central banks in the developed countries in cahoots with Goldman Sachs sang the same tune. All sorts of schemes were conjured to legitimize this bailout.

In essence, what transpired was the mere transfer of monies from the left pocket to the right pocket, with the twist that the banks were in fact helping the Government to overcome the financial crisis.

The Fed and key central banks agreed to lend “virtual monies” to the “too big to fail” global banks at zero or near zero interest rate and these banks in turn would “deposit” these monies with the Fed and other central banks at agreed interest rates. These transactions are all mere book entries. Other “loans” from the Fed and central banks (again at zero or near zero interest rates) are used to purchase government debts, these debts being the stimulus monies needed to revive the real economy and create jobs for the growing unemployed. So in essence, these banks are given “free money” to lend to the government at prior agreed interest rates with no risks at all. It is a hoax!”

—– Snip —–

“The US economy will be spiraling out of control in the coming months and will reach critical point by the end of the 1st quarter 2010 and implode by the 2nd quarter.

The massive US$ trillions of dollars stimulus has failed to turn the economy around. The massive blood transfusion may have kept the patient alive, but there are numerous signs of multi-organ failure.

There will be another wave of foreclosures of residential and more importantly commercial properties by end December and early 2010. And the foreclosed properties in 2009 will lead to depressed prices once they come through the pipeline. Home and commercial property values will plunge. Banks’ balance sheets will turn ugly and whatever “record profits” in the last two quarters of 2009 will not cover the additional red ink.”

The Dollar Bubble

Last week I mentioned another bubble that is currently bursting in our economy, the commercial real estate bubble. Today I would like you to look at possibly the most damning bubble that is currently collapsing, the dollar bubble. I have found a recent video from the National Inflation Association that explains it far better than I can. Are you ready for the inflation that the Federal Reserve is creating? Wonder why the mainstream media is touting an economic recovery and an end to the recession even though we here on main street are seeing the opposite? Curious why there are so many commercials on TV from companies offering to buy your old gold jewelry and coins? Take a look at this video and perhaps some of your questions will be answered.

Change Is The Road Less Traveled In Washington D.C.

Last week President Obama told Fox news that America faces the possibility of a “double-dip” recession. He stated this while in China, of all places, which is a country that has made an astounding stimulus investment to create jobs for its citizens, holds the winning hand in trade balance with the US, and outsmarted the US government when it comes to bailing out their economies. Imagine that… while doing an interview with his alleged enemy in the information war, Obama finally expresses some concern over deficit spending and acknowledges that the country could be heading toward another drop in the economy. Sometimes I wonder if Mr. Obama is simply as clueless as G.W. Bush, cares more about his Wall Street buddies than the rest of America, or has been hit over the head with one of his beloved golf clubs.

To be fair, the stimulus package aimed at shoring up the US economy did help slow the downward slide caused by the greed of the banksters, but it fell very short of actually creating the jobs needed to keep America on the road to recovery. Also, to be fair to Mr. Obama, he didn’t create this mess; it was in place before he was elected. But the question remains: how are we each to pay our portion of the national debt if jobs continue to be lost and the banksters are allowed to continue stealing our savings? Several issues need to be dealt with, and so far Obama has done little to take a leadership role in dealing with them. The alleged “change we can believe in” has turned out to be “don’t rock the boat” because mainstreet America will pay the consequences, not the elite class that created the turmoil.

While the media and public “dither” over the proposed health care reforms, the nation continues to sink into a possible abyss of unpayable debt, loses more and more international credibility, and income inequality is at an all time high. Things aren’t looking all that great for the future of America and her citizens when these and other factors are added together. It also seems that the puppets in Washington are content in allowing the continued decline of our nation, so long as they get their share of the pie before it’s all gone.

Lately I’ve been looking for solutions to the troubles that we face as a nation, and while most of them will never be addressed by the majority of current representatives that are corrupting our capital, at least one of them has been. Most of us lowly taxpayers are aware that America has been in decline for at least thirty years; it doesn’t take a genius to see the effects of nearly half a century of neglect and abuse from the ruling class. A shining example of where the glut and greed of the elite oligarchy has gotten us is the sale of the Pontiac Silverdome for a mere $583,000, or about 1 percent of the $55.7 million it took to build in 1975. That’s the cutting edge of a new pothole in the road to economic recovery for America, the collapsing bubble of the commercial real estate market.

Amidst all this doom and gloom there must be some hope for the future of our nation, but it’s doubtful we will find it in the stacked deck of cards that represents the politicians in Washington. Serious steps are going to have to be taken in order to bring this country back to its former vitality, many of which the oligarchy and political elite are going to fight tooth and nail. I did mention that one of these steps had recently been given some ground though, didn’t I? That step is just one of many we will have to take as a nation, but it does bring hope that all is not lost yet. That step would be an audit of the Federal Reserve. Many Americans are still under the impression that the Fed is a part of the government, however it is a private enterprise ran by those very banksters that caused the latest recession and continue to suck the wealth from American taxpayers with the support of the Obama Administration. While it may be an instrument of the government, it is not an agency of the government, and is not accountable to anyone. This brings us to another step that eventually must be taken if we want America to survive into the 22nd century: abolish the Federal Reserve Act of 1913 and give Congress complete oversight of the economy and the coining of money.

Of course the Fed is only part of the problem. Another factor that must be dealt with, possibly the first hurdle in the plight of Americans as they regain control of their government, is campaign reform. The way we currently select those who will be in public office is woefully inefficient and obviously very destructive when the overall status of life in America is studied. While we live in the dream that this is a Democracy, the Republic for which we stand has become more like a Plutocracy. The only way to recapture the “by and for the people” ideal, is to deny the access to our government bought by the wealth of the elite class. It’s an age old battle, one the American people have been losing for centuries, one that must be revitalized if “We The People” want a “More Perfect Union”. Stripping the rich of their power over our politicians is critical if we wish to actually change the way this country is ran.

Another measure that needs to be addressed is one of many that Obama campaigned with and then reneged on. Renegotiation of  NAFTA and GATT, to make them fair to American workers, is paramount to making this country strong again economically. I’ve been reading a lot on free trade lately and still haven’t been convinced that it is always good for America. In theory, free trade doesn’t appear to be a completely bad thing. The idea that each country produces what it is best at, and then trades for products it isn’t best at producing isn’t completely unrealistic. Unfortunately, the benefits to an unfair free trade system are devastating to countries that are being sold out by their politicians. Here is a nice little table that will clue you in as to where “free trade” is taking us. It comes as no surprise to most of us that another stacked deck of trade agreements made by the US has put Americans out of work in favor of cheap labor for Corporate America. It’s time Americans are given a choice between “free trade” and “fair trade”. To have corporations and bought out politicians making these kinds of choices for our country cannot continue.

We have a long way to go if we are to ensure that our nation prospers into the 22nd century, but step by step the American People can win back their sovereignty and break the iron grip of the globalist elite that has been crushing it. Many are beginning to stand up to Wall Street, and we must continue the momentum against the oligarchy if we are to survive as a nation. Here are just a few points for further consideration and study that may help us on our journey to change we can believe in:

1. Campaign finance and procedure reform. Bring an end to the lobbyists exclusive access to our representatives.

2. End corporate personhood.

3. Greatly improve unemployment benefits.

4. Re-enact the Glass-Steagall Act.

5. Fix our trade policy: Pull out of or renegotiate NAFTA, CAFTA and the WTO.

6. Reimpose tariffs, just like every other successful economy, and just like the US had before Reagan got into the White House.

7. Review and update our foreign policy without the interference of the CFR, WTO, IMF, and all the other groups that lobby our government to go to war.

8. Auditing and nationalizing the Federal Reserve. Abolishing the Federal Reserve control over our economy and bringing the right to coin money back under Congress instead of privately owned banks.

9. Make college education free or nearly free, as it is in virtually every other industrialized country.

10. Pass card check, the Employee Free Choice Act, thus making it easier to form a union.

Click here to contact your Representative in Congress.

In Debt We Trust

In America’s earliest days, there were barn-raising parties in which neighbors helped each other build up their farms. Today, in some churches, there are debt liquidation revivals in which parishioners chip in to free each other from growing credit card debts that are driving American families to bankruptcy and desperation.

IN DEBT WE TRUST is the latest film from Danny Schechter, “The News Dissector,” director of the internationally distributed and award-winning WMD (Weapons of Mass Deception), an expose of the media’s role in the Iraq War. The Emmy-winning former ABC News and CNN producer’s new hard-hitting documentary investigates why so many Americans are being strangled by debt.

It is a journalistic confrontation with what former Reagan advisor Kevin Phillips calls “Financialization”–the “powerful emergence of a debt-and-credit industrial complex.” While many Americans may be “maxing out” on credit cards, there is a deeper story: power is shifting into fewer hands…..with frightening consequences.

IN DEBT WE TRUST shows how the mall replaced the factory as America’s dominant economic engine and how big banks and credit card companies buy our Congress and drive us into what a former major bank economist calls modern serfdom. Americans and our government owe trillions in consumer debt and the national debt, a large amount of it to big banks and billions to Communist China.

Quiet Conspiracy

The following article, written by former Sen. Ernest F. “Fritz” Hollings,  is reprinted from EconomyInCrisis.org under a Creative Commons Attribution-No Derivative Works 3.0 United States License.

Fifteen years ago, I called my friend Walter in California to ask that his next expansion be in South Carolina.  Walter responded:  “I don’t produce anything in the United States.  It’s all in China.  I lease the plant for a year.  They provide the workers, and I put a quality control man in charge, keeping up with him on the Internet.  If I make a profit, I don’t have to pay any taxes.  I just invest in another plant and expand.  If business has a downturn, I just walk away.  I haven’t lost any capital investment or incurred any legacy costs.”

The conspiracy has four components. The first begins with business keeping this deal quiet.  It is globalization. Nothing you can do about it.  If one tries to address the issue, it is called “protectionism,” and they are told “don’t start a trade war.”  Instead of leading the way in Congress for a strong economy, they remain hushed! Thus, business began the conspiracy of silence on the Trade War that rages in globalization.  Globalization is nothing more than a Trade War with production looking for a cheaper country to produce. When producing offshore one doesn’t have to bother with health care, labor laws, protecting the environment, OSHA’s safety rules and anti-trust provisions.

Second in the conspiracy is Wall Street, which is interested in offshore profits, banks and investment houses like Goldman-Sachs finance offshore production.

Then third is the conspiracy of silence on the Trade War by the president and Congress.  Both go along with the charade because Wall Street, the financial crowd, and Corporate America furnish the contributions for the campaigns.

The fourth and most cancerous part of the conspiracy are the economists and free press.  They give credibility to the charade of silence on a Trade War.   The economists follow the adage:  “Whose bread I eat, his song I sing.”  The best of the best, Paul Krugman, recommends more stimulation, “New-Deal-style employment programs,” such as the WPA and the CCC, and Germany’s reducing “workers’ hours rather than laying them off” –everything about creating jobs, but nothing about stopping the loss of jobs in the Trade War.  Krugman has to know that offshoring our production and jobs at the present rate will soon put the economy beyond repair.  The media avoids mentioning the Trade War like the plague.  Last week’s Time magazine lists “5 Things We Can Learn From China.”  (1) “Be ambitious;” (2) “Education matters;” (3) “Look after the elderly;” (4) “Save more;” (5) “Look over the horizon.”   Time ignores China’s lesson that government is the “comparative advantage” in the Trade War.

I was drafted in this Trade War by the northern and southern textile industries to testify before the old U. S. Tariff Commission in 1960.  I told them how we were losing textile production and jobs because Japan was dumping its textile exports at less than cost into the U. S. market.  John Kenneth Galbraith later helped draw up President John Kennedy’s seven-point program in 1961 to protect textiles from Japan’s trade practices.  But Japan continued building plants around the Pacific Rim and transshipping in violation of its trade agreements into the United States.  Twenty-five years ago, U. S. Customs estimated that the textile industry was suffering from $5 billion in textile transshipments.  We were receiving textiles from Matsui that didn’t even have a textile plant.

In 1968 we passed five bills to counter this conduct and have the president enforce our trade agreements, but President Lyndon Johnson blocked one in the House of Representatives, President Carter vetoed one, President Reagan vetoed two, and President George H. W. Bush vetoed one.  In passing bills through both Houses of Congress, we proved the textile industry was the most productive in the world — investing $2 billion a year in new machinery, downsizing the card room from 25 employees to none, downsizing the weave room from 112 to 12.

Zenith spent three years and $3 million going through the courts to protect its production and finally won before the U. S. Supreme Court.  But President Ronald Reagan said we had to help his friend, Nakasone, in Japan and overrode the Supreme Court decision.  Industry, seeing it could get no relief in the courts or from the Congress, started offshoring in earnest.  And under President Clinton’s and George W. Bush’s free trade policies offshoring hemorrhaged.  Milliken Textiles, that launched the program “Crafted with Pride in the USA,” had to move its carpet production to Beijing in order to sell the carpet for the Chinese Olympics’ Bird Nest.  In the last ten years, the United States has lost one-third of its manufacturing and now imports a majority of what we consume.  Long before today’s recession, the United States lost a substantial portion of its production of textiles, shoes, watches, radios, TVs, steel, electronics, computers, machine tools, robots, communications equipment, automobiles, advanced technology and now research.  But Corporate America, the financial interests, the government in Washington, the economists and media, act as if there is no Trade War.

Click here to contact your Representative in Congress.