From Rebellion:
Sep 3, 2010 (2 days ago)Wyoming Man Donates $1.5M to Defend Arizona Immigration Law in Courtfrom feed/http://lsrebellion.blogspot.com/feeds/posts/default by Old RebelLooks like the case of Obama vs. America is heating up:
The contribution from Timothy Mellon of Saratoga is the largest to Brewer's defense fund, which has amassed more than $3.6 million from 41,000 donors nationwide.
I hope some of that money helps Sheriff Joe Arpaio!
What a message this sends! If a State leader takes a stand against the despised Federal government, people will rally around them.
Know hope.
A Nation In Distress
Saturday, September 4, 2010
The Death Of Cash? All Over The World Governments Are Banning Large Cash Transactions
From A Charging Elephant:
The Death Of Cash? All Over The World Governments Are Banning Large Cash Transactions
Posted on September 4, 2010
by dancingczars
1 Comment
TheEconomicCollapse
There is no doubt that this type of measure would temporarily be a set back for drug dealers, prostitutes, and those dealing in cash. Would it also have a beneficial effect on counterfeiting? How will the government stop cash from going off shore, then wired to banks in the U.S.
My bet is that temporarily it may work, like most laws the government comes up with when it comes to people and their money, loop holes will be found, and ultimately another new cottage industry will dial it up, that being false credit cards and other yet to be devised schemes. Big money will find ways around this and the rest of us will have additional privacy taken from us.
That’s my story and I’m sticking to it, I’m J.C.
Are we witnessing the slow but certain death of cash in this generation? Is a truly cashless society on the horizon? Legislation currently pending in the Mexican legislature would ban a vast array of large cash transactions, but the truth is that Mexico is far from alone in trying to restrict cash. All over the world, governments are either placing stringent reporting requirements on large cash transactions or they are banning them altogether.
We are being told that such measures are needed to battle illegal drug traffic, to catch tax evaders and to fight the war on terror. But are we rapidly getting to the point where we will have no financial privacy left whatsoever? Should we just accept that we have entered a time when the government will watch, track and trace all financial transactions? Is it inevitable that at some point in the near future ALL transactions will go through the banking system in one form or another (check, credit card, debit card, etc.)?
The truth is that we now live at a time when people who use large amounts of cash are looked upon with suspicion. In fact, authorities in many countries are taught that anyone involved in a large expenditure of cash is trying to hide something and is probably a criminal.
And yes, a lot of criminals do use cash, but millions upon millions of normal, law-abiding citizens simply prefer to use cash as well. Should we take the freedom to use cash away from the rest of us just because a small minority abuses it?
Unfortunately, the freedom to use cash is being slowly stripped away from us in an increasingly large number of countries.
In fact, as countries like Mexico “tighten the noose” around big-ticket cash purchases, our freedom to use cash is going to erode rather rapidly.
The following is a summary of some of the very tight restrictions being placed on large cash transactions around the globe right now….
Mexico
In Mexico, a bill before the legislature would completely ban the purchase of real estate in cash. In addition, the new law would ban anyone from spending more than MXN 100,000 (about $7,700) in cash on vehicles, boats, airplanes and luxury goods.
$7,700 is not a very high limit, and this legislation has some real teeth to it. Anyone violating this law would face up to 15 years in prison.
Greece
In Europe, some of the “austerity packages” being introduced in various European nations include very severe restrictions on the use of cash.
In Greece, all cash transactions above 1,500 euros are being banned starting next year. The following is a comment by Greek Finance Minister George Papaconstantinou at a press conference discussing the new austerity measures as reported by Reuters….
“From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards”
Italy
Even Italy has gotten into the act. As part of Italy’s new “austerity measures”, all cash transactions over 5,000 euros will be banned. It is said this is being done to crack down on tax evasion, but even if this is being done to take down the mafia this is still quite severe.
The United States
The U.S. government has not banned any large cash transactions, and hopefully it will not do so any time soon, but it sure has burdened large cash transactions with some heavy-duty reporting requirements.
For example, your bank is required to file a currency transaction report with the government for every deposit, withdrawal or exchange over $10,000 in cash.
Not only that, but if a bank “knows, suspects, or has reason to suspect” that a transaction involving at least $5,000 is “suspicious”, then another report must be filled out. This second type of report is known as a suspicious activity report, and it is also filed with the government.
But the reporting does not stop there. As Jeff Schnepper explained in an article for MSN Money, if you are in business and you receive over $10,000 in cash in a single transaction you must report it to the IRS or you will go to prison…..
If you’re in a business and receive more than $10,000 in cash from a single transaction, or from related transactions within a 12-month period, you have to file Form 8300 and report the buyer to the IRS. Don’t file, and you go to jail.
The IRS isnt kidding. I had a client who was a dealer in Corvette sports cars. He told me he didnt have time to file the forms. I told him several times to file. He thought he knew better. He went to jail. So did his children who were involved in the business.
This is very, very serious.
Just because someone forgets to file a certain form with the IRS, that person can go do serious jail time?
Yes.
According to Schnepper, quite a few Americans have already received very substantial sentences for this kind of thing….
In fiscal 2004, the Internal Revenue Service initiated 1,789 criminal investigations. There were 1,304 indictments and 687 convictions — and an 89.1% incarceration rate. The average sentence: 63 months.
In fiscal 2005, the IRS started 4,269 investigations, winning 2,406 indictments and 2,151 convictions and an 83% incarceration rate. Average sentence: 42 months.
The reality is that governments around the world are getting very, very sensitive about large amounts of cash and they are not messing around.
They don’t want all of us running around with big piles of cash. They want our money in the banks where they can track it, trace it and keep a close eye on it.
On the one hand, it is a good thing to catch criminals and terrorists, but on the other hand how much privacy and freedom are we willing to lose just so that we can feel a little safer?
And as cash becomes criminalized, are all of us going to be forced into the banking system whether we like it or not? If we cannot pay for things in cash, what other choices are we going to have?
The truth is that the more you think about this issue, the more disturbing it becomes.
The Death Of Cash? All Over The World Governments Are Banning Large Cash Transactions
Posted on September 4, 2010
by dancingczars
1 Comment
TheEconomicCollapse
There is no doubt that this type of measure would temporarily be a set back for drug dealers, prostitutes, and those dealing in cash. Would it also have a beneficial effect on counterfeiting? How will the government stop cash from going off shore, then wired to banks in the U.S.
My bet is that temporarily it may work, like most laws the government comes up with when it comes to people and their money, loop holes will be found, and ultimately another new cottage industry will dial it up, that being false credit cards and other yet to be devised schemes. Big money will find ways around this and the rest of us will have additional privacy taken from us.
That’s my story and I’m sticking to it, I’m J.C.
Are we witnessing the slow but certain death of cash in this generation? Is a truly cashless society on the horizon? Legislation currently pending in the Mexican legislature would ban a vast array of large cash transactions, but the truth is that Mexico is far from alone in trying to restrict cash. All over the world, governments are either placing stringent reporting requirements on large cash transactions or they are banning them altogether.
We are being told that such measures are needed to battle illegal drug traffic, to catch tax evaders and to fight the war on terror. But are we rapidly getting to the point where we will have no financial privacy left whatsoever? Should we just accept that we have entered a time when the government will watch, track and trace all financial transactions? Is it inevitable that at some point in the near future ALL transactions will go through the banking system in one form or another (check, credit card, debit card, etc.)?
The truth is that we now live at a time when people who use large amounts of cash are looked upon with suspicion. In fact, authorities in many countries are taught that anyone involved in a large expenditure of cash is trying to hide something and is probably a criminal.
And yes, a lot of criminals do use cash, but millions upon millions of normal, law-abiding citizens simply prefer to use cash as well. Should we take the freedom to use cash away from the rest of us just because a small minority abuses it?
Unfortunately, the freedom to use cash is being slowly stripped away from us in an increasingly large number of countries.
In fact, as countries like Mexico “tighten the noose” around big-ticket cash purchases, our freedom to use cash is going to erode rather rapidly.
The following is a summary of some of the very tight restrictions being placed on large cash transactions around the globe right now….
Mexico
In Mexico, a bill before the legislature would completely ban the purchase of real estate in cash. In addition, the new law would ban anyone from spending more than MXN 100,000 (about $7,700) in cash on vehicles, boats, airplanes and luxury goods.
$7,700 is not a very high limit, and this legislation has some real teeth to it. Anyone violating this law would face up to 15 years in prison.
Greece
In Europe, some of the “austerity packages” being introduced in various European nations include very severe restrictions on the use of cash.
In Greece, all cash transactions above 1,500 euros are being banned starting next year. The following is a comment by Greek Finance Minister George Papaconstantinou at a press conference discussing the new austerity measures as reported by Reuters….
“From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards”
Italy
Even Italy has gotten into the act. As part of Italy’s new “austerity measures”, all cash transactions over 5,000 euros will be banned. It is said this is being done to crack down on tax evasion, but even if this is being done to take down the mafia this is still quite severe.
The United States
The U.S. government has not banned any large cash transactions, and hopefully it will not do so any time soon, but it sure has burdened large cash transactions with some heavy-duty reporting requirements.
For example, your bank is required to file a currency transaction report with the government for every deposit, withdrawal or exchange over $10,000 in cash.
Not only that, but if a bank “knows, suspects, or has reason to suspect” that a transaction involving at least $5,000 is “suspicious”, then another report must be filled out. This second type of report is known as a suspicious activity report, and it is also filed with the government.
But the reporting does not stop there. As Jeff Schnepper explained in an article for MSN Money, if you are in business and you receive over $10,000 in cash in a single transaction you must report it to the IRS or you will go to prison…..
If you’re in a business and receive more than $10,000 in cash from a single transaction, or from related transactions within a 12-month period, you have to file Form 8300 and report the buyer to the IRS. Don’t file, and you go to jail.
The IRS isnt kidding. I had a client who was a dealer in Corvette sports cars. He told me he didnt have time to file the forms. I told him several times to file. He thought he knew better. He went to jail. So did his children who were involved in the business.
This is very, very serious.
Just because someone forgets to file a certain form with the IRS, that person can go do serious jail time?
Yes.
According to Schnepper, quite a few Americans have already received very substantial sentences for this kind of thing….
In fiscal 2004, the Internal Revenue Service initiated 1,789 criminal investigations. There were 1,304 indictments and 687 convictions — and an 89.1% incarceration rate. The average sentence: 63 months.
In fiscal 2005, the IRS started 4,269 investigations, winning 2,406 indictments and 2,151 convictions and an 83% incarceration rate. Average sentence: 42 months.
The reality is that governments around the world are getting very, very sensitive about large amounts of cash and they are not messing around.
They don’t want all of us running around with big piles of cash. They want our money in the banks where they can track it, trace it and keep a close eye on it.
On the one hand, it is a good thing to catch criminals and terrorists, but on the other hand how much privacy and freedom are we willing to lose just so that we can feel a little safer?
And as cash becomes criminalized, are all of us going to be forced into the banking system whether we like it or not? If we cannot pay for things in cash, what other choices are we going to have?
The truth is that the more you think about this issue, the more disturbing it becomes.
Video: We Are Never Gonna Stand For This
From A Charging Elephant and Government Mess:
Friday, September 3, 2010
Music Video of the Year - We are Never Gonna Stand for This (Vid)
I was blown away by this video and I think it will impress you too. This is by far the best Music Video of the year in my opinion, this is a must see for every American, enjoy.
Nashville based songwriters Jamie Teachenor and "Banjo" Ben Clark team up for this exclusive release, aimed to raise-the-hair and boil-the-blood of every liberty-loving American ready to make a difference this fall...one vote at a time.
Please help the powerful voice of "We The People" ring through the halls of Congress by forwarding this to any and all who are fed up with the Elites in Washington who consistently ignore our cries.
If you're not registered to vote, PLEASE do so now, and may God bless America now and forever.
Posted by PFFV at 2:07 AM
Friday, September 3, 2010
Music Video of the Year - We are Never Gonna Stand for This (Vid)
I was blown away by this video and I think it will impress you too. This is by far the best Music Video of the year in my opinion, this is a must see for every American, enjoy.
Nashville based songwriters Jamie Teachenor and "Banjo" Ben Clark team up for this exclusive release, aimed to raise-the-hair and boil-the-blood of every liberty-loving American ready to make a difference this fall...one vote at a time.
Please help the powerful voice of "We The People" ring through the halls of Congress by forwarding this to any and all who are fed up with the Elites in Washington who consistently ignore our cries.
If you're not registered to vote, PLEASE do so now, and may God bless America now and forever.
Posted by PFFV at 2:07 AM
Friday, September 3, 2010
The Road To Hyper-Inflation
from Gonzalo Lira and Lew Rockwell.com:
Monday, August 23, 2010How Hyperinflation Will Happen
Right now, we are in the middle of deflation. The Global Depression we are experiencing has squeezed both aggregate demand levels and aggregate asset prices as never before. Since the credit crunch of September 2008, the U.S. and world economies have been slowly circling the deflationary drain.
To counter this, the U.S. government has been running massive deficits, as it seeks to prop up aggregate demand levels by way of fiscal “stimulus” spending—the classic Keynesian move, the same old prescription since donkey’s ears.
But the stimulus, apart from being slow and inefficient, has simply not been enough to offset the fall in consumer spending.
For its part, the Federal Reserve has been busy propping up all assets—including Treasuries—by way of “quantitative easing”.
The Fed is terrified of the U.S. economy falling into a deflationary death-spiral: Lack of liquidity, leading to lower prices, leading to unemployment, leading to lower consumption, leading to still lower prices, the entire economy grinding down to a halt. So the Fed has bought up assets of all kinds, in order to inject liquidity into the system, and bouy asset price levels so as to prevent this deflationary deep-freeze—and will continue to do so. After all, when your only tool is a hammer, every problem looks like a nail.
But this Fed policy—call it “money-printing”, call it “liquidity injections”, call it “asset price stabilization”—has been overwhelmed by the credit contraction. Just as the Federal government has been unable to fill in the fall in aggregate demand by way of stimulus, the Fed has expanded its balance sheet from some $900 billion in the Fall of ’08, to about $2.3 trillion today—but that additional $1.4 trillion has been no match for the loss of credit. At best, the Fed has been able to alleviate the worst effects of the deflation—it certainly has not turned the deflationary environment into anything resembling inflation.
Yields are low, unemployment up, CPI numbers are down (and under some metrics, negative)—in short, everything screams “deflation”.
Therefore, the notion of talking about hyperinflation now, in this current macro-economic environment, would seem . . . well . . . crazy. Right?
Wrong: I would argue that the next step down in this world-historical Global Depression which we are experiencing will be hyperinflation.
Most people dismiss the very notion of hyperinflation occurring in the United States as something only tin-foil hatters, gold-bugs, and Right-wing survivalists drool about. In fact, most sensible people don’t even bother arguing the issue at all—everyone knows that only fools bother arguing with a bigger fool.
A minority, though—and God bless ’em—actually do go ahead and go through the motions of talking to the crazies ranting about hyperinflation. These amiable souls diligently point out that in a deflationary environment—where commodity prices are more or less stable, there are downward pressures on wages, asset prices are falling, and credit markets are shrinking—inflation is impossible. Therefore, hyperinflation is even more impossible.
This outlook seems sensible—if we fall for the trap of thinking that hyperinflation is an extention of inflation. If we think that hyperinflation is simply inflation on steroids—inflation-plus—inflation with balls—then it would seem to be the case that, in our current deflationary economic environment, hyperinflation is not simply a long way off, but flat-out ridiculous.
But hyperinflation is not an extension or amplification of inflation. Inflation and hyperinflation are two very distinct animals. They look the same—because in both cases, the currency loses its purchasing power—but they are not the same.
Inflation is when the economy overheats: It’s when an economy’s consumables (labor and commodities) are so in-demand because of economic growth, coupled with an expansionist credit environment, that the consumables rise in price. This forces all goods and services to rise in price as well, so that producers can keep up with costs. It is essentially a demand-driven phenomena.
Hyperinflation is the loss of faith in the currency. Prices rise in a hyperinflationary environment just like in an inflationary environment, but they rise not because people want more money for their labor or for commodities, but because people are trying to get out of the currency. It’s not that they want more money—they want less of the currency: So they will pay anything for a good which is not the currency.
Right now, the U.S. government is indebted to about 100% of GDP, with a yearly fiscal deficit of about 10% of GDP, and no end in sight. For its part, the Federal Reserve is purchasing Treasuries, in order to finance the fiscal shortfall, both directly (the recently unveiled QE-lite) and indirectly (through the Too Big To Fail banks). The Fed is satisfying two objectives: One, supporting the government in its efforts to maintain aggregate demand levels, and two, supporting asset prices, and thereby prevent further deflationary erosion. The Fed is calculating that either path—increase in aggregate demand levels or increase in aggregate asset values—leads to the same thing: A recovery in the economy.
This recovery is not going to happen—that’s the news we’ve been getting as of late. Amid all this hopeful talk about “avoiding a double-dip”, it turns out that we didn’t avoid a double-dip—we never really managed to claw our way out of the first dip. No matter all the stimulus, no matter all the alphabet-soup liquidity windows over the past 2 years, the inescapable fact is that the economy has been—and is headed—down.
But both the Federal government and the Federal Reserve are hell-bent on using the same old tired tools to “fix the economy”—stimulus on the one hand, liquidity injections on the other. (See my discussion of The Deficit here.)
It’s those very fixes that are pulling us closer to the edge. Why? Because the economy is in no better shape than it was in September 2008—and both the Federal Reserve and the Federal government have shot their wad. They got nothin’ left, after trillions in stimulus and trillions more in balance sheet expansion—
—but they have accomplished one thing: They have undermined Treasuries. These policies have turned Treasuries into the spit-and-baling wire of the U.S. financial system—they are literally the only things holding the whole economy together.
In other words, Treasuries are now the New and Improved Toxic Asset. Everyone knows that they are overvalued, everyone knows their yields are absurd—yet everyone tiptoes around that truth as delicately as if it were a bomb. Which is actually what it is.
So this is how hyperinflation will happen:
One day—when nothing much is going on in the markets, but general nervousness is running like a low-grade fever (as has been the case for a while now)—there will be a commodities burp: A slight but sudden rise in the price of a necessary commodity, such as oil.
This will jiggle Treasury yields, as asset managers will reduce their Treasury allocations, and go into the pressured commodity, in order to catch a profit. (Actually it won’t even be the asset managers—it will be their programmed trades.) These asset managers will sell Treasuries because, effectively, it’s become the principal asset they have to sell.
It won’t be the volume of the sell-off that will pique Bernanke and the drones at the Fed—it will be the timing. It’ll happen right before a largish Treasury auction. So Bernanke and the Fed will buy Treasuries, in an effort to counteract the sell-off and maintain low yields—they want to maintain low yields in order to discourage deflation. But they’ll also want to keep the Treasury cheaply funded. QE-lite has already set the stage for direct Fed buys of Treasuries. The world didn’t end. So the Fed will feel confident as it moves forward and nips this Treasury yield jiggle in the bud.
The Fed’s buying of Treasuries will occur in such a way that it will encourage asset managers to dump even more Treasuries into the Fed’s waiting arms. This dumping of Treasuries won’t be out of fear, at least not initially. Most likely, in the first 15 minutes or so of this event, the sell-off in Treasuries will be orderly, and carried out with the idea (at the time) of picking up those selfsame Treasuries a bit cheaper down the line.
However, the Fed will interpret this sell-off as a run on Treasuries. The Fed is already attuned to the bond markets’ fear that there’s a “Treasury bubble”. So the Fed will open its liquidity windows, and buy up every Treasury in sight, precisely so as to maintain “asset price stability” and “calm the markets”.
The Too Big To Fail banks will play a crucial part in this game. See, the problem with the American Zombies is, they weren’t nationalized. They got the best bits of nationalization—total liquidity, suspension of accounting and regulatory rules—but they still get to act under their own volition, and in their own best interest. Hence their obscene bonuses, paid out in the teeth of their practical bankruptcy. Hence their lack of lending into the weakened economy. Hence their hoarding of bailout monies, and predatory business practices. They’ve understood that, to get that sweet bail-out money (and those yummy bonuses), they have had to play the Fed’s game and buy up Treasuries, and thereby help disguise the monetization of the fiscal debt that has been going on since the Fed began purchasing the toxic assets from their balance sheets in 2008.
But they don’t have to do what the Fed tells them, much less what the Treasury tells them. Since they weren’t really nationalized, they’re not under anyone’s thumb. They can do as they please—and they have boatloads of Treasuries on their balance sheets.
So the TBTF banks, on seeing this run on Treasuries, will add to the panic by acting in their own best interests: They will be among the first to step off Treasuries. They will be the bleeding edge of the wave.
Here the panic phase of the event begins: Asset managers—on seeing this massive Fed buy of Treasuries, and the American Zombies selling Treasuries, all of this happening within days of a largish Treasury auction—will dump their own Treasuries en masse. They will be aware how precarious the U.S. economy is, how over-indebted the government is, how U.S. Treasuries look a lot like Greek debt. They’re not stupid: Everyone is aware of the idea of a “Treasury bubble” making the rounds. A lot of people—myself included—think that the Fed, the Treasury and the American Zombies are colluding in a triangular trade in Treasury bonds, carrying out a de facto Stealth Monetization: The Treasury issues the debt to finance fiscal spending, the TBTF banks buy them, with money provided to them by the Fed.
Whether it’s true or not is actually beside the point—there is the widespread perception that that is what’s going on. In a panic, widespread perception is your trading strategy.
So when the Fed begins buying Treasuries full-blast to prop up their prices, these asset managers will all decide, “Time to get out of Dodge—now.”
Note how it will not be China or Japan who all of a sudden decide to get out of Treasuries—those two countries will actually be left holding the bag. Rather, it will be American and (depending on the time of day when the event happens) European asset managers who get out of Treasuries first. It will be a flash panic—much like the flash-crash of last May. The events I describe above will happen in a very short span of time—less than an hour, probably. But unlike the event in May, there will be no rebound.
Notice, too, that Treasuries will maintain their yields in the face of this sell-off, at least initially. Why? Because the Fed, so determined to maintain “price stability”, will at first prevent yields from widening—which is precisely why so many will decide to sell into the panic: The Bernanke Backstop won’t soothe the markets—rather, it will make it too tempting not to sell.
The first of the asset managers or TBTF banks who are out of Treasuries will look for a place to park their cash—obviously. Where will all this ready cash go?
Commodities.
By the end of that terrible day, commodites of all stripes—precious and industrial metals, oil, foodstuffs—will shoot the moon. But it will not be because ordinary citizens have lost faith in the dollar (that will happen in the days and weeks ahead)—it will happen because once Treasuries are not the sure store of value, where are all those money managers supposed to stick all these dollars? In a big old vault? Under the mattress? In euros?
Commodities: At the time of the panic, commodities will be perceived as the only sure store of value, if Treasuries are suddenly anathema to the market—just as Treasuries were perceived as the only sure store of value, once so many of the MBS’s and CMBS’s went sour in 2007 and 2008.
It won’t be commodity ETF’s, or derivatives—those will be dismissed (rightfully) as being even less safe than Treasuries. Unlike before the Fall of ’08, this go-around, people will pay attention to counterparty risk. So the run on commodities will be for actual, feel-it-’cause-it’s-there commodities. By the end of the day of this panic, commodities will have risen between 50% and 100%. By week’s end, we’re talking 150% to 250%. (My private guess is gold will be finessed, but silver will shoot up the most—to $100 an ounce within the week.)
Of course, once commodities start to balloon, that’s when ordinary citizens will get their first taste of hyperinflation. They’ll see it at the gas pumps.
If oil spikes from $74 to $150 in a day, and then to $300 in a matter of a week—perfectly possible, in the midst of a panic—the gallon of gasoline will go to, what: $10? $15? $20?
So what happens then? People—regular Main Street people—will be crazy to buy up commodities (heating oil, food, gasoline, whatever) and buy them now while they are still more-or-less affordable, rather than later, when that $15 gallon of gas shoots to $30 per gallon.
If everyone decides at roughly the same time to exchange one good—currency—for another good—commodities—what happens to the relative price of one and the relative value of the other? Easy: One soars, the other collapses.
When people freak out and begin panic-buying basic commodities, their ordinary financial assets—equities, bonds, etc.—will collapse: Everyone will be rushing to get cash, so as to turn around and buy commodities.
So immediately after the Treasury markets tank, equities will fall catastrophically, probably within the next few days following the Treasury panic. This collapse in equity prices will bring an equivalent burst in commodity prices—the second leg up, if you will.
This sell-off of assets in pursuit of commodities will be self-reinforcing: There won’t be anything to stop it. As it spills over into the everyday economy, regular people will panic and start unloading hard assets—durable goods, cars and trucks, houses—in order to get commodities, principally heating oil, gas and foodstuffs. In other words, real-world assets will not appreciate or even hold their value, when the hyperinflation comes.
This is something hyperinflationist-skeptics never quite seem to grasp: In hyperinflation, asset prices don’t skyrocket—they collapse, both nominally and in relation to consumable commodities. A $300,000 house falls to $60,000 or less, or better yet, 50 ounces of silver—because in a hyperinflationist episode, a house is worthless, whereas 50 bits of silver can actually buy you stuff you might need.
Right now, I’m guessing that sensible people who’ve read this far are dismissing me as being full of shit—or at least victim of my own imagination. These sensible people, if they deign to engage in the scenario I’ve outlined above, will argue that the government—be it the Fed or the Treasury or a combination thereof—will find a way to stem the panic in Treasuries (if there ever is one), and put a stop to hyperinflation (if such a foolish and outlandish notion ever came to pass in America).
Uh-huh: So the Government will save us, is that it? Okay, so then my question is, How?
Let’s take the Fed: How could they stop a run on Treasuries? Answer: They can’t. See, the Fed has already been shoring up Treasuries—that was their strategy in 2008—’09: Buy up toxic assets from the TBTF banks, and have them turn around and buy Treasuries instead, all the while carefully monitoring Treasuries for signs of weakness. If Treasuries now turn toxic, what’s the Fed supposed to do? Bernanke long ago ran out of ammo: He’s just waving an empty gun around. If there’s a run on Treasuries, and he starts buying them to prop them up, it’ll only give incentive to other Treasury holders to get out now while the getting’s still good. If everyone decides to get out of Treasuries, then Bernanke and the Fed can do absolutely nothing effective. They’re at the mercy of events—in fact, they have been for quite a while already. They just haven’t realized it.
Well if the Fed can’t stop this, how about the Federal government—surely they can stop this, right?
In a word, no. They certainly lack the means to prevent a run on Treasuries. And as to hyperinflation, what exactly would the Federal government do to stop it? Implement price controls? That will only give rise to a rampant black market. Put soldiers out on the street? America is too big. Squirt out more “stimulus”? Sure, pump even more currency into a rapidly hyperinflating everyday economy—right . . .
(BTW, I actually think that this last option is something the Federal government might be foolish enough to try. Some moron like Palin or Biden might well advocate this idea of helter-skelter money-printing so as to “help all hard-working Americans”. And if they carried it out, this would bring us American-made images of people using bundles of dollars to feed their chimneys. I actually don’t think that politicians are so stupid as to actually start printing money to “fight rising prices”—but hey, when it comes to stupidity, you never know how far they can go.)
In fact, the only way the Federal government might be able to ameliorate the situation is if it decided to seize control of major supermarkets and gas stations, and hand out cupon cards of some sort, for basic staples—in other words, food rationing. This might prevent riots and protect the poor, the infirm and the old—it certainly won’t change the underlying problem, which will be hyperinflation.
“This is all bloody ridiculous,” I can practically hear the hyperinflation skeptics fume. “We’re just going through what the Japanese experienced: Just like the U.S., they went into massive government stimulus—hell, they invented quantitative easing—and look what’s happened to them: Stagnation, yes—hyperinflation, no.”
That’s right: The parallels with Japan are remarkably similar—except for one key difference. Japanese sovereign debt is infinitely more stable than America’s, because in Japan, the people are savers—they own the Japanese debt. In America, the people are broke, and the Nervous Nelly banks own the debt. That’s why Japanese sovereign debt is solid, whereas American Treasuries are soap-bubble-fragile.
That’s why I think there’ll be hyperinflation in America—that bubble’s soon to pop. I’m guessing if it doesn’t happen this fall, it’ll happen next fall, without question before the end of 2011.
The question for us now—ad portas to this hyperinflationary event—is, what to do?
Neanderthal survivalists spend all their time thinking about post-Apocalypse America. The real trick, however, is to prepare for after the end of the Apocalypse.
The first thing to realize, of course, is that hyperinflation might well happen—but it will end. It won’t be a never-ending situation—America won’t end up like in some post-Apocalyptic, Mad Max: Beyond Thuderdome industrial wasteland/playground. Admittedly, that would be cool, but it’s not gonna happen—that’s just survivalist daydreams.
Instead, after a spell of hyperinflation, America will end up pretty much like it is today—only with a bad hangover. Actually, a hyperinflationist spell might be a good thing: It would finally clean out all the bad debts in the economy, the crap that the Fed and the Federal government refused to clean out when they had the chance in 2007–’09. It would break down and reset asset prices to more realistic levels—no more $12 million one-bedroom co-ops on the UES. And all in all, a hyperinflationist catastrophe might in the long run be better for the health of the U.S. economy and the morale of the American people, as opposed to a long drawn-out stagnation. Ask the Japanese if they would have preferred a couple-three really bad years, instead of Two Lost Decades, and the answer won’t be surprising. But I digress.
Like Rothschild said, “Buy when there’s blood on the streets.” The thing to do to prepare for hyperinflation would be to invest in a diversified hard-metal basket before the event—no equities, no ETF’s, no derivatives. If and when hyperinflation happens, and things get bad (and I mean really bad), take that hard-metal basket and—right in the teeth of the crisis—buy residential property, as well as equities in long-lasting industries; mining, pharma and chemicals especially, but no value-added companies, like tech, aerospace or industrials. The reason is, at the peak of hyperinflation, the most valuable assets will be dirt-cheap—especially equities—especially real estate.
I have no idea what will happen after we reach the point where $100 is no longer enough to buy a cup of coffee—but I do know that, after such a hyperinflationist period, there’ll be a “new dollar” or some such, with a few zeroes knocked off the old dollar, and things will slowly get back to a new normal. I have no idea the shape of that new normal. I wouldn’t be surprised if that new normal has a quasi or de facto dictatorship, and certainly some form of wage-and-price controls—I’d say it’s likely, but for now that’s not relevant.
What is relevant is, the current situation cannot long continue. The Global Depression we are in is being exacerbated by the very measures being used to fix it—stimulus is putting pressure on Treasuries, which are being shored up by the Fed. This obviously cannot have a happy ending. Therefore, the smart money prepares for what it believes is going to happen next.
I think we’re going to have hyperinflation. I hope I have managed to explain why.
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Monday, August 23, 2010How Hyperinflation Will Happen
Right now, we are in the middle of deflation. The Global Depression we are experiencing has squeezed both aggregate demand levels and aggregate asset prices as never before. Since the credit crunch of September 2008, the U.S. and world economies have been slowly circling the deflationary drain.
To counter this, the U.S. government has been running massive deficits, as it seeks to prop up aggregate demand levels by way of fiscal “stimulus” spending—the classic Keynesian move, the same old prescription since donkey’s ears.
But the stimulus, apart from being slow and inefficient, has simply not been enough to offset the fall in consumer spending.
For its part, the Federal Reserve has been busy propping up all assets—including Treasuries—by way of “quantitative easing”.
The Fed is terrified of the U.S. economy falling into a deflationary death-spiral: Lack of liquidity, leading to lower prices, leading to unemployment, leading to lower consumption, leading to still lower prices, the entire economy grinding down to a halt. So the Fed has bought up assets of all kinds, in order to inject liquidity into the system, and bouy asset price levels so as to prevent this deflationary deep-freeze—and will continue to do so. After all, when your only tool is a hammer, every problem looks like a nail.
But this Fed policy—call it “money-printing”, call it “liquidity injections”, call it “asset price stabilization”—has been overwhelmed by the credit contraction. Just as the Federal government has been unable to fill in the fall in aggregate demand by way of stimulus, the Fed has expanded its balance sheet from some $900 billion in the Fall of ’08, to about $2.3 trillion today—but that additional $1.4 trillion has been no match for the loss of credit. At best, the Fed has been able to alleviate the worst effects of the deflation—it certainly has not turned the deflationary environment into anything resembling inflation.
Yields are low, unemployment up, CPI numbers are down (and under some metrics, negative)—in short, everything screams “deflation”.
Therefore, the notion of talking about hyperinflation now, in this current macro-economic environment, would seem . . . well . . . crazy. Right?
Wrong: I would argue that the next step down in this world-historical Global Depression which we are experiencing will be hyperinflation.
Most people dismiss the very notion of hyperinflation occurring in the United States as something only tin-foil hatters, gold-bugs, and Right-wing survivalists drool about. In fact, most sensible people don’t even bother arguing the issue at all—everyone knows that only fools bother arguing with a bigger fool.
A minority, though—and God bless ’em—actually do go ahead and go through the motions of talking to the crazies ranting about hyperinflation. These amiable souls diligently point out that in a deflationary environment—where commodity prices are more or less stable, there are downward pressures on wages, asset prices are falling, and credit markets are shrinking—inflation is impossible. Therefore, hyperinflation is even more impossible.
This outlook seems sensible—if we fall for the trap of thinking that hyperinflation is an extention of inflation. If we think that hyperinflation is simply inflation on steroids—inflation-plus—inflation with balls—then it would seem to be the case that, in our current deflationary economic environment, hyperinflation is not simply a long way off, but flat-out ridiculous.
But hyperinflation is not an extension or amplification of inflation. Inflation and hyperinflation are two very distinct animals. They look the same—because in both cases, the currency loses its purchasing power—but they are not the same.
Inflation is when the economy overheats: It’s when an economy’s consumables (labor and commodities) are so in-demand because of economic growth, coupled with an expansionist credit environment, that the consumables rise in price. This forces all goods and services to rise in price as well, so that producers can keep up with costs. It is essentially a demand-driven phenomena.
Hyperinflation is the loss of faith in the currency. Prices rise in a hyperinflationary environment just like in an inflationary environment, but they rise not because people want more money for their labor or for commodities, but because people are trying to get out of the currency. It’s not that they want more money—they want less of the currency: So they will pay anything for a good which is not the currency.
Right now, the U.S. government is indebted to about 100% of GDP, with a yearly fiscal deficit of about 10% of GDP, and no end in sight. For its part, the Federal Reserve is purchasing Treasuries, in order to finance the fiscal shortfall, both directly (the recently unveiled QE-lite) and indirectly (through the Too Big To Fail banks). The Fed is satisfying two objectives: One, supporting the government in its efforts to maintain aggregate demand levels, and two, supporting asset prices, and thereby prevent further deflationary erosion. The Fed is calculating that either path—increase in aggregate demand levels or increase in aggregate asset values—leads to the same thing: A recovery in the economy.
This recovery is not going to happen—that’s the news we’ve been getting as of late. Amid all this hopeful talk about “avoiding a double-dip”, it turns out that we didn’t avoid a double-dip—we never really managed to claw our way out of the first dip. No matter all the stimulus, no matter all the alphabet-soup liquidity windows over the past 2 years, the inescapable fact is that the economy has been—and is headed—down.
But both the Federal government and the Federal Reserve are hell-bent on using the same old tired tools to “fix the economy”—stimulus on the one hand, liquidity injections on the other. (See my discussion of The Deficit here.)
It’s those very fixes that are pulling us closer to the edge. Why? Because the economy is in no better shape than it was in September 2008—and both the Federal Reserve and the Federal government have shot their wad. They got nothin’ left, after trillions in stimulus and trillions more in balance sheet expansion—
—but they have accomplished one thing: They have undermined Treasuries. These policies have turned Treasuries into the spit-and-baling wire of the U.S. financial system—they are literally the only things holding the whole economy together.
In other words, Treasuries are now the New and Improved Toxic Asset. Everyone knows that they are overvalued, everyone knows their yields are absurd—yet everyone tiptoes around that truth as delicately as if it were a bomb. Which is actually what it is.
So this is how hyperinflation will happen:
One day—when nothing much is going on in the markets, but general nervousness is running like a low-grade fever (as has been the case for a while now)—there will be a commodities burp: A slight but sudden rise in the price of a necessary commodity, such as oil.
This will jiggle Treasury yields, as asset managers will reduce their Treasury allocations, and go into the pressured commodity, in order to catch a profit. (Actually it won’t even be the asset managers—it will be their programmed trades.) These asset managers will sell Treasuries because, effectively, it’s become the principal asset they have to sell.
It won’t be the volume of the sell-off that will pique Bernanke and the drones at the Fed—it will be the timing. It’ll happen right before a largish Treasury auction. So Bernanke and the Fed will buy Treasuries, in an effort to counteract the sell-off and maintain low yields—they want to maintain low yields in order to discourage deflation. But they’ll also want to keep the Treasury cheaply funded. QE-lite has already set the stage for direct Fed buys of Treasuries. The world didn’t end. So the Fed will feel confident as it moves forward and nips this Treasury yield jiggle in the bud.
The Fed’s buying of Treasuries will occur in such a way that it will encourage asset managers to dump even more Treasuries into the Fed’s waiting arms. This dumping of Treasuries won’t be out of fear, at least not initially. Most likely, in the first 15 minutes or so of this event, the sell-off in Treasuries will be orderly, and carried out with the idea (at the time) of picking up those selfsame Treasuries a bit cheaper down the line.
However, the Fed will interpret this sell-off as a run on Treasuries. The Fed is already attuned to the bond markets’ fear that there’s a “Treasury bubble”. So the Fed will open its liquidity windows, and buy up every Treasury in sight, precisely so as to maintain “asset price stability” and “calm the markets”.
The Too Big To Fail banks will play a crucial part in this game. See, the problem with the American Zombies is, they weren’t nationalized. They got the best bits of nationalization—total liquidity, suspension of accounting and regulatory rules—but they still get to act under their own volition, and in their own best interest. Hence their obscene bonuses, paid out in the teeth of their practical bankruptcy. Hence their lack of lending into the weakened economy. Hence their hoarding of bailout monies, and predatory business practices. They’ve understood that, to get that sweet bail-out money (and those yummy bonuses), they have had to play the Fed’s game and buy up Treasuries, and thereby help disguise the monetization of the fiscal debt that has been going on since the Fed began purchasing the toxic assets from their balance sheets in 2008.
But they don’t have to do what the Fed tells them, much less what the Treasury tells them. Since they weren’t really nationalized, they’re not under anyone’s thumb. They can do as they please—and they have boatloads of Treasuries on their balance sheets.
So the TBTF banks, on seeing this run on Treasuries, will add to the panic by acting in their own best interests: They will be among the first to step off Treasuries. They will be the bleeding edge of the wave.
Here the panic phase of the event begins: Asset managers—on seeing this massive Fed buy of Treasuries, and the American Zombies selling Treasuries, all of this happening within days of a largish Treasury auction—will dump their own Treasuries en masse. They will be aware how precarious the U.S. economy is, how over-indebted the government is, how U.S. Treasuries look a lot like Greek debt. They’re not stupid: Everyone is aware of the idea of a “Treasury bubble” making the rounds. A lot of people—myself included—think that the Fed, the Treasury and the American Zombies are colluding in a triangular trade in Treasury bonds, carrying out a de facto Stealth Monetization: The Treasury issues the debt to finance fiscal spending, the TBTF banks buy them, with money provided to them by the Fed.
Whether it’s true or not is actually beside the point—there is the widespread perception that that is what’s going on. In a panic, widespread perception is your trading strategy.
So when the Fed begins buying Treasuries full-blast to prop up their prices, these asset managers will all decide, “Time to get out of Dodge—now.”
Note how it will not be China or Japan who all of a sudden decide to get out of Treasuries—those two countries will actually be left holding the bag. Rather, it will be American and (depending on the time of day when the event happens) European asset managers who get out of Treasuries first. It will be a flash panic—much like the flash-crash of last May. The events I describe above will happen in a very short span of time—less than an hour, probably. But unlike the event in May, there will be no rebound.
Notice, too, that Treasuries will maintain their yields in the face of this sell-off, at least initially. Why? Because the Fed, so determined to maintain “price stability”, will at first prevent yields from widening—which is precisely why so many will decide to sell into the panic: The Bernanke Backstop won’t soothe the markets—rather, it will make it too tempting not to sell.
The first of the asset managers or TBTF banks who are out of Treasuries will look for a place to park their cash—obviously. Where will all this ready cash go?
Commodities.
By the end of that terrible day, commodites of all stripes—precious and industrial metals, oil, foodstuffs—will shoot the moon. But it will not be because ordinary citizens have lost faith in the dollar (that will happen in the days and weeks ahead)—it will happen because once Treasuries are not the sure store of value, where are all those money managers supposed to stick all these dollars? In a big old vault? Under the mattress? In euros?
Commodities: At the time of the panic, commodities will be perceived as the only sure store of value, if Treasuries are suddenly anathema to the market—just as Treasuries were perceived as the only sure store of value, once so many of the MBS’s and CMBS’s went sour in 2007 and 2008.
It won’t be commodity ETF’s, or derivatives—those will be dismissed (rightfully) as being even less safe than Treasuries. Unlike before the Fall of ’08, this go-around, people will pay attention to counterparty risk. So the run on commodities will be for actual, feel-it-’cause-it’s-there commodities. By the end of the day of this panic, commodities will have risen between 50% and 100%. By week’s end, we’re talking 150% to 250%. (My private guess is gold will be finessed, but silver will shoot up the most—to $100 an ounce within the week.)
Of course, once commodities start to balloon, that’s when ordinary citizens will get their first taste of hyperinflation. They’ll see it at the gas pumps.
If oil spikes from $74 to $150 in a day, and then to $300 in a matter of a week—perfectly possible, in the midst of a panic—the gallon of gasoline will go to, what: $10? $15? $20?
So what happens then? People—regular Main Street people—will be crazy to buy up commodities (heating oil, food, gasoline, whatever) and buy them now while they are still more-or-less affordable, rather than later, when that $15 gallon of gas shoots to $30 per gallon.
If everyone decides at roughly the same time to exchange one good—currency—for another good—commodities—what happens to the relative price of one and the relative value of the other? Easy: One soars, the other collapses.
When people freak out and begin panic-buying basic commodities, their ordinary financial assets—equities, bonds, etc.—will collapse: Everyone will be rushing to get cash, so as to turn around and buy commodities.
So immediately after the Treasury markets tank, equities will fall catastrophically, probably within the next few days following the Treasury panic. This collapse in equity prices will bring an equivalent burst in commodity prices—the second leg up, if you will.
This sell-off of assets in pursuit of commodities will be self-reinforcing: There won’t be anything to stop it. As it spills over into the everyday economy, regular people will panic and start unloading hard assets—durable goods, cars and trucks, houses—in order to get commodities, principally heating oil, gas and foodstuffs. In other words, real-world assets will not appreciate or even hold their value, when the hyperinflation comes.
This is something hyperinflationist-skeptics never quite seem to grasp: In hyperinflation, asset prices don’t skyrocket—they collapse, both nominally and in relation to consumable commodities. A $300,000 house falls to $60,000 or less, or better yet, 50 ounces of silver—because in a hyperinflationist episode, a house is worthless, whereas 50 bits of silver can actually buy you stuff you might need.
Right now, I’m guessing that sensible people who’ve read this far are dismissing me as being full of shit—or at least victim of my own imagination. These sensible people, if they deign to engage in the scenario I’ve outlined above, will argue that the government—be it the Fed or the Treasury or a combination thereof—will find a way to stem the panic in Treasuries (if there ever is one), and put a stop to hyperinflation (if such a foolish and outlandish notion ever came to pass in America).
Uh-huh: So the Government will save us, is that it? Okay, so then my question is, How?
Let’s take the Fed: How could they stop a run on Treasuries? Answer: They can’t. See, the Fed has already been shoring up Treasuries—that was their strategy in 2008—’09: Buy up toxic assets from the TBTF banks, and have them turn around and buy Treasuries instead, all the while carefully monitoring Treasuries for signs of weakness. If Treasuries now turn toxic, what’s the Fed supposed to do? Bernanke long ago ran out of ammo: He’s just waving an empty gun around. If there’s a run on Treasuries, and he starts buying them to prop them up, it’ll only give incentive to other Treasury holders to get out now while the getting’s still good. If everyone decides to get out of Treasuries, then Bernanke and the Fed can do absolutely nothing effective. They’re at the mercy of events—in fact, they have been for quite a while already. They just haven’t realized it.
Well if the Fed can’t stop this, how about the Federal government—surely they can stop this, right?
In a word, no. They certainly lack the means to prevent a run on Treasuries. And as to hyperinflation, what exactly would the Federal government do to stop it? Implement price controls? That will only give rise to a rampant black market. Put soldiers out on the street? America is too big. Squirt out more “stimulus”? Sure, pump even more currency into a rapidly hyperinflating everyday economy—right . . .
(BTW, I actually think that this last option is something the Federal government might be foolish enough to try. Some moron like Palin or Biden might well advocate this idea of helter-skelter money-printing so as to “help all hard-working Americans”. And if they carried it out, this would bring us American-made images of people using bundles of dollars to feed their chimneys. I actually don’t think that politicians are so stupid as to actually start printing money to “fight rising prices”—but hey, when it comes to stupidity, you never know how far they can go.)
In fact, the only way the Federal government might be able to ameliorate the situation is if it decided to seize control of major supermarkets and gas stations, and hand out cupon cards of some sort, for basic staples—in other words, food rationing. This might prevent riots and protect the poor, the infirm and the old—it certainly won’t change the underlying problem, which will be hyperinflation.
“This is all bloody ridiculous,” I can practically hear the hyperinflation skeptics fume. “We’re just going through what the Japanese experienced: Just like the U.S., they went into massive government stimulus—hell, they invented quantitative easing—and look what’s happened to them: Stagnation, yes—hyperinflation, no.”
That’s right: The parallels with Japan are remarkably similar—except for one key difference. Japanese sovereign debt is infinitely more stable than America’s, because in Japan, the people are savers—they own the Japanese debt. In America, the people are broke, and the Nervous Nelly banks own the debt. That’s why Japanese sovereign debt is solid, whereas American Treasuries are soap-bubble-fragile.
That’s why I think there’ll be hyperinflation in America—that bubble’s soon to pop. I’m guessing if it doesn’t happen this fall, it’ll happen next fall, without question before the end of 2011.
The question for us now—ad portas to this hyperinflationary event—is, what to do?
Neanderthal survivalists spend all their time thinking about post-Apocalypse America. The real trick, however, is to prepare for after the end of the Apocalypse.
The first thing to realize, of course, is that hyperinflation might well happen—but it will end. It won’t be a never-ending situation—America won’t end up like in some post-Apocalyptic, Mad Max: Beyond Thuderdome industrial wasteland/playground. Admittedly, that would be cool, but it’s not gonna happen—that’s just survivalist daydreams.
Instead, after a spell of hyperinflation, America will end up pretty much like it is today—only with a bad hangover. Actually, a hyperinflationist spell might be a good thing: It would finally clean out all the bad debts in the economy, the crap that the Fed and the Federal government refused to clean out when they had the chance in 2007–’09. It would break down and reset asset prices to more realistic levels—no more $12 million one-bedroom co-ops on the UES. And all in all, a hyperinflationist catastrophe might in the long run be better for the health of the U.S. economy and the morale of the American people, as opposed to a long drawn-out stagnation. Ask the Japanese if they would have preferred a couple-three really bad years, instead of Two Lost Decades, and the answer won’t be surprising. But I digress.
Like Rothschild said, “Buy when there’s blood on the streets.” The thing to do to prepare for hyperinflation would be to invest in a diversified hard-metal basket before the event—no equities, no ETF’s, no derivatives. If and when hyperinflation happens, and things get bad (and I mean really bad), take that hard-metal basket and—right in the teeth of the crisis—buy residential property, as well as equities in long-lasting industries; mining, pharma and chemicals especially, but no value-added companies, like tech, aerospace or industrials. The reason is, at the peak of hyperinflation, the most valuable assets will be dirt-cheap—especially equities—especially real estate.
I have no idea what will happen after we reach the point where $100 is no longer enough to buy a cup of coffee—but I do know that, after such a hyperinflationist period, there’ll be a “new dollar” or some such, with a few zeroes knocked off the old dollar, and things will slowly get back to a new normal. I have no idea the shape of that new normal. I wouldn’t be surprised if that new normal has a quasi or de facto dictatorship, and certainly some form of wage-and-price controls—I’d say it’s likely, but for now that’s not relevant.
What is relevant is, the current situation cannot long continue. The Global Depression we are in is being exacerbated by the very measures being used to fix it—stimulus is putting pressure on Treasuries, which are being shored up by the Fed. This obviously cannot have a happy ending. Therefore, the smart money prepares for what it believes is going to happen next.
I think we’re going to have hyperinflation. I hope I have managed to explain why.
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Thursday, September 2, 2010
Obama Regime Working To Give Tax Dollars To Questionable Muslim Groups
From A Charging Elephant:
Tax Dollars for Muslims
Posted on September 2, 2010
by dancingczars
2 Comments
How many outrageous acts can an administration pull before the voters revolt? This administration will go down as the most corrupt in the History of the U.S. We must rise up in November and crush the evil progressive movement. That’s my story and I’m sticking to it, I’m J.C.
by Connie Hair
Human Events
The Obama Administration reportedly held a special workshop this week to help leaders of controversial Muslim groups acquire “direct access” to taxpayer funding for their activities.
It’s payback time with our money.
The event’s main organizer, the Coordinating Council of Muslim Organizations (CCMO) has long-established ties to Egypt’s Muslim Brotherhood, which fostered many Islamist terror groups. Some of CCMO’s member groups were unindicted co-conspirators in the successfully prosecuted terrorist funding trial against the Holy Land Foundation (HLF).
Event organizers said they would dedicate themselves to “cutting through red tape” to provide “direct access” to U.S. taxpayer funding for these terrorist funding-related groups.
An email announcement was sent out August 27 by the Islamic Society of North America (ISNA), a group long associated with Muslim Brotherhood and an unindicted co-conspirator in the HLF trial. (The ISNA email is available here from the Big Peace website.)
The ISNA email said:
“The Workshop: So what exactly is this workshop, you may ask. Leaders from Muslim organizations around the nation, particularly social service organizations, are invited to a workshop with representatives from the DOA, Faith Based and Neighborhood Partnerships, Health and Human Services, the White House, Department of Education, the Department of Homeland Security, and more. Twenty-five to thirty Muslim leaders representing 20 Muslim organizations are expected to attend the workshop.
“According to a representative of CCMO, this workshop is designed to clarify how Muslim nonprofits, mosques, Islamic centers, and social service organizations can strengthen their communities through more direct access to opportunities provided to social service agencies at the federal level. ‘It will hopefully help cut through some of the red tape and shine light on the many opportunities for funding, government assistance, and resources that we just don’t know about at the local level,’ said Elsanousi.”
The Obama Administration has not disclosed which CCMO groups attended the “direct access” to taxpayer funding workshop. The Department of Agriculture (DOA) referenced in the email as a sponsoring group did not respond to requests for information on the event.
Christine Brim on the website Big Peace has provided in-depth research into the CCMO and member groups. As Brim notes in her piece, the CCMO website has been scrubbed of a great deal of information on its Muslim Brotherhood ties, yet the Wayback Machine offers prior versions of the group’s website (2004-2008) that include more information on the groups ties to Muslim Brotherhood.
One such member list found on the CCMO’s 2007 website reads like a who’s who of Muslim Brotherhood organizations.
Brim compiles background information on several unindicted co-conspirator groups (information from the Investigative Project on Terrorism) listed among the CCMO member organizations and terror-funding linked organizations advertising on the CCMO website:
• The Islamic Society of North America (ISNA), an unindicted co-conspirator in the Holy Land Foundation terrorism finance trial, and the source of Friday’s email promoting this CCMO/Department of Agriculture Event.
• The Council on American Islamic Relations (CAIR) , shunned by the FBI, several of its leaders indicted or convicted for terrorism, a possible violator of the Foreign Agents Registration Act, sued for fraud by Muslim, Hispanic and African-American families, named as an unindicted co-conspirator (CAIR fundraiser advertised at the CCMO site) in HLF trial.
• The International Institute of Islamic Thought (IIIT), the “think tank” of the Muslim Brotherhood according to The Grand Jihad author and former prosecutor Andrew McCarthy. One of the current and longest-serving officers of CCMO is Imam Johari Abdul-Malik, founder of the educational arm of IIIT, the Fairfax Institute and the director of outreach for the Dar-ul Hijrah “Terror” Mosque.
• The Muslim Public Affairs Committee (MPAC), exposed in IPT report for their defense of terrorists and terrorist financers. MPAC advertised here at the CCMO site for an event co-sponsored by Islamic Free Market Institute, the latter described in Paul Sperry’s book Infiltration)
• The Dar al Hijrah Mosque (known as the “Terror Mosque” in Northern Virginia for its links to imprisoned, indicted or wanted terrorists as vividly described by Frank Gaffney), advertised here at the CCMO site.
• The Muslim American Society “Freedom Foundation” (MASFF) run by three-time felon Mahdi Bray (MASFF fundraiser advertised at the CCMO site). The Muslim American Society was originally founded as the U.S. branch of the Muslim Brotherhood. MAS leader Mahdi Bray was elected on September 7, 2003 to the Executive Committee by over 40 CCMO member organizations.
The justice presiding over the HLF trial, U.S. District Judge Jorge A. Solis, was so concerned about the significance of the ongoing threat to America and that so many unindicted co-conspirators remained to be prosecuted, he ordered the documents submitted as evidence be put on the uscourts.gov web site.
For a broad offering of documents submitted in this trial, see the court documentation here or more clearly categorized here by the NEFA Foundation.
When a party is designated as an unindicted co-conspirator in a trial it essentially means that the government could have indicted and prosecuted that party with the same evidence they are using to prosecute the conspirators actually indicted.
The sheer volume of Muslim groups listed as part of the terrorist funding schemes deterred simultaneous prosecutions so they were compiled in an unindicted co-conspirator list.
Two of the groups, ISNA and the North American Islamic Trust (NAIT), unsuccessfully petitioned to have their names removed from the HLF unindicted co-conspirator list. The prosecution blocked the groups’ removal through a filing in federal court in Dallas stating: “During last year’s trial, numerous exhibits were entered into evidence establishing both ISNA’s and NAIT’s intimate relationship with the Muslim Brotherhood, the Palestine Committee, and the defendants in this case,” the prosecutors wrote. “They were intimately connected with the HLF and its assigned task of providing financial support to HAMAS…. That ISNA and NAIT appeared in these documents and share a common history with these defendants is a reflection of the evidence, not any attempt to ‘disparage’ or ‘vilify.’”
Politico’s Josh Gerstein this week reported ISNA and NAIT are again attempting to have their names removed from the HLF list. In a highly controversial move, the 5th Circuit Court of Appeals has sealed all of the filings and moved the proceedings behind closed doors.
Tax Dollars for Muslims
Posted on September 2, 2010
by dancingczars
2 Comments
How many outrageous acts can an administration pull before the voters revolt? This administration will go down as the most corrupt in the History of the U.S. We must rise up in November and crush the evil progressive movement. That’s my story and I’m sticking to it, I’m J.C.
by Connie Hair
Human Events
The Obama Administration reportedly held a special workshop this week to help leaders of controversial Muslim groups acquire “direct access” to taxpayer funding for their activities.
It’s payback time with our money.
The event’s main organizer, the Coordinating Council of Muslim Organizations (CCMO) has long-established ties to Egypt’s Muslim Brotherhood, which fostered many Islamist terror groups. Some of CCMO’s member groups were unindicted co-conspirators in the successfully prosecuted terrorist funding trial against the Holy Land Foundation (HLF).
Event organizers said they would dedicate themselves to “cutting through red tape” to provide “direct access” to U.S. taxpayer funding for these terrorist funding-related groups.
An email announcement was sent out August 27 by the Islamic Society of North America (ISNA), a group long associated with Muslim Brotherhood and an unindicted co-conspirator in the HLF trial. (The ISNA email is available here from the Big Peace website.)
The ISNA email said:
“The Workshop: So what exactly is this workshop, you may ask. Leaders from Muslim organizations around the nation, particularly social service organizations, are invited to a workshop with representatives from the DOA, Faith Based and Neighborhood Partnerships, Health and Human Services, the White House, Department of Education, the Department of Homeland Security, and more. Twenty-five to thirty Muslim leaders representing 20 Muslim organizations are expected to attend the workshop.
“According to a representative of CCMO, this workshop is designed to clarify how Muslim nonprofits, mosques, Islamic centers, and social service organizations can strengthen their communities through more direct access to opportunities provided to social service agencies at the federal level. ‘It will hopefully help cut through some of the red tape and shine light on the many opportunities for funding, government assistance, and resources that we just don’t know about at the local level,’ said Elsanousi.”
The Obama Administration has not disclosed which CCMO groups attended the “direct access” to taxpayer funding workshop. The Department of Agriculture (DOA) referenced in the email as a sponsoring group did not respond to requests for information on the event.
Christine Brim on the website Big Peace has provided in-depth research into the CCMO and member groups. As Brim notes in her piece, the CCMO website has been scrubbed of a great deal of information on its Muslim Brotherhood ties, yet the Wayback Machine offers prior versions of the group’s website (2004-2008) that include more information on the groups ties to Muslim Brotherhood.
One such member list found on the CCMO’s 2007 website reads like a who’s who of Muslim Brotherhood organizations.
Brim compiles background information on several unindicted co-conspirator groups (information from the Investigative Project on Terrorism) listed among the CCMO member organizations and terror-funding linked organizations advertising on the CCMO website:
• The Islamic Society of North America (ISNA), an unindicted co-conspirator in the Holy Land Foundation terrorism finance trial, and the source of Friday’s email promoting this CCMO/Department of Agriculture Event.
• The Council on American Islamic Relations (CAIR) , shunned by the FBI, several of its leaders indicted or convicted for terrorism, a possible violator of the Foreign Agents Registration Act, sued for fraud by Muslim, Hispanic and African-American families, named as an unindicted co-conspirator (CAIR fundraiser advertised at the CCMO site) in HLF trial.
• The International Institute of Islamic Thought (IIIT), the “think tank” of the Muslim Brotherhood according to The Grand Jihad author and former prosecutor Andrew McCarthy. One of the current and longest-serving officers of CCMO is Imam Johari Abdul-Malik, founder of the educational arm of IIIT, the Fairfax Institute and the director of outreach for the Dar-ul Hijrah “Terror” Mosque.
• The Muslim Public Affairs Committee (MPAC), exposed in IPT report for their defense of terrorists and terrorist financers. MPAC advertised here at the CCMO site for an event co-sponsored by Islamic Free Market Institute, the latter described in Paul Sperry’s book Infiltration)
• The Dar al Hijrah Mosque (known as the “Terror Mosque” in Northern Virginia for its links to imprisoned, indicted or wanted terrorists as vividly described by Frank Gaffney), advertised here at the CCMO site.
• The Muslim American Society “Freedom Foundation” (MASFF) run by three-time felon Mahdi Bray (MASFF fundraiser advertised at the CCMO site). The Muslim American Society was originally founded as the U.S. branch of the Muslim Brotherhood. MAS leader Mahdi Bray was elected on September 7, 2003 to the Executive Committee by over 40 CCMO member organizations.
The justice presiding over the HLF trial, U.S. District Judge Jorge A. Solis, was so concerned about the significance of the ongoing threat to America and that so many unindicted co-conspirators remained to be prosecuted, he ordered the documents submitted as evidence be put on the uscourts.gov web site.
For a broad offering of documents submitted in this trial, see the court documentation here or more clearly categorized here by the NEFA Foundation.
When a party is designated as an unindicted co-conspirator in a trial it essentially means that the government could have indicted and prosecuted that party with the same evidence they are using to prosecute the conspirators actually indicted.
The sheer volume of Muslim groups listed as part of the terrorist funding schemes deterred simultaneous prosecutions so they were compiled in an unindicted co-conspirator list.
Two of the groups, ISNA and the North American Islamic Trust (NAIT), unsuccessfully petitioned to have their names removed from the HLF unindicted co-conspirator list. The prosecution blocked the groups’ removal through a filing in federal court in Dallas stating: “During last year’s trial, numerous exhibits were entered into evidence establishing both ISNA’s and NAIT’s intimate relationship with the Muslim Brotherhood, the Palestine Committee, and the defendants in this case,” the prosecutors wrote. “They were intimately connected with the HLF and its assigned task of providing financial support to HAMAS…. That ISNA and NAIT appeared in these documents and share a common history with these defendants is a reflection of the evidence, not any attempt to ‘disparage’ or ‘vilify.’”
Politico’s Josh Gerstein this week reported ISNA and NAIT are again attempting to have their names removed from the HLF list. In a highly controversial move, the 5th Circuit Court of Appeals has sealed all of the filings and moved the proceedings behind closed doors.
U.N. Report From Obama Regime Is Treasonous, Not Act Of Treason
From The American Thinker:
September 02, 2010
U.N. report clearly not treason, just treasonous
Mark J. Fitzgibbons
Apparently the Obama administration and Hillary Clinton's State Department consider our republican form of government a human rights deficiency.
As Carol Taber wrote, "Last week, the Obama State Department submitted a report to the U.N. High Commissioner for Human Rights on the supposed human rights violations taking place in the United States." Michelle Malkin does her usual great job as well blasting the report.
Arizona's immigration enforcement law, S.B. 1070, is referenced in the report's ugly circumstances:
"A recent Arizona law, S.B. 1070, has generated significant attention and debate at home and around the world. The issue is being addressed in a court action that argues that the federal government has the authority to set and enforce immigration law. That action is ongoing; parts of the law are currently enjoined."
Arizona Governor Jan Brewer, justifiably upset, wrote a letter calling the report "unconstitutional" and "downright offensive."
Enacted lawfully by the State of Arizona, with provisions consistent with a federal statute, currently in a court challenge (opposed 2 -1 by Americans) by the Obama administration initiated before the law was implemented, and, of course, having violated no human rights, S.B. 1070 is a typical product of our American republican form of government, enacted at law and being litigated in our judicial system.
To air its displeasure with S.B. 1070 by referencing it in a human rights violation report to the U.N. clearly gives our foreign detractors and enemies comfort. This is a not-so-subtle attack on our republican form of government, the majority of Americans who support the law, and the majority of Americans who oppose the Obama administration's litigation against it.
It is treasonous, albeit, not an act of treason.
Posted at 03:48 PM
September 02, 2010
U.N. report clearly not treason, just treasonous
Mark J. Fitzgibbons
Apparently the Obama administration and Hillary Clinton's State Department consider our republican form of government a human rights deficiency.
As Carol Taber wrote, "Last week, the Obama State Department submitted a report to the U.N. High Commissioner for Human Rights on the supposed human rights violations taking place in the United States." Michelle Malkin does her usual great job as well blasting the report.
Arizona's immigration enforcement law, S.B. 1070, is referenced in the report's ugly circumstances:
"A recent Arizona law, S.B. 1070, has generated significant attention and debate at home and around the world. The issue is being addressed in a court action that argues that the federal government has the authority to set and enforce immigration law. That action is ongoing; parts of the law are currently enjoined."
Arizona Governor Jan Brewer, justifiably upset, wrote a letter calling the report "unconstitutional" and "downright offensive."
Enacted lawfully by the State of Arizona, with provisions consistent with a federal statute, currently in a court challenge (opposed 2 -1 by Americans) by the Obama administration initiated before the law was implemented, and, of course, having violated no human rights, S.B. 1070 is a typical product of our American republican form of government, enacted at law and being litigated in our judicial system.
To air its displeasure with S.B. 1070 by referencing it in a human rights violation report to the U.N. clearly gives our foreign detractors and enemies comfort. This is a not-so-subtle attack on our republican form of government, the majority of Americans who support the law, and the majority of Americans who oppose the Obama administration's litigation against it.
It is treasonous, albeit, not an act of treason.
Posted at 03:48 PM
Department Of Justice Sues Maricopa County, Arizona Sherriff Arpaio For Alleged Civil Rights Violations
From Newsmax:
Feds Sue Sheriff Arpaio in Civil Rights Probe
Thursday, 02 Sep 2010 02:02 PM Article Font Size
The U.S. Justice Department sued Sheriff Joe Arpaio on Thursday, saying the Arizona lawman refused for more than a year to turn over records in an investigation into allegations his department discriminates against Hispanics.
The lawsuit calls Arpaio and his Maricopa County office's defiance "unprecedented," and said the federal government has been trying since March 2009 to get officials to comply with its probe of alleged discrimination, unconstitutional searches and seizures, and jail policies that discriminate against people with limited English skills.
Arpaio, who had been given until Aug. 17 to hand over documents the federal government asked for 15 months ago, called the Justice Department actions harassment.
His office has said it won't hand over additional documents because federal authorities haven't said exactly what they were investigating.
"They have hundreds of thousands of reports, hundreds of thousands," Arpaio said at a news conference Thursday morning in downtown Phoenix. "They're so broad, we're trying to narrow it down. We're trying to work with them."
The lawsuit is a ruse, Arpaio said.
"I think they know we have not been racial profiling, so what's the next step — camouflage the situation, go to the courts, and make it look like I'm not cooperating?" he said.
Arizona Republican Sen. Russell Pearce described the Justice Department's actions as a "witch hunt."
"This is the game that's played," he said. "They couldn't find any violations . . . that's why it's broad, that's why they're very vague about what they want. It doesn't take a very high IQ to figure out what's going on with these folks."
The lawsuit is the latest action against Arizona by the federal government, which earlier sued the state to stop its strict new immigration law that requires police officers to question people about their immigration status if there is reason to suspect they are in the country illegally.
"The actions of the sheriff's office are unprecedented," said Thomas Perez, assistant attorney general for the department's civil rights division. "It is unfortunate that the department was forced to resort to litigation to gain access to public documents and facilities."
The lawsuit, filed in U.S. District Court in Phoenix, names Arpaio, the Maricopa County Sheriff's Office, and the county. It says the department is investigating police practices and jail policies but did not specify the documents sought in its dozens of requests.
Xochitl Hinojosa, a Justice Department spokeswoman in Washington, said she could not release information on the documents sought. "It is an ongoing investigation," she said.
Arpaio also declined to specify what documents the department is seeking.
Arizona's new law, most of which a federal judge has put on hold, mirrors many of the policies Arpaio has put into place in the greater Phoenix area.
Arpaio believes the inquiry is focused on his immigration sweeps, patrols where deputies flood an area of a city — in some cases, heavily Latino areas — to seek out traffic violators and arrest other offenders.
Critics say his deputies pull people over for minor traffic infractions because of the color of their skin so they can ask them for proof of citizenship.
Arpaio denies allegations of racial profiling, saying people are stopped if deputies have probable cause to believe they've committed crimes — and only later do deputies find that many of them are illegal immigrants.
The sheriff's office has said half of the 1,032 people arrested in the sweeps have been illegal immigrants.
Last year, the federal government stripped Arpaio of his special power to enforce federal immigration law. The sheriff continued his sweeps through the enforcement of state immigration laws.
The department's lawsuit said Arpaio's office signed agreements promising to cooperate with civil-rights investigations and other reviews when it accepted federal law enforcement grants.
Last year, the nearly $113 million that the county government received from the federal government accounted for about 5 percent of the county's $2 billion budget. The lawsuit listed $16.5 million of funding provided Arpaio's office through several programs.
In a separate investigation, a federal grand jury in Phoenix is examining allegations that Arpaio has abused his powers with actions such as intimidating county workers by showing up at their homes at nights and on weekends.
A Hispanic activist said a federal judge might have to threaten jail time to get Arpaio to cooperate in the lawsuit filed Thursday.
Hispanics alleging racial profiling by Arpaio's deputies in a lawsuit already pending in federal court have met with resistance in their own document demands, said Lydia Guzman of the Phoenix-based civil rights group Somos America.
"It's going to take the hard hand of the judge to order some sanctions against the sheriff's office," Guzman said.
© Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed
Feds Sue Sheriff Arpaio in Civil Rights Probe
Thursday, 02 Sep 2010 02:02 PM Article Font Size
The U.S. Justice Department sued Sheriff Joe Arpaio on Thursday, saying the Arizona lawman refused for more than a year to turn over records in an investigation into allegations his department discriminates against Hispanics.
The lawsuit calls Arpaio and his Maricopa County office's defiance "unprecedented," and said the federal government has been trying since March 2009 to get officials to comply with its probe of alleged discrimination, unconstitutional searches and seizures, and jail policies that discriminate against people with limited English skills.
Arpaio, who had been given until Aug. 17 to hand over documents the federal government asked for 15 months ago, called the Justice Department actions harassment.
His office has said it won't hand over additional documents because federal authorities haven't said exactly what they were investigating.
"They have hundreds of thousands of reports, hundreds of thousands," Arpaio said at a news conference Thursday morning in downtown Phoenix. "They're so broad, we're trying to narrow it down. We're trying to work with them."
The lawsuit is a ruse, Arpaio said.
"I think they know we have not been racial profiling, so what's the next step — camouflage the situation, go to the courts, and make it look like I'm not cooperating?" he said.
Arizona Republican Sen. Russell Pearce described the Justice Department's actions as a "witch hunt."
"This is the game that's played," he said. "They couldn't find any violations . . . that's why it's broad, that's why they're very vague about what they want. It doesn't take a very high IQ to figure out what's going on with these folks."
The lawsuit is the latest action against Arizona by the federal government, which earlier sued the state to stop its strict new immigration law that requires police officers to question people about their immigration status if there is reason to suspect they are in the country illegally.
"The actions of the sheriff's office are unprecedented," said Thomas Perez, assistant attorney general for the department's civil rights division. "It is unfortunate that the department was forced to resort to litigation to gain access to public documents and facilities."
The lawsuit, filed in U.S. District Court in Phoenix, names Arpaio, the Maricopa County Sheriff's Office, and the county. It says the department is investigating police practices and jail policies but did not specify the documents sought in its dozens of requests.
Xochitl Hinojosa, a Justice Department spokeswoman in Washington, said she could not release information on the documents sought. "It is an ongoing investigation," she said.
Arpaio also declined to specify what documents the department is seeking.
Arizona's new law, most of which a federal judge has put on hold, mirrors many of the policies Arpaio has put into place in the greater Phoenix area.
Arpaio believes the inquiry is focused on his immigration sweeps, patrols where deputies flood an area of a city — in some cases, heavily Latino areas — to seek out traffic violators and arrest other offenders.
Critics say his deputies pull people over for minor traffic infractions because of the color of their skin so they can ask them for proof of citizenship.
Arpaio denies allegations of racial profiling, saying people are stopped if deputies have probable cause to believe they've committed crimes — and only later do deputies find that many of them are illegal immigrants.
The sheriff's office has said half of the 1,032 people arrested in the sweeps have been illegal immigrants.
Last year, the federal government stripped Arpaio of his special power to enforce federal immigration law. The sheriff continued his sweeps through the enforcement of state immigration laws.
The department's lawsuit said Arpaio's office signed agreements promising to cooperate with civil-rights investigations and other reviews when it accepted federal law enforcement grants.
Last year, the nearly $113 million that the county government received from the federal government accounted for about 5 percent of the county's $2 billion budget. The lawsuit listed $16.5 million of funding provided Arpaio's office through several programs.
In a separate investigation, a federal grand jury in Phoenix is examining allegations that Arpaio has abused his powers with actions such as intimidating county workers by showing up at their homes at nights and on weekends.
A Hispanic activist said a federal judge might have to threaten jail time to get Arpaio to cooperate in the lawsuit filed Thursday.
Hispanics alleging racial profiling by Arpaio's deputies in a lawsuit already pending in federal court have met with resistance in their own document demands, said Lydia Guzman of the Phoenix-based civil rights group Somos America.
"It's going to take the hard hand of the judge to order some sanctions against the sheriff's office," Guzman said.
© Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed
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