A Tipping Point Is Nearing By Jeff T. Allen

We are facing a tipping point.  There will soon be a crisis affecting US citizens beyond any experienced since the Great Depression.  And it may happen within the year.  This past week three awful developments put a dagger into the hope for a growth-led recovery, which held promise of possibly averting a debt and currency implosion crushing the American economy.

Where are the Baby Boomer Nest Eggs?

From the Daily Bell:

It was never a reality; it was fiction. Stock markets go up because of the way the system has been built. Central banks and modern stock markets are the two halves of an efficient, middle-class money-extraction mechanism. Prompted by money stimulation, markets run up and – in America anyway – suck consumers' money into "opportunities." Then the market crashes, the valuations are diminished, jobs are lost and the contraction begins. Many who cannot stand the losses, psychologically or otherwise, sell out at the bottom – much as they have bought at the top – and the contraction of the middle classes continues apace. Lives are destroyed and families' hopes and dreams are ruined.
As economies undistort without the endless goad of monetary stimulation, people would gradually begin to be self-sufficient again. Nuclear families would collapse and extended families would reappear; this is the logical solution to old age, not frantic investing leading to the selection of an old-age home where one is likely to be abused before dying.

Quote for February 28, 2011.

"I contend that we are much closer to a centralized military corporate fascist state than a true democratic Republic of the people, for the people, and by the people. Both political parties have been successful in shoving us in the direction of big government, corporate & banking oligarchic monopolies, never ending warfare, fiat currency, entitlements for the many, and riches for the few."

- Jim Quinn

The Philosophy of Liberty: Property

Video explains the libertarian concept of property rights in about three minutes. It’s so gratifying to see our ideas continue to spread!

All About the Fed (four excerpted articles and one video)

Tracing the Fed’s Vital Role in the Decline of the US Dollar
by Eric Fry of The Daily Reckoning

In 2013, we Americans will commemorate a century of wealth destruction in the United States – the Federal Reserve will be 100 years old.

In 1913, the Federal Reserve Act became law – granting sole authority to the Federal Reserve to “issue legal tender.” Armed with its new power and its good intentions, the Fed embarked on a 98-year process of currency debasement. That’s not what the Fed set out to do; it’s just what it did do. 

The purchasing power of a one dollar bill has plummeted more than 95% since the Federal Reserve first began printing its legal tender in 1914. Although the dollar’s epic decline began glacially, it has gathered luge-like momentum.

 

Deception at the Fed
by Ron Paul

For the past three decades, the Federal Reserve has been given a dual mandate: keeping prices stable and maximizing employment. This policy relies not only on the fatal conceit of believing in the wisdom of supposed experts, but also on numerical chicanery.

In terms of keeping stable prices, the Fed has failed miserably. According to the government's own CPI calculators, it takes $2.65 today to purchase what cost one dollar in 1980. And since its creation in 1913, the Federal Reserve has presided over a 98% decline in the dollar's purchasing power. The average American family sees the price of milk, eggs, and meat increasing, while packaged household goods decrease in size rather than price.

It should not be surprising that monetary policy is ineffective at creating actual jobs. It is the effects of monetary policy itself that cause the boom and bust of the business cycle that leads to swings in the unemployment rate. By lowering interest rates through its loose monetary policy, the Fed spurs investment in long-term projects that would not be profitable at market-determined interest rates. Everything seems to go well for awhile until businesses realize that they cannot sell their newly-built houses, their inventories of iron ore, or their new cars. Until these resources are redirected, often with great economic pain for all involved, true economic recovery cannot begin.

How the Fed Fuels Unemployment
by Thomas J. DiLorenzo

Monetary policy under the direction of the Federal Reserve has a history of creating and destroying jobs. The reason for this is that the Fed, like all other central banks, has always been a generator of boom-and-bust cycles in the economy.

When the Fed expands the money supply excessively it not only is prone to creating price inflation, but it also sows the seeds of recession or depression by artificially lowering interest rates, which can ignite a false or unsustainable "boom" period. Lower interest rates induce people to consume more and save less. But increased savings and the subsequent business investment that it finances is what fuels economic growth and job creation.

Lowered interest rates and wider availability of credit caused by the Fed’s expansionary monetary policy causes businesses to invest more in (mostly long-term) capital projects (primarily real estate in the latest boom-and-bust cycle), and there is an accompanying expansion of employment in those industries. But since the lower interest rates are caused by the Fed’s expansion of the money supply and not an increase in savings by the public (i.e., by the free market), businesses that have invested in long-term capital projects eventually discover that there is not enough consumer demand to justify their investments. (The reduced savings in the past means consumer demand is weaker in the future). This is when the "bust" occurs.

The economic damage done by the boom-and-bust policies of the Fed occur in the boom period when resources are misallocated in the ways described here. The "bust" period is actually a necessary cure for the economic miscalculations that have occurred, as businesses liquidate their unsound investments and begin to make decisions on realistic, market-based interest rates. Prices and wages must return to reality as well.

Government policies that bail out businesses that have made these bad investment decisions will only delay or prohibit economic recovery while encouraging more of such behavior in the future (the "moral hazard problem"). This is how short recessions can be turned into seemingly endless ones. Worse yet is for the Fed to create even more monetary inflation, rather than allowing the necessary economic adjustments to take place, which will eventually set off another boom-and-bust cycle.
As applied to today’s economic situation, it is obvious that the artificially low interest rates caused by the policies of the Greenspan Fed created an unsustainable boom in the housing market. Thousands of new jobs were in fact created – and then destroyed – giving an updated meaning to Joseph Schumpeter’s phrase "creative destruction." Many Americans who obtained jobs and pursued careers in housing construction and related industries realized that those jobs and careers were not sustainable after all; they were fooled by the Fed’s low interest rate policies. Thus, the Fed was not only responsible for causing the massive unemployment that we endure today, but also a great amount of what economists call "mismatch" unemployment. The skills that people in these industries developed were no longer in demand; they lost their jobs; and now they must retool and re-educate themselves.

Cheating Investors As Official Government Policy
by Daniel R. Amerman, CFA

When interest rates in general are manipulated, what does that mean for savers and investors?

When you put your savings into a money market fund, and the policy of the US government is to force interest rates to unnaturally low levels - you are being cheated out of the yield you should be receiving.

When you buy a corporate bond or corporate bond fund - you are being cheated by overt government market interventions that have the explicitly stated purpose of lowering corporate borrowing costs.  This is where that "spin" comes back in.  How does a government lower borrowing costs for multinational corporations, enabling them to take the proceeds and invest them overseas?  (Taking the money and investing it out of country seems to be the most common behavior so far.) 

The government does so by manipulating the market so that investors receive much lower interest payments than they would receive in a free market.  In other words, it directly creates benefits for corporations and banks by cheating ordinary investors out of the income they would receive if free market forces governed.  Boil it down to another level, and this is a fairly straight up redistribution of wealth from average citizens to corporate interests. 

Wherever the investor goes, whatever interest-bearing investment they look to - there is no escaping the cheating, because there is no escaping the unprecedented direct government control over interest rates.  Even as inflation rises (in the real world rather than the also manipulated world of government statistics), there is nowhere for the fixed-income investor to find compensation for current inflation or inflationary pressures.  Which, in a free market, would likely be the dominant market forces at this point.

Adding to the irony - and the tragic dilemma for us all - is that the market manipulation is being paid for by the Federal Reserve creating brand new money out of the nothingness, so to speak, at the rate of about $1,000 per US household per month.  This is creating perhaps the greatest inflationary pressures of our lifetime.  In other words, government policy is to risk the value of all of our savings in the future, in order to fund a program of cheating us out of market interest rates today.  And this thereby ensures that none of us are compensated for the inflationary risks, or are able to prepare for the destruction of the value of our money by way of conventional methods. 

"Unmasking the Federal Reserve"
by Joseph Salerno 

 

The Conservative Movement Can't Stand Ron Paul

Because he opposes the American empire and the bipartisan welfare state, says Gary North.
 Setting the Government's Agenda by Gary North

Visualizing Obama's budget cuts. Student Explains Obamanomics in 1 Minute

Frankly, (almost) every Politician in Washington uses this bit of "fuzzy math" in their speeches.

A Modest Proposal for Interposition by Tom Mullen

When the Insiders Lose Control by Gary North

10 Things We Can Learn From Egypt About Preparing for Economic and Societal Collapse by Mac Slavo

A People’s Uprising Against the Empire by Llewellyn H. Rockwell, Jr.

Tunisia, Egypt, the Fed: Overthrowing the Depots

The Egyptians, Tunisians, and others rebel against political and economic tyranny. Markets reveal truths and the truth is anti-federal government. The interventionist chickens are coming home to roost. People are poorer and less free for US policing of the world. Americans, too, of course. The big event will be a currency collapse, when trust is lost. Dr. Paul’s first committee hearing, as chairman of the Domestic Monetary Policy Subcommittee, showcases the Fed’s responsibility for higher prices and unemployment, here and around the globe.

Stop the renewal of the Bill of Rights-shredding provisions of the "PATRIOT Act" set to expire

The three provisions set to expire are the "roving wiretap" provision, which allows the government to conduct surveillance without specifying person or place being wiretapped; the "library records" provision that allows the government to collect "any tangible thing" during an investigation; and the "lone wolf" provision, which targets "non-US" persons unaffiliated with terrorists. 

It is time for Congress to let these Bill of Rights-shredding provisions of the "PATRIOT Act" expire.

The implementation of the national security state has created an expansive, inefficient, and secretive bureaucratic nightmare increasingly being targeted to spy on Americans, even based on anonymous information and political affiliation, all supposedly in the name of "keeping us safe."

Last year, The Washington Post series on "Top Secret America" exposed just how massive and unaccountable America's surveillance state has become.

Please send your senators and representative a free action fax IMMEDIATELY by clicking here.

Interview of Catherine Austin Fitts, Former Assistant Secretary of Housing under George H.W. Bush

Catherine Austin Fitts blows the whistle on how the financial terrorists have deliberately imploded the US economy and transferred gargantuan amounts of wealth offshore as a means of sacrificing the American middle class. Fitts documents how trillions of dollars went missing from government coffers in the 90's and how she was personally targeted for exposing the fraud.

Fitts explains how every dollar of debt issued to service every war, building project, and government program since the American Revolution up to around 2 years ago - around $12 trillion - has been doubled again in just the last 18 months alone with the bank bailouts. "We're literally witnessing the leveraged buyout of a country and that's why I call it a financial coup d'état, and that's what the bailout is for," states Fitts.

Massive amounts of financial capital have been sucked out the United States and moved abroad, explains Fitts, ensuring that corporations have become more powerful than governments, changing the very structure of governance on the planet and ensuring we are ruled by private corporations. Pension and social security funds have also been stolen and moved offshore, leading to the end of fiscal responsibility and sovereignty as we know it.

Fitts explained how when she was in government she tried to encourage the creation of small businesses, new jobs and new skills to compete in a globalized world otherwise the American middle class was toast, only to be forced out by the feds using dirty tricks. The elite instead wanted Americans to take on more credit card, mortgage and auto debt that corporations and insurers knew they couldn't afford, while quietly moving their jobs abroad in the meantime.