tagged w/ US Economy
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The US national debt has recently surpassed the debt ceiling and has reached a staggeringly high amount of $ 15 trillion. It has reached an unsustainable level and is dragging down the functioning of the US economy.The US national debt has recently surpassed the debt ceiling and has reached a... more
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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.Former Assistant Secretary of Housing under George H.W. Bush Catherine Austin Fitts... more
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The U.S. political climate might change if Americans understood how much the federal government did to create the infrastructure behind many business fortunes, including the Internet and computer technology. That narrative would justify higher taxes on the rich to repay the nation and allow for future R&D, writes Robert Parry.
By Robert Parry
If the Republican presidential race has made one thing clear, it is that the GOP narrative for 2012 will be that the federal government is the “problem” – as Ronald Reagan once said – if not worse, an internal enemy that must be defeated. So far, the Democrats lack a counter-narrative with similar appeal to a deeply alienated public.
The Republican narrative holds that the route to freedom and prosperity lies in the twin principles of states’ rights and free markets. GOP frontrunner Rick Perry has even taken aim at Social Security and Medicare, two longtime bastions of federal social policy for the elderly.
It also has become Republican dogma that the wealthy “job creators” must be freed up from taxes and regulations. Supposed “moderate” Mitt Romney says he would slash taxes for corporations, make their overseas earnings tax-free, and eliminate the estate tax. Let Ayn Rand’s vision of unchained corporate supermen lead America to some brighter day, the Republicans say.
The only way to counter this ascendant GOP narrative is to supply a counter-narrative, one that appeals to American values and makes sense.
Right now, the principal Democratic narrative is that the American people must work together as a community to solve the nation’s problems – with the government collaborating with the private sector as part of that effort.
However, the “community narrative” may not fit today’s angry mood, especially when many white middle-class Americans feel they are being pushed down the economic ladder and are thus open to propaganda blaming scapegoats, whether dark-skinned people or the “guv-mint.”
A different narrative would note that many of today’s rich made their wealth because of taxpayer-funded projects which created lucrative opportunities. This narrative would stress the fairness of expecting the rich to reimburse the taxpayers for both these past projects and to make possible new research and development aimed at keeping the nation competitive.
For instance, where would Facebook founder Mark Zuckerberg or other online billionaires be today if the federal government had not built the Internet? Their wealth was made possible by government engineers, mostly working for middle-class salaries, who devised the Internet as part of a Defense Department project.
Shouldn’t Zuckerberg and the others be expected to give a chunk of their money back to the country which made their fortunes possible – and isn’t the tax structure the most efficient way of ensuring that they do?
The same is true for Silicon Valley tycoons who made their money from personal computers, software and other technological advances. But the miniaturization of electronics behind modern computers was spurred by the space program in the 1960s, again sponsored by the taxpayers and developed by government engineers.
The federal government has played key roles, too, in the development of other industries, such as biochemistry. The government also built the nation’s transportation system, including the Interstate Highway system, creating opportunities for businesses to expand nationally while also opening vast new tracts of land for home construction.
Government – federal, state and local – also is responsible for educating the American work force, thus saving companies untold billions that otherwise would have to be spent on job training. And, by protecting commerce around the globe, the U.S. military has enabled American corporations to expand without many of the risks from earlier eras.
Past Understanding
Earlier generations of Americans understood and appreciated this government role in helping people and making the country stronger. Not only did Franklin Roosevelt’s New Deal put millions of Americans to work during the Great Depression, those programs built lasting improvements to the national infrastructure, from still-operational bridges to rural electrification.
The post-World War II era also recognized the wisdom of having the rich tamp down their personal greed for the good of all. That was why, during Dwight Eisenhower’s presidency, the top marginal income tax rate was about 90 percent. That meant that for the top tranche of income for the rich, they got to keep only 10 percent.
While that high a marginal tax rate may seem unfair by today’s standards, it achieved some important goals. Not only did the tax money help the government pay off the debts from World War II, those taxes provided the means for the post-war expansion of America – and the high tax rate represented a disincentive for destructive greed.
Back then, the pay gap between corporate CEOs and their workers was much smaller than today, meaning that there was more unity within companies. There was also less of a motive for Wall Street sharpies to exploit companies seeking public capital to build new plants and investors looking for a reasonable return on their money.
The U.S. economic system worked pretty well when the tax structure held greed in check.
However, as the top marginal tax rates came down – to the 70 percentiles in the 1960s and then to 28 percent under Ronald Reagan – the rich not only got richer but they were incentivized to be greedy, even unscrupulous. Since they could keep so much more of the money, some began taking whatever they could.
The biggest change in the tax structure — and in attitudes toward government — occurred under Reagan after the pivotal election of 1980.
Ironically, the American people were at a point where they might have expected their lives to start getting a whole lot easier and more rewarding. The government’s investments in infrastructure in the 1950s and in technology in the 1960s were bearing fruit, expanding productivity, generating wealth – and leaving the Soviet Union in the dust.
Granted, the 1970s appeared on the surface to be a grim decade, with the Middle East oil shocks and the inflationary hangover from the Vietnam War. But those short-term problems were masking a promising future. The bounty from the wise investments of the post-World War II era was just over the horizon.
However, instead of sharing in that bounty – and reinvesting some of it in an even brighter American future – a majority of voters followed Reagan, the charming Pied Piper of corporate power and wealth.
Reaganomics.........
Continue at:
http://consortiumnews.com/2011/09/08/resetting-the-american-narrative/The U.S. political climate might change if Americans understood how much the federal... more
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I was in Australia one month ago. At that point the USD was worth about the same (1.00778) as the AUD. In the past 41 days the difference between them has increased by almost 10 cents to 1AUD equaling 1.097USD. Yes, 10 cents in 41 days! I'm not saying it's all due to the USD declining in value because the AUD/economy is booming right now, but wow a ten cent spread in 41 days!
Click on invert to see the other graph.
Check out XE Currency Converter:
http://www.xe.com/ucc/convert/?Amount=1&From=AUD&To=USDI was in Australia one month ago. At that point the USD was worth about the same... more
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ptr23
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10 months ago
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This far into a recovery, the economy is supposed to be roaring ahead, which makes the stumble in first quarter growth all the more disappointing. The question consumers, investors, businesses and government leaders now face is: Was it a temporary pause or a sign that slower growth lies ahead?
After sailing along at a 3.1 percent growth rate in the last three months of 2010, U.S. Gross Domestic Product slowed sharply in the first quarter of this year to a 1.8 percent annual rate.
The slowdown, according to economists, was blamed on a collection of forces outside the control of the government. The list includes an unusually harsh series of winter storms, a surge in gasoline prices and a temporary lull in defense spending.
Story: U.S. economic growth slowed in first quarter
"The biggest factor was weather,” said Stephen Stanley, chief economist at Pierpont Securities in Stamford, Conn. “It hurt consumption and construction. Energy also hurt consumption as well. Higher gasoline prices took a bigger bite out of people's budget."
What's less clear is whether the forces holding back first quarter growth are temporary, or whether they may linger into the rest of the year.
Weather: The winter storm season may be over, but the extreme weather continues to wreak havoc in much of the country. In recent weeks, tornadoes have ravaged the South, floods are threatening much of the Midwest and a prolonged drought continues to grip the Southwest. Any shortfall in crop yields would further tighten grain supplies, adding to the upward push in food prices.
Inflation: Pump prices topping $4 a gallon in many parts of the country have wiped out much of the boost that a payroll tax cut gave to consumer spending. After jumping roughly $1 a gallon in the past year, the rise in gas prices is expected to slow. But the higher cost will still put a damper on spending. Higher prices for food and other raw materials are beginning to put a squeeze on corporate profits.
Government spending: First quarter growth also got clobbered by a temporary pullback in defense spending, which dropped more than 11 percent. As last year’s emergency stimulus package winds down, that spending will continue to dry up. Deeper cuts are expected as Congress and the White House grapple with a ballooning federal deficit that is threatening the government’s AAA debt rating.
Housing: As the housing industry enters its fourth spring selling season with little signs of improvement, one of the biggest sectors of the economy has yet to contribute to growth. The recent resumption of falling home prices and a large backlog of foreclosures will likely keep the housing industry on the sidelines indefinitely.
Confidence: Consumer and business confidence was shaken by a series of global events that included the devastating earthquake in Japan and the outbreak of widespread turmoil in the Middle East. So far, the loss of Japanese production of car parts and electronic components has had only limited impact on global manufacturing. But the spread of unrest in the Arab world remains a major source of uncertainly.
Though the economic recovery official began in June, 2009, Americans remain unconvinced. More than half told a Gallup poll that the U.S. economy is in a recession or a depression, despite official data showing a slow recovery underway.
The April 20-23 survey of 1,013 U.S. adults found that only 27 percent said the economy is growing. Twenty-nine percent said the economy is in a depression and 26 percent said it is in a recession, with another 16 percent saying it is "slowing down," Gallup said.
The poll findings have a 4 percentage point margin of error, according to Gallup.
To be sure, Thursday’s disappointing report on first quarter growth contained some evidence that the recovery may soon get back on a track of higher growth. Businesses continued to invest in new equipment at a healthy pace, suggesting they see stronger demand. The manufacturing sector grew by 9.1 percent in the first quarter, up from 3.5 percent in the fourth quarter of last year.
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But the first quarter slowdown casts doubt on whether the momentum generated last year will continue. Propped up by hundreds of billions of dollars worth of stimulus spending and payroll tax cuts, along with record low interest rates engineered by the Fed, the slowdown wasn’t supposed to happen.
“All things considered, it could have been worse,” said Paul Ashworth, chief U.S. economist at Capital Economics. “Nevertheless, in a quarter when the economy began to benefit from additional monetary and fiscal stimulus, we had originally expected a lot more.”
In his first-ever press conference Wednesday, Fed Chairman Ben Bernanke assured reporters that the forces behind the slowdown were “transitory,” and that central bankers see growth bouncing back to a pace that will put it back on track to grow between 3.1 percent to 3.3 percent in 2011. (That update trimmed the Fed's previous forecast of 3.4 percent to 3.9 percent growth 2011.)
Story: Bernanke to reporters: Fed has limits
Private economists are also upbeat about the rest of the year. A quarterly survey of 42 forecasters this week by The Associated Press found they expect GDP to advance by 3.2 percent in the current quarter, 3.4 percent from July through September and 3.5 percent from October to December. They also expect employers to picking up the pace of hiring, pushing the unemployment rate — now 8.8 percent — down to 8.4 percent by year end.
Even if it shakes off the “transitory” impact of bad weather and higher gas prices, the U.S. economy will have to accelerate even faster than its best quarter last year to overcome the impact of the sluggish first quarter.
"Coming in at 1.8, to get to where Fed's forecast is, you're going to need some robust growth," said Bob Andres, chief investment strategist and economist at Merion Wealth Partners in Berwyn, Penn. "In my mind, the Fed's forecast and the Street's forecast are more than likely a little too optimistic."This far into a recovery, the economy is supposed to be roaring ahead, which makes the... more
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ptr23
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10 months ago
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This week Max Keiser and co-host, Stacy Herbert, report on the world fleeing the dollar flood and the dollar fraud and about Jamie Dimons worst nightmare. In the second half of the show, Max talks to Matt Taibbi about the real housewives of Wall Street.
http://www.youtube.com/watch?v=M_RBbeIFeT8&feature=player_embeddedThis week Max Keiser and co-host, Stacy Herbert, report on the world fleeing the... more
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Hardly a day goes by without an excellent analysis of hard facts and data being followed by a surprisingly disconnected conclusion. Over the weekend, it appeared to be Zero Hedge's analysis of a video report by Eric deCarbonnel of Market Skeptics, which concluded that the Federal Reserve, U.S. Treasury market, and U.S. dollar may all be on the verge of imminent implosion due to the Fed's AIG-esque policy of selling large amounts of protection against an increase in Treasury bond rates. A rebuttal to this view was provided the next day on The Automatic Earth, in a piece entitled Bailing Out The Thimble With The Titanic.
In this piece, it was essentially argued that the U.S. dollar and Treasury market are symbolic of the Fed and the financial elite class, as partly confirmed by deCarbonnel's report, and these elite institutions have been engineering a successful bailout of those markets over the last few years, in tandem with natural financial dynamics and at the expense of everyone else. The bailout was "successful" in the sense that those markets will most likely remain stable in value for at least the next 2-3 years. On April 19 we were provided an excellent report by Chris Martenson, entitled The Breakdown Draws Near, but, as usual, all roads lead to financial chaos in Washington, D.C.
The "excellent" part of the report comes from the thorough data it provides regarding global liabilities that are maturing for banks and governments over the next few years. First, we are given a reference to the IMF's conclusions regarding global bank liabilities maturing in the near-term, with a stern eye locked on Europe [1]:
--- "The world's banks face a $3.6 trillion "wall of maturing debt" in the next two years and must compete with debt-laden governments to secure financing. Many European banks need bigger capital cushions to restore market confidence and assure they can borrow, and some weak players will need to be closed, the International Monetary Fund said in its Global Financial Stability Report.
The debt rollover requirements are most acute for Irish and German banks, with as much as half of their outstanding debt coming due over the next two years, the fund said." ---
The IMF basically tells us what has become painfully obvious by now - European banks and governments are both struggling to acquire the capital necessary to service their existing and/or refinance maturing debts, and there isn't nearly enough to satisfy them both. The latter fact is especially true when factoring in the maturing liabilities of banks and governments in other parts of the world, which is something that Martenson focuses on in the remainder of his analysis.
It is important, however, to note the added twist in the IMF's statement, in which it says that "some weak players will need to be closed". While it is specifically referring to European banks, the logic can be applied just as well to banks and governments all around the world, but we will return to that point later. In the rest of Martenson's report, we find out that Spain is actually pinning a significant portion of its private financing hopes on China, which, in turn, is facing its own imminent financial crisis due to an imploding real estate bubble.
--- "But it is Spain that is first in the firing line and its 10-year bond premium in the secondary market widened 14 basis points to 194 bps. Madrid is hoping for support from China for its efforts to recapitalise a struggling banking sector... [2]
Prices of new homes in China's capital plunged 26.7% month-on-month in March, the Beijing News reported Tuesday, citing data from the city's Housing and Urban-Rural Development Commission. [3]." ---
We can also expect that housing bubbles in countries such as Australia and Canada will start to implode in lockstep with China, as their economies are both highly dependent on Chinese import demand for natural resources. A renewed round of real estate busts, combined with the ongoing slump in Europe and the U.S. and less aggressive monetary policy (-temporary- winding down of QE), will also feed off of and into a collapse in global equity and commodity values. That collapse will wipe out large swaths of imaginary capital existing on the books of major institutions. All of that leads us to Martenson's seminal question, "Who Will Buy All of the Bonds?", specifically meaning the public bonds of Europe and the U.S.
Martenson refers to the Treasury International Capital (TIC) Report in his piece, which indicated that there was a "lower-than-trend" net inflow of foreign capital ($26.9B) into long-term securities for the month of February, which includes those going into long-term Treasury bonds. When including short-term securities, we see that there was a healthy net inflow of $97.7B into U.S. bond markets from foreign investors. [4]. What this data indicates is that, during the month of February, there was significant foreign investment in U.S. bonds, but 72% of that was into short-term securities (which do not include 10 or 30-year Treasury bonds).
He goes on to conclude that this inflow dynamic will get worse as Japanese purchases drop off in the next few months, and that the proposed "spending cuts" for a few federal programs will hardly do anything to reduce the supply of Treasury bonds over this same time period. I agree that there is a strong possibility of reduced purchases by the Japanese government in the short-term, as well as the governments of China and the UK. In addition, the minuscule spending cuts will indeed be irrelevant to the overall size of the 2011-12 federal budget deficits.
To go from there to the conclusion that the U.S. Treasury faces an imminent funding crisis, however, requires a few major and unlikely assumptions; the classic hallmark of those fretting over hyperinflation of the dollar in the short-term. As briefly discussed above, a slowdown in foreign government purchases of U.S. Treasury bonds could be significantly offset by an increase of inflows from private foreign investors fleeing the equity, commodity, government agency and mortgage-related investments of other regions, as well as domestic investors fleeing those same risky investments.
And that's where we return to the IMF's little "hint" in its report from last week. The financial elites do not need anyone to buy ALL of the bonds, only those that are most important to maintaining their wealth extraction operations. The weak players? Well, they can all fight over the scraps and devour themselves in the financial marketplace. The truly significant capital will be transported towards a few central locations by natural forces and by human design, like lambs to the inevitable slaughter. Of these locations, the most critical are surely the U.S. Treasury market, which can be used to support major U.S. banks, and the U.S. currency market.
What are the chances that the majority of people who find themselves invested in U.S. government bonds and the dollar will get anything close to a return on their investment over 10, 20 or 30 years? The answer to that is probably a massively negative percentage, because the psychological pain of holding on for that long will be even worse than the total wipe out itself. However, the herd typically doesn't figure out how close they were to the edge of the cliff until after they are tumbling down the other side.......
Continue at:
http://theautomaticearth.blogspot.com/2011/04/april-23-2011-welcome-to-slaughterhouse.htmlHardly a day goes by without an excellent analysis of hard facts and data being... more
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In a piece in last week’s edition of The Nation titled “Why Washington doesn’t care about jobs,” Christopher Hayes points out that D.C. is doing much better than the rest of the country economically, which is a significant contributor to what he terms “social distance” from the Americans the government purports to serve. That distance is disorienting and bizarre to those of us outside the Beltway, and is hugely fueled by the annoying conceit of many in the political media that they personally embody the concerns of average Americans. This misguided assumption would be merely amusing if not for the fact that almost the entire political conversation in the U.S. takes place among this small group of people — and that these alleged champions of the middle class inevitably convey the impression that Americans across the land are obsessed with deficit reduction and low taxes, which require deep cuts to
“entitlements.”In a piece in last week’s edition of The Nation titled “Why Washington... more
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In January Steven Hansen observed that, through November, the trade deficit for manufactured goods was the equivalent of 1.3 million workers earning the median manufacturing wage in the U.S. Well, the trade deficit has been with us in a major way for nearly two decades. I am reminded of the 1992 presidential campaign where one of the three candidates, Ross Perot, argued against the adoption of NAFTA, The North American Free Trade Agreement. The other two candidates supported NAFTA.
Perot is famous for his statement that a free trade agreement that was not a two way street would create a “ giant sucking sound” of jobs going south to the cheap labor markets of Mexico. Both of Perot’s opponents (George H.W. Bush and Bill Clinton) argued that NAFTA would create jobs in the U.S. because of business expansion.
However, the goods balance of trade for the U.S. with Mexico has been negative and steadily growing over the years. In 2010 it amounted to $61.6 billion, which was 9.5% of the total goods trade deficit last year.
So Perot has been vindicated in his opinion; expanded free trade has not been accompanied by an increase in jobs in the U.S. relative to the vast numbers of jobs created in the rest of the world as NAFTA became just a stepping stone on the pathway to global commerce.
Veronique de Rugy has produced a graph which shows how manufacturing output and manufacturing employment have varied over the years 1975 – 2010.
Read more here:
http://econintersect.com/wordpress/?p=5769In January Steven Hansen observed that, through November, the trade deficit for... more
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“Drastic measures” is not language you typically see in an economic paper from the Bank for International Settlements. But the picture painted in a very concise and well-written report by the BIS for 12 countries they cover is one for which the words drastic measures are well warranted.
The authors start by dealing with the growth in fiscal (government) deficits and the growth in debt. The United States has exploded from a fiscal deficit of 2.8 percent to 10.4 percent today, with only a small 1.3 percent reduction for 2011 projected. Debt will explode (the correct word!) from 62 percent of GDP to an estimated 100 percent of GDP by the end of 2011 or soon thereafter. The authors don’t mince words.
They write at the beginning of their work:
“The politics of public debt vary by country. In some, seared by unpleasant experience, there is a culture of frugality. In others, however, profligate official spending is commonplace. In recent years, consolidation has been successful on a number of occasions. But fiscal restraint tends to deliver stable debt; rarely does it produce substantial reductions. And, most critically, swings from deficits to surpluses have tended to come along with either falling nominal interest rates, rising real growth, or both. Today, interest rates are exceptionally low and the growth outlook for advanced economies is modest at best. This leads us to conclude that the question is when markets will start putting pressure on governments, not if."
Please read more at:
http://www.businessinsider.com/the-future-of-public-debt-2011-2#ixzz1DoRbQkHi“Drastic measures” is not language you typically see in an economic paper... more
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NEW YORK – U.S. gasoline prices have jumped to the highest levels ever for the middle of February. The national average hit $3.127 per gallon on Friday, about 50 cents above a year ago.
The price is about 6 percent higher than on this date in 2008. The next day, pump prices began a string of 32 gains over 34 days. They rose 39 percent over five months, eventually hitting an all-time high of $4.11 per gallon in July.
Although gas prices are expected to rise, most experts aren't expecting a reprise of 2008, when the price spike forced many drivers to join car pools and trade in gas-guzzling SUVs for fuel-efficient cars.
More at:
http://news.yahoo.com/s/ap/20110212/ap_on_bi_ge/oil_pricesNEW YORK – U.S. gasoline prices have jumped to the highest levels ever for the... more
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President Obama’s proposed 2012 budget will cut several billion dollars from the government’s energy assistance fund for poor people, officials briefed on the subject told National Journal.
It's the biggest domestic spending cut disclosed so far, and one that will likely generate the most heat from the president's traditional political allies. Such complaints might satisfy the White House, which has a vested interest in convincing Americans that it is serious about budget discipline.
Read more at:
http://www.nationaljournal.com/whitehouse/exclusive-obama-to-cut-energy-assistance-for-the-poor-20110209President Obama’s proposed 2012 budget will cut several billion dollars from the... more
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Is it just coincidence that subprime foreclosures surged right after the bankruptcy abuse reform (BAR) took effect in October 2005?
http://calculatedriskimages.blogspot.com/2010/10/personal-bankruptcy-filings-sept-2010.html
This article presents arguments and evidence suggesting that it is not. Before BAR, any household could file Chapter 7 bankruptcy and have its credit card and other unsecured debts discharged. By sidestepping their unsecured debts, households retained more income to pay their secured debts, such as mortgages. BAR blocks that
maneuver by presenting a variety of obstacles, including a means test that forces better-off households that demand bankruptcy protection to file Chapter 13, where they must continue paying unsecured lenders.
Read more about the New York Federal Reserve's report:
http://www.newyorkfed.org/research/epr/forthcoming/1102morg.pdfIs it just coincidence that subprime foreclosures surged right after the bankruptcy... more
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Four names top the list of potential candidates to succeed Warren Buffett as chief executive of Berkshire Hathaway, though finding a replacement for him as Berkshires investment chief has proved more complicated, Vanity Fair reported in its new issue.
http://www.indiareport.com/India-usa-uk-news/reuters/Business/76808Four names top the list of potential candidates to succeed Warren Buffett as chief... more
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Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcyAcross the nation, a rising irritation with public employee unions is palpable, as a... more
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Super-person power needed to infuse the poor, weak, downtrodden masses while they engage in the battle of the century against the biggest, greediest, most ruthless, murdering elite money hoarders ever! Watch closely, because one side will eat the food of the babies before they will stop taking from the peasants.
http://www.alternet.org/story/149075/Super-person power needed to infuse the poor, weak, downtrodden masses while they... more
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Congressman, analysts warn that deficit must be reduced now or globalist sharks will tear America to pieces.
Texas Congressman Ron Paul, active member of the Committee on Financial Services, appeared on MSNBC today and issued a stark warning to viewers regarding the continuing debt crisis: reduce the deficit now or face mass political and social chaos.
The Congressman began by acknowledging that the country is waking up to the fact that continued spending and an increasing deficit is unsustainable, but noted that this awakening has come “out of desperation” and there is still a long way to go before solutions can be put into place.
The Congressman told Morning Joe that he is “heartened” to see that the Debt Commission is considering his proposal to cut military spending.
However, Paul noted that he remains unconvinced, stating that there is a “need to change the policy, you can’t quit one weapons system and think that’s a solution if you still want to be policemen of the world.”
While making it clear that he does not see welfare spending as a long term solution, the Congressman suggested taking $10 billion that is earmarked for building more foreign embassies and bases and putting half of it into medical or unemployment benefits “to tide us over”, while using the remaining $5 billion “against the deficit.”
Earlier this week, the Congressman emphasized in a commentary piece that Congress should refuse to raise the debt ceiling, a vote that will likely take place early next year, noting that it would act as a litmus test for the new Republican controlled House.
Paul wrote that “You will know that Congress, despite the rhetoric of the midterm elections, is doing business as usual.” if they vote to raise the debt ceiling.
The Congressman elaborated on this issue in today’s interview.
“If the Fed couldn’t monetize debt and the debt limit couldn’t be increased, [Congress] would say oh my goodness, we’re going to have to change policies, maybe we shouldn’t be the policemen of the world, maybe we shouldn’t be the endless welfare state, and it will come to an end.” The Congressman said.
“And when it ends with the dollar crisis, everybody loses… then there’s political chaos. We’re not immune to that. This idea that we won’t suffer the same consequences of other nations…right now we bail out everybody!..But it all depends on trust in the dollar.” he added.
“One day people will wake up and say ‘why are we trusting this counterfeit machine.’ We’re the biggest counterfeit machine in the history of the world.”
MSNBC’s Jim Cramer re-emphasized the Congressman’s points by noting that if something is not done now to reduce the deficit, the consequences could be irreversible.
“This is too close, this is not thirty or forty years if we don’t do something, this is ten years. It’s way too close and we have got to reach some agreement.” Cramer said.
“IMF comes here if we don’t do this deficit reduction.” Cramer added. “The IMF is really pretty powerful, and you don’t want them in your country. But that’s who comes in when you can’t pay your debts.” the analyst warned.
Ron Paul added that he has spent a long time warning that we are dumping huge amounts of debt on our children and our grandchildren, but “I don’ t think that’s true anymore, it’s here, we’re in the midst of the crisis.”
http://www.prisonplanet.com/ron-paul-us-counterfeit-machine-will-lead-to-political-social-chaos.htmlCongressman, analysts warn that deficit must be reduced now or globalist sharks will... more
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eva2
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