Executive Order 6102 is an Executive Order signed on April 5, 1933, by U.S. PresidentFranklin D. Roosevelt "forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates" by U.S. citizens.
Economics
An assortment of links concerning the Economics of this Nation as well as links for learning and decerning all the ups and downs of the financial world.
The cause is hidden, the effect visible to all. ~ Ovid 43 BC- 17 AD
Recession is when your neighbor loses his job.
Depression is when you lose your job.
Recovery is when Obama loses his job.
Help us in our Campaign to defeat
Barack Hussein Obama in 2012
PATRIOT FREEDOM IS SUPPORTED TOTALLY BY PATRIOTS LIKE YOU
Please Donate Today...A $17.76 donation, or any other amount would be greatly appreciated.
Help Save our Nation!
ONE PICTURE ALONE WILL EXPLAIN ALL OF
AMERICAS ECONOMICS PROBLEMS
THE FEDERAL RESERVE
America’s Poorest States
10. North Carolina > Median income: $43,275 > Poverty rate: 16.1% (tied for 9th highest) > Without health insurance: 16.7% (13th highest) > Unemployment: 10.1% (9th highest)
North Carolina has one of the lowest median incomes in the country. It does not perform much better on other metrics related to poverty. There have been a number of programs implemented to help combat poverty in the state recently. One example is the No Kid Hungry program which aims to end childhood hunger in North Carolina by 2015. According to information from the program, “more than 1 in 4 children in North Carolina do not get sufficient food.”
9. Alabama > Median income: $42,218 > Poverty rate: 16.1% (tied for 9th highest) > Without health insurance: 14.4% (21st highest) > Unemployment rate: 10.0% (10th highest)
Alabama has one of the worst poverty rates in the country. Combined with an unemployment rate of 10% and a median income of just $42,000, state residents are in truly awful shape. While unemployment in most of the country has dropped in recent months, it has actually increased in Alabama. State Governor Robert Bentley, acknowledging the dire circumstances state residents face, has begun a “road to economic recovery” campaign aimed at creating jobs in order to pull the state out of depression. In an interview in the Andalusia Star News, Bentley says he hoped to create 10,000 new jobs by the end of the year, but that it would be challenging.
8. Kentucky > Median income: $42,091 > Poverty rate: 17.3% (6th highest) > Without health insurance: 15.5% (18th highest) > Unemployment rate: 9.5% (13th highest)
Residents of Kentucky are among the poorest in the nation, and have the 6th highest rate of poverty. One wa y the state works to lessen the impact of poverty is through Community Action Kentucky, an organization that provides “direct social services to Kentuckians with low and moderate incomes in all 120 Kentucky counties.” The group provides services ranging from housing to employment training to Meals on Wheels. To raise awareness of community-based agencies, Governor Steve Beshear declared May “Community Action Month” this year.
7. South Carolina > Median income: $42,059 > Poverty rate: 14.9% (16th highest) > Without health insurance: 17.6% (12th highest) > Unemployment rate: 10.9% (4th highest)
South Carolina has the fourth-highest unemployment rate in the country, contributing to the state’s high level of poverty and seventh-lowest median income. According to the Greenville News, Governor Nikki Haley stated: “The No. 1 key to dealing with these is training people quickly and getting them back to work.” As a result, Haley is in the midst of developing a jobs training program designed to improve the readiness of the state workforce and, hopefully, drive new employers to South Carolina.
6. Montana > Median income: $42,005 > Poverty rate: 13.4% (24th highest) > Without health insurance: 16.3% (16th highest) > Unemployment rate: 7.7% (18th lowest)
Aside from its exceptionally low median income, Montana does not rank particularly low on many poverty-related metrics. It also has a lower overall poverty rate than the national average of 15.1%. Times are still tough in the state. According to NBC Montana, the number of students who receive free or reduced cost lunches has increased by at least 2% each year since 2007. In some schools, the share of students receiving these benefits has exceeded 80%
5. Louisiana > Median income: $41,896 > Poverty rate: 18% (4th highest) > Without health insurance: 18% (11th highest) > Unemployment rate: 7.6% (17th lowest)
Nearly one in five people in Louisiana lives in a state of poverty. This is the fourth-worst rate in the country. A full 18% of residents are without health insurance, and median income is the fifth-lowest in the country. The after effects of Hurricane Katrina and, to a lesser extent, the Gulf oil spill, have hurt tourism and job opportunities in the region. In an effort to stimulate the state economy, Governor Bobby Jindal has proposed the construction of a new gas-to-liquids facility, which is expected to create more than 5,000 jobs: “We’re here to make an announcement that could result in Louisiana’s largest economic development project in our state’s entire history.”
4. West Virginia > Median income: $40,824 > Poverty rate: 15.7% (12th highest) > Without health insurance: 13.9% (25th highest) > Unemployment rate: 8.1% (tied for 24th lowest)
The percetange of West Virginia residents living below the poverty line has increased steadily since 2008. Worst still, approximately one in five West Virginia children now live in poverty. There has been an increase in the number of West Virginians with health insurance, however. This is likely due to government programs such as Medicaid and the Children’s Health Insurance Program, according to the Center on Budget and Policy, as there has been a decrease in employer-based coverage.
3. Tennessee > Median income: $40,026 > Poverty rate: 16.1% (11th highest) > Without health insurance: 14.7% (20th highest) > Unemployment rate: 9.8% (11th highest)
Tennessee has the third-lowest median income in the United states, as well as some of the worst poverty and unemployment rates in the country. While speaking at the Kingsport Center for Higher Education, Governor Bill Haslan announced that the centerpiece of his job creation initiative was “setting the right environment.” “It has to have a low-tax and low-regulatory environment,” he continued. “We need to have elected officials who understand business.”
2. Arkansas > Median income: $38,600 > Poverty rate: 16.5% (8th highest) > Without health insurance: 18.5% (9th highest) > Unemployment rate: 8.2% (25th highest)
Despite an unemployment rate that is almost a full percentage point below the national average, Arkansas is one of the poorest states. The state’s median income is the second lowest in the country. Its poverty rate and the percentage of people without health insurance also place the state among the ten worst. Poverty may be even worse among children in the state. According to a recent study by the Annie E. Casey Foundation, about 27% of children in the state lived in impoverished homes as of 2009.
1. Mississippi > Median income: $36,850 > Poverty rate: 21.3% (the highest) > Without health insurance: 18.7% (8th highest) > Unemployment rate: 10.4% (7th highest)
In nearly every metric associated with poverty, education, employment, health risk, and insurancecoverage, Mississippi has been close to the bottom for years. The state is among the ten worst for both unemployment and health insurance coverage. It has the worst poverty rate in the U.S., and by far the lowest median income in the country, at just $36,850 — not quite half of New Hampshire’s median household income. The state was also hit hard by Katrina, including the Gulfport Harbor, which the Federal Government is allotting $500 million to help rebuild. Proponents of the project expect thousands of jobs will be created in the process.
The kind of impact we are going to have will not be like flying into the side of a mountain. It will be the kind of crash that skids over land, clipping trees and buildings until the plane ends up wingless in a smoldering heap. I just hope the fuel tanks don’t ignite when the long rough ride is over.
“Brace for Impact.” I have thought about this economic collapse title for months. I held onto it and figured I would know when the right time was to put it out there. Today is the day. Read Here
US credit rating downgrade prompts warning from China
S&P cuts US credit rating from AAA to AA+ for first time
China says it has 'every right to demand' US tackles debt
The United States has lost its top AAA credit rating for the first time, in a move that could severely undermine the recovery of the world's largest economy and prompt further calamitous falls on world stock markets next week.
Ratings agency Standard & Poor's decision to cut the debt rating after another dire day on the world stock markets on Friday could increase the cost of borrowing for the US and set off more panic selling when stock markets reopen on Monday.
The downgrade is an embarrassment for the Obama administration, coming less than a week after protracted wrangling among Republicans, Democrats and the White House took the US to the brink of default.
In his weekly radio address, Obama appealed to politicians from both parties to set aside partisanship and refocus on efforts to stimulate the stagnant economy.
"Congress reached an agreement that's going to allow us to make some progress in reducing our nation's budget deficit. And through this compromise, both parties are going to have to work together on a larger plan to get our nation's finances in order," Obama said.
China, the world's largest holder of US debt, condemned the "short-sighted" political wrangling in the US and said the world needed a new and stable global reserve currency.
In a comment article the official Xinhua news agency said China had "every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets. International supervision over the issue of US dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country."
S&P had held back cutting the rating earlier on Friday after the US government reportedly questioned its maths. But the agency insisted it was going ahead with the downgrade to AA-plus, saying the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilise the debt situation.
It is the first time S&P has issued a "negative" outlook on the US government since it began rating the credit-worthiness of railroad bonds in 1860. Michael Hewson, a market analyst at CMC Markets, warned: "This crisis will run and run, and could make Lehmans look like a Tupperware party."
The dramatic reversal of fortune for the world's largest economy means that US treasuries, once seen as the safest investment in the world, are now rated lower than bonds issued by countries such as the UK, Germany or France. The move is likely to raise borrowing costs for the US government, companies and consumers.
Unnamed US officials had been telling the media that S&P's analysis was deeply flawed, but S&P said in a statement: "The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilise the government's medium-term debt dynamics."
Britain's stock market suffered another major sell-off on Friday, ending its worst week since the collapse of Lehman Brothers in 2008 with almost £150bn wiped off the value of the country's top 100 companies.
After a calamitous five days for stock markets on both sides of the Atlantic, the FTSE 100 closed 146 points lower at 5247 to record its third day of triple-digit declines – a trading pattern last witnessed in the immediate aftermath of Lehman's bankruptcy in September 2008.
Better-than-feared US employment figures failed to calm the markets. A rally prompted by news that America's economy generated an extra 117,000 jobs last month fizzled out within an hour in London, after the German government ruled out providing extra money for Europe's bailout fund, and rumours about the impending S&P move swirled around Wall Street.
After the European markets closed, Wall Street – which had suffered a 512-point fall on Thursday in one of its worse performances since 2008 – was encouraged by remarks from the Spanish government that the prime minister, José Luis Rodríguez Zapatero, agreed with the French president Nicolas Sarkozy's desire for greater co-ordination.
Even so, the Dow Jones Industrial Average, on a day of wild fluctuations, ended just 60 points higher. Tensions were also eased after Italy's prime minster, Silvio Berlusconi, promised to accelerate austerity measures by a year, and summoned a meeting of G7 finance ministers as soon as possible.
His comments followed rumours that the European Central Bank could reverse its hardline stance and begin buying Spanish and Italian government bonds in return for quicker reforms.
Dealers have been frustrated by the lack of urgency shown by the ECB in supporting Italy and Spain. During Thursday's market mayhem, they had bought only bonds issued by Ireland and Portugal.
Amid fears of an escalation in the crisis, Mervyn King, the governor of the Bank of England, held a conference call with David Cameron and the chancellor, George Osborne – both on holiday – to discuss the impact of the financial crash on Britain's banks and the struggling UK economy. The Bank is likely to cut its growth forecast for the UK when it publishes its latest quarterly inflation report on Wednesday.
"They discussed the financial situation and the chancellor asked the governor for his judgment," a Treasury source said. "They agreed to monitor the situation."
The source said the chancellor was keeping up the pressure on eurozone leaders to carry through the terms of the second bailout of Greece, which was intended to calm the markets when announced on 21 July but has failed to do so, with concerns widening to Italy and Spain. "What we are communicating to our European counterparts is you must deliver on what you have promised," a Treasury source said.
The US jobless rate went down from 9.2% to 9.1%. Analysts said the increase in non-farm payrolls was bigger than the 85,000 jump expected by Wall Street, but the figures were not good enough to make traders feel less gloomy about the possibility of a global double-dip recession.
Glenn Uniacke, senior dealer at Moneycorp, said there was relief at the US jobs figures. "With employment growth in the world's top consumer market an indicator of the future strength of the global economy, today's non-farm payroll figures gave the markets a modest upside surprise and President Obama some short-term reprieve following the blood-letting of the past week," he said.
"However, the data won't stop the rot and is not sufficient to change the bearish outlook from traders, with a sustained figure of 200,000-plus needed for any major positive impact on the unemployment rate. The markets were seen swinging wildly straight after the data, unsure how to interpret the ray of light in an otherwise gloomy week."
The British economist Baroness Vadera, a former Labour minister and G20 adviser who played a role in devising a rescue package for the international banking system at the time of the 2008 crash, said the current crisis could be even worse.
She told BBC Newsnight: "It feels as scary, but it is different. The reason it is potentially worse is that governments stepped in [in 2008-09] all over the world and saved the banking system in order to save their economies, but now who is going to step in to save governments?
"When we went into that crisis, interest rates were quite high, so we did have monetary policy to use as a tool and now we are at the outer limits of that. Lastly, we are currently facing quite a lot of inflationary pressures, particularly coming from commodities and emerging markets, so our room for manoeuvre is a lot more limited."
States Where People Pay the Most (and Least) in Taxes
The Ten States with the Highest Tax Burdens
10. Pennsylvania Taxes paid by residents as pct. of income: 10.1% Total state and local taxes collected: $109.7 billion Pct. of total taxes paid by residents: 76.3% Pct. of total taxes paid by non-residents: 23.7%
Pennsylvania has among the largest revenues in the country. The great majority of this money comes from its residents. Approximately one third of state tax revenue comes from individual income taxes. Another one half comes from various sales taxes. Pennsylvania also has the highest state corporate tax rate in the country. There are a number of ways the state could increase the amount of taxes it "exports" to non-residents, however. The state can further expand its burgeoning gambling industry. According to the Pennsylvania Gaming Control Board, $81.4 million in tax revenue was generated by table games in the most recent fiscal year. The state could also pass a tax on natural-gas drilling, as it is currently the only state without one.
9. Maine Taxes paid by residents as pct. of income: 10.1% Total state and local taxes collected: $10.7 billion Pct. of total taxes paid by residents: 64.7% Pct. of total taxes paid by non-residents: 35.3%
For a state with one of the highest tax burdens on its residents, Maine has a relatively large percent of its total tax revenue come from out-of-state residents and business, standing at more than 35%. Maine has the eighth lowest population and the tenth lowest tax revenue. The state has middle-of-the-road taxes for gasoline and alcohol, but at $2.00 per pack, it is tied with Michigan and Alaska for the 11th highest tobacco tax.
8. Vermont Taxes paid by residents as pct. of income: 10.2% Total state and local taxes collected: $6.1 billion Pct. of total taxes paid by residents: 62.1% Pct. of total taxes paid by non-residents: 37.9%
Vermont collects a relatively large percentage of its tax revenue from non-residents. The state has one of the largest shares of vacation homes in the country, and collects a major portion of its property tax revenue from these homes, effectively taxing residents of other states. Despite this, residents of Vermont have among the greatest tax burden in the country. A large reason for this is the state's excise taxes, or taxes on the sale of goods and services. According to a recent report from the Mercatus Center titled, "Excise Taxes in the States," Vermont collected the greatest amount in excise taxes per capita in 2010, $858. This includes taxes on things such as tobacco, alcohol, insurance, and motor fuels.
7. Minnesota Taxes paid by residents as pct. of income: 10.3% Total state and local taxes collected: $45.7 billion Pct. of total taxes paid by residents: 75.5% Pct. of total taxes paid by non-residents: 24.5%
Less than 25% of Minnesota's tax revenue comes from non-residents and businesses. The state only collects average, or below average, rates on alcohol and tobacco, and has one of the smallest tourism economies in the country. This means the state relies heavily on income and property taxes from residents. Minnesota has the 21st largest population in the country, but it collects the 12th most in tax revenue each year. The state and local taxes collected per capita is the seventh highest in the country, as is the tax burden as a percent of income.
6. California Taxes paid by residents as pct. of income: 10.6% Total state and local taxes collected: $354 billion Pct. of total taxes paid by residents: 82.5% Pct. of total taxes paid by non-residents: 17.5%
California is exceptional in many ways when it comes to taxing its residents. The state has the highest statewide sales tax in the country, currently 8.25%. It also has the highest tax on gas, charging 46.6 cents per gallon. The state collects among the lowest amount of taxes from non-residents and business out of all the states. But with the lowest credit rating in the nation, according to S&P, an ongoing budget problem, and a $10.8 billion deficit, one of the biggest in the country, the state may want to change its approach.
5. Rhode Island Taxes paid by residents as pct. of income: 10.7% Total state and local taxes collected: $9.4 billion Pct. of total taxes paid by residents: 70.9% Pct. of total taxes paid by non-residents: 29.1%
Rhode Island is one of the smallest states and has one of the smallest revenues. Despite this, residents' tax burdens are among the highest. Each year, the average Rhode Islander pays $671 in state "sin taxes," or taxes on things such as alcohol, tobacco, and gambling. This is the second highest amount in the country, behind only Delaware. Part of the reason for this is that the state taxes each pack of cigarettes $3.46, the second highest in the country. The state's tax burden is hurting business as well. Rhode Island has an exceptionally high corporate tax rate of 9% and was recently rated as the worst state for business by CNBC.
4. Wisconsin Taxes paid by residents as pct. of income: 11% Total state and local taxes collected: $41.7 billion Pct. of total taxes paid by residents: 77.9% Pct. of total taxes paid by non-residents: 22.1%
According to the Milwaukee Journal Sentinel, Wisconsin relies more on income and property taxes for its revenue than most states. In fact, both are approximately 25% higher than the national averages. The state receives a smaller portion of federal money than most others, leaving little room for this money to offset state spending. Worst still, taxes on industrial property owners rank among the bottom half, and often the bottom third, of the country, while residential taxes are among the greatest. According to a study by the Institute on Taxation and Economic Policy, Wisconsin's middle class pays a bigger share of government spending than any other state, except for New York.
3. Connecticut Taxes paid by residents as pct. of income: 12% Total state and local taxes collected: $33.3 billion Pct. of total taxes paid by residents: 80.1% Pct. of total taxes paid by non-residents: 19.9%
The state with the highest per capita income in the country collects more than $5,000 per resident on average, the most in the country. It is the 30th most populous state in the U.S., but it collects the 19th most in tax revenue. Less than 20% of Connecticut's tax revenue comes from non-residents and business. According to the Tax Foundation, the state ranks 47th in business environment, with a 7.5% tax on businesses. The state's residents have a higher tax burden than all but two other states. Part of the reason for this has to do with the fact that the taxes Connecticut commuters pay to the empire state counts as part of the Connecticut tax burden.
2. New York Taxes paid by residents as pct. of income: 12.1% Total state and local taxes collected: $243.9 billion Pct. of total taxes paid by residents: 71.4% Pct. of total taxes paid by non-residents: 28.6%
New York places much of its tax burden on residents from other states. Consider, for example, the amount of state revenue derived from New York City tourism, or those who commute to the city for work. Despite this, state residents maintain the second largest tax burden in the country. The state has one of the highest state and local tax collections per capita, an average of $6,884. It has one of the highest combined averages local and state sales tax rates — 8.3%. The Big Apple also has a number of exceptionally high excise taxes, such as its $4.35 tax on each pack of cigarettes, the highest rate in the country. Additionally, the state has exceptionally high property tax rates. According to the Census Bureau, the top ten counties in the U.S. with the highest property taxes as a percentage of home values are all in New York.
1. New Jersey Taxes paid by residents as pct. of income: 12.2% Total state and local taxes collected: $85.9 billion Pct. of total taxes paid by residents: 79.5% Pct. of total taxes paid by non-residents: 20.5%
New Jersey residents have a higher tax burden than those of any other state. As a percent of their income, taxes in the Garden State were 12.2% in 2009, nearly double that of Alaska. Like Connecticut, much of this tax burden comes from state residents who commute to New York City and pay taxes there as well. This illustrates how a state resident contributes to the tax base of multiple states. Although not reflected in the percent of income residents pay in state and local taxes, it is nonetheless an additional burden commuters have to bear. According to Tax Foundation, the state has the third-worst environment for business in the country, with a corporate tax rate of 9%. It also has an above-average sales tax, as well as one of the highest rates in the country for cigarettes and liquor.
The Ten States with the Lowest Tax Burdens
10. New Mexico Taxes paid by residents as pct. of income: 8.4% Total state and local taxes collected: $16.9 billion Pct. of total taxes paid by residents: 59% Pct. of total taxes paid by non-residents: 41%
The state and local tax burden on New Mexico residents is the tenth lowest in the country. The state has a slightly below-average business climate, with a corporate tax rate ranging from 4.8% to 7.6%. Gasoline taxes are quite low, but excise taxes on alcohol and cigarettes are above average. The state tax on beer is one of the highest in the country. A high percentage of state and local revenues come from non-residents. This is usually the case with most states with a low tax burden on its residents. Per capita, state residents pay just $2,027, the sixth-lowest amount in the country.
9. Louisiana Taxes paid by residents as pct. of income: 8.2% Total state and local taxes collected: $44.2 billion Pct. of total taxes paid by residents: 54% Pct. of total taxes paid by non-residents: 46%
Despite having the fifth highest average state and local sales tax rate, residents of Louisiana have a relatively low tax burden. A leading reason for this is the simple fact that, on average, residents pay one of the smallest amounts of total state and local taxes in the country. According to the Tax Foundation, property taxes in the state are $565.23 per capita, the fifth lowest amount among states. Louisiana also collects $1.78 in federal spending for every dollar spent on federal taxes — the fourth highest ratio. This rate of federal spending helps offset the need for higher state revenue from taxes.
8. South Carolina Taxes paid by residents as pct. of income: 8.1% Total state and local taxes collected: $35.4 billion Pct. of total taxes paid by residents: 66% Pct. of total taxes paid by non-residents: 34%
Residents of South Carolina pay the second smallest total amount in state and local taxes per person in the country, behind only Mississippi. The average person in the state pays $2,742 in taxes. Excise taxes are extremely low: the state has the fifth lowest gasoline tax in the country and the ninth lowest cigarette tax. The state also has relatively low property taxes at both the state and local level.
7. New Hampshire Taxes paid by residents as pct. of income: 8% Total state and local taxes collected: $9.6 billion Pct. of total taxes paid by residents: 56.4% Pct. of total taxes paid by non-residents: 43.6%
New Hampshire "has no special revenue source from non-residents, but the citizens' approval of limited government spending has kept the tax burden low," according to the Tax Foundation, The state has a flat 5% income tax rate that only applies to dividend and interest income, but, effectively, no tax on wages, and as a result most residents don't have to pay it. The state is also one of only five states that has no sales tax. This causes many people from outside of the state to travel to New Hampshire to purchase goods that are heavily taxed in their own states. Not all taxes in New Hampshire are low, however. The state has the third highest property tax rate in the country.
6. Texas Taxes paid by residents as pct. of income: 7.9% Total state and local taxes collected: $196.5 billion Pct. of total taxes paid by residents: 63.4% Pct. of total taxes paid by non-residents: 36.6%
The population of Texas is 30% larger than New York, but collects more than 60% less in tax revenue than the Empire State. The tax burden on residents is the sixth lowest in the country, at just 7.9% of average income per resident. The biggest reason for this is that the state is one of just six in the country to levy no personal income tax. Texas also has the 11th lowest sales tax, at 7.39%, and average or below average rates on gasoline, cigarettes and alcohol.
5. Wyoming Taxes paid by residents as pct. of income: 7.8% Total state and local taxes collected: $9.3 billion Pct. of total taxes paid by residents: 29.9% Pct. of total taxes paid by non-residents: 70.1%
Besides Alaska, Wyoming has the greatest percentage of its state revenue paid for by non-residents. This is because of taxes on oil and coal that bring money in from out-of-state oil and mineral companies. These taxes account for such a large percentage of Wyoming's revenue that the state does without a corporate income tax. The state also has no individual income taxes. Wyoming has an average state and local sales tax rate of 5.38%, one of the lowest in the country.
4. Tennessee Taxes paid by residents as pct. of income: 7.6% Total state and local taxes collected: $48 billion Pct. of total taxes paid by residents: 63.7% Pct. of total taxes paid by non-residents: 36.3%
Tennessee has the eleventh lowest per capita income in the country. Residents of the state pay just $1,851 in taxes, the second lowest amount in the U.S. The state's business climate is average, but other taxes are relatively low. The sales tax of 7% is one of the highest in the country, but food purchases are exempt from all but 1.5% of that. Dividend and interest income is taxed in the state at a rate of 6%, but there is no other personal income tax levied. Tennessee collects no state-level property tax, one of just a few to do so.
3. South Dakota Taxes paid by residents as pct. of income: 7.6% Total state and local taxes collected: $5.2 billion Pct. of total taxes paid by residents: 56% Pct. of total taxes paid by non-residents: 44%
Since 1977, South Dakota's tax burden has dropped from 9.1% to 7.6%, causing the state to change from the 15th least burdened state to the third least burdened. The state has no corporate or individual income tax. It is easier for South Dakota to keep a low tax burden than many other states, however. According to the most recent data available from the Tax Foundation, South Dakota receives $1.53 back for every dollar collected in federal taxes, lessening the state's dependence on state and local revenue.
2. Nevada Taxes paid by residents as pct. of income: 7.5% Total state and local taxes collected: $20 billion Pct. of total taxes paid by residents: 52.5% Pct. of total taxes paid by non-residents: 47.5%
Nevada has the second-lowest tax burden in the country, with residents paying just 7.5% of their income on state and local taxes. Nearly half of all state tax revenue comes from non-residents. According to the Tax Association's State Business Tax Climate Index, Nevada has one of the most favorable environments for business, as it is one of the four states to levy no corporate tax at all. A significant amount of the state's revenue comes from "sin taxes" on gambling, alcohol, and tobacco, most of which comes from tourists. Sales tax is above the national average, and the tax on gasoline is one of the highest in the country. Counties are also allowed to levy additional gas taxes on top of the state.
1. Alaska Taxes paid by residents as pct. of income: 6.3% Total state and local taxes collected: $18.8 billion Pct. of total taxes paid by residents: 20.5% Pct. of total taxes paid by non-residents: 79.5%
Alaskans have the lowest tax burden of any state in the country, paying just 6.3% of their income in state and local taxes. This is over one full percentage point lower than the state with the second smallest tax burden. According to the Tax Foundation, "Before the Trans-Alaska pipeline was finished in 1977, taxpayers in Alaska bore the second-highest tax burden in the country. By 1980, with oil tax revenue pouring in, Alaska repealed its personal income tax and started sending out checks instead. The tax burden plummeted, and now Alaskans are the least taxed." The state also levies no personal income tax or sales tax.
Europe is figuratively financially burning. In Greece everyday there are demonstrations ranging from 200,000 to two million at any given time. The price of gold in euros hits a new high almost every day. The bankers and leadership in Europe are delusional. They simply refuse to face the reality they have created. The end of QE 2 is a joke. The Fed has not refrained from monetizing Treasury debt, as its balance sheet hit another high on July 6,2011. That was a total of $2.854 trillion, consisting of $1.625 trillion in Treasuries. The total was $600 billion plus $250 billion from reinvested funds. We had estimated more than a year ago participation of $900 billion net. This $850 billion will continue to be invested on a rolling basis. The maturities will dictate participation and how much more funds would have to be added to absorb 80% of Treasury issues and to stimulate the economy. As you can see the Fed has lied again and the crossover to QE 3 has been silent and seamless. There is no limit and as we pointed out long ago, there will be no limit. There cannot be because in the absence of perpetual funding comes collapses. Read more of this story here
A Brief History of the Gold Standard
Thursday, June 16, 2011
by Robert McTeer
Congress established a mint in 1792 and defined the dollar in terms of a specific weight in both gold and silver. This put the new republic on a bimetallic standard, common at the time. Initially, the official ratio of gold to silver at the mint overvalued gold relative to silver, so silver became the de facto standard.
In 1834, the dollar was devalued in terms of gold — from $19.39 per troy ounce to $20.67, shifting the United States to a de facto gold standard. The official gold price remained $20.67 until President Franklin Roosevelt devalued the dollar to $35 an ounce a century later.
us monetary historyPaper Money in a Domestic Gold and Silver Standard. The federal government did not initially issue paper money. Private state-chartered banks issued bank notes that circulated as paper money until the Civil War. In addition, the federally chartered First and Second Banks of the United States issued notes during 1791-1811 and 1816-1836, respectively. Note-issuing banks were expected to redeem their notes on demand in gold or silver at the official prices.
Banks were not required to hold 100 percent of their note and deposit liabilities as gold or silver reserves, but they were expected to hold enough specie reserves to be able to redeem them on demand at the official rates. This “convertibility” requirement was intended to prevent “over-issue” of notes or paper money.
The Return to Gold after the Civil War. During major economic disturbances creating inflation, especially wars, banks often became unable to redeem their notes at par, so they “suspended specie payments” and their notes traded at a discount. This happened early in the Civil War. In addition, for the first time in U.S. history, the government began issuing paper money in the form of U.S. Notes (greenbacks) to finance the Civil War. It also passed a legal tender law requiring people to accept greenbacks at their face value.
The Civil War ended with the market price of gold substantially above the old official price. Instead of returning to gold convertibility at a new price, the country went through severe deflation. The federal government ran budget surpluses and destroyed bank notes flowing into the Treasury as tax payments. The price level fell about 25 percent in 1865-1868. In 1868 the government decided to stop shrinking the money supply and instead let the economy “grow into” the existing money supply. Convertibility at the old parity was finally achieved in 1879, a date that many scholars regard as the beginning of the international gold standard.
Exchange Rates in an International Gold Standard. Two things fixed to the same thing are fixed to each other. Thus:
Two currencies fixed to gold (or silver) at official prices have an implicit official exchange rate. If the official price of an ounce of gold is $20 in the United States and £2 in Britain, the implied exchange rate is $10 per pound or £1/10 per dollar.
International arbitrage will keep the actual exchange rate as close to that price as the cost of shipping gold will allow.
An importer had the option of buying pounds in the foreign exchange market or shipping gold. An exporter had a similar choice in selling pounds. Therefore, no government action was necessary to peg the exchange rate.
Silver Populism. The deflation leading up to the return of gold convertibility was hard on debtors in general and farmers in particular. This contributed to a populist movement of debtors and silver interests demanding a return to a silver standard, which they perceived to be less harsh on debtors than the gold standard.
This populist movement culminated in the election campaign of 1896, made famous by presidential candidate William Jennings Bryan’s “Cross of Gold” speech favoring a silver standard over a gold standard. His speech, which put the crowd into frenzy and won him the Democratic nomination, concluded with: “You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind on a cross of gold.”
After World War I, however, the gold standard was substantially restored. The Federal Reserve Act was passed in 1913, and the issue of paper money was transferred from national banks to the 12 Federal Reserve Banks. The Federal Reserve was expected to operate within the framework and rules of the gold standard.
The Depression, World War II and After. The boom of the 1920s gave way to depression in the 1930s. President Roosevelt devalued the dollar in terms of gold in 1934 by raising its price to $35 per ounce. He also abrogated the gold clause in contracts and prohibited the private ownership of gold, requiring citizens to sell their gold to the government at the new rate. Congress did not restore the ability of private citizens to own gold until 1975.
Following World War II the western nations set up a modified gold standard at a meeting in Bretton Woods, New Hampshire. Other countries pegged their currencies to the dollar and the United States converted dollars to gold for foreign central banks and governments. In the early postwar years, the world was hungry for dollars and there were few demands to redeem dollars for gold.
By the 1960s, however, the world dollar shortage was over and official U.S. gold reserves declined as dollars were redeemed. On a couple of occasions, Congress reduced the gold reserve requirement on outstanding Federal Reserve notes. In 1971 President Nixon took the dollar off the gold standard and announced that the United States would no longer redeem dollars for gold, removing the last vestiges of the gold standard. The dollar was officially a fiat currency.
Robert McTeer is a distinguished fellow with the National Center for Policy Analysis.
The taxing authority of the federal government extends ONLY to any activity over which it has authority to exercise control, and any activity outside that authority is “exempt” from taxation by the federal government.
U S. Supreme Court in McCulloch v. Maryland, 17 U.S. 316 (1819)
The federal government is forbidden by the Constitution to regulate or abridge the exercise of a fundamental right, those rights that are included in the “right to life, liberty and the pursuit of happiness.” Among those fundamental rights are your right to freedom of speech, to worship as you choose and your right to earn a living for yourself and your family through any lawful occupation.
U. S. Supreme Court in Butchers' Union Co. v. Crescent City Co., 111 U.S. 746, 4 S.Ct. 652 (1884); Yick Wo v. Hopkins, 118 U.S. 356 (1886); Truax v. Raich, 239 U.S. 33 (1915); Coppage v. Kansas, 236 U.S. 1; Adams v. Tanner, 244 U.S. 590, 37 S.Ct. 662 (1917); Meyer v. Nebraska, 262 U.S. 390, 43 S.Ct. 625 (1923); and many other cases.
Because the power to tax is the power to destroy (Chief Justice John Marshall in McCulloch v. Maryland, above), and because the federal government does not have the right to restrict, much less destroy, your fundamental rights, the exercise of a fundamental right, such as your freedom of speech, your freedom of religion and your freedom and right to earn a living through any lawful occupation is EXEMPT from taxation by the federal government!
U. S. Supreme Court in Grosjean v. American Press Co., 297 U.S. 233 (1936); and, again, in Murdock v. Pennsylvania, 319 U.S. 105 63 S.Ct. 870 (1943); and, again, in Jones v. Opelika, 316 U.S. 584, 56 S.Ct. 444 (1943); Follett v. McCormick, 321 U.S. 573 64 S.Ct. 717 (1944); and Harper v. Virginia Bd. Of Elections, 383 U.S. 663, 86 S.Ct. 1079 (1966).
The law, as it is written, instructs us to EXCLUDE EXEMPT INCOME (26 CFR § 1.861-8T), so even if part of your personal earnings can be separated as profit “derived from compensation for services”, that exempt income should be excluded from your gross income.
Union of Unemployed Warns of ‘Economic Niagara Falls’
Washington-June 3, 2011
In response to anemic employment figures released today by the Bureau of Labor Statistics, Ur Union of Unemployed warned of dire consequences if immediate and aggressive action is not taken to kick start the pace of employment growth in the United States. “This is a travesty. Nearly one-quarter of America’s most productive asset – its workforce – has been sidelined in this endless recession. And no one in Washington has a clue what to do,” said Ur Union of Unemployed Executive Director Rick Sloan. “Adding only 54,000 jobs in May means but one thing: We are headed for an economic Niagara Falls, and we can no longer ignore the roar of that precipitous drop.
“It’s time to face up to this jobs crisis. This week, both Nobel laureate Paul Krugman and former Labor Secretary Robert Reich endorse the idea of a Works Progress Administration – style jobs program. It may not be the only answer but it’s the quickest way to put millions of Americans back to work, and the only proven way to avoid going over the falls.”
Ur Union of Unemployed, or UCubed, is a community service project of the International Association of Machinists and Aerospace Workers (IAM) designed to assist the millions of unemployed and underemployed Americans, and to provide them with a structure that allows them to take advantage of their growing numbers. For more information, visit Ur Union of Unemployed...BUSINESS WIRE
Fannie and Freddie’s Regulator Opposes Making Mortgage Giants Subject to FOIA
Government-controlled mortgage giants Fannie Mae and Freddie Mac were bailed out by taxpayers, but their regulator opposes making them subject to greater transparency requirements under federal public records laws.
Edward DeMarco, acting director of the companies’ now-regulator, the Federal Housing Finance Agency, told lawmakers last week that Fannie and Freddie “did not cease to be private legal entities when they were placed into conservatorship,” according to MarketWatch. (Read DeMarco’s testimony [PDF].)
His argument? Making the companies subject to the Freedom of Information Act would ultimately cost taxpayers:
The mandates that FHFA as conservator preserve and conserve the property and assets of the Enterprises and minimize losses to the taxpayers, may be undermined by subjecting the Enterprises to FOIA, as they will incur significant operational and compliance costs in establishing and administering a function to respond to such information requests. FOIA requests made to the Enterprises would also lead directly to added legal administrative burdens on FHFA, as conservator.
The FOIA blog, a blog dedicated to news about the Freedom of Information Act, has argued that making the mortgage giants subject to FOIA will save money in the long run but surmised that regulators don’t want the extra scrutiny.
Meanwhile, DeMarco voiced concerns about another proposal that would limit how much taxpayers are on the hook for Fannie and Freddie’s legal expenses.
Fannie and Freddie have spent $160 million and counting on legal fees since the government took them over. That’s money that’s gone to defending the companies and their ex-execs against fraud claims, and as the New York Times reported in January, that sum remained secret until just a few months ago when Fannie, Freddie and the FHFA disclosed it at the request of lawmakers.
DeMarco has defended billing taxpayers for the legal fees, saying that forcing employees to pay their own legal expenses and would make it harder for Fannie and Freddie to attract talent.
As the Associated Press notes, it is common for companies to cover their executives’ legal expenses unless they’re found guilty of wrongdoing. Of course, it’s not common for taxpayers to be paying for it.
Overall, taxpayers have spent more than $160 billion so far bailing out the two mortgage giants.
How much does the Average American Make? Breaking Down the U.S. Household Income Numbers.
How much does the typical American family make? This question is probably one of the most central in figuring out how we can go about fixing our current economic malaise. After all, we don’t hear many people saying in today’s world that they have too much money.
The median household income in the United States is $46,326. Here in California people have a hard time understanding that yes, 50 percent of our population live on $46,000 or less a year. Even today, all the elixirs and remedies being thrown around fail to focus on income and the big brother of income, solid employment. Dual earner households have a higher median income at $67,348.
To highlight the massive discrepancy I’ve put together a chart showing the household income distribution:
How Much Stimulus Funding is Going to Your County?
The result: the most comprehensive publicly available analysis of stimulus spending that we know of. Type in your county or click on your state to find local projects, and check out how per capita spending compares with poverty, income and unemployment in your area.
More than 500 CEOs considered a wide range of criteria, from taxation and regulation to workforce quality and living environment, in our annual ranking of the best states for business. The charts and articles in this special report show how each state fares on the factors most essential for a business-friendly environment—as well as what states are doing to attract and retain companies in the increasingly competitive battle to win site selection.
Banking in darkness – FDIC system insures over $7 trillion in deposits with a dwindling insurance fund. Americans are offered close to zero percent interest rates to stuff their money into this banking vortex.
The American banking system is based on pure faith. Usually when the topic comes up in conversation I will ask someone if they know what backs the green cash in their wallet. One of the common responses is “there is gold in Fort Knox” or another typical response is that it is backed by U.S. assets. Unfortunately both of these answers are incorrect. In fact all of our money deposited in the banking system is backed by the pure faith in our U.S. government. Now for decades this implicit belief was fine because we actually were a creditor and exporter nation. We also had a higher savings rate. Today we have a system where we continually spend more than we produce and expect this dynamic to somehow function long term as if we found an endless well of Kool-Aid. The Federal Deposit Insurance Corporation (FDIC) insures each individual account up to $250,000. Given that one in three Americans has zero dollars to their name and most others have a sum nowhere close to this amount, many go forward with an unstated faith in the system. However the FDIC Deposit Insurance Fund is largely running on fumes. This shouldn’t be such a big issue aside from the fact that the American banking system has over $7 trillion in deposits.
FDIC Fund taking hits
Source: The Tree of Liberty
The interesting thing to note is that bank failures have slowed down yet the FDIC is actually benefitting from the Federal Reserve’s massive quantitative easing adventure. Banks have been allowed to step up to the plate and borrow from the Fed at ridiculously low rates to remedy their own appalling balance sheets. Yet little of this has helped working and middle class Americans. It is also worth mentioning that the banks with the ugliest balance sheets are the too big to fail and we have already been told that they will not fail even if we have to increase the Fed balance sheet to $2.7 trillion in a colorful trail mix of junk loans. These banks have grown over the problematic decade:
Bank of American and JP Morgan Chase each have $2 trillion worth of assets each. Most of the troubled balance sheets are situated in a handful of banks even though collectively the U.S. has over 7,500 banks. The top 10 virtually dominate the $13 trillion in total assets:
Now you have to draw your own conclusions here. The biggest banks with the worst balance sheets have a mandate that they will not fail. What this means is the cost of the bailouts is being supported by the public via low savings rates and also hidden inflation:
Keep in mind the above rate is for larger accounts. Most working and middle class Americans simply have enough in their banking account to pay the monthly bills and maybe fill up their car with low octane $4 a gallon fuel. As food and energy costs rise a larger portion of monthly income is being devoted to these items thanks to the Federal Reserve bailing out these too big to fail banks. This is ultimately the cost of not letting bad banks fail and allowing good banks to grow. The cost indirectly shows up and is spread across the mainland of America.
Even in light of the pathetically low savings rate, many Americans have increased their savings rate because access to debt has been slowed down:
Of course increasing your savings rate from zero makes anything look significant. Two main drivers for the above trend; first, Americans are being pushed to save because access to debt via home equity or credit cards is being shut off and second, many simply do not trust the casino that is known as Wall Street. You know things are bad when big time Vegas gamblers state publicly that they don’t trust Wall Street. This push is being reflected above and the increase has occurred at a time when many of the big banks are simply offering a place similar to your mattress to store your money and a rate of interest that is slightly above zero (also similar to your mattress).
The employment picture and banking implications
The good news is that we have added jobs in the last few months. The bad news is these jobs are reflecting the new world of low wage capitalism. In other words we have lost many good paying higher wage jobs and have replaced them with lower paying jobs. All this is happening while the cost of many items is rising. So you can do the math here; less pay and rising expenses. This calculus is not good for the American worker. If anything it is showing that our economy is adjusting to this new reality where bailed out banks can pay CEOs 800 times the median household income for actually driving our economy into the ground. I think as Americans we rally around innovative companies that produce a good and reward those that provide a service. Yet most of the large payouts are going to Wall Street investment banks that are nothing more than swindlers and snake oil salesmen trying to siphon off economic rents from the productive economy. Reward production and economic growth, not scandalous cronies that exist only because they have mastered the art of graft.
The clearest picture of this new economic divide shows up in the average per capita income:
Source: Social Security Administration
I find it amazing that few realize that half of all workers make on average $25,000 a year or less. That is, one out of two working Americans makes the equivalent of one Ford car per year (or half a year of tuition at a private university). There is something seriously awry with our banking system because it does not support the greater good of our economy. As things stand we will live in a casino like environment were massive bubbles will appear in random sectors like housing, technology, energy, commodities, and higher education simply because we allow this symbiotic relationship between Wall Street and our government to persist. The real scandal is happening there and this is what will bring the end to the middle class.
So what do we need to do? What needs to be called for is the splitting up between Wall Street investment banking and regular deposit institutions. How is it possible that we have a FDIC with nearly no money in their insurance fund backing up $7 trillion in deposits? Not only is that hard to believe but these banks have over $13 trillion in assets while massively speculating in global stock markets. If these institutions want to gamble with their own money so be it but expect them to fail. Working and middle class Americans need to rally around the nucleus of the problem and demand real substantive change. The Federal Reserve cannot balloon its balance sheet to $2.7 trillion and impact our money supply without allowing for a deep and thorough audit. If change does not occur we are going to end up with a Wal-Mart and McJob economy with people moonlighting at questionable for profit institutions that teach you a hard lesson in student loan debt all the while banks count their profits after booting out millions of Americans via foreclosure thanks to taxpayer bailouts. With this kind of system you might as well bank with the lights out.
29 Absolutely Crazy Statistics About The Housing Crisis
numbers to think about, the following are 29 absolutely crazy statistics about the housing crisis that show just how nightmarish the U.S. housing market is right now....
#1 During the first three months of this year, less new homes were sold in the U.S. than in any three month period ever recorded.
#2 Home prices just keep falling month after month. The Standard & Poor's/Case-Shiller 20-city index has fallen for seven months in a row.
#9 According to a recent census report, 13% of all homes in the United States are sitting empty.
#10 According to the U.S. Census Bureau, 18 percent of all homes in the state of Florida are sitting vacant. That number is 63 percent larger than it was just ten years ago.
#14 California had more foreclosure filings that any other U.S. state during 2010. The 546,669 total foreclosure filings during the year means that over 4 percent of all the housing units in the state of California received a foreclosure filing at some point during 2010.
#15 Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.
#16 Approximately 26 percent of all renters in the United States spend more than half their pre-tax income on rent.
#17 It is estimated that 49 percent of all American renters are paying out more in rent than they can afford.
#18 In 1996, 89 percent of Americans believed that it was better to own a home than to rent one. Today that number has fallen to 63 percent.
#1972 percent of the major metropolitan areas in the United States had more foreclosures in 2010 than they did in 2009.
#20 Two years ago, the average U.S. homeowner that was being foreclosed upon had not made a mortgage payment in 11 months. Today, the average U.S. homeowner that is being foreclosed upon has not made a mortgage payment in 17 months.
#21 In September 2008, 33 percent of Americans knew someone who had been foreclosed upon or who was facing the threat of foreclosure. Today that number has risen to 48 percent.
#22 During the month of January, it was estimated that there were 1.8 million distressed homes in the United States that had yet to be listed for sale. Many analysts believe that this "shadow inventory" will extend the housing crisis for several more years.
#23 In February, U.S. housing starts experienced their largest decline in 27 years.
#24 Now home sales in the United States are now down 80% from the peak in July 2005.
#25 Bank repossessions and short sales now make up approximately 30 percent of all home sales in the United States.
#26 As of the end of 2010, new home sales in the United States had declined for five straight years, and they are expected to be lower once again in 2011.
#2731 percent of the homeowners that responded to a recent Rasmussen Reports survey indicated that they are "underwater" on their mortgages.
#28 Deutsche Bank is projecting that 48 percent of all U.S. mortgages could have negative equity by the end of 2011.
#29 According to the Mortgage Bankers Association, at least 8 million Americans are currently at least one month behind on their mortgage payments.
"And--if that's NOT the case-- then where did the banks come up with $600 billion in US Treasuries that they just sold to the Fed? After all, in testimony before the Financial Crisis Inquiry Commission (FCIC), Bernanke admitted that 12 of the 13 biggest banks in the country were underwater after Lehman Brothers defaulted. If that's true, then where did they get the $600 billion in Treasuries?"
It's not a question of whether the Fed has been abusing its power. It's just a matter of "how much"
The IRS has more employees than there are people in Flint, Michigan (106K vs 102K
Thanks to big loopholes, GE paid no taxes on U.S. operating income of $5.1 billion. Actually, they claimed a $3.2 billion tax benefit
Government Cash Handouts Now Top Tax Revenues
By Elizabeth MacDonald
U.S. households are now getting more in cash handouts from the government than they are paying in taxes for the first time since the Great Depression.
Households received $2.3 trillion in some kind of government support in 2010. That includes expanded unemployment benefits, as well as payments for Social Security, Medicare, Medicaid, and stimulus spending, among other things.
Also, an estimated 59% of the 308.7 million Americans in this country get at least one federal benefit, according to the Census Bureau, based on 2009 data. An estimated 46.5 million get Social Security; 42.6 million get Medicare; 42.4 million get Medicaid; 36.1 million get food stamps; 12.4 million get housing subsidies; and 3.2 million get Veterans' benefits.
Truth is, we’ve all been had. We’re right smack in the middle of the greatest scam in History and you and I are paying the price for it. What’s worse, and possible the most hurtful, is that the work our founding fathers did, along with the lives lost defending it, is being trampled on and used for the benefit of thieves.
Incorrect Statue of Liberty on $880 million worth of stamps
Lady Liberty is doomed to be a Vegas showgirl, the Postal Service conceded yesterday.
With more than 2 billion stamps already printed featuring the cheap Sin City statue knockoff instead of the one that greeted millions of immigrants to New York Harbor, it’s probably too late to undo the damage, officials said.
To put this philatelic foul-up in perspective, the average press run of a stamp is just 40 million, according to USPS spokesman Roy Betts.
“This was a very significant press run,” Betts said. The mix-up, which was caused by a photo agency’s failure to properly identify the image, was spotted by magnifying-glass-eyed stamp nuts.
Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?
Christy is the wife of John Mack, the chairman of Morgan Stanley. Susan is the widow of Peter Karches
America has two national budgets, one official, one unofficial. The official budget is public record and hotly debated: Money comes in as taxes and goes out as jet fighters, DEA agents, wheat subsidies and Medicare, plus pensions and bennies for that great untamed socialist menace called a unionized public-sector workforce that Republicans are always complaining about. According to popular legend, we're broke and in so much debt that 40 years from now our granddaughters will still be hooking on weekends to pay the medical bills of this year's retirees from the IRS, the SEC and the Department of Energy...READ HERE
(Reuters) - The United States will hit the legal limit on its ability to borrow no later than May 16, Treasury Secretary Timothy Geithner said on Monday, ramping up pressure on Congress to act to avoid a debt default.
"The longer Congress fails to act, the more we risk that investors here and around the world will lose confidence in our ability to meet our commitments and our obligations," Geithner said in a letter to congressional leaders.
"Default by the United States is unthinkable."
Previously, the Treasury had forecast that the $14.3 trillion statutory debt limit would be reached between April 15 and May 31. As of Friday, Treasury borrowing stood just $95 billion from the ceiling.
Some Republican lawmakers have sought to use the need to raise the debt limit as a lever to pressure the Obama administration into agreeing on large-scale budget cuts.
The debt-limit showdown comes as Congress struggles to complete a spending package that would keep the government operating beyond Friday.
Republicans are seeking to use that bill to enact deep spending cuts and lawmakers are focusing on a proposal to trim this year's budget by $33 billion, a relatively small amount compared with a projected $1.4 trillion deficit.
Geithner said a failure to raise the debt ceiling in a timely way would push interest rates higher and spark "a financial crisis potentially more severe than the crisis from which we are only starting to recover."
Both Geithner and Federal Reserve Chairman Ben Bernanke have said a failure to raise the ceiling could have "catastrophic consequences."
BUYING TIME
As the government nears the debt ceiling, the Treasury has authority to take certain extraordinary measures to postpone the date the United States would default on its obligations.
However, those actions would be exhausted after about eight weeks and there would be "no headroom" to borrow after July 8, Geithner said.
Some lawmakers have called for legislation to force the Treasury to first pay interest on U.S. bonds before other obligations, such as unemployment benefits and Social Security and Medicare payments, as a way to stave off a debt default.
They have also asked Treasury whether financial assets such as the country's gold reserves or the government's portfolio of student loans could be sold to avoid raising the debt ceiling.
Treasury has rejected the proposals as unworkable.
"To attempt a fire sale of financial assets in an effort to buy time for Congress to act would be damaging to financial markets and the economy and would undermine confidence in the United States," Geithner said.
Based on estimates last year from the International Monetary Fund, U.S. debt as measured against the size of the economy is higher than in France, Canada and Germany, but less than in Italy and Japan
Geithner said that while the debt ceiling projections could change, the Obama administration does not believe they could change in a way that would give Congress more time to raise the debt ceiling. He said Treasury would provide updated projections in early May.
Monthly Statement of the Public Debt (MSPD) and Downloadable Files
The downloadable files include the Summary page, the STRIPS information, and the Monthly Statement of the Public Debt (MSPD) in its entirety. Data is available on the fourth business day of each month.
Select the time period below. For the years 1953-1996 only the MSPD in its entirety is available in PDF format.
Note: To read or print a PDF document, you need the Adobe Acrobat Reader (v5.0 or higher) software installed on your computer. You can download the Adobe Acrobat Reader from the Adobe Website.
Some of the files are large and may take a few minutes to load.
With gold prices getting ready to soar, we've decided to find out who owns the most bullion in the world.
It's no surprise that governments, central banks, and investment funds are world's largest holders of gold reserves. These organizations know gold is the ultimate store of value that protects against inflation and offers a safe haven during times of economic and geopolitical turmoil.
To find out who owns the most gold in the world, we referred to data from the International Monetary Fund's International Financial Statistics Report.
The 10 biggest gold owners in the world:
Rank
Owner
Tonnes
Share of Foreign Reserves
10
Netherlands
612.5
61.4%
The Netherland central bank, De Nederlandsche Bank, oversees the Dutch national finances, including the country's 612.5 tonnes of gold reserves. The Dutch gold is currently worth over $20 billion and accounts for 61.4% of the country's foreign reserves.
Rank
Owner
Tonnes
Share of Foreign Reserves
9
Japan
765.2
2.1%
Although Japan is ninth largest gold owner in the world, its 765.2 tonnes of gold accounts for just 2.1% of the nation's total foreign reserves. On the open market, Japan's gold reserves would fetch approximately $25.4 billion and are managed by the Bank of Japan.
Rank
Owner
Tonnes
Share of Foreign Reserves
8
Switzerland
1040.1
37.1%
Conducting Switzerland's monetary policy is the Swiss National Bank, which oversees the country's 1,040.1 tonnes of gold. The gold is believed to be stored in huge underground vaults near the federal Parliament building in Berne, but the Swiss National Bank treats the location of the gold reserves as a secret. With the world's eighth largest reserve of the yellow metal, Switzerland's stockpile would fetch approximately $34.5 billion in today's gold market, accounting for 37.1% of the country's foreign reserves.
Rank
Owner
Tonnes
Share of Foreign Reserves
7
China
1054.0
1.8
The world's most populous country also has the world's seventh largest gold reserve. With a population of 1.33 billion, the country holds about $26 worth of gold per person, worth a total of almost $35 billion. The Chinese gold accounts for only 1.8% of the nation's total foreign reserves.
Rank
Owner
Tonnes
Share of Foreign Reserves
6
SPDR Gold Shares ETF
1,120.6
n/a
Originally listed on the New York Stock Exchange in 2004, SPDR Gold Shares has been one of the fastest growing ETFs in the world. SPDR Gold Shares now trade on the Singapore Stock Exchange as well as the Tokyo Stock Exchange. All of the Trust’s gold is held by the Custodian, HSBC Bank, in their London vault except when the gold has been allocated in the vault of a sub-custodian.
Rank
Owner
Tonnes
Share of Foreign Reserves
5
France
2,450.7
72.6%
The Banque De France is responsible for France's gold holdings, which have been reported at about 2,450.7 tonnes by the International Monetary Fund. With the fifth largest gold reserve in the world, France's amount to about $81.3 billion, accounting for 72.6% percent of the country's foreign reserves, which is the second highest percentage of gold in foreign reserves on our top ten list.
Rank
Owner
Tonnes
Share of Foreign Reserves
4
Italy
2,451.8
66.5%
The Italian National Bank, Banca D'Italia, manages the country's large gold holdings, which account for 66.5% of its foreign reserves. With approximately 2,451.8 tonnes of gold in reserve, Italy's holdings are very close to France's and are also worth approximately $81.3 billion at current prices.
Rank
Owner
Tonnes
Share of Foreign Reserves
3
International Monetary Fund
3,217.3
n/a
The International Monetary Fund oversees the global financial system by following the macroeconomic policies of its member countries 185 member countries. It is an organization formed to stabilize international exchange rates and facilitate development and offers highly leveraged loans mainly to poorer countries. The IMF's gold policies have changed in the last quarter century, but the reserves remain in place for use in stabilizing international markets and aiding national economies. The IMF's official policy on gold as it is stated on the organization's website is governed by the following principles:
As an undervalued asset held by the IMF, gold provides fundamental strength to its balance sheet. Any mobilization of IMF gold should avoid weakening its overall financial position.
The IMF should continue to hold a relatively large amount of gold among its assets, not only for prudential reasons, but also to meet unforeseen contingencies.
The IMF has a systemic responsibility to avoid causing disruptions to the functioning of the gold market.
Profits from any gold sales should be used whenever feasible to create an investment fund, of which only the income should be used.
Rank
Owner
Tonnes
Share of Foreign Reserves
2
Germany
3,412.6
69.5%
The Deutsche Bundesbank, Germany's central bank, is the most influential member of the European System of Central Banks. With a hefty 3,412.6 tonnes of gold reserves, which are valued at about $113.2 billion at current prices, Germany's gold accounts for almost 70% of the country's total foreign reserves.
Rank
Owner
Tonnes
Share of Foreign Reserves
1
United States
8,133.5
78.3%
The United States holds the largest gold reserve in the world. With 8,133.5 tonnes, the US gold holdings are worth approximately $269.67 billion. This massive gold reserve represents about .9436 an ounce for ever person living in the country. The majority of the American gold is reported to be held in the world famous United States Bullion Depository in Fort Knox, Kentucky, although there is some controversy that suggests otherwise. The remainder of the US reserves are held at the Philadelphia Mint, the Denver Mint, the West Point Bullion Depository and the San Francisco Assay Office.
The top ten largest owners of gold in the world are reported to control a total of 24,258.3 tonnes, or over 855 million ounces. At current spot prices, this gold would be worth approximately $804.35 billion and represents about 15.4% of all the gold ever mined.
In a secular world, the operative "Golden Rule" is "He Who Has the Gold Makes the Rules". The condition of the global financial banking system is untenable. The aggregate amount of debt worldwide is anyone’s guess. The introduction of derivatives and counter claims pushes the chain of obligations into the unknown. All that is left is for central banks to create mountains of uninterrupted counterfeit money to roll over and delay the inevitable. The IMF chart of World Currency Reserve is a skyrocket line to oblivion. It does not reflect a healthy stockpile of treasure, but certainly manifests a new debt machine running to infinity. The Bullion Vault explains this reality in the following manner.
"Sure, the Fed can create money. But it can't create credit (from the Latin credere, "to trust, have faith"). And it sure as hell can't let America's outstanding debts – both private and public – simply get written off now, neither at home nor abroad. Not after all that crashing and banging in ER from 2007-09.
So never mind the record-large cash pile sitting at non-financial corporates. Never mind that their problem is too much debt, not the $1.8 trillion in cash they've already got. Never mind the 50-fold growth since 2007 to $1 trillion in US banks' cash holdings either. Again, debt is their problem – not a lack of money – but it doesn't matter. New money is the only fix Dr. Ben now has to hand (he's all out of interest-rate cuts). So those foreign reserves, US corporates and domestic banks already drowning in money will get flooded with more".
Back in 1966 Alan Greenspan wrote in The Objectivist, Gold and Economic Freedom.
"Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets".
Since the gold standard was abandoned worldwide, the banksters have run wild. So who owns all the gold? Part of the answer is that the official sector holds much less, than one might think.
Wealth Daily concurs with the Dollar Daze list of largest holders of bullion - United States, Germany, International Monetary Fund, Italy, France, SPDR Gold Shares, China, Switzerland, Japan and Netherland, rank as the top ten.
"Central banks and multinational organizations (such as the International Monetary Fund) currently hold just under one-fifth of global above-ground stocks of gold as reserve assets (amounting to around 30,500 tonnes, dispersed across 110 organisations). On average, governments hold around 10% of their official reserves as gold, although the proportion varies country-by-country".
Total value in U.S. Dollars = 7 Trillion, 581 Billion, 608 Million, 876 Thousand and 688 Hundred Dollars of all gold worldwide.
Since the US Mint reports that Fort Knox stores 147.3 million troy ounces, current redemption in U.S. Federal reserve notes would be approximately $366,261,298,432. That is a drop in the bucket against the outstanding Federal obligations, which exceed world GDP. Then there is the question of exactly how much gold remains in government hands or if the bullion is actually good delivery gold. View the video there is no Gold at Fort Knox for an alarming report. Have you ever wondered why the Federal Reserve and their co-conspirer central banks for decades waged a war against gold? The Paper Empire sums up quite nicely.
"The Federal Reserve is arguably the most powerful institution in the world as it maintains the sole legal right to counterfeit the world’s reserve currency without limit and without oversight. This allows them to bail out the too big to fail banks, manipulate currencies, support foreign central banks and corporations and allow near endless government spending above and beyond what the government can pay for through direct taxation. A true, enforceable gold standard would put an immediate end to all of that".
Now examine the seamy history of IMF gold sales. The next video, The IMF sold Gold plated tungsten bars to India, illustrates why the international banking system needs to be eliminated. The Gold-plated tungsten bars scandal is about to erupt. Imagine the chaos among banking circles when governments become aware of a bait and switch delivery fraud.
If all the gold in the world has a current value of less than eight trillion dollars, how much could be bought by the Forbes 2011 Billionaires List, which breaks two records: total number of listees (1,210) and combined wealth ($4.5 trillion). How much do they already own?
What is never disclosed in official statistics of wealth ownership are the names of the true underworld bosses of the global controllers. The shadow manipulators conceal the extent of their money hordes. Most public lists painstakingly omit the master criminals. Their plan is to buy real assets with counterfeit notes obtained through illicit profits from rigged markets and phony financial derivative instruments.
When the banking system finally collapses with mathematical certitude from the burden of compound interest, these same crooks will be prepared to provide a specious substitute. The schemes described in IMF Plotting Gold-Backed SDRs?, make the following point.
"The IMF is about as likely to help individual European countries subvert the euro via gold as it is to encourage debtor countries not to honor banking their debts. The IMF is a creature of the power elite, and it will always remain so, in our opinion. But none of this militates against the idea of the IMF backing its OWN currency (SDRs) with gold".
A most revealing fact is that central banks and governments do not possess the bulk of gold supplies. The World Gold Council publishes an astounding pie chart, 83% of above ground stocks are in the hands of industry, investment and jewelry concerns. This overwhelming percentage points to an alternative to the fiat paper debt created banking tyranny.
Only individual ownership of gold, directly in your own possession can preserve any store of value when the next Draconian level of the Totalitarian Collectivism system is imposed after the financial meltdown hits in earnest.
"When individuals acquire gold in mass, politicians will be forced to address the public debt, and the true extent of the unconscionable confiscatory taxation condition that we all suffer. Limited government can be achieved, but must be based upon a currency that has gold convertibility. There lies the answer, keep enough gold to insist that real money will replace phony Fed notes. Nothing less will restore a store of value or a nation of free citizens".
Remember that tyrannical regimes are always arbitrary. Executive Order 6102 was signed on April 5, 1933, by U.S. President Franklin D. Roosevelt "forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates" by U.S. citizens. This kind of blatant violation of the U.S. Constitution is routine. Citizen ownership of gold could very well become illegal again. However, if it is, you will already know you are a pawn in a fascist state.
The risk banning gold ownership and government confiscation is always real for individuals. However, the prospects of rounding up gold bullion as contraband from banking institutions or the chosen and privileged financial elite, would require a coup d'�tat. The establishment will sacrifice hundreds of millions of expendable serfs, before it relinquishes the reins of superiority over the humble taxpayer.
An underground barter economy will thrive, while it is condemned as a black market. Any attempt to substitute new money with a gold component, must allow for unlimited convertibility for it to be a legitimate monetary system. As long as the same globalists retain political rule, you can bank on the scheme proposed to be another sophisticated attempt to rob and enslave you, all over again.
Douglas Herman offers up four possible scenarios, the best of which requires an old currency recall, and replacement with new species money. The other theories feed into the control matrix of the globalists to implement even greater despotic methods of servitude. Intentional civil unrest provides opportunistic excuses to herd the cattle into the pens of slaughter. Just owning private gold will not protect citizens adequately, until the gold hordes of the elite are stripped from their control.
The decisive test remains the same, who has the bullion makes the rules, with one caveat. If you are so foolish to accept the next new-fangled money hoax from the same banksters who brought you their planned global collapse, you deserve to be a slave. Business wealth creators need to lead the charge to abolish the phony debt created money monopoly. Financial Armageddon lays at the feet of humanity. Gold alone will not save you, but it will allow the means for rebuilding a society free of banksters’ tyranny, only, if you have the courage to remove their ilk from all seats of power and government.
Ben Bernanke, testifying before the Senate Committee on Banking yesterday, was asked about a possible return to a gold standard – his disingenuous reply was that there isn’t enough gold in the world to cover the US money supply.
This really has to be one of the most pernicious fallacies that haunts the entire discussion of money*. The truth is there is always enough gold, it is simply a matter of price. Of course the dollar denominated price of an ounce of gold would be many multiples of the current price, but that just serves to demonstrate that gold is still significantly undervalued at the current levels. Creating a gold standard for the Dollar is simply a matter of dividing the total weight of gold that provides the backing, by the money supply to be backed. Each dollar is redeemable for a fixed weight of gold. The price does not matter. What matters is that new dollars cannot be created out of thin air without adding a proportional weight of gold to the reserves.** This is why Bernanke does not want a gold standard and perpetuates simple myths about money.
The Federal Reserve is arguably the most powerful institution in the world as it maintains the sole legal right to counterfeit the world’s reserve currency without limit and without oversight. This allows them to bail out the too big to fail banks, manipulate currencies, support foreign central banks and corporations and allow near endless government spending above and beyond what the government can pay for through direct taxation. A true, enforceable gold standard would put an immediate end to all of that. Responsible people who live within their means and save would not have the efforts of their labor stolen through inflation. These are all positive outcomes. So the problem isn’t that there is too little gold in the world but rather too little discipline and honesty in Washington DC.
*The close cousin of which is the fallacy that the money supply must continually be increased to match expanding production.
**In reality fractional reserve banking is not compatible with a true fixed gold standard. True monetary reform and discipline would require a full reserve banking model – another massive limitation on the power and profits of bankers.
Behind Administration Spin: Bailout Still $123 Billion in the Red
The administration has been on a PR offensive [1] in recent months to tell the good news about the TARP. As the Treasury Department official in charge of the TARP is saying at a congressional hearing this morning [2], the bailout won't cost anywhere near the full $700 billion Congress authorized. In fact, many of its investments have turned a profit, and some of its most infamous bailouts -- such as the rescue of AIG -- won't end up being the tax dollar black holes [3] they once seemed sure to be.
Add that to the bailout of Fannie Mae and Freddie Mac -- which our site also tracks and is separate from the TARP -- and taxpayers are $257 billion in the hole [5].
Although the bailout has extended to nearly a thousand institutions, just a few are primarily responsible for the continued deficit: Fannie and Freddie [6], of course, AIG [7], and the auto companies (GM [8], Chrysler [9], GMAC [10]).
Fed Reserve official "America is approaching insolvency".
"The Congressional Budget Office (CBO) says that President Barack Obama’s 2012 budget will cause large and persistent yearly deficits that will push the public debt to $20.8 trillion by 2021.
“Federal debt held by the public would double under the President’s budget, growing from $10.4 trillion (69 percent of GDP) at the end of 2011 to $20.8 trillion (87 percent of GDP) at the end of 2021,” the CBO said in its March 18 analysis of Obama’s 2012 budget."
This is what ObamaCare will bring us. This is what his regulations and fees will bring us. This is what happens when you give Brazil $3 billion to drill of oil off their shores and not allow Americans to drill off our shores.
This does not include the tens of trillions of dollars of unfunded liabilities. Oh, in two weeks we would have spent more money on the Libyan War then the GOP cut in spending--in two weeks we will be behind the curve again.
Obama has sent us over the edge. As the Fed Reserve official said yesterday, "America is approaching insolvency".
Does the White House care or is this what they want?
So How Much is This New War Conflict Costing?
Ever wonder how much a Tomahawk missile costs? How about 110 of them? And what effect will those prices have on GOP attemps to trim the budget? Those are the questions that many are asking as American involves itself in yet another international conflict. And the answers aren’t too settling.
Originally, as The Hill reports, Republicans were on a roll this month, steadily trumpeting budget cuts to the tune of more than $285 million a day since the beginning of March. But that could all be for naught as the president thrusts the nation into an open-ended military mission.
Take the cost of the approximately 110 Tomahawk missiles launched on the first day of operation. The Center for a New American Security (CNAS), a Washington think tank, estimates the Pentagon likely spent more than $81 million on those, says The Hill. National Journal puts the cost for those missiles higher at between $112 million to $168 million.
National Journal goes on to detail other costs, including some of those associated with the marathon B-2 bombing run we reported on yesterday:
Meanwhile, it generally costs $10,000 per hour, including maintenance and fuel, to operate F-15s and F-16s. Those costs do not include the payloads dropped from the aircraft. The B-2s dropped 45 Joint Direct Attack Munitions, or JDAMS, which are 2,000-pound bombs that cost between $30,000 and $40,000 apiece to replace.
On the personnel front, special pay for soldiers involved in the operation will kick in immediately — unlike the munitions costs, which the Pentagon can defer.
Another think tank, the Center for Strategic and Budgetary Assessments (CSBA), said in a report released earlier this month that a no-fly zone covering just the northern portion of Libya will cost between $30 million and $100 million per week. It also said there are one-time bills that could cost between $400 million and $800 million.
As a result, one former budget official told The Hill that Congress can expect to see a supplemental spending bill for Libya.
“Yeah, sure it will come,” Gordon Adams, who oversaw defense budgeting at the Office of Management and Budget (OMB) during the Clinton years, said. “Any opportunity to raise money inside the Department of Defense will be seized.”
He went as far as to say costs for the Libyan no-fly zone “could get to $1 [billion] or $1.5 billion, if it goes on for a year.”
Kenneth Baer, a spokesman for OMB, told National Journal that there are currently no plans to request such supplemental funding. He didn’t rule out, however, such requests in the future.
“The operation in Libya is being funded with existing resources at this point,” he said. “We are not planning to request a supplemental at this time.”
So far, the Pentagon has not released official cost estimates for the new conflict, which will depend on the length and scope of the mission.
“We are working on cost estimates,” Pentagon spokeswoman Cheryl Irwin told The Hill in a Monday e-mail. For now, department officials are “cash flowing the Libyan operations out of funding available under the [2011] continuing resolution.”
Still, that doesn’t allay the fears of Sen. Richard Luger (R-IN). “Congress has been squabbling for months over a budget to run the federal government for a fiscal year that is almost half over,” he said in a statement.
“We argue over where to cut $100 million here and there from programs many people like,” Lugar said. “So here comes an open-ended military action with no-end game envisioned.”
So wanting to cut $100 billion, as was promised by the GOP Pledge, is now likened to wanting to "cut anything that moves?" Let's put those cuts in perspective for people like Rep. LaTourette. From Bob Williams of State Budget Solutions:
If every penny represents a billion dollars...
1. You would need a pile of 14,200 pennies ($14.2 trillion) to represent the Federal debt as of March 10.
2. Add to the pile 1,600 pennies to represent this year's $1.6 trillion projected deficit. The total in pile would be 15,800 pennies.
Now let's look at the proposals...
1. Senate Democrats' proposal would remove 5 pennies from the pile. Senate Democrats hope to cut $4.7 billion (15.795 pennies would remain).
2. Add the pennies back to the pile and show the White House proposal that would remove 6 and 1/2 pennies from the pile. White House proposed $6.5 billon cut (15,796 pennies would remain).
3. Add the pennies back to the pile and show the House Republicans proposal that would remove 61 pennies from the pile (15,739 pennies remain). House Republicans hope to cut $61 billion.
As you can see, even the House Republican proposal merely kicks the can down the road and doesn't address the depth of the problem facing our country. Though it is not yet fiscal 2012, if the House Republican proposal passes, we will have an additional $1.5 trillion problem to deal with as the FY 2012 budget develops.
So... we're supposed to be impressed with $6 billion?
The recent events in Japan are showing us that a nation living so close to the fiscal edge cannot afford an unexpected disaster to occur [6]. We are drowning in so much red ink that one unexpected, unpreventable, uncontrollable event could bring our house of cards right down on top of us.
Global systemic crisis: Second half of 2011 – Get ready for the meltdown of the US Treasury Bond market
Beyond its tragic human consequences (1), the terrible disaster that has just hit Japan weakens the shaky US Treasury Bond market a little more. In the GEAB No. 52, our team had already explained how the sequence of Arab revolutions, this fall of the “petro-dollar” wall (2), would translate during 2011 into the cessation of the massive purchases of US Treasury Bonds by the Gulf States. In this issue, we anticipate that the sudden shock experienced by the Japanese economy will lead not only to the halt in US T-Bond purchases by Japan, but it will force the authorities in Tokyo to make substantial sales of a significant portion of their US Treasury Bond reserves to finance the enormous cost of stabilization, reconstruction and revival of the Japanese economy (3).
With Japan and the Gulf States alone accounting for 25% of the total 4.4 trillion USD of US federal debt (December 2010), LEAP/E2020 believes that this new situation which is asserting itself during the first quarter of 2011, against a background of China’s increasing reluctance (holding 20% of US Treasury Bonds) to continue to invest in US government debt (4), carries the seeds for the collapse of the US Treasury Bond market in the second half of 2011, a market that now has only a single buyer: the US Federal Reserve (5).
It is certain that the context of the crisis of US local authority securities (Munis) and European government debt (the entire periphery of the EU, including the United Kingdom) that our team anticipated for this timeframe (see GEAB N°50 ), will only exacerbate the event. Moreover, it is highly significant that PIMCO the world’s largest bond fund manager decided, at the end of February 2011, to liquidate its US Treasury Bond holdings. And that was before the disaster in Japan (6)!
Most Americans, if they know anything at all about the Federal Reserve, believe it is an agency of the United States Government. This article charts the true nature of the "National Bank."
A special index created by the Labor Department to measure the actual cost of living for Americans hit a record high in February, according to data released Thursday, surpassing the old high in July 2008. The Chained Consumer Price Index, released along with the more widely-watched CPI, increased 0.5 percent to 127.4, from 126.8 in January. In July 2008, just as the housing crisis was tightening its group, the Chained Consumer Price Index hit its previous record of 126.9.
“This speaks to the need for the Fed to include food and energy when they look at inflation rather than regard them as transient costs,” said Stephen Weiss of Short Hills Capital. “Perhaps the best way to look at this is to calculate a moving average over a certain period of time in order to smooth out the peaks and valleys.”
“As the cost of living increases, we are headed toward a bigger problem with the slowing of housing permits,” said JJ Kinahan, chief derivatives strategist at thinkorswim, a division of TD Ameritrade. “As the staples start to cost more, this could lead to a quick slowdown in the auto and technology sectors as an iPad is an easy thing to pass on if you are paying more for your gas and food and need to cut back somewhere.”
Still, states will be cutting back services drastically this year at the very same time they are raising taxes in order to close enormous budget deficits and avoid a muni-bond defaults crisis. So while it may be the missing link to a perfect cost of living measure, one can assume that Americans will be paying more for unquantifiable services such as police enforcement and education, but getting them at a lesser quality.
Bottom line: The cost of living for Americans is now above where it was when housing prices were in a bubble, stock prices at a record, unemployment low and consumer confidence was soaring. Something has gotta give.
Iran's Minister of Economic Affairs and Finance Shamseddin Hosseini has announced the planned establishment of a joint Iran-Syria bank.
The bank, named al-Aman, will have a branch inside Iran and work without restrictions, Hosseini said.
He made the remarks in a meeting with Syrian Economy and Trade Minister Lamia Assi in Tehran on Tuesday, Mehr News Agency reported.
Describing the meeting as an occasion to boost ties between the two states, the Iranian minister said the 13th joint commission between Tehran and Damascus will be held soon.
According to an agreement by the joint commission, the joint bank committee would be launched within three months, Hosseini said.
The Iranian official also noted that the building of the bank in Syria has been purchased.
Iran signed a draft agreement on free trade with Syria in August last year in a move to boost the Islamic Republic's economy.
The 23-article document applied to a wide variety of commodities in the fields of industry and agriculture, and is applicable to any product as long as 50 percent of it is produced in either country.
Under the agreement, all existing tariffs would be reduced to four percent within a five-year period, Iranian officials said.
WASHINGTON (AFP) – China's holdings of US bonds reached $1.16 trillion at the end of December, almost $270 billion more than previously estimated, new data showed Monday.
Beijing, which has converted much of a huge trade surplus with the United States over the past two decades into buying up US treasuries and other securities, held 26.1 percent of the total of $4.44 trillion held by foreigners, the Treasury said.
The figures came as the US government recalculated its data on foreign holdings of US securities from June 2010.
Chinese-held Treasuries have fallen since hitting a high of $1.18 trillion in October, under the revised figures. Japan remained by far the second largest holder of US government debt, with $882 billion in December, around $1.3 billion less than original estimates.
Britain was third at $272.1 billion
Economists list U.S. budget deficit as No. 1 worry
(Reuters) - The massive U.S. budget deficit is the gravest threat facing the economy, topping high unemployment and the risk of inflation or deflation, according to a survey of forecasters released on Monday.
The National Association for Business Economics said its 47-member panel of forecasters increased its estimate for the 2011 federal deficit to $1.4 trillion from $1.1 trillion in its previous survey in November.
"Panelists continue to characterize excessive federal indebtedness as their single greatest concern," with state and local government debt the second-biggest worry, the survey said. It was conducted between January 25 and February 9.
The panel's deficit forecast is lower than the Obama administration projection of a record $1.65 trillion this fiscal year, or 10.9 percent of U.S. gross domestic product.
Although the White House budget proposes $1.1 trillion in deficit reductions over 10 years, Republicans in the House of Representatives say that is not enough.
Republicans are pressuring the administration to reduce spending by $61 billion by September, and the dispute threatens to shut down the government if Democrats and the White House refuse to go along.
NABE panelists tweaked their previous stance on the Federal Reserve's decision to pump more money into the economy by buying government bonds.
Most panelists now view the Fed's decision to buy an additional $600 billion in longer-term Treasury securities as having either somewhat diminished the risk of deflation or having had no impact on inflation whatsoever.
November's survey showed economists worried that the bond purchases could stoke inflation.
Panelists forecast core inflation, which excludes volatile food and energy prices, to rise gradually from 0.8 percent in the final quarter of last year to 1.2 percent in 2011.
GDP growth for 2011 is expected to advance 3.3 percent year over year, up from the panel's previous estimate of 2.6 percent, the survey said.
"Factors supporting growth going forward include pent-up consumer and business demand, strong growth in foreign economies, especially those in Asia, and accommodative monetary policy," NABE President Richard Wobbekind said in a statement.
"Factors restraining growth include financial headwinds, uncertainty about future federal government economic policies, a tepid housing market and sustained high unemployment," he said.
20 Shocking New Economic Records That Were Set In 2010
2010 was quite a year, wasn't it? 2010 will be remembered for a lot of things, but for those living in the United States, one of the main things that last year will be remembered for is economic decline. The number of foreclosure filings set a new record, the number of home repossessions set a new record, the number of bankruptcies went up again, the number of Americans that became so discouraged that they simply quit looking for work reached a new all-time high and the number of Americans on food stamps kept setting a brand new record every single month. Meanwhile, U.S. government debt reached record highs, state government debt reached record highs and local government debt reached record highs. What a mess! In fact, even many of the "good" economic records that were set during 2010 were indications of underlying economic weakness. For example, the price of gold set an all-time record during 2010, but one of the primary reasons for the increase in the price of gold was that the U.S. dollar was rapidly losing value. Most Americans had been hoping that 2010 would be the beginning of better times, but unfortunately economic conditions just kept getting worse.
So will things improve in 2011? That would be nice, but at this point there are not a whole lot of reasons to be optimistic about the economy. The truth is that we are trapped in a period of long-term economic decline and we are now paying the price for decades of horrible decisions.
Amazingly, many of our politicians and many in the mainstream media have declared that "the recession is over" and that the U.S. economy is steadily improving now.
Well, if anyone tries to tell you that the economy got better in 2010, just show them the statistics below. That should shut them up for a while.
The following are 20 new economic records that were set during 2010....
#2 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.
#3 The price of gold moved above $1400 an ounce for the first time ever during 2010.
#4 According to the American Bankruptcy Institute, approximately 1.53 million consumer bankruptcy petitions were filed in 2010, which was up 9 percent from 1.41 million in 2009. This was the highest number of personal bankruptcies we have seen since the U.S. Congress substantially tightened U.S. bankruptcy law several years ago.
#6 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs, which is believed to be a new record low.
#7 The number of Americans working part-time jobs "for economic reasons" was the highest it has been in at least five decades during 2010.
#8 The number of American workers that are so discouraged that they have given up searching for work reached an all-time high near the end of 2010.
#9 Government spending continues to set new all-time records. In fact, at the moment the U.S. government is spending approximately 6.85 million dollars every single minute.
#10 The number of Americans on food stamps surpassed 43 million by the end of 2010. This was a new all-time record, and government officials fully expect the number of Americans enrolled in the program to continue to increase throughout 2011.
#11 The number of Americans on Medicaid surpassed 50 million for the first time ever in 2010.
#12 The U.S. Census Bureau originally announced that 43.6 million Americans are now living in poverty and according to them that was the highest number of Americans living in poverty that they had ever recorded in 51 years of record-keeping. But now the Census Bureau says that they miscalculated and that the real number of poor Americans is actually 47.8 million.
#13 According to the FDIC, 157 banks failed during 2010. That was the highest number of bank failures that the United States has experienced in any single year during the past decade.
#14 The Federal Reserve brought in a record $80.9 billion in profits during 2010. They returned $78.4 billion of that to the U.S. Treasury, but the real story is that thanks to the Federal Reserve's continual debasement of our currency, the U.S. dollar was worth less in 2010 than it ever had been before.
#15 It is projected that the major financial firms on Wall Street will pay out an all-time record of $144 billion in compensation for 2010.
#16 Americans now owe more than $881 billion on student loans, which is a new all-time record.
#18 According to Zillow, U.S. housing prices have now declined a whopping 26 percent since their peak in June 2006. Amazingly, this is even farther than house prices fell during the Great Depression. From 1928 to 1933, U.S. housing prices only fell 25.9 percent.
#19 State and local government debt reached at an all-time record of 22 percent of U.S. GDP during 2010.
#20 The U.S. national debt has surpassed the 14 trillion dollar mark for the first time ever and it is being projected that it will soar well past 15 trillion during 2011.
There are some people that have a hard time really grasping what statistics actually mean. For people like that, often pictures and charts are much more effective. Well, that is one reason I like to include pictures and graphs in many of my articles, and below I have posted my favorite chart from this past year. It shows the growth of the U.S. national debt from 1940 until today. I honestly don't know how anyone can look at this chart and still be convinced that our nation is not headed for a complete financial meltdown....
"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." (Cicero, in 55 BC)
WARNING:
THE FOLLOWING PRESENTATION IS CONTROVERSIAL AND MAY BE OFFENSIVE TO SOME AUDIENCES.
Most taxpayers have no idea what their federal income taxes actually provide. When I ask folks if they know where their IRS check goes I get answers from, “…it pays for the operation of the Federal Government.” to, “… hummm, I really don’t know.” Actually both answers are partially true. Why were the IRS and the Federal Reserve created by the same act of Congress — what is their relationship to the Federal Government?
About a year ago, I made the assertion that the Federal Reserve through the IRS has the power to tax directly by congressional action and indirectly by inflation. It is very easy to see when you understand the “not quite governmental, not quite private” structure of the Federal Reserve System and its taxing arm the IRS.
Here is how it works. Congress passes a law, the House appropriates the funds. The Federal Treasury Department prints the notes for the appropriation. Then the Federal Reserve purchases these notes/paper at the cost of printing, about 4 cents note. A $1bill, $100 bill, or $1000 bond, costs the same 4 cents. The Federal Reserve then loans this money back to the Federal Government at interest based on face value. This interest rate may fluctuate. The cash is then distributed to the regional Federal Reserve banks from which the appropriations are disseminated as per the Congressional mandate.
Now, as the interest climbs with each appropriation, this debt requires payment your taxes – and occasionally the taxes must be increased to keep up with the “can never be paid off by design, debt”. The Federal Reserve profits greatly on this value created out of thin air paid by IRS collected taxes, and OUR REAL ASSET collateral on loans that go into foreclosure/confiscation.
Periodically, the Federal Reserve will ask Congress for an increase in money supply. This indirectly taxes folks by pumping cash into the economy which decreases the buying power of the dollar. This makes it seem as though prices have risen – not the case, the money added causes the value of the dollar to drop. This is the inflation tax. A tax that causes big problems for people with savings or on fixed incomes. The frightening thing is, the FED-IRS has NEVER had it’s books opened to Congressional scrutiny.
On 2/26/09, Representative Ron Paul rose before the House to introduce his “Federal Reserve Transparency Act” HR-1207. In his speech, he said…
“…Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? [...] Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests. [...] The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight?”
In this unique Federal Reserve/Federal Government relationship the IRS works as the “Taxing Arm For The FED” – NOT the Federal Government which is prohibited from direct taxing at Article 1 section 9 clause 4 of the Constitution! Now you know. Those sneaky-rascal bankers anyway.
I understand you want me to pay my account in full, but the present condition of my bank balance makes that impossible. My shattered financial status is due to federal laws, state laws, international laws, county laws, corporate laws, liquor laws, drug-laws, common laws, mother-in-laws, sister-in-laws, bylaws, in-laws, outlaws and law-yers. Through these multitudes of laws and law-yers, I am compelled to pay business tax, personal tax, amusement tax, school tax, poll tax, gas tax, water tax, sales tax, income tax, electric tax, property tax, corporate tax, employment tax, excise tax, car tax, back tax, a taxi tax, and now I understand they want to tax my tacks. My will is taxed, my body is taxed, my labor is taxed, my property is taxed, my car is taxed (it wrecked), my boat is taxed (it sank), my accounts are taxed, my money is taxed, my assets are taxed, my ass is taxed by the new sewage tax, and my brains are taxed most of all ! I am required to carry fourteen different forms of insurance, all of which promise to make me rich at age 65 - if only I can live that long. Can you wait until then ? If you can't wait that long: I don't have a business plan, medical plan, dental plan, Christmas plan, retirement plan, house plan, game plan, future plan, or prayer for a plan in planning for the time when I plan to collect all the insurance money building up at umpteen percent. (The government man told me about the plan.) Then I can pay off your account with the money left over from the tax plan I am hatching, along with the endangered species vulture eggs (I am planning). I think one of your repo men left the eggs instead of a business card to remember him by. Of course, that is after I plan to pay the planning tax. My business is so governed that I am no longer sure who owns it. I am inspected, suspected, disrespected, dissected, infected, dejected, rejected, unelected and indicted. I am Noticed, examined, re-examined, Summoned, fined, penalized, and sonfined until I provide a constant source of revenue for everyone but myself and my legitimate creditors. I wanted you to have a bellyful of my bellyaching before I go belly-up ! Which, I might add, would already have occurred except for the wolf. Fortunately you see, the wolf that comes to my door daily to be fed, had pups in the kitchen, so I sold them and here's a good faith five percent payment of what I owe you. I'm afraid you won't be so lucky next month unless the market improves for vulture eggs, because I don't have the stomach for them anymore either. Yours forever, [American Citizen]
WASHINGTON/CHICAGO (Reuters) - The U.S. Federal Reserve's journey to the outer limits of monetary policy is raising concerns about how hard it will be to withdraw trillions of dollars in stimulus from the banking system when the time is right.
While that day seems distant now, some economists and market analysts have even begun pondering the unthinkable: could the vaunted Fed, the world's most powerful central bank, become insolvent?
Almost by definition, the answer is no.
As the monetary authority, the central bank is the master of the printing press. It can literally conjure up money at will, and arguably did exactly that when it bought about $2 trillion of mortgage-backed securities and U.S. Treasuries to push down borrowing costs and boost the economy.
The Fed's unorthodox steps helped it generate record profits in 2010, allowing it to send $78.4 billion to the U.S. Treasury Department. But its swollen balance sheet leaves the central bank unusually exposed to possible credit losses that could create a major headache at a time of increasing political encroachment on the Fed's independence.
Asked about the issue of potential losses during congressional testimony on Friday, Fed Chairman Ben Bernanke suggested the risks were minimal. If liabilities on the Fed's balance sheet were to exceed its assets, it would only be so because of rising interest rates in the context of a thriving economy, he suggested.
"Under a scenario in which short-term interest rates rise very significantly, it's possible that there might come a period where we don't remit anything to the Treasury for a couple of years. That would be I think a worst-case scenario," Bernanke said. Customarily, the Fed submits surplus profits from its operations back to the Treasury's coffers.
But the Fed's newfangled policy steps and the potential for credit losses raises, for some experts, the prospect that the Treasury may actually be forced to "recapitalize" the Fed -- economist-speak for what others might call a bail-out.
That would be a strange role reversal given the Fed's efforts to ease monetary policy by buying the Treasury's debt, and it could raise a political firestorm from lawmakers who believed all along the Fed was putting taxpayer money at risk.
A PAUPER ON PAPER
Varadarajan Chari, an economics professor at the University of Minnesota and a consultant to the Minneapolis Fed, says that at some point during its exit from easy monetary policies, the Fed actually may go broke -- at least on paper.
"The most obvious exit strategy is, when inflation starts to pick up, to stop and reverse asset purchases," he said. "That's likely to include requiring the Fed in an accounting sense to see a significant accounting loss."
The Fed now holds just over $1 trillion in Treasuries, Chari noted, and if inflation rose by a couple of percentage points, it would dent the value of those holdings by about 10 percent, leaving the Fed with a $100 billion loss.
"I'm sure it will have some negative political fallout," Chari said. "But not economic consequences. Their ability to print money means it (insolvency) doesn't mean anything."
Many economists argue that the potential cost to the taxpayer from the Fed's policies is far smaller than the threat of a prolonged period of economic stagnation that would result from a less proactive approach.
With the U.S. unemployment rate at 9.4 percent and only tentative signs that businesses are beefing up hiring, Fed officials, including Chairman Bernanke, see a duty to prevent a further deterioration of economic conditions -- and have signaled a readiness to use all the tools at their disposal.
Last November, as the economic recovery appeared to falter, the Fed said it would buy a new round of $600 billion in Treasury securities through June of this year. That's on top of the $1.7 trillion in Treasuries and mortgage-backed securities it had purchased in response to the financial crisis.
Still, the pitfalls of the Fed's approach are almost as numerous as the lending facilities it undertook to stem the crisis. Perhaps most daunting, the Fed's purchases of Treasury debt and mortgage-backed securities have effectively turned it into a mammoth investor -- a thoroughly undiversified one.
"The biggest risk is losses on its portfolio on long-term debt if inflation rises," said Alan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh.
QUANTITATIVE TEASING
That threat is already apparent in the Fed's latest round of bond buying, or so-called quantitative easing. According to calculations by Reuters Insider credit analyst Ed Rombach two weeks ago, the average duration of the Fed's new portfolio of bonds is just under 5 years, and every 1-basis-point rise in 5-year to 6-year Treasury yields results in a loss of about $65 million.
The Fed is sitting on paper losses of about $2.3 billion on the purchases of U.S. Treasuries it made from November 12 until late last week, according to an analysis by Reuters Insider.
The Fed is also vulnerable to losses through its so-called Maiden Lane portfolios, a collection of investments it acquired when it brokered J.P. Morgan Chase's takeover of a floundering Bear Stearns and bailed out failed insurer AIG.
The portfolio will likely generate losses, according to many analysts. Still, the total Maiden Lane portfolio amounts to just $66 billion, a small slice of the Fed's growing pie of securities.
For most Fed officials, a concern over credit losses would be a luxury compared with the risk they see as predominant: that the economy will not grow quickly enough to return more than 14 million unemployed Americans to work, and inflation so low that it leaves the country exposed to possible deflationary shocks.
"The risks are worthwhile given that the economy would be in the toilet if the Fed never did anything to expand its balance sheet," said Michael Feroli, chief economist at JP Morgan and a former New York Fed staffer.
Feroli does not believe asset sales will be a primary avenue for the Fed's exit. Indeed, Bernanke appears to think the ability to raise interest rates on bank reserves might prove the most effective way to withdraw stimulus. But even that tool is not without its mechanical difficulties.
The problem lies in the basic workings of fixed income. By definition, bond prices decline when their yields or interest rates go up. That means that as the economy recovers and pushes inflation higher, the Fed will move to increase interest rates, pushing down the value of its giant bond portfolio.
"What would the international reaction be if the Fed suddenly had to go and be recapitalized?" said Bob Eisenbeis, chief monetary economist at Cumberland Advisors and a former head of research at the Atlanta Fed. "I don't think that would bode well for Treasuries, or for the dollar, or anything else. It would be embarrassing."
WASHINGTON, Jan 10 (Reuters) - The Federal Reserve reported on Monday its earnings jumped by more than 50 percent in 2010 to a record $80.9 billion on its massive holdings of securities, and it is turning the bulk of it over to the U.S. Treasury Department.
The $78.4 billion that the Fed is remitting to Treasury is also a record and is $31 billion more than a year earlier. In 2009 the Fed had net income of $53.4 billion.
The Fed's portfolio has ballooned to $2.16 trillion, roughly triple its size before the financial crisis, as it purchased securities including U.S. government debt and mortgage-linked bonds in a move to drive down borrowing costs and stimulate the economy.
"The increase was due primarily to increased interest income earned on securities holdings during 2010," the U.S. central bank said in releasing preliminary unaudited results. Audited results will be issued in the spring and may show some changes, Fed officials indicated.
After driving overnight interest rates close to zero percent in December 2008, the Fed bought $1.7 trillion of longer-term Treasury and mortgage-related bonds as a supplement to its pledge to keep overnight rates near zero for a long time.
It followed that up late last year with a new $600 billion bond-buying program -- again intended to spur growth by pumping liquidity into the economy. That program ends at mid-year.
The Fed turns over profits to the Treasury annually and has never posted a loss. But the central bank took a number of extraordinary actions during and after the 2007-2009 financial crisis that critics say may have left it with some poor-quality holdings.
DOUBTS ON ALL SIDES
Critics fault the Fed on several scores, with some claiming its actions have sown the seeds for a potential flare-up in inflation and others saying it has put the central bank at risk of destabilizing losses when it sells down its holdings.
If credit losses were to pile up, those criticisms could mount.
In addition, some foreign governments have charged that the Fed's easy money policies could weaken the dollar and spark a round of competitive currency devaluations.
Fed officials who briefed reporters said asset sales would be part of a so-called "exit strategy" from loose monetary policy, but only once the economy was on a sound footing. That means sales of the securities may be some way down the road, they added.
A Fed official said that if the central bank had to make sales and take some losses, it could always scale back the amount it remits to the Treasury. But there is no mechanism in place for it to get past remittances returned by the Treasury.
In testimony to Congress on Friday, Fed Chairman Ben Bernanke gave no sign the Fed was ready start scaling back its bond purchase program.
Nor did the Fed chief give any hints about further buying beyond the June deadline for the $600 billion program.
The Fed said its 2010 income included $76.2 billion in income on securities bought through open market operations, including Treasury and mortgage-linked debt, $7.1 billion from limited liability companies created in response to the financial crisis, $2.1 billion in interest income from credit extended to American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) and $1.3 billion of dividends on preferred interests in AIA Aurora LLC and ALICO Holdings LLC
Confirmed: We’re Literally On the Brink of Catastrophic Collapse Author: Mac Slavo - January 6th, 2011
We’ve been told a lot of things since the global economic crisis first became apparent in 2007. In March of that year Federal Reserve Chairman Ben Bernanke said, “the impact on the broader economy and financial markets of the problems in the sub-prime markets seems likely to be contained.” Clearly, Mr. Bernanke’s assessment was incorrect and the sub-prime real estate issues were only part of a broader, systemic issue.
The fundamental problems within our economy became mainstream news in the latter part of 2008 when stock markets around the world were in free fall and most major financial institutions were on the cusp of insolvency. In response, our government, with the full support and confidence of Congress, took unprecedented steps to save the system by injecting, first billions, and then trillions of dollars to bailout failed companies, stabilize deflationary price collapses and stimulate the economy.
Treasury Secretary Henry Paulson eventually wrote a book about the crisis, aptly titled On the Brink. But how close to the brink were we? If Representative Brad Sherman is to be believed, we were close. So close, in fact, that according to Sherman, Congressional members were told that if the bailout was not authorized by Congress the collapse would be so severe that martial law may have to be declared - basically, tanks in the streets.
Are we now to believe that the actions taken by Congress, The President, US Treasury and The Federal Reserve have resolved the fundamental problems facing our nation?
I am writing in response to your request for an estimate by the Treasury Department of when the statutory debt limit will be reached, and for a description of the consequences of default by the United States.
Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States.Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs.Even a very short-term or limited default would have catastrophic economic consequences that would last for decades. Failure to increase the limit would be deeply irresponsible.For these reasons, I am requesting that Congress act to increase the limit early this year, well before the threat of default becomes imminent
Treasury would prefer not to have to engage again in any of these extraordinary measures [suspension of the issuance of certain types of government debt and government investment vehicles].If we are forced to do so again, these measures could delay the date by which the limit is reached by several weeks.Once these steps have been taken, no remaining legal and prudent measures would be available to create additional headroom under the debt limit, and the United States would begin to default on its obligations.
The Treasury Secretary of The United States of America just said that if we don’t get another $1 trillion or so dollars by March of this year then this country will begin to default on its debt obligations. These remarks are extremely serious and should be understood for what they are.
We are, literally and without mixing words, on the brink of economic catastrophe.
The scary thing is, according to Mr. Geithner and the many supporters of raising our debt ceiling, that borrowing more money is the only solution available.
In a recent commentary we pointed out the opposing view from Karl Denninger of Market Ticker, who said that raising the debt ceiling would essentially lead to the very same consequence as leaving it as is:
Let me be clear: If you extend the debt ceiling and by doing so allow deficits of this sort to continue for another year, say much less two, you will have placed a loaded shotgun in the mouth of this nation and pulled the trigger.
It will go off, and you will splatter this nations’ economic and political system all over the wall.
It’s a Catch 22 and there’s no way out.
Defaulting on or inflating away our debt are the only viable solutions. Both of these will lead to the same end - a complete and total collapse of the way of life Americans have become used to.
Just as Henry Paulson, President Bush, et. al. warned of economic collapse and depression in 2008, Mr. Geithner warns of the very same today. All of the trillions spent, all of the laws passed, and all of the manipulations of global asset markets, have done absolutely nothing to resolve the fundamental systemic problems we faced prior to the onset of the crisis.
It is, quite literally, going to be the end of the world as we know it - and it cannot be stopped.
Starbucks cuts name, "coffee" from logo; stirs ire By Lisa Baertlein
REUTERS
LOS ANGELES | Wed Jan 5, 2011 5:33pm EST
LOS ANGELES (Reuters) - Starbucks Corp (SBUX.O), the world's biggest coffee chain, dropped both its name and the word "coffee" from its 40-year old logo, prompting cries of outrage from people who said they were loyal customers.
The new green logo amplifies the company's female siren symbol -- representing half-human mythical temptresses who led sailors to their deaths -- as Starbucks tries to build new billion-dollar brands sold outside its network of cafes.
"Even though we have been, and always will be, a coffee company and retailer, it's possible we'll have other products with our name on it and no coffee in it," Chief Executive Howard Schultz said on a webcast to explain the change.
Self-described Starbucks fanatics were not impressed, and many of the 156 comments on the company's website called for the well-known Seattle company name to be reinstated.
"Who's the bonehead in your marketing department that removed the world-famous name of Starbucks Coffee from your new logo? This gold card user isn't impressed!" wrote one customer who identified herself as MimiKatz.
Another wrote: "I have been a big supporter of (Starbucks) since the early days, taken expensive rides in taxis to get my morning coffee, even waded through two feet of snow in my business suit ... but I do not see the logic of your Business Development folks for the removal of the Starbucks name."
Executives said the logo, which was designed by an in-house team, would appear first on paper products like cups and napkins in March and then be phased in over time.
The company declined to say how much it would spend swapping out the logos.
The world's biggest coffee chain has not changed its logo since it went public in 1992.
"IT'S NUTS"
Some brand experts questioned whether the change was a smart move, and even likened it to a recent ill-fated attempt by clothing chain Gap Inc (GPS.N) to change its well-known brand image.
"I think it's nuts," said James Gregory, CEO of brand consulting firm CoreBrand. "What's it going to be -- the coffee formerly known as Starbucks?"
The new logo probably won't hurt cafe sales in the near term because most Starbucks customers are enthusiasts, Gregory said. But he said a nameless logo was a bad fit for Starbucks products sold by grocery stores and other retailers.
"There you're dealing with people who aren't enthusiasts. You're looking at something that's almost generic and it's not shouting out as something that is Starbucks."
The latest posting today of the National Debt shows it has topped $14 trillion for the first time.
The U.S. Treasury website today reported that as of last Friday, the last day of 2010, the National Debt stood at $14,025,215,218,708.52.
It took just 7 months for the National Debt to increase from $13 trillion on June 1, 2010 to $14 trillion on Dec. 31. It also means the debt is fast approaching the statutory ceiling $14.294 trillion set by Congress and signed into law by President Obama last February.
Some Republicans in the new Congress have said they'll seek to block an increase in the Debt Ceiling unless a plan is in place to significantly reduce federal spending and unfunded government liabilities on entitlement programs such as Social Security and Medicare.
White House economic adviser Austan Goolsbee warned yesterday that it would be "catastrophic" if the U.S. Government were to default on its financial obligations.
"That would be the first default in history caused purely by insanity," said Goolsbee of plans to block an increase in the Debt Ceiling.
Time and time and time again in country after country in every corner of the globe, IMF loans spell disaster for the people who are left holding the bag.
Not Yours To Give Col. David Crockett US Representative from Tennessee >>> HERE
"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." (Cicero, in 55 BC)
The National Inflation Association is pleased to announce the release of its 2010 U.S. Inflation Report. PDF
Of course they do ... they're bought and paid for:
Lobbyists from the financial industry have paid hundreds of millions to Congress and the Obama administration. They have bought virtually all of the key congress members and senators on committees overseeing finances and banking. The Congress people who receive the most money from lobbyists are the most opposed to regulation. See this, this, this, this, this, this, and this.
FAST FACT... A record 37.2 million people, which is approximately one out of every eight Americans, received food stamps in September, and that number is growing rapidly.the program is expanding at a pace of about 20,000 people a day. The United States of America is very quickly becoming a socialist welfare state. READ HERE
While your thoughs were on the health care bill this was behind the scenes
A License Required for your HOUSE?
But wait. This awful bill (that no one in Congress has actually read) has many more surprises in it.
Probably the worst one is this: A year from now you won’t be able to sell your house.
Yes, you read that right. The caveat is (there always is a caveat) that if you have enough money to make required major upgrades to your home, then you can sell it. But, if not, then forget it. Even pre-fabricated homes (”mobile homes”) are included.
Wow! Home owners take note & tell your friends and relatives who are home owners!!! Beginning 1 year after enactment of the Act, you won’t be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the “Cap & Trade” bill passed by the House of Representatives, if also passed by the Senate, will be the largest tax increase any of us has ever experienced.READ HERE
Porker Of The Month'
CAGW Names Gary Locke and Robert Groves February’s Porkers of the Month'
Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers HERE
Unchartered Waters Governments around the world will issue an estimated $4.5 trillion in debt this year, triple the five-year average for industrial countries.
WHO NEEDS A THIEF TO STEAL YOUR WALLET WHEN THE OBAMA ADMINISTRATION IS ALREADY DOING IT Government Fraud and Waste Report: HERE IS JUST A TINY EXAMPLE OF THE EXCESS,RECKLESS POLITICAL SPENDING SPREES OUR " ELECTED OFFICIALS" ARE MAKING US THE TAXPAYER SPEND .
City, State, % of People Below the Poverty Level 1. Detroit , MI
32.5% 2. Buffalo , NY
29.9% 3. Cincinnati , OH
27.8% 4. Cleveland , OH
27.0% 5. Miami , FL
26.9% 5. St.. Louis , MO
26.8% 7. El Paso , TX
26.4% 8. Milwaukee , WI
26.2% 9. Philadelphia , PA
25.1% 10. Newark , NJ
24.2%
U.S. Census Bureau, 2006 American Community Survey, August 2007 What do the top ten cities (over 250,000) with the highest poverty rate all have in common?
Detroit , MI (1st on the poverty rate list) hasn't elected a Republican mayor since 1961;
Buffalo , NY (2nd) hasn't elected one since 1954;
Cincinnati , OH - (3rd)...since 1984;
Cleveland , OH - (4th).....since 1989;
Miami , FL - (5th) has never had a Republican mayor;
St. Louis , MO - (6th)....since 1949;
El Paso , TX - (7th) has never had a Republican mayor;
Federal and State Info 
United States 
