Craig Torres, Josh Zumbrun & Caroline Salas Gage
February 26, 2013
Federal Reserve Chairman Ben S. Bernanke’s efforts to rescue the economy could result in more than a half trillion dollars of paper losses on the central bank’s books if interest rates rise abruptly from recent levels.
That sum is the difference between the value of securities in the Fed’s portfolio on Dec. 31 and what they may fetch in three years, according to data compiled by MSCI Inc. of New York for Bloomberg News. MSCI applied scenarios devised by the Fed itself for stress-testing the nation’s 19 largest banks.
MSCI sees the market value of Fed holdings shrinking by $547 billion over three years under an adverse scenario that includes an economic contraction and rising inflation. MSCI puts the Fed’s mark-to-market loss at less than half that, or $216 billion, if the economy performs in line with consensus forecasts of gradually rising growth, inflation and interest rates.
WASHINGTON — The Federal Reserve chairman, Ben S. Bernanke, played down concerns about the Fed’s economic stimulus campaign on Tuesday, describing it as necessary and effective and making clear it was likely to continue for some time.
In testimony before the Senate Banking Committee, Mr. Bernanke was relatively upbeat about the broader economy, which he said was growing again after pausing in the fourth quarter. But he said unemployment remained unacceptably high.
“In the current economic environment, the benefits of asset purchases, and of policy accommodation more generally, are clear,” Mr. Bernanke said. “Monetary policy is providing important support to the recovery” even as inflation remains in check.
The Fed, which has amassed almost $3 trillion in Treasury and mortgage-backed securities to promote more borrowing and lending, is expanding those holdings by $85 billion a month until it sees clear improvement in the labor market. It plans to hold short-term interest rates near zero even longer, at least until the unemployment rate falls below 6.5 percent.
As Washington seeks to identify wasteful federal spending, two lawmakers have proposed getting rid of the Selective Service System that registers men ages 18-25 for the potentiality of reinstating the military draft.
Congressmen Peter DeFazio (D-Ore) and Rep. Mike Coffman (R-Colo) say that it makes no sense to maintain the Selective Service System when the “Pentagon has no interest in returning to conscription due to the success of the all-volunteer force.”
They said that the government is wasting millions of dollars each year to maintain this database “preparing for the possibility of a military draft” that is highly unlikely.
According to the Associated Press:
The Selective Service has a budget of $24 million and a full-time staff of 130. It maintains a database of about 17 million potential male draftees. In the event of a draft, the agency would mobilize as many as 11,000 volunteers to serve on local draft boards that would decide if exemptions or deferments to military service were warranted.
The Selective Service is an “inexpensive insurance policy,” said Lawrence Romo, the agency’s director. “We are the true backup for the true emergency.”
Men between the ages of 18 and 25 are required to register and can do so online or by mail. Those who fail to register with the Selective Service can be charged with a felony. The Justice Department hasn’t prosecuted anyone for that offense since 1986.
There can be other consequences, though. Failing to register can mean the loss of financial aid for college, being refused employment with the federal government, and denied U.S. citizenship.
This proposal to end draft registrations comes just one week after Rep. Charlie Rangel (D-NY) proposed reinstating the draft to include all women.
“Now that women can serve in combat they should register for the Selective Service alongside their male counterparts,” said Rangel in a statement. “Reinstating the draft and requiring women to register for the Selective Service would compel the American public to have a stake in the wars we fight as a nation.
Obviously, returning to conscription and expanding Selective Service to all women aged 18-25 would dramatically increase these costs.
“There is no one who wants this (draft registration) except ‘chicken hawk’ members of Congress,” DeFazio told the Associated Press.
The move announced Tuesday by the New York company, the nation’s most profitable bank in 2012 and the biggest U.S. lender by assets, will reduce its staff by 6.5% in one of the most aggressive reductions to date amid widespread financial-industry cutbacks.
…by charging insane amounts for services, such as these…
Source: Bloomberg BusinessWeek
This control system requires dependence from the population; we must, therefore, do all we can to reduce our need to ever ask for help from their institutions, and render our would-be controllers impotent.
Our first priority of course is breaking out of and remaining free from their mental and spiritual entrainment. If your mind and spirit are contained and controlled as their entire matrix of deceit is designed to do, dependence on their enslaving institutions is assured. Maintaining a high level of loving, conscious awareness and encouraging the same in others is the driving force that keeps us free to make wise decisions and live in peace in these times of increasing crises.
Here are 4 key practical areas where we can help ourselves, our families, and our neighbors break free from the stranglehold of those who benefit from crises manufactured or real.
It all comes down to self-sufficiency . . . .
Of all the scams, the worldwide banking system is one of the most mind-boggling. Once you “buy into it” you’re already ensnared, and it’s either eat, or be eaten. That’s their design. Never mind the entire false premise of fiat money and the debt system — vast amounts of this illusory “currency” get shifted every micro-second in a wave of deceit and piracy. If we are to break free of our engineered financial shackles we must develop and promote competing currencies and barter systems. They are already trying to imprison people for doing just that, which is a sure sign that it is an Achilles Heel. They can’t lock up everyone, so get started now developing your own private currency, supporting state-owned banks, and discussing alternatives to The Federal Reserve fiat system. Completely throwing out the bankers, jailing those responsible for the collapse, and forgiving fraudulent debt might not be as feasible as it was in Iceland, but we shouldn’t stop entertaining the possibility.
Until that time, we can take some lessons from other areas which already are experiencing the economic collapse looming in America’s future. In the wake of their pillaging by international financiers, Greeks who have realized that protesting is likely to bring little relief have begun to implement barter systems to meet their local community needs. Through a combination of decentralization from the Euro, free markets, local cooperation, and the creation of a new currency based on productivity, markets like this one in Volos are leading the charge to a restoration of the principles that build truly sustainable economies.
A similar rebellion against austerity-induced servitude by elite overlords is taking place in Spain as a means to combat a loss in the standard of living through inflation and outright theft by global banksters.
Americans would do well to learn from the truly revolutionary actions taken by individuals in deliberately collapsed countries, because if global (mis)managers have their way, a similar scenario is guaranteed to unfold in the United States.
Food and Water
This is the second main method of control the world over. Globalists employ the IMF to literally use food as a weapon, which is exactly what was proposed in State Department Memorandum 200 from 1974 where Henry Kissinger addresses much of what we see happening across the globe in the present day. Food inflation already has begun in earnest, while environmental
destruction is impacting food and water quality planet-wide. Agenda 21 is impacting local communities with long-standing family businesses being shut down. Now is the time to become fully self-sufficient.
By all means begin by filtering your water at the very least; the global water supply is running short and that which still is available is highly contaminated with industrial run-off, pesticides and worse, among them pharmaceuticals, heavy metals and fluoride. If possible, find a local supply of fresh water. You can do this at findaspring.com, a user database of natural springs around the world.
It is never too late to learn off-the-grid food production methods such as aquaponics and permaculture. We must build our communities from the food up, rather than from government down. If you find that food growing is simply not possible, then learn where your local growers are so that you can support the strength of the community that can help you best in times of crisis.
Shelter and Skills
Much has been made of the massive rise in doomsday bunker purchases, as well as purchases to enter self-sustaining underground communities. This path is certainly not for everyone, as the most serious disasters like a mega quake across New Madrid could last for an indeterminate length of time.
Perhaps a better path is to stay mobile, rather than fixed. It is sad that many people have lost their permanent homes during the financial collapse; however, for those in such a position you might just be best suited toward survival. The ability to pick up and go has proven to be important as the fallout from the Fukushima disaster has circled the globe. There is always someplace safe; it is important to identify where that is and be prepared to move when necessary.
Densely populated metropolitan areas most likely aren’t going to be safe so that should be taken into consideration. Also, if your entire nation has become inhospitable you might want to consider other countries. It’s a big world and there are many places way more sane than the United States for example, if you can find a way to make it work.
Rather than “running for one’s life” as a cowardly act, this should be viewed as running toward better opportunities when presented with adversity beyond one’s control.
Some key areas of focus are radiation protection, plug-in scalar technology, orgonite and EMP protection.
We saved the best survival tactic for last. Ironically, the pooling of resources is the single most effective and inexpensive strategy to ensure your own independence. Disaster preparation can seem like an overwhelming task to take on single-handedly — much better to befriend people who are already skilled (and well-stocked) in certain areas. Every community already has people well-trained in mechanics, craftsmanship, food production, and tactical weapons. Rather than try the nearly impossible task of gaining skills in all of these areas, offer your current skills, property, or ideas to other key people and strategize about what-if scenarios.
Just such a project has been started in New Hampshire. The Free State project is a recruitment for liberty-loving people to move to New Hampshire. You can read their statement of intent to decide if this might be the path for you. Also take a look at the Safe Haven States Project initiated by Brandon Smith from Alt-Market and Stewart Rhodes from Oathkeepers. These are just two examples of concrete plans for people to connect with other like-minded individuals and carry out shared goals. This erases the feeling of being alone, which leads so many people to inaction as they see their current neighbors turn a blind-eye to the problems we have outlined above.
Or perhaps you are a hardcore individualist. One can still maintain total independence outside of any formal organization while still trading and interacting with others. Have a look at what has been accomplished by The Moneyless Man, Mark Boyle, for true adaptability and survival.
We sincerely hope that we don’t have to encounter a collapse scenario, but simple wishful thinking might not be enough; best to balance continued optimism with sound preparation.
In many Western industrialized nations, debt has overwhelmed or is about to overwhelm the economy’s debt-servicing capacity. In the run-up to a debt crisis, bad debt tends to move to the next higher level and may ultimately accumulate in the central bank’s balance sheet, provided the economy has its own currency. The process whereby government or quasi-government debt is taken over by the central bank is
called quantitative easing. Many observers assume that, once bad debt is purchased by the central bank, the debt crisis is solved for good; that central banks have unlimited wealth at their disposal, or can print unlimited wealth into existence.
However, central banks can only create liquidity, not wealth. If printing money were equivalent to creating wealth, then mankind would not have to get up early on Monday morning. QE just transfers losses from the previous holders of the asset to the
central bank itself. Up to a certain amount, the central bank absorbs these losses by sacrificing its equity and accumulated profits. Losses exceeding the central bank’s loss-absorption capacity necessarily lead to inflation. If the central bank’s net worth turns significantly negative (as Bernanke discussed and dismissed today), hyperinflation may ensue and a vicious circle may be set in motion.
Only a solvent central bank can halt hyperinflation.
The longer governments run large deficits, the longer central banks continue to monetize them, and the longer their balance sheets grow, the higher the potential for enormous losses and thus hyperinflation.
Necessary preconditions for hyperinflation are a quasi-bankrupt government whose debt is monetized by a central bank with insufficient assets. One way or another, owning physical gold is the safest and most effective way of insuring against hyperinflation.
February 26, 2013
Ben Bernanke, chairman of the US Federal Reserve, defended the decision to launch a third round of QE by telling US politicians that the benefits still outweighed the risks.
He was speaking shortly after Sir Mervyn King, Governor of the Bank of England, told an audience in Japan that monetary policy was “not a panacea” for economic problems and repeated his warning that, “as time passes, larger and larger doses of stimulus are required”.
Mr Bernanke said policymakers were aware of the risks from QE3, which was launched at the end of last year, including potential problems with unwinding the programme and rising inflation, but he claimed they were not material at the moment. “To this point, we do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more rapid job creation,” he told the Senate Banking Committee.
Submitted by Phoenix Capital Research on 02/26/2013 16:29 -0500
The Fed has a HUGE problem on its hands.
Fed officials are well aware that stocks have become totally disconnected from reality. However, they cannot simply come out and discuss ending stimulus efforts outright because it would cause a market collapse. Remember, the single most important role for the Fed post-2008 is to maintain confidence in the system. So they cannot risk any explicit statement that they will be pulling the punchbowl.
Consequently, Fed officials have begun a careful process of managing down expectations regarding future stimulus.
Federal Reserve Bank of St. Louis President James Bullard gave remarks Thursday on “U.S. Monetary Policy: Easier Than You Think It Is,” at a special banking forum sponsored by Mississippi State University’s Department of Finance and Economics…
Bullard discussed four considerations for QE3 going forward. First, while substantial labor market improvement is a condition for ending the program, Bullard said that “the Committee could consider many different aspects of labor market performance when evaluating whether there has been ‘substantial improvement.’” These include the unemployment rate, employment, hours worked, and Job Openings and Labor Turnover Survey (JOLTS) data.
Second, “Without an end date, the Committee may have to alter the pace of purchases as news arrives concerning U.S. macroeconomic performance,” Bullard said, noting that “substantial labor market improvement” does not arrive suddenly. “This suggests that as labor markets improve somewhat, the pace of asset purchases could be reduced somewhat, but not ended altogether,” he explained. “This type of policy would send important signals to the private sector concerning the Committee’s judgment on the amount of progress made to that point.”
A third consideration for the QE program is inflation and inflation expectations, Bullard said. Current readings on inflation are rather low, which he said may give the FOMC some leeway to continue asset purchases for longer than otherwise. Although worries about rising inflation have so far been unfounded, “the lesson from QE2 is that inflation and inflation expectations did trend higher,” he said, adding that it is too early to know if that will happen with the current QE program.
Finally, he said, “The size of the balance sheet could inhibit the Committee’s ability to exit appropriately from the current very expansive monetary policy.” He explained that when interest rates rise, asset values will fall, which could possibly complicate monetary policy decisions.
Note that Bullard, like the December Fed FOMC, mentions “inflation expectations.” The Fed cannot ever openly admit that inflation is a problem because doing so would inevitably lead to the realization that the Fed is in fact the primary cause of inflation in the financial system.
Feb 25, 2013
During the last housing crash, the big banks begged the federal government for help and they received it, but when average Americans ask the big banks for help most of the time the banks show no mercy whatsoever. If you fall behind on your mortgage payments, the big banks have shown that they are willing to be absolutely ruthless. They will change locks in the middle of the night, they will toss disabled veterans and families with children out into the street in the middle of winter, and sometimes once the foreclosure process has begun they will not even allow someone to come forward and offer to pay off the loan if they think that they can make more money by selling the home. The big banks will often string homeowners along for months or even years with loan modification promises, only to drop the hammer on them at the most inopportune time. Over the past several years there has been case after case where mortgage documents have “disappeared”, where big banks have “manufactured” missing documents out of thin air and there have even been cases where big banks have tried to foreclose on homes that do not even have a mortgage. Once in a while, the big banks get a small slap on the wrist, but nobody ever really gets into much trouble for any of this. In fact, the big banks just continue to gain even more market share and even more power. Hopefully when some of these foreclosure horror stories start to become publicized more widely we will start to see some real changes in the marketplace.
The following are 10 foreclosure horror stories that will blow your mind…
#1 If you get behind on your mortgage, your family might be tossed into the street at gunpoint in the middle of the night…
This week, Christine Frazer and her family were thrown out of the Atlanta home they’d lived in for 18 years, at gunpoint in the dead of night.
They were not set upon by robbers, but by the Dekalb County Sheriff’s department, which evicted the family at the request of Investors One Corporation. As Steven Rosenfeld reported for AlterNet, it was the fourth company to buy the family’s mortgage in eight months.
#2 Time after time we have seen authorities show absolutely no mercy when conducting these evictions…
It was bad enough when 62-year-old disabled veteran Ramsey Harris was evicted from a foreclosed house on Jamaica Lane where the former owner had been letting him live.
Then it started to rain as all his worldly possessions sat in a heap by the side of the road and Harris noticed some of his valuables were missing.
“It was just ugly,” Harris said Friday. “I was just broken-hearted. I couldn’t believe what was happening to me. I ended up standing, watching all my life’s work go down the tubes.”
#3 Sometimes financial institutions will promise you a loan modification for many months and then turn around and foreclose on you anyway…
When the economy crashed and his business slowed down, Wells Fargo offered to modify Steve Bailey’s loan to lower his payments. After making a series of trial payments, Wells Fargo notified Steve that his modification was on the way.
A few days later he received a letter stating that his modification had been denied. The Wells Fargo representative he spoke with reassured him that they had made a mistake and that he should keep making the payments, which he did for seven months.
Steve then started to receive foreclosure notices. Again, the bank representative assured him that the notices had been sent in error.
Then Steve checked his credit. Wells Fargo had reported him delinquent on his mortgage for the last six months. The reduced payments that Steve had agreed to pay for the previous months had been put into a separate trust by Wells Fargo, and they had not gone towards his mortgage.
Steve took the case to court but lost despite mountains of evidence in his favor. He lost his home and his business.
#4 Other homeowners have found themselves trapped in loan modification hell for years…
I am self-employed, have been all my life and have owned a home for 30 years. When I started my Loan Modification process in August of 09 I WAS NOT behind on any payments. I sent full documentation, over 150 pages, with the things they needed to verify my income. I am now 2 payments behind and I am getting nowhere. They keep flipping me between Loss Mitigation and Imminent Default, back and fourth month end month out. I made a habit of calling every week, then every two weeks just to be sure all was moving forward. From the middle of November I was told my file was with the underwriter and it would only be 30-60 days. I began automatically updating my income verification, verification that I still resided at the property and an updated 4506-T every month. In the middle of April a rep finally told me I was not in the loan modification process. In fact, that I had been denied on March 2. Keep in mind, I’m talking to these people every 2 weeks. She did a financial interview and sent me a new packet so that I could start all over, resubmitting all the documentation yet again. She told me she was my Account Manager. I completed the packet, called with a question (2 weeks later – over a week to receive the packet and another few days to complete it and gather all my documents again) and learned that my “Account Manager” was on maternity leave and I now didn’t have an account manager. Also, I was told that I had received the incorrect packet…it was the old version rather than the updated version. She asked me to fax four or five pieces of information in the hopes it would, quote, “jump start my file back into the process” and said she we send me another packet. That was mid April. Here we sit, 2-1/2 months later, I have still not received anything in writing about my rejection. And, though I’ve now had people tell me on three separate occasions that I would receive a new packet, it has yet to show up on my door step. I asked several times why my application was denied and the answer I finally got last week was that it was because I was DELIQUENT in my payments. Call me crazy but I thought that was the whole point??!! I almost hired a third party but am so hesitant to take that step. Every time I get on the phone with them it takes an hour out of my day and I am usually so upset I find it difficult to work, so I just don’t call. I’m going to sit back and regroup and decide what I need to do next.
#5 Sometimes a big bank will kick someone out of their home and then never actually take possession of the house. As a result, many former homeowners now find themselves stuck with thousands of dollars of unpaid bills. For example, a recent CNN article told the story of Rose Nathan, a 37-year-old office manager…
Nathan lost her South Bend, Ind., home in January 2009, after working out a deal with CitiMortgage to voluntarily walk away in a “deed in lieu of foreclosure.”
“On Christmas Eve, the bank called and told me a sheriff’s sale was coming and I had to move out right away,” she said. “So that’s what I did — seven days after New Year’s.”
She sold her belongings and moved to Hawaii. Nearly two years later, she received a property tax bill from the City of South Bend for $5,000. The bank had never taken possession of the house.
These unpaid taxes that she didn’t even know about have absolutely destroyed Nathan’s finances…
Meanwhile, the unpaid debt has crushed Nathan’s credit score. The deed-in-lieu alone lowered her score by 80 to 120 points, but the unpaid debt meant her credit kept taking a hit. Eventually her credit card companies cut her off, even though she said she was making her payments.
Her auto loan now carries a 25% rate. Her car insurance premiums have skyrocketed. She can only afford a one-bedroom apartment where she lives with her three kids. And forget about buying another home. “Nobody will give me a mortgage,” she said.
As the March 1 deadline rapidly approaches for what has been termed the “Sequestration,” the majority of Americans seem unable to do anything other than sit idly by and wonder to themselves what programs and agencies will be cut under the guise of “balancing the budget,” “reducing the deficit,” and “cutting government spending.”
Unfortunately, by applying terminology to the latest “crisis” in Congress such as the “Debt Ceiling,” “Fiscal Cliff,” and now the “Sequester,” the mainstream media, along with the relevant government agents, major banks, and corporations, are able to hype the population into a state of hysteria and fear (for those that actually pay attention to anything other than the latest television show) so that the general public will be thoroughly convinced that the only way to avoid imminent disaster is to reach a compromise in the form of cuts, firings, and a general reduction of standards of living.
In reality, the creatively-named “Sequester” is nothing more than semantic jargon devised for purposes of the implementation of austerity measures against the American people. It is quite clear that, although the Sequester itself exempts many social safety net programs in terms of its automatic spending cuts pending a failure of Congress to reach an agreement, the social safety net is very much on the table in the course of those discussions.
While not openly labeled as Austerity measures, the growing cuts to the American social safety net and U.S. critical infrastructure coupled with alarming increases in taxes for low income to upper middle income workers should leave no doubt as to what is actually taking place within the United States. Although nomenclature and terminology may be different in the public discourse, make no mistake that Americans have much more in common with the Greeks, Spanish, Irish, and other Austerity victims than they may wish to admit.
Largely at the forefront of any budgetary discussion in the United States is the issue of government spending as it relates to programs such as Medicare, Social Security, Medicaid, Unemployment Insurance, Food Stamps, etc. – programs that have been given the politically charged name of “entitlement programs” in order to associate the spoiled child mentality with programs that have actually been funded by the taxes of working people during the course of an entire lifetime.
Constant propaganda from both pillars of the false left/right paradigm have contributed to the brainwashing of the American population regarding the programs mentioned above. Most notably, claims that the United States cannot afford to maintain a social safety net system without vastly increasing taxes or simply abolishing the program altogether are reported back to uninformed constituencies of both political parties to be parroted back to them in times of national debate in the form of mandates and demands.
From Libertarians who oppose social safety net programs on ideological grounds (as promoted by the Rockefeller family) and Conservatives who have money and expect to continue to have money (hence the lack of concern for anyone who may not enjoy their level of comfort at the moment) to Socialists who are willing to bleed the average citizen for everything he is worth (for little in return but that which government decides is appropriate) and Liberals who are willing to both fleece taxpayers and compromise the programs these taxes would allegedly go to support, it is clear that the working men and women of the United States and those who have been victimized by Wall Street parasitism and the folly of Free Trade are left completely alone and to themselves.
Yet, amongst all of the reasons put forward as justification for the dismantling of the social safety net, few mention the Wall Street bailouts and the $27 trillion worth of credit extended to bankrupt institutions under the concept of “too big to fail.” Likewise, few tend to mention the financial costs of administering a global war OF terror on virtually every continent or the development and maintenance of a police state here at home. Neither are the consequences of prosecuting an unbelievably stupid and non-productive War on Drugs discussed when it comes to questions of what should be cut from the Federal budget.
Instead, the talk immediately turns to the social safety net and the programs that are currently keeping millions of Americans alive.
Yet there is a more immediate and preferable way to address the concerns regarding the social safety net than any raise in taxes on an American population that is already taxed to death or by the dismantling of the social safety net system.
This new method of support for the social safety net system is as simple as the Wall Street Sales Tax, a move which would solve both the “crisis” of the social safety net as well as the general budgetary crisis at all levels of government in the United States of America.
The Wall Street Sales Tax should be applied at the rate of 1% to financial market transactions such as stocks, bonds, flash trading, e-trading, high-frequency trading, debt instruments, and the notional value of derivatives. A reasonable exemption of $1 million per person per year should be enacted in order to prevent the placement of taxes on individuals who shift around personal financial assets or make investments for their 401(k) or other retirement account. The 1% tax should be paid by the seller of the instrument, not the buyer, and the proceeds accrued from the tax should be split evenly between the Federal government and the States.
The following is a brief explanation of how this program would achieve such a lofty goal and how it should be implemented in order to achieve maximum effect. In short, it is the argument for the creation and implementation of the Wall Street Sales Tax.
February 25, 2013
The number of people in America on Food Stamps remains at an all-time high, and now a new program is allowing Fido, Garfield and their peers to get in on the goods.
While the Supplemental Nutrition Assistance Program (SNAP) is a federal program administered by the states, Pet Food Stamps is a New York-based nonprofit that helps pet owners who can’t afford to support their animal friends.
“The Pet Food Stamps program … has been created to fill the void in the United States Food Stamp program which excludes the purchase of pet food and pet supplies. In these rough economic times, many pet owners are forced to abandon their beloved pet to the ASPCA, North Shore Animal League or other animal shelters due to the inability to pay for their basic food supply and care,” the organization’s website explains.
U.S. politicians have cried wolf over austerity long enough for the public to ignore them. A perfect time, then, for politicians to actually unleash the wolves. Barring an unlikely last minute deal, here’s a short list of some of the massive, national bi-partisan-created austerity cuts, according to the New York Times:
-600,000 food stamp recipients will be cut from the program
-Massive education cuts. According to President Obama:
“Once these cuts take effect thousands of teachers and educators will be laid off and tens of thousands of parents will have to scramble to find child care for their kids. ”
-12 billion in Medicare cuts (more to come after 2013)
-Millions receiving unemployment will see their checks cut by 11% (an average of 132 a month)
-Federal funds to state governments will be cut, creating even more deficits for states and municipalities, and thus more localized cuts (the states have already made austerity cuts of $337 billion!)
Also, 700,000 jobs are expected to be loss, while 70,000 kids are also expected to be kicked off of Head Start
And this is just for 2013. The current plan for the austerity “sequester” cuts is $100 billion of federal cuts every year for ten years, equaling massive cuts to jobs, Medicare, education, and completely destroying federally funded social programs.
Will it actually happen this time? The New York Times reports:
“In private, Capitol Hill staff members and members of Congress have admitted that there are no viable plans on the horizon to delay or offset the cuts.”
The finger pointing in Washington, D.C. has already reached a crescendo, with the perverted logic being that, if both parties are to blame, it’s really no one’s fault. In reality Democrats and Republicans created these “sequester” cuts, and they can just as easily undo them with a snap of the finger.Both parties are choosing not to delete the cuts. They just don’t want political responsibility for the fallout, which many economists have predicted will push the U.S. economy over the edge into official recession.
Former Federal Reserve economist Arnold Kling is not saying anything that EPJ readers aren’t aware of, but it is instructive that the fear of what is developing has has registered with Kling who is a card-carrying beltarian, currently at Cato Shrugged. He writes:
[…]consider the scenario that worries me. Our debt continues to increase. Nominal interest rates rise, so the government has to borrow more just to finance the debt. Congress wants to avoid having to cut spending elsewhere, and the Fed is asked to do its part.[…]
My guess is that in practice, for a variety of reasons, when the cost of government debt starts to rise, the Fed is not going to be willing/able to sterilize its funding of the debt, through IOR or any other means. We are going to see both intended and unintended monetary expansion, and that will produce inflation.
On a side note, any money printing is the direct result of Federal Reserve operations. Kling has the warning right, but only a beltarian, with a Cato Shrugged paycheck, could mix this very important warning with the next paragraph he writes:
As usual, let me say that I am not blaming the Fed or saying that inflation is just around the corner. When really out-of-control inflation emerges, it is a fiscal phenomenon.
The world order has changed in the course of the financial crisis and with it, enhanced the consolidation of a new arena of world politics in which superpowers somewhat urgently seem to hunt for new allies to rescue their well-being, says Gabriele Suder.
Gabriele Suder is Jean Monnet chair and professor of International & European Business at Skema Business School.
“Globalisation is out, regionalism is in! One could argue that we might need to thank the lasting economic crisis for at least a few sweeping developments on the global level: Amongst them, the awareness that the world is in no way as ‘flat’ as some contemporary thinkers made many believe.
Because resolution of crises may primarily originate from bi-and multilateral, often region-to-region forms of cooperation and free trade conditions that governments (and corporations) hope will stimulate economies.
For the past three years and more, we have seen an exceptionally dynamic trend towards more and more free trade negotiations and agreements. They install a political and economic multi-polarity already predicted ten years ago, right after 9/11.
Yet it is the financial crisis that has caused the main changes to the world arena that used to be perceived as an international order run by a few somewhat fading superpowers.
The world order has changed in the course of this crisis however and with it, enhanced the consolidation of a new arena of world politics in which superpowers somewhat urgently seem to hunt for new allies to rescue their well-being.
Driven by political and economic motivations, they are weaving a net of trade agreements. This net is increasingly perceived as a competitive race for political and economic first-mover advantages (intensified political cooperation; market access for trade and investment) that come with signing the best, most comprehensive or earliest agreement.
This is part of today’s driving force of geopolitical and geo-economic change. Hadn’t we already seen this ever so clearly in the race towards trade agreements with South Korea?
Now, after many long years of hesitation, both the EU and the USA have come to realise that their system of regionalising the world will work even better (they hope) if they themselves, mutually and reciprocally, open trade and unite forces further.
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Here you’ll find our rankings of the top US-friendly online casinos of 2020. With mobile real money casinos , you can use your device to access the same benefits and bonuses. Online casino sites tend to support a wide range of payment methods. Our reviewers examine ease-of-navigation and software speed in determining which sites offer...
As any savvy in-bound marketer knows, blogging is a very important tool for bringing the correct visitors to your website. If you were blogging for almost any amount of time, you could have started tinkering with the concept of guest blogging, too. Of course, if you’ve been wavering with this particular idea, we’re here to...
Antivirus application, sometimes recognized ant-malware or perhaps anti-spyware, can be an essential laptop application that is used to identify, block, and eliminate malware from some type of computer. In this article, we will need a look at exactly what is a virus, and why should we consider it? During the past, computers were slow, unimpressive,...