America’s financials are no longer in its own hands, but in the hands of foreign investors and foreign central banks. As you know, we need $3 billion in fresh investment everyday to forestall possible bankruptcy. They also pour lots of money into our stock market and real estate as well. American consumers, who make up 71% of our economy, depend on these foreigners to maintain their borrow-and-spend lifestyle! The reason we need all this money everyday is we spend much more money than we earn. It is called a balance of payments deficit and we owe $706.1 billion annually. Thus far, our lenders have been willing to take our bonds, stocks, real estate and other investments. The question is, for how long? The lenders know we owe trillions of dollars and our financial health deteriorates every day. Over the past three months Treasury bonds have been falling, yields have been rising and foreign central banks are forever coming to the rescue. These are to say the least very worrisome trends. We are already hearing despair in American’s voices as they complain about vanishing buying power. PIMCO’s mortgage people see 4-6% gains in housing in 2006. We call that wishful thinking. Who is going to buy these houses and condos with the Affordability Index having fallen from 144 to 115? Between rising mortgage rates, lack of affordability and a slowing economy and overbuilding, prices are going to fall. In hot areas such as NYC, Boston, Maryland, DC and Phoenix we are already seeing the high-end houses down 8-10%. Toll Brothers, builders of high-end homes says business is rapidly slowing down. They say cancellations are 6.5%%, up from 4% and business will be slower next year. Toll is one of our short positions.
The US dollar position as the world’s reserve currency is being very badly abused and its status and deterioration is further being undermined by free trade and globalization of financial markets. The US financial sphere has been capitalized tremendously, both from globalization and the proliferation of securitisations, derivatives, securities market-based credit entitlements and Treasury and Fed manipulation. Our market has been selling junk paper as safe financial claims to create endless quantities of readily tradable A-rated securities, which has allowed the credit binge to continue by government corporations and individuals. All US deficits have heightened risk. This has led to speculation and marketplace liquidity excesses and these distortions are reinforcing more excesses. Market adjustment and self-correction of these excesses have been papered over by the Fed and the Treasury via further expansion of aggregates and further excessive debt creation. Sooner or later the expansion of money and credit has to moderate and once that happens so will liquidity moderate, speculation will moderate as well asset prices and the bubble will have been broken. It is the widening gulf between perceptions and reality that insures future tumult, revulsion and dislocation. Are those 10,000 hedge funds out there, those proprietary trading desks and derivative jockeys going to buy all this indefinitely – of course not. We are going to have hyperinflation and the only guard against that is gold.
After being politically disemboweled last week, California Governor Arnold Schwarznegger has backed out of a fight with California’s nurses. He has dropped his yearlong legal effort to rollback legislation requiring hospitals to maintain a ratio of one nurse for every five patients. Arnold will not be reelected.
Whatever happened to Habeas Corpus? If George and the neocons and Tony Blair have their way it will be history. Habeas Corpus is at the foundation of our freedom and its destruction removes the basis of guarantee that no on can imprison you without trial. These monsters want to detain indefinitely anyone at any time for any reason they want under the cover of “terrorism”. That is without charges. The power to detain was lost to kings and tyrants in the Magna Carter. This should indelibly print in your mind how serious an issue habeas corpus is. Without it we are simply vassals of a despot, in this case namely George the lunatic. Tony Blair, as you know, was just defeated on the issue in parliament, which shows there are still some sane politicians in the English-speaking world. Detention without benefit of Habeas Corpus is a police state trick only used by an unscrupulous government. It is the ultimate in injustice. Unfortunately, the American people are too dumb to realize this.
How our Republican dominated Senate could vote last week along party lines 49-42 to overturn the Supreme Court’s 2004 ruling that permits Guantanamo detainees to challenge their detentions is beyond the pale. Our Senate Republicans are mad because our court upheld our Constitution and the civil liberties of Americans when we have terrorists to fight, when the Senate knows the terrorists sit in the White House. We have a Senate that is injurious to our health. It under cuts America as the land of freedom, the home of the moral and the brave and a home of real democracy. Without habeas corpus government can simply detain opponents or dissenters indefinitely to shut them up. The sponsor of this legislation and every Senator who voted for it personifies evil. Our Senate wants to join George and the neocons in the barbaric ritual of torture and murder. Our Senate and our neocon administration are tyrants. Mind you, we are not from the left, we are extreme right wing. No matter where you are from on the political spectrum you should be for the retention of our Constitution, otherwise we are lost. A free nation does not hire bounty hunters all over the world to snatch people off the streets and detain and torture them indefinitely. How can Americans tolerate such despicable behavior? Have we descended to the level of beasts?
George and the neocons are violating our Constitution and our Senate agrees with them. They trample on the rule of law, the laws of war, the Geneva Convention and what we set in stone at Nuremberg. Our country is being run by a band of criminals that make the Mafia look like good citizens. These malefactors must be thrown out of office and impeached and tried for their dastardly deeds. Americans show what you are made of – strike down these tyrants.
An auditing board sponsored by the UN has recommended that the US repay as much as $208 million to the Iraq government for contracting work in 2003 and 2004, performed by Halliburton subsidiary Kellogg, Brown and Root. The work was paid for from Iraq oil proceeds and it was carried out at inflated prices or done poorly. As we have learned over and over from other jobs KBR has little or no documentation for work they’ve said they’ve done. All the contracts were sole sourced or bid uncompetitively. The Bush administration repeatedly gave Halliburton special treatment and allowed the company to gouge both the US taxpayers and the Iraqi people. Never has so much money been stolen by so few. It’s to be expected when you have a criminal elitist government. The corruption staggers the imagination. Remember, you elected these crooks.
In a pile 100 yards long and 60 feet high corn is collecting as Iowa finishes its second-largest crop in history. Those 2.7 million bushels illustrates the explosive growth in American corn production. Last year it was a record 11.8 M/B and this year it will be 10.9 M/B. As the Bush administration tries to persuade member nations of WTO that it is serious about trimming agricultural subsidies, federal spending on farm payments is closing in on the record of $22.9 billion set in 2000, when the Asian financial crisis caused American exports to fall and crop prices to sink, pushing the Midwest farm belt into recession. If exports sales stay weak, this year’s subsidies could hit a new record. Just last week the US Agriculture Department raised its projection of payments to farmers by $1.3 billion to $22.7 billion. In 2004, those subsidies were only $13.3 billion. In retort, recently the administration said it was ready to cut subsidies by 60% over five years, which we don’t believe for a second. The government spent $41.9 billion on corn subsidies from 1995 to 2004. So far, current and future corn shipments are running 11% behind last year’s level of 640 million bushels in early November. The result is major inventory and lower corn prices. Sixty percent of corn shipments go through New Orleans, which has a shortage of river barges, which has caused barge rates to triple in some places. A higher cost for gasoline and diesel has led railways and truckers to increase rates four to six times normal rates. This year grain piles are everywhere across Iowa and parts of Illinois and storage of corn is up 19% to the highest level in 25 years.
Subsidies are costing us lots of money in exchange for a reliable food supply. We were writing articles about farm problems in the 70s of how we were showing all these developing nations how they could farm to compete with us and now the results of that have come home to roost.
All broadband Internet service providers and many Voice Over Internet Protocol, or VOIP, companies now have 18 months to insure their systems have backdoors that allow law enforcement to eavesdrop on their customers’ communications for investigative purposes. The FCC has justified the expansion on the basis of terrorism and homeland security, which is as bogus as it gets. The order by the government is particularly vague, so they can rope in just about everything in the technology. A coalition of groups, including the Center for Democracy & Technology and the VOLP company Pulver.com, issued their own one-page notice of appeal. They intend to argue that Congress never intended for CALEA (Commission on Accreditation for Law Enforcement Agencies) to apply to the Internet and that the FCC has overstepped its bounds. The way the court system is today in the US we hardly expect any changes as more of our freedoms are destroyed.
A shift from a productive to a service economy really got underway in the early 70s as a result of GATT and the formation by David Rockefeller of the Trilateral Commission. We began to jettison an economy based on fair trade principles to a post-industrial services economy and simultaneously we were beginning to slide into free trade and globalization. All the plans by the transnationals we see in action today were planned during the 1970s and 1980s. These plans have accelerated the decline of the US economy and have virtually destroyed much of the potential for economic recovery. If we had been allowed to have a real recession between 1989 and 1996. Instead, Sir Alan Greenspan, at the behest of his masters, papered over the recession and now because of that we face depression. Mr. Greenspan created the stock market bubble, which will be followed by the piercing of the real estate bubble. The economy, since 2001, has been floating on a sea of derivatives augmented by hedge funds. What should have been a serious recession in the early 1990s will make Weimer Germany in 1923 and the 1930’s look very tame. This time Americans will be swindled out of most everything they own. We are about to enter an economic, financial, cultural and intellectual Dark Age. This is a replay of the Fourteenth Century, which simultaneously in 1348 saw the bubonic plague and the collapse of the Venetian banking empire.
In the 1400s the elitists were exiled and only two countries would take them in, the Netherlands and what is today called Wales. This time it’s a planned economic failure, much like many they have created in the past. This time there can be no Mr. Nice Guy. They must be punished for the havoc they have caused in our society and the world at large. Yes, they will pay and we will win, but we are going to pay a terrible price for our lack of vigilance. We soon will be looking at an explosive end and concluding phase of a global collapse. All you can hope and pray for is a Renaissance after the storm. We believe there will be one in a much different world.