When Ben Bernanke becomes the Chairman of the Federal Reserve in just over one week, we expect he will get to work on inflation targeting. Part of the approach, other than interest rates, will be what he calls the Sacrificial Ratio, a measure of the amount of increased unemployment that will be caused by an increase in interest rates versus the amount of future inflation that will be allowed as a result of the increase in rates. Increasing employment in any meaningful way is next to impossible as we found out over the past five years. Ben will have to contend with free trade, globalization, offshoring and outsourcing. Inflation cannot be contained by raising rates and at the same time increasing M3 and credit by 12% - one in the antithesis of the other. Thus, no matter what the Fed does in the best of circumstances, it cannot produce quality jobs. That formula is going to get much worse before it gets better, absent protective tariffs. As the stock market, real estate and bonds fall, the economy will erode and foreigners who have lent us money will demand a higher interest rate to compensate for losses. That is just around the corner. Poor Ben has been served up a can of worms that is certainly uneatable. There will be no trade off. The decisions have really been taken out of Ben's hands and all he can do is make excuses for a mess he didn't create. Whether Ben or anyone else like it, interest rates may rise higher than we expect, 1/2% to 3/4% by June. They may go from 4 1/4% to 6 1/2% to 7% on the overnight rate. Who knows yet what foreign lenders are going to demand? If gold is rising with climbing interest rates it will soar when rates stop going up or fall. We find it amusing few writers put forth the thesis we do and we've almost always been right. It's been simple, but what can they be thinking? With all their intellectualizing they cannot run against the system. They are afraid too. They want acceptance and they want to keep their jobs. That is more important than the truth. God help the poor people who follow their advice. We are experiencing a classic economic and financial collapse. Anyone who has absorbed history and our cultures should be well aware of what we face. This is what a classical education is all about. This is what it prepares you for. Economy and finance are art forms and you cannot put a slide rule to them. Turning up the printing presses and dropping money from helicopters is not the answer and has disastrous consequences, as we are about to again experience. Weakness in stocks, bonds and real estate are deflationary and that means Ben has no choice but to crank up monetary aggregates 15-20 or perhaps 50 percent. Eventually someone will say, isn't it about time we faced the music and fix the system? That astute messenger will, of course, eventually be shot or never heard from again. Then comes the deluge that can only be solved by purging the system, which should have been done in the first place.
Halliburton, under a no-bid contract with the government, has $300 million worth of Mercedes trucks sitting idle at Camp Anaconda, Iraq. We pay taxes and Washington's inefficiency wastes our hard earned money.
New Orleans residents are hopping mad and full of defiance. A proposed building plan has been unveiled, and under the plan the mostly working class and poor residents of the hardest hit areas, some two-thirds of the city that includes more than half the homeowners, would not be allowed to move back and begin rebuilding their homes for at least four months. During this four-months, residents would have to demonstrate the existence of sufficient “critical mass” in their neighborhoods by showing, for example, that half of the population planned to return and rebuild. Neighborhoods that failed the test would either be reduced in size or plowed under, and a new city agency, the Crescent City Redevelopment Corp., would buy out homeowners or seize their property through eminent domain. These areas would be returned to wetlands and green space. The estimated cost would be $12 billion and which the city would seek to receive from us taxpayers via the federal government. This is a calculated and cruel scheme to permanently depopulate low-income areas of New Orleans, and build up more affluent residential areas, as well as tourist districts. We believe connected elitist interests and cronies of local and state politicians will end up with the land at fire-sale prices and further enrich themselves. Tens of thousands of working class New Orleans residents, stripped of their homes and their jobs and scattered across America, as a result of incompetence, collusion and theft by government and its thieving appendages as our country sinks to new lows. The city is being given to the elite, privileged and wealthy. Isn't that the way it is supposed to be? You have to have a reward for creating and directing hurricanes. Behind this theft is G. W. Bush's good friend N.O. developer J. C. Canizaro. We are currently checking to see if he is connected to the Traficanti's. Canizaro is a commission member. All we get from lizard blood Bush is personal contempt and indifference toward the suffering of the city's poorest residents. In Bush's visit he visited the rich and connected only and in his own unequally moronic way displayed his ignorance and callous stupidity.
Only one-third of the former inhabitants of N.O. have returned. The Latin Quarter has come to life and the city's wealthier areas have as well. The poor and middle-class areas are a shambles. Our President is giving the city $3.1 billion to fix the levees, but experts say $32 billion is needed. Our government has allocated $25 billion for relief; $250 billion is needed. We believe the disaster was deliberately caused and the part of government is a classic case of gross negligence and a colossal misallocation of resources away from social needs and infrastructure and into the private bank accounts of the rich and super-rich. Washington and local politicians and the elitists will rape what is left of the city.
Last week we talked about presidential signing statements, something we are sure you have never heard of before. It was in reference to legislation the President had signed, but added a statement to. In that particular case, the signing statement involved torture legislation and in effect Mr. Bush said he'd ignore it and do as he pleased.
Signing statements are often used instead of vetoes and most are abusive. Reagan, H. W. Bush and Clinton all used them. George W. Bush issued 23 signing statements in 2001; 34 statements in 2002, raising 168 constitutional objections; 27 statements in 2003, raising 142 constitutional challenges, and 23 statements in 2004, raising 175 constitutional criticisms. In total, during his first term, Bush raised a remarkable 505 constitutional challenges to various provisions of legislation that became law.
That number is now close to 600. No vetoes - by saying parts of legislation don't apply to him. By using signing statements he effectively nullifies them as they relate to the executive branch. These statements are savers to help him when the relevant laws are construed in court to be relevant to their interpretation of a given law.
Bush has been secretly using these statements to bolster presidential powers. A scheme that has gone unnoticed until two weeks ago when he used a signing statement to attempt to nullify the recent McCain Amendment regarding torture – a primitive action George is quite fond of. These statements are usually brief, very broad, and seldom cite the law - essentially personal opinions that render a law passed null and void in the eyes of the President. They are a rewriting and reinterpreting of how the law will be implemented if at all. These acts are like line item vetoes, and they are unconstitutional and will be shown thus upon challenge. George is playing a game he'll lose that will eventually aid in his impeachment. The law on the line item veto says that after a bill has passed both Houses, but before it becomes law, must be presented to the President who shall sign it if he approves it but return it, that is veto the bill, in its entirety. That makes all signing statements null and void. The frequency and audacity of Bush's use of signing statements smacks of a man who desires dictatorial power. Such end-runs around the Constitution should be challenged by the Justice Department. He owns the department, so the matter isn't pursued. It's simply a conflict of interest in a government that is being conducted unconstitutionally. Justice is no longer a non-partisan legal division - it is an appendage of the presidency. That means law and order is whatever the President says it is. If he says, what we write here about what he is doing is seditious or terrorist, than it is and we can be interned indefinitely without charges and tortured at will. Justice has acceded to dictatorial government. Bush ignores the law; Justice complies to protect itself in the furtherance of unconstitutional actions.
As a result of these actions there are those within the executive branch who are getting cold feet and that is why you are seeing leaks about torture and domestic spying. Now it is the place of Congress to take action, now. Not after the Democrats take back both Houses in November. Now is the time to let legislators know you know what is going on and you want something done about it.