Letters to a President 9/30/201

Dr Paul,

You just might have a chance of winning! They are listening to you.  Hell, Perry is copying you.  You just have to get out there and do something that no president has done since Jimmy Carter; TELL THE TRUTH.

The Fed, The Weed, The Oil Companies, The Banks - Real American History.

But you also have to TELL US A VISION we can all stand behind, as well as KENNEDY.

Something as grande as Kennedy's Trip to the Moon (assuming that was even real).  But it moved us all towards one goal.  Tell them about the high speed rail we can build that runs on solar, hydro, and hemp bio-diesel.  Tell them about the roaring horse power of the new American Bullet trains powered cutting edge technology.  

That's a vision people will stand behind when the price of gas reaches $10 a gallon, which is what will happen when the Eurozone tumbles.  Investors will flee to the USD and gold, maybe silver, and the Pound Sterling, and YUAN from China.  Some to the indian ruppee and others to the russian ruble. Al currencies will spike as the world economies feel the ripple affect of the Greek and Italian defaults.  Then, imports will become more expensive.  Some will even blame others countries for their misery and then the CIA, MI6, ISI and Mossad will play their games and someone will end up dead.  Then a war will start and where will be be?

And that's why hemp should be legalized.  Because war is politix by another means, and economix is business by other means, and business is sometimes personal.  Because it was made illegal to protect the cotton and papers industries and now it stays illegal to protect the oil and banking industries.  

If every American was allowed to grow hemp in their backyard and sell it on the market at a fair price, it would become a commodity.  And then the bankers and speculators would fuck that up too.

Anyway, hemp could become a source of fuel and income.  Some regulations, but the people could regulate themselves with third party auditing.  Balance the powers.  The people need more equity.  The middle class need more equity.  Less debt.

Got it? I'll explain more in my book.  For now you can follow @twistedpolitix

Dr Paul,



You just might have a chance of winning! They are listening to you. Hell, Perry is copying you. You just have to get out there and do something that no president has done since Jimmy Carter; TELL THE TRUTH.



The Fed, The Weed, The Oil Companies, The Banks - Real American History.



But you also have to TELL US A VISION we can all stand behind, as well as KENNEDY.



Something as grande as Kennedy's Trip to the Moon (assuming that was even real). But it moved us all towards one goal. Tell them about the high speed rail we can build that runs on solar, hydro, and hemp bio-diesel. Tell them about the roaring horse power of the new American Bullet trains powered cutting edge technology.



That's a vision people will stand behind when the price of gas reaches $10 a gallon, which is what will happen when the Eurozone tumbles. Investors will flee to the USD and gold, maybe silver, and the Pound Sterling, and YUAN from China. Some to the indian ruppee and others to the russia http://amplify.com/u/a1dzjm

Economic War Caused by Weather? Killer Cantaloupe, Scary Sprouts

@collapsenet #?4MCR Is this economic war? Caused by weather? Killer cantaloupe, scary sprouts http://j.mp/rfcgDA #peakoil #climate



This could have been contaminated when it was flown over. Airborne dust, virus, bacteria, food scum, carcinogens, toxins, poisons, etc. The damn planes are flying dirty boxes and containers from country to country. State to state, city to city, community to community, person to person, man to beast, beast to insect, insect to microbe to speck of energy.



Human intelligence, is it above that of mother earth? How is it that we FORGOT that the planet is alive and we are simply flies on its back.

Amplify’d from www.smdailyjournal.com

Killer cantaloupe, scary sprouts — what to do?

September 30, 2011, 04:10 AM By Marilynn Marchione The Associated Press

MILWAUKEE — Avoid foreign produce. Wash and peel your fruit. Keep it refrigerated. None of these common tips would have guaranteed your safety from the deadliest food outbreak in a decade, the one involving cantaloupes from Colorado. Whether it’s sprouts or spinach, turkey or hamburger; whether the government doubled, tripled or quadrupled inspections, the truth is that no food will ever be completely free of risk. And a few foods have become so risky that certain people such as children, pregnant women and the elderly may do best to avoid them altogether until growers and the government figure out how to make them safer, some food experts say. An unappetizing fact: Although the current cantaloupe outbreak has been tied to just one farm in Colorado, it’s at least the 19th outbreak involving that melon since 1984. It’s also the first one caused by listeria, a germ that actually likes to be in the refrigerator and thrives in this fruit, which cannot be cooked unless you want to eat melon mush. Listeria also prompted a California farm to recall bags of chopped romaine lettuce on Thursday because of possible contamination, though no illnesses have been reported. The greens from Salinas-based True Leaf Farms went to an Oregon distributor and possibly at least two other states — Washington and Idaho. So what should you do if you see cantaloupe on a salad bar or at the grocery store? Can you be sure all of the tainted stuff has been pulled from the market, since the last bad melons were shipped on Sept. 10? What if no one knows where the cantaloupe was grown? “If the store can’t tell them or the restaurant can’t tell them, I would not buy it at all,” said Chris Waldrop, director of the Food Policy Institute at the Consumer Federation of America. Laura Anderko, a Georgetown University public health expert, went a step further. “Honestly, as a nurse, I would tell people don’t eat the cantaloupe until this thing resolves itself,” she said. “This stuff happens because our system is not as tight as it needs to be.” The federal Centers for Disease Control and Prevention, which has confirmed 13 deaths and 72 illnesses in the outbreak so far, has not told people to stop buying cantaloupe. However, the CDC and the Food and Drug Administration cannot even say where all of the tainted melon went, because it was sold and resold to many distributors across the nation. “When in doubt, throw it out,” is the CDC’s advice to consumers who have any cantaloupe whose origins they can’t determine. “Even if the cantaloupe is gone, you need to wash the drawer or shelf it may have been on” to make sure other foods don’t become contaminated, said Caroline Smith DeWaal, director of food safety at the Center for Science in the Public Interest. Beyond that, each outbreak brings fresh lessons on how to make produce safer. And while some of these things aren’t guarantees, they can cut the odds you’ll lose at the food safety lottery. Some new tips food experts offered Thursday: — Shop more often and consume fresh fruits and vegetables within a few days. This gives germs less chance to multiply and gives you more nutrients from your food, too. — Don’t just wash a melon. Scrub it under running water to rinse off any dislodged germs, and let it dry. If you cut it while it’s still wet, “you may be sliding the pathogens more easily from the outside to the inside” on the knife, DeWaal said. — Keep the fridge cold, 40 degrees or lower. Higher than that can let germs grow. — Don’t get a false sense of security if you buy organic produce. That just means less pesticide — not necessarily fewer germs. — Consider dropping especially risky foods from your diet. Bean sprouts are not safe for children, pregnant women or people with weak immune systems and certain diseases, but that doesn’t mean they’re OK for everyone else, said Michael Doyle, a microbiologist who heads the University of Georgia’s Center for Food Safety. Doyle also consults for a lot of food companies, including a major spinach producer that sought help after outbreaks involving that vegetable. He has chaired a food safety advisory council for McDonald’s for many years. “I don’t eat sprouts at all,” he said. If harmful bacteria are in the seeds “they grow in the sprouting process, and there’s nothing to kill them unless you cook them.” You can go too far with this, though. Even Dr. Robert Tauxe, the CDC’s top food-germ sleuth, once confessed over lunch that he refused to live in fear of the fork, and that there were only a few foods he absolutely wouldn’t eat, such as raw oysters and unpasteurized milk. Beyond that, safe handling and cooking can generally keep most foods safe, he said. The big picture is important, said Robert Gravani, a food scientist at Cornell University. A gazillion pounds of produce are consumed each day, and only a tiny fraction cause problems, he said. “I have a hard time saying, ‘Don’t eat produce,’ because of all of the health benefits,” he said. “Everything we do has some degree of risk attached to it.” ——— Online: Food safety tips: www.cspinet.org , http://www.fightbac.org Read more at www.smdailyjournal.com

 

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Weather, Climate, and the Scientific Impact on Human Activity and Economic Cycles

Economic cycles: long cycles and business cycles since 1870

 By Solomos Solomou


http://bit.ly/n3p09s 

Is America Fomenting War with Pakistan? pt1

The CIA and the news have been reporting quite a lot lately about Pakistan's ISI working with the Hakkani network. It looks like now that OBL is dead, we need a new phantom to chase in order to hide the energy wars. Remember, the Unocal pipeline runs through Pakistan and Afghanistan from the Caspian Sea, all around Iran. On the other side of Iran, the US thought they had secured Iraq. Now it is all falling apart.

Amplify’d from nation.com.pk

All stand united for national defence Published: September 26, 2011

ISLAMABAD – Mounting threat of US attack on Pakistani soil after Islamabad’s blunt refusal to blindly implement Washington’s orders against the Haqqanis has generated a national fervour for country’s defence, swinging Prime Minister Gilani into action. The premiere Sunday contacted leaders of all shades of opinion to take them on board and inform that he was going to call an all-party conference in the days ahead to hammer out with consensus a strategy to deal with the situation. The mainstream political parties across the national spectrum vowed to go to any extent to defend the country’s sovereignty and territorial integrity, vowing to stand by the government and the army in this noble cause. Gilani, who met President Asif Ali Zardari later the same day, also asked Foreign Minister Hina Rabbani Khar to immediately return from New York after her address to the UN General Assembly on Tuesday. A PM House spokesperson said the premiere Sunday spoke to the foreign minister twice and asked her to forcefully project Pakistan’s point of view on that important platform. The prime minister’s initiative of direct contacts with all the political leaders was appreciated by all political quarters who are concerned over the gravity of the situation because of the widening divergences between Pakistan and the United States. PML-N President Nawaz Sharif, PML-Q President Chaudhry Shujat Hussain, MQM chief Altaf Hussain, JUI-F amir Maulana Fazlur Rehman, ANP President Asfandyar Wali Khan, Jamaat-i-Islami amir Syed Munawwar Hasan, Awami Muslim League President Sheik Rashid Ahmed, Pakistan Tehrik-i-Insaaf Chairman Imran Khan, PML-Q Likeminded President Salim Saifullah Khan, PPP-S Chairman Aftab Sherpao, JUP President Maulana Anas Noorani and Fata leader Munir Orakzai are among the leaders the prime minister talked to. The prime minister told the political leaders that they would be given a briefing on the situation and then in the light of their suggestions a strategy would be framed. No date has been set, though various political leaders said the APC would be held during the next few days. Although there have been ups and downs in the past in the relations between the two allies in war on terror, the ties plummeted to the lowest ebb when the United States alleged that Inter-Services Intelligence (ISI) supported the Haqqani group, an accusation Pakistan strongly denies, and a number of its officials issued threats that the US could launch ground attack in Waziristan to get the Haqqanis. A session of the National Assembly has already been called for October 3 to discuss the situation arising out of the US allegations of “exporting terrorism” to Afghanistan. It is believed the APC would be held much before the NA session. Political leaders have different assessments about the likely course the US could take in the changed situation. However, all leaders are of the view that the US has lost the battle in Afghanistan despite spending billions of dollars over the past 10 years and was now trying to make Pakistan a scapegoat. Some leaders said that they told the premier that he has taken the initiative very late. Still, they said, it was a step in the right direction. Following the contacts by PM Gilani with mainstream political parties, PTI Chairman Imran Khan contacted JI amir Syed Munawar Hasan on telephone and discussed with him the situation, suggesting him to formulate a joint strategy for participation in the APC. PTI chief Imran Khan said that if US attacked Pakistan, the nation would stand against the US. He said that he would attend all parties’ conference as it is for the national cause. Senator Zahid Khan of ANP said that Pakistan is a sovereign state and cannot be run on the foreign dictation. He said that any foreign interference in Pakistan would not be tolerable. PML-Q Senior Vice President Sheikh Waqqas Akram said that the Core Commanders Conference in this situation was a need of the hour. He said that the nation has full confidence on his military and political leadership and would welcome every decision being made by them. He further said that the people of Pakistan stand united with Pakistan army and ISI. He said that the international community should recognise our sacrifices in the war against terror and the US doesn’t try to blame Pakistan for its failures. When contacted, Senior MQM leader Haider Abbas Rizvi said that every nation in the world has its own interest, which they serve with their full efforts. Sometimes situation requires some specific measures. In case of internal and external pressure, Rizvi said, “We should always serve our national interest.” To a question, he said that this is very serious situation and needs to be dealt with wisdom. The government and other forces are united for the solidarity and integrity of Pakistan. Read more at nation.com.pk

 

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Vote for Ron Paul to End the Federal Reserve #occupywallst

Usury and debased coin have become the new American nightmare, just like Rome. Fractional reserve banking enables the banks to lend out and make a profit with a multiplier affect.

Amplify’d from www.themoneymasters.com

Milton Friedman:

END THE FED

and

Withdraw from the Bank for International Settlements, the IMF and the World Bank

Nobel Laureate Milton Friedman is known now as one of the most influential economists of the 20th century. As our readers will have noted, Dr. Friedman praised our Monetary Reform Act and perhaps unbeknownst to them assisted in drafting it, with suggestions and constructive criticisms. Yet a few of our readers have emailed wondering how Dr. Friedman could support genuine reform in the markets based on reform legislation when he seemed to be fundamentally opposed to government interference in the marketplace.

The distinction is between theory and practice. Theoretically to minimize government interference in the operation of the free markets is an ideal, which follows Frederich von Hayek’s (author of 1944 classic The Road to Serfdom) view that maximizing the ability of business to allocate resources efficiently at the lowest levels without government or political interference combined with the freedom to contract worked best to ensure a productive economy. Conversely, the failed examples of communist and socialist governments, which prohibited or controlled private business nearly totally, seemed to cement Hayek’s view as the correct approach.

The gradual victory of Hayek’s anti-regulatory, pro-market economic views in the West, largely through the influence of Milton Friedman particularly in the 1980s Reagan-Thatcher period (Friedman was an economic advisor to President Reagan) began a worldwide deregulatory trend that eventually included the financial sector. The Economist magazine praised him as “the most influential economist of the second half of the 20th century…possibly of all of it“. In 1988 he received the Presidential Medal of Freedom and the National Medal of Science. Initially the results of implementing his pro-market prescriptions were largely positive. Excessive government regulation, particularly in more socialist economies, had in fact created a stranglehold on businesses – especially small to medium-sized – that was doing far more harm than good.

Pushed too far the same views that initially helped business resulted in an extreme anti-regulatory environment that began to benefit only the largest companies as they were increasingly freed to use their economic power to warp the free markets in their favor. This became particularly true in the financial sector in the 1990’s when they succeeded in getting part of the 1933 Glass-Steagal Act repealed with passage of the 1999 Gramm-Leach-Bliley Act. A host of federal and state regulatory acts stemming from the experiences of the Great Depression were repealed in the 1990s and beyond. Branch banking and interstate banking became widespread resulting in numerous bank mergers consolidating most banking into a handful of banks later deemed TBTF (Too Big to Fail) and so were given special, favored treatment by Treasury Secretary Hank Paulson and later Secretary Tim Geithner and Fed Chairman Bernanke with taxpayer-financed bank bailouts and low interest loans. The foxes were rewarded for gutting the hen house.

Without recounting those partial causes of the 2007-2010 Credit Contraction, suffice it to note that one result was a trend away from the almost laissez-faire (French trans. “leave it alone”) anti-regulatory approach of the 1980s on.  Some have turned the blame for the current situation on Milton Friedman. Is that fair? It depends on who and what is to blame for the current recession/depression (as Present Reagan sagely noted, “If your neighbor is unemployed it’s a recession; if you are unemployed it’s a depression”).

Let us listen to Milton Friedman on the single cause of severe economic depressions:

“I know of no severe depression, in any country or any time, that was not accompanied by a sharp decline in the stock of money, and equally of no sharp decline in the stock of money that was not accompanied by a severe depression.”

Was Friedman right this time too – was this recession/depression caused by a “sharp decline in the stock of money.” If so, what was its origin? Let’s start with a look at the top of the international financial system.

The Central bankers’ Bank for International Settlements (BIS) in 1988 in its “Basel I” regulations imposed an 8% capital reserve standard on member central banks. This almost immediately threw Japan (which had banks with 3-5% capital reserves) into a 15 year economic depression as those banks contracted credit to comply with Basel I. In 2004 Basel II imposed “mark to the market” capital valuation standards that required international banks to revalue their reserves according to changing market valuations (such as falling home or stock prices). The US implemented those standards in November, 2007. Almost immediately, in December 2007 the US stock market collapsed and credit began drying up as banks withheld loans to comply with the 8% capital requirement as collateral valuations, particularly on homes, began to drop. The snowball effect of tightening credit, which reduces economic activity and values further, which resulted in further tightening of credit, etc., has produced a worldwide recession/depression.

Was Friedman to blame for that, or was the BIS and implementation of its Basel II regulations?

For those unfamiliar with the BIS – it is the central bankers’ bank. It is above all governments, is exempt from the laws of its host country – Switzerland, and its regulations, which are adopted among its 53 member Central banks, become in effect part of the banking law of those nations without legislative approval (such as that of the US Congress). Yet they effect the economies of those member nations and that of the world, as we are still experiencing, a’ la Japan. The BIS is in most respects, when combined with the IMF (International Monetary Fund) and World Bank, a worldwide version of the US Federal Reserve System. Here is former JP Morgan Chase CEO Walter Shipl­ey on this point re the IMF:

The same thing is true on the international front. The world clearly needs the global equivalent of the Federal Reserve. That is what the role of the IMF is.

What was Milton Friedman’s attitude towards the Fed (and towards the BIS/IMF/World Bank combo which is the global equivalent of the US Fed). For starters, he squarely blamed the Great Depression on the Fed:

“The Fed was largely responsible for converting what might have been a garden-variety recession, although perhaps a fairly severe one, into a major catastrophe. Instead of using its powers to offset the depression, it presided over a decline in the quantity of money by one-third from 1929 to 1933 … Far from the depression being a failure of the free-enterprise system, it was a tragic failure of government.”. —Milton Friedman , Two Lucky People, 233

Friedman was opposed to the very existence of the Fed:

“Any system which gives so much power and so much discretion to a few men, [so] that mistakes ‑‑ excusable or not ‑‑ can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic ‑‑ this is the key political argument against an independent central bank. . .To paraphrase Clemenceau: money is much too serious a matter to be left to the Central Bankers.”

Friedman was in favor of abolishing the Federal Reserve System and replacing it with a mathematical model that would keep the quantity of money increasing at a steady rate, issued directly by the government (Treasury) and ending fractional reserve banking powers for the banks, which is why he supported our Monetary Reform Act. He said he actually would “like to abolish the Fed“, and pointed out that when he wrote about reforming the Fed it was simply his recommendations of how it should be run given that it exists. Though opposed to the existence of the Fed, Friedman argued that, given that it does exist, a steady expansion of the money supply was the only wise policy, and he warned against efforts by a treasury or central bank such as the Fed to do otherwise.

Friedman emphasized the advantages of free market economics and the disadvantages of government intervention and regulation. He opposed cartels and monopolistic business practices such as the Federal Reserve Act of 1913 created in the US banking industry, delegating to them the exclusive power to create most of the US money supply. Friedman later concluded that all government intervention associated with the New Deal was “the wrong cure for the wrong disease“, arguing that the money supply should simply have been expanded, instead of contracted. Friedman and economist Anna Schwartz argued that the Great Depression was caused by monetary contraction, which was the consequence of poor policymaking by the Fed. Friedman encapsulated his philosophy in a lecture at Universidad Católica de Chile, saying: “free markets would undermine political centralization and political control.”

Friedman said: “If a government were put in charge of the Sahara Desert, within five years there’d be a shortage of sand”. Friedman’s distrust of massive government has recently been reflected in the public mood resulting in the upset election of a Republican Senator in liberal Massachusetts. After Friedman’s death, Keynesian Nobel Laureate Paul Krugman, while regarding Friedman as a “great economist and a great man,” criticized him during 2007 by writing that “he slipped all too easily into claiming both that markets always work and that only markets work. It’s extremely hard to find cases in which Friedman acknowledged the possibility that markets could go wrong, or that government intervention could serve a useful purpose.” However, Keynesian economists William Baumol and Alan Blinder repudiated that view, writing that “Friedman is surely no anarchist … He recognizes that any society needs laws, and that legislation and enforcement of the law are proper roles for government in a free society.” Friedman himself acknowledged cases where, for instance, government regulation or a public monopoly may be preferred to private monopoly (e.g., in money creation, which should be exclusively the perogative of government and never delegated to private banks to create using fractional reserve lending practices as is the present case) and noted numerous areas where he believed government intervention is necessary:

“A government which maintained law and order, defined property rights, served as a means whereby we could modify property rights and other rules of the economic game, adjudicated disputes about the interpretation of the rules, enforced contracts, promoted competition, provided a monetary framework, engaged in activities to counter technical monopolies and to overcome neighborhood effects widely regarded as sufficiently important to justify government intervention, and which supplemented private charity and the private family in protecting the irresponsible … would clearly have important functions to perform. The consistent [classical] liberal is not an anarchist.”

Rather than an economic anarchist, Friedman was a believer in freedom. He opposed what he saw in communist and socialist command economies as excessive governmental control and restriction on freedom (even in the educational realm), and similar tendencies in the Western economies. He was not a laissez-faire economist, rather he was a monetarist – a school of economic thought that may be traced back to the 16th century School of Salamanca. Monetarists do not generally support government intervention in the markets as this is contrary to a properly functioning free market system. However, if the economic system is already warped by special interests and private monopolistic practices (such as the financial system in the US is and has been since the passage of the Federal Reserve Act of 1913 cabalizing the US banking industry and allowing their cabal to create money using fractional reserve banking) then monetarists inevitably want to see balance and justice restored to the free market system, in this case by abolishing the Fed and withdrawing from participation in the BIS/IMF/World Bank combination.

Monetarists are neither supporters of socialism nor monopoly capitalism. They are instead supporters of the third way – the free market system – which opposes both aforesaid forms of economic totalitarianism. Friedman was a monetarist and a strong supporter of the free market system (even in the educational system by supporting use of school vouchers).

In the current economic setting, Freidman’s writings suggest that cutting spending to reduce the fiscal deficit would result in less transitional unemployment than raising taxes to do so. In other words, the solutions proposed by the Bush and Obama administrations of massive government intervention in the markets will prolong unemployment compared to reducing government spending (which is diverting national resources away from productive industry).

At the same time Friedman, a strong supporter of transparency, would undoubtedly support Congressman Ron Paul’s push to audit and to end the Fed. He supported prohibition of fractional reserve banking and withdrawing the US from the BIS/IMF/World Bank global equivalent of the Fed (as his support of our Monetary Reform Act which advocates exactly that demonstrates [see Monetary Reform Act Sections 4 and 15 excerpted below this article]). The BIS is responsible for this current recession/depression and with the US Fed has misused its control of great wealth and resulting influence radically to tilt the economic system in the favor of the major international banks and against all other economic sectors. This threatens to subject the political liberty of the entire world to BIS supra-governmental economic regulations since political liberty depends upon private control of private property.

Just as in the Great Depression (renamed the Great [Credit] Contraction by Friedman), the government caused the current severe recession/depression by implementing the BIS Basel II regulations and is again applying “the wrong cure for the wrong disease.” The right cure is to abolish the Fed, prohibit fractional reserve banking and withdraw from the BIS/IMF/World Bank supra-government that initiated this economic crisis. The international banks behind these financial bodies have manipulated the financial system of the world to aggregate more and more wealth into their hands, concentrating vast economic power and hence political power under their control.

What Friedman wrote regarding the US Fed, quoted above, is even more germane to the international combination of the BIS/IMF/World Bank:

“Any system which gives so much power and so much discretion to a few men, [so] that mistakes ‑‑ excusable or not ‑‑ can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic ‑‑ this is the key political argument against an independent central bank. . .To paraphrase Clemenceau: money is much too serious a matter to be left to the Central Bankers.” – Milton Friedman

Excepts from the Monetary Reform Act (supported by Dr. Friedman: “I am entirely sympathetic with the objectives of your Monetary Reform Act…I am impressed by your attention to detail in your successive revisions… Milton Friedman”):

Sec. 4. ONE HUNDRED PERCENT (100%) RESERVE REQUIREMENT. Section 19(b)(2)(A-D) of the Federal Reserve Act is hereby amended to raise the Reserve Requirement ratio for financial institutions, in equal monthly increments of eight and one-half percent (8.5%), to one hundred percent (100%), during the said transition period.

Sec. 15. WITHDRAWAL FROM INTERNATIONAL BANKS. It is hereby declared as a matter of federal statutory law that membership and/or participation of the United States government, or its agencies, or of the Federal Reserve Board or Reserve Banks or any officer or employee thereof, with the Bank for International Settlements, the International Monetary Fund, the World Bank, and all other international banks, is inconsistent with and in direct conflict with the purposes of this Act of Congress. Read more at www.themoneymasters.com

 

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3rd Biggest Drop in DOW with 9/11/01 and 10/03/08 the only two larger in absolute size

And weekly changes in the Dow - this last week is almost a 4 standard deviation move and third largest ever (with 9/11/01 and 10/03/08 the only two larger in absolute size!

Amplify’d from www.zerohedge.com

And weekly changes in the Dow - this last week is almost a 4 standard deviation move and third largest ever (with 9/11/01 and 10/03/08 the only two larger in absolute size!

Third Biggest Weekly DJIA Drop In History

A dearth of knife-catchers and bottom-callers suggests that our views on a broad swathe of investors being caught unhedged and offside by Bernanke's relative inaction was correct. By the look of today's huge selloff, investors will become increasingly aware of our recent post on the difference (risks) between owning stocks and bonds. The equity market remains a market in chaos as the following charts show. We can only assume they must be extremely good at discounting whatever it is that talking-heads believe on a tick-by-tick basis - just look at the flip-flopping in the last two months (and in 2008/09). Read more at www.zerohedge.com

 

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Student Loan Bubble - Saddling the Next Generation with Debt Before They Even Get Started #peakdebt

This is pathetic. Universities have been active participants in the exuberance that grew from the Federal Reserve's inflationary debt bubble.



100% global debt forgiveness is the ONLY hope for world citizens

Amplify’d from www.alternet.org

Is the Near-Trillion-Dollar Student Loan Bubble About to Pop?

By Sarah Jaffe, AlterNet Posted on September 21, 2011, Printed on September 22, 2011 http://www.alternet.org/story/152477/is_the_near-trillion-dollar_student_loan_bubble_about_to_pop

“If you want to take a relation of violent extortion, sheer power, and turn it into something moral, and most of all, make it seem like the victims are to blame, you turn it into a relation of debt.” -- Economic anthropologist David Graeber, author of Debt: The First 5,000 Years

Tarah Toney worked two full-time jobs to put herself through college, at McMurry University in Abilene, Texas, and still has $75,000 in debt. She graduated in six years with a Bachelor's in English and wanted to go on to teach high school.

“Right about the time I graduated, Texas severely cut funding to our education system—thanks, Perry--and school districts across the state stopped hiring and started firing. It became abundantly clear that there was no job for me in the Texas public school system,” she told me. “After two months of job searching I got a temporary position in a real estate office.”

She continued, “In August my post-graduation grace period was up and all of the payments on my student loans amount to $500/month. Adding that expense to my monthly bills puts me at $2,100 per month. If I don't make my payments they will revoke my real estate license, which I need in order to do my job.”

Max Parker (not his real name) enrolled at Texas A&M in College Station, Texas to get a BA in economics and a BS in physics. His freshman year was great—his parents had saved some money to help pay the bills, and after that he was able to get “more generous” student loans. He took a job to help cover the fees and bills that his student loans wouldn't cover, and worked about 35 hours a week during his sophomore year while taking 15 hours of classes—but found that his grades dropped with his workload.

“Part of the reason I thought to take on such a heavy load was the university's newly (at the time) implemented policy of flat-rate tuition,” he explained. “This policy stated basically, no matter how many hours you enroll in (full time) for the semester, you will pay for 15. This means, you enroll in 12 hours or 20 hours, and you'll pay for 15 hours either way. Being economically minded, I wanted to make the best decisions I could with the money I had been loaned, so I enrolled in 15 hours.”

He adjusted his course load, but in the spring of his junior year, a family emergency led him to withdraw midway through the semester, taking incompletes in his courses.

“I am 25 years old now, and shacking up in my parents' guest bedroom,” he told me. “I have successfully made four payments on my student loans in the past three and a half years. I have over $48,000 dollars of student loan debt, and absolutely nothing to show for it. No degrees. No certificates. No qualifications. I have continued my education to the best of my ability since leaving A&M, but always at community colleges and always paying for everything out of pocket. As you can imagine, since I'm not 'qualified' for a decent paying job, my savings for school piles up very slowly, and then disappears when August and January roll around. I haven't been back to school in about a year now, and I currently work at Subway, making sandwiches. I don't make my loan payments.”

He's about to join the military because he sees it as his only option. “I am depressed at the idea of signing my life away for four years so I can fight someone else's wars. I am angry beyond belief that it's come to this,” he said.

Kate Sternwood (not her real name) was recently laid off from a job at a nonprofit organization where she was making $55,000 a year. She has $40,000 in debt from the University of Massachusetts. “When I called my repayment program to tell them I was losing my job, they told me my payment would go from $400 a month to $384 a month because making $55K a year I already qualified for the "hardship" rate.”

The agency in question is Van Ru, a collection agency that takes loans from the Dept. of Education if they go into default. Sternwood said they can't even tell her what the rate will be when she's paid enough to get out of default because they don't know which bank will end up with her loans.

Colleen Williams, a writer in New York, has $975 a month in payments on various student loans from her undergraduate degree at the University of New Mexico and her graduate degree from Parsons School of Design; $325 of that is automatically debited from her account each month after she went into “Student Loan Rehab” after a default.

“When you default on government loans, the collection agency the loans eventually go to are ridiculous,” she said. “Obviously someone defaulting on student loan debt does not have the payoff amount, and they will argue with you, repeatedly, to get you to pay $30,000 off, in full. 'Don't you have a friend you can borrow the money from?' etc.”

Williams noted that she's not pursuing the career she originally intended after Parsons, which was fashion design. “If I could do it all over again, I would have gone into science,” she said.

Matt Hindman graduated two years ago from Temple University in Philadelphia and is pursuing a career in film. “We are all trying to get our feet wet in our collective industries. The job hunting process costs money too,” he pointed out. “I don't think it makes sense that I got penalized for being late on payments during my first year out of school. Plus I went into forbearance once, so now my interest is super high from that.”

The story is the same around the country. The economy is stagnant, the job market terrible, and graduates who used to believe their degrees would lead to good jobs are struggling. Meanwhile, the unforgiving student loan system continues to penalize them for their inability to pay.

As Mychal Denzel Smith at the Grio pointed out, “The fundamentals of our economy aren't strong, but they are the same as ever: we are a country built on low wages and debt.” With those low wages, and particularly with the likelihood of finding a job remaining so low, students who took on debt to pay for an education cannot pay it back. We're in the middle of another bubble—a student loan bubble. And it doesn't look like we've learned much from the impact the popping of the housing bubble had on our economy—the same lending practices are continuing.

The Bubble

Since the beginning of the recession, most types of credit have gone down. The only exception to that rule has been student loans.

A recent piece in the Atlantic noted that student debt has grown by 511 percent since 1999. At that time, only $90 billion in student loans were outstanding—by the second quarter of 2011, that balance was up to $550 billion, according to the New York Fed. And the Department of Education estimates that outstanding loans total closer to $805 billion—and that number will pass $1 trillion soon.

As student loans rise, so has delinquency. Phil Izzo at the Wall Street Journal reported that 11.2 percent of student loans were more than 90 days past due and that rate was steadily going up. “Only credit cards had a higher rate of delinquency — 12.2 percent — but those numbers have been on a steady decline for the past four quarters,” he noted.

It shouldn't be surprising to anyone that student loan defaults are going up as young workers especially are struggling in the current economy. Izzo reported, “Workers between 20 and 24 years old have a 14.6 percent unemployment rate, compared to the national average of 9.1 percent recorded in July. That comes even as the share of 20- to 24-year-olds who are working or looking for a job is at the lowest level since the 1970s, before women entered the labor force en masse.”

In his Huffington Post blog, Michigan Democratic Representative Hansen Clarke noted, “This year, the average borrower graduating from a four-year college left school with roughly $24,000 of student debt, despite the grim statistic that -- according to a Rutgers University study -- only 56 percent of 2010 graduates were able to find work following completion of their studies.”

Back in July, credit rating firm Moody's Analytics warned that student debt could lead to the next economic crisis. How did student loans go from “good debt” that could be expected to pay off--Pew found that an adult with a bachelor's degree earns about $650,000 more during their career than a typical high school graduate—to a bubble that threatens the economy?

According to the National Center for Education Statistics, college enrollment skyrocketed 38 percent, from 14.8 million to 20.4 million, between 1999 and 2009. (The previous decade it had only gone up 9 percent.) This should be a good thing—except it was not accompanied by measures to make tuition affordable for working families who wanted to send their kids to school. Combined with the decline in the type of union manufacturing jobs that used to allow workers to be comfortably middle-class without a college degree, we've wound up with working-class families taking on debt to send their kids to college, which they are told will help those kids make more money.

Labor economist Mark Price told me:

“Manufacturing was a path into the middle class that didn't require a college degree but manufacturing has shrunk as a share of all employment and access to similarly high paying good jobs in the service sector typically requires a college education. One other complicating factor is that that the manufacturing that remains in this country often does require more than just a high school diploma for entry.”

As student loans are relatively easy to come by, both from the government and from private lenders increasingly getting into the game, universities have been able to keep hiking tuition without seeing a drop in enrollment. Students are still advised that student debt is “good debt,” as noted above, and that they will be able to pay it off—but the costs are rising far more rapidly than average incomes.

The Philadelphia Inquirer reported that Temple University has raised tuition every year since 1995—it's gone up 9.9 percent for in-state students. At the University of Pennsylvania (an Ivy League private university—Temple is the state school) tuition went up 3.9 percent to $42,098 a year. “Throw in a dormitory bed, meals and books, and the price reaches $57,360,” wrote Inquirer reporter Jeff Gammage.

Josh Harkinson at Mother Jones pointed out that like anything else, the bang for your buck isn't the same at different universities. Private universities have increased per-student spending by about $7,500, he wrote. But public community college spending per student has stayed flat at around $10,000—while those private college students get $36,000 spent on them. He wrote, “It should come as no surprise then that graduates of prestige schools continue to outpace other collegians.”

All of these factors have combined to send student loan debt into the stratosphere. Daniel Indiviglio at the Atlantic pointed out, too, that student debt has far outpaced the growth of all other household debt over the past 10 years—including increasing twice as fast as housing debt. He argued:

“This wasn't just any average period in history for household debt. This period included the inflation of a housing bubble so gigantic that it caused the financial sector to collapse and led to the worst recession since the Great Depression. But that other debt growth? It's dwarfed by student loan growth.”

RJ Eskow at the Smirking Chimp noted that the same banks that broke the economy by creating that housing bubble are responsible for the student debt crisis—as well as the federal government, which issues student loans. “[T]hese debts were incurred with broken promises. Much of that money is owed to the government itself, and billions are owed to the banks we bailed out at taxpayer expense,” he wrote.

Student loans are not really comparable to housing loans, though: if you default on your student loans, there's nothing to repossess. Instead, you'll face a drop in your credit rating, and constant pressure from the types of collection agencies that Williams and Sternwood discussed above. They can garnish your wages, as Williams explained, and even if you declare bankruptcy, your student loans don't go away. And as Hindman noted, miss a payment, and your interest rate goes up, creating a punitive spiral of debt there's no way to escape from.

Even if mass default isn't likely to happen the same way mortgage defaults did, Indiviglio wrote that the cost of college and debt is already slowing the economy. “As Americans grapple with high student loan payments for the first few decades of their adult lives, they'll have less money to spend and invest,” he wrote, pointing out that all the money going into colleges and the pockets of lenders in the form of interest is being funneled away from other places it could be spent. “Of course, this would be a rather unfortunate irony: higher education is supposed to enhance a nation's growth, but with such an enormous debt burden, graduates might not be able to spend and invest enough to allow that growth to occur.”

Iris Van Kerckhove, who blogs about business at On My Grind, wrote:

“Now the labor pool is flooded with people who have postgraduate degrees and are desperate for work. Employers are overwhelmed with the number of applicants and, in response, demand higher qualifications as a way to filter the applications. Yet higher education institutions continue selling something that doesn't exist-- a guarantee of a better future. Something's gotta give.”

The Solutions

So what can give?

Mychal Smith reminded us that just last year in his State of the Union, President Obama proclaimed, "No one should go broke because they chose to go to college.” He called for student loans to be forgiven after 20 years—10 for those who go into public service—and a $10,000 tax credit for families paying for a four-year college.

But that's not a solution for people like Parker, who was unable to finish school because of the cost, or Toney, who wanted to go into public service but saw that door shut in her face with state budget cuts. They're in debt now, not in 20 years, and $10,000 doesn't begin to cover their debt, let alone the $80,000 Williams owes for a graduate degree. As tuition goes up thousands of dollars a year, a $10,000 tax credit looks pretty measly—and the chances of getting even that through the current Congress are slim to none.

The Philadelphia Inquirer reported that New Jersey's state legislature has a bill under consideration that would ban state colleges from raising tuition more than 2 percent a year. Keeping tuition down is certainly part of the solution—tuition growing faster than wages is a recipe for defaults as students struggle to pay back their loans. In addition, just as housing prices going way up wound up pricing many people out of home-buying, increases in tuition will price students out of an education—particularly if the benefits of that education become less clear, as jobs remain hard to come by.

One university actually lowered its prices recently. The Inquirer reported that Sewanee, the University of the South, a private school in Tennessee, cut its annual cost 10 percent, from about $46,110 to $41,000--without closing programs or laying off staff:

“Enrollment was better than expected, alumni giving went up, and some parents donated the $5,000 price difference back to the university. The deficit turned out to be half of what was projected, at $1.5 million, and Sewanee got the bump in publicity it sought: Campus visits increased 60 percent.”

But what do we do for the people who've already finished college but are stuck without jobs and with mounting debts? RJ Eskow proposed a “Youth WPA,” imitating the Works Progress Administration from the New Deal to put young people to work rebuilding our infrastructure, developing new business ideas, make creative works that we can all enjoy, and more (his six-part proposal is worth reading in detail).

An idea that's been getting a lot of traction lately—including an online petition pushed by MoveOn member Robert Applebaum that has 320,000 signatures as of this writing—is student loan forgiveness as economic stimulus.

Rep. Hansen Clarke introduced a resolution in Congress, co-sponsored by 12 other members, that includes student loan forgiveness in its suggestions for bringing down the U.S.'s “true debt burden.”

In his Huffington Post blog, Clarke wrote:

"Congress is now completely focused on reducing debt. This would be a positive development, if not for one detail: it's focused on the wrong kind of debt.

With over a quarter of all American homeowners "underwater" -- owing more on their homes than their homes are worth -- and total student loans slated to exceed $1 trillion this year, it is household debt, not government debt, that is constraining spending, undermining confidence, and precluding sustainable long-term growth.”

Clarke is right. For years, credit was a substitute for real wage growth in the U.S. And now as that debt burden has grown unsustainable, working families are barely able to keep up with payments, let alone spend enough to get the economy back on its feet. And student debt, as we've shown, is on the least sustainable trajectory of all.

Mychal Smith wrote:

“[C]onsider the potential impact on the economy if all of a sudden 35 million people were able to add to their monthly budget anywhere between $400 and $1000 that they no longer needed to satisfy exorbitant student loan repayments. And no longer faced with the threat of default(at a rate of 7 percent as of September 2010), credit scores would rise and more people with inclination toward starting small businesses (those things that every politician proclaims drive economic growth)[could do so]. Debt free degree holders would allow for more risk taking and innovation.”

Student debt forgiveness would put $400 a month back into Sternwood's pockets, $975 a month in Williams'. Even just forgiving the government loans would probably allow Parker to finish his degree instead of going to war.

Of course the resolution is unlikely to pass Speaker John Boehner's Congress, and even if it does, it's just a resolution. But the instant popularity of Applebaum's petition shows something: Americans realize that student debt at the current levels is completely untenable, and something must be done soon.

Republicans love to talk about the debt we're leaving our children with. But saddling them with record levels of student debt and no jobs with which to earn money to pay it back hurts young people much, much more than government budget deficits.

Sarah Jaffe is an associate editor at AlterNet, a rabblerouser and frequent Twitterer. You can follow her at @seasonothebitch. Read more at www.alternet.org

 

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#QE3 and #TARP2.0 AS The US Fed Provides Free Money to ECB and Eurozone Banks

"Lend" with what interest rates? Same as to US banks? This is going to cause massive inflation if the banks dont fail and if they do, it will become part of the national debt?

Amplify’d from www.bloomberg.com

ECB Coordinates With Federal Reserve to Provide Dollars to Euro-Area Banks

The European Central Bank said it will lend dollars to euro-area banks in a series of three-month loans as the region’s debt crisis limits market access to the U.S. currency.

The Frankfurt-based ECB said it will coordinate with the Federal Reserve and other central banks to conduct three separate dollar liquidity operations to ensure banks have enough of the currency through the end of the year. The three-month loans are in addition to the bank’s regular seven-day dollar offerings and will be fixed-rate tenders with full allotment, the ECB said in a statement today. They will be offered on Oct. 12, Nov. 9 and Dec. 7.

The euro jumped more than a cent against dollar after the announcement and traded at $1.3854 at 5:14 p.m. in Frankfurt. Stocks rose and Treasuries fell, pushing 10-year yields up the most in more than three weeks.

“The market focus on this as a problem is way over the top,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “This is not a Lehman event. Extending the term to three months today is a clever way to show the central bank authorities are on the case.”

Two Banks

Two banks this week borrowed dollars from the ECB in its seven-day operation, a sign they are finding it difficult to access the U.S. currency in markets as the debt crisis makes financial institutions more wary of lending. The premium European banks pay to borrow in dollars through the swaps market is close to the highest level in almost three years. It declined after the ECB’s announcement today.

The cost of converting euro-based payments into dollars, as measured by the one-year cross-currency basis swap, was 80.25 basis points below the euro interbank offered rate, or Euribor, at 4:15 p.m. in Frankfurt. It widened to as much as 112.6 basis points earlier this week, the most since Dec. 2, 2008, according to data compiled by Bloomberg.

“The ECB is seeing the stress in the dollar markets right now,” said Benjamin Schroeder, a rate strategist at Commerzbank AG in Frankfurt. “If there was really a big problem you’d see more demand in the seven-day tender. The ECB is trying to prevent things from getting out of hand.”

BNP Paribas Surges

The ECB yesterday allotted $575 million in its seven-day dollar operation, without naming the banks it lent to. French banks Societe Generale SA and BNP Paribas SA said yesterday they didn’t borrow dollars from the ECB.

BNP Paribas, France’s biggest lender, rose as much as 22 percent in Paris trading after today’s ECB announcement. BNP Paribas shares were up 5.57 euros, or 21 percent, to 32.47 euros as of 3:18 p.m.

Moody’s Investors Service yesterday cut the long-term credit ratings of Credit Agricole SA and Societe Generale, France’s second- and third-largest banks, and put BNP Paribas on review for a possible downgrade, citing the risks posed by their investments in Greece. Moody’s also said it will evaluate the impact of tighter financing markets on French banks.

While the ECB’s provision of liquidity helps to ease tensions in money markets, “the root is the debt crisis, and that will remain on the table for a long time,” said Marco Valli, chief euro-area economist at UniCredit Group in Milan. “The ECB could decide to extend refinancing operations to 12 months or resume the covered-bond purchase program.”

Strains Continue

The ECB last introduced a three-month dollar loan in May 2010 to calm markets roiled by the threat of a Greek default.

The ECB has been lending banks as much euro cash as they need at its benchmark rate since October 2008, when the collapse of Lehman Brothers Holdings Inc. triggered a global recession. It has been forced by the debt crisis to extend those measures and last month reintroduced an unlimited six-month euro loan.

The ECB’s dollar loans tackle “one small problem in the market at the moment,” said Chris Scicluna, deputy head of economic research at Daiwa Capital Markets Europe in London. “Ultimately, until there’s a more comprehensive response to the sovereign debt crisis, which has been feeding into concerns about the health of European banks, the strains in Europe’s banking sector will continue.”

To contact the reporter on this story: Jeff Black in Frankfurt at Jblack25@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net Read more at www.bloomberg.com

 

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