Simon Black-Sovereign Man (source/link)
At our workshop in Chile some months ago, European MEP Nigel Farage blasted French President Francois Hollande as leading the pack “in the modern day Pantheon of idiots who are running countries around the world…”
You can see Nigel’s scathing remarks below, about 35 seconds in to the clip: (see link above)
Of course, the French president had recently introduced a ‘hate tax’ on its countries most successful people, driving out whatever few productive people remain in France.
But this hate tax was just the tip of le iceberg.
Just look at what they’ve done or announced just in the last month:
Double the corporate surtax
It’s not enough that France has one of the highest corporate tax rates in the developed world. On top of this, they have a corporate ‘surtax’, or a tax on top of the tax.
And earlier this month, they announced plans to DOUBLE it.
Increase reporting obligations
Anyone who has ever started a business knows that a new business is like a newborn baby. It’s critical to focus on growth, not on filling out a bunch of paperwork.
The French government doesn’t care about this. So they’ve recently LOWERED the bar for reporting obligations, requiring a businesses with top-line revenue of just 80,000 euros to submit time consuming and onerous VAT reports to the tax authorities.
Increased pension tax
France has one of the most bankrupt… and unsustainably generous… pension systems in the world.
But rather than completely overhauling the system and expect people to, you know, actually work past the age of 55, they’ve just decided to raise the pension tax. Again.
Energy drink tax
Not to be outdone by Michael Bloomberg’s soda tax in New York City, the French National Assembly has recently proposed to tax energy drinks… as much as ONE EURO ($1.37) per can.
Higher property taxes
Last month, the French government announced plans to revise property value assessments across the country, which serves as the basis for a number of property taxes.
Data tax [my personal favorite]
You can’t make this stuff up.
In one of the most absurd tax propositions in history, the French government now has the idea that they should tax data transfers outside the European Union.
They actually plan on proposing this at this week’s European Summit. Strangely, though, they don’t seem to even understand what this means. They’re just so desperate to tax something… anything. They’re just monkeys throwing darts at the wall right now.
And they’re getting ready for more.
Earlier this year, the French government promised a ‘tax pause’ in 2014, suggesting that they would not raise taxes next year.
Last month, though, they revised this pledge, saying that the tax pause would take effect in 2015 instead.
Needless to say, there will be no pause in 2015.
Why? Because France is broke. Like so many other nations across the West, France has been rendered completely insolvent by decades of unsustainable spending.
France has been in this position before. In the 18th century, the French Bourbon monarchy was the pinnacle of civilization.
Yet decades of unsustainable spending took their toll on the economy. They tried everything– raising taxes, debasing the currency… yet their was no avoiding the inevitable. Revolution.
And this period of turmoil, from the time the French people stormed the Bastille, to the time when calm prevailed, took 26-years.
In the meantime, they had internal civil war, external war against both Austria and Prussia, hyperinflation, and the genocidal dictatorship of Robespierre.
Conditions are similar now, both in France and across the West. This includes the Land of the Free.
We have reached a time where it’s imperative to look abroad at different options and opportunities. Clinging to blind patriotism– staying home, doing nothing, and trusting your government– is akin to taking a toaster into the bathtub.
Wealth and power have constantly shifted throughout history. And the transitions are rarely smooth or peaceful. It’s foolish to assume that this time is any different.
- 70 million phone calls in France recorded in one month by NSA, new report claims. French government demands immediate explanation to “shocking” revelations (12160.info)
- France to Beef Up Its Exit Tax (nationalreview.com)
- Obama calls French president amid spying concerns (wtvm.com)
- Wealthy, ambitious youth flee French taxes… (telegraph.co.uk)
A civil liberties watchdog is suing Canada’s electronic spy agency for allegedly breaching the constitutional rights of Canadians.
The British Columbia Civil Liberties Association says Communications Security Establishment Canada violates the Charter of Rights by intercepting Canadians’ private communications.
The organization filed the lawsuit in the Supreme Court of British Columbia.
Ottawa-based CSEC monitors foreign communications — from email and phone calls to faxes and satellite transmissions — for intelligence of interest to Canada.
CSEC says it operates within all Canadian laws, including the charter, the Criminal Code, the Canadian Human Rights Act and the Privacy Act.
The National Security Agency, CSEC’s American counterpart, is at the centre of a storm of leaks from former contractor Edward Snowden that document the U.S. agency’s vast reach into cyberspace.
Read the entire statement of claim by the BCCLA:
- Civil liberties group suing snooping agency (metronews.ca)
- Civil Liberties Watchdog Suing Communications Security Establishment Canada (blogs.ottawacitizen.com)
- BC Civil Liberties Association launches lawsuit against Canadian government over CSEC spying (blogs.vancouversun.com)
- Civil liberties group files suit against Canada’s electronic surveillance agency (calgaryherald.com)
- BCCLA files lawsuit against CSEC – Spying in Canada? Eh? (lunaticoutpost.com)
For the first time (in the 44 years of polling), the majority of Americans favor legalizing marijuana. As Gallup notes, from a low of 12% in favor in 1969, the latest poll shows a clear majority (58%) now believe the drug should be made legal.
Perhaps not so surprising, given the prospects for much of today’s youth (67% of 18 to 29 year olds in favor), Gallup adds that a sizable percentage of Americans (38%) this year admitted to having tried the drug, which may be a contributing factor to greater acceptance.
Those who identfied themselves as Democrats were almost twice as ‘in favor’ of legalization as Republicans.
It has been a long path toward majority acceptance of marijuana over the past 44 years, but Americans’ support for legalization accelerated as the new millennium began. This acceptance of a substance that most people might have considered forbidden in the late 1960s and 1970s may be attributed to changing social mores and growing social acceptance. The increasing prevalence of medical marijuana as a socially acceptable way to alleviate symptoms of diseases such as arthritis, and as a way to mitigate side effects of chemotherapy, may have also contributed to Americans’ growing support.
Whatever the reasons for Americans’ greater acceptance of marijuana, it is likely that this momentum will spur further legalization efforts across the United States. Advocates of legalizing marijuana say taxing and regulating the drug could be financially beneficial to states and municipalities nationwide. But detractors such as law enforcement and substance abuse professionals have cited health risks including an increased heart rate, and respiratory and memory problems.
With Americans’ support for legalization quadrupling since 1969, and localities on the East Coast such as Portland, Maine, considering a symbolic referendum to legalize marijuana, it is clear that interest in this drug and these issues will remain elevated in the foreseeable future.
- Support For Legalizing Marijuana Grows To Highest Point Ever In Gallup Poll (huffingtonpost.com)
- Gallup Poll Finds Legal Marijuana Is More Popular Than Almost Anything Else (businessinsider.com)
- A new high for pot legalization (msnbc.com)
- For First Time, Americans Favor Legalizing Marijuana (drhiphop85.com)
The Snapback | KUNSTLER. (source)
Well, at least the poobahs cleared a path to the annual orgy of Christmas, which, along with the S & P 500, have become proxies for the American economy. Lately, the Christmas season starts directly after Halloween, so, the whole fourth quarter of the year becomes a circus of ceremonial distractions. In the background, though, the nation grinds toward anguish, measured in soiled Justin Bieber dolls deposited in the landfills.
Historians who look back on these strange years of suspended consequence will marvel at how this empire of grift kept its wheels turning after its engine died. Being on the downhill slope is often enough to keep anything going. One might think the young people of this land would be seething at the eclipse of their futures, but it seems they have been successfully lobotomized with cell phones — when the endorphin hits lag between text messages, they can watch sitcoms, or porn.
You can be sure there will be a snapback from all this drift and anomie, and when it comes, the snap will be savage. Like the US economy, the Republican Party is dead but hasn’t gotten the news. It killed itself just as the Whigs did in the years before the Civil War, by splitting up into factions — one faction of “know-nothings” preoccupied with scape-goats opposed to a faction of sclerotic parasitical fat-cats too timid and greedy to engage in the emergencies of the day.
The Tea Party faction should change its name to the Cracker Party because it represents the interests of white southerners who are too dumb to know what these emergencies amount to. They are really more comfortable with the supernatural, hence their fondness for religions based on snake-handling, visitations of the dead, and motor sports. Personally, I believe they will eventually contrive to form their own break-away Cracker Republic and attempt to re-enact the Civil War. They will fail, and starve, and find themselves back in an even worse long-term depression than Dixieland experienced from 1860 to 1960, in a de-suburbanized wasteland of bare subsistence farming. Their highest art will be soup-making.
The non-Tea Party Republicans will just shrivel and vanish out of sheer irrelevance. This leaves the Democrats to become the focus of intense ire as they attempt to ‘splain why the nation’s affairs went to shit on their watch. A lot of them will end up being executed and plundered by the new kid on the block, the Savior Party, led by some charismatic character willing to ignore procedural protocols to clear away the debris left by his-or-her predecessors. Alas, the juice will not be there to permit the Savior to really control a territory as large as the continental USA. By juice, I mean money and oil. Thus, the nation enters its new dark age.
Who knows when that will get underway in earnest, though I think the folks who say 2014 are onto something. If you believe in cycles, which I tend to, then it rhymes nicely with 1814 and 1914, two watersheds when one epoch ended and another truly began. 2014 would logically be the year that China tells America to go piss up a rope. The message would be sent on the back of the envelope containing $2.7 trillion in official American debt paper. As Ole Blue Eyes used to say, this could be the start of something big.
Sentient observers of the current scene are clearly frustrated by the remarkable homeostasis that seems to rule the scene, these horse-latitudes of history where the air is still and nothing moves and the mind is exhausted by watchful waiting. Things will get lively, soon enough, so enjoy the holiday quarter of the year which is so soon upon us. Gorge on candy corn. When you recover from that, roast a turkey. Then make a nice figgy pudding. Then pop some bubbly and salute your loved ones. Then gird your loins for the new age of consequence.
- Kunstler: The “Aggregation Of Rackets” That American Life Has Become Is Rolling Over (peakoil.com)
- Kunstler: Returning to the ‘Real’ (peakoil.com)
- Paradigm Blindness | KUNSTLER (olduvaiblog.wordpress.com)
EU-Canada – International affairs – Enterprise and Industry. (source/link)
The European Commission and the Government of Canada have made several political commitments to intensify cooperation between regulators. The results of business surveys, notably on the conditions/barriers for market access, have confirmed the impact of differences in regulations on EU-Canada trade and investment. As a consequence, both sides decided to explore ways and means of encouraging regulators to cooperate on a voluntary basis when creating technical regulations that they believe may have significant trade effects.
1. The current state of regulatory cooperation is recorded in the road map [106 KB] .
2. The most recent study on EU-Canada trade and investment was complited in 2009, in preparation for negotiations for a Comprehensive Economic and Trade Agreement (CETA) which began in October 2009. The EU and Canada have agreed that a chapter on Regulatory Cooperation should be included in this agreement.
Background to the existing cooperation activities
At the Canada-EU Summit held in Ottawa on 19 December 2002, the Commission and the Government of Canada agreed to treat this issue in two separate ways, namely to:
- “intensify our regulatory dialogue and work towards a new Framework in this field”; and
- “design a new type of forward-looking, wide-ranging bilateral trade agreement covering, inter alia, new generations issues and outstanding trade barriers”.
A voluntary framework [48 KB] for regulatory cooperation was adopted in 2004 between the Commission, led by DG Enterprise and Industry, and the Canadian government, led by the Department of Foreign Affairs and International Trade of Canada (DFAIT).
The voluntary Framework is designed to promote more effective Canada-EU regulatory co-operation, and to work towards preventing and eliminating unnecessary barriers to trade and investment while ensuring better quality and effective regulations to achieve public policy objectives, as described in the press release.
Discussions on a Trade and Investment Enhancement Agreement (TIEA) began after the summit, but have since been abandoned and are now replaced by the CETA negotiations.
- CETA Free Trade Deal: Harper Heading To Europe To Conclude Pact (olduvaiblog.wordpress.com)
- EU Assures that CETA Does Not Contain ACTA Copyright Rules (michaelgeist.ca)
- EU, Canada trade deal finalized in Brussels after 4 years of negotiations (business.financialpost.com)
- Harper announces agreement in principle on European free trade (o.canada.com)
Prior to 1913 the U.S. treasury issued treasury notes as currency that was backed by gold. The Gold and Silver certificates could be converted into silver and gold on demand. This kept the government on a financial leash to prevent over spending. The treasury printed its own money so they did not have to borrow it. They could print as much money as they had gold to back it.
In 1913 a non-elected body called the Federal Reserve, which is owned by some of the largest banks in the world, became the issuer of U.S. currency. This establishment went on to replace all of the sound money in the U.S. with what is today a totally fiat currency. In 1971 we were taken off of the gold standard thus allowing the FED to print as much money as they wished with absolutely no backing other than the good faith of the U.S. Government.
When the government wants to borrow money they print treasury bonds which are sold by selected traders. The bonds are sold as an interest bearing investment. The more credit worthy the issuer is, the lower the interest rate will be. This is an indication of how safe the bond is.
Just like an IOU, the bonds are the same as cash. The perception of cash value is based on the perceived ability of the issuer to repay the IOU. If it is suspected that the IOU may not be honored, it may be sold at a discount to unload it onto someone else before the issuer defaults on repayment and it becomes worthless.
When the demand for bonds is not sufficient to absorb all of the new bonds, the FED must buy them to prevent a failed auction. A failed auction would bring the credit worthiness of the U.S. into question. This would cause the interest rates to go up to reflect the increased risk.
When the U.S. issues bonds as repayment for the loan, the holders of these bonds have the ability to call the loan if they want. This is done by demanding payment at maturity of the bond rather than rolling it over into more bonds.
As the U.S. increases its’ deficit spending, its’ credit worthiness will come into question. This will cause those holding U.S. bonds to dump them for something more secure. When no one else will buy them anymore, the FED must purchase them to keep the dollar stable. We are seeing this happen now. Eventually the FED will own all of the outstanding bonds if the crisis goes on long enough. When the FED has to buy bonds it must print new money to buy them. This is called monetizing the debt. This is very inflationary.
Keep in mind that the FED is owned by other banks. What the FED owns, they actually own.
Since the U.S. government no longer prints its’ own money, it must go to the FED to get more currency if government revenues are insufficient. If the FED should one day say it will no longer issue currency to the government until the bonds it is holding are satisfied, what would the U.S. government be able to pay them with? If you borrow money from a bank and cannot repay it, they ultimately come for your assets to satisfy the loan. That is a lesson the Greeks are now learning.
The U.S. government has some very nice assets in the form of pristine real estate, much of it with a great deal of mineral wealth beneath it. If they cannot pay the banks, the bankers may demand assets in return. If you don’t think the banks would do something like that, you obviously have not been paying attention to world events lately. It may not even be the FED bankers. It could be anyone with the funds to buy up all of the worthless bonds. Someone like the IMF perhaps.
This is a larger version of what happened during the great depression. People that owned land but had no money would get a line of credit at a store to buy food. The store would continue to extend credit until it reached a certain level then they would suddenly demand payment. The people were unable to pay their bill so the store owner would demand their land as payment. This was the intention of the store owner all along. I know because this is how some of the largest farms in my county came into existence at that time.
The people never agreed to use their land as collateral for the credit, but after the debt was created, they had no other recourse. This is the position the U.S. will likely be placed in to deprive Americans of the land the rightfully own. Those in power that get a piece of the pie will willingly support this option. Americans will lose the land their forefathers fought for, all for a pile of worthless paper printed out of thin air that ultimately destroyed their standard of living.
This may not be the future of this country but at this point in time it seems likely. Unless the public understands how this could happen and resolve to fight it if it ever does come to pass, we could lose it all overnight. One thing is for certain. Whoever comes to foreclose on America will not be willing to give up easily.
- The On-Going Collapse Of The U.S. Treasury Bond Market Is A Disaster In The Making (blacklistednews.com)
- What Is The Debt Ceiling and How Does It Affect You? (edgeucationnewmedia.wordpress.com)
- Default Softly, While China Carries A Big Stick (dailyresourcehunter.com)
- Quantitative Easing Worked for the Weimar Republic, Too. For a While. (directorblue.blogspot.com)
This Lack Of Syrian Aggression Will Not Stand, Man: Saudi’s Bandar Bin Sultan Furious At US | Zero Hedge
That Saudi Arabia has been furious at the US for refusing to be the monarchy’s puppet Globocop, and in the last minute declining to bomb Syria following Putin’s gambit in which World War III seemed a distinctly possible consequence of John Kerry’s hamheaded “YouTube-substantiated” false flag campaign, is no secret. However, while the US has largely forgotten this latest foreign policy debacle and the humiliation it brought upon the Department of State, Saudi Arabia is nowhere close to forgetting. Or forgiving. And this time the anger comes from the one man who truly matters, and whom we dubbed several months ago as the puppetmaster behind the Syrian campaign: the man in charge of Saudi intelligence, Prince Bandar Bin Sultan.
The WSJ reports overnight, that Prince Bandar told European diplomats this weekend that he plans to scale back cooperating with the U.S. to arm and train Syrian rebels in protest of Washington’s policy in the region, participants in the meeting said. This demonstratively framed announcement follows Saudi Arabia’s surprise decision on Friday to renounce a seat on the United Nations Security Council. “The Saudi government, after preparing and campaigning for the seat for a year, cited what it said was the council’s ineffectiveness in resolving the Israeli-Palestinian and Syrian conflicts.”
In short: Bin Sultan has decided to take the stage and make it quite clear that this lack of aggression by the US will not stand. The question is: what can or will he do?
Diplomats here said Prince Bandar, who is leading the kingdom’s efforts to fund, train and arm rebels fighting Syrian President Bashar al-Assad, invited a Western diplomat to the Saudi Red Sea city of Jeddah over the weekend to voice Riyadh’s frustration with the Obama administration and its regional policies, including the decision not to bomb Syria in response to its alleged use of chemical weapons in August.
“This was a message for the U.S., not the U.N.,” Prince Bandar was quoted by diplomats as specifying of Saudi Arabia’s decision to walk away from the Security Council membership.
U.S. officials said they interpreted Prince Bandar’s message to the Western diplomat as an expression of discontent designed to push the U.S. in a different direction. “Obviously he wants us to do more,” said a senior U.S. official.
Obviously. What is odd is that the “proxy” intelligence chief appears to have usurped foreign policy decision-making from the Saudi king himself.
Top decisions in Saudi Arabia come from the king, Abdullah bin Abdulaziz al Saud, and it isn’t known if Prince Bandar’s reported remarks reflected a decision by the monarch, or an effort by Prince Bandar to influence the king. However, the diplomats said, Prince Bandar told them he intends to roll back a partnership with the U.S. in which the Central Intelligence Agency and other nations’ security bodies have covertly helped train Syrian rebels to fight Mr. Assad, Prince Bandar said, according to the diplomats. Saudi Arabia would work with other allies instead in that effort, including Jordan and France, the prince was quoted as saying.
If there was any confusion that the entire Syrian campaign was purely at the behest of the Qataris and the Saudis as we first suggested in May, it can finally be put to bed.
The monarchy was particularly angered by Mr. Obama’s decision to scrap plans to bomb Syria in response to the alleged chemical-weapons attack in August and, more recently, tentative overtures between Mr. Obama and Iran’s new president.
Diplomats and officials familiar with events recounted two previously undisclosed episodes during the buildup to the aborted Western strike on Syria that allegedly further unsettled the Saudi-U.S. relationship.
In the run-up to the expected U.S. strikes, Saudi leaders asked for detailed U.S. plans for posting Navy ships to guard the Saudi oil center, the Eastern Province, during any strike on Syria, an official familiar with that discussion said. The Saudis were surprised when the Americans told them U.S. ships wouldn’t be able to fully protect the oil region, the official said.
Disappointed, the Saudis told the U.S. that they were open to alternatives to their long-standing defense partnership, emphasizing that they would look for good weapons at good prices, whatever the source, the official said.
In the second episode, one Western diplomat described Saudi Arabia as eager to be a military partner in what was to have been the U.S.-led military strikes on Syria. As part of that, the Saudis asked to be given the list of military targets for the proposed strikes. The Saudis indicated they never got the information, the diplomat said.
“The Saudis are very upset. They don’t know where the Americans want to go,” said a senior European diplomat not in Riyadh.
To be sure, not just Prccne Bandar is angry – everyone else in Saudi is now fuming at Obama too:
In Washington in recent days, Saudi officials have privately complained to U.S. lawmakers that they increasingly feel cut out of U.S. decision-making on Syria and Iran. A senior American official described the king as “angry.”
Another senior U.S. official added: “Our interests increasingly don’t align.”
Fair enough: but what can it do? It is no secret, that as the primary hub of the petrodollar system which is instrumental to keeping the dollar’s reserve status, Saudi has no choice but to cooperate with the US, or else risk even further deterioration of the USD reserve status. A development which would certainly please China… and Russia, both of which are actively engaging in Plan B preparations for the day when the USD is merely the latest dethroned reserve currency on the scrap heap of all such formerly world-dominant currencies.
Perhaps the only party that Saudi can lash out at, since it certainly fears escalating its animosity with the US even more, is Russia. And perhaps it did yesterday, when as we reported, a suicide-bombing terrorist incident captured on a dashcam killed many people, and was supposedly organized by an Islamist extremist – of the kind that Bandar told Putin several months ago are controlled and funded by Saudi intelligence chief.
If true, and if Saudi wants to project its impotence vis-a-vis the US by attacking Russia, this will likely culminate with the Sochi winter Olympics. So will Prince Bandar be crazy enough to take on none other than the former KGB chief? And more importantly, just like in the US Syrian fiasco, what happens when and if Putin retaliates against the true power that holds the USD in place?
- Saudi Arabia to train more Syrian rebels in protests against Washington’s decision not to bomb Syria (voiceofrussia.com)
- Saudi Prince is real leader of al-Qaeda: Syrian envoy (chasvoice.blogspot.com)
- bandar’s war against the world expands a bit more (niqnaq.wordpress.com)
- Saudi anger at the failure of the US to launch attacks against Syria and daring to make peaceful overtures to Iran – will Saudis Bandar Bin Sultan take on the Russian Bear directly ? Meanwhile after successfully defusing the Syria War campaign pushed by (fredw-catharsisours.blogspot.com)
- Saudi Arabia to hit back at US in Syria (gulfnews.com)
Did you know that the U.S. national debt has increased by more than a trillion dollars in just over 12 months? On September 30th, 2012 the U.S. national debt was sitting at$16,066,241,407,385.89. Today, it is up to $17,075,590,107,963.57. These numbers come directly from official U.S. government websites and can easily be verified. For a long time the national debt was stuck at just less than 16.7 trillion dollars because of the debt ceiling fight, but now that the debt ceiling crisis has been delayed for a few months the national debt is soaring once again. In fact, just one day after the deal in Congress was reached, the U.S. national debt rose by an astounding 328 billion dollars. In the blink of an eye we shattered the 17 trillion dollar mark with no end in sight. We are stealing about $100,000,000 from our children and our grandchildren every single hour of every single day. This goes on 24 hours a day, month after month, year after year without any interruption.
Over the past five years, the U.S. government has been on the greatest debt binge in history. Unfortunately, most Americans don’t realize just how bad things have gotten because the true budget deficit numbers are not reported on the news. The following is where the U.S. national debt has been on September 30th during the five years previous to this one…
09/30/2009: $ 11,909,829,003,511.75
The U.S. national debt is now 37 times larger than it was 40 years ago, and we are on pace to accumulate more new debt under the 8 years of the Obama administration than we did under all of the other presidents in U.S. history combined.
Of course all of the blame can’t be placed at the feet of Obama. During the last two elections the American people have given the Republicans a solid majority in the U.S. House of Representatives, and the government cannot spent a single penny without their approval.
Unfortunately, House Speaker John Boehner and the Republicans that are allied with him have repeatedly turned their backs on the people that gave the Republicans the majority and they have authorized trillions of dollars of new debt which will be passed on to future generations of Americans…
Since John Boehner became speaker of the U.S. House of Representatives on Jan. 5, 2011, the debt of the federal government has increased by $3,064,063,380,067.72. That is more than the total federal debt accumulated in the first 200 years of the U.S. Congress–during the terms of the first 48 speakers of the House.
In fact, if all of that debt had been given directly to the American people, every household in America would have been able to buy a new truck…
The $26,722 in new debt per household accumulated under Speaker Boehner would have been more than enough to buy every household in the United States a minivan or pickup truck–or to pay three years of in-state tuition (not counting room and board) at the typical state college.
Sometimes we forget just how much money a trillion dollars is. In aprevious article, I included some illustrations that I believe are helpful…
-If you were alive when Jesus Christ was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now.
-If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
We are doing the exact same thing that Greece did, only on a much larger scale. What we are doing is not even close to sustainable, and it will inevitably end very, very badly. The following is what Michael Pento, the president of Pento Portfolio Strategies, told RT the other day…
“That $17 trillion everybody says its 107 percent of GDP, that’s true. But who really cares about the percentage of GDP? It’s the percentage of the debt as a percentage of the revenue – its 700 percent of our revenue. Deficits are growing at 30 percent of our revenue every year added to the deficits we have already. So it’s unsustainable. What is going to happen eventually – a currency and bond market collapse! And it’s not going out 20 years, as I also heard someone mention. In 2016 we’ll probably be spending 40 percent of all of our revenue just to service our debt. That is what the interest payments will equal.”
The U.S. debt situation is so bad that even the Prime Minister of Cyprus is scolding us…
“The U.S. has been fortunate in the sense that it’s like a bank, it prints the money that other people accept. So you can live beyond your means over an extended period of time without being punished by the market.”
Unfortunately, we will not be able to live way beyond our means forever. Reality is going to catch up with us at some point.
Right now, the rest of the world is lending us giant mountains of money at interest rates that are far below the real rate of inflation. This is extremely irrational behavior, and this state of affairs will probably not last too much longer.
But if interest rates go up, it will absolutely cripple the U.S. economy. For much more on this, please see this article.
And what would make things much, much worse is if the rest of the globe starts moving away from using the U.S. dollar. At the moment, the U.S. dollar is the de facto reserve currency of the planet and this creates a tremendous demand for U.S. dollars and U.S. debt.
If that changes, it will be absolutely catastrophic for the United States, and unfortunately there are already lots of signs that this is already starting to happen. I wrote about this in my recent article entitled “9 Signs That China Is Making A Move Against The U.S. Dollar“.
But don’t just take my word for it. Just a couple of days ago a major U.K. newspaper came to the same conclusions…
China has overtaken the US as the world’s largest oil importer and goods trading nation. Over the next five years, it will surpass the rest of the world combined in its consumption of base metals.
Given the scale of the country’s consumption of fossil fuels and raw materials, it is only a matter of time before the renminbi replaces the dollar as the primary currency for trading commodities and resources such as crude oil and iron ore.
The debt ceiling farce in Washington and China’sgrowing reluctance to continue underwriting the US economy by buying up its bonds and adding to America’s near $17 trillion (£10.5 trillion) debt mountain suggests that this tectonic shift in the global trade system could be just around the corner.
So what will happen when the rest of the world decides that they don’t need to use our dollars or buy our debt any longer?
At that point the consequences of decades of incredibly foolish decisions will result in an avalanche of economic pain that the American people are not prepared for.
Earlier today, I came across a photograph that perfectly captures what America is heading for. The following photo of Mt. Rushmore crying has not been photoshopped. It was taken by Megan Ahrens and it was posted on the Tea Party Command Center. If George Washington was alive today, this is probably exactly how he would feel about the nation that he helped establish…
- Public debt, to infinit and beyond (12) (libertariandad.wordpress.com)
- U.S. National Debt Over $17 Trillion – Surges $328 Billion In A Single Day (goldcore.com)
- A Fifth of Doom (pjmedia.com)
- Another One Trillion Dollars ($1,000,000,000,000) In Debt (brotherjohnf.com)
- Obama Said That We Have To Pay The Debt Back, Right Before He Doubled It (stevengoddard.wordpress.com)
Rights groups have demanded that the US launch an impartial investigation into its use of drone warfare and that the country publicly disclose any evidence of civilian casualties.
In independent reports published on Tuesday, both Amnesty International and Human Rights Watch said that the US must hold to account those responsible for civilian deaths and be more transparent about its drone programme.
“As evidence emerges of civilian casualties in these strikes, it’s time for the US to stop covering its ears and starting taking action to ensure the programme is legal,” Letta Taylor, senior counterterrorism researcher at HRW told Al Jazeera.
Two recently published UN reports are to be presented to the General Assembly on Friday. Taylor said that the release of the four reports in a brief period “underscores the mounting questions about the legality” of drones.
All four reports demand that the US should provide a full legal rationale for targeted killings.
Polly Truscott, Amnesty International’s deputy Asia-Pacific director, said that while its report focuses on Pakistan, and HRW’s on Yemen, the drones programme “raises the same questions about human rights violations all over the world”.
“Both organisations are calling on the US Congress to fully investigate the cases the we have documented in our reports and other potentially unlawful deaths,” she told Al Jazeera, adding that the group hoped that the US would act immediately on their recommendations.
HRW said that the Yemeni government, which is engaged in a conflict with al-Qaeda, had been “almost as silent” as the US on the death toll caused by air raids.
Caitlin Hayden, a spokesman for the US National Security Council, said that President Barack Obama had outlined the US rational for drone strikes in a May 23 speech.
“The president spoke at length about the policy and legal rationale for how the US takes action against al-Qaeda and its associated forces. As the president emphasised, the use of lethal force, including from remotely piloted aircraft, commands the highest level of attention and care.
“Of particular note, before we take any counterterrorism strike, there must be near-certainty that no civilians will be killed or injured – the highest standard we can set.”
She said the US was aware that this report had been released and were reviewing it carefully.
Through personal testimonies from eye-witnesses and relatives of drone-strike victims in Pakistan’s North Waziristan, Amnesty International’s 74-page report titled Will I be next? US drone strikes in Pakistan reviewed 45 known drone strikes in the region between January 2012 and August this year.
It found that nine of the strikes could amount to war crimes or extrajudicial executions – some of which were unjustified and some of which were cases of “rescuer” or follow-up attacks on residents who had gone to the scene after an initial strike.
|The bodies were charred like coal – I could not recognize the faces
Ahmad al-Sabooli, Yemeni Farmer,
In July 2012, 18 labourers, including a 14-year-old boy, were killed in multiple strikes on a village close to the Afghan border. The report indicates that the victims of the strike were not involved in fighting and did not pose a threat.
The London-based rights group added that such strikes were caused locals to live in fear, and set “a dangerous precedent that other states may seek to exploit to avoid responsibility for their own unlawful killings”.
HRW’s 97-page report, Between a Drone and al-Qaeda’: The Civilian Cost of US Targeted Killings in Yemen, examined six US targeted killings in the country – one from 2009, and the rest between 2012 and 2013.
The strikes killed 82 people, at least 57 of them civilians.
None met US policy guidelines for targeted killings set out in US President Barack Obama’s speech in May, said the New York-based rights group.
“Two of the attacks killed civilians indiscriminately in clear violation of the laws of war; the others may have targeted people who were not legitimate military objectives or caused disproportionate civilian deaths,” said HRW.
A witness quoted in the report described the aftermath of one strike targeting an alleged al-Qaeda leader, but instead struck a passenger van killing 12 civilians.
“The bodies were charred like coal – I could not recognise the faces,” Ahmad al-Sabooli, a 23 year-old Yemeni farmer, said.
International law prohibits arbitrary killings and limits intentional lethal force to exceptional situations wherein in an armed conflict, only combatants and those participating in hostilities may be targeted.
Intentional lethal force is lawful only when there is, with certainty, an imminent threat to life.
- Rights groups probe US drone strikes (bbc.co.uk)
- 2 human rights groups question legality of U.S. drone strikes (mcclatchydc.com)
- US Accused of Unlawful Killings in Pakistan Drone Strikes (voanews.com)
It is rare that investors are given a road map. It is rarer still that the vast majority of those who get it are unable to understand the clear signs and directions it contains. When this happens the few who can actually read the map find themselves in an enviable position. Such is currently the case with gold and gold-related investments.
The common wisdom on Wall Street is that gold has seen the moment of its greatness flicker. This confidence has been fueled by three beliefs: A) the Fed will soon begin trimming its monthly purchases of Treasury and Mortgage Backed Securities (commonly called the “taper”), B) the growing strength of the U.S. economy is creating investment opportunities that will cause people to dump defensive assets like gold, and C) the renewed confidence in the U.S. economy will shore up the dollar and severely diminish gold’s allure as a safe haven. All three of these assumptions are false. (Our new edition of the Global Investor Newsletter explores how the attraction never dimmed in India).
Recent developments suggest the opposite, that: A) the Fed has no exit strategy and is more likely to expand its QE program than diminish it, B) the U. S. economy is stuck in below-trend growth and possibly headed for another recession C) America’s refusal to deal with its fiscal problems will undermine international faith in the dollar.
Parallel confusion can be found in Wall Street’s reaction to the debt ceiling drama (for more on this see my prior commentary on the Debt Ceiling Delusions). Many had concluded that the danger was that Congress would fail to raise the ceiling. But the real peril was that it would be raised without any mitigating effort to get in front of our debt problems. Of course, that is just what happened.
These errors can be seen most clearly in the gold market. Last week, Goldman Sachs, the 800-pound gorilla of Wall Street, issued a research report that many read as gold’s obituary.The report declared that any kind of agreement in Washington that would forestall an immediate debt default, and defuse the crisis, would be a “slam dunk sell” for gold. Given that most people never believed Congress would really force the issue, the Goldman final note to its report initiated a panic selling in gold. Of course, just as I stated on numerous radio and television appearances in the day or so following the Goldman report, the “smartest guys in the room” turned out to be wrong. As soon as Congress agreed to kick the can, gold futures climbed $40 in one day.
Experts also warned that the dollar would decline if the debt ceiling was not raised. But when it was raised (actually it was suspended completely until February 2014) the dollar immediately sold off to a 8 ½ month low against the euro. Ironically many feared that failing to raise the debt ceiling would threaten the dollar’s role as the world’s reserve currency. In reality, it’s the continued lifting of that ceiling that is undermining its credibility.
The markets were similarly wrong-footed last month when the “The Taper That Wasn’t” caught everyone by surprise. The shock stemmed from Wall Street’s belief in the Fed’s false bravado and the conclusions of mainstream economists that the economy was improving. I countered by saying that the signs of improvement (most notably rising stock and real estate prices) were simply the direct results of the QE itself and that a removal of the QE would stop the “recovery” dead in its tracks. Despite the Fed surprise, most people still believe that it is itching to pull the taper trigger and that it will do so at its earliest opportunity (although many now concede that it may have to wait until this political mess is resolved). In contrast, I believe we are now stuck in a trap of infinite QE (which is the theme of my Newsletter issued last week).
The reality is that Washington has now committed itself to a policy of permanent debt increase and QE infinity that can only possibly end in one way: a currency crisis. While the dollar’s status as reserve currency, and America’s position as both the world’s largest economy and its largest debtor, will create a difficult and unpredictable path towards that destination, the ultimate arrival can’t be doubted. The fact that few investors are drawing these conclusions has allowed gold, and precious metal mining stocks, to remain close to multi year lows, even while these recent developments should be signaling otherwise. This creates an opportunity.
Gold moved from $300 to $1,800 not because investors believed the government would hold the line on debt, but because they believed that the U.S. fiscal position would get progressively worse. That is what happened this week. By deciding to once again kick the can down the road, Washington did not avoid a debt crisis. They simply delayed it. That is why I tried to inform investors that gold should rally if the debt limit were raised.Instead most investors put their faith in Goldman Sachs.
Investors should be concluding that America will never deal with its fiscal problems on its own terms. In fact, since we have now redefined the problem as the debt ceiling, rather than the debt itself, all efforts to solve the real problem may be cast aside. It now falls on our nation’s creditors to provide the badly needed financial discipline that our own elected leaders lack the courage to face. That discipline will take the form of a dollar crisis, which will morph into a sovereign debt crisis. This would send U.S. consumer prices soaring, push the economy deeper into recession, and exert massive upward pressure on U.S. interest rates. At that point the Fed will have a very difficult decision to make: vastly expand QE to buy up all the bonds that the world is trying to unload (which could crash the dollar), or to allow bonds to fall and interest rates to soar (thereby crashing the economy instead).
The hard choices that our leaders have just avoided will have to be made someday under far more burdensome circumstances. It will have to choose which promises to keep and which to break. Much of the government will be shut down, this time for real. If the Fed does the wrong thing and expands QE to keep rates low, the ensuing dollar collapse will be even more damaging to our economy and our creditors. Sure, none of the promises will be technically broken, but they will be rendered meaningless, as the bills will be paid with nearly worthless money.
In fact, the Chinese may finally be getting the message. Late last week, as the debt ceiling farce gathered steam in Washington, China’s state-run news agency issued perhaps its most dire warning to date on the subject: “it is perhaps a good time for the befuddled world to start considering building a de-Americanized world.” Sometimes maps can be very easy to read. If the dollar is doomed, gold should rise.
- Ron Paul On the Never Ending QE Cycle (tradethenewsroom.com)
- Manipulated Markets Prospects: Gold, U.S. Dollar, Bonds, Equities & Interest Rates (silverdoctors.com)