Weekly Thoughts September 2008

Time Is Running Out -
From Ron Paul
9-25-8

Dear Friends,

Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

The events of the past week are no exception.

The bailout package that is about to be rammed down Congress' throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! "This is welfare for the rich," he said. "This is socialism for the rich. It's bailing out the financiers, the banks, the Wall Streeters."

That describes the current bailout package to a T. And we're being told it's unavoidable.

The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

* The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.

* Financial institutions are "designated as financial agents of the Government." This is the New Deal to end all New Deals.

* Then there's this: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

Even some so-called free-market economists are calling all this "sadly necessary." Sad, yes. Necessary? Don't make me laugh.

Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we're supposedly presented with this November: yes or yes. Now, with a backlash brewing, they're not quite sure what their views are. A sad display, really.

Although the present bailout package is almost certainly not the end of the political atrocities we'll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.

The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?

When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.

In liberty,

Ron Paul

September 24th, 2008

I agree with Whitley...  A nuke will go off in Portland, OR I think.  A place where the whole world will be shocked as to why there...  Why there?  It's one of the less popular cities and only has around 3 million people including my family.

I also read that Portland just recently did a nuke drill and they didn't even report it in the media.  If not Portland, it will be somewhere on the west coast.  Why?  I don't know.  It's just what I have been reading between the lines...  We get nuked, martial law takes place, elections are halted and it's the perfect time for the NWO to creep in.  Maybe in the bible, the antichrist will come out and save us all from this crap...  Regardless, I am shocked as to not see anyone really scared right now...

A Time of Extraordinary Peril
Wednesday September 24th, 2008
Whitley Strieber

There are rumors floating around the beltway that the credit crisis was intentionally triggered by gigantic short sales that were orchestrated in London and Dubai, and Iranian President Mahmoud Ahmadinejad declared "that 'the American empire' is nearing collapse and should end its military involvement in other countries."
At the same time, as reported in the Unknowncountry.com Newsletter and on Unknowncountry.com, the 3rd Infantry Division's 1st Brigade Combat Team will be deployed to the US mainland beginning on October 1 for 12 months. The brigade will have the most advanced nonlethal weapons in the army's arsenal. It is trained in crowd control and how to deal with massive terror assaults, such as nuclear attacks.

I have to tell you, I am concerned that things are coming apart in major, indeed fundamental ways, and I would not be in the least surprised to see that the financial collapse is followed by a massive terror attack, probably involving a nuclear weapon.

In January, I have a book coming out called Critical Mass which deals with nuclear terrorism. To write it, I studied the realities of nuclear nonproliferation carefully, and there is little question in my mind but that weapons-grade nuclear materials or even actual bombs, are hidden away in the west right now.

In my book, a nuclear weapon is detonated first over a large American city, then over a European one, whereupon a shadowy terrorist group demands that the world convert to Islam. And the world is caught like a rat in a trap, because nobody knows if there are more bombs hidden in other cities.

Obviously, an extreme scenario, but we are living in extraordinary times, and frankly, I don't think it's beyond possibility, not at all. The more I learned about the realities of nuclear nonproliferation, the more I came to understand that it's a very hard thing to achieve--so much so that it may be impossible. To make matters worse, very little was spent on hardening US borders against nuclear smuggling. Incredibly, our most vulnerable entry point, which is the Port of Los Angeles, was not fitted with detection equipment until last year. That is to say, the government waited six years before actually deploying some sort of protection in the port that controls 70% of American trade.

We are facing an economic disaster on a scale never before seen in human history. To give you an idea, a seven hundred billion dollar bailout of the financial industry, if distributed instead to each American voter, would provide each one of us with $3,500,000, assuming that there are 200,000,000 voters in the country.

In other words, it is an unimaginable, impossible amount of money--or rather, debt, because the country is already in deficit. We have no reserves to draw on. Every penny of that money must be borrowed.

Congress is in a no-win situation. The bailout will fail because it will cause the dollar to collapse. But if there is no bailout, the entire credit system will fail. This will mean that there will be no money to borrow to buy a car, certainly not a house, or even to finance business inventories or things like cash flows.

Very quickly, and by that I mean over the next few months, the economy will grind to a halt. I believe that many banks--quite possibly most of them--may fail. If there is a bailout, that won't happen, at least, not for a while, but with a collapsed dollar the economy of the entire world is going into a tailspin which will take years to put right.

Meantime, virtually every country on earth will experience severe economic disruption, on a scale that has not only not been seen since the Depression, but that has never before been seen.

And, incredibly, it gets worse, and this has to do with climate. Recently on Unknowncountry, we ran a story about starving polar bears. They are starving because the arctic summer has been too warm because of global warming. But there is another concealed problem that is far more serious even than their suffering. It is that massive quantities of methane gas are being released by melting arctic permafrost. Methane is a far more powerful greenhouse gas than carbon dioxide, and the result of this release is going to be dramatically higher temperatures next year and the year after, with the result that even more outgassing will take place.

Temperatures are going to literally shoot up worldwide during this period, very much as they did 11,000 years ago just prior to the period geologists call the Younger Dryas. The ice age had ended, and warming had begun. But massive quantities of methane were trapped in the world's permafrost, and it flooded the atmosphere, so temperatures shot up to about where they are today.

Then the trapped methane ran out, and the atmosphere was suddenly clear of it. Temperatures plummeted, and, as German scientists have recently discovered and Art Bell and I predicted in Superstorm, the climate went from warm to cold in a single season.

All of this is going to happen again, and in the context of the worst economic crisis we have ever known, not to mention the possibility of terror attacks of extraordinary power.

Let me give you a timeline.

First, the most likely time for a terror attack is this October. It hits us just as the economy is collapsing, and disrupts the presidential election. If it strikes Washington, the country takes the worst blow it has ever taken in its history. As there is no continuity of government plan in effect that takes the possibility of the sudden disappearance of Washington into account, it is literally anybody's guess what might happen next.

At the same time, bailout or no bailout, over the next eight weeks we will see extraordinary changes in financial markets and in our lives. Without a bailout, we will see credit dry up and banks fail. With one, we will see the dollar collapse.

In terms of the environment, it is likely that scientists will announce sometime this fall that methane outgassing has taken place over the summer at unprecedented levels. We will begin to see its effects next winter. The wild card here is the sun. If it remains quiescent, there will be fewer coronal mass ejections and therefore less heat reaching earth's atmosphere. (How the sun affects our weather is controversial, but there is general agreement that it gets warmer during solar maxima.) At present, the solar wind is probably as low as it has ever been, so the sun could help us here.

I think that there is a very real risk of terrorism and social upheaval right now, or those troops would not have been deployed to the U.S.

It could be--in fact, it's probable--that the bailout will be approved by congress in some form this weekend. If that happens, the stock markets will respond explosively next week and gold will plummet.

If so, it would be a good time to put cash into the yellow stuff, it seems to me. But I'm no investment adviser, so don't take my word for it.

September 23rd, 2008

I lost the spirit of the Lord temporarily for the past few days.  It seems Satan has been condemning me for my works.  Lately, I have been feeling like I was doing too much works for the Lord and people were judging me or acting jealous in which none of that is true.  I hate that feeling.  A brother told me today to read psalms.  So I will.  I love the Lord.

September 22nd, 2008

Paying the Piper
Saturday September 20th, 2008
Whitley Strieber

What a week! We have seen the effective nationalization of the financial industry, and handed a bill to pay that will reach past a trillion dollars. More fantastically, our national wealth is to be spread among the horde of Wall Street bankrupts not by an impartial agency, but by contractors who will be working for a profit and will, essentially, be the same people who have gone broke, giving our money to themselves.
How will we pay for it? One guess: we will be taxed to pay for it. It no longer matters which party wins the election. The hope of lower taxes is moot. There is only one way to pay this piper, and that is with higher taxes, and both parties know this perfectly well. Of course, they will continue to lie to us and say there will be tax cuts of one kind or another, but it will not happen because it cannot happen.

Not only that, we have been experiencing stealth tax increases for years, in the form of congress's refusal to end the alternative minimum tax. In 2007, four million of us got hit by this. In 2008, the amount has risen to twenty-six million. This fall, congress, Democrats and Republicans included, will pass the so-called "AMT Patch" by voice vote, possibly even without debate, or with a few of our elected reprobates making a token protest, and next year, as many as forty million of us will find ourselves paying higher taxes, on this basis alone.

In the real world--that is to say, the place where we all live, but which the media and the politicians pretend doesn't even exist--what will happen is that they will soon come screaming to us that Social Security must be privatized and Medicare cut back. No way will we see any kind of comprehensive national health care program. Far from it, a lot of us are going to lose our jobs over the next few years, and with them any access we may now have to health insurance.

Meanwhile, they will continue to try to ram the Social Security privatization scam down our throats. If this had already been achieved, one might reflect, we would ALL be seeing our pensions go down the tubes, because they would be caught in the Wall Street debacle that is taking place now. But, I can assure you, we would NOT be getting the benefit of any bailout.

I am constantly hearing that this whole mess started because a lot of people who could not afford mortgages took them out and then walked away from the houses when they couldn't pay. This is what happened, but it didn't need to happen.

Starting with the Clinton administration, a process of deregulation encouraged banks to loosen mortgage restrictions. Then, in 2003--2004, when home prices appeared to be reaching a top, new, more creative mortgage instruments were invented, and along with them, the wholesale gathering of millions of mortgages into pools, which were then sold as "securities." Fake securities, because there was and is no way to determine their actual value.

In the Bush administration, the regulations that were left were simply abandoned, and, what is worse, financial entities were allowed to stop disclosing their actual financial state. As a result, housing prices escalated into a lunatic bubble, which began to burst when many of the loans made on interest payments only in 2003-2004 began to require capital payments as well. People who had been paying $300.00 a month interest on a loan on a $200,000 house, suddenly had to pay that, plus principal, in many cases more than doubling their loans.

This could not work, because not only had housing prices topped out, thus making it impossible to sell without handing the bank a fat check for the difference between the sale proceeds and the mortgage amount, the average persons taxes haven't gone down and his wages haven't gone up--so he ended up able neither to pay nor to sell.

The result was foreclosure, and from that point, the rot began to spread upward. As unsold housing inventories rose, more and more expensive houses began to lose value. Now, even prime mortgages came to be in trouble--and the rest is history, because it is plastered all over the headlines right now.

I have been listening to the candidates talk about this, and it has been extremely disappointing. All Obama ever says is "change." What change, exactly? He'd better tell us soon, or a lot of us are going to conclude that he is blowing smoke. He has said that he supports the bailout, meaning that he hasn't got the slightest idea what it means or what the perils involved may be.

As far as McCain is concerned, his chief economic adviser is Phil Gramm, the arrogant fool who accused us, a few weeks ago of being "whiners" because we were losing our jobs and our homes. But of course, why not? He's made a bundle at the public trough, and he isn't going to suffer. To be fair, McCain has disavowed the comments, but continues to rely on the man.

No matter who reaches the White House in November, we are in for one hell of a time over the next few years. This bailout is, simply, a matter of replacing money Wall Street has lost with our hard-earned tax dollars. In other words, they made the mistakes and WE must pay for them. And, you can be sure, that they wll not be losing their multimillion dollar mansions.

The simple fact is that, without big regulation, big finance and big industry are always going to experience the same kind of boom and bust cycles that dogged all capitalist economies prior to the Depression. Abandoning regulation and ignoring the need for disclosure led directly to the disaster we are facing now.

What will happen to us? First, this gigantic bailout is only a bandaid. It will work for a while, but, inevitably, the truth will become known: we are in the process of seeing a trillion dollars of our money thrown into a black hole. There is much, much more out there in terms of worthless paper, and the system that is being set up is tailored to encourage the big banks and financial institutions to make the absolute maximum demands, without the need to disclose very much at all about what they are doing with our money.

What we have now is a cynical cabal between Wall Street and government, that is designed to replace the street's losses with our hard earned tax dollars.

What is worse, as of right now the document that is being sent to congress explaining the new program is exactly three pages long. One thing it does make clear though, is that the president will have absolute authority to appoint the administrator, and he will have final say about where the money goes.

Bush's history with appointments is abysmal, of course, so we can expect the worst with this, too, presumably.

Bottom line: the financial community goes to a trough filled with our money, and what is worse, we have to listen to the media and the politicians crow about how smart they have all been, to have saved us from another depression.

The bailout will work for a while, but not for long. What will cause it to fail? I don't know, but I have some ideas. First, it depends absolutely on the rest of the world continuing to be willing to by US Treasuries.

Our government's biggest customer is China, and they are going to see this as both an opportunity and a peril. How they will manage this is anybody's guess, but you can be sure that we will have to pay some sort of a price in order to get them to continue to buy our national debt, most probably in the form of our having to pay higher interest.

Worse, though, is the extraordinary vulnerability that our country must now face. Basically, if China refuses to buy our debt, the United States of America is, effectively, bankrupt. And their peril is, of course, that we may fail as an economy anyway, so being a buyer of US debt right now is a risk they may not want, or be able, to take.

It must not be forgotten that Asian bourses have taken a fantastic hit over the past 12 months, China is suffering from inflation, its own consumer economy sliding into recession, with hundreds of thousands of people losing their jobs.

The Chinese leadership knows history, and not only their own. They know that revolutions take place in countries where the aspirations of an expanding middle class are thwarted, as happened in France in the 1780s, in Russia in the early twentieth century, and more recently in the Shah's Iran.

It's anybody's guess what China will do. Obviously, we're a vitally important trading partner, but, given the risks that we now present, they will do whatever they can to reduce their exposure to us, and that does not mean continuing to buy our debt, obviously.

What else might go wrong? One thing that certainly will go wrong is that there is going to be a historic feeding frenzy as the wealth of the American people is doled out, and every single financial entity with even the slightest reason to go to the trough is going to stick its big square nose in and just gobble. And because the administrator will have total control, we probably won't even get any disclosure.

Will the bailout save the financial world? For a while, sure, but it will not change the massive inventory overhang in the housing market, and, because it is going to force the government to tax us ever more heavily at a time when our real income is dropping, it won't do a single thing to stimulate demand. In fact, the ever increasing tax bite that will result from it is going to retard economic growth in this country for many years to come.

There will be those who say that the candidates are both promising tax cuts, which they are. But this spending frenzy just ate those tax cuts--or, to put it more accurately--converted them into unavoidable tax increases, no matter who is in power.

The truth is, the bailout is the last card the government can play, in its effort to undo the grotesque catastrophe that its own policies--or lack thereof--have caused.

Once the bailout fails, it's the abyss for us. But not for the politicians of course, or for the Wall Street millionaires. Just us tax-choked whiners.

September 22nd, 2008

My father-in-law pointed out something to me today about how I may be reading politics differently.  It appears that most of the news sites have opinionated speakers who lean on one issue without pointing out both sides of the story before giving their opinion.  Perhaps I have been reading wrong.  Maybe a lot of the websites I read to get (dis)information have been feeding their opinions versus being true journalists. 

September 21st, 2008

What do all of the financial bailouts mean?  When these institutions get their money from the taxpayers non-existent funds, what are they immediately doing with it?  We are hearing the terms billions and trillions as if they were a normal phrase of currency.  I think the money is going to the executives for a temporary solution.  1.)  They will place their cash in their swiss bank accounts and flee the country.  2.)  They will give up the company for dismantle hence jobs will be lost.

We are heading towards a depression that we have never seen before.  This will be worse than all previous thought.  America was already sold out back in the 80's and for 20 years, all of this problematic displacement has been implemented for a hostile takeover.  America has lost all of it's rights.  You now can be arrested for being in the press or for speaking bad about the President.  It all happened so fast.

Buy food.  Buy a lot of it.  Buy guns and ammo.  A lot of it.  AND GET RIGHT WITH THE LORD.  Jesus Christ is the light.  All of this must take place and we have to go through these hard times...

My wife thinks I am nuts.  But bailing out companies is only a temporary fix.  If you stop and think for a second, don't you think that throwing more money at a problem is only going to temporarily fix the problem?  More money adds to problems.  I have learned that.  These large companies are doomed to fail.  I think that the powers to be are bandaging the inevitable.  They are waiting for something extraordinary to happen.  Something catastrophic.  The mood fits and just on Coast to Coast, some guys were predicting something to happen on October 8th, 2008.

What does all of this mean?  If something bad will happen, do you think the media will just come out and prepare you?  Do you personally think the government cares about you?  Are you still naive in trusting your television?

Something bad is about to happen to good people.