Max Keiser: ‘America will lose its sovereignty’

 

 

Peter Shiff: Problem is the debt, not the ceiling

RT
July 30, 2011

The country which holds more U.S. debt than any other, has hit out at the failure of Congress to reach a deal over its debt ceiling. China says the political deadlock in Washington threatens the entire global economy.

So far Republicans and Democrats have delayed a vote over limiting what the country owes, as they haven’t agreed on rival budgets. They have until Tuesday to avoid a potentially devastating default. Earlier in the week, U.S. Secretary of State Hillary Clinton was in Beijing to reassure Asian leaders, that America will not fall back on its debt payments. But Peter Schiff from investment company Euro Pacific Capital, thinks China could well dump the dollar as its main reserve currency.

Ron Paul: “Default Is Coming”

Fox News
July 29, 2011

Rep. Ron Paul (R-TX) explains why default by inflation is worse than default by not raising the debt ceiling.

Rep. Paul also talks about how the devaluing of the U.S. has led to record prices in gold bullion.

“Default is coming. The only argument that’s going on now is how to default, not send the checks out or just print the money. In all countries our size, they always print the money,” Paul said.

“They’re going to raise the debt limit, and then they’re going to print the money, and then they’ll default by inflation, and that’s much more dangerous than facing up to the facts of what’s happening today.”  (See YouTube video below.)

Americans Are Becoming Desperate: Scrap Metal Theft On The Rise

It seems that more and more Americans are becoming desperate enough to steal scrap metal in order to survive this economy.  With staggering unemployment figures at an all-time high; home foreclosures in the millions, and with little hope of ever achieving that “American Dream”, stealing scrap metal here and there to put food on their tables may be the only option left for some Americans. 

(If you haven’t yet figured it out folks, we’re are in a depression.  If you still have a job to rely on, be very thankful.)  Check out the links below:

SCRAP METAL THIEVES STRIKE CHARITY FOR KIDS WITH CANCER…

Steal 100+ Bronze Vases Off Headstones At Cemetery…

2 Men Arrested For Stealing Guard Rails From Roadway…

Thieves Strip Live Copper Wiring From 14 Schools In Town; Start Of Year Threatened…

DC FIREHOUSE RANSACKED…

COPS: Man tries to sell stolen sewer grates at scrap yard…

Bill Approved To Create Massive Surveillance Database Of Internet Users

Privacy busting legislation a “stalking horse for a massive expansion of federal power”

Steve Watson
Prisonplanet.com
July 25, 2011

Legislation that will force Internet providers to store information on all their customers and share it with the federal government and law enforcement agencies was significantly beefed at the last minute yesterday and approved by a U.S. House of Representatives committee.

Under the guise of protecting children from internet pornographers, the House Judiciary committee voted 19-10 to approve a bill that will require Internet Service Providers to store temporarily assigned IP addresses for future government use.

In addition, the bill was re-written yesterday to also include the enforced retention of customers’ names, addresses, phone numbers, credit card numbers and bank account numbers.

As Declan McCullagh of CNet reports, the panel rejected an amendment that would have clarified that only IP addresses must be stored.

“The bill is mislabeled,” said Rep. John Conyers of Michigan, the senior Democrat on the panel. “This is not protecting children from Internet pornography. It’s creating a database for everybody in this country for a lot of other purposes.”

It represents “a data bank of every digital act by every American” that would “let us find out where every single American visited Web sites,” said Rep. Zoe Lofgren, who led Democratic opposition to the bill. The Californian Representative described the legislation as a “mess of a bill” and a “stalking horse for a massive expansion of federal power”.

Rep. Darrell Issa, R-Calif., noted that the bill would open a Pandora’s box of government abuse.

“This is not about child porn. It never has been and never will be,” Issa said. “This is a convenient way for law enforcement to get what they couldn’t get in the PATRIOT Act.”

Advocates for the legislation include the National Sheriffs’ Association, which has said it “strongly supports” mandatory data retention. The bill has also attracted endorsements from the National Center for Missing and Exploited Children, as well as the FBI.

In a last ditch effort to derail the bill, the ACLU, along with dozens of other privacy watchdog groups penned a letter (PDF) to House Judiciary Committee Chairman Lamar Smith earlier this week, noting that “any data retention mandate is a direct assault on bedrock privacy principles.”

“The data retention mandate in this bill would treat every Internet user like a criminal and threaten the online privacy and free speech rights of every American, as lawmakers on both sides of the aisle have recognized,” Senior Staff Attorney Kevin Bankston of the Electronic Frontier Foundation said.

“Requiring Internet companies to redesign and reconfigure their systems to facilitate government surveillance of Americans’ expressive activities is simply un-American. Such a scheme would be as objectionable to our Founders as the requiring of licenses for printing presses or the banning of anonymous pamphlets.” Bankston added.

“This is China-style law enforcement, treating everyone as a potential suspect and requiring the collection of personal information just in case it might later be useful to the government,” said Greg Nojeim, senior counsel for the Washington based Center for Democracy and Technology, in an interview with Bloomberg.

A fortnight ago, the Electronic Privacy Information Center (EPIC) appealed before the House Judiciary Committee, asking that Congress recognize the fact that retaining identifying information would put at risk “99.9% of Internet users.”

EPIC President Marc Rotenberg pointed out that it is more prudent to seek data minimization rather than data retention, in the wake of increased risk of data breaches and identity theft. Rotenberg noted that enforced data retention would make ISPs more vulnerable to hackers, citing the LulzSec group, which recently claimed responsibility for temporarily shutting down a CIA website and other high-profile hacks.

“Minimizing stored user data reduces incentives for hackers to attack data storage systems by reducing the amount of data available to steal. Minimization also reduces the costs of data breaches,” Rotenberg said in prepared testimony.

Rotenberg suggested that the data could be used to bring criminal charges that were unrelated to child pornography, noting that any mandatory retention of data would be accessible to police investigating any crime.

“Although this data retention requirement has been introduced as part of a bill focused on child sexual exploitation, there is no evidence to suggest that the majority of law enforcement requests for customer subscriber information relate to child protection cases.” Rotenberg argued.

The bill would also allow access to the data by attorneys litigating civil disputes in divorce, insurance fraud, and other cases that have nothing to do with the protection of children on the internet.

“It would give the government sweeping authority to mandate the collection and retention of personal information obtained by business from their customers, or generated by the business in the course of providing services, for subsequent examination without any reason to believe that information is relevant or necessary for a criminal investigation,” Rotenberg further testified.

Rep. Bobby Scott, D-Va., had proposed an amendment to the bill that would have limited use of the data to child-pornography or terrorism cases, but it was withdrawn at the last minute, as Lamar Smith claimed that limiting the use of the information to child-pornography investigations could “undermine current cases on other issues”.

Rep. Scott also attempted to add an amendment to allocate $45 million a year to pay for more than 200 additional federal investigators and prosecutors dedicated to child pornography cases. Clearly a real move to crack down on child porn peddlers was unwelcome, however, as this too was struck down by committee members who claimed the funding wasn’t available.

The legislation, with all it’s privacy stripping measures intact, will now be scheduled for a full House debate.

——————————————————————

Steve Watson is the London based writer and editor for Alex Jones’ Infowars.net, and Prisonplanet.com. He has a Masters Degree in International Relations from the School of Politics at The University of Nottingham in England.

Giant Banks Lobby to Raise the Debt Ceiling and Slash Public Benefits … So They Can Keep Sucking at the Public Teat

Washington’s Blog
July 28, 2011

 

Economist Dean Banker notes:

Wall Street will suffer more than anyone from a default and it will not let it happen. The public should know this, certainly Wall Street does.

No wonder the fatcats running the giant banks which received tens of trillions in bailouts, loans and guarantees from the American public are screaming loudly that the debt ceiling must be raised.

Robert Reich points out:

Why has Standard & Poor’s decided now’s the time to crack down on the federal budget — when it gave free passes to Wall Street’s risky securities and George W. Bush’s giant tax cuts for the wealthy, thereby contributing to the very crisis its now demanding be addressed?

Could it have anything to do with the fact that the Street pays Standard & Poor’s bills?

Remember, the big 3 government-sponsored rating agencies routinely took bribes as their normal business model, committed massive fraud which greatly contributed to the financial crisis, covered up improper ratings after the fact, and otherwise sold their soul (in their own words). And see this and this.

Some complain about the poor sucking on the government teat.

But the fact that Wall Street controls the rating agencies, and the rating agencies are now creating an artificial emergency sounds like the powers-that-be – the giant banks which run this country – are trying to protect their government teat of perpetual bailouts from the public coffers.

And of course, they are the ones calling for slashing of spending which helps the public. Even though – as conservative writer Michael Rivero points out:

Social Security is not “unfunded” nor is it an “entitlement.” That is YOUR money in that trust fund. You worked for it, and it was taken out of all your paychecks your entire working life.

The Social Security Trust fund invested your money by loaning it to the US Government, which is the largest single holder of US Government debt. But the US Government is already in default in fact, as the actual tax revenues have not even come close to the projections on which the budgets were drawn up.

So the US Government has looked at all the entities they owe money to and decided that stiffing the American people is the least likely to cause them harm. They will pay the bankers and they will pay foreign nations and they will continue to bail out Wall Street for the mortgage-backed securities fraud by embezzling your retirement money you gave them in trust. The US Government is robbing you to save the private central bank! [i.e. the big banks. See this and this.]

The debt crisis might be real … I’ve been warning about it for years (and see this and this).

The potential downgrade to America’s credit is real … I’ve been warning about that for years, as well.

But the way that the rating agencies and Wall Street are approaching the debt ceiling debate is a scam. See this, this and this.

After all, they aren’t even discussing the spending cuts which must be enacted to reduce our debt:

(1) Ending the imperial wars, which reduce – rather than strengthen – national security (and see this and this);

(2) Ending the never-ending bailouts for Wall Street;

(3) Prosecuting fraud and clawing back the ill-gotten gains;

(4) Ending the Bush tax cuts, which are hurting the economy; and

(5) Slashing pensions for public employees, at least when they are pegged to an artificially “spiked” final year’s salary.

This Is What A Collapsing Ponzi Scheme Looks Like

Housing Market Headed Off A Cliff. 10.8 Million Mortgages At Risk

David DeGraw
July 28, 2011

You might want to sit down for this one. As bad as the housing crisis has been over the past three years, it has only been a warm up to what we have headed our way. Laurie Goodman, from Amherst Securities, has been tracking the housing market as well as anyone. She just presented her latest findings at the American Enterprise Institute and it is a horrific forecast, to say the least. As she puts it, “10.81 million homes are at risk of default over the next 6 years. Even if we try to be extremely conservative we can’t get the number below 8.7 million units.”

With defaults already piling up, the shadow inventory of homes has been growing rapidly, and given this new datathe number is going to skyrocket. As this chart shows, the total has gone up from 2 million homes in 2009 to 3.35 million as of April, a 67.5% increase already.

The Atlantic explains this shadow inventory chart: “What’s happening to the homes of all those defaulted borrowers that we hear about? Many of those properties are a part of so-called shadow inventory. This is the sort of limbo between when a home’s loan defaults and when the property is put on the market for purchase. The increase shown above is staggering. The shaded area shows mortgages more than 12 months delinquent or in foreclosure (darker blue) and those seized by the bank (lighter blue).”

Laurie Goodman’s full presentation is available in pdf format here.

Obviously this is going to significantly drive home prices further down, as I reported a few weeks ago, 28% of US homeowners already owe more on their mortgage than their homes are worth. A recent survey by Fannie Mae found that 27% of American homeowners are considering walking away from their mortgage. A perfect storm is brewing. As prices continue to drop, with 10 million now at risk of default, a strategic default movement could devastate the “too big to fail” banks that caused this mess in the first place.

With all this trouble headed their way, no wonder they are fighting hard to, as Reuters put it, get “immunity over irregularities in handling foreclosures, even as evidence has emerged that banks are continuing to file questionable documents.” They can attempt to fraudulently paper over reality, play accounting games, “extend and pretend” and buy off all the state attorneys and regulators they want, even have the Fed, Treasury, Congress and the president in their pocket; they can buy all the king’s horses and all the king’s men, but they can’t put Humpty Dumpty back together again.

This is what a collapsing Ponzi scheme looks like.

We must break up the “too big to fail” banks and end this RICO racket now. As the data proves, the longer we wait, the uglier this is going to get.

Only 17% of Americans Believe That The United States Is Headed In The Right Direction

Paul Joseph Watson
Prison Planet.com
Thursday, July 28, 2011

Despite being hailed as a Christ-like savior when he was elected, a record number of Americans have lost faith in Barack Obama, with just 17 per cent believing that his administration is leading the nation in the right direction, figures that illustrate how Obama’s handling of the debt crisis has virtually assured his 2012 election defeat, unless the President can exploit a terror attack on U.S. soil to regain popular support.

“Just 17% of Likely U.S. Voters now say the country is heading in the right direction. That finding is the lowest measured since Barack Obama took office,” reports Rasmussen.

Obama has also beaten his all time high for the number of Americans who think the country is on the wrong track, with 75 per cent, or three quarters of all Americans, losing faith in his administration’s policies.

Wrangling over the debt crisis has clearly turned many more Americans against Obama. In the previous week’s poll, before the debt story rose to the center of public attention, the number of Americans who thought the country was heading in the right direction stood at 21 per cent. The figure has declined by 8 per cent in just the last two weeks alone.

But Americans’ disdain for Obama has almost been matched by their disapproval for Congress. A new high of 46 per cent of likely voters think members of Congress are “corrupt”. Just 29 per cent think they are not corrupt, and Congress has a pathetic 6 per cent approval rating.

Unsurprisingly, the only group that retains a slim majority of people confident in the nation’s current course are from the “political class,” which is precisely whom most Americans would blame for the country’s downfall in recent years.

As John Pilger warned leftists right at the start of Obama’s term in office, the presidency of Barack Obama was nothing more than a corporate marketing creation designed to quell building resentment after the Bush era. It has taken two and a half years for most liberals to realize that fact. The poll shows that 58 per cent of Democrats believe the country is heading in the wrong direction.

Obama’s Democratic base has completely crumbled, with support for Obama’s jobs record plummeting by a whopping 22 points.

Every indication shows that Obama is on his way to a landslide defeat in 2012, which is why Democratic strategists have said the only thing that will save his presidency is a domestic terror attack on the scale of Oklahoma City or 9/11.

Appearing on Chris Matthews’ MSNBC Hardball show last year, former Clintonite and Democrat operative Mark Penn said Obama needed an OKC bombing-style event to regain his popularity.

“Remember, President Clinton reconnected through Oklahoma, right?” said Penn. “And the president right now seems removed. It wasn’t until that speech [after the bombing] that [Clinton] really clicked with the American public. Obama needs a similar defining moment.”

Former senior advisor to President Bill Clinton Robert Shapiro echoed similar rhetoric when he wrote in the Financial Times that only an OKC bombing or 9/11 style event could provide Obama with the opportunity to demonstrate that he is a strong leader.

“The bottom line here is that Americans don’t believe in President Obama’s leadership,” said Shapiro, adding, “He has to find some way between now and November of demonstrating that he is a leader who can command confidence and, short of a 9/11 event or an Oklahoma City bombing, I can’t think of how he could do that.”

*********************

Paul Joseph Watson is the editor and writer for Prison Planet.com. He is the author of Order Out Of Chaos. Watson is also a regular fill-in host for The Alex Jones Show.

New High: 46% of American Voters Think Most in Congress Are Corrupt

Rasmussen Reports
Wednesday, July 27, 2011

Voters are more convinced than ever that most congressmen are crooks.

A new Rasmussen Reports national telephone survey finds that 46% of Likely U.S. Voters now view most members of Congress as corrupt. That’s up seven points from June and the highest finding yet recorded. Just 29% think most members are not corrupt, and another 25% are not sure. (To see survey question wording, click here.)

Similarly, a whopping 85% of voters think most members of Congress are more interested in helping their own careers than in helping other people. That’s a record high for surveys stretching back to early November 2006. Only seven percent (7%) believe most of the legislators are more interested in helping others.

These findings come at a time when voter approval of the job Congress is doing has fallen to a new low. Just six percent (6%) of voters now rate Congress’ performance as good or excellent. Sixty-one percent (61%) think the national legislators are doing a poor job.

Full story here.

Related articles

• 46% of Americans Think Congress is Corrupt (fellowshipofminds.wordpress.com)
• The Congress keeps on sinking down (atung.net)

Caught on Tape: American Police beat and taser homeless man to death

Rachel Quigley
Daily Mail
Wednesday, July 27, 2011

A shocking video has been released allegedly showing police officers tasering and beating a homeless man to death who they claim was resisting arrest.

Though the video is not clear, eye witnesses say the homeless man – Kelly Thomas, 37 – was unable to put up any resistance and was lying on the ground on his front when the attack took place on July 5th.

His screams and cries for his father can be heard amid the tasering noises.

The video was shot by a student in Fullerton, California. Kelly Thomas was beaten so badly he died in hospital several days later.

 

 

Related articles

• Police Beat ‘Gentle’ Homeless, Mentally Ill Man to Death [Video] (gawker.com)
• Homeless man dies 5 days after fight with Fullerton police (latimesblogs.latimes.com)

Ron Paul to Congress: Stop Stealing from the American People

Ron Paul
July 26, 2011

Imagine you had a pesky neighbor who somehow took out a mortgage on his house in your name and by some legal trickery you were obligated to pay for it. Imagine watching this neighbor throw drunken parties, buy expensive cars, add more rooms to the house, and hire dozens of people to wait on him hand and foot. Imagine that he also managed to take out several credit cards in your name. One by one, he would max them out and then use your good name and credit to obtain another credit card, then another and then another. Each time, this neighbor would claim that he needed the new credit card to pay interest on the other maxed out credit cards. If he defaulted on those cards, your credit score would be hurt and when you wanted to buy something for yourself, it would be more difficult to get a loan and the interest you paid would be higher. Imagine that you mulled this over, and time after time, said nothing as he filled out more credit applications so he would not have to default on the other debt taken out in your name. Meanwhile, another shiny new Mercedes appears in his driveway. At what point do you think you might get tired of this game? And, even though you are left with no really good options, do you think you might eventually tell him to go ahead and default, just stop spending your money!

This analogy demonstrates the position we are in with our government and the debt ceiling. The government has run up a huge debt in the name of the American people, who are sick and tired of being on the hook for it. There are no really good options left. Defaulting on a portion of the debt may not be without costs, but it is better than handing the government yet another credit card.

The government is using the usual scare tactics to strong-arm the people into going along with more spending. Remember the rhetoric surrounding the big bailout of October 2008? We were told, not that this would be calamitous for the banks, but for the people, who would continue to experience massive job losses and foreclosures. We were told that the economy would sink into a deep recession if this money was not handed out to too-big-to-fail corporate cronies. So, after much hand-wringing, leaders from both parties, against unprecedented public outcry, agreed to shower money on the banks and increase the debt. The banks learned nothing, except that Washington will come to their rescue, no matter what. The people, however, continued to lose their jobs and houses anyway, and here we are, still in a deep recession.

When you read the above example, your first reaction might have been to dismiss the neighbor’s debt as illegitimate and in no way your responsibility or your problem. You would be right. No fair-minded legal system would hold you responsible for such a debt, and would instead cart your thieving neighbor off to jail. Yet Congress can impose liabilities on you, your children, and grandchildren without your consent, and even without your knowledge. This is another example of government holding itself above the law. Much like the TSA claims the right to molest us, yet arrested a woman who turned the tables last week, stealing somehow becomes legitimate when the government does it.

We supposedly live in a nation of laws. For once, government needs to heed the law regarding the debt ceiling.

The Federal Reserve ADMITS that Its 12 Banks Are PRIVATE – Not Government – Entities

Washington’s Blog
July 26, 2011

Much of the tens of trillions in bailout money and “easy” money from quantitative easing went to foreign banks (and see this, this and this).

Indeed, Ron Paul noted recently that one-third of all fed bailout loans – and essentially 100% of loans from the New York Fed – went to foreign banks.

The New York Fed is the most important Fed bank. As Bloomberg pointed out in 2009:

The New York Fed is one of 12 regional Federal Reserve banks and the one charged with monitoring capital markets. It is also managing $1.7 trillion [now up to at least $1.9 trillion] of emergency lending programs [and accepting collateral from the banks in return].

However, the country’s most powerful “agency” – the Federal Reserve – is actually no more federal than Federal Express. The Fed itself admitted (via Bloomberg):

While the Fed’s Washington-based Board of Governors is a federal agency subject to the Freedom of Information Act and other government rules, the New York Fed and other regional banks maintain they are separate institutions, owned by their member banks, and not subject to federal restrictions.

For that reason, the New York Fed alleged in the lawsuit brought by Bloomberg to force the Fed to reveal some information about its loans – Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan) – that it was not subject to Federal Freedom of Information Act. As Bloomberg reported in a separate article:

The Federal Reserve Bank of New York … runs most of the lending programs. Most documents relevant to [a freedom of information lawsuit filed by Bloomberg news] are at the New York Fed, which isn’t subject to FOIA law, according to the central bank. The Board of Governors has 231 pages of documents, to which it is denying access under an exemption for trade secrets.

As the long-time Chairman of the House Banking and Currency Committee (Charles McFadden) said on June 10, 1932:

Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies ….

Similarly, the Bank for International Settlements (BIS) – often called the “central banks’ central bank”, as it coordinates transactions between central banks, and which is the entity determining the level of reserves banks are required to keep worldwide – is itself owned by the central banks of the world.

As Spiegel reported in 2009:

The BIS is a closed organization owned by the 55 central banks. The heads of these central banks travel to the Basel headquarters once every two months, and the General Meeting, the BIS’s supreme executive body, takes place once a year.

In, other words, the private banks own the Fed (and most other central banks), and the central banks – in turn – own BIS, the global bank regulator.

Interestingly, Spiegel points out that BIS is largely immune from regulation, oversight or taxes:

Formally registered as a stock corporation, it is recognized as an international organization and, therefore, is not subject to any jurisdiction other than international law.

It does not need to pay tax, and its members and employees enjoy extensive immunity. No other institution regulates the BIS, despite the fact that it manages about 4 percent of the world’s total currency reserves, or €217 trillion ($304 trillion), as well as 120 tons of gold…

Central bankers are not elected by the people but are appointed by their governments. Nevertheless, they wield power that exceeds that of many political leaders. Their decisions affect entire economies, and a single word from their lips is capable of moving financial markets. They set interest rates, thereby determining the cost of borrowing and the speed of global financial currents.

City To Firefighter and Police Retirees: Give Up 50% Of Your Pension Or Risk Losing It All

Alexander Higgins
July 25, 2011

The city of Central Falls, Rhode Island says they are so broke they had to give their retirees a dreaded ultimatum — give up 50% of your pension or risk losing it all.

As the size of government across the nation continues to spiral out of control countries and states across the nation are finding it increasingly difficult to pay their builds Central Falls, Rhode Island has been forced into giving their retirees a dreaded ultimatum.

According to a CNN report, Judge Robert Flanders who appointed by the state to work out a solution to keep the the city from going bankrupt said the choice is limited to the pensioners to either volunteer to a 50% pension cut or risk losing it all in bankruptcy court.

The ultimatum has been given as part of an overall restructuring plan for the city in which broad sweeping sacrifices and deep budget cuts are being made across the board in order to close the gap on the city’s $80 million dollar budget shortfall.

The Fox news video report attached on this page gives more details on the crisis in Flanders, Rhode Island.

http://youtu.be/HerD6MSvXxY

The situation in Flanders may just be a prelude of things to come across the nation.

Just last week in a blaring sign of the times we saw the collapse of the San Francisco civil court system which was declared as essentially being out of business.

Many states and cities are on the verge of such a collapse and one will inevitably occur across the entire country if the nation is forced to default on its debt as Greece was just last week.

Adding to the fears of economic collapse is the reportedly stalled negotiations between politicians in Washington to hammer out a deal to prevent a default from happening by raising the U.S debt ceiling.

While a more reputable smaller credit rating agency, The Egan-Jones Agency, has alreadydowngraded the United States credit rating on fears of a default unavoidable , the major agencies have so far neglected to do so instead choosing only to put the U.S. on a credit rating warning.

However, two of the major agencies Moody’s and S&P warned last week if the U.S doesn’t work out a deal to deal with the out of control debt by August second they will be forced to downgrade the United States credit rating. Many analysts warn such a move by the major agencies will trigger a chain reaction of events that will lead to a global financial meltdown.

MSNBC warned last week it may already be to late and we may be soon hearing stories similar to the Central Falls, Rhode Island story all over the United States.

Norway Shooting Suspect Anders Breivik: Attacks Were ‘Price of Their Treason’

MIGUEL MARQUEZ
ABC News
July 25, 2011

The man suspected of killing more than 70 people in a separate bombing and shooting spree in Norway Friday said he attacked the country’s liberal party because, the “price of their treason is what they had to pay.”

http://abcnews.go.com/assets/player/walt2.69/flash/SFP_Walt_2_69.swf

Anders Breivik made the statement in a closed court hearing today in which judge Kim Heger said he would be held without bond for eight weeks until his next court appearance, four of which in solitary confinement. Breivik told the court that he committed the crimes, but did not plead guilty, Heger said. He was, as he told the court, trying to save Norway and Europe from cultural Marxism and Muslimization.

Though Breivik previously told police he acted alone, today he also told the court there were two more “cells” in his “organization”.

In a video posted online, Breivik uses comics and signs to illustrate his views against what he perceived as communism and anti-nationalism in the Labour party-led government. In a 1,500-page online manifesto, Breivik describes his contempt for the Muslim population in Oslo and mulls even deadlier attacks by Christian conservatives — including one involving a weapon of mass destruction.

Full article here

Norway Killer Warns Of “Two More Cells” Preparing Attacks

Steve Watson
Prisonplanet.com
July 25, 2011

After initially stating that he acted alone in carrying out Friday’s massacre, Anders Behring Breivik has now suggested in court that two other “cells” of extremists collaborated with him.

During an initial hearing today, which was closed to both the public and the media, Breivik stated that there are “two more cells in our organisation” that will carry out further attacks.

The information was relayed to reporters via a statement from the Judge presiding over the hearing:

The court further finds that the conditions for remanding the accused in custody have been met, as there is an immediate risk that the accused would tamper with evidence if he were now released. Reference has been made to the accused making statements that require further investigation, including a statement about “two more cells in our organisation”, and as such the investigations must be carried out without the accused being able to interfere with the investigation or to disturb it.

Penal alternatives to the penal code 168 are not applicable in this case. Remanding in custody for up to eight weeks is a proportional measure. The court finds out of consideration to the investigation, the accused not be given the op[portunity to communicate with others [and so Breivik will be denied access to media and prevented from communicating].

The prosecution has also requested complete isolation, with regard of the loss of evidence. The court finds that the seriousness of the case means that the conditions are met. The isolation has been set at four weeks.

Anders Behring Breivik, born 13 February 1979, will be held by the court not beyond 20 September 2011. He will be held in complete isolation until 22 August 2011. That is the ruling.

As the statement outlines, Breivik will be held in isolation for a month to prevent him from interfering in police investigations into potential accomplices or attempting to communicate with them.

Breivik had requested a public circus show trial in which he also wished to appear in a pre world war one national military uniform.

Breivik’s claims that he did indeed have accomplices dovetail with eyewitness reports that at least two killers were involved in the deadly shooting.

The Norwegian VG newspaper has claimed that victims reported shots fired at the summer camp on Utoya island coming from “two different places on the island at the same time.”

Survivor, Alexander Stavdal said;

“I believe that there were two people who were shooting.”

The witnesses described the second man as a 180-centimeter tall, dark-haired man with Nordic appearance with “a pistol in his right hand and a rifle on his back.”

An anonymous 16-year old girl told VG paper that the gunmen seemed to be in a hurry, but nevertheless “always made sure that their victims were shot dead.”

Further eyewitness accounts described shooting incidents in two different areas on the island, one with a handgun and the other with a ‘sniper rifle’.

There is no indication that the alleged second gunman is related to the story of a second man being seized by special forces in an area where victims’ relatives had gathered on Sunday.

Norwegian Police have said “there are no concrete reports of a second gunman, although we’re not excluding any possibilities”.

A further police press conference is scheduled this afternoon to address the claims of accomplices.

As we have also reported today, despite being portrayed by the media as inept due to the length of time it took them to reach the island of Utoeya, it has now emerged that police knew Breivik’s identity before they even arrested him, raising yet more questions surrounding the attacks.

According to an interview interview with Breivik’s lawyer in the Oslo newspaper Aftenposten, the shooter has said that in 60 years, society will understand why he did what he did.

——————————————————————

Steve Watson is the London based writer and editor for Alex Jones’ Infowars.net, and Prisonplanet.com. He has a Masters Degree in International Relations from the School of Politics at The University of Nottingham in England.

The Federal Reserve Made $16 Trillion In Secret Loans To Their Bankster Friends

The American Dream
July 25, 2011

The real enemy

A one-time limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act has uncovered some eye-popping corruption at the Fed and the mainstream media is barely even covering it.  It turns out that the Federal Reserve made $16.1 trillion in secret loans to their bankster friends during the financial crisis.  You can read a copy of the GAO investigation for yourself right here.  These loans only went to the “too big to fail” banks and to foreign financial institutions.  Not a penny of these loans went to small banks or to ordinary Americans.  Not only did the banksters get trillions in nearly interest-free loans, but the Fed actually paid them over 600 million dollars to help run the emergency lending program.  The GAO investigation revealed some absolutely stunning conflicts of interest, and yet the mainstream media does not even seem interested.  Solid evidence of the looting of America has been put right in front of us, and yet hardly anyone wants to talk about it.

Many Americans have a hard time grasping just how large 16.1 trillion dollars is.  It is an amount of money that is almost inconceivable.  It is more than the GDP of the United States for an entire year.  It is more than the U.S. government has spent over the last four years combined.

The Federal Reserve was just creating gigantic piles of cash out of thin air and throwing them around with wild abandon.

One of the only members of Congress that has wanted to talk about the GAO audit has been U.S. Senator Bernie Sanders.  The following is a statement about this audit that was taken from his official website….

“As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world”

So precisely who got this money?

Well, a recent article on Raw Story named some of the big Wall Street banks that got some of this money….

Out of all borrowers, Citigroup received the most financial assistance from the Fed, at $2.5 trillion. Morgan Stanley came in second with $2.04 trillion, followed by Merill Lynch at $1.9 trillion and Bank of America at $1.3 trillion.

But it just wasn’t U.S. banksters that were showered with nearly interest-free loans.  It turns out that approximately $3.08 trillion went to foreign financial institutions all over Europe and Asia.

So who in the world gave the Federal Reserve permission to bail out financial institutions all over the world?

Nobody did.

But under our current system the Federal Reserve doesn’t have to get permission.  They literally get to do whatever they want.

On his website, Senator Sanders expressed his outrage over these foreign loans….

“No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president”

So should we expect Congress to approve legislation that would reduce the power of the Fed?

Of course not.

We all know that is not going to happen.

The Federal Reserve is run like a dictatorship.  They get to do what they want and nobody can stop them.

Not only did the Fed dish out over $16 trillion in secret loans to their friends, but they also paid their bankster friends over 600 million dollars to help them do it.

According to the GAO, the Federal Reserve paid $659.4 million to the very financial institutions which caused the financial crisis to help the Fed manage all of these emergency loans.

Can anyone say “conflict of interest”?

Not only were the banksters raking in trillions in secret loans, they were also paid to help run the lending process.

Wow.

So why isn’t the mainstream media talking about this?

That is a very good question.

But wait, there is more.

It turns out that many Fed officials had very large investments in the financial institutions that were receiving these secret loans.

So what was done about all of the conflict of interest issues that arose?

According to Senator Sanders, “the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.”

Oh, everyone was given waivers.

Apparently corruption is okay if we just get everyone to sign a bunch of forms.

The following is one example of a conflict of interest that occurred during this lending program that Senator Sanders noted on his website….

For example, the CEO of JP Morgan Chase served on the New York Fed’s board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed.  Moreover, JP Morgan Chase served as one of the clearing banks for the Fed’s emergency lending programs.

This is a classic case of the foxes watching the hen house.

It was the banksters that caused the financial crisis.  They were the only ones that the Federal Reserve helped.  In fact, the Federal Reserve ended up having the banksters basically run the entire emergency lending program as Senator Sanders noted on his site….

The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo.  The same firms also received trillions of dollars in Fed loans at near-zero interest rates.

If you were not outraged by that, then you need to read it again.

What the banksters have been getting away with is absolutely mind blowing.

So will changes be made to make sure that something like this never happens again in the future?

Well, the GAO has recommended that significant changes should be made.

But as mentioned above, the only one that gets to tell the Federal Reserve what to do is the Federal Reserve.

According to the Washington Post, the Federal Reserve is promising to “strongly consider” the recommendations of the GAO….

The Fed’s general counsel, Scott Alvarez, said in a letter responding to the GAO’s audit that officials will “strongly consider” the recommendations.

Most Americans do not realize that the Federal Reserve is not actually part of the federal government.  It is a privately-owned central bank that is not accountable to anyone.

But most Americans still believe that the Fed is a government agency.

The truth is that the Federal Reserve is about as “federal” as Federal Express is.

In another article about the Federal Reserve, I noted that the Federal Reserve has even admitted that it is not an agency of the federal government in court….

In defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve objected by declaring that it was “not an agency” of the U.S. government and therefore it was not subject to the Freedom of Information Act.

Basically, an unaccountable private monopoly creates our money, sets our interest rates, regulates our banking system and makes secret loans to whoever they want.

The Federal Reserve has more power over our economy than any other institution and nobody can overrule any decisions that they make.

Does that sound very “American” to you?

Since the Federal Reserve was created in 1913, it has been systematically destroying the wealth of America through constant and never ending inflation.

The U.S. dollar loses more value every single year.

According to the U.S. Bureau of Labor Statistics, what you could buy for $1.00 in 1965 will cost you $7.17 today.

Sadly, the devaluation of our money is actually accelerating.  That is one reason why we are seeing precious metals soar right now.

Not only that, but the Federal Reserve was also designed to be a perpetual government debt creation machine.

Do you know how money is created in this country?

Normally, more money is only created when more debt is created.

What this sets up is a never end spiral where the amount of money and the amount of debt are continually increasing.

Most Americans believe that we could solve the government debt problem if we could just control spending.

But that is not the case.

The Federal Reserve system was designed to get the U.S. government into constantly increasing amounts of debt and this is exactly what has happened….

The U.S. government will never fix the national debt problem as long as it participates in the Federal Reserve system.

Founding fathers such as Thomas Jefferson tried to warn us about the danger of central banking.

Jefferson strongly believed that when the federal government borrows money in one generation that must be paid back by future generations it is equivalent to theft….

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

Not only that, Thomas Jefferson actually said that if he could add just one more amendment to the U.S. Constitution it would be a complete ban on all government debt….

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

Of course we did not listen to Thomas Jefferson, did we?

Now we have gotten ourselves into one fine mess.

If the federal government shut down the Federal Reserve system, started issuing debt-free money and established a new system based on sound financial principles we might have a chance of turning this thing around.

But if we continue on the path that we are currently on, we are going to experience a financial disaster of unprecedented magnitude.  We have piled up the biggest mountain of debt in the history of the world, and a day of reckoning is approaching.

Our founding fathers tried to warn us about this, but we thought that we were so much smarter than them.

Now we get to suffer the consequences of our foolishness.

Former Governor Jesse Ventura: ‘We’re a fascist nation now’

Eric W. Dolan
Raw Story
Sunday, July 24, 2011

Former Minnesota Governor Jesse Ventura lambasted Friday at a federal court hearing ”un-American” security procedures implemented at airports across the nation in 2010.

He filed a lawsuit with the Transportation Security Administration in January, claiming their use of pat down searches at airport security checkpoints is unconstitutional. Pioneer Press reported that a lawyer for Ventura argued in federal court that the searches violate his Fourth Amendment right against unreasonable and unwarranted searches.

The Justice Department has filed a motion to have the lawsuit dismissed, claiming that the searches are legal and that they can only be challenged in a federal appeals court.

“In a free country, you should never feel comfortable being searched,” Ventura told the Justice Department lawyer Tamara Ulrich. ”This is not the country I was born in. We’re a fascist nation now.”

Full story here.

—————————–

Pioneer Press reports: There is no indication when (Judge) Nelson will rule. After the hearing, Ventura said he questioned why the government was providing security for private industry and said that TSA’s actions were part of “the locking down of the American citizen.”

91 Killed: Death Toll Rises Dramatically

Peter Beaumont
London Guardian
Saturday, July 23, 2011

Norway was today coming to terms with one of the worst atrocities in recent European history as police revealed that 91 people died in the attacks in the centre of Oslo and on a nearby island summer camp, apparently the work of a lone gunman.

The killings, it now seems clear, were carried out by a 32-year old Norwegian, named by local media as Anders Behring Breivik, who had expressed far-right views, and had dressed as a policeman to carry out his bomb attack on government buildings in central Oslo before heading to the island of Utøya, where he shot at least 84 people.

Survivors of the island attack, which took place barely two hours after a huge bomb was detonated close to the offices of Norway’s prime minister, Jens Stoltenberg, described how the gunmen moved across the small, wooded Utøya holiday island on Friday firing at random as young people scattered in fear.

Teenagers at the lakeside camp organised by Stoltenberg’s ruling Labour party fled screaming in panic, many leaping into the water or climbing trees to save themselves, when the attacker began spraying them with gunfire.

The Class War in America has Gone for the Shock and Awe Approach

Posted on July 23, 2011 by willyloman

by Scott Creighton

This new debt default “compromise” being bandied about by supporters of the Gang of Six in the slime-coated halls of D.C. is finally taking shape and to be honest it’s probably even worse than I had previously imagined.

Matt Taibbi over at Rolling Stone wrote about a “one time” corporate tax holiday that is being considered as part of this new deal. “One time” is rather funny, as Matt points out, because they just enjoyed another “one time” corporate tax holiday just recently back in 2004. As Matt explains the gimmick behind this little trick is that this “one time” holiday allows corporations which have been shielding their corporate profits in over-seas shell companies to bring that money back into the states without having to pay even the minimal taxes on them that the IRS now charges. Corporations now enjoy the lowest tax rates ever in this country and this little trick enables them to get by even paying that minimal standard.

“… In 2004, the corporate lobby got together and major employers like Cisco and Apple and GE begged congress to give them a “one-time” tax holiday, arguing that they would use the savings to create jobs. Congress, shamefully, relented, and a tax holiday was declared. Now companies paid about 5 percent in taxes, instead of 35-40 percent.

Money streamed back into America. But the companies did not use the savings to create jobs. Instead, they mostly just turned it into executive bonuses and ate the extra cash. Some of those companies promising waves of new hires have already committed to massive layoffs..

It was bad enough when lobbyists managed to pull this trick off once, in 2004. But in one of the worst-kept secrets in Washington, companies immediately started to systematically “offshore” their profits right after the 2004 holiday with the expectation that somewhere down the road, and probably sooner rather than later, they would get another holiday.” Rolling Stone

Bernie Sanders recently went on the floor of the senate to explain the “Gang of Six” debt default compromise plan. Though he didn’t mention the corporate tax holiday plan he did layout the truer nature of it and how it targets the weakest and most vulnerable in our society. There will also be cuts in the Environmental Protection Administration so that the major corporations can save money and earn more profits by decimating our eco-system even more than they already have.

Cuts in Social Security, Medicare, health care for the poor and working classes, cuts in education, Pell grants, nutrition programs to help feed the children of the poor and working poor, and it cuts medical benefits for soldiers who have returned from defending this country.

And for all of this, you will have to pay more for the privilege of receiving less. There will probably be additional taxes workers will have to pay on their health insurance plans, reductions in home owners interest deduction programs, and increased taxes on your retirement programs like say your 401(k)s.

While you pay more, the wealthiest pay less. Currently the top tax rate for the wealthiest Americans is 35% and the Gang of Six proposal stipulates that rate should be reduced to 23%… even lower than it was during the Bush years.

Go here to read Bernie Sanders’ write-up on the Gang of Six proposal.

Both Taibbi and Sanders both seem surprised that the American people are not in an uproar about this plan. It’s draconian in nature and pure neoliberalism at it’s finest.

Government in this country is in service to the major corporations, leading financial institutions, and the wealthiest individuals who reside on our shores. They care not one bit about the people and are in fact working diligently in opposition to the people’s best interests. Mussolini called this fascism and that’s what we have. America is a fascist state, has been for some time behind the scenes and in the quiet whispered plans in the dark rooms of D.C. far away from the spot light of the news cameras. They used to call these people the “crazies” but now the lunatics run the asylum.

Related articles

• Debt Crisis Being Used as Shock Doctrine to Steal More Money from the American People to Give to the Richest 1% (destructionist.wordpress.com)
• About those ‘job creators’: Cisco to cut 10,000 jobs while lobbying for tax break (dailykos.com)

UPDATED: Possible 20-25 dead in Norway shooting; more killed in bombing

POSTED: Friday, July 22, 2011 – 12:49pm
UPDATED: Friday, July 22, 2011 – 1:50pm
(AP) KETK News

OSLO, Norway — An eyewitness tells Norwegian broadcaster NRK that he saw 20 to 25 bodies at the youth camp where a gunman dressed in a police uniform opened fire.

Andre Scheie says he saw bodies on the shore of the Utoya island where the youth wing of the Labor Party was holding a summer camp for hundreds of youths.

Scheie said Friday: “There are very many dead by the shore …there are about 20-25 dead.” He also said he saw dead people in the water.

---

A spokesman for Norway’s Labor Party says a gunman opened fire at the party’s youth camp outside Oslo, shooting several people following the bomb blast at the government headquarters in the capital.

It wasn’t immediately clear if the attacks were related.

Labor spokesman Per Gunnar Dahl told the AP that a man dressed in a police uniform started shooting at youths assembled for the party’s annual youth camp at Utoya, an island outside Oslo. He said unconfirmed reports that five people were hit, and that “we don’t know how serious.”

He said some 700 people, mostly teenagers between 14-18, were assembled for the camp.

---

OSLO, Norway (AP) – Oslo police officials say two people have been confirmed dead and 15 injured in a powerful bomb blast at the prime minister’s office.

Police told reporters the explosion Friday was caused by a “one or more” bombs. They declined to speculate on who was behind the blast.

Asked if the blast was caused by a car bomb, Oslo police chief Anstein Gjengdal said: “It is possible that a vehicle has been used in this incident, but we can’t confirm this.”

He said that police have sealed off the office of Norwegian broadcaster TV2 to investigate a suspicious package there.

A Norwegian government official also was quoted as saying that people remain trapped in some buildings hit by the bomb blast.

Report: Man Dressed As Policeman Fires Shots at Youth Meeting In Oslo After Bombing

Sky News
Friday, July 22, 2011

Update: Four people killed during shooting at ruling Labour party youth meeting on Utoya Island, Norway

Norwegian police have said that an explosion in Oslo this afternoon was caused by a bomb, and has led to “deaths and injuries” – while there are reports that shots have been fired at a nearby children’s camp.

There are reports that some shots were fired at a youth meeting near the capital.

As many as 700 people were believed to be taking part in the summer camp.

Police have told people in the Norwegian capital to stay away from the city centre and limit the use of mobile phones.

They also warned people to avoid large gatherings.

Full story here.

———————————————

Guardian live coverage

Neil Perry has sent me more details of the shooting on the Labour party youth camp, which suggests co-ordinated attacks. It is a Google translation from Dagbladet, tidied up a bit, so it is not perfect.

Eyewitnesses told the AP that a man dressed as a police officer has fired several shots at Utøya in Buskerud. AP spoke with one of those who were on Utoya where there is an AUF event with over 700 people.

“Suddenly, we heard lots of shooting. People had to run and hide. We have been told to get off the island.”

“We now have reports of a serious situation there – a critical situation on Utøya,” Prime Minister Jens Stoltenberg told TV 2

The police are now on site and sealed off the area. Bjorn Jarle Røberg-Larsen of Labor, is not in Utoya, but has had telephone contact with young people who are on the island.

“They say that at least one person wearing a police-like uniform was firing shots with a handgun,” he said.

He says that the young people he talked to were hiding and dared not speak on the phone anymore for fear of being discovered by the perpetrator.

“Young people have to swim in panic, and it is far to the mainland from Utoya. Others are hiding. Those I spoke with did not want to talk more. They were terrified,” he said to VG Nett.

Oslo Explosion: One of Two Blasts Result of Massive Vehicle Bomb, Sources Say

Debt Crisis Being Used as Shock Doctrine to Steal More Money from the American People to Give to the Richest 1%

Washington’s Blog
Thursday, July 21, 2011

 

I noted in 2008:

The powers-that-be have used the “Shock Doctrine” to pass anti-American, fascist legislation while the public was in a state of shock.

This applies to economic shocks, as well as physical attacks like 9/11.

Indeed, right now, Paulson and Bernanke are using the shock doctrine to try to ram through legislation that would help out the fat cats at the expense of taxpayers, and give the government control over the free market.

But there is some resistance. For example, Senator Leahy and the New York Times are questioning Paulson’s use of shock and awe:

• Senator Leahy said “If we learned anything from 9/11, the biggest mistake is to pass anything they ask for just because it’s an emergency”

• The New York Times wrote:
  

  “The rescue is being sold as a must-have emergency measure by an administration with a controversial record when it comes to asking Congress for special authority in time of duress.”
  ***

  Mr. Paulson has argued that the powers he seeks are necessary to chase away the wolf howling at the door: a potentially swift shredding of the American financial system. That would be catastrophic for everyone, he argues, not only banks, but also ordinary Americans who depend on their finances to buy homes and cars, and to pay for college.

  Some are suspicious of Mr. Paulson’s characterizations, finding in his warnings and demands for extraordinary powers a parallel with the way the Bush administration gained authority for the war in Iraq. Then, the White House suggested that mushroom clouds could accompany Congress’s failure to act. This time, it is financial Armageddon supposedly on the doorstep.

  “This is scare tactics to try to do something that’s in the private but not the public interest,” said Allan Meltzer, a former economic adviser to President Reagan, and an expert on monetary policy at the Carnegie Mellon Tepper School of Business. “It’s terrible.”

The Tarp bailouts were passed using apocalyptic – and false – threats. For example, as I’ve previously reported:

The New York Times wrotelast year:

In retrospect, Congress felt bullied by Mr. Paulson last year. Many of them fervently believed they should not prop up the banks that had led us to this crisis — yet they were pushed by Mr. Paulson and Mr. Bernanke into passing the $700 billion TARP, which was then used to bail out those very banks.

Indeed, Congressmen Brad Sherman and Paul Kanjorski and Senator James Inhofe all say that the government warned of martial law if Tarp wasn’t passed:

http://www.mrctv.org/public/eyeblast.swf?v=e4qG2G6UkU

That is especially interesting given that the financial crisis had actually been going on for a long time, but – instead of dealing with it – Paulson and the rest of the crew tried to cover it up and pretend it was “contained”, and that it was obvious to world leaders months earlier that it was not a liquidity crisis, but a solvency crisis (and see this).

Bait And Switch

The Tarp Inspector General has said that Paulson misrepresented the big banks’ health in the run-up to passage of TARP. This is no small matter, as the American public would have not been very excited about giving money to insolvent institutions.

And Paulson himself has said:

During the two weeks that Congress considered the [Tarp] legislation, market conditions worsened considerably. It was clear to me by the time the bill was signed on October 3rd that we needed to act quickly and forcefully, and that purchasing troubled assets—our initial focus—would take time to implement and would not be sufficient given the severity of the problem. In consultation with the Federal Reserve, I determined that the most timely, effective step to improve credit market conditions was to strengthen bank balance sheets quickly through direct purchases of equity in banks.

So Paulson knew “by the time the bill was signed” that it wouldn’t be used for its advertised purpose – disposing of toxic assets – and would instead be used to give money directly to the big banks?

Senator McCain also says that Paulson pulled a bait-and-switch:

Sen. John McCain of Arizona … says he was misled by then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. McCain said the pair assured him that the $700 billion Troubled Asset Relief Program would focus on what was seen as the cause of the financial crisis, the housing meltdown.

“Obviously, that didn’t happen,” McCain said in a meeting Thursday with The Republic‘s Editorial Board, recounting his decision-making during the critical initial days of the fiscal crisis. “They decided to stabilize the Wall Street institutions, bail out (insurance giant) AIG, bail out Chrysler, bail out General Motors. . . . What they figured was that if they stabilized Wall Street – I guess it was trickle-down economics – that therefore Main Street would be fine.”

Even the New York Times called Paulson a liar in 2008:

“First [Paulson’s Department of Treasury] says it has to have $700 billion to buy back toxic mortgage-backed securities. Then, as Mr. Paulson divulged to The Times this week, it turns out that even before the bill passed the House, he told his staff to start drawing up a plan for capital injections. Fearing Congress’s reaction, he didn’t tell the Hill about his change of heart.

Now, he’s shifted gears again, and is directing Treasury to use the money to force bank acquisitions. Sneaking in the tax break isn’t exactly confidence-inspiring, either.”

What tax breaks is the Times talking about? The article explains:

A new tax break [pushed by Treasury], worth billions to the banking industry, that has only one purpose: to encourage bank mergers. As a tax expert, Robert Willens, put it: “It couldn’t be clearer if they had taken out an ad.”

Indeed, all of the other “emergency” economic and monetary measures – like quantitative easing – didn’t help the American people, but just helped the richest 1%. And most of the bailout and “easy” money went to foreign banks (and see this, this and this).

The Same Thing Is Happening With the Debt Ceiling

The same thing is now happening with the debt ceiling.

We know that the productive actions which would reduce the debt and fix the economy are not being discussed. See this, this, this, this, this and this.

What is being discussed would just steal more money from the American people and give it to the richest 1%. For example, Congress is planning on selling off “unused federal property”. Selling off and privatizing public assets and resources is a core tactic in shock doctrine schemes.

As Matt Taibbi shows, another tax holiday for big corporations is one of the main focuses of discussion in D.C.

MSN Money reports:

The plan proposes three [tax brackets] (we now have six) and would lower the top rate — and the corporate tax rate — from 35% to a range of 23% to 29%. That would be great news for rich folks. “That could provide a windfall for wealthy taxpayers because the 35% tax bracket currently applies to taxable income above $379,150,” said The Associated Press.

There are numerous other giveaways to the biggest fatcats, which will be paid for by slashing social security and otherwise fleecing the elderly.

Robert Borsage notes that the proposed debt agreement:

Would add to unemployment in the short term, increase Gilded Age inequality, leave seniors more vulnerable, and shackle any possibility of rebuilding America. It puts the burden of deficit reduction on the elderly, the poor and the vulnerable, endangers jobs and growth, and lards even more tax breaks on the rich.

The Nation writes:

The [proposed debt ceiling agreement] proposal shafts those who have already borne so much of the burden of the financial crisis and its fallout—lost pensions, lost homes, lost wealth—while the very people who brought the economy to its knees through their recklessness make out like banksters and bandits. In fact, at a time of inequality akin to that of the Gilded Age, the top marginal tax rate would be lowered—lowered!—to 23 to 29 percent, while there would be massive cuts in Social Security, Medicare and Medicaid.Dean Baker, co-director of the Center for Economic and Policy Research (CEPR), notes that JP Morgan CEO Jamie Dimon and Goldman Sachs CEO Lloyd Blankfein would save approximately $2 million to $3 million on their tax bills. But in twenty years, a 90-year-old living on a Social Security income of $15,000 would lose more than $1,200 a year in benefits.

How’s that a “bargain” for this nation and who exactly finds it “grand”?

All along, the alternatives that reflect the popular idea of shared sacrifice have been marginalized—by the political establishment (and, tragically, the Democratic leadership) and the corporate media.

***

This is not about left and right. This is about right and wrong. And that’s something the political and media establishment just don’t seem to get.

And Senator Sanders points out today that there is no shared sacrifice by the top 1%, but that the government may take from the poor and middle class in numerous ways for years to come:

There will be major cuts in Social Security … Medicare … Medicaid and other health care programs … education … nutrition program[s] … environmental protection.

***

There are very, very clear provisions making sure that we are going to make massive cuts in programs for working families, for the elderly, for the children. Those cuts are written in black and white. What about the revenue? Well, it’s kind of vague. The projection is that we would rise over a 10-year period $100 billion in revenue. Where is that going to come? Is it necessarily going to come from the wealthiest people in this economy? Is it going to come from large corporations who are enjoying huge tax breaks? That is not clear at all. I want middle-class families to understand that when we talk about increased revenues, do you know where that comes from? It may come from cutbacks in the home mortgage interest deduction program, which is so very important to millions and millions of families. It may mean that if you have a health care program today, that health care program may be taxed. That’s a way to raise revenue. It may be that there will be increased taxes on your retirement programs, your I.R.A.’s, your 401(k)’s.

Note: As usual, it’s not liberal-versus-conservative, but the top 1% versus the rest of the country, and you versus the giant corporations. See this, this, this, this, this, this, this, this, this, this and this.

And – no – the top 1% are not using the money to create more jobs. It’s being used for prostitutes and other hanky panky.

Layoffs, Layoffs Everywhere You Look There Are Layoffs

The Economic Collapse
July 22, 2011

The competition for jobs in the United States is absolutely brutal right now, and it is about to get worse.  A new wave of layoffs is sweeping across America.  During tough economic times, Wall Street favors companies that are able to cut costs, and the fastest way to “cut costs” is to eliminate employees.  After a period of relative stability, the employment picture in the U.S. is starting to get bleaker again.

New applications for unemployment benefits have now been above 400,000 for 15 straight weeks.  Finding a good job is kind of like winning the lottery in this economy. Our federal government and the state governments have made it incredibly complicated and extremely expensive to have employees on the payroll.  It is getting harder and harder to get a large enough return to justify the time and expense that hiring employees requires.  So many firms now find themselves trying to do more with the employees that they already have.

Other companies are turning to temp agencies as a way to reduce costs and increase workplace flexibility.  A lot of the big corporations are sending as much work as they can overseas where the wages are far lower and where the regulatory environment is much simpler.  All of this is really bad news for American workers that just want good jobs that will enable them to provide for their families.

When we first started seeing huge numbers of layoffs a few years ago, I encouraged people to look into government jobs because I thought that they would be a lot more stable in this economic environment.

But today that is no longer true.  In fact, state and local governments all over the United States are responding to massive budget problems by slashing payrolls in an unprecedented fashion.

Sadly, the reality is that the number of “secure jobs” is rapidly declining in America.  If you have a “job” (“just over broke”) right now, you might not have it for long.  That is one reason why everyone should be trying to become more independent of the system.

Once upon a time the U.S. economy produced a seemingly endless supply of good jobs.  This helped us develop the largest and most vibrant middle class in modern world history.

But now employees are regarded as “costly liabilities”, and businesses and governments alike are trying to reduce those “liabilities” as much as they can.

This summer the pace of layoffs seems to be accelerating all over the nation.  Just check out what has been happening over the past few weeks….

-Lockheed Martin has made “voluntary layoff offers” to 6,500 employees.

-Detroit is losing even more jobs. American Axle & Manufacturing Holdings has told the remaining 300 workers at its manufacturing facility in Detroit that their jobs will be ending in early 2012.

-Layoff notices have been sent to 519 employees of Milwaukee Public Schools, and more than 400 open positions are going to go unfilled.

-The Gap has announced that up to 200 stores will be closed over the next two years.

-Cisco has announced plans to lay off 9 percent of their total workforce.

-Chicago Mayor Rahm Emanuel says that 625 city employees will be losing their jobs as a result of cutbacks.

-Pharmaceutical giant Merck recently dumped 51 workers from an office in Raleigh, North Carolina.

-Perkins has revealed that they will be closing 58 restaurants.

-This week, Goldman Sachs announced that they will be eliminating 1,000 jobs.

-Cracker Barrel is rapidly reducing staff at its headquarters.

-Telecommunications and web marketing firm Crexendo has announced that it will be laying off about 30 percent of its workforce.

-Borders has announced that they will be shutting down their remaining 399 stores and that 10,700 employees will lose their jobs.

-Now that the space shuttle program has ended, thousands of NASA employees will be losing their jobs.

Sadly, there are hundreds of more examples of recent layoffs and job losses.  One website that tracks these layoffs daily is Daily Job Cuts.  It is pretty sad when there are entire websites that are devoted to chronicling how fast our economy is bleeding jobs.

What is worse is that it looks like the pace of layoffs is going to keep increasing.

One report that was recently released found that the number of job cuts being planned by U.S. employers increased by 11.6% in June.

That is not good news.

Things don’t look good for employees of state and local governments either.

State and local governments have eliminated approximately 142,000 jobs so far this year.

That is bad, but this is just the beginning.

UBS Investment Research is projecting that state and local governments in the U.S. will combine to slash a whopping 450,000 jobs by the end of next year.

Ouch.

Barack Obama and Ben Bernanke keep trying to tell us that the economy is improving, but that simply is not the case.  Yes, some of the largest corporations have announced big earnings, but that is not translating into lots of jobs for American workers.

Today, most large corporations only want to have as many U.S. workers as absolutely necessary.  In a world where labor has been globalized, it just doesn’t make sense for corporations to shell out massive amounts of money to American workers when they can legally get away with paying slave labor wages to workers on the other side of the globe.

So if it seems like it is far harder to get a good job in America today than it used to be, the truth is that you are not imagining things.

Our entire system discourages job creation inside the United States.  Every single year, even more ridiculous job-killing regulations are being passed on the federal and state levels.  It has become extremely expensive and ridiculously complicated to hire people.

So how are American families surviving?  Those that still do have jobs are finding that wages are not going up but the cost of living rapidly is.  Many American families are making up the difference by using their credit cards more.

In June, credit card purchases in the U.S. increased by 10.7 percent compared to the same month a year ago.

It looks like a whole lot of people have not learned their lessons about how bad credit card debt is.

Millions of other American families have fallen out of the middle class completely.  Today, one out of every six Americans is enrolled in at least one government anti-poverty program.  The level of economic suffering in this country continues to soar.

In fact, the number of Americans that are now sleeping in their cars or living in tent cities remains at staggering levels.

What we are witnessing in this country is not just a “recession” or an “economic downturn”.  What we are witnessing are fundamental economic changes.

Until there are fundamental policy changes in the United States, there will continue to be huge waves of layoffs and millions of jobs will continue to be shipped out of the country.

In the old days, one could go to college, get a good job with one company for 30 years and retire with a big, fat pension.

Now, that way of doing things is completely and totally dead.

Today, there is virtually no loyalty out there.  It doesn’t matter how long you have been working at a particular job.  When it becomes financially expedient to get rid of you, that is exactly what is going to happen.

It is a cold, cruel world out there right now.  Don’t assume that you will always have a good job.  The world is rapidly changing.

Don’t get caught in the trap of believing that the way that things were is the way that things are always going to be in the future.

Related articles

• Companies Step Up Layoffs (online.wsj.com)

U.S. Consumers Relying on Credit for Basic Necessities

By Anna-Louise Jackson and Anthony Feld – Jul 21, 2011 12:00 AM ET
Bloomberg News

Consumers in the U.S. are increasingly using credit cards to pay for basic necessities as income gains fail to keep pace with rising food and fuel prices.

The dollar volume of purchases charged grew 10.7 percent in June from a year ago, while the number of transactions rose 6.8 percent, according to First Data Corp.’s SpendTrend report issued this month. The difference probably represents the increasing cost of gasoline, said Silvio Tavares, senior vice president at First Data, the largest credit card processor.

“Consumers, particularly in the lower-income end, are being forced to use their credit cards for everyday spending like gas and food,” said Tavares, who’s based in Atlanta. “That’s because there’s been no other positive catalyst, like an increase in wages, to offset higher prices. It’s a cash-flow problem.”

Rising costs of food and gasoline are leaving Americans less money to spend discretionary items, slowing the pace of the recovery, Tavares said. Household spending accounts for about 70 percent of the world’s largest economy.

After-tax income adjusted for inflation fell 0.1 percent from January through May, according to figures from the Commerce Department. The drop came as Labor Department data showed energy prices rose 8.2 percent and food climbed 2 percent during the same period.

‘Dramatic’ Swings

The swings in purchases of fuel and food have been “dramatic,” Tavares said. The volume of gasoline purchases placed on credit cards jumped 39 percent last month from a year earlier, compared with a 21 percent increase in June 2010, he said. Food shopping increased 5 percent after falling 7 percent last year.

The value of an average transaction on credit cards outpaced the gain for debit cards, showing consumers are increasingly relying on borrowing to pay for gasoline and other necessities, Tavares said.

The figures are in synch with data from the Federal Reserve. Revolving credit, primarily credit card balances, increased by $3.37 billion to $793.1 billion in May from an almost seven-year low of $789.8 billion in April, figures from the central bank showed. The gain was equivalent to a 5.1 percent increase at an annual rate.

The use of credit cards is a “smoking gun” that indicates some consumers, including the long-term unemployed who have lost jobless benefits, are resorting to other sources of cash flow just to “get by,” said David Rosenberg, chief economist at Gluskin Sheff & Associates Inc. in Toronto.

“People on the margin are putting necessities on their credit cards and this is a trend that’s very consistent with what lower-end retailers have been saying about their paycheck cycles,” Rosenberg said.

‘Cash-Strapped’

Core customers of Bentonville, Arkansas-based Wal-Mart Stores Inc. (WMT) are “cash strapped,” William Simon, U.S. stores chief, said at a June 15 conference hosted by William Blair & Co. “The paycheck cycle is severe.”

Similarly, customers of Matthews, North Carolina-based Family Dollar Stores Inc. (FDO) are living “paycheck-to-paycheck,” so when gas or food prices go up, “they don’t have the cushion that many others might have,” Chairman and Chief Executive Howard Levine said on a June 29 conference call.

Changes within the industry may account for some of the recent stabilization in outstanding revolving credit as several banks have ended incentive programs for debit cards, while increasing credit-card solicitations this year, Tavares said.

A possible bright spot is that inflation may moderate as prices of commodities stabilize, Fed Chairman Ben S. Bernanke said July 13 in his semi-annual testimony to Congress. As of July 19, the average price of a gallon of unleaded gas had dropped 7.6 percent from May 4, when it reached an almost three- year high.

Bernanke’s View

“The anticipated pickups in economic activity and job creation, together with the expected easing of price pressures, should bolster real household income, confidence, and spending,” Bernanke said.

Confidence has a long way to climb for those in the lower- income brackets. The sentiment gauge for those making less than $15,000 a year was minus 66 in the week ended July 10 and was minus 69.6 for those earning $15,000 to $24,999, according to the Bloomberg Consumer Comfort Index. The comparable reading for households making more than $100,000 was minus 1.4.

“For people to think that this rebound in credit-card usage is actually a sign of resurging consumer confidence, I think they’re looking at the situation backwards,” Rosenberg said.

Pentagon looks to social media as new battlefield

By Agence France-Presse
Wednesday, July 20th, 2011 — 8:21 pm

WASHINGTON — The Pentagon is asking scientists to figure out how to detect and counter propaganda on social media networks in the aftermath of Arab uprisings driven by Twitter and Facebook.

The US military’s high-tech research arm, the Defense Advanced Research Projects Agency (DARPA), has put out a request for experts to look at “a new science of social networks” that would attempt to get ahead of the curve of events unfolding on new media.

The program’s goal was to track “purposeful or deceptive messaging and misinformation” in social networks and to pursue “counter messaging of detected adversary influence operations,” according to DARPA’s request for proposals issued on July 14.

The project echoes concerns among top military officers about the lightning pace of change in the Middle East, where social networks have served as an engine for protest against some longtime US allies.

Some senior officers have spoken privately of the need to better track unrest revealed in social networks and to look for ways to shape outcomes in the Arab world through Twitter, Facebook or YouTube.

“Events of strategic as well as tactical importance to our Armed Forces are increasingly taking place in social media space,” the DARPA announcement said.

“We must, therefore, be aware of these events as they are happening and be in a position to defend ourselves within that space against adverse outcomes,” it said.

DARPA predicted that social networks would have a groundbreaking effect on warfare.

“Changes to the nature of conflict resulting from the use of social media are likely to be as profound as those resulting from previous communications revolutions,” it said.

Under the proposal, researchers would be expected to unearth and classify the “formation, development and spread of ideas and concepts (memes)” in social media.

The document cited a case in which authorities employed social media to head off a potential crisis, but did not specify details of the incident.

“For example, in one case rumors about the location of a certain individual began to spread in social media space and calls for storming the rumored location reached a fever pitch,” it said.

“By chance, responsible authorities were monitoring the social media, detected the crisis building, sent out effective messaging to dispel the rumors and averted a physical attack on the rumored location.”

DARPA planned to spend $42 million on the Social Media in Strategic Communication (SMISC) program, with prospective contractors asked to test algorithms through “experiments” with social media, it said.

One possible experiment could involve a “closed social media network” of two to five thousand volunteers or an online role playing game with tens of thousands of players.

(Destructionist: Does anyone else out there feel like such a program will be used to censor certain views that are not in line with political government dogma?)

City Council Attempts To Oulaw Free Speech And Freedom Of Assembly

Steve Watson
Prisonplanet.com
July 19, 2011

Big government tyranny filters through to localities

Small government is increasingly taking a leaf out of the book of big government throughout the US with fresh reports of another city council railing against free speech and the right to assembly.

As Fox 16 news reports, in Gould, Arkansas, the City Council has moved to ban all gatherings and groups, no matter how small from discussing city matters without prior permission from the authorities.

A proposed ordinance would even extend to residents’ own homes and is so broad in its reach that it covers boy scout groups and book clubs. Even dinner table conversations about the local community would technically be outlawed.

“You can’t just come in here, get with four people and decide to start an organization,” Gould City Councilor Sonja Farley told the reporters, adding, “You will go through your city council with legal documentation and get approval.”

The city mayor, Earnest Nash, is standing up for the people of Gould and fiercely opposing the move.

“They can take me to court,” said Nash. “This is America and even though this is Gould, Arkansas, this is still part of America. And in America, you can’t just vote and violate peoples constitutional rights.”

“With this city council, it’s their way or the highway,” Nash added. “They act more like Napoleon Bonaparte. Total domination.”

The mayor has vetoed the ordinance on a technicality, but has warned that if it is reintroduced at an upcoming council meeting next month, it could be passed into law without his approval.

The local Fox affiliate had John DiPippa, Dean of the Law School at the University of Arkansas, examine the proposed ordinance, which he instantly dismissed as unconstitutional, noting “I couldn’t believe that it was real.”

“The truth is the city of Gould doesn’t have the authority to tell anyone that they have no right to petition them, no right to speak and no right to exist in their city,” DiPippa told Fox16.

“The fact is, if it’s aimed at this group, it also extends to you talking to your mother or a church group or any other group that wants to form. A garden club! It’s so broad that it can’t possible comply with the First Amendment,” he added.

When DiPippa attempted to inform the council of his conclusion, members reportedly attempted to have him fired from his job at the University of Arkansas.

As the reporter states in the following clip, under the new ordinance even the interview the station conducted with the mayor would be classified as illegal.

http://www.fox16.com/mediacenter/local.aspx?videoid=2664569

This is, unfortunately, not an isolated incident. As we reported last week, an Arizona woman was arrested recently at a town meeting in Quartzsite after the council ordered henchmen to remove her when they realized she was about to air their dirty laundry.

Despite the fact that the Mayor intervened and confirmed Jennifer Jones had been recognized to speak and had not violated the council’s rules, police still dragged her from the meeting and threw her in jail.

The Quartzsite Police Chief then asked the town council to declare a “state of emergency” in light of the publicity the town received from the incident.

In other recent incidents across the country, local councils and police have targeted residents for innocuous activities such as maintaining front yard vegetable gardens, owning unlicensed dogs, setting up lemonade stands and collecting rainwater.

Welcome to the new Amerika, overrun by corrupt power hungry government from top to bottom.

——————————————————————

Steve Watson is the London based writer and editor for Alex Jones’ Infowars.net, and Prisonplanet.com. He has a Masters Degree in International Relations from the School of Politics at The University of Nottingham in England.

Related articles

• Is Gould, Arkansas, The Least Democratic Town In the United States? (alan.com)
• Insanity In A Small Town (loopyloo305.wordpress.com)

Sept. 11 families seek FBI meeting

By JENNIFER EPSTEIN | 7/18/11 3:59 PM EDT

(Politico) Relatives of victims of the September 11 attacks have asked to meet with the FBI and top members of the Obama administration about allegations reporters from one of Rupert Murdoch’s British papers tried to hack the cell phone accounts of victims.

In letters sent Monday to Attorney General Eric Holder, FBI Director Robert Mueller and Rep. John Conyers (D-Mich.), the ranking member on the House Judiciary Committee, a lawyer representing some victims’ families is asking for meetings to discuss a report that journalists from the now-defunct News of the World asked a New York-based private investigator to help them gather information from victims’ phones.

The FBI has initiated an informal probe into the allegations, which were first reported by the Daily Mirror.

“We commend the FBI for opening a preliminary inquiry into this serious issue and we are requesting a meeting to ascertain the scope, goals and timetable of the inquiry,” the letter to Mueller said, Reuters reported. The FBI’s press office declined to comment.

The lawyer representing the victims’ relatives, Norman Siegel, told the wire service that his “clients are troubled about the allegation of potential hacking and they are particularly upset that there now exists an allegation that a newspaper would seek to illegally obtain information about their loved ones.”

“I tried in the letter not to accuse anyone, especially News Corp, of anything yet because you don’t want a media frenzy accusing someone if the facts aren’t there. We want to find out what the truth is,” he said.

http://www.politico.com/news/stories/0711/59290.html

Related articles

• Phone hacking: 9/11 victims’ relatives ask for FBI meeting (telegraph.co.uk)

Record one in six Americans now on food stamps as depression escalates

Saturday, July 09, 2011 by: Jonathan Benson, staff writer

(NaturalNews) While the mainstream media has all but convinced most Americans that the nation is slowly climbing out of the “recession,” new statistics released by the US Department of Agriculture (USDA) suggest otherwise. According to just-released participation numbers for the agency’s Supplemental Nutrition Assistance Program (SNAP), known more commonly as “food stamps,” nearly one in six Americans now participates in the program, which represents a new record high.

Rising from 14.3 percent of the US population participating in the program back in February (http://www.naturalnews.com/032312_f…), the new numbers are a bit shocking when considering how many of these new enrollees actually are. It is not simply the very poor and chronic abusers that are taking advantage of the program — many former middle class families now struggling just to get by are having to sign up for government food assistance.

According to the numbers, a record 44.647 million people are now enrolled in SNAP, up from 44.587 in May. Meanwhile, the average monthly benefit payment per household has dropped, and is now at a post-April 2009 revision low of $282.38 a month.

According to recent figures, 7.41 million people are now receiving state and federal unemployment benefits, which implies an unemployment rate of about 9.1 percent. Though upon first glance this appears to be lower than average unemployment rates throughout the past several years, these figures fail to take into account those that are underemployed and not receiving benefits, as well as those that have reluctantly taken part- or full-time jobs that do not pay nearly as much as those same workers were earning previously.

As opposed to the U-3 unemployment rate of 9.1 percent, the U-6 rate, which takes into account the aforementioned factors, is actually teetering at almost 16 percent as of May figures — and in 2009, that rate was over 17 percent. This is nearly double the stated rate that is constantly repeated in mainstream news, and yet it is the more accurate figure that aligns with the true condition of the nation, and the subsequent increases in food stamp participation.

Sources for this story include:

http://www.zerohedge.com/article/re…

http://www.csmonitor.com/Business/P…

As The Dollar And The Euro Continue To Collapse, How High Is That Going To Push The Price Of Gold?

The American Dream
July 19, 2011

Right now, the global financial system is facing a crisis that is really unprecedented.  The reserve currency of the world (the U.S. dollar) is collapsing and the second most powerful currency on the planet (the euro) is also collapsing.  As the major paper currencies of the globe crumble, the hunger that investors around the world have for gold continues to grow.  Today, the price of gold hit an all-time record of $1607.90 an ounce.  But that record surely will not live for long.  The truth is that gold has been steadily climbing for quite some time now.  A year ago, the price of gold was hovering around $1200 an ounce and many “mainstream economists” scoffed at the idea that the price of gold could go significantly higher.  Well, nobody is laughing now.  As colossal debt loads continue to crush both Europe and the United States, the euro and the dollar are going to continue to collapse.  There are going to be more bailouts and central banks are going to be doing more money printing.  So how high is all of this going to push the price of gold?

That is a very good question.

At the moment, the price of gold is experiencing its longest rally since 1980.  As the financial markets become increasingly unstable, investors are looking for security, and security is not to be found in anything denominated in dollars or anything denominated in euros.

The price of gold is up 13% so far this year and appears poised to go even higher.  The more global financial markets get rattled, the more attractive gold is going to become.

The sovereign debt crisis in Europe seemingly gets worse by the day.  All of the PIIGS (Portugal, Ireland, Italy, Greece and Spain) are a complete and total financial mess.  Either the EU is going to have to bail out these countries continuously or the EU is going to have to find a way to start printing a whole lot more money.  Whatever happens, the reality is that the debt crisis in Europe is not going to be solved any time soon.

All of this uncertainty in Europe is helping drive up the price of gold.  A recent CNN article contained the following quote from portfolio manager Jim Foster….

“Greece is sort of on the verge of default and they’re still trying to figure out how to engineer a recovery for Greece without inflicting a default on the country [and] the markets are sensing that’s almost impossible,” said Foster. “Until the situation is resolved in these peripheral countries, it’s going to drive gold.”

The whole debt ceiling drama in the United States is also driving up the price of gold.  Investors are getting nervous about what is going to happen.  But even if a “deal” is reached, the truth is that the U.S. government still has a 14 trillion dollarnational debt and will be running trillion dollar deficits for as far as the eye can see.  The U.S. has entered a seemingly endless cycle of borrowing, spending and money printing.  It has become apparent to almost everyone that the U.S. dollar is a very bad investment.

After all, who wants to hold on to an investment that is being devalued a little bit more every single day?

Meanwhile, the U.S. economy continues to fall apart.  Many believe that it is only a matter of time before we see more “stimulus” from the federal government and more “quantitative easing” from the Federal Reserve.

With the world such a financial mess, it is easy to see why so many are falling in love with gold right now.

But many mainstream economists are still clueless about the role of gold in the financial system.

The other day during a congressional hearing, U.S. Representative Ron Paul asked Federal Reserve Chairman Ben Bernanke the following question….

“Do you think gold is money?”

Bernanke was visibly stunned for a moment before answering no.

When Paul asked Bernanke why central banks still hold gold, Bernanke said that he believed that it was because of “tradition”.

Video of this extraordinary exchange is posted below…

If gold is just an “asset” as Bernanke believes, then why doesn’t the Fed hold many other kinds of assets like oil, pork bellies or art collections?

The truth is that gold has been money for thousands of years.  Central banks all over the world continue to hold vast amounts of gold.

In fact, central banks are increasing their stockpiles of gold at a staggering rate right now.

According to the World Gold Council, central banks around the globe purchased more gold during the first half of 2011 than they did all of last year.

Do they know something that we don’t?

Should all of us be stocking up on gold too?

Sometimes we need to stop reading the headlines and stop listening to the talking heads and just watch what the “powers that be” are doing.

So how high is the price of gold going to go?

Well, it depends who you ask.

A recent Forbes article had an interesting take on where the price of gold might be going….

Another interesting approach is to look at money supply and measures of the money stock.  Since September 2008, the U.S. monetary base has increased by more than 200%, compared with a rise in the price of gold of about 70%.  “If the two had been directly related, gold should already have risen to around $2,800.”

If the price of gold should already be above $2000 an ounce, where might it be going over the longer term?

Yan Chen, the head of metals and mining for Standard Chartered Equity Research, is convinced that the price of gold could hit $5,000 by the year 2020.

Others believe that his forecast is far too conservative.

Some financial professionals have not been afraid to forecast the the price of gold will eventually hit $10,000 an ounce.

In fact, prominent names such as Peter Schiff and Porter Stansberry have mentioned $10,000 gold as a possibility.

Does that mean that it is definitely going to happen?

Of course not.

The financial world is becoming incredibly unstable.  It is getting very difficult to forecast anything with certainty at this point.  As the global financial system comes apart, we are going to see volatility that is going to be absolutely unprecedented.  The wild swings that we have seen in recent years are nothing compared to what is coming.

But one rule of economics that has stood the test of time is that gold maintains value even when everything else is falling apart.  An ounce of gold would buy you a nice suit back in 1900, and an ounce of gold will buy you a nice suit today.

Unfortunately, the same cannot be said of paper currencies.  Your dollars and your euros are going to continually lose value.

For example, the U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created back in 1913.

So would you say that an asset that goes down by 95 percent is a good investment?

Of course not.

Anyone that puts big piles of money in the bank is just going to get poorer and poorer and poorer as the U.S. dollar loses value.

Federal Reserve notes have always lost value and they always will lose value.  It is the way our current financial system is constructed.

A huge economic storm is coming, and a small percentage of Americans will be putting a chunk of their money into gold and other precious metals while most will just be relying on the big piles of money that they have put into their bank accounts.

Which group do you think will be better off in the end?