Friday, February 12, 2010

Haunting New Images From Sept. 11

Haunting New Images From Sept. 11

Ferguson and Faber: Sovereign Debt Crisis Will Spread World-Wide, U.S. Debt Is Unsafe

Thursday, February 11th, 2010

In a must-read essay, Niall Ferguson slams the prevailing Keynesian consensus, and says that the sovereign debt crisis in Greece will spread to America:

What we in the western world are about to learn is that there is no such thing as a Keynesian free lunch…

US government debt is a safe haven the way pearl harbor was a safe haven in 1941.

And in a must-watch interview, Marc Faber says that the US, Europe and the entire developed world will default on their debt:

Feds push for tracking cell phones

February 11, 2010 4:00 AM PST

by Declan McCullagh

Two years ago, when the FBI was stymied by a band of armed robbers known as the "Scarecrow Bandits" that had robbed more than 20 Texas banks, it came up with a novel method of locating the thieves.

FBI agents obtained logs from mobile phone companies corresponding to what their cellular towers had recorded at the time of a dozen different bank robberies in the Dallas area. The voluminous records showed that two phones had made calls around the time of all 12 heists, and that those phones belonged to men named Tony Hewitt and Corey Duffey. A jury eventually convicted the duo of multiple bank robbery and weapons charges.

Even though police are tapping into the locations of mobile phones thousands of times a year, the legal ground rules remain unclear, and federal privacy laws written a generation ago are ambiguous at best. On Friday, the first federal appeals court to consider the topic will hear oral arguments (PDF) in a case that could establish new standards for locating wireless devices.

In that case, the Obama administration has argued that warrantless tracking is permitted because Americans enjoy no "reasonable expectation of privacy" in their--or at least their cell phones'--whereabouts. U.S. Department of Justice lawyers say that "a customer's Fourth Amendment rights are not violated when the phone company reveals to the government its own records" that show where a mobile device placed and received calls.

Read the entire story

Insiders, Neocons Plan Simulated Cyber Attack

Kurt Nimmo
February 11, 2010

The Bipartisan Policy Center (BPC) plans to simulate a cyber attack on America’s infrastructure on February 16, 2010. Dubbed Cyber ShockWave, the simulation “will provide an unprecedented look at how the government would develop a real-time response to a large-scale cyber crisis affecting much of the nation,” according to a BPC press release issued today.

Read the entire story

Obama strategy widens assault on terrorists
(AP) By MATT APUZZO Associated Press Writer

In the early months of his presidency, President Barack Obama's national security team singled out one man from its list of most-wanted terrorists, Baitullah Mehsud, the ruthless leader of the Pakistani Taliban. He was to be eliminated.

Mehsud was Pakistan's public enemy No. 1 and its most feared militant, responsible for a string of bombings and assassination attempts. But while Mehsud carried out strikes against U.S. forces overseas and had a $5 million bounty on his head, he had never been the top priority for U.S. airstrikes, something that at times rankled Pakistan.

"The decision was made to find him, to get him and to kill him," a senior U.S. intelligence official said, recalling weeks and months of "very tedious, painstaking focus" before an unmanned CIA aircraft killed Mehsud in August at his father-in-law's house near Pakistan's border with Afghanistan.

It was not the first airstrike on Obama's watch, but it marked the first major victory in his war on terrorism, a campaign the administration believes can be waged even more aggressively than its predecessor's. Long before he went on the defensive in Washington for his handling of the failed Christmas Day airline bombing, Obama had widened the list of U.S. targets abroad and stepped up the pace of airstrikes.

Advances in spy plane technology have made that easier, as has an ever-improving spy network that helped locate Mehsud and other terrorists. These would have been available to any new president. But Obama's counterterrorism campaign also relies on two sharp reversals from his predecessor, both of which were political gambles at home.

Obama's national security team believed that the president's campaign promise to pull U.S. troops out of Iraq would have a side benefit: freeing up manpower and resources to hunt terrorists in Pakistan and Afghanistan. Intelligence officials, lawmakers and analysts say that approach is showing signs of success.

Obama also has sought to reach out to Islamic allies and tone down U.S. rhetoric, a language shift that critics have argued revealed a weakness, in an effort to win more cooperation from countries like Yemen and Pakistan.

For example, though Pakistan officially objects to U.S. airstrikes within its border, following the Mehsud strike, the U.S. has seen an increase in information sharing from Pakistani officials, which has helped lead to other strikes, according to the senior law enforcement official. He and other current and former officials spoke on condition of anonymity to discuss sensitive security matters.

Pakistan's cooperation is key to U.S. counterterrorism efforts because much of the best intelligence still comes from Pakistan's intelligence agency. Ensuring that cooperation has been a struggle for years, in part because Pakistan wants greater control over the drone strikes and its own fleet of aircraft, two things the U.S. has not allowed.

"The efforts overseas are bearing fruit," said Sen. Lindsey Graham, R-S.C., a strident critic of Obama's domestic counterterrorism policies who said Obama has at times shown himself even more aggressive than Bush in his use of force overseas. "I give them generally high marks for their efforts to capture and kill terrorists in Pakistan, and they're pushing the envelope in Yemen."

CIA drones, the remote-controlled spy planes that can hunt terrorists from miles overhead, are responsible for many of the deaths. Drone strikes began increasing in the final months of the Bush administration, thanks in part to expanded use of the Reaper, a newer generation aircraft with better targeting systems and greater, more accurate firepower.

Obama has increased their use even further. A month after Mehsud's death, drone strikes in Pakistan killed Najmiddin Jalolov, whose Islamic Jihad Union claimed responsibility for bombings in 2004 at U.S. and Israeli embassies in Uzbekistan. Senior al-Qaida operatives Saleh al-Somali and Abdallah Sa'id were killed in airstrikes in December. And Mehsud's successor at the Pakistani Taliban, Hakimullah Mehsud, died following an attack last month.

Intelligence officials and analysts say the drawdown of troops in an increasingly stable Iraq is part of the reason for the increase in drone strikes. The military once relied on drones for around-the-clock surveillance to flush out insurgents, support troops in battle and help avoid roadside bombs.

With fewer of those missions required, the U.S. has moved many of those planes to Afghanistan, roughly doubling the size of the military and CIA fleet that can patrol the lawless border with Pakistan, officials said.

"These tools were not Obama creations, but he's increased their use and he has shifted the U.S. attention full front to Afghanistan," said Thomas Sanderson, a defense analyst and national security fellow at the Center for Strategic and International Studies.

The Obama administration has also benefited from stepped-up cooperation with officials in Osama bin Laden's ancestral homeland of Yemen. Authorities there killed 30 suspected militants in airstrikes in December closely coordinated with U.S. intelligence agencies.

Yemen has had a sometimes rocky relationship with the U.S. and was perceived to have an on-again-off-again approach to fighting terrorism, but officials in Washington are cautiously optimistic about a newly strengthened relationship.

Abdullah al-Saidi, Yemen's ambassador to the United Nations, said his country has always been committed to fighting terrorism. But in a fragmented country beset by a growing al-Qaida presence, a rebellion in the north and a secessionist movement in the south, it wasn't always easy for the government to openly align with the United States.

Washington is trying to make it easier with the promise of more money. But perhaps more important, al-Saidi said, were overtures such as Obama's June 2009 speech in Cairo, where he sought a "new beginning" with the Muslim world.

Obama has also abandoned terms like "radical Islam" and "Islamo-fascism," rhetoric that was seen as anti-Muslim by many in the Arab world and which al-Saidi said made it harder for governments to openly cooperate with Washington.

"Just the notion of not equating Islam with terrorism, there is a lot of good will toward him," al-Saidi said. "For the public, it's easier to say, 'Well, it's no longer a hostile power as it used to be.'"

Such international successes have largely been drowned out by the controversy that followed the failed bombing of a Detroit-bound airliner on Christmas. When the FBI read suspected bomber Umar Farouk Abdulmutallab his rights and charged him in federal court, Republicans accused Obama of not understanding the country is at war.

"They're trying to be tougher than Bush overseas but different from Bush at home," Graham said. "It doesn't make a lot of sense. They really got the right model for Pakistan and Yemen, but they're really tone deaf at home."

After Obama missed his own deadline to close the prison for terrorist suspects at Guantanamo Bay, Cuba, and backtracked on a plan to prosecute 9/11 mastermind Khalid Sheikh Mohammed in a New York courthouse, Republicans saw the Detroit case as an opportunity to renew questions about Obama's national security credentials, Republican strategist Kevin Madden said.

Madden said that Obama's stepped-up strategy overseas doesn't resonate with voters, and Republicans gain little in an election year by acknowledging where they agree with the White House strategy.

"National security politics is driven by events more than it's driven by long-term trends," he said.

Or, as Graham put it: "What resonates with people is what happens in Detroit, more than what happens on the Afghanistan-Pakistan border."

The White House says it see no conflict between broadening the attacks overseas and sticking with the U.S. judicial system at home, where hundreds of people have been convicted on terrorism charges since the attacks of Sept. 11, 2001.

"The president believes that we need to use all elements of American power to defeat al-Qaida, including the strength of our military, intelligence, diplomacy and American justice," White House spokesman Ben Rhodes said. "We only weaken ourselves when we fail to use our full arsenal."


Associated Press writers Jennifer Loven and Lolita Baldor in Washington and Adam Goldman in New York contributed to this report.

Tuesday, February 9, 2010

The Dumping Begins: Chinese Reserve Managers Notified That Any Non-USG Guaranteed Securities Must Be Divested

Editor's Note: WE'RE HIT!!!
Published on 02-09-2010

Source: Zero Hedge

It appears that this time China's posturing is for real. Following up on our earlier post that Chinese military officials want to "punish" America by selling Treasuries, Asia Times Online is reporting that an explicit directive by the Chinese government has notified reserve managers to sell all risky US assets, including asset backed and corporates, and just hold on to explicitly guaranteed Treasuries and Agency debt. And from following TIC data we know that China's enthusiasm for MBS/Agencies over the past year has been matched solely by that of one Bill Gross.

From Asia Times:
Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China’s large commercial banks. The Chinese government has ordered its reserve managers to divest itself of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events.

It is not clear whether China’s motive is simple risk aversion in the wake of a sharp widening of corporate and mortgage spreads during the past two weeks, or whether there also is a political dimension. With the expected termination of the Federal Reserve’s special facility to purchase mortgage-backed securities next month, some asset-backed spreads already have blown out, and the Chinese institutions may simply be trying to get out of the way of a widening. There is some speculation that China’s action has to do with the recent deterioration of US-Chinese relations over arm sales to Taiwan and other issues. That would be an unusual action for the Chinese to take–Beijing does not mix investment and strategic policy–and would be hard to substantiate in any event.

Read the entire story

'Jerusalem will be Palestinian capital'

The Jerusalem Post

28/01/2010 11:59

Abbas: Peace talks can’t start until Israel stops Jerusalem construction.

Palestinian Authority President Mahmoud Abbas on Thursday said that the Palestinians would not accept Abu Dis, a town between Jerusalem and Ma'aleh Adumim that is currently controlled by the PA, as the capital of their future state, but would insist on receiving control over east Jerusalem.

In an interview with an Arab-language Russian TV channel, Abbas explained that while he feels east and west must not be divided in practice, it was important that it would be clear which part of the capital belongs to the Palestinians and which part belongs to Israel.

The PA president said that the Israeli demand to be recognized as a Jewish state appeared only in the 1947 partition plan, hinting that Israel would have to implement that plan in order to gain recognition as a Jewish state.

Abbas went on to explain that he could not resume peace talks with Israel without agreeing on basic issues and while Israel continued construction in east Jerusalem, because the peace process would suffer a serious blow already after the first meeting.

“What if they say in this meeting that they do not accept the ’67 borders and are not prepared to discuss [the issues of] and the [return of Palestinian] refugees? What would we talk about?” Abbas was quoted as telling the Russian TV channel. “If I engage in negotiations while construction in goes on – they will say that is theirs, since I was willing to resume talks while construction continued.”

has rejected two ideas about resuming the peace talks, consolidated by the PA, and , Abbas claimed. Those ideas reportedly included a short building moratorium in the West Bank and east Jerusalem, Israeli recognition of international decisions and the resumption of peace talks from the point they were halted in December 2008, under then-prime minister Ehud Olmert.

Editor's Note:

 If I forget you, O Jerusalem,

may my right hand forget its skill .

 May my tongue cling to the roof of my mouth
if I do not remember you,
if I do not consider Jerusalem
my highest joy.

Remember, O YAHWEH, what the Edomites did
on the day Jerusalem fell.
"Tear it down," they cried,
"tear it down to its foundations!"

O Daughter of Babylon, doomed to destruction,
happy is he who repays you
for what you have done to us-

 he who seizes your infants
and dashes them against the rocks.
PSALM 137: 5-9

O God, do not keep silent;

be not quiet, O God, be not still.

See how your enemies are astir,
how your foes rear their heads.

With cunning they conspire against your people;
they plot against those you cherish.

"Come," they say, "let us destroy them as a nation,
that the name of Israel be remembered no more."

With one mind they plot together;
they form an alliance against you-

the tents of Edom and the Ishmaelites,
of Moab and the Hagrites,

Gebal,  Ammon and Amalek,
Philistia, with the people of Tyre.

Even Assyria has joined them
to lend strength to the descendants of Lot.

Do to them as you did to Midian,
as you did to Sisera and Jabin at the river Kishon,

who perished at Endor
and became like refuse on the ground.

Make their nobles like Oreb and Zeeb,
all their princes like Zebah and Zalmunna,

who said, "Let us take possession
of the pasturelands of God."

Make them like tumbleweed, O my God,
like chaff before the wind.

As fire consumes the forest
or a flame sets the mountains ablaze,

so pursue them with your tempest
and terrify them with your storm.

Cover their faces with shame
so that men will seek your name, O LORD.

May they ever be ashamed and dismayed;
may they perish in disgrace.

Let them know that you, whose name is YAHWEH -
that you alone are the Most High over all the earth.

"Sha'alu Shalom Yerushalayim"  --- Pray for the Peace of Jerusalem
Mark Matheny.

China’s hawks demand cold war on the US

From The Sunday Times
February 7, 2010

Washington believes Obama was made to appear weak.
Michael Sheridan, Far East Correspondent
MORE than half of Chinese people questioned in a poll believe China and America are heading for a new “cold war”.

The finding came after battles over Taiwan, Tibet, trade, climate change, internet freedom and human rights which have poisoned relations in the three months since President Barack Obama made a fruitless visit to Beijing.

According to diplomatic sources, a rancorous postmortem examination is under way inside the US government, led by officials who think the president was badly advised and was made to appear weak.

In China’s eyes, the American response — which includes a pledge by Obama to get tougher on trade — is a reaction against its rising power.

Read the entire story

Hillary Clinton says Whitehouse and Congress not giving up on Healthcare Reform

Clip from CNN News

Mark Matheny

In an interview on CNN  Secretary of State Hillary Clinton stated that although the health care reform issue is a complex one, the White House and many in Congress are not ready to give up on passing this bill.

It is therefore important to stay on top of this, and vote against a government takeover of healthcare.

Monday, February 8, 2010

An actual Haiti Eyewitness report.


This is very interesting. Somehow, though, I am not that surprised. Thank you for sending this,

By a Special Forces buddy with contacts.

To All,

I just returned from Haiti with Hxxxx. We flew in at 3 AM Sunday to the scene of such incredible destruction on one side and enormous ineptitude and criminal neglect on the other.

Port au Prince is in ruins. The rest of the country is fairly intact. Our team was a rescue team and we carried special equipment that locates people buried under the rubble. There are easily 200,000 dead, the city smells like a charnel house. The bloody UN was there for 5 years doing apparently nothing but wasting US Taxpayers money. The ones I ran into were either incompetent or outright anti-American. Most are French or french speakers, worthless every damn one of them.

While 1800 rescuers were ready willing and able to leave the airport and go do our jobs, the UN and USAID (another organization full of little OBamites and communists that openly speak against America ) These two organizations exemplared their parochialism by:

USAID, when in control of all inbound flights, had food and water flights stacked up all the way to Miami , yet allowed Geraldo Rivera, Anderson Cooper and a host of other left wing news puppies to land.

Pulled all the security off the rescue teams so that Bill Clinton and his wife could have the grand tour, whilst we sat unable to get to people trapped in the rubble.

Stacked enough food and water for the relief over at the side of the airfield then put a guard on it while we dehydrated and wouldn't release a drop of it to the rescuers.

No shower facilities to decontaminate after digging or moving corpses all day, except for the FEMA teams who brought their own shower and decon equipment, as well asair conditioned tents.

No latrine facilities, less digging a hole. If you set up a shitter everyone was trying to use it.

I watched a 25 year old Obamite with the USAID shrieking hysterically, berate a full bird colonel in the air force, because he countermanded her orders, whilst trying to unscrew the air pattern. " You don't know what your president wants! The military isn't in charge here we are!"

If any of you are thinking of giving money to the Haitian relief, or to the UN don't waste your money. It will only go to further the goals of the French and the Liberal left.

If we are a fair and even society, why is it that only white couples are adopting Haitian orphans. Where the hell is that vocal minority that is always screaming about the injustice of American society.

Bad place, bad situation, but a perfect look at the new world order in action. New Orleans magnified a thousand times. Haiti doesnt need democracy. What Haiti needs is Papa Doc. That's not just my opinion. That is what virtually every Haitian we talked with said. The French run UN treat us the same as when we were a colony, at least Papa Doc ran the country.

Oh, and as a last slap in the face the last four of us had to take US AIRWAYS home from Phoenix . They slapped me with a $590 dollar baggage charge for the four of us. The girl at the counter was almost in tears because she couldn't give us a discount or she would lose her job. Pass that on to the flying public.


U.N. gun ban faces pre-emptive attack

'There's no doubt that the real agenda is domestic firearms control'

Posted: February 06, 2010

8:25 pm Eastern

By Bob Unruh

© 2010 WorldNetDaily

United Nations headquarters

A gun rights organization has launched a petition effort to build opposition to plans being discussed by U.S. officials and the United Nations that could result in the confiscation and destruction of privately owned firearms inside the U.S.

The online petition, run by officials with the National Association for Gun Rights, offers participants a conduit to tell their U.S. senators a "Small Arms Treaty"' being discussed is "nothing more than a massive global gun control scheme, designed to register, ban and confiscate firearms from law-abiding citizens."

Spokesman Luke O'Dell has explained in on online statement that the exact wording of the proposal so far has been kept "under wraps."

"But looking at previous versions of the U.N. 'Small Arms Treaty,' you and I can get a good idea of what's likely in the works," he wrote. "Don't let any of the 'experts' lull you to sleep by saying 'Oh, we have it handled' or 'Until you know exactly what's in the treaty you can't fight against it.'"

"Judging by Ambassador [John] Bolton's comments – who certainly knows what to expect from the American-freedom-hating international crowd that infests the U.N. – we are certain the treaty's going to address the private ownership of firearms," O'Dell wrote.

In a video posted on the website for the National Rifle Association, Bolton said, "I think it was clear from the outset that the Obama administration would move in this direction. The only thing that's surprising is that it's taken this long."

He said the presentations have portrayed the "Small Arms Treaty" as something to address international arms trade. "But there's no doubt that the real agenda is domestic firearms control," he said.

'Shooting Back' tells of lives saved from attackers. Learn the Bible's defense of bearing arms from a man who defended his church from terrorists

He said there are many references that the only targets would be "illicit" arms.

"That begs the whole question. What's legal and what's illegal in a domestic application?" he said.

"Whatever the appearance on the surface, there's no doubt that domestic firearms control is right at the top of the agenda," he said.

O'Dell suggested that the new "international" law could bring tougher licensing requirements, programs to confiscate "unauthorized" firearms and even a ban on the private ownership of weapons inside the U.S.

The petition delivers to senators a request to oppose any plans to ratify a U.N. "Small Arms Treaty."

"The ratification of this treaty would also likely create an international gun registry, setting the stage for full-scale gun confiscation," it states.

WND reported last fall when Secretary of State Hillary Clinton first announced the U.S. had changed its stance and would support negotiations of an Arms Trade Treaty to regulate international gun trafficking.

The Bush administration had opposed it.

The U.S. also at that point joined a nearly unanimous 153-1 U.N. vote to adopt a resolution setting out a timetable on the proposed Arms Trade Treaty, including a U.N. conference to produce a final accord in 2012.

While Clinton called the plan a "crucial national security concern for the United States," gun rights advocates said it was an attempt under President Obama to sneak gun control into the U.S. without having the issue debated in Congress.

At the time, Brian Wood, disarmament expert for Amnesty International, said in a Bloomberg report the U.S. is the largest conventional arms trader in the world and the unregulated trade of conventional arms "can fuel instability, transnational organized crime and terrorism."

"All countries participate in the conventional arms trade and share responsibility for the 'collateral damage' it produces – widespread death, injuries and human rights abuses," said Rebecca Peters, director of the International Action Network on Small Arms in an Agence France-Presse interview. "Now finally governments have agreed to negotiate legally binding global controls on this deadly trade."

But Bob Barr, a former U.S. representative and presidential candidate of the Libertarian Party, explained in a separate interview with the NRA how a treaty that looks like it's all about fighting international crime will necessarily lead to erosion of Second Amendment gun rights:

"Even though [treaty advocates] all say, 'We are not going to involve domestic laws and the right to keep and bear arms, that won't be affected by all this,' that's nonsense," Barr said. "There's no way that if you buy into something like this and a treaty is passed regulating to ensure that firearms transfers internationally don't fall into the hands of people that the U.N. doesn't like, there's no way that that mechanism will work unless you have some form of national regulation and national tracking."

The effort is just one more of the outreaches launched under Obama that critics fear could lead to additional gun bans. They have expressed concern his nominee to head the Occupational Safety and Health Administration could arbitrarily ban guns across large segments of society as a "job safety" concern.

Also, Obama's attorney general, Eric Holder, supported Washington, D.C.'s ban on handguns before it was overturned by the U.S. Supreme Court. And since Obama has been in office, he's already advocated for a treaty that would require a federal license for hunters to reload their ammunition, has expressed a desire to ban "assault" weapons, has seen a plan to require handgun owners to submit to mental health evaluations and sparked a rush on ammunition purchases with his history of anti-gun positions.

Citizens wishing to speak out on the issue can contact the State Department or the National Rifle Association.

Sunday, February 7, 2010

Banking and Housing Payments Devoured the Middle Class Income – 1 out of 10 Americans on Food Stamps and how the Fed Slowly Devalued the Dollars in your Wallet.
Posted: 07 Feb 2010 01:16 AM PST

Editor's Note: You can click on any of the graphs to enlarge them.

It is a challenge to say that things are getting better when every month that goes by more Americans are losing their jobs or needing to apply for food assistance. In the latest data for food assistance through SNAP we find that 200,000 more Americans were added to the program. That now brings the total number of Americans on food assistance to 38,183,000. 1 out of 10 Americans are receiving food assistance. For 2009 this cost the government $50 billion, up from $34 billion in 2008 and $30 billion in 2007. It should be no surprise then that average Americans are questioning the viability of a middle class in the upcoming decade.

But even when we look at the balance sheet of the government, things are still not improving:

Source: U.S. Treasury

Take a look at the amount of revenue (taxes) the government brought in for the month of December. $218 billion was taken in. But look at data from December of 2008. The government at the peak of the crisis brought in $237 billion. So this December was even worse than the one ending 2008. How is this a sign of recovery? You would assume that receipts would be going up if things were in fact getting better. All we see is the spending side of the equation going up and the only sector in the economy turning a solid profit is the banking sector that is now running a new form of corporatocracy. It would be one thing if we were adding jobs each and every month but even the massive amounts of bailouts have yet to yield any visible help for average Americans.

In the past few decades Americans have seen more and more of their income being eaten up by the housing sector of the economy:

This latest decade saw a much larger share of income going to housing than any in the past. Unlike stocks, every American needs to live somewhere and will need to either pay a mortgage if they own or pay rent. The banking sector found a method of siphoning off wealth from the biggest asset Americans hold. In a purely fiat money system, banks can create money out of thin air. The Federal Reserve has done this through the monetization of debt. Now think about this, if a participating member bank borrows say $1 million from the Fed it can then turn around and lend the money out through loans up to $9 million courtesy of fractional reserve banking. With current interest rates, if it borrows from the Fed at near zero even a 5 percent return on bread and butter mortgages would yield $450,000 a year for doing absolutely nothing but being a middleman. And some banks have gone ahead and issued credit cards with 79.9 percent rates. When Bear Stearns and Lehman Brothers failed their leverage was even higher at 20 and even 30 to 1. The other investment banks are near those levels even today yet with full government support.

So why bring this up? In the United States debt is treated as money. In fact, without debt we wouldn’t have money. I think this is lost on many. When someone goes to a bank and takes out a mortgage with virtually no money down, all of a sudden a liability and asset of a few hundred thousand is created out of financial alchemy. So when this housing bubble burst trillions of dollars evaporated from the system but it was nothing more than erasing previous debt that really had no actual backing.

So if the Fed can create money out of thin air through their banking web why is the economy still faltering? In boom and bust cycles we see a love and revulsion towards debt. Banks can be willing to lend out money but you can’t force average Americans to borrow. This past decade we saw the absolute disregard for prudent debt lending and now, many Americans are averse to taking out loans. In fact, now that banks are actually checking and verifying incomes it turns out that many middle class Americans really don’t qualify for additional debt.

This brings us to our next chart looking at household debt:

Even after the stock market recovery, it is estimated that average Americans have seen their household net worth decline by $11 trillion since the peak of this bubble. Yet take a look at the chart above. Household debt still remains near the peak. And keep in mind that real estate was the biggest item of net worth for Americans and this has fallen by roughly $6 trillion. Yet the loans remain the same. And that is largely a reason for the flood of foreclosures and bankruptcies. While banks still have mortgages valued at peak levels the actual market value is much less. The U.S. Treasury and Federal Reserve made a troubling bet during the early days of the crisis that things would correct quickly. Actually, I tend to believe that the Fed knew all along that when push came to shove, the entire banking sector would be bailed out by the U.S. taxpayer since the Fed is simply the lender of first and last resort for member banks.

So this leaves Americans contenting with debt amounts that no longer reflect the value of their underlying asset. Yet the banking sector is now fully supported by the taxpayer. So with the current system in place, if banks do fail taxpayers are on the hook. The Fed has setup the perfect trap for middle class Americans. If average Americans decide to walk away from their underwater mortgages then the bill will be paid by taxpayers. After all, we are already told that the too big to fail by definition won’t fail. And the other option is to continue paying a mortgage on a home that is no longer worth its value. Many Americans simply cannot afford to do this. Do you notice how in no scenario the banks lose? This is another characteristic of the corporatocracy. And the FDIC which insures bank deposits is essentially insolvent:

And the FDIC backs $13 trillion in total assets with a fund that is insolvent! Now that is maximum leverage.

Over the past decade as the financial sector gained more and more power many Americans saw more and more money go to their housing payment. The housing bubble was merely the end product of the banking sector through Wall Street flooding the system with debt. If we live in a world where only one house is on the block and you have $1,000 and I have $1,000 and we both want the house the maximum we can pay for the home is $1,000 given our resources. But enter a bank that is willing to create debt of $10,000 in the form of a mortgage and say we are obsessed with the house; it is very likely we would be willing to pay $11,000 for the home. Is the home really worth $10,000 more? Of course not. But our $1,000 just got a lot less valuable. And this is the crux of a fiat money system. The government can force it as legal tender but if the value continues to erode people will begin questioning the system. It is only valuable to the point that people have faith in it. And right now many Americans are losing faith in the system.

TERROR CAMPS:The Global Agenda

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New World Order Rising-Documentary

New World Order Rising-Documentary
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My Other Passions

My Other Passions
Aikido and Iaido