EASY READING CULTURE OF LIFE NEWS:  THE MAGIC WEALTH PYRAMID VS U.S. STATISTICS LIARS « Culture of Life News 2basis-of-all-world-wealth1Despite the 0% spiral into negativity, we already are seeing the dawning of the next inflation wave.  Like the last one, it will be confined mostly to commodities and things we need to survive. The price of gold has, again, scaled the mountains and hit $1,000 an ounce today.  This is due to India buying more gold, again.  As well as savers in America, fearful of the next inflation wave.  While trolling the archives of the Federal Reserve, I again, came up with some interesting pearls of information that seems to have bypassed both Greenspan and Bernanke’s peanut brains.  We will look at some interesting graphs.

Gold demand soars 84% in Q4

India’s gold demand surged by 84 per cent in the fourth quarter of 2008 on investors’ confidence in the yellow metal as a safe haven.

According to data collated by Gold Fields Mineral Services, an independent consultancy, for the World Gold Council (WGC), India’s gold demand shot up to 147.2 tonnes in the fourth quarter in 2008 from 80 tonnes in the comparable quarter in the previous year. While demand from the jewellery sector rose 107 per cent to 102.1 tonnes, investment demand jumped 47 per cent to 45.1 tonnes, a WGC release said…

Gold prices have appreciated by 10.1 per cent, which works out to an annualised return of 81 per cent, in 2009 so far.

Nothing else had a 81% return this year.  Let’s call this ‘The Year of the Golden Calf’ rather than the ox.  As instability spreads, people instinctively go for traditionalism.  This protects us from destruction, it is a natural, human reaction.  One of the people I correspond with, Larry F., sent me a wonderful book to review [coming up soon, after I finish it]—‘Gold Wars’ by Fredinand Lips.  


As gold shoots upwards and it is the first of the commodity markets to turn around, we will need to discuss how gold was changed from a decorative item to the basis of global trade to the total elimination of gold as the basis for trade valuations and how this is now trying to reassert itself via a harsh method, namely, in default.  All the world’s central banks are dead set against gold returning as the trade valuation device.  The hour that one country declares, they will use gold as their basis, this nation will then slowly and finally, very swiftly, take over as the world’s fiat trade currency.


I see this in the future.  It is that or we continue to muddle along in a perpetual Japanese-ZIRP system.  Also, this is a queer religious matter: the Derivatives beast was created to protect investments and it has turned into a monster in size and is now stomping the daylights out of all investments….EXCEPT GOLD.  And this is very significant.  For religious reasons, of course.  Gold has been associated with religious power from the very beginning.   And cows [or sheep and pigs!] have been associated portable wealth since time immemorial. 


This is why we will first, see inflation in gold, then in animals and then, in grains…the ancient trinity of wealth!  At the top of the pyramid is gold which, in ancient times, was the ‘eye of god’ or the sun. The bags in the cartoon above are filled with grain.  This sustains the animals who stand on it as well as the humans. The plowed field in front shows how human labor on the land creates this wealth.  And the rain clouds: we all pray to the Lightning gods [Pegasus was called ‘Zug’ in the ancient city of Ur, for example] and this brings us rain.  And the apple is the apple of wisdom and life.


When we run off to the Goddess of Infinity, seeking wealth WITHOUT labor, wealth that ruins or destroys the pyramid of wealth, all wealth is then destroyed in a firestorm by Libra as She sets things to right again.  We can tip the scales or cheat on the weights only for so long before She stomps into the room and draws Her sword rather than holding Her scales.  See how easy it is to understand things when we draw upon our ancient beliefs?  The gods and goddesses are supposed to protect us from ourselves!  If we listen to their stories or understand their fundamental elements, we can see this as a tool to prevent us from going to infinity. Infinity is, like zero, tremendously dangerous to all living things in the universe. Worldwide

 The Federal Reserve today began releasing officials’ longer-term projections for inflation, economic growth and unemployment to anchor public expectations for prices.

New projections for five or six years from now, in addition to the current three-year forecasts, are to appear beginning with minutes of the Jan. 27-28 Federal Open Market Committee meeting, Chairman Ben S. Bernanke announced in a speech today, one hour before the minutes were released.

Fed governors and district-bank presidents are trying to contain the risk of deflation, which would worsen the financial crisis and deepen the recession. The change brings the Fed closer to a formal inflation goal, something that central banks in the euro region, the U.K. and other countries are required to observe in designing interest rate policies.

HAHAHA.  So, they will now release six year plans?  How communistic!  Well, these projections are mostly wishful thinking, I would think.  The act of issuing these things alters their utility to the future.  What we want Bernake to give us is very simple: restore access to the M3 data!  This dimwit thinks he can suppress our demands by releasing ‘projections’ while concealing from us the real data which this is based on.  


I spend hours searching for raw data and information.  So do many of the readers here who are very generous with sharing their findings here so we may all use it to educate ourselves.  I greatly appreciate this and periodically, must mention it because it is VALUABLE to me for information is like gold: it is a tool as well as a commodity resource.  I can’t build a world-picture of how things work without measuring tools or numbers.  Numbers are a tool of the gods just like fire.  My father once told me, ‘God writes not in words but in numbers.’  It is a great miracle that we can express all forces and things in nature using just numbers!  Few people give thought as to why this is so.  Our ten digital universe is how we transfered the five fingers of each hand into this marvelous system whereby we can digitalize everything. The computer universe took it further by 1 and 0 everything.  This binary system has made it possible to make a cyber mirror of reality.  Now, we are going off a cliff here!  I hope we can debate this!


Back to the Federal Reserve: it exists to circumvent the Golden Eye of Horus.  Instead of restricting things, the Fed wanted to lend with impunity and beginning its very first year, it did.  It funded much of WWI.  That butcher shop would have closed its bloody window much earlier if the Fed didn’t fund it so enormously.  Bernanke started out in office by unilaterally eliminating the M3 data from view so I and others can’t see it anymore. He figured, if it were made invisible like the Holy Ghost, we would be unable to see it.  Well, I can see the RESULTS of all this!  What a catastrophe. 


It was like removing the ‘BRIDGE OUT’ signs in the hopes that no one would notice the bridge is missing after the Fed drives us off the cliff.


Text: FOMC Minutes – Economy * US * News * Story –

5. In the execution of the Committee’s decision regarding policy during any intermeeting period, the Committee authorizes and directs the Federal Reserve Bank of New York, upon the instruction of the Chairman of the Committee, to adjust somewhat in exceptional circumstances the degree of pressure on reserve positions and hence the intended federal funds rate and to take actions that result in material changes in the composition and size of the assets in the System Open Market Account other than those anticipated by the Committee at its most recent meeting. Any such adjustment shall be made in the context of the Committee’s discussion and decision at its most recent meeting and the Committee’s long-run objectives for price stability and sustainable economic growth, and shall be based on economic, financial, and monetary developments during the intermeeting period. Consistent with Committee practice, the Chairman, if feasible, will consult with the Committee before making any adjustment.

In light of its program to purchase large quantities of agency debt and mortgage-backed securities, the Committee voted to suspend temporarily the Guidelines for the Conduct of System Operations in Federal Agency Issues (last amended January 28, 2003). Mr. Lacker dissented, stating that he views targeted purchases of agency debt and mortgage-backed securities as distorting credit markets and would prefer that the Desk instead purchase Treasury securities.

YIKES!  They are suspending ‘temporarily’, the guidelines? Not only has Bernanke taken down the ‘Bridge out’ sign, now he is throwing away the driver’s manual and unbolted the steering wheel!  And Mr. Lacker objected!  HAHAHA.  He won’t be around much longer, I bet.  How dare he bring up reality?


Bernanke thinks, if we buy up all those hideous, ugly places in Phoenix, Arizona, the banking system will work again!  This is insanity.  Those buildings need to be blown up.  And the bankers who funded these suburban horrors should be arrested for crimes against nature! Worldwide

U.S. January Producer Prices Rise More Than Forecast 

U.S. producer prices climbed more than forecast in January as companies tried to boost earnings at the start of the year before demand weakened even more.

The 0.8 percent increase in wholesale costs was higher than projected and followed a 1.9 percent drop in December, figures from the Labor Department showed today in Washington. Excluding food and fuel, so-called core prices rose 0.4 percent, also more than anticipated.

Makers of autos, communications gear and pharmaceuticals were among the industries boosting prices last month even as sales slumped. The worsening global recession will likely limit inflation and minutes of the Federal Reserve’s January meeting showed some policy makers saw a threat of broad declines in prices….

In today’s report, the gain in wholesale prices was led by a 3.7 percent increase in fuel costs. Passenger car prices rose 0.3 percent, communications gear jumped a record 1.3 percent and drug companies boosted prices by 1.1 percent for a second month.

Costs of intermediate goods, those used in earlier stages of production, dropped 0.7 percent after declining 4.2 percent in December. Prices for raw materials, or so-called crude goods, fell 2.9 percent following a 5.3 percent drop.

Inflation is Deflation’s twin sister.  Humans hate the Goddess of Deflation and love the Goddess of Inflation.  But both are very much ‘death goddesses’ and both are extremely dangerous.  To have a massive downturn in asset values while having inflation in necessities is extremely bad.  This means both savers AND debtors are hammered at the same time!  The relentless rise in gold prices shows that inflation is gaining strength.  She comes in waves, not just all at once.  Every surge in US domestic money-handouts creates inflation in necessities for this is not money we are sending to China or Japan.  This money stays home and buys things we need.


Now, yesterday, the Treasury handed out the financial statements for our empire.  This led me down an interesting path.  Let’s start with this week’s report:


OK:  the US reserves have $9 billion euros and $14 billion in yen.  This totals $23 billion.  What a miserable number this is!  All our trade rivals hold more than this, every last one of them holds more than $23 billion!  Good grief.  The IMF and BIS amounts are even more miserable, $17 billion.  With the gold reserves [valued at the old Nixon numbers] is only $11 billion.  Of course, it is about $1 trillion except we can’t use it as a monetary value!  Got that?  More about that later.  I found some very interesting stuff for all the gold bugs who are popping champagne right now.  So hang on! 


Here is the 2000 IRP data:

LS-341: U.S. International Reserve Position


OK: our reserves total was $5 billion less than today.  Our total currency holdings was $11 billion.  This has doubled today.  Euros and yen were equal. Today, yen is more than double the 2000 number.  We don’t have a ‘other central banks and BIS’ listing anymore.  It was $20 billion back in 2000.


We do have the IMF numbers: $18 billion in 2000, it is half that at $7.5 billion!  OOPS.  No wonder the Japanese lent $200 billion to the IMF this week.  The SDRs are also down by $2 billion, so far. Gold is the same in both reports.  Now, I dug up, with increasing difficulty [the stupid Treasury has a very shallow pool of information online!] the 1996 data:

International investment position of the United States in 1996


OK: gold was listed second, not last. HAHAHA.  Um, that is interesting in itself.  The drive to minimize gold has been very relentless this last 20 years.  Back then, they still had to have it close to the top, not at the bottom.  It was $100 billion?  There is no data about amount of gold in weight.  So I have no idea, how they valued it.  Did they do it according to its worth at that time?  It droppedin price by $4.5 billion that year!  So I think it may be price value, not weight.  


The special drawing rights were $11 billion.  Today, they are at $9 billion.  The IMF numbers were at $14.6 billion and today, it is at $7.5 billion.  This means, it increased under Clinton by $3 billion by 2000 and then dropped like a rock under Bush.  The 1996 tables have things that none of the later tables show.  And of course, each decade has a totally different way of tabulating information!  So cross-checking becomes a damn nightmare.


Now the the BIG numbers: the US official reserve assets:

  • $176 billion in 1996. 
  • $71 billion in 2000.  
  • $76 billion today.

Trying to compare things is hard for several reasons.  One of them is, the rules of the game were changed in the past. Like all other systems we use to track things, people didn’t like the data so they revised the data information so the analysis would be ‘friendlier’ to free trade and the global financial games based on the floating fiat currency system.


According to this graph, our position has rapidly deteriorated since Reagan’s rule.  Since Reagan was promised a bribe by the Japanese who paid him off as soon as he slipped out of the White House, we can see that the downward trend of this graph has gotten much, much worse.  


Why is this?  HAHAHA.  I howled about Reagan openly taking a bribe from a trade rival.  I was furious.  The media said, ‘Oh, the Japanese love our President so much, they want to pay him $2.5 million for just one speech!’  I said, ‘This is a bribe, you numbskulls’ but I am not allowed on TV.  So no one heard me yelling.  I did go to DC to demand Congress impeach him for treason.


They didn’t.  So the Bush father and son tag team and Clinton the Dawg all ran off to our trade rivals, OPEC and the Chinese for their own bribes.  So, instead of correcting our course, we went off the cliff.  Comparing this graph with the Treasury charts, we can see that someone is lying.  And it isn’t the Cleveland Fed, in this case.


While trying to untangle the incomplete data from the Treasury, I found this study from the Economic Policy Institute which was published in 1990:

Still A Debtor Nation 

Interpreting the New U.S. 

International Investment Data 

By Robert A. Blecker


Robert A. Blecker is Assistant Professor of Economics at The American University. 

Washington, DC, and an economist with the Economic Policy Institute. 

 In response to criticisms by private economists,’ the Commerce Department’s Bureau of Economic Analysis (BEA) has revised its method of 

calculating the U.S. Net International Investment Position (NIIP). New estimates for 1982-89 released on June 9, 1991 seemed to imply that the U.S. was much less of an international debtor than was previously thought. [HAHAHA] When the new methods were extended to the data for 1990, in estimates released on July 2, 1991, however, the result was only confusion. The BEA reported that one of its 

two new measures of the NIIP improved by $27.5 billion in 1990, while the other one worsened by $92.9 billion! 


How typical!  For years, the BEA collected and compared data.  It was easy to track things.  This didn’t please people who wanted to drive the economic car off the cliff.  So they demanded changes!  And did the changes make things clearer?  Or did it sow confusion?  


Easy to answer!  It made it impossible to correctly track trends that were definitely aimed straight down to hell.


This Briefing Paper will explain how the BEA revised its measures and discuss what they imply for our understanding of the United States’ net debtor status. This paper will show that the parts of the NIIP which have been revised are not the parts which reflect our true net debt position, as the term “debt” is normally understood. Neither of the new measures changes the extent to which the U.S. increased its net Financial liabilities to the rest of the world in order to pay for the trade deficits of the 1980s. 


I have noticed this long-range program of ideology which has sought to turn debt into something else.  This is classic black magic: things are turned into their exact opposite via magic language spells.  By spinning a web of words around the word ‘debt’, these magicians have worked for years to flip it into a good thing, not pure evil.  


The good professor here notes that truth was not the goal of the changes in how data is written and examined but rather, this was toyed with to give a false answer so we could continue with raging trade deficits!


They did this with EVERYTHING.  They did this to unemployment data, inflation data, you name it, they toyed with everything in an attempt to cover up the truth.  The refusal to give out the M3 data is along the same lines.  Bernanke claimed, no one was interested in the data.


The firestorm of howls led him to tell us, he was still collecting the data.  He just didn’t want to SHARE it with us!  The same with gold: the Fed hides, obscures and misleads by hiding data or making it difficult to compare time frames, as we see in the Treasury data above.


Moreover, as a glance at Figure 1 will indicate, both new measures show that the overall trend of the NIIP is still very much downward, even though these new measures make the level of the NIIP look higher, and even though one of the new measures (along with the old measure) shows a slight upturn in1990. Nothing in the revised estimates changes the fact that the United States   went from having a large net creditor position at the beginning of the 1980s to being the world’s largest net debtor at the beginning of the 1990s. 


They tried to hide this vital information!   There is no point in having data if it is used for lies.  The need for truth is tremendous.  The very ancient concept of Libra was, She was the guardian at the Gates of Death.  She wrote down everyone’s history with this feathered pen.  And weighed our hearts on her scale against this fatal feather.  She insists, we confess the Truth when we come to Her.  


Anyone running a system on lies is like Madoff and Stanford: money does seem to come from nowhere and it makes us feel temporarily rich but it is all faux wealth and will vanish in a flash the minute the Truth is told.  Bang!  Gone!  Not even an hour later, does fake wealth survive surveillance from the All-Seeing Eye.


In addition, there are some special problems with the data for 1990 which account for the apparent improvement in the NIIP in that year by the old historical cost measure and the new current cost measure. Both a temporary fall in the value of the dollar at the end of 1990 and the enormous statistical discrepancy in the U.S. balance of payments for 1990 make these apparent improvements dubious. In fact, it is likely that the true NIIPfor 1990 should be about $60 billion lower by any measure, implying a continued downward trend. 


Doesn’t this graph look like the mirror image of Shadow Government Statistics wonderful graphs?  ALL of our major data is way, way off.  We can’t compare the past with the present because of this outright lying.  For example, our rulers boast about killing inflation.  I know, since I am on a fixed income, this is one big, fat lie.  No, inflation has ravaged my family since 1996, when my husband was injured at work.  

The upper classes who pay people to lie about inflation don’t care if inflation rages, they make money off of this!  They LOVE inflation!  If their paintings by Monet rise from $1 million to $65 million, they are pleased as punch. If their mansions rise from $5 million to $25 million, they are happy as peas in pea soup!  But they know that if the lower classes are unhappy about inflation, all hell will break lose.  So they lie about it.  When angry lower class people complain, these con men tell us to shut up.

‘What inflation?  I don’t see no stinking inflation,’ they tell us.

Under the old method, direct investment was valued at historical cost (book value). That is, the value of U.S.-owned facilities abroad and foreign- owned facilities in the U.S. were both valued at the prices at which they were acquired in the past (net of depreciation). This created a distortion, however, because U.S. firms tend to own production facilities abroad which are older than foreign-owned facilities in the U.S. For example, a Ford plant in Europe or a General Motors plant in Brazil would be valued at the prices of the 1960s or 1970s. when those plants were built, while Honda and Nissan plants in the United States would be valued at the prices of the 1980s. when they were built. 


Ah, the innocent days of 1990!  Back then, we had old factories and Japan was building new ones here.  Now, our auto industries are building state-of-the-art factories in China and Brazil!  The bankruptcy has to be managed so Ford and GM can keep these foreign factories while shutting down union factories in the US.  


Since price levels have risen dramatically due to inflation, both at home and abroad, this procedure greatly exaggerated the value of foreign direct investments in the U.S. relative to U.S. direct investments abroad. 


Also, U.S. gold reserves were valued at the 1973 official price of $42.22 per fine troy ounce. However, the market price of gold soared to about $600 per fine troy ounce at the end of 1980, and has fluctuated between $300 and $500 per fine troy ounce since that time.3 Thus the old method grossly undervalued the official U.S. gold position in the 1980s by a factor of about ten. 


THIS BRINGS UP A SEARING ISSUE!  Namely, why have the totally fake valuation of gold?  And do they do this all the time?  I have a lot of trouble, figuring out gold holdings in the Treasury do to instability in calculating the gold values.  Instead of accurately reflecting inflation by having the value numbers change with gold prices, they have a stable, fake valuation.  They may as well say, ‘We have all this gold, hahaha.’  


But they could easily show the valuation changes and these do affect how we figure out our balance numbers.  So many screwy things are going on around gold!  It is like this dark corner in our public finances.  It sort of sits there, in the dark and we can barely see its outline as it grows or shrinks in size.  Ron Paul correctly called for an investigation of our gold holdings.  


The fact that he is ignored means, this is important and the liars who are screwing with all our basic statistics do not want us to know more information about our gold holdings.


In contrast, the old measures of portfolio investments had no special valuation problems (aside from the adequacy of the underlying reporting, which will be discussed further below). Most of these assets and liabilities were already measured in current values, and those measured at historical values were mainly items which would be hard to revalue at current prices (such as 

bank loans). 


The only parts of the NIIP which the BEA revised are (1) direct investment and (2) gold reserves. But it was (3) portfolio investment-the part which has not been revised-which accounted for most of the decline in the U.S. NIIP in the 1980s.


So, the ‘portfolio investment’ parts that were not tinkered with by the criminals is the one that showed the most decline?  That is interesting!  It is obvious, this is a crime: the other data showed no decline but the one that wasn’t changed to a new regime DID show a decline so this means, the point of the operation was to prevent us from seeing an obvious decline.




Table 1 shows that the negative net investment position for 1990 is reduced by about one-third in the current cost series (-412.2 compared with -617.9 billion dollars) and by about two-fifths in the market value series (-360.6 compared with -617.9 billion dollars). Thus it appears that the U.S. was less in debt in 1990. However, all of this improvement comes from the revaluation of gold stocks and of direct investment to current cost or market value (which are the same for gold). Our net financial debt is unaffected by these changes. as the nation was still $646.7 billion in the red in terms of portfolio investments which were not revalued. The excess of stocks, bonds, and other financial instruments owned by foreigners in the U.S. over those owned by U.S. residents abroad is exactly the same in the new measures of the 

NIIP as it was in the old. 

Finally, as mentioned earlier, the measured net capital inflows into the United States for 1990 were only $28.6 billion. This low figure, which holds down the decreases in all three measures of the NIIP, is almost surely an underestimate. The U.S. balance of payments shows a current account deficit of $92.1 billion in 1990.’ Conceptually, all of this deficit should be exactly matched by net capital inflows. However. only $28.6 billion of net capital inflows were recorded in the capital account of the balance of payments, leaving 

a statistical discrepancy of $63.5 billion. This far exceeds the previous record statistical discrepancy, which was $36.6 billion in 1982 (a year of major capital flight out of Latin America). The $63.5 billion discrepancy is also larger than the claimed increase of $27.5 billion in the current cost measure of the NIIP. 


And how do we hid this discrepancy?  Well, so far, ignoring it has worked.  Anyone who yells about this outright fraud are ignored!  Since 99.9% of our major media supports ‘free trade’, all negative data must be ignored or falsified.  I was just horrified as our trade data shot downwards to negative trillion a year levels.  It has improved only during grinding recessions.


This is a sign that Libra is trying to force it to balance.  She will use powerful counter forces.  The more we struggle to run things in the red, the more determined She will be to correct this one way or another.  If the only way left is WWIII, we will get that, too!  This is why it is much safer and easier to recognize the need to balance things and stop this attempt at increasing lending when we have already borrowed too much, for example.


While there are problems with the reporting of all international transactions, the current account figures are undoubtedly more reliable than the capital account figures.’This suggests that most of the $63.5 billion statistical discrepancy is probably accounted for by unrecorded capital inflows. Thus the true NIIPfor 1990 by any measure is probably about $60 billion lower than it appears in the official BEA calculations. In this respect, even the small improvements in the NIIP at historical and current costs in 1990 are probably 

the results of mismeasurement rather than a genuine improvement in the U.S. net investment position. 

How Much Do We Really Owe? 

It is apparent from the disparity among the three measures of the U.S. NIIP, including the two new ones (which differ as much from each other in some respects as they do from the old one), that there is no single number that can truly summarize the United States’ position as a net creditor or debtor to the rest of the world. Nevertheless, it is possible to draw some conclusions from the trends in the available data. 


None of the revisions to the data on direct investment and gold reserves should obscure the fact that the U.S. had to borrow almost $700 billion more from the rest of the world than it lent to the rest of the world between 1982 and 1990. This is the import of the decline of $689.2 billion in the portfolio investment position, a figure which is not affected by the revised estimation methods. And this is not even counting the giant statistical discrepancy for 1990, which along with previous discrepancies would push this figure to over 

$800 billion.” 


The revaluations of other types of assets do not change the fact that the U.S. had to borrow this amount. First, the revaluation of the gold reserves merely puts a more accurate price tag on the gold in Fort Knox (or wherever the Treasury keeps it).  [HAHAHA—Ron Paul wants to know this information!!!]  Since we do not use that gold to pay our bills, its greater current market value does not imply lesser net financial obligations to other countries. In fact, as the tables show, although the value of the gold reserves was much higher in both 1982 and 1990 at current market prices than it was at the historical (official) price, its value actually fell slightly over that eight-year span as gold prices came down. 


Similarly. a more accurate portrayal of the actual value of the direct foreign investment position does not detract from the significance of our increased financial borrowing. In particular, the $88.4 billion rise in the U.S. direct investment position at market value from 1982 to 1990 is due entirely to the boom in the stock prices of existing U.S. equity abroad in the late 1980s. a boom which was only partly offset by the stock price declines of 1990. This is purely a paper gain which can be wiped out in a stock market crash just as 

rapidly as it rose in the boom. [We just saw this happen, didn’t we?]  Indeed, even the $183.7 billion net direct 

investment position at market value for 1990 is $90.6 billion lower than it was in 1989 ($274.3 billion), precisely because foreign stock markets fell by more than the U.S. stock market in 1990. 


More importantly, this rise in the market value of the U.S. direct investment position does not help us to pay for our increased financial obligaltons to other countries, such as interest and principal on U.S. Treasury securities, or interest and withdrawals on bank deposits held by foreigners. 


Bravo!  This was an excellent and rather short report!  And did it change things?  Did Madoff get investigated in 1990 when he was first reported as a scam artist?  No?  Of course not!  The scam is deep and great.  Almost everyone at the top of the economic pyramid wanted to lie and cheat us.  We allowed this to happen because our media is corrupt and supports this sort of treason.  Lying about trade, about gold, about monetary policies: Congress is totally corrupted by bribes by Wall Street gnomes!  They don’t seek the truth, they seek to profit.  Most of the Senate is made up of multi-millionaires, for example. 




Now, onwards to another report from the Cleveland branch of the Federal Reserve:


The Net International Investment Position :: Owen F. Humpage and Michael Shenk :: Economic Trends :: 08.06.08 :: Federal Reserve Bank of Cleveland

The Net International Investment Position

Owen F. Humpage and Michael Shenk

The United States has run a current account deficit almost continuously since 1982. We have financed this deficit by issuing financial claims, such as stocks, bonds, and bank accounts, to the rest of the world. Since 1986, foreigners have held more claims on the United States than U.S. residents have held on them, or, in the jargon of international finance, the United States has maintained a negative net international investment position. Last year, that negative position reached a record $2.5 trillion…

Reflecting the increased integration of global financial markets, both U.S. and foreign financial claims have increased much faster than U.S. GDP since the mid 1990s, especially since 2001. Contrary to reports that some foreign governments have been diversifying out of dollars, foreign official holdings of U.S assets have increased steadily by 5 percentage points since 2001. Official reserves accounted for 19 percent of foreign claims on the United States in 2007. U.S. holdings of foreign securities have also increased their share of total U.S. claims on foreigners in recent years ; they now account for 43 percent of that total. Direct investments, however, have been shrinking as a share of both U.S. claims on foreigners and foreign claims on the United States.


This isn’t ‘globalization’, this is the bankruptcy of the US.  Note the ‘hockey stick’ characteristic of this graph!  Foreign powers who trade with us increasingly own us!  Who would have guessed this would be the outcome of the changes in figuring out US red ink flows?  Heh.  Our markets inflated [yes, this is the Goddess of Inflation’s work, She adores hockey and plays a mean game, She loves to high-stick everyone].  It went from $1 trillion in 1980 to $15 trillion in US holdings.  And foreign holdings went from a quarter trillion dollars to over $22 trillion and the total went to over $35 trillion!  This is disgusting to look at.  


Foreign powers, trade rivals and competition overseas has huge claims on the US.  Trillions and trillions of dollars of claims which we have to pay.  We own less and less.  Even as rank inflation raises the numbers to ludicrous levels, the share of foreign claims has doubled faster than our own claims based on inflated numbers.  And looking at this graph, we can clearly see that ‘inflation’ was NEVER tamed at all.  It was growing like weeds, hidden from view.


AFP: China says forex assets safe but face ‘grave’ challenge

“By the end of 2008, the national foreign exchange reserve assets on the whole were kept safe,” Fang Shangpu, a deputy administrator of the State Administration of Foreign Exchange, told reporters.

“We provided abundant liquidity (for the country) to cope with the crisis and at the same time we also made some profits,” he said, without elaborating.

However, he warned that the financial crisis had not yet bottomed out and its negative impacts would continue to be felt, possibly affecting China’s forex investments.

“China holds nearly two trillion dollars in foreign exchange reserves that is (exposed) to the international market. It certainly faces grave challenges,” Fang said.

Words of warning from one of those holders claims against US property and value.  The Dragon is worried, we will collapse the entire system.  This is why WWIII is a danger, of course.  The Dragon will not allow us to skip off, free.  I am also betting, since the Dragon always loved gold and has golden scales, Mr. Shangpu was referring to buying gold when he mentioned, ‘making some profits’. Worldwide

Bank of America, AmEx May Suffer on Card Defaults 

Credit-card defaults may rise beyond 10 percent this year, breaking records and wiping out more than half of annual profit for lenders including Bank of America Corp. and JPMorgan Chase & Co., analysts said.

Loan failures are about to surpass a previous high of 7.53 percent as people losingjobs amid the U.S. recession can’t repay debt, according to Fitch Ratings. The defaults may peak at 10 percent to 11 percent of loans by yearend under a stress scenario, Goldman Sachs Group Inc. analyst Brian Foran said yesterday in an e-mail, reducing 2009 earnings for issuers including an almost 40 percent cut forAmerican Express Co.

And last of all: the credit card money machine is finally breaking down, last of all.  Bankrupt Americans fleeing their unsustainable mortgages try to keep up the credit cards to the bitter end.  Now, we see the end in sight here; they can’t limp along much longer.  Even as Congress and the President try to patch this mess with MORE debt on future tax earnings, eventually the futility of all this will force them to stop.


We need social care for the People or we have a revolution.  Seeing how corrupt our entire government is, the revolution solution grows daily in its appeal.  I warned everyone about this a long, long time ago.  But the rulers won’t listen to me.  They tell each other, I am insane.  I draw stupid cartoons.  I talk about goddesses that represent various forces all the time.  Yes, I am insane.  Like Libra.





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Filed under .money matters


  1. The goldbug sites have been much more consistant in their view on gold than this one. This is not good.

  2. leavingtheoffice

    The Dragon may be buying gold, but oil has been on the Dragon’s mind as well. One week after the Siberian deal, this…

    BRASILIA, Feb 19 (Reuters) – Brazil signed an agreement on Thursday to supply China with 100,000 to 160,000 barrels of oil per day at market prices and expects to obtain billions of dollars in Chinese investment to develop its huge oil reserves.

    Total, the French oil major signed a deal with Iran to develop nat gas last night (don’t have the link). What does that mean for a potential US/Israeli attack?

    Also, it looks like the banks still have “savings” rolling in, lol….

    The United Nations’ crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.


  4. emsnews

    Ziff, when India slowed down gold purchases, I warned the gold bugs, the price would plummet. Which it did. When the hedge funds began to buy gold, I mentioned this, too.
    I also spend a lot of effort explaining the curious situation of gold which was turned into a commodity by the central bankers but it still is part of the banking system. This leads to mental confusion. Guess what????
    THIS IS F***KING DELIBERATE!!!! Got that? Note that this story today examines the lies used to confuse people! And how this hinges on thinking about gold. I believe my examinations of the properties of gold and the history of gold is quite superior. Because I do NOT peddle gold. The gold bug sites are run by guys who want you to buy, no matter what or when or why.
    This is why their commentary is often rather erratic, and filled with lots of wishful thinking. And you better remember this: IF GOLD IS RE-ESTABLISHED AS GLOBAL TRADE CURRENCY VALUE, ALL GOLD WILL BE CONFISCATED BY GOVERNMENTS ACROSS THE ENTIRE F***KING PLANET. Got that? I hope you understand what this means.
    If, instead we opt for bankruptcy of America and chaos, then a good gun collection, bullet-making equipment, a brace of big dogs like mastiffs, for example, and lots of like-minded friends who want to form a militia is the way to go. Your gold would be used only to buy some more fighters. Anyone who does this will then rampage across the landscape, stealing stuff. We have seen this more than once in history! Watch Mad Max movies if you want an amusing Aussie version of this sort of world. 🙂

  5. WNC Observer

    I remember my econ profs telling me that the US national debt “didn’t matter, because we owed it to ourselves”. That was all prior to 1982, of course. You don’t hear that any more, because it isn’t true. (Amazing, one lie they AREN’T telling! Honor amongst thieves, I guess!)

    Countries that rack up huge foreign debts ALWAYS end in sovereign default, and ALWAYS end up as an economic basket case. I cannot think of a single exception. Of course, none of this is being admitted to or even spoken amongst the power elites or talking heads – except just maybe behind closed doors.

  6. I”m surprised you go for the gun nut stuff, very american and foolish, if it comes to that you are doomed, nobody will fair well in fire fights.
    I won’t hold it against you as i agree with your cautions about gold, but you did assert rather forcefully at one one point that gold was a only a commodity.
    Will they nationalize a big connected player like Barrick?

  7. DrKrbyLuv

    Ziff House –
    The gold bug sites have been saying to buy for the last 3 years – right through the peak and long decline. Elaine was not bullish, until more recently – BEFORE the price started taking traction for a bull run.
    I remember commenting some weeks back that the fact that Elaine was becoming bullish, made me feel good about my holdings.

  8. RobG

    I think I just heard a belch of satisfaction from the Derivatives Beast polishing off another hedge fund:

    Highland Capital CDO Fund Is Insolvent, Wiping Out Investors (Bloomberg)

    Highland Capital Management LP, the investment firm founded by James Dondero and Mark Okada, said one of its hedge funds was wiped out by losses on high-risk debt securities, at least its third fund since October to close.

    The managers and directors of Highland CDO Opportunity Fund LP, comprised of a U.S. partnership and an offshore affiliate, determined that “it is in the best interests” of the fund to wind down, according to a Feb. 4 letter to investors. Remaining assets will be distributed to creditors, leaving nothing for shareholders.

  9. DrKrbyLuv

    A Gold Backed Currency
    I agree Elaine, the first country or collective to initiate a gold backed currency will do very well. Recently, while in the Middle East, Peter Schiff suggested that Saudi Arabia could rule the world economic markets by buying all the gold and issuing a new currency (interesting video):


    Does anyone know if the US has any gold? Last I saw, the US and the criminal fed held just over 8,000 tonnes. But, it is not certain how much each holds and it has been reported that they fed holds almost all of the gold – including what was once ours; taken as collateral (national debt).

  10. Pingback: » THE MAGIC WEALTH PYRAMID VS U.S. STATISTICS LIARS « Culture of … » Easy Forex Investments

  11. Charlie the Jester

    “There exists in R (the set of ‘real’ numbers) a number 0, called zero, so that

    0 + a = a + 0 = a

    for any ‘a’ in the set R”.

    Hmmm, are we really sure we want to go there?
    The ancient Egyptian hieroglyph for 1,000,000 was “an astonished man”.
    Maybe we should bring that back.

  12. Simon

    A militia is not going to cut it in the US since there are a lot more ‘gun nuts’ than you can imagine.
    See if something sounds like a good thing, imagine if everyone does it. Still, you can try
    I heard that AK is going for $600, bargain

  13. Paul S

    “I”m surprised you go for the gun nut stuff, very american and foolish, if it comes to that you are doomed, nobody will fair well in fire fights.” Really?? First, I absolutely in NO WAY advocate violence. I do not. But that said, who would you rather not make angry, someone with a 12 gauge shotgun in his hand or Robert’s Rules of Order? HAHA I know who my money is on. Doomed? Maybe so, but no one likes getting shot at; it can be a deterrent. One need only visit the war memorials in Northern France and Belgium to find examples of how European ideas of civility actually work–or go there if you want to be ‘foolish’. As I said,I certainly do NOT in any way advocate violence, but fear of ones potential enemies is a great motivator. The real problem with us Americans is we are anesthetized. We eat junk food and watch junk TV. We have a corpoarate media that hides the doings of people like Madoff and Stanford from public view–to say nothing about hiding what our politicians are up to. I watched a BBC interview of Ann Coulter today. She wilted and looked foolish. Coulter fell apart. It is embarassing to think that people actually BUY her books. Coulter imploded because the BBC interviewer asked her questions any REAL journalist SHOULD ask her. I wish we had more journalists like him on American TV. Little wonder the American media are a laughingstock among the international media. No, the American problem is not private firearms ownership; the problem is too many people know more about Angelina Jolie’s kids than how their members of Congress are voting. Then they go shopping at WalMart and wonder why jobs in this country are disappearing.

  14. CMS

    Elaine, Awesome work, as usual! Thanks for the great insights.

  15. Simon

    So, it seems, Rogers was right about the agricultural commodities boom? 🙂

  16. emsnews

    If I were in chaos, I know that the first thing I would do is join or start my own militia. I have some experience with that sort of thingie. The US military, of course, will devolve into a bunch of warlords. THIS HAPPENS TO ANY COUNTRY THAT FALLS APART. There is little loot up where I am and lots of hard work so I expect any looters to remain far, far away, of course.
    Nature of mountains. This is why the majority of ‘survivalists’ live in mountains.

  17. Simon

    It can get crowded with many survivalists coming to the same mountain!

  18. emsnews

    Rush hour with guns! 🙂

  19. PLovering

    Elaine, speaking as an old ridge-runner, one wants to be very friendly with the natives. Looters are not that far away.
    An alcohol still would come in handy. Many an old farmer fueled his farm with ethanol and bartered what was left over.
    New world currency exchange coming in 2010 based on commodities, mostly oil and gold. No monetary component. This is a Russian and Saudi initiative plus support from China, Japan, and Germany.
    Unless WWIII interferes, of course.

  20. Simon

    That already happens on highways on a daily basis….

  21. GM Gaskins

    Dear Gold Lovers,

    Rueters published an article today that I found interesting. I don’t have the link, but you can search for it. An official from the Indian government said that India has imported NO gold for the month of February. The reason is that nobody is buying it because prices are too high. In fact, the demand for selling is so high that Indiand are waiting in line, literally taking numbers, to SELL it. Gold lovers be very careful. Sometimes you can just feel the hurt. Remember the USO from last year. I sure do. CASH is KINGOLA.

    Take care all,


  22. Simon

    I find that when you feel the greed the most, is when you are about to feel the hurt
    Kind regards

  23. nah

    numbers are based on 10 as fingers i guess its ez… binary is based on multiplication period… data is based on 8… Hexidecimal is a alpha numeric representation of the data based system… it all is fairly ez to understand and has ‘points of understanding’… 10 is heartless… 0 is less than frugal and the first imaginary number… the rest is bullshit to explain planes of existance ‘most of which could be controversisial’… numbers are the writing of man… god knows were fools
    i sent you that email

  24. So the US military would turn into warlords,,,,, they have gunships and your militia has???
    Up here in Canada the drug gangs would take over, so automatics vs a few hunting guns.
    Same deal , just a false sense of security and a justification for a gun fancy.

  25. Simon

    It is better than sitting at home and doing nothing
    and it can work in certain situations (mountain, cave, etc)
    In cities I don’t fancy the spartan’s chances though

  26. David

    Citizen ownership of firearms serves several purposes.
    What citizen firearms ownership does not do, is give citizens the power to rebel against the government, especially our very well-armed one. US police and military have weapons you can hardly imagine. So, if you have armed rebellion in mind, forget it right now…if you even think about it you fall under anti-terrorism laws and could disappear forever without a trial.
    In such a case, a few hunting style and even semi-automatic, military style look alike weapons would be absolutely no match against a military takeover or even against determined law enforcement, both of which have automatic weapons, lots of ammo and explosive devices to use against opponents. Both have vastly superior weaponry and would simply annihilate anyone who resisted them. So mass armed rebellion by US citizens that will ever be a military success is completely out of the question for contemporary American citizens. If you want change, you will have to work in other, less violent ways to create change in our government. General strikes always get some attention.
    What citizen ownership of weapons might prevent is uncontrolled robbery, looting and murder during a societal and economic breakdown, until some form of legality and order can be restored. In such a breakdown (which I sense might possibly happen if people ever give up hope of government solving this crisis), there might very well be people roaming the streets and roads of America looking to temporarily take over your homeplace, live there until resources are exhausted, and then move on. If they organize into armed gangs, we single,unarmed individuals will be powerless to stop them.
    Already, in my area, I see empty police cars parked in parking lots, but with no cops are in sight…the economy…they are on short time…but are attempting to give the appearance of police protection. So too with Sheriff’s deputies…where the Black Maria police cruisers once whizzed up and down the roads, they are now sitting parked out in communities, watching the goings on…but not much movement…probably their fuel and personnel budgets have been cut as the tax base shrinks
    And as police protection dries up and military funding also, in a worst case scenario which I hope we never see here in the US, we might see a societal breakdown with roaming gangs of thieves or just plain beggars and hungry people roaming the roads and streets.
    This could evolve into a dangerous situation for some homeowners.
    Now, many of these poor people will be harmless and peaceful. If you give them food and temporary shelter, they will be eternally grateful and move on. However, we can be certain that there will also be others who make the decision to take what they want from those who have it by force.
    Reason does not usually work with people who have made a decision to rob their fellow man for sustenance…these folks have already made the decision that they will harm you if you don’t comply with their wishes, and because you have something,and they don’t, they might be somewhat angry at you already…so you are in danger.
    Now, as far as gun ownership is concerned, look alike semi auto AK-47s or M-16s are ok for protection, So are manually operated hunting rifles, but they’re expensive, and you have to carefully aim the things to hit anything. And most people are not trained like soldiers and police, so they are very poor marksmen. So too with pistols. You have to practice shooting to be able to hit anything with them. Pistols, however, are portable,and in dangerous times, they are great to keep with you at all times…just use a good holster and cover them with a shirt or jacket (illegal in many places without a special permit, but, at times, life preservation becomes more important than a legality if things do go South). Against a group of armed individuals, one pistol is at a disadvantage unless you are trained to use it.
    The very best weapon for personal protection in close encounter situations with single or multiple opponents, is a short barreled (18 inches is the shortest that is legal under harsh federal law), automatic or pump shotgun with the 3 shot plug removed or an extension tube attached…in 12 or 20 gauge with No.4 or No.2 or 00 buckshot.
    The reason I say this, is that in Vietnam, early in the war, M-16s were unreliable and jammed. So,many soldiers imported their own personal shotguns with buckshot…and some kept using them because they learned that a shotgun would take an enemy’s legs out from under him with one blast, but even with an M-16, you stood a chance of missing or only inflicting a minor wound that didn’t stop the enemy. Unless you are military or police trained, you will make all kinds of mistakes in a fearful, deadly situation, and you might get yourself killed.
    A shotgun is a point and shoot thing and the shot spreads in a pattern that will usually hit what you are shooting at,even if you are not an expert…and they are very deadly. Besides, they will impress the hell out of whoever you point the thing at. That big hole at the muzzle leaves little doubt that you mean business when you point it at someone.

    Now, I will say this. Threatening someone with deadly force is serious business and if you decide that you are in danger and point a gun at someone, be prepared to kill them because you just might provoke theme to take action against you, and then it will be too late for you to back down. So, it’s best not to point the weapon unless the situation demands it.
    I can use a gun. I was an expert rifleman in the army, and I grew up with guns. With a shotgun, I would take the opponent’s legs out, but I would not recommend this to a novice. A novice would do better, in a deadly situation to aim at the largest part of the body…this is how police train their officers too.
    I’m not telling anyone to go buy a gun… It’s a serious matter and a personal decision, and I hope we never need one to protect ourselves…and it has all kinds of risks involved…What are you going to do after you are forced kill the person??? How will you live with it? Will you be prosecuted?
    It’s a last resort action, not to be taken lightly.

    However, gun ownership can act as a deterrent to uncontrolled police where, like in Central America, they come and drag a person out in the middle of the night and kill them…if they know their is a lot of deadly danger involved in doing this, they think twice before each assassination.
    Mainly, however, when the citizens are armed, they have an option of resisting oppression whether it come from the established order or from roving gangs or from criminal individuals…
    Besides, guns can be used to kill animals for protein also.

    So owning a gun is serious business. And the things are worthless without a good supply of ammo. So if you buy one, buy a good supply of ammo too.


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  28. Paul S

    Look at what has and is happening in Iraq/Afghanistan/Pakistan. The US has a clear (and massive)firepower advantage, but to what effect? Yes the US inflicts terrible losses, but on innocent citizens of those countries. It is no proud feat or show of strength to bomb with a drone plane flying at 20,000 feet some poor Iraqi sitting in his home eating dinner with his family. Has the US been successful against the insurgency? No. If anything the insurgent movement is GAINING strength. I don’t think who has the bigger guns can accurately determine who wins in a conflict. The US dropped more bombs on Viet Nam than in WW2 and had a HUGE firepower advantage, but again to no effect. As far as the government enforcing some sort of military rule over the people and backing it up with their enormous firepower advantage, think of how they have ruined the banking industry. Or their foreign policy disasters such as Iran-Contra up to the present day. Our ruling elites are smug, arrogant and inbred. They aren’t even competent at being corrupt.

  29. criticalcontrarian

    Paul S: War is a racket. The more bombs you drop the more money the MIC boys make. A Mark 82 500lb. is $268.50 a pop. A Mark 84 2,000lb. is $3,100 a pop. Get the picture? They just look for any reason to drop these, and the defense contractors keep track of who is being naughtier than nice. The bad boys get cushy directorships with the defense contractors when they retire. Beaucoup bucks for the “patriots”. Too sad.

  30. criticalcontrarian

    David: shotguns are good defensive weapons (excellent for covering fire in an ambush situation) but a bit too-whom-it-may-concern, for my taste. Unless you are using slugs. You can mix load to get the best results. An opponent thinks he as good cover against your shotgun (lack of penetration), then you take him out with a slug or sabot round. Nasty piece of work that. But remember your loading order so you know when to make it count. 🙂

  31. emsnews

    In all collapses, the military does two things: either it takes over in lieu of civilian government or it disintegrates and the left overs are taken over by outsiders. Now, the disadvantage of our modern military is easy to spot: it is tremendously expensive, utterly spoiled and impossible to use without a very wealthy empire backing it up! Do note what happened to Russia: insurgencies using very small weapons were nearly impossible to stamp out. So the secret police under Putin were able to regroup and take back the power but they fought with much cheaper weapons systems than the US uses. See?
    Just like the Praetorian guard couldn’t fight the barbarians, a strong military is not made stronger by piling incredibly expensive weapons on top of it. Remember: our fathers were forced into ‘survivalist’ mode by WWII. They were not coddled and a lot of fighting was done in extreme conditions. Starting with Nam, we helicopter in and helicopter out after killing peasants and even worse, now the soldiers sit in temperature controlled environments far from the fighting, using assassin robots to kill wedding parties and funerals….killed a funeral procession this week, got the natives madder than hell.

  32. David

    Paul S:
    And these elites will have anyone killed who crosses them, and they will sleep like a baby the same night they order the extermination.
    They didn’t bat an eye when they ordered the Iraq invasion…and many in this administration voted for that invasion…they love war and war profiteering, and to many of them, ordinary people like you and I are mere gnats, to be swatted down and smashed if they get in the way of elites power plays. Just ask those who overrode the chain of command and misdirected atomic bombs intended for the middle east…most have been exterminated one by one until there will be no story to tell historians in the future…both officers and enlisted people involved have had many mysterious deadly accidents (there are power plays within power plays, I suspect).
    Yes, elites are smug,arrogant,inbred, and SECRETIVE…laughing smugly among themselves as they plot their moves. It’s as someone on the blog pointed out to me, like a large chess game for them…and they are having fun until they hit a losing streak like now.
    One way for us mere mortal peasants to resist them is to search for and expose the mechanisms of their manipulations and control as Elaine and others are doing. Then, citizens can counter their oppressive rule with strategic economic moves of their own.
    For example,every citizen in the US could be resisting imports and debt by not visiting Wal-Mart, but many are as yet too ignorant and brainwashed to even know that…When the nation’s educators and students can be brought on board in resistance to this secrecy and manipulation, then we will see movement…Elaine was right about revolutions depending upon educated students…they know how to plan, and how to organize, and they are young and full of spit and energy…and they will provoke change.
    Old dogs like myself are of little use except to complain and point out the workings of things to others.
    So, it’s up to those of us who’ve struggled to learn the workings of this situation to spread the word…talk to people you meet (especially young people), and keep doing it until you make an impact (and encourage people you meet to do the same)…that is worth a lot more that picking up some sort of weapon and storming the castle gates without any idea of what objective your are pursuing. If you go into battle without a strategic plan you are going definitely going to be defeated…just ask old Bushey Baby about that Iraq thingy he was messing around with with.
    Oh! It is interesting that you should mention Angela Jolie and her kids. Ironically, according to, she is a member of The Council of Foreign Relations (a breeding ground for future US elites)…,an interesting gal, like Sarah Palin, but a lot smarter, “purdy” to look at too….maybe a future president?

  33. David

    “In all collapses, the military does two things: either it takes over in lieu of civilian government or it disintegrates and the left overs are taken over by outsiders.”
    There are, according to a number of conspiracy theorists, some plans for the US military to establish martial law in case of a breakdown, and these same conspiracy theorists also claim that congress spent 385 million dollars revamping old military bases into camps to hold people in case this happens. If people were shipped off to camps inside the US, I suspect this would only galvanize people’s will to resist…And would military training keep US soldiers in line when they are ordered to kill and oppress their own countrymen. I recently heard that Marine DIs are asking their soldiers if they would have problem killing Americans if ordered to do so…..Don’t know if this is true or more conspiracy theory stuff…but if it were true, it’s scary.
    Such actions, I suspect would only increase resistance…if not active, then passive resistance…where systems were allowed to deteriorate, as in the old Soviet Union until nothing worked and everything stagnated.

    Yes, I must concede that you are right about might not necessarily winning the wars, General Giap used the ancient teachings of Sun Tzu, the Chines military writer to defeat the US in Vietnam. The only point I would object in a US scenario is that US citizens, especially young people are terribly soft and spoiled, and it would take some time for them to become hardened resistors. Of course the young toughen up quickly when stress is brought to bear.
    And, if the consensus among the masses is that government is no good, and that it is oppressing and killing people without just reason, then, there is a basis for general disorder. So, in such a case, any action by military or police might not be supported by the populace, and a situation like the resistance in Iraq or in Vietnam might develop…and these are difficult to control and snuff out with force. In Vietnam, most of the citizens supported the fight against us…and the few who didn’t soon were brought on board by pressure by neighbors who were in the resistance. So, what appeared to be a peaceful countryside, became a deadly battleground at night…and the US had no real allies there, and defeat was certain.
    Elaine, thinking through all of this is scary…It makes me realize just how fragile the contract between government and the people really is. We have one of the best contracts in the world, The US Constitution, but our leaders are ignoring their side of this contract, and I see problems ahead if this situation is not corrected in the near future.
    I don’t like to be an alarmist, talking about worst case scenarios, but I sure hope our leaders get on the ball and become open and honest in the near future…if not, we are in for some suffering on a large scale…whatever happens.

  34. GM Gaskins

    Dear Elaine,

    You are not insane. You are a gift to all of us who read you and I mean that.
    China is worried about the value of their assets, whether the fall arise from dollar devaluation or default. It seems to me we have put ourselves in a box by guaranteeing the debt. Remember, however, Paulson was not at all clear that GSE debt was “explicitly” guaranteed. I’d like to know the breakdown of China’s holdings between GSE paper and US Treasury debt. This could become an eventual sticking point. The Chinese knew GSE paper was only an implicit backing by the US taxpayer. Shouldn’t the Chinese recognize that maybe they made a bad investment and have to write it off, just like FNM and FRE are doing now?
    This is an obvious political problem. Should the US taxpayer be on the hook for a failed investment made by the Chinese government when it bought GSE paper? The treasury debt, as we know, is backed by the full faith of the US government. Could default occur? Yes. That is why we should stop issuing debt, let the system reset so that we can have a functioning economy for the next generations. Otherwise, we risk it all for very little current benefit except protection for the elite class. Elaine is right; we should be using government money to take care of our citizens in need.


  35. emsnews

    Napoleon had no trouble subduing his European neighbors who were rich countries. When he went into Spain and Russia, he encountered total hell. Especially, when he invaded Russia. And the poor in Russia gave him as much if not more trouble than the Czar’s armies. They actually made the retreat nearly impossible for Napoleon because they looted and harried his army as it fled.

  36. WNC Observer

    The USA presently has an all volunteer military. Mistreat the citizenry too badly, and the stream of volunteers dries up. They are having a hard enough time meeting recruiting goals as it is.

    So, go to a draft? Right. If there is one thing that is guaranteed to bring everyone of HS and college age (with considerable sympathy from quite a few older folks) out onto the streets, it is that.

    I am thinking that what we are seeing and are going to see is a gradual transformation of the US from a democratically governed republic into an authoritarian state that carefully and cleverly disguises itself by maintaining the outward appearances and trapping of democracy. We are already far down that pathway – far more than most people realize. We already know that our elections are a sham, and that what we really have is a crony capitalist banana republic – the best government that money can buy. Presently, the US government is clearly subordinate to the people with the money who are calling the tunes. I suspect that this will continue, but that the military will have to be more richly rewarded and brought increasingly into partnership in a less suborbinate capacity. I doubt that we will ever see someone in uniform being officially “in charge”, though I do suspect that eventually whoever the civilian might be who is put forward to the public as being officially “in charge” will say or do nothing contrary to what the military wants him to say or do. In other words, a puppet.

    We are already most of the way there. IMHO, the occupants of the White House have already been puppets, at least starting with Reagan. Carter was the last non-puppet; I suspect that he was deliberately set up to fail so that it would be easier to get puppets into the White House from then on. The puppeteers are very cleaver about how they do things. For example, they made a point of flattering GW Bush into making him think that he was “te Decider”, all the while manipulating him so that he would do exactly what they wanted him to do. The guy was uninformed and asked few questions, so it was the easiest thing in the world to do. Obama is a little smarter, but he is very young and green, and very much obligated to those who bought him through the $ billion+ in campaign donations he received; they just surrounded him with a clique of old reliable “advisors” to assure that Obama twitches in the direction that the strings are pulled.

    So far, the military has been content to simply be given lots of toys to play with, and will remain content as long as they can play with their toys overseas. When they are finally forced to disengage and withdraw from their overseas positions and re-focus on domestic “security”, the military brass will be wanting more of a say in how things are run as their price of continuing to prop up the money men who are the puppeteers.

  37. Pingback: Wealth In The Us | More More Pics

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