IMF World Report Peers Into ZIRP Death Pit

ΩΩThere are all sorts of fairy dust solutions to the intractable problems caused by gross credit bubbles and a free for all pirate banking and trade system.  One really favorite fairy dust solution is to have free lending in a ZIRP system.  This really alarms me because the first nation to try this system was Japan and the result was 20+ years of depression in Japan.  The other fairy dust solution is to stop enforcing mortgage-related evictions.  This really kills real estate and destroys the value of any land holdings forever.

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ΩΩThe annual state of the world report has been issued by the IMF.  Silently, China has crept up into the territory held by the IMF which is to lend to former European colonies and thus, keep control over their economies so the ‘West’ could continue to dominate the planet.  All colonizations were launched in order to gain and control markets and after the disasters of WWI and WWII, Europe had to join with the new US international empire to control these colonies somehow and thus, maintain domestic markets and keep political power at home.

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ΩΩEven as Europe was totally trashed by Hitler and then half taken over by a mad Stalin, the IMF was created to give back the powers of imperial diktat while the military ability to enforce this was handed over entirely to the US.  This led directly to the US slogging though one colonialist morass after another such as in Southeast Asia.

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ΩΩToday, the IMF still acts as if it is the only lender for the third world but China is rapidly usurping this. The IMF decided recently to let China become a powerhouse within itself but this is quite revolutionary since these European, Japan and US powers are exactly the same powers that sought to rip apart and enslave China from 1800-Mao’s ascent to power.

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ΩΩThere is great unease in the IMF since they are no longer ‘one voice’ (ie: all empires that sought to crush the rest of humanity) and they know that the Dragon sitting at the same table has its own agenda and there are fears that this Dragon–Dragons have been notorious for this since humans first invented the concept of a ‘dragon’—will remember the recent past and take revenge.  Well, duh!  What on earth do we expect?

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ΩΩSo, here is some information from this long report with graphs, courtesy of the IMF.  And I will intersperse these graphs with stories from today’s news to illustrate how insane the ideology of the IMF is and why it will fail to turn back the tides of history.  And why the fairy dust solutions being peddled to desperate Americans and Europeans will not fix anything.  Hard work lies ahead and true sacrifices will have to be made, there is no easy out from our present trap!

 

http://www.imf.org/external/pubs/ft/weo/2010/02/pdf/text.pdf

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ΩΩFirst, gold has been winging ever higher as all the world’s top industrial powers fight with the US to keep up the value of the dollar and weaken their own currencies so they can export  more goods.  The US competes all over the world for market share so everyone has excellent reasons to insure we are the losers in every deal.  This is called ‘doing business’ and the US has been really childish about this obvious business.

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ΩΩGold is a declaration that this downward revision of all currencies against the dollar and the ZIRP banking system imposed on western savers who get nothing for parking their wealth in banks is leading towards a flight to gold.  This is a resounding ‘no confidence’ vote from savers.

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ΩΩOil is very unstable in price and even though it briefly fell during the start of the Japanese Great Depression, once China replaced Japan in world oil markets as a consumer, the price of oil shot back upwards again and is continuing to be expensive.  This hammers the US economy which imports much of its oil.  So long as oil is expensive, the US economy will flounder and our trade balance will worsen.

ΩΩIMF report on world economies:

The result is a recovery that is neither strong nor balanced and runs the risk of not being sustained. For the past year or so, inventory accumulation and fiscal stimulus were driving the recovery. The first is coming to an end. The second is slowly being phased out. Consumption and investment now have to take the lead. But in most advanced economies, weak consumption and investment, together with little improvement in net exports, are leading to low growth. Unemployment is high and barely decreasing. By contrast, in many emerging market economies, where excesses were limited and the scars are few, consumption, investment, and net exports are all contributing to strong growth, and output is once again close to potential.

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What can be done to improve things?

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First, and wherever private demand is weak, central banks should continue with accommodative monetary policy. However, one should be realistic. Not much more can be done, and one should not expect too much from further quantitative or credit easing. While there is no evidence yet that sustained low interest rates are leading to excessive risk tak- ing, should such risks materialize, they should be addressed through macroprudential measures, not through increases in policy rates.

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ΩΩOK: the IMF experts say NOTHING CAN BE DONE.  This is recognition of the nature of credit traps.  Knowledge that credit traps are very dangerous and once in, very hard to escape, has been known for centuries.  Literally, centuries, in some cases.  A rich country can turn into a desperately poor country in a flash.  History is a guide for these sorts of events so the only reason why the US and Europe fell into the exact same real estate/government spending trap as Japan and is using the same dumb ZIRP solution is due to arrogant irresponsibility on the part of the elites who refused to heed all sorts of obvious warning signs.

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ΩΩLet’s look at the prospects for growth:http://www.imf.org/external/pubs/ft/weo/2010/02/pdf/text.pdf

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ΩΩThe US simply regained the growth it lost in 2009.  We didn’t advance any over 2007.  This is…ZIRP growth during a year of ZIRP lending to the top bankers.  Corporations are still sitting on their cheap loans and not using these to grow anything.  Japan hasn’t regained its shrinkage so it is in very dire shape.  More about that later in today’s news.  Japan’s struggle to escape the real estate trap of the 1980’s continues and shows clearly that cheap lending can’t fix a grossly overinflated real estate bubble.

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ΩΩDean Baker: Currency Wars and Accounting Identities

This brings us back to the budget deficit part of the story. If the United States has a large trade deficit, then it means that net national savings are negative. That is definitional. For net national savings to be negative then we must have either negative private savings or negative public savings (i.e. a budget deficit)….The budget deficit follows from the fact that we have a trade deficit, which is in turn the result of the over-valued dollar. This brings us to the strangely paradoxical behavior of the Washington policy elite.

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Many of the same people who routinely express horror over the size of the budget deficit, were either on the sidelines or in actual opposition to the effort by Congress to get China to raise the value of its currency against the dollar. While one can argue as to whether the bill approved by the House was the best route to go, anyone who hopes to get the trade deficit down must recognize the need to lower the value of the dollar. And, if one wants to get the budget deficit down, then it is necessary to reduce the trade deficit.

 

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ΩΩThe US devalued the dollar extremely aggressively and repeatedly ever since Nixon suddenly terminated the gold peg to the dollar.  During the Great Depression, to help our trade and prevent imports, FDR devalued the dollar against our trade gold by nearly 50% in one fell swoop, thus worsening the depression in Europe and South America as well as angering Asia and especially Japan.

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ΩΩRevaluing the dollar won’t work since we don’t control everyone’s currency and the Bretton Woods accords that were hammered between us and the people we defeated in WWII and thus, occupied militarily, can’t be applied to nuclear armed nations we have no military control over.  We can’t unilaterally force them to revalue their currencies to suit us.  The traditional tool for trade controls was thrown aside very foolishly and today, Congress threatens to pick these tools up again and use them only we cannot do this without very dangerous consequences due to flooding the world with pieces of paper money we can’t honor if it all suddenly is used to buy things or pay off debts.

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ΩΩThe tradition of using inflation to rid a government of pesky debts won’t work if foreign powers hold US dollars hostage, too.  That is, if they release this suddenly, they will buy up world resources quickly while we flounder about, trying to print up money for ourselves.  This, in turn, will lead to a mad rush for commodities or land and once locked up in this fashion, the remaining paper money will plunge to worthlessness and the US will be unable to replace it with ‘new’ money and then go out and buy world resources.  It will be impossible since the new currency to buy in the world will be the yuan.

 

http://www.imf.org/external/pubs/ft/weo/2010/02/pdf/text.pdf

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ΩΩ

We see from the graphs here, the crisis in banking isn’t over at all.  It remains totally out of whack.  The above graph isn’t short term spreads, it is long term spreads showing a sense of panic that remains from the first bust.  The fact that the US is now toying with no evicting people who don’t honor their contracts means no contracts are enforceable and Iceland is now considering doing this!

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ΩΩThis is pure insanity.  This is the worst form of fairy dust: it is pure poison.  People who wanted to gamble in real estate, people who bought homes with no down payments, people who lied about their incomes, there are all sorts of people aside from those who simply lost their jobs who will try to get a free ride here.

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ΩΩEven if you have bad things happen, and I have had this happen whereby I lived with the family in a tent complex for ten years in a very cold climate, things happen.  But to execute an entire sector of the economy to fix a mess caused by too easy lending isn’t a solution.  It is suicide.

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ΩΩMany people who we think are ‘rich’ are actually very deep in debt.  This happens a lot to movie stars, sports heroes or celebrities.  A lot of people get a good income and then get inflated ideas as to how to live and strive to live like the Queen of England.  She lives off of fees and taxes.  She is being forced to squeeze herself lately due to  her country going off the economic cliff.  But the average faux-royals simply go bankrupt and wreck everything they touch.

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ΩΩThe US had many frauds running during the boom years.  These are now falling apart and thus, the illusion of wealth is vanishing for many investors suckered into Madoff-style schemes.  And the biggest, richest bankers all exist courtesy of the government bailing them out.  And they refuse to pay realistic taxes which should be about 90% of their grossly inflated incomes.  Of course, the IMF won’t say this.  This is why the reports from the IMF are so hilarious: the solutions all evolve on crushing the masses so they can pay up.

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ΩΩBut someone has to pay.  The US still isn’t ready to tax the very rich due to the demented need to tax everyone else heavily, first.  That is, the rich call the shots in DC.  The small revolts of the masses on the left or right seem hopelessly unable to cope with the power of the elites who pretty much control the media (only billionaires own the media) and thus, can defy gravity and prevent a realistic appraisal of who gets to pay for these bail outs (ie: the rich should be heavily taxed until the bail out money is restored).

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ΩΩBack to the issue of world trade and how banking and government policies affect us in many ways: http://www.imf.org/external/pubs/ft/weo/2010/02/pdf/text.pdf The nostrum being peddled by the media and bankers is, we have to have a very weak dollar and then magically, our trade deficit will melt like snow in Tibet.  Look at the graphs here, they show clearly that China has valued upwards the yuan and guess who is way below the US dollar in value?  The yen!  Up until the crash.  Then, the yen and dollar finally got some parity.

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ΩΩThis totally and royally pisses off the Japanese no end!  To the point, they openly cheated.  They decided to cease faking it and openly manipulated the currency to increase Japanese export profits from the US.  Even though the US media didn’t say a peep or push for Japan to be listed as a currency manipulator, this has led to secret yelling from the White House staff which led to this story today in Japan:  Noda Signals Japan to Avoid Large-Scale Intervention (Update1) – Bloomberg.com

 

Japan’s finance minister signaled that while his government is ready to sell yen in the market if needed, the country doesn’t intend to return to the long-term, large scale intervention campaigns of the past.

 

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“The intervention we conducted on Sept. 15 was to rein in excessive movements,” Yoshihiko Noda told reporters today in Tokyo before departing for a Washington meeting of Group of Seven finance authorities. “It has a different character from one seeking a certain level with large scale, long-term intervention.”...The Japanese finance minister’s remarks suggest that Japan’s current intervention strategy is aimed at stemming sharp moves rather than guiding the yen weaker, said economist Norio Miyagawa.

 

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“Japan is a member of the G-7 nations, so it’s difficult for it to take the stance of guiding its currency to a certain level,” said Miyagawa, senior economist at Mizuho Securities Research and Consulting Co. in Tokyo.

 

 

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ΩΩHahaha, what a very delicate way of pretending they were not frantically pushing down the value of the yen!!!  What this weasel is saying is, ‘We are not manipulating it like China, even though we are using the exact same tactics!’  Also, they are stopping ‘sharp moves’ which is, of course, the yen losing its depressed ZIRP advantage over the dollar!  The Japanese always love to pretend they are doing things in a special, Japanese way which isn’t like anyone else.  This is ridiculous and they know it but take advantage of stupid foreigners thinking Japan is different.

 

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ΩΩHere is why Japan is frantic:  August current account surplus down 5.8% › Japan Today: Japan News and Discussion

The balance of trade in goods and services posted a surplus of 101.0 billion yen, down 47.5%. In goods trade, the surplus dropped 35.2 percent to 195.9 billion yen. The value of exports climbed 16.5% to 4,931.6 billion yen for the ninth straight month of expansion, while imports grew 20.5% to 4,735.7 billion yen, rising for the eighth consecutive month. The deficit in services trade, which includes payments for transport and tourism, shrank by 15 billion yen from a year earlier to 94.9 billion yen.

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ΩΩImports from the US didn’t grow by 20%.  These are things growing that scare Japan: China’s exports to Japan are growing!  This is why Japan, for a year, joined the US in attacking China for having a FOREX holding bigger than Japan’s immense, gigantic US $ FOREX holdings!  HAHAHA.  Now, Japan is actually declaring war on the US dollar which means, making the dollar artificially stronger.

 

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ΩΩThe Europeans did notice Japan pulling these obvious tricks and are quite angry about this:  Trichet on ‘Battlefield’ Edge as Euro Climbs to $1.40 (Update2) – Bloomberg.com

 

With the Bank of Japan this week boosting its asset- purchase plan and the U.S. Federal Reserve mulling a similar shift, Trichet said yesterday that ECB policy makers are in the “same mood” as a month ago and for now remain committed to phasing out their unlimited lending program.

 

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That resolve propelled the euro to $1.40 for the first time since February and leaves it to shoulder the burden of what economists say is an international embrace of weaker exchange rates as nations try to boost exports. The price Trichet may have to pay is slower growth as Goldman Sachs Group Inc. and Credit Suisse Group AG warn the stronger currency is starting to hurt the European economy.

 

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“The ECB is standing at the edge of the battlefield and is happily allowing others to fire on it without any sign of self- defense,” said Klaus Baader, co-chief European economist at Societe Generale SA in London.

 

 

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ΩΩAnd what is this ‘battlefield’ anyway?  They are referring to TRADE.  Yes, trade is also war.  Trade is the preliminary setting of the stage for war.  The US imagines we have ‘peace’ with other nations but we gain this only by losing the trade wars across the board!  This ridiculous idea that we have to buy peace from 100 smaller nations by letting them ravage our own economic base is definitely a big fairy dust item.  And the fix, export more, was echoed by poor Obama who hasn’t the foggiest idea as to how trade works: expanding exports while expanding imports even faster doesn’t work.  Duh.

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ΩΩThe brake on US spending for imports is due to too much debt.  http://www.imf.org/external/pubs/ft/weo/2010/02/pdf/text.pdf

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ΩΩJapan’s population’s wealth creation is flat.  The US is now going flat, too.  Welcome to ZIRP lending!  Whoopee!  The UK is now declining after going very disastrously into debt.  On nearly al graphs, the US is matching Japan in critical ways that are very scary.  The graphs below show us how the EU and US are falling into the Japanese ZIRP trap:

 

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ΩΩHere is Bloomberg wondering why we aren’t getting filthy rich with our new ZIRP lending system:  Fed’s $2 Trillion May Buy Little Improvement in Jobs (Update1) – Bloomberg.com

The meager impact shows the conundrum U.S. central bankers face. Interest rates near zero have failed to produce the intended cycle of borrowing and spending among consumers and businesses. Unemployment hovering near a 26-year high, partly a symptom of weak demand, keeps downward pressure on prices, and further declines in inflation would raise borrowing costs in real terms, making credit more expensive.

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ΩΩEmployment in Japan is dreadful.  One third of the population is forced to work part-time!  Wages have fallen for two decades.  The people are very much poorer and now, as I said yesterday, their pitiful jobs are now being shut down entirely and shipped to cheaper labor countries.  I warned everyone about ZIRP banking and no one listens to me.  Worse, the fairy dust people want this desperately forever!  YIKES.  Talk about stupid.

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ΩΩThe Keynes people think government spending and money printing will bring healthy inflation. This works ONLY if you spend it all domestically.  This creates jobs and keeps factories humming.  But if this money is used to buy imports, it doesn’t work, DUH!  This obvious problem is never alluded to by people like Prof. Krugman, for example.  He is a huge pusher for government spending but on what?  More drones to blacken the skies of Afghanistan?  Or shall we pay people to shovel sand on Coney Island so they can buy Toyotas?  Either way, it won’t work if we don’t fix our trade problems, first.

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ΩΩJapan is squirming over the fact that China is playing better poker:  China Sold the Most Japanese Debt on Record in August (Update4) – Bloomberg.com

China sold a record amount of Japanese debt in August, snapping a seventh-straight month of purchases.

 

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China cut Japanese debt holdings by a net 2.02 trillion yen ($24.5 billion), the Ministry of Finance said today in Tokyo, the biggest monthly sale in data going back to 2005. The larger nation bought a record 735.2 billion yen of Japanese debt in May and 1.04 trillion yen of the securities the following two months.

 

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“Today’s ministry report suggests China had purchased yen- denominated assets not to diversify their foreign reserves but to temporarily escape from the unstable financial situation in Europe,” Yasunari Ueno, chief market economist at Mizuho Securities Co. in Tokyo, wrote in a report today.

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ΩΩHAHAHA….note this Japanese economist and his funny story line!  HAHAHA.  China sold this Japanese debt back to Japan when a desperate Bank of Japan decided to buy up government debts!  So, instead of buying new-minted debts, they had to also eat up a lot of Japanese debt sold to the Chinese.  This destabilizes the Bank of Japan even further since the Japanese government is very deep in debt compared to the GDP, it is the worst off of all first world nations in this regard!

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ΩΩMeanwhile, as Moody’s degrades everyone including warning Japan about their debts, China Rating May Be Raised by Moody’s; Stocks Gain (Update1) – Bloomberg.com.  HAHAHA.  Look, China is growing.  China has both an active industrial base as well as other virtues whereas both Japan and the US are exporting their industrial base!!!!  Simple to figure out, eh?

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ΩΩAnd what happens to bankrupt empires? Here is the most recent news from the sinking ships of the British Navy which once ruled the Seven Seas:  Navy to reduce to smallest size ever to save carriers – Telegraph.  Despite the US screaming at them, the conservatives in the UK are dumping nearly everything and resuming shrinking the British empire to the size of a bathtub navy.  That is, the days of glory are now gone for who knows how many centuries.

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ΩΩGreat navies vanishing usually are signs of imperial collapse.  When China ceased sailing in the early 1600’s, it was merely a matter of time as to when the empire would also cease sailing on land.  And eventually, did die.  Japan still has a navy and builds ships.  Unlike the US and UK which both destroyed their domestic civilian navies, Japan kept theirs.  This was very smart of them.

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ΩΩChina is madly building a navy which means the US and UK both yell at China as if China were cheating by doing the obvious next step for any strong empire!  HAHAHA.  The US has a very expensive navy which is riddled by graft and overruns as it is viewed mainly as a means for enriching various warlords here and abroad.  We pay for this by selling our national debts to China while not taxing the military/industrialists very heavily.  That is, tax the bastards at 90% and have these clowns pay for their navy.

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ΩΩIn 20 years, our navy will vanish, too.  We can’t pay for it and the rich don’t want to pay for it.  End of story.  End of empire.  Stupid, that.  But since when are humans smart?  More fairy dust, please!

sunset borger

 

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32 Comments

Filed under .money matters, Free Trade, gold

32 responses to “IMF World Report Peers Into ZIRP Death Pit

  1. Joseppi

    Elaine,
    Your piece was pure inspired financial poetry today.
    After the election the fairy dust will fall like a monsoon deluge.

  2. Shawntoh

    Pass the dust, I think I’m Bowie…

    ?

  3. Ah well, it was fun while lasted.

  4. adamm

    Excellent state of the world report. Obama should get you to write his next State of the Nation address.. hahahaha.

    Here is more REAL news…. on whats going on.

    IMF Article Predicts New World Order

    http://www.thedailybell.com/1425/IMF-Article-Predicts-New-World-Order.html

    Yes its the old order of the “eye of horus”, etc.
    Back to the middle ages?

  5. I don’t think the foreclosure moratorium is as dire as you paint it. By slowing the flood of houses to market, it should help prop up home prices. Also, it is not a permanent Jubilee, it is just a temporary injunction that will allow the home-occupiers greater leverage to negotiate for lower notes, ie., for principal reduction.

    It makes long-term sense to keep people in their homes and negotiate the note down 50%, rather than evict them and sell for a 75% loss, which is what they are currently doing (because they are cash constrained).

  6. DeVaul

    Here’s a graph that shows Elaine was right about the Chinese 50 year plan. According to her, they plan (or planned) for us to go bankrupt in 2020. The graph shows that after 2019, little to no government debt is due, i.e. the Chinese stopped buying our long term debts in 2009, and I strongly suspect that the spike in 10 year notes due in 2019 were actually bought by the Federal Reserve last year. So, China should be “out” of the US Treasury bond market by 2017 or 2018 completely. Here it is:

    http://www.silverbearcafe.com/private/10.10/horrifying.html

    I bet 90% of the long term debt is “US” debt and the short term debt is Chinese owned.

    Time is running out.

  7. Christian W

    There isn’t any sinister plans to scuttle the US needed by the Chinese. All China needs to do is to let the US to it’s own devices.

    Basically with leadership as criminal, corrupt, inept and self-serving as the current US leadership is, there is no need for China to act directly. Just let the fools do what fools do. Serve them rope if they ask for it and stay the hell out of their way.

  8. nah

    over entirely to the US. Led directly to the US slogging though one colonialist morass after another such as in Southeast Asia.
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    the world is full of poisoned clams… the chinese seek some ‘disenfranchised parity’, which dont make nothing right…. as for manufacturing being a ‘gold’ mine, well yeah thats right aint it obvious
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    really its some discussion regarding the fate of billions of folks on credit… seems like bullshit is if anything GAINING as a collateral position… the US is yet a Great nation with many things to yield within its boundaries… perhaps the notion of modern WTO law is as empty as the banks positions outside their boundaries
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    raw dude

  9. nah

    http://www.jpost.com/Israel/Article.aspx?id=190714
    Arab League agrees to give US one month to revive talks
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    Foreign ministers from the 22-member Arab League agreed Friday to give the United States another month to try to persuade Israel to renew the moratorium on West Bank settlement construction and keep Mideast peace talks from collapsing.
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    theres alot of oil in not pretending we are zionists… peace aint some summer meal supplied… let the Presidency find solemn honor in intent

  10. emsnews

    Geeze, where is the money coming from for building housing on Palestinian lands whereas our own market has finally ground to a total halt? Odd, isn’t it.

  11. nah

    http://www.reuters.com/article/idUSTRE69804T20101009
    Gunmen in Pakistan torch nearly 30 NATO fuel tankers
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    as i see it the ISI runs afghanistan… and the Taliban or whoever know it
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    quote – He said one of the paramilitary soldiers escorting the convoy was wounded.
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    that right 30 tankers…. and oil derivitives are INSAINELY expencive in afghanistan… THERES NO PIPELINE ITS ALL trucked in if we are lucky… what does oil cost FLOWN IN????
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    i would say its a fact the Pakistan security forces are terrorists… you be the judge

  12. nah

    cambodia anyone

  13. nah

    emsnews
    October 9, 2010 at 3:31 am

    Geeze, where is the money coming from for building housing on Palestinian lands whereas our own market has finally ground to a total halt? Odd, isn’t it.
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    excuses make for excellent bad math…. israel is a queen joined by bribe… nothing is important but the messiah save the nazis

  14. nah

    dow is at 11k???? expect inflation BUT with all the housing crisis….
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    i wouldn’t count on it
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    markets are a dream if participation is impossible… the inflation/deflation debate is alive and well… there are millions of ILLIQUID contracts ranging from 100k-2mil… and… illiquidity is no bargain… gold could go to $600 if dollars cant be traded or manipulated in high value assets… its up to the FED how many zillions of douche bags we need to think

  15. billibaldi

    To Nah, the Chinese seem to be building rail and pipelines all over the place, even apparently a Trans-Afghan pipeline, the ultimate in irony.

  16. CK

    China is paving the old silk road.

  17. NOTICE! $ devaluation is now known as a ‘currency war” w/ China as bad guy. Official Can gov policy via CBC.

  18. DeVaul

    If you are going to devalue the currency in order to pay off unpayable debts, then you need to find a scapegoat for all the people whose money will become worthless. The rich aristocrats who are not complete idiots have already shifted their hot money into things like gold, silver, platinum, oil, or whatever. China is doing the same thing.

    Today, I saw a headline that China will purchase 2.6 million tons of LNG from a French company (no price given). I cannot help but wonder why the French company would sell anything for dollars.

    I also saw a headline that Geitner demands the “IMF monitor other countries currencies, especially China’s”. Yes, China will be held up as the bad guy, which is bad for us and good for the Pentagon (they think they will get more money for “defense”).

    It looks like a great many rich people are going to lose their shirts. They have been in power so long that they cannot conceive of ceding power to another country that is not part of their club, so they will risk everything in order to hang on to their power over others.

    For rich people, that is what money really buys: “power”. Without power, most rich people would feel poor.

  19. bravo

    Elaine
    your last line summed it up perfectly
    when are humans smart

  20. Christian W

    “In 20 years, our navy will vanish, too. We can’t pay for it and the rich don’t want to pay for it. End of story. End of empire. Stupid, that.”

    Hehe, why should they pay for it? If you don’t have a navy you can’t go after them in their hideouts/luxury overseas mansions/fortresses :p

  21. zip

    someone states that the IRS in not an US agency. Is this real or nonsense?

    http://www.zerohedge.com/article/date-headline#comment-639452


    The Internal Revenue Service is not an agency of the United States government either. It is true that not only can it NOT be found in Title 31, but it is nowhere to be found in the entirety of Title 5 U.S.C.

    Congress THOUGHT it created it but it didn’t. Just look at the 1100 manual and it tells you so. Congress only created the Commissioner’s Office. He then hired the private collection agency people (IRS) and used them as the tax collectors. ..


    Where does our tax money go? When you send money to the IRS it first goes to a Federal Reserve Bank. From there it goes into the International Bank for Reconstruction and Development into what they call a Quad Zero account with a drawback fund from which the IRS refunds are distributed. (Title 22 section 286 United States Code) (31 CFR chapter 11, section 214.7)

    What is left is then transferred to the International Monetary Fund (United Nations Monetary and Financial Conference, July 22, 1944) this money is then loaned out to other countries around the world including the United States. They must then pay back these loans (with interest) to the Central Bankers, not the United States of America. …

  22. DeVaul

    Wow, Zip, if that is true, then no wonder Woodrow Wilson believed he had unwittingly destroyed his country. The more complicated the system, the more likely it is a complete scam and also the result of a small group of very rich conspirators.

    It is no different than the scams perpetrated by the Jews during the middle ages. Selling “get out of jail free” cards, forcing destitute farmers to give one tenth of everything they own to the local church/bishop/whatever in order to “save their souls”, forcing them to pay one third of their crops to the feudal lord for “protection”, and on and on and on. The few grew rich at the expense of the many.

    It is foolish to think that our country is not chock full of schemes to enrich the few at the expence of the many, as this is how all rich people become rich in the first place. A few hundred years from now, the schemes will be studied objectively by historians, but that hardly helps us, the current victims.

    As I said before, the only real way to avoid being fleeced by the rich is to not own anything they want. When the things they want become the very things necessary for survival, such as water, food, heat, your own children, etc., then you must be ready to pick up a weapon and put your life on the line if you want your family to survive.

    I am still methodically preparing for the day when I will receive no support from anyone but myself and maybe my family. I just ordered a water purification system to purify rainwater that I will collect off the roof in rain barrels for us to drink since the county government sold our water supply to a German lord. If the German lord comes and claims the rain belongs to him, I have an 1895 Chilean Mauser that will claim otherwise. It works as well as any modern rifle for a fraction of the cost, and it’s German-made — something his lordship might well consider.

    Today I saw that Social Security will not increase next year because “there is no inflation”. It is effectively frozen in place, and there will probably be no more increases. A very clever way to starve the elderly and disabled, but then, the rich pride themselves on being “clever”.

    There are a thousand ways to lie, but only one way to tell the truth, and right now the truth is that you can only really depend upon yourself — and you might fail.

    ΩΩΩΩΩΩΩΩΩΩΩ

    ELAINE: it was the Catholic Church that sold indulgences and tithed the peasants. They were the authors of these oppressions and they sucked up what should have been state revenues which is why kings had to always go on looting expeditions.

  23. Devaul , thank you for your fine response, i have nothing to add , so this, to allay the suspicion i might seem rude.

  24. Daliwood

    zip, the idea that the IRS is not a gov’t agency is one of those ideas beloved by the tin foil hat crowd when they’re not at a Tea Party rally, a book burning, or a birther convention. Read the reality:

    http://www.irs.gov/businesses/small/article/0,,id=106508,00.html

  25. zip

    @daliwood
    thanks

  26. Aussie

    @ zip and Daliwood

    Re: Read the reality: http://www.irs.gov/businesses/small/article/0,,id=106508,00.html

    The legal logic to justify seems indirect and convoluted citing precedents?

    Is it true the US Constitution forbids taxation as practiced by IRS?

    Hence the convoluted legal logic?

  27. if

    Three Horrifying Facts About the US Debt “Situation”
    The US will Default on its Debt

    … either that or experience hyperinflation. There is simply no other option. We can NEVER pay off our debts. To do so would require every US family to pay $31,000 a year for 75 years.

    Bear in mind, I’m completely ignoring the debt we took on with the nationalization of Fannie and Freddie, AIG, and the slew of other garbage we nationalized or shifted onto the Fed’s balance sheet. And yet we’re STILL talking about every US family making $31,000 in debt payments per year for 75 years to pay off our national debt.

    Obviously that ain’t going to happen.

    So default is in the cards. Either that or hyperinflation (which occurs when investors flee a currency). Either of these will be massively US Dollar negative and horrible for the quality of life in the US. But they’re our only options, so get ready.

    Good Investing!
    Graham Summers
    http://tinyurl.com/28tkvcb

  28. Wu Wei

    The IRS?!!? The IRS has no right to exist.

    Aaron Russo made a very interesting documentary on them: Freedom to Fascism.

    Sadly, he died shortly after making it………….

    WHAT A COINCIDENCE!

  29. emsnews

    The IRS was created to tax the top 10%: the very rich robber barons! Thanks to inflation and never, ever indexing the IRS tax to real inflation, it slowly sucked in more and more people until it taxed all of the workers from top to bottom. Now, it is being flattened so the rich pay the same rate as the poor which is totally wrong.

  30. DeVaul

    I work in a law library. Maybe I can find the exact law creating the IRS. If it is interesting at all, I can photocopy it and send it to Elaine for her to dissect.

  31. I love the article and all of the comments here. Enlight my vision. Thanks in advance

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