October 18, 2012
Weekly applications for U.S. unemployment benefits jumped 46,000 last week to a seasonally adjusted 388,000, the highest in four months. The increase represents a rebound from the previous week’s sharp drop. Both swings were largely due to technical factors.
The four-week average of applications, a less volatile measure, fell slightly to 365,500, the Labor Department said Thursday. That is a level consistent with modest hiring.
Last week, California reported a large drop in applications, pushing down the overall figure to the lowest since February 2008. This week, it reported a significant increase as it processed applications delayed from the previous week.
Financial Collapse 2013: The End of The Bretton Woods System
The financial crisis of 2008 was not an accident. Fraud and theft by banking elites was pre-planned, and the determination was made to allow it, and not prevent, nor prosecute those banking insiders who were guilty of doing it.
These actions are all part of a plan to bring an end to what remains of the Bretton Woods Financial System and replace it with a new financial system that gives even greater power to the banking elite.
U.S. to Get Downgraded Amid Fiscal ‘Theater,’ Pimco Says
October 18, 2012
The sovereign credit rating of the U.S. will be cut as “fiscal theater” plays out in the world’s biggest economy, according to Pacific Investment Management Co., which runs the world’s largest bond fund.
“The U.S. will get downgraded, it’s a question of when,” Scott Mather, Pimco’s head of global portfolio management, said today in Wellington. “It depends on what the end of the year looks like, but it could be fairly soon after that.”
The Congressional Budget Office has warned the U.S. economy will fall into recession if $600 billion of government spending cuts and tax increases take place at the start of 2013. Financial markets are complacent about whether the White House and Congress will reach agreement on deferring the so-called fiscal drag on the economy until later next year, Mather said.
In a “base case” of President Barack Obama being re- elected and Congress becoming more Republican, there is a high likelihood an agreement “doesn’t happen in a nice way, and we have disruption in the marketplace,” he said.
Welfare government’s single largest budget item in FY 2011 at approx. $1.03 trillion
October 128, 2012
The government spent approximately $1.03 trillion on 83 means-tested federal welfare programs in fiscal year 2011 alone — a price tag that makes welfare that year the government’s largest expenditure, according to new data released by the Republican side of the Senate Budget Committee.
The total sum taxpayers spent on federal welfare programs was derived from a new Congressional Research Service (CRS) report on federal welfare spending — which topped out at $745.84 billion for fiscal year 2011 — combined with an analysis from the Republican Senate Budget Committee staff of state spending on federal welfare programs (based on “The Oxford Handbook of State and Local Government Finance”), which reached $282.7 billion in fiscal year 2011.
The data excludes spending on Social Security, Medicare, means-tested health care for veterans without service-connected disabilities, and the means-tested veterans pension program.
Our Greek Tragedy
October 17, 2012
Regardless of who the President is after this close election, the equity markets and the U.S. economy are in trouble. Debt has spread throughout the Western world. The fallout is political dissonance, growing economic hardship and, in some places, mob violence.
Ground zero for the spreading fear and panic is Greece, which was once the world’s greatest civilization and the birthplace of democracy, poetry and philosophy.
There is violent evidence of the contradiction from what the ancients taught and what is unraveling in Greece. It would all just be another boring story at the end of the news day, except there is brewing tragedy that Homer would find worthy of telling: The greatest Nation on Earth, the United States, may be a few short years or months from the economic debt collapse that wreaked havoc from Athens, Greece, to Akron, Ohio.
How to Waste a Trillion Dollars
What America could have had for the cost of Lockheed Martin’s F-35.
Tony Cartalucci, Contributor
Already possessing the largest, most advanced air force and air defense capability on the planet, the United States has recently developed at the cost of 323 billion dollars, the F-35 Joint Strike Fighter (JSF) produced by Lockheed Martin. It is the most expensive defense program in human history. The US plans to buy a total of 2,443 of these aircraft, utilize them for approximately 50 years at the total program cost of 1.5 trillion dollars. The Pentagon has already begun a public relations campaign to endear Americans to this latest unnecessary waste of trillions of taxpayer dollars.
Image: For the cost of bombing third world nations for another half-century with the astronomically expensive F-35 program, the US could have permanently colonized the planet Mars, and still had hundreds of millions to subsidize healthcare and education back on Earth. The corporate-financiers of the Fortune 500 and the military-industrial complex have run roughshod over America’s destiny, irrevocably staining our generation’s page in history.
The United States has never fought a major air battle over its continental territory, and for good reason. It is separated by oceans and allies on all sides from any potential enemy, and possesses more than adequate air defense capabilities along with the largest navy on Earth protecting the water and air along its coasts. The F-35 was not built to protect the United States. It was built to protect “American interests,” or in other words, take and hold what belongs to others.
This includes operations like those against Iraq, Afghanistan, Libya, and possibly in the near future, Syria, Iran, and beyond – wars all admittedly fought to advance corporate-financier and geopolitical interests, not for self-defense.
The total estimated costs of America’s last 3 imperial adventures include 3.7 trillion dollars for the invasions and occupations of Iraq and Afghanistan, and around 900 million for the bombardment of Libya, not counting the cost of 30 years of covert operations to instigate the violence that finally led to military intervention.
What can be bought for the sort of money needed for planes we don’t need, to fight unnecessary wars we should never fight?
What Trillions Can Buy
For the cost of the most expensive defense program in human history, we could have funded several manned missions to Mars – or essentially – permanently colonize another planet. So for the cost of jets that will, for 50 years, be used to bomb third world nations into submission, we could have funded the greatest achievement ever in human history.
Colonizing Mars and making humanity multi-planetary would be akin to evolutionary leaps, such as life emerging from the oceans, or human consciousness, says SpaceX founder Elon Musk, whose company has developed and successfully launched rockets now resupplying the International Space Station, before Lockheed with billions of taxpayer dollars managed to test a single rocket in its Orion program.
Video: Elon Musk, founder of SpaceX, explains the importance and significance of making human life “multi-planetary.”
Even by the highest estimates, the cost of a manned mission to Mars, which would include shipping habitats and a power station ahead of astronauts in stages, would fall well short of the F-35′s 1 trillion dollar price tag. The benefits to Americans, not to mention humanity, would greatly dwarf whatever “achievements” the F-35 may accomplish in its 50-year operational lifespan. The landing and permanent settlement by humans on Mars would echo through the ages, open up an entire planet to development and exploration, and serve as a springboard for projecting human civilization yet further.
Video: Details of Robert Zubrin’s “Mars Direct” mission, proposed as a viable means of both initially landing on Mars, and subsequently colonizing it. The mission could be accomplished well under the cost of corporate-financier driven defense programs and the trillion-dollar wars of hegemony they are developed to fight.
And for the cost of of Lockheed Martin’s F-35, not only could humanity permanently colonize Mars, but there would be hundreds of millions left over to subsidize whatever programs skeptics might claim are being neglected on Earth to fund space exploration, such as healthcare and education. The F-35 program truly is amongst the biggest wastes of money in human history, an unforgivable crime against humanity, as are the conflicts it will enable Western corporate-financier interests to fight, well into the 21st century.
Derivative Meltdown and Dollar Collapse
By James Hall
October 17, 2012
The frightening prospects from a derivative meltdown, well known for years, seem to deepen with every measure to prop up a failing international financial system.
The essay Greed is Good, but Derivatives are Better, characterizes the gamble game in this fashion:
“The elegance of derivatives is that the rules that defy nature are not involved in intangible swaps.
The basic value in the payment from the risk is always dumped on the back of the taxpayer. Ponzi schemes are legal when government croupiers spin loaded balls on their fudged roulette tables.”
Under conventional international trading settlement, the world reserve currency is the Dollar. The loss of confidence in the Federal Reserve System causes a corresponding decline in value in U. S Treasury obligations.
Add into this risk equation, derivative instruments that are deadly threats that can well destroy national currencies.
One such response to this unchecked danger can be found in a Bloomberg Businessweek perceptive article, A Shortage of Bonds to Back Derivatives Bets, makes a stark forecast.
“Starting next year, new rules will force banks, hedge funds, and other traders to back up more of their bets in the $648 trillion derivatives market by posting collateral.
While the rules are designed to prevent another financial meltdown, a shortage of Treasury bonds and other top-rated debt to use as collateral may undermine the effort to make the system safer.”
However, what happens when buyers of Treasury notes abandon the reoccurring cycle of rollover debt and stop buying new T-Bonds?
Take the Chinese example as a template for things to come. China’s yuan hits record high amid US pressure, “The Yuan touched an intraday high of nearly 6.2640 to $1.0, according to the China Foreign Exchange Trade System, marking the highest level since 1994 when the country launched its modern foreign exchange market.”
While it is old news that the Dollar consistently drops in purchasing power, the circumvention of typical trade agreements, that by-pass transitions using the Dollar as the currency of exchange, is relatively recent.
The next report forewarns of a major departure from the post Bretton Woods global trade environment.
China And Japan Move Away From Dollar, Will Conduct Bilateral Trade Using Own Currencies, is one method to avoid the direct consequences of a derivative meltdown.
“The China Foreign Exchange Trade System, the division of the People’s Bank of China which manages currency trading, said that the country will set a daily trading rate based on a weighted average of prices given by market makers.
The People’s Bank said on Tuesday that an initial trading rate would be set at 7.9480 Yuan for every 100 Yen at market in Shanghai.
Unlike yuan-dollar trading, which only allows for a daily fluctuation of 1 percent in Yuan trading value, Yuan trading with the Yen will be able to move within a 3 percent range.”
Timing of a Dollar reputation is almost impossible to pinpoint with precise market foreknowledge. Yet the inevitability that The Dollar is Doomed, refers to the insight of “Hans F. Sennholz in his essay - Saving the Dollar from Destruction - we are presented with a bleak financial future. Even under optimum conditions, the alternatives are not pleasant. Now let’s ask the 64,000 dollar question. What will happen when interest rates start to rise?”
The economic havoc, with the rise in interest rates, will greatly disrupt existing worldwide trade agreements and practices. In the article How The U.S. Dollar Will Be Replaced, Brandon Smith addresses the pragmatic measures undertaken by major trade partners to protect their domestic economies from a Dollar freefall.
“To those people who consistently claim that the dollar will never be dropped, my response is, it already has been dropped!
China, in tandem with other BRIC nations, has been covertly removing the greenback as the primary trade unit through bilateral deals since 2010.
First with Russia, and now with the whole of the ASEAN trading bloc and numerous other markets, including Japan. China in particular has been preparing for this eventuality since 2005, when they introduced the first Yuan denominated bonds.
The bonds were considered a strange novelty back then, especially because China had so much surplus savings that it seemed outlandish for them to take on treasury debt.
Today, the move makes a whole lot more sense. China and the BRIC nations today openly call for a worldwide shift away from the dollar:”
“Dagong Global, a fledgling Chinese rating agency, degraded the U.S. treasury bonds late last year, yet its move was met then with a sense of arrogance and cynicism from some Western commentators.
Now S&P has proved what its Chinese counterpart has done is nothing but telling the global investors the ugly truth.”
The derivatives time bomb lingers over every financial market on the planet. Reforms cannot remove excess and greed, from risk management fiscal contracts.
When the largest foreign trading partners look to insulate their transactions from an unstable Dollar currency, the panic has already begun.
It should be self-evident that additional U.S. Treasury bailouts with unlimited Federal Reserve claims against every asset of collateral that can be attached, is obscene in its nature.
Hedging is equivalent to reassigning betting risk to unfunded insurance underwriters that would never be able to pay off the claim. Governments are broke by almost any financial standard. Central banksters accumulate titles to real property and assets by hook or crook.
Nation states held hostage to financial manipulation are slaves to the central banks. With the demise of the Dollar, the fake debt obligations of the United States must be repudiated.
Foreign states are prepared to sever their links to the Dollar reserve currency, by trading directly in the domestic currencies of other countries.
Interacting commerce in Dollars with American companies will continue, but the yoke of Federal Reserve Notes legal tender will be rejected when the derivative meltdown explodes.
James Hall is a contributor to theintelhub.com
Government Spending: $27 Million for Moroccan Pottery Classes? Over $500 Billion for Defense?
By Alec Scheer
October 16, 2012
Contributed by WeAre1776.org
He reveals that $19 billion is spent on outlandish projects and programs.
The following is a list of points extracted from the book:
- Though skeptics say there’s no such thing as a free cellphone or service funded by the federal government, Coburn’s report shows otherwise.
It estimates that taxpayers are subsidizing phone service at a cost of nearly $1.5 billion a year.
Though the roots of the program can be traced back to an effort in the 1930s to make sure all Americans had access to telecommunications, it has morphed into program that provided free cell service to some 16,500,000 participants last year.
- A $325,000 grant for the development of “Robosquirrel” – a robotic rodent designed to test the interaction between rattlesnakes and squirrels.
- Moroccan pottery classes – (U.S. Agency for International Development) $27 million.
- Out-of-this-world Martian food tasting – (HI) $947,000.
- U.S. Iraqi police training program burns through hundreds of millions of dollars, crashes in flames – (Department of State) $400.2 million.
If that is not enough, defense spending is over a $100 billion dollars a year. According to a White House Office of Management and Budget fact sheet the 2012 fiscal year request from the Department of Defense was $553 billion.
The 2011 fiscal year request was $549.1 billion and the 2010 fiscal year request was $530.8 billion.
So, not only are we spending $27 million for Moroccan pottery classes, but we are spending over $500 billion a year on Department of Defense ventures.
Wouldn’t you agree it is time to seriously reevaluate our federal budget?
We do not need to be all over the world engaging in other nation’s affairs. As Ron Paul would say, “We need to stop being the policeman of the world.”
We definitely don’t need to be spending such astronomical amounts on Moroccan pottery classes. In fact, we shouldn’t be spending money on trivial programs.
Budget Deficit Tops $1 Trillion for Fourth Straight Year
October 13, 2012
The United States government reported a budget surplus for the final month of the 2012 fiscal year, but the tiny bump in revenues did not prevent the country’s deficit from exceeding $1 trillion for the fourth year in a row.
The 2012 budget gap was $1.089 trillion, narrower than last year’s deficit of $1.297 trillion because of higher corporate income tax receipts and less spending, the Treasury Department said on Friday.
The deficit equaled 7.0 percent of U.S. economic output, down from 8.7 percent last year, the department said. Economists generally consider deficits exceeding 3.0 percent of gross domestic product to be unsustainable in the long term.
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