left right politics showbiz tech invest good life gossip fun hot
HuffingtonPost Hot Air Wonkette Variety Engadget Seeking Alpha Lifehacker TheSuperficial Daily Beast Drudge
Daily Kos Michelle Malkin Politico Billboard Boing Boing TheBigPicture Luxist TMZ.com Fark digg
ThinkProgress RightWingNews First Read CNN Showbiz Gizmodo FT Alphaville Joystiq Perez Hilton 4chan memorandum
Crooks+Liars Power Line CNN ticker E! Online Techcrunch InfectiousGrd Kotaku gamer Bastardly Post Secret Techmeme
TalkngPtsMemo Ameri..Thinker Swampland TV Guide Ars Technica 24/7 Wall St. TreeHugger Egotastic hascheezburgr tweetmeme
The Raw Story NewsBusters The Caucus Ent. News Mashable bloggingstocks Consumerist PinkIsTheNew dooce trends
Hullabaloo Wizbang fishbowlDC HlywdWiretap Google blog DealBook lifehack.org CelebrityBaby Someth'nAwful Megite
Atrios The Corner WashWhisprs DeadlnHllywd Read/Write Jeff Matthews 43folders GoFugYourself Neatorama PSFK
Firedoglake Big Hollywood The Fix MSN Ent. OReilly Radar PhilsStockWorld Autoblog Page Six Cool Hunter reddit.com
MyDD AndrewSullivan Capital Gains Rot'nTomatoes GigaOM Daily Rec'ng Deadspin BestWeekEver stereogum Timespop
Americablog AceOfSpades Open Secrets Cinematical ProBlogger Zero Hedge DownloadSqd Dlisted CuteOverload media eye
LiberalOasis Redstate WikiLeaks law Cool Tools Bespoke MediaZone PopSugar Dilbert blog TVNewser
SeeTheForest Jawa Report econ law.alltop Scobleizer BtwTheHedges Deviant ArtHollyw'dTuna gapingvoid BuzzMachine
TalkLeft Patterico EconLog Volokh Consp. Apple Blog Minyanville Gothamist x17online DailyGrail Gigaom
Feministing Townhall.com Freakonomics Legal Insurrec.. Valleywag Fast Money Curbed DailyBlabber Prof. Hex Steve Rubel
PolitAnimal OutsideBeltwy CrookedTimbr Conglomerate mozillaZine RealClearMkts FabSugar Gawker OvrheardinNY MediaBlgNRO
Truthdig Moonbattery MarginalRevo SportsLawBlog Smashing W$J Mktbeat Gridskipper Radar Last.fm Threat Level
AlternetPeek RealClearPoli crime W$J Law BlogTechdirt AbnormalRtrns Material Defamer kottke.org Seth's blog
Pandagon Instapundit CrimeblogsBalkinizationMAKE RandomRoger Sartorialist Jossip PumpkinChuckin mediamatters
Shakesville Hugh Hewitt AMW Credit Slips SrchEngLand Stock Advisors Drink'nMadeEasy Just Jared Maps Mania Newshounds
Sadly, No! RightwingNut CourtTV FindLaw VentureBeat Slope of Hope Mark Cuban Celebitchy CollegeHumor FAIR

Wednesday, August 24, 2011

Warning: "Uncle Sam" AKA the Rogue Highwayman is on the lose

Uncle Sam also known as the U.S. Government has become a thief

The U.S. Government is out of control. The U.S. Government, AKA "Uncle Sam" or the "Rogue Highwayman," is now robbing random citizens, who stumble on its broad pothole riddled bureaucratic boulevard. That once beautiful boulevard was known as Constitution Avenue. It has now become a dangerous and rundown toll road.

The Fifth Amendment states that “No person shall be… deprived of life, liberty, or property, without due process of law.” Sadly, this dear Constitutional right has been ambushed by bureaucratic assassins, who have shot and killed it, and buried it in an unmarked grave beside the road.

Due process and the presumption of innocence have also waylaid by these government raiders.

The Wall Street Journal recently reported on how the government now harbors a criminal enterprise in an article entitled, Federal Asset Seizures Rise, Netting Innocent With Guilty (subscription required).

That was followed up by a Wall Street Journal blog post: DOJ’s Expanding Power to Seize Assets Sparks Concerns. In this article Nathan Koppel writes:
The statistics are jarring.

There are now nearly 400 federal laws that empower the federal government to seize assets from convicted criminals as well as those never charged with crimes, a near-doubling of asset-seizure laws since the 1990s.

And last year, law enforcement seized more than $2.5 billion, a haul that has more than doubled over the last five years.

The Wall Street Journal cites these figures as a part of a deep dive today into the world of asset forfeiture, a federal power that critics on the left (the ACLU) and right (the Heritage Foundation) regard as a growing threat to innocent people...
Simon Black of the Sovereign Man blog also sounds the alarm:
According to Justice Department statistics, the total value of confiscated property exceeded $2.5 billion in 2010, more than double from five years ago. The average take per case? $166,000… and the vast majority of cases were non-criminal.

It’s truly staggering to think about how much can be taken away from you in the blink of an eye, all without any judicial oversight or right to a hearing.

The reason could be anything. Maybe you violated some arcane, meaningless regulation among the hundreds of thousands of pages of US Code (ignorance of the law is NOT an excuse!). Maybe you were at the wrong place at the wrong time. Or maybe they had no real reason at all other than mere suspicion.

One minute you have money, the next you’re completely locked out of your wealth and livelihood. They force YOU to prove to them that you aren’t guilty, but they take away any means you had to defend yourself.

Look, this is the new reality in America. The entire country has become a nation of criminals– there isn’t a single man, woman, or child alive who is not in violation of some obscure regulation or cannot be ‘suspected’ of wrongdoing.

This is really just a form of cannibalism– a government feeding on its own citizens...
Who can possibly stop these bureaucratic crooks, who hide in plain sight? Mr. Black's advice is to bail on the United States:
I’ve long advocated for an internationalization strategy: diversifying various assets and interests overseas so that no one single government has total control over your livelihood.

Store your gold in Switzerland. Open a bank account in Hong Kong. Register your company in the BVI. Establish a ‘backup’ residency in Chile. Expand your business in Brazil. Get a better job in Singapore. Obtain a second passport in Malta. Open a brokerage account in the Cayman Islands...
If you can't defend against the kleptocracy then Mr. Black's advice is simple: cut and run. You really have to hope it doesn't come to that. But, who can stand up to this growing army of faceless thieves?

More discussion:
Zero Hedge: Guest Post: US Government Asset Seizures On The Rise
Independent.org: As Government Revenues Fall, Asset Seizures Double
FreeRepublic: ...Big Government Tyranny Alert

related:
Wall Street Journal:  
As Criminal Laws Proliferate, More Are Ensnared --
Eddie Leroy Anderson of Craigmont, Idaho, is a retired logger, a former science teacher and now a federal criminal thanks to his arrowhead-collecting hobby...
OverCriminalized.com

Monday, August 22, 2011

Fed Secretly Loaned $1.2 Trillion to Bailout Wall Street

Power tends to corrupt, and absolute power corrupts absolutely...
Lord Acton
The following Bloomberg story is shocking, because it shows the absolute and secret power of the Federal Reserve and Ben Bernanke to do whatever they want to. The Congress, the President, and the American public have no control over the Fed. It can slip $1.2 trillion through secret financial cracks to whoever it wants. These secret liquidity lifelines from the Fed saved the jobs of tens of thousands of Wall Street bankers. Bankers who had spawned the very crisis they needed saving from. They should at least send a Christmas card to Ben Bernanke and the Federal Reserve for a very long time.

For example, at the same time Morgan Stanley was saying that it had "strong capital and liquidity positions" (at the end of September 2008) it was secretly borrowing over $107 billion from the Fed to keep the company from following Lehman Brothers into bankruptcy.

All these revelations beg the question: if the Fed could secretly lend $1.2 trillion to save hundreds of banks and financial institutions, why did they not lend a fraction of that at the beginning to save Lehman Brothers? That smaller action would have avoided the subsequent financial blood bath. The Fed is supposed to be the overseer of the financial markets, couldn't they see the dire consequences of letting Lehman fall?

This cabal of secret banker lords at the Federal Reserve will have to be toppled just like Muammar Gaddafi is being toppled today in Libya.

Bradley Keoun and Phil Kuntz / Bloomberg:
Wall Street Aristocracy Got $1.2T in Loans -- 
Citigroup Inc. and Bank of America Corp. were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits.

By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret...

Data gleaned from 29,346 pages of documents obtained under the Freedom of Information Act and from other Fed databases of more than 21,000 transactions make clear for the first time how deeply the world’s largest banks depended on the U.S. central bank to stave off cash shortfalls. Even as the firms asserted in news releases or earnings calls that they had ample cash, they drew Fed funding in secret, avoiding the stigma of weakness....
----
Two weeks after Lehman Brothers Holdings Inc.'s bankruptcy triggered a global credit crisis, Morgan Stanley countered concerns that it might be next to go by announcing it had 'strong capital and liquidity positions.'
-----
Morgan Stanley, along with Citigroup Inc., and Bank of America Corp., were the biggest borrowers under seven Fed emergency-lending programs. The three banks' combined $298.2 billion in hidden Fed loans was triple what they received in publicly disclosed bailouts from the U.S. Treasury.
-----
The Fed’s Secret Liquidity Lifelines
-----
discussion:

ZeroHedge:
Visualizing What $1.2 Trillion In Secret Fed Bailouts To The Banking Kleptocracy Looks Like

Joe Coscarelli / New York Magazine:
Wall Street Secretly Borrowed $1.2 Trillion From the Fed

Phil Villarreal / The Consumerist: 

John Hinderaker / Power Line:   

Reliapundit / THE ASTUTE BLOGGERS:  

Tdog / The Talking Dog:  
 
Captain Renault / Man Are We Screwed: 

Saturday, August 6, 2011

The Nixon Shock: Going off the Gold Standard... Forever

Roger Lowenstein at Bloomberg Business just wrote an interesting account of how Richard Nixon ended up taking the United States off the gold standard back in 1971.

Bloomberg Business:
The Nixon Shock -- How Nixon stopped backing the dollar with gold and changed global finance, a 40-year-old decision that still echoes in Greece, Ireland, and the U.S. ...

Lowenstein's conclusion:
The Nixon Shock was a central cause of the Great Inflation. It also spelled the end of the fixed relationships that had governed the financial universe. Previously, people took out mortgages for set periods and at fixed rates. They had virtually no options for saving money other than in banks, and the interest rates that banks could pay were capped. Floating currencies unleashed a new world of risk and instability. For the first time, investors could bet on the direction of interest rates or the Swiss franc. New financial instruments, new speculative tools, proliferated. The world gravitated from the certainties of Bretton Woods to the dizzying market cycles we’ve lived with since. Donald Kohn, who joined the Fed in 1970 and retired last year as vice-chairman, thinks Bretton Woods was doomed. But bankers have yet to find as rigorous a standard as gold. And they have become ever more apt to please politicians, deferring recessions at the risk of inflating asset bubbles...
The "dizzying market cycles" of the recent past are not going to be quelled by going back to the gold standard. The gold standard era is over for good. Gold is too scarce to support a new monetary standard. Instead it has become another currency on to itself, which offers a store of value.

related:

Wikipedia
Gold Standard --
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold...
Wikipedia:
Nixon Shock --
The Nixon Shock was a series of economic measures taken by U.S. President Richard Nixon in 1971 including unilaterally cancelling the direct convertibility of the United States dollar to gold that essentially ended the existing Bretton Woods system of international financial exchange...
Economist Paul Krugman summarized the post-Nixon Shock era as follows:
The current world monetary system assigns no special role to gold; indeed, the Federal Reserve is not obliged to tie the dollar to anything. It can print as much or as little money as it deems appropriate. There are powerful advantages to such an unconstrained system. Above all, the Fed is free to respond to actual or threatened recessions by pumping in money. To take only one example, that flexibility is the reason the stock market crash of 1987—which started out every bit as frightening as that of 1929—did not cause a slump in the real economy.

While a freely floating national money has advantages, however, it also has risks. For one thing, it can create uncertainties for international traders and investors. Over the past five years, the dollar has been worth as much as 120 yen and as little as 80. The costs of this volatility are hard to measure (partly because sophisticated financial markets allow businesses to hedge much of that risk), but they must be significant. Furthermore, a system that leaves monetary managers free to do good also leaves them free to be irresponsible—and, in some countries, they have been quick to take the opportunity.
-----
Naturally, the gold bugs would like to see us return to the gold standard. However, on July 14, 2011, former Fed Chairman Paul Volcker, dismissed the possibility of a return to the gold standard, saying that, among other things, "I don't think there's enough gold in the world."

That's the big problem: the supply of gold is simply not large enough and growing fast enough to support a world with 6.79 billion people, growing 1.14% a year. Gold production peaked at 2,600 tonnes in 2001. It has been sliding down since then, despite rising prices. A total of 165,000 tonnes of gold have been mined in human history, as of 2009. That works out to about 0.85 ounces of gold per person in the world. This quick calculation does not even subtract the gold that has been lost or used for industrial applications like catalytic converters. Also, for the sake of argument ignore all the gold that went into jewelry. So at today's price of gold ($1663.40), that works out to about $1,425 worth of gold that has been mined for every person on earth. Even if all that gold was in bullion form, that is clearly not enough "money" to run the world economy.

The other side of this argument is taken by Robert Murphy, who would like to see the U.S. go back on the gold standard. At the Ludwig von Mises Institute blog Murphy recently posted: Putting the Country Back on Gold. His conclusion proclaims: "Ludwig von Mises's proposal for a return to a gold standard is theoretically elegant and eminently practical." It's not. If you can decipher Ludwig's turgid writing it looks like his idea would violate Gresham's law:
when government compulsorily overvalues one money and undervalues another, the undervalued money (gold backed) will leave the country or disappear from circulation into hoards, while the overvalued money (non-gold backed) will flood into circulation...
The bottom line is that the world economies and their money supply will continue to be controlled by those who have been given the license to print money. Actually, we know from Modern Monetary Theory (MMT) that most money today is not printed, but simply created via computer credits. So how the U.S. manages its 'money computer' or the keeper of the credits will be one of the most hotly debated topics for a very long time.

If you want to get a get an understanding of how the modern money machine really works, it is recommended that you read Warren Mosler's, Seven Deadly Frauds of Economic Policy. It is an eye opening look at the world of fiat currency.
----
update:

The Trader's Crucible blog asks:
Would the China economic miracle been possible under a gold standard? --
What China did was to put vast amounts of people to work through massive government spending in a currency that had little or no value to the outside world. Even today, the Yuan/Renminbi isn’t freely exchangeable.

Could China have done what it did under a pure gold standard? I think not.

Friday, August 5, 2011

Killer Cops Convicted in New Orleans

Five police officers were convicted of shooting unarmed people post-Katrina in New Orleans.

CNN:
New Orleans cops convicted in post-Katrina shootings --
Five current or former police officers were found guilty Friday of deprivation of rights and other civil rights violations tied to fatal shootings on New Orleans' Danziger Bridge in the chaotic aftermath of Hurricane Katrina, federal prosecutors said.

Jurors reached a verdict after three days of deliberations

The shootings occurred on Danziger Bridge on September 4, 2005, six days after much of New Orleans went underwater after the powerful hurricane slammed into the Gulf Coast.

Prosecutors contended the officers opened fire, killing 17-year-old James Brissette. Minutes later, an officer shot and killed 40-year-old Ronald Madison, prosecutors said. Four others were wounded.

Kenneth Bowen, Robert Gisevius, Robert Faulcon and Anthony Villavasoare had been charged in the shootings along with a fifth defendant, former detective Arthur Kaufman...
------
This conviction shows that there is a small minority of really bad cops. In New Orleans the cop culture seems to have been especially rotten.


related:
NOLA.com:
Danziger Bridge jury form details charges against 5 guilty NOPD officers

Five current or former New Orleans police officers were convicted in the Danziger Bridge case. They are, from top left: Kenneth Bowen, Robert Faulcon, Robert Gisevius, Arthur Kaufman and Anthony Villavaso.

Monday, August 1, 2011

Brian Williams and Jimmy Fallon: Slow Jam Debt-Ceiling

Funny: Too much Caucus Blockus is bad.



via TheBigPicture

zero hedge

Calculated Risk

Mish's Global Economic Trend Analysis

Paul Krugman - NY Times

The Big Picture - Barry Ritholtz

naked capitalism - Yves Smith

Pragmatic Capitalism

Washington's Blog

Safe Haven

The Daily Capitalist

Paper Economy

The Daily Reckoning - Australia

GLOOM AND DOOM REPORT

Financial Sector and Stocks Analysis from Seeking Alpha

Gold / Oil

Loading...