PRISON INDUSTRY STEALING U.S. JOBS

Editor's Note: Real unemployment is as high as %40

American Free Press
Keith Johnson

•With 8% unemployment, why are prisoners working while citizens aren’t?

By Keith Johnson

As if American businesses don’t have enough trouble competing with free traders, who exploit cheap labor in third world countries to make sizable profits, they are also fighting government-run corporations that pay prisoners pennies on the dollar to manufacture cheap goods and undercut private industry.

Is it any wonder that the United States has the highest rate of incarceration in the industrialized world? According to a recent report on cable news, the U.S. government is using federal prison inmates to steal business away from civilian manufacturers by producing comparable merchandise for pennies on the dollar.

At the very heart of this scheme is Federal Prison Industries, or Unicor, a U.S. government-owned corporation that employs 13K prisoners at slave wages to produce everything from windbreakers to solar panels. Although the agency is currently restricted to selling their products exclusively to the federal government, they still cut into a major slice of several industrial markets.

Michael Mansh, owner-operator of Ashland Sales and Service, a Pennsylvania apparel manufacturer that does contract work for the U.S. Air Force (USAF), recently spoke with this AMERICAN FREE PRESS reporter about the impact Unicor has on many small businesses.

“I make certain products, and [Unicor] makes the identical product,” said Mansh. “They get paid higher prices than commercial manufacturers even though their labor rates range somewhere between 23¢ and $1.15 per hour. They don’t pay workers compensation,they don’t pay taxes  and they don’t have to pay any of the benefits private enterprise has to pay—yet they get paid a higher price by Department of Defense than I do.”

In February, Mansh discovered that Unicor was close to stealing away his contract with the USAF, a move that would have forced him to close his plant in Olive Hill, Kentucky and lay off 100 workers. That month, he appeared on the television show Fox and Friends and made a desperate plea for help.

“We’re hopeful that this broadcast today will get the American people behind us and perhaps save these jobs,” Mansh told the show’s hosts.

Apparently, that paid off. According to Mansh, “24 hours later, Unicor decided not to offer on the solicitation to take [the contract] away. So from my standpoint, as a short-term event, we won a battle.”

However, Mansh stressed that the long-term battle is very far from over.

“Unicor continues to look for ways to take work away from domestic companies every chance they get,” he said.

Mansh added that it’s difficult for most companies to compete with Unicor because of existing U.S. government policy designating them as a mandatory source preference. “The Department of Defense and other federal agencies are obligated to buy from Unicor if they can provide a comparable product to one that is offered by a commercial manufacturer,” he explained. “The government basically has no choice but to buy the product from them.”

And although Unicor pays slave wages to the prisoners it employs, Mansh argued that none of those savings are passed along to the taxpayer.

“The taxpayer doesn’t get a benefit because Unicor sells the product at a comparable rate to commercial manufacturers,” he said.

When asked how Unicor justifies this, Mansh explained: “They say they are less efficient and it takes six to eight of their workers to do what one of ours does. Another argument they make is that it’s their job to be inefficient in order to employ the most inmates.”

Mansh doesn’t buy this argument.

“If their goal is to employ the most and be the least efficient, then why do they purchase state-of-the-art automated equipment that makes them even more efficient?” he asked. “It’s a complete reversal of what they’re saying.”

Although it may sound like Unicor is running a for-profit business, Mansh believes that the exorbitant prices they charge for products are absorbed by a bloated government bureaucracy and the usual wasteful spending that goes along with it.

“If private enterprise was given the $700M per year that is currently being done by inmates, they wouldn’t need to pay all those government salaries that are running the program,” said Mansh. “[Unicor] has about 6K employees who work in their clothing and textiles segment alone. That’s 6K jobs that would be created in this economy. With unemployment over 8% in this country, it’s disgraceful to me that we’d have prisoners, rather than citizen taxpayers, doing the work.”

A recently introduced bill, cosponsored by 28 lawmakers in the House of Representatives, aims to rein in Unicor’s advantage on government contracts.

When asked if he was optimistic about this move, Mansh conceded: “Do I take a positive view? The answer is, no. There has to be some sort of ground swell in this country. A few weeks ago there was some controversy because [American athletes were wearing] Olympic uniforms made in China. There was a huge outcry from Congress. . . . Somehow that same focus has to be put on this. We have federal inmates making products for our military and taking jobs from taxpayers. This isn’t right.”

——
Keith Johnson is an independent journalist and the editor of “Revolt of the Plebs,” an alternative news website. Keith is also a licensed private detective.

Study: Many Americans die with 'virtually no financial assets'

Phys
Peter Dizikes

It is a central worry of many Americans: not having enough money to live comfortably in old age. Now an innovative paper co-authored by an MIT economist shows that a large portion of America’s older population has very little savings in bank accounts, stocks and bonds, and dies “with virtually no financial assets” to their names.

Indeed, about 46 percent of senior citizens in the United States have less than $10,000 in financial assets when they die. Most of these people rely almost totally on Social Security payments as their only formal means of support, according to the newly published study, co-authored by James Poterba of MIT, Steven Venti of Dartmouth College, and David A. Wise of Harvard University. That means many seniors have almost no independent ability to withstand financial shocks, such as expensive medical treatments that may not be covered by Medicare or Medicaid, or other unexpected, costly events. “There are substantial groups that have basically no financial cushion as they are reaching their latest years,” says Poterba, the Mitsui Professor of Economics at MIT. However, the study — one of the first to examine Americans’ end-of-life finances — also reveals a diversity of outcomes among senior citizens. Between 1993 and 2008, it found, unmarried older individuals had median wealth of about $165,000 roughly a year before they died — a figure that includes current and future Social Security income, job-related pension benefits, home equity and financial assets. In the same period, the median wealth for continuously married senior citizens, roughly a year before they died, was more than $600,000. “There is a lot of divergence in how people are doing,” Poterba says. Those disparities also complicate the public-policy issues relating to the new findings. “One of the clear messages is that it is very hard to do a one-size-fits-all retirement policy,” Poterba says. “We need to recognize that, for example, if we were to substantially reduce Social Security benefits for those later in life, that there is a share of the elderly households for whom that would translate very directly into reduced income, because they seem to have accumulated little in the way of financial resources.”


The paper appears as a chapter in a book edited by Wise — “Investigations in the Economics of Aging” — newly published by the University of Chicago Press. The three pathways of retirement … While much attention has been paid to how much wealth people should aim to accumulate at the time of retirement, this study focuses on the evolution of that wealth during retirement, right up until death. The idea, as Poterba puts it, was “instead of looking at these people going into retirement, why don’t we try looking late in the game, and see how it all came out.” The research in question draws from data collected in the Health and Retirement Study (HRS), an ongoing survey that follows people throughout their retirement years, thus providing data on their wealth over time; it is sponsored by the National Institutes of Health and based at the University of Michigan. Poterba, Venti and Wise focused their study on people who were 70 and older in 1993, when the HRS began, and examined data running through 2008. This enabled them to track levels of wealth, prior to the participants’ deaths, over an extended period. People were surveyed every two years, which means that on average, those who passed away between 1993 and 2008 were last studied roughly one year before their deaths. The researchers identified three main “pathways,” running between the early years of retirement and death, for the households in the survey: those consisting of one person who remained single until death; married individuals who outlive their spouses and die single; and married individuals who die before their spouses. The three pathways tend to produce very different financial outcomes for the elderly. Married couples, for one thing, are better able to mitigate the financial burdens of old age. Among retirees in the study, 52 percent who were single had annual incomes of less than $20,000 and less than $10,000 in other financial assets; by contrast, just 36 percent of single people who started out in two-person households at retirement fell below those levels, and only 26 percent of people in two-person households fit that description.  “There really is a key distinction between what it looks like for the married [couples] and the singles,” says Poterba, who is also the current president of the National Bureau of Economic Research (NBER). The study also revealed a “strong correspondence” between wealth in 1993 and the length of time that people lived. That relationship held true across a variety of asset classes: People whose homes were worth more, who had larger retirement incomes, and who had more financial savings all tended to live longer than those who had fewer assets. While there is, Poterba observes, a “very active debate” among social scientists about the precise causal relationship between wealth and health, the study helps confirm, he notes, that “the patterns of health status in these years are quite persistent.” …

And at least two pathways for future research The paper, which Poterba presented at an NBER conference last week, has earned praise from other researchers. David Laibson, an economist at Harvard, calls it “a terrific paper, which should have a significant impact on our national conversation about savings adequacy.” Moreover, Laibson suggests that the replacement of defined-benefit retirement plans with 401(k) plans for many workers — investments that are subject to market fluctuations — means that the financial situation for some seniors “is likely to get even worse in the years ahead. … For many reasons, especially preretirement leakage and poor stock market returns, households are accumulating far too little wealth in their 401(k) plans.” For his part, Poterba agrees that this is an issue for further discussion, although he also notes that in the current study, many people “who end up in the bottom [tier] in terms of income when they are very old are folks who were probably not covered by defined-benefit plans during their working lives in any event.” Poterba also suggests that future research is needed to identify the mechanisms that financially struggling seniors use to pay for their needs late in life. “There may be other sources of support that are hard to track,” he says, citing informal help from family members as a way in which seniors likely supplement their incomes. Broadly, Poterba hopes that tracking the wealth of seniors as they move through retirement will add nuance to the policy dialogue.

“It’s a complicated problem,” he says. “Households that reach retirement differ widely in their financial circumstances, and that heterogeneity not only persists, but is accentuated as people go further into their retirement years.” The research was supported by a grant from the National Institute of Aging. Poterba serves as a trustee of the College Retirement Equity Fund and the TIAA-CREF mutual funds, which offer retirement savings products to consumers. Provided by Massachusetts Institute of Technology This story is republished courtesy of MIT News (web.mit.edu/newsoffice/), a popular site that covers news about MIT research, innovation and teaching.

Is Another Depression Possible?: A Comparison of "The Great Depression" and "The Great Recession"

Global Research
Devon DB

In 2007, the world became engulfed in the largest economic slump since the Great Depression. The crisis was so damaging it was coined “the Great Recession” and there was much comparison of the recession to the Great Depression of the 1930s in the mainstream media. However, what many failed to do was an in-depth analysis of both the Great Depression and the Great Recession, to compare and contrast to two. Thus, this article will be a comparison of both economic downfalls, ending in an analysis of the current economic situation America finds itself in and asking the question if another Great Depression is possible.

The decade prior to the 1930s, the US was in a time of great economic boom known as “The Roaring Twenties.” Yet while the nation’s income rose about 20% (from $74.3 billion in 1923 to $89 billion in 1929), the majority of this wealth went to the richest as can be seen by the fact that “in 1929 the top 0.1% of Americans had a combined income equal to the bottom 42%” [1] and that the disposable income per capita rose 9% from 1920 to 1929, while the top 1% enjoyed a massive 75% increase in per capita disposable income. This greatly increased wealth disparity and led to a imbalance in the US economy where demand wasn’t equal to supply and thus there was an oversupply of goods as “those [the poor and the middle class] whose needs were not satiated could not afford more, whereas the wealthy were satiated by spending only a small portion of their income,” [2] which caused the US to become reliant on three things to keep the economy afloat: credit sales, luxury spending, and investment by the rich. However, the major flaw of an economy based on credit sales, luxury spending, and investments was that all three of those activities depended upon people’s confidence in the economy. If confidence were to lower, then those activities would come to a halt and with it the US economy.

The massive inequality in wealth was not solely in terms of socioeconomic status, but also extended to corporations as well. During the first World War, the federal government subsidized farms in earnest as they wanted to feed not only Americans, but also Europeans. However, once the war ended, so did subsidies for farms. The government began to support the automobile and radio industries, with help from then-President Calvin Coolidge in the form of pressuring the Federal Reserve to keep easy credit, as to allow for both industries to easily be heavily invested in.

In the 1920s, the profits of the automobile and its connected industries such as lead, nickel, and steel skyrocketed, so much so, that by 1929 “a mere 200 corporations controlled approximately half of all corporate wealth.” [3] The automobile boom also led to the creation of hotels and motels which in turn led “Americans spent more than a $1 billion each year on the construction and maintenance of highways, and at least another $400 million annually for city streets” [4] in the 1920s. In addition to the massive success of the automobile industry, the radio industry also preformed exceptionally well as “Radio stations, electronic stores, and electricity companies all needed the radio to survive, and relied upon the constant growth of the radio market to expand and grow themselves.” [5]

This dependence on two main industries to support the entire US economy led to quite serious problems as in the case of depending on the spending habits of the upperclass to support the economy, if the expansion of either the radio or automobile industries slowed down or halted, the US economy would meet the same fate.

Still further, there was wealth inequality on the international banking scene. After World War 1, the Americans lent their “European allies $7 billion, and then another $3.3 billion by 1920” and by 1924 “the U.S. started lending to Axis Germany,” eventually “climbing to $900 million in 1924, and $1.25 billion in 1927 and 1928” [6] The Europeans then used the loans to buy US goods and thus were in no shape to pay back the loans. One must realize that after World War 1, virtually all of Europe was hit hard economically by the war and thus unable to make any goods with which to sell, yet the US played a role as well due to its high tariffs on imports, thus increasing the difficulty in which Europe could sell goods and pay off its debt.

Yet, the massive wealth inequalities domestically were not the only problems that led to the stock market crash, financial speculation was rampant also, which allowed corporations to make huge amounts of money. As long as stock prices continued to rise, the corporation itself became near-meaningless. “One such example is RCA corporation, whose stock price leapt from 85 to 420 during 1928, even though it had not yet paid a single dividend.” [7] This was a serious fundamental problem in the stock market as many forgot that if stock prices increase extremely quickly, a bubble is being created and sooner or later it will burst. This speculation greatly distorted the values of corporations. Usually, the stock price somewhat correlates with the performance of the company, but due to the rampant speculation, companies that were doing horribly could now seem as if they were great investments, all based on the increase in their stock price.

A factor that led to rampant speculation was the ability to buy stocks on margin, which allowed for one to buy stocks without actually having the money. Due to this, investors could potentially get extremely high returns on their investments. Buying stocks on margin was quite easy as the process

functioned much the same way as buying a car on credit. Using the example of [the RCA corporation], a Mr. John Doe could buy 1 share of the company by putting up $10 of his own, and borrowing $75 from his broker. If he sold the stock at $420 a year later he would have turned his original investment of just $10 into $341.25 ($420 minus the $75 and 5% interest owed to the broker). That makes a return of over 3400%! [8] (emphasis added)

This massive speculation led stock prices to incredibly high levels, with “the total of outstanding brokers' loans [being] over $7 billion” [9] by mid-1929.

The stock market bubble soon burst as on October 21, 1929, prices began to fall so rapidly that the ticker fell behind. Prices fell even further due to investors fears which led them to sell their shares. The speculation and wealth inequality caused a major undermining of the entire market which led to the wealthy ending their spending on luxury items and investing, as well as “[the] middle-class and poor stopped buying things with installment credit for fear of loosing their jobs, and not being able to pay the interest,” [10] and with it the US economy came to a griding halt. The lack of spending led to a nine percent decrease in industrial production from October to December 1929. This led to job losses, defaults on interest payments, and the destruction of the radio and automobile industries as inventory grew due to no one having the ability to purchase anything.

Internationally, loaning had already come to an abrupt halt earlier in the decade because “With such tremendous profits to be made in the stock market nobody wanted to make low interest loans” [11] and trade quickly ended as the US increased already high tariffs and foreigners quit purchasing US goods.

A topic that is rarely mentioned in regards to the Great Depression is the role of the Federal Reserve. The Fed played a major role in why investment purchases collapsed dramatically. The main problem was that in the onset of the Great Depression, there was rampant deflation. This was caused by the fact that the M1 money supply had reached a peak in 1929 and went downhill from there, yet the Fed didn’t see this. Instead, they saw “only the statistics on the monetary base, the currency in circulation plus the funds held as reserves by the banks with the twelve Federal Reserve Banks,” [12] which showed that the monetary base had been steadily increasing since about 1929. Thus, since the Fed saw that the money supply was increasing, they found no reason to act, when in reality, the M2 money supply was decreasing rapidly. However, in the late 1920s, the Fed acted to end speculative banking and wound up applying more restrictive monetary policies than thought. This resulted in banks closing en masse, which the Fed initially welcomed, yet this caused

the banks and the banking public [to become] alarmed. Some people withdrew their funds from the banks. The banks became worried about withdrawal of deposits and even runs on banks. The banks reacted by holding reserves in excess of what the Fed required. [13]

This massive withdrawal of funds emptied the coffers of banks, thus causing the aforementioned deflation. The Fed’s actions, along with the stock market crash, led to a 90% decrease in investment purchases, cutbacks in the labor force due to business not being able to sell anything, and a downturn in consumer spending.

Thus, due to a mixture of socio-economic and industrial wealth inequality, high tariffs on foreign imports, a stock market bubble, and poor economic management by the Federal Reserve, the United States descended into the Great Depression.

Initially, in the onset of the Depression, then-President Hoover decided against the government taking action to help individuals on the grounds that “if left alone the economy would right itself and argued that direct government assistance to individuals would weaken the moral fiber of the American people.” [14] However, when he was forced by Congress to intervene in the economy, Hoover focused his “spending [on stabilizing] the business community, believing that returning prosperity would eventually ‘trickle down’ to the poor majority,” [15] and thus began the first implementation of what would later be called in the ‘70s, “trickle-down economics.”

The public, being appalled by the lack of empathy from Hoover, voted Franklin D. Roosevelt (FDR) into office. Once in office, he began embarking on programs that would come to be known as “The New Deal.” However, this was not a deal concerned with easing the pain of the Depression on ordinary people, rather FDR “sought to save capitalism and the fundamental institutions of American society from the disaster of the Great Depression.” [16] While the popular view is that the New Deal was radically different from Hoover’s plan, in reality the two plans didn’t truly differ to much as while some social programs were implemented, overall FDR’s plan “tended toward a continuation of ‘trickle down’ policies, albeit better-funded and executed more creatively.” [17]

He never truly adopted Keynesian economics, which argued that the “government should use its massive financial power (taxing and spending) as a sort of ballast to stabilize the economy.” [18] This can be seen in the Agricultural Adjustment Act which paid farmers to produce less, however, this “did little for smaller farmers and led to the eviction and homelessness of tenants and sharecroppers whose landlords hardly needed their services under a system that paid them to grow less” [19], while also not addressing the main problem of the Depression: weak consumer spending. Overall, the Act benefited mainly moderate and large agriculture operations. Another example is the National Industrial Recovery Act. The National Industrial Recovery Act encouraged industries to avoid selling below cost to attract more customers, and while this was good for businesses in the short run, it “resulted in increased unemployment and an even smaller customer pool in the long-run.” [20] FDR’s overall goal, while he did aid in the creation of social programs such as Social Security and enacted many jobs programs, was to protect capitalism and the very institutions that led to the Great Depression.

Economic Collapse, Financial Manipulation and the Dollar Crisis

Global Research
Bob Chapman

The question plays out on three fronts. England quietly is immersed in its own financial problems, churning out their version of quantitative easing, as the US FOMC meeting rises in the distance for two days this time.

Will we get the twist? Of course we will. If we do not the bottom will fall out. That will signify the issuance of more funds plus what is needed to purchase some 80% of Treasury securities, or about another $850 billion.

It is no secret that the Fed, Bank of England, Bank of Japan and the Swiss national Banks are going to provide dollars to European banks that are the victims of American lenders who have pulled their funds out of Europe for fear of losing their investments. They are phasing out an orderly fashion. The commitments of these central banks are doing three things putting their citizens at more financial risk; driving inflation higher; aiding in the increase in gold prices and following a path they already know is doomed to failure. The players did not want a replay of the Lehman Affair of just three years ago, or the ongoing immediate consequences. Everyone wanted to look like they were in motion, that they were doing something about the problem. The underlying problem is that banks in Europe cannot issue much more debt or they will look like bigger fools than they already are. Due to the banks poor choices in the past these banks are on the edge of failure and were Greece to default they’d get closer to the edge. If all insolvent nations were to default these banks would all go under. Thus, we see another bank bailout engineered by the Fed and other central banks. As this new crisis unfolds the European and world economies are slowing down, which will compound problems.

Under the best of circumstances the European banks and sovereigns will lose half of their investments in Greek bonds and loans. We stated two years ago the 100% default is the only answer for Greece and the other five problem countries. The losses would then be $4 to $6 trillion. Not only are many European banks already insolvent, but also the future portends a bank wipeout. The banks did everything wrong expecting as always a taxpayer bailout. In addition in this process these banks assumed leverage of about 30% in an attempt to raise profits. If these banks do not go under they will be nationalized and again the public will be allowed to assume again the banker’s losses. This crisis already in motion is going to be worse than the one experienced three years ago and its mutating into an ongoing crisis, because no one is willing to purge the system. In the wings we see the ECB, which already has made an illegal foray into the bond market to purchase Italian and Spanish bonds. The big question there is who is going to pay for their purchases? We will find that out on September 29th when the German Bundestag votes on German participation. If they say no the European financial world will go upside down. If they vote yes we could see anarchy in Germany. As we have cited often European countries are a collection of different tribes that do not like to be forced into anything. At this juncture we are told by our sources that the funding bill will be passed. If not passed, we could see military action between Greece, Israel and Turkey, as a deliberate diversion to force European countries to fund Greece and other bailouts. When in doubt have another war.

The US Treasury Secretary Mr. Geithner managed to make a fool of himself in Poland, but did find support among other elitists regarding the regulation and full implementation of banking federalization. This supposedly is needed to mitigate the crisis and prevent future confusion, when in fact it is a move to remove the sovereignty of member states. The Fed, that endless source of swaps, money and credit, would supply recapitalization. Trillions of dollars can easily be conjured up for just about anything and especially to further a European Federal Reserve. The upshot of this move would be to give the ECB or another authority the ability to create money and credit at will, which is totally apposed by the Germans. In total they do not want anyone telling them what to do especially after the mess in part created by the ECB. This is a war the internationalists cannot win, but they will try anyway.

These attempts at centralization and federalization are not what the Germans want. They want something similar to the Bundesbank and they want direct control via representation. What has transpired is another bailout for Europe via the Fed, BoJ, BoE and the SNB. That certainly spells much more inflation as a consequence of this policy, which is something Germany is dead set against. The newest swap facility is for 45 days, so that the ECB would convince US and other money market funds and other large investors to repurchase the banks’, notes and bills of EU banks and government, of course with the aid and pressure of the Fed and the US Treasury. There were strong reasons for American lenders to pull out of euro zone short-term paper markets. It is called risk-reward. Higher yields are desperately needed by money managers, but not at the risk of losing capital. Just look at the correction in the US commercial paper market, nine-weeks of rising yields and plunging participation.

In fact, such policies are really a QE 3 in motion although concentrated on Europe. The absence of such backdoor financing had to make players realize that funds were needed quickly, because without them there would have been another European banking crisis that would have spread into the UK and US markets. The European economies are slowing down and in the absence of such a move the downside would have accelerated into a large recession or depression. The only way the Fed can operate such a swap would be with freshly minted money, because if they buy dollars in the Forex market they would drive the dollar higher and the euro lower and they do not want that to happen. The Fed is well aware that some European banks and sovereigns are insolvent, as is the US system and by using such policies they keep the whole structure functioning and buying valuable time. Default is on the way and all the players know that. They want to be sure it is an orderly default. The same is true of currencies. They want a big meeting where all currencies are revalued and devalued simultaneously and where multilateral defaults go smoothly. From a liquidity viewpoint European banks have bought 45 days to November 5th. We do not think that is enough time and that the swaps, QE 3, will be extended through the end of the year.

While this goes on the twist will take place in the US that is holding short-term rates static and deliberately lowering long-term rates by manipulating the markets. We are afraid that will cause upward pressure on short-term rates. The resultant lower rates are to encourage economic activity, investment, and revival in the real estate market. On the short end it is not going to happen. Rates will rise and bank leverage will be neutralized. All those months of riskless profits will end at least temporarily. Lower mortgage rates are fine, but suppressing long-term yields is a mistake. These moves are inflationary and we now see that an official CPI of plus 3.8%. Real inflation is 11.4%. They are the highest in two years and we predicted more than a year ago real inflation will match that of three years ago of 14%. We find it astounding that people are dumb enough to buy a 10-year note yielding 1.83% in an 11.4% inflationary environment and deliberately lose 9.4%. In 10-years almost all your purchasing power is gone. It is a small wonder that people are resorting to gold and silver coins, bullion and shares.

The bond market continues to reach ridiculous levels as the twist gets underway. During that process the dollar has rallied and the US 10-year note has begun trading at 1.83% yield. It is obvious that the Fed wants the 10 somewhere near 1%. That would put the 30-year fixed rate mortgage at 3% and perhaps lower. This move should boost official inflation from 3.8% to 5.5%, along with other factors to 5.5%. Unofficially that would put real inflation at 14%.

The higher bond levels have the Chinese all excited and they want to liquidate US Treasuries, but not dollars. That presents quite a problem for the Fed because worse yet they want to use those dollars to gobble up American assets, and securities. This demand has come at a most unfortunate juncture.

There is definitely fear among bankers and central bankers who have no choice but to throw monetary caution to the wind. Leading the pack believe it or not is the Swiss National Bank, that great recent devaluer of currency. Have they ever opened a can of worms? We wonder whether the Japanese will get the go ahead from the Fed, as a reward for supplying dollars to Europe, to further devalue its yen? We will just have to wait and see. Will 45 days be enough for Europe? Of course not, and neither will 90 days suffice. The slide of the European banking system won’t happen overnight. It will still take a year or two. The elitists will do everything possible to extend the process. You also have to take note regarding how fast the swap line was set up. Intervention is the name of the game, and everyone in the UK, US and Europe are in on it. All the professionals have to know this is not going to work, but no one is saying anything. A conspiracy of silence. No one wants to say it but fascist Keynesianism is a failure. This is the foundation for future economic life for the New World Order and it is falling apart at the seams. You might say it is the end product of centuries of fraud, deceit and the looting of each successive civilization. The personification of what has been and is the evil within society. The monstrosity the Illuminists have created is in the process of collapsing and rightly so.

Irrespective of how dollars are created they still make up about 60% of world Forex reserves and oil producers are forced to accept the dollar for oil in exchange for protection from the US and Britain. The dollars only challenge in a sea of fiat currencies is gold, which we believe has become again the world’s only real currency. What we see in Europe reminds us that the euro is a failed experiment. Trillions more dollars have been and will be created to keep the current system functioning and each time more dollars are created it strengthens the case for gold. Under current circumstances the dollar is not going to crash, although it will eventually. It still is the only viable paper world reserve currency, even though foreign central bank holdings have fallen from 72% to 60% in recent years. The closest competitor, the euro, can’t come close to challenging the dollar, only gold can.

In Europe September 29th is a big day. On that day the Bundestag will decide whether to approve another Greek bailout. Our sources say they will approve it, although anything could happen. If this crisis passes over the next three months there will be a rush to pass legislation to allow the ECB to issue bonds. Once accomplished that would give the ECB the money and credit creating powers of the Fed and that would allow the ECB to stretch the problem out over a number of years. These moves might solve the current liquidity crisis, but they won’t solve the solvency crisis. It is difficulty to tell how long this sort of bailout will go on and how difficult the problems will be. One thing is for sure inflation will rage and many nations will not want to subsidize others indefinitely. This will be especially true in smaller nations. The goal by the ruling EU in Brussels will be to totally control the entire 27 nations involved. Can this be accomplished? We do not know, but we do know it will be very difficult to accomplish.

While Mrs. Merkel, German Chancellor, sees nothing suggesting a recession in Germany, the government is maneuvering behind the backs of its citizens to give unlimited power to the EFSF, the European Financial Stability Facility, which is not a legitimate entity, to support the hopelessly bankrupt euro system at the expense of German taxpayers and the common good. This facility will strip Germany and all other participants of their sovereignty in its process of handling one facet of euro zone finance. The $500 billion in Swaps and the eventual bond issuance will guarantee much higher inflation. Europe’s present problems are going to make the 2008 Lehman episode look like a walk in the park. The pooling of the debt burden and a further easing of monetary policy threatens to weaken the institutional framework of the EU.

            German finance minister Wolfgang Schäuble, who resides in the back pocket of the bankers has proposed a doubling of funds to be made available to the bankrupt sovereigns of just over $1 trillion. On September 29th the banker’s idea is to have the Bundestag the EFSF carte blanche to carry out measures to save the euro, the insolvent countries and banks. If that were passed, all control passes to the EFSF and the ECB. We believe that most Germans and selective others are finally realizing that Brussels is the enemy.

            The passage of legislation by Germany, which in part has already been passed by the Bundesrat (Senate) would leave Germany with no more say on the use or increase in funding just to save the euro, Greece and the other five countries, which is an impossible task at a cost of $4 to $6 trillion. What the Bundestag does on 9/29/11 will dictate the future of Germany as an industrial and social nation far into the futures. Will it be enslavement to the EFSF or freedom to run its own affairs? This amounts to a coup d'état. Coming on the heels of abject failure to solve the economic problems of the insolvent six countries.

            What is happening in Europe, and particularly in Germany, is beyond belief - a plan to prop up the hopelessly bankrupt financial states through deregulation of the financial sector. If legislation allow all this to happen you could have revolution in Germany and other countries. It is a frightful situation.  

Income Inequality Ignorance

vU S middle class disappearing into abyss (12-May-11)(NWO SOCIETY series)