giovedì 11 agosto 2011

The Dollar is Dying - And the Fed Is Killing It

News stories related to the World Bank and IMF

A selection of news stories related to the World Bank and IMF, brought to you by the Bretton Woods Project:

World Bank unmoved as allegations build around official
IPS, 9 August 2011

French court to investigate IMF head Lagarde for abuse of authority
France 24, 4 August 2011



By: Devvy
August 11, 2011

The usual noise is filling the boob tube and Internet about "creating jobs." There is no shortage of criticism by GOP presidential hopefuls blaming the Red in the White House for not creating more jobs. A cacophony of political horse crap. Job creation in a free market economy is done by the private sector, not by a president. It is not the job of the General Government to create jobs, either.

Prior to 1994, Americans were employed in good paying jobs with long term job security. Then came NAFTA, CAFTA, GATT/WTO and many more trade treaties that have killed more than 8 MILLION good paying jobs in our most important job sectors: industrial, manufacturing, agriculture. How many columns have I written on this since 1995 in my old newsletter and then on the Internet? Too many to even remember. When I ran for Congress in '94 & '96, I focused on getting rid of the privately owned "Federal" Reserve sucking the life blood of this country, getting rid of the unnecessary "federal" income tax, getting the US out of the communist UN and getting us out of the aforementioned treaties because millions of us knew what was going to happen:

Massive unemployment and America turning into a service oriented economy which would doom our nation into becoming dependent on foreign countries for things like steel, food and clothing.

I allegedly was not elected even though three weeks before the election in '96, I was only 5 -7 percentage points behind the forever-on-the-public-payroll, dullard, Rep. "Waffle" Wally Herger who voted for those treaties. One minute after the polls closed in California, I allegedly lost 84-14 in all ten counties in the district. Game, set, vote fraud. Electronic voting machines kept another ten candidates like myself who pledged to get us out of those treaties - all defeated in California.

My heart truly breaks for the destruction I have seen with my own eyes driving from Colorado to DC and Sacramento to DC. Rural America gutted. Cities and towns became nothing more than gas and potato chip stops while the jobs went to communist China. I also traveled through southern states that used to supply 90% of everything Americans wore on their body. Prior to NAFTA, 93% of all shoes were manufactured here in the U.S. by Americans with materials made or grown here in America. Today, that number is 3%.

While I did not see the Diane Sawyer special on the stupid tube, she did a segment on Made in America. A tour was taken of the typical American home. The reporter went item by item and by the time he was done, almost everything was made outside the US except the kitchen sink. Here is the 5-minute video clip.

The big push over the past couple of decades is every student must go to college and graduate tens of thousands of dollars in debt. For what? Pushing paper for foreign companies while our trade deficit skyrockets. Of course, most of those college graduates have no clue what that even means. Most were children when NAFTA and subsequent treaties were passed.

Instead of being a self-reliant, independent people who produced everything we as a nation need along with a stable job base, America turned to anti American companies like China Mart (aka Wall Mart) for "cheap" goods. Parking lots at GM filled with employee cars made by foreign companies. Grocery stores flooded with fruits and vegetables from Mexico, Canada and South America while American farmers were being driven off their land because they couldn't compete with slave labor.

Well, the rooster has come home to croak and here we are even further down the road to hell with almost 25 MILLION Americans out of work and a record 45.8 MILLION on food stamps. Think about before NAFTA, CAFTA, GATT/WTO and now in our country.

People who are unemployed can't afford to buy anything other than paying the rent, utilities and food. There's is no money for vacations, trips requiring hotel stays, attending sporting events or eating out at Red Lobster every week or shopping at Macy's. THAT is the danger of a service oriented economy. Instead of buying our clothes, shoes, cars, food and other essentials from ourselves, that money goes out of this country to keep people in India or China or the Philippines employed.

Does anyone see the madness here?

It sickens me, but who is at fault? The American people and that includes those who belong to big unions like the AFL-CIO. How many times has that union endorsed the same senators who voted to ratify treaties that literally gutted their industry? Countless.

50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.

Yet, every two years, Americans continue to vote back the same incumbents who refuse to get us out of those treaties.

Instead of voting out every incumbent who voted for those destructive treaties, voters continue to reelect the same scoundrels who sold us out: Boehner, Pelosi, Herger and Juan McCain to name a few.

Because millions lost their jobs, they have very little disposable income and are forced to buy cheap crap from commie countries like China, India and Hong Kong. Because American companies can't compete with slave labor wages paid in India, they go out of business. Those companies big enough to stay in business are the ones who have shipped American jobs to Bangladesh, Mexico, South America and other foreign countries. Former American companies who no longer support Americans, closed thousands of plants and shipped good paying jobs over seas - and they're still doing it because Americans continue to buy their products.

Those companies then expect you to buy their products made by someone employed in a foreign country. Your job went to commie China, but you turn right around and buy the same products you used to make at your job which is now made by a slave wage worker in India who now has your former job.

Do you not see the madness here?

Pile on 11.5 MILLION jobs held by criminals (illegal aliens) and you wonder why Americans are starving and out of work?

Must not bother most folks because last November, the voters sent 86% of incumbents back to the Outlaw Congress who have destroyed this republic and caused massive unemployment and starvation.

Now, you expect Obama/Soetoro or whatever his name is, or the same incumbents to do what they have refused to do for almost two decades and bring millions of jobs home? The same incumbents who now crow all over the TV that "we have to stop government spending" and "we have to focus on creating jobs."

"I can't find anything made in America." Whose fault is that? Tens of millions of voters because they continue to vote back the same incumbents AND will not take the time to find what they need made in America because it takes too much time. Yes, it does and I've been doing it for the past 16 years. I don't care if the crap from commie China sits on the store shelves and rots, I will not buy it, I go without.

Thankfully, over time, more Americans are demanding Made in the USA. People are actually starting to "get it" about jobs, but will they do anything about it?

Recently I received a couple of emails praising Rep. Allen West and Senator Mark Rubio who serve in the Outlaw Congress. Oh, boy, Allen West just said this and Rubio dressed down John Kerry on the senate floor. Whoopie!

It's what they are not doing that should be brought front and center.

Rep. Allen West [R-FL] is very popular around the country. I would not have voted for him because I read his campaign web site both times he ran. West is a Christian Zionist who believes our treasury and the blood of our military belong to Israel. That is not a condemnation of anyone of the Jewish faith, but rather our Constitution does not give the Outlaw Congress a scintilla of authority to throw $3 BILLION BORROWED dollars to that country to build up their military or any other country on this earth for any reason - while you, me, our children and grand children pay the interest on the to the banking cartel. Nor was our military ever meant to protect any country on this planet except the sovereign states of the Union.

Tea Party Favorite Allen West Breaks With GOP Over Health Care Strategy

"Rep. Allen West (R-Fla.), who has emerged as an outspoken conservative voice among GOP freshmen, cast a surprising vote last week against a bill to scrap part of the 2010 healthcare overhaul. The legislation would repeal $100 million in funding for the construction of school-based health centers. West was one of just four Republicans to vote against the measure, which passed 235-191."

His fist priority is not the U.S. Constitution:

"West spokeswoman Angela Sachitano said in an email that the congressman 'believes there are bigger funding issues to be focusing on right now including the numerous developments in the Middle East, concerning Pakistan and whether there is a link to [Osama bin Laden] and the recent unity agreement with the [Palestinian Authority] and Fatah and Hamas.'"

Additionally, West's web site contained nothing but the same worn out blather about lower taxes, limited government and all the rest of the popular mantra regurgitated by "conservative" Republicans looking for votes. In his short time in office West has never introduced a single bill to kill the cancers eating this country: Abolish the privately owned FED and the IRS, get US out of the communist UN. The list is endless. In fact, West supports another poison, the so-called flat tax. This tells me he clearly has zero understanding on the issue of taxation. While I thank West for his military service, that doesn't make him qualified to serve in the U.S. Congress.

West was given a great deal of support by the tea party movement. Surprise, surprise. He just bit them in the arse:

Tea Party Favorite Allen West Calls the Movement Schizophrenic

The same goes for Rubio. Another neo con who believes more war is good for our country. Rubio talks real good for the cameras, but has he introduced a bill to get us out of NAFTA, CAFTA, GATT/WTO? No. Rubio has no problem with millions of jobs gone overseas leaving Americans standing in bread lines. Another free trader (traitor): "We must continue reducing barriers to free and fair trade. We should adopt the free trade agreements that have already been negotiated with Colombia, Panama, South Korea and other nations around the world. We should also insist that other countries reduce their own barriers to trade so that American goods can find new markets."

That doesn't do squat to bringing home our textile and manufacturing jobs or parity for our farmers. Rubio also has a problem with understanding what illegal means. Rubio has stated for the record that children of illegals should pay in-state college tuition. Children of illegal aliens have NO right to be on U.S. soil, so they have no "right" to enroll in any college in this country. The only "right" they have is to deported.

Here are some raw facts made possible by the Outlaw Congress and Clinton, Bush and Barry Soetoro aka Barack Hussein Obama:

"So what happens when the debt bubble pops?

"The deindustrialization of the United States should be a top concern for every man, woman and child in the country. But sadly, most Americans do not have any idea what is going on around them.

"For people like that, take this article and print it out and hand it to them. Perhaps what they will read below will shock them badly enough to awaken them from their slumber.

"The following are 19 facts about the deindustrialization of America that will blow your mind....

"#1 The United States has lost approximately 42,400 factories since 2001.

"#2 Dell Inc., one of America's largest manufacturers of computers, has announced plans to dramatically expand its operations in China with an investment of over $100 billion over the next decade.

"#3 Dell has announced that it will be closing its last large U.S. manufacturing facility in Winston-Salem, North Carolina in November. Approximately 900 jobs will be lost.

"#4 In 2008, 1.2 billion cell phones were sold worldwide. So how many of them were manufactured inside the United States? Zero.

"#5 According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.

#6 As of the end of July, the U.S. trade deficit with China had risen 18 percent compared to the same time period a year ago.

#7 The United States has lost a total of about 5.5 million manufacturing jobs since October 2000.

#8 According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million. During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million.

#9 In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent.

#10 Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in St. Paul, Minnesota. Approximately 750 good paying middle class jobs are going to be lost because making Ford Rangers in Minnesota does not fit in with Ford's new "global" manufacturing strategy."

The rest of the list is at: The De-Industrialization of America: Prepare the Economic Collapse ofa Lifetime

I have had the Made in America section up on my web site for close to ten years. Everyone of those companies manufactures here in the U.S.; more than 20,000 products. Some I can't afford even though I would like to buy them. A few months ago I was looking for soup mugs. Found a lovely collection, but they are just too pricey on our fixed income. That company does sell their products, but if Americans simply refuse to buy foreign products AND the scam called withholding tax is abolished, those companies will become more competitive and so will their prices. They will also become more available in stores around the country making it easier for all of us to buy. THAT creates jobs.

When I say Americans don't want good paying jobs I say that because I do not see an outright rebellion by the people of this nation against those destructive trade treaties. I see millions begging the monster out in DC to create more jobs, but what they're really doing is begging for their own destruction through higher taxes to pay for jobs created that the Outlaw Congress has no legal authority to rob the people's purse to fund.

If Americans really want to create good paying jobs in this country stop buying foreign products. Tell store managers you want Made in America. While you might feel differently, to me it is un-American to buy foreign products while our people go without jobs. If we won't even support real American companies and workers, what does that say about us as a united America for tangible growth and prosperity?

Sell your stock in companies like GE and others who care nothing for Americans and continue to ship jobs to India and China. Is your little dividend check worth more than the future of these united States of America?

If this doesn't make you puke, then you really don't understand the problem:

Top US senators join business trip to Tunisia , Egypt -- in hopes of creating thousand of jobs in those countries!

"McCain, a Republican, and Kerry, a Democrat, will visit the two countries with General Electric CEO Jeff Immelt, along with officials from Boeing, Coca-Cola, Bechtel, ExxonMobil, Marriot and Dow, confirmed McCain's office on Wednesday.'

"The visit comes as the two lawmakers join Independent Senator Joe Lieberman in sponsoring a bill to create economic assistance funds for Egypt and Tunisia, both rocked with popular unrest and subsequent regime change in recent months. The purpose of the funds is to provide capital to local entrepreneurs in the hope of creating "thousands of jobs," which both countries desperately need, said Kerry, who chairs the US Senate Committee on Foreign Relations."

I've had two Coca-Cola's in my entire life. I don't like the taste of soft drinks and don't drink them, but even if I did, I wouldn't give Coca-Cola, Exxon or Marriot another penny of my money. Not one cent. They buy the favors of the Outlaw Congress using the money they get from you buying their products.

There isn't a scintilla of constitutional authority to steal the fruits of your labor to give to Egypt, Tunisia or any other country for "economic assistance" or military build up. NONE. Our purse is over drawn almost $15 TRILLION dollars and those maggots want to borrow even more to give to foreign countries who need jobs?

Where is your outrage, America? Think this is anything new for Kerry who was endorsed by the Communist Party USA? Think this is anything new for Juan McCain who has voted to kill millions of jobs since he's been in office? No, but with the help of illegals voting in Arizona, uniformed voters and electronic machines counting the ballots, anti-American globalists like McCain keep getting reelected.

The Outlaw Congress is now out of session until September 6th.They are in your district and you should be in their face at every single event. Every speech, every fund raiser - where ever Michelle Bachmann, Steve King, Max Baucus, Nancy Pelosi - all of them - get there. Contact a tea party group in your district or your own group or organization that you support and spread the word. Tell your congress critter that if they don't get us out of those treaties, you will work tirelessly to see they are booted out of office in 2012. It's the only thing incumbents care about despite their carefully crafted speeches about how much they care about you and jobs.

As I have written many, many times, I am not against fair trade. Here and there I do purchase products from New Zealand, Scotland and even Australia. Prior to 1995, America had excellent trade relations with countries around the world. But, the evil doers who want a one world government knew "free" trade would destroy this country, suck the wealth of America and ship it to the grotesque monster called "globalization". The solution was to drop big money into the coffers of the prostitutes in the biggest whore house on this earth who are now too scared of China to get us out of those treaties. After all, it is the incumbents in Congress that have reduced us to nothing but slaves to repay the debt they created sending $800 MILLION dollars a week to China to pay the interest on that debt.

If we do not as a nation demand an end to all those "free" trade treaties, we will, as Thom Jefferson warned, end up beggars in rags in our own land.

It can't happen overnight, but it can happen if only you will make the effort. If you stop buying foreign gadgets (which won't fill an empty stomach), foreign made clothes, tools, whatever and make your voice heard. It takes time to crank up factories long abandoned, but it can be done.

I mentioned this on a radio show I did recently. As someone in the trenches full time going on 21 years, I have spoken to literally thousands of people all across this great and beautiful land. Many people hate their jobs because they don't feel fulfilled. Many young people come out of college with no job prospects, $20- $50,000 in debt for student loans working at Staples or Home Depot (who does not get my money because of their in your face support of sexual deviants). Please don't misunderstand. I support anyone who works an honest day for a day's wages whatever their job. But, retail clerking jobs used to be for seniors wanting to keep busy and bring in some extra money, mom's whose children are now in school but don't want to work full time or students. Those level of jobs were never meant to be the level of paycheck needed to support a family.

What would those folks rather be doing? You might be surprised, but an awful lot of them tell me they want to create things. Where have America's artisans gone? There are a substantial number of Americans who loved their jobs in a factory or farming, but because of those treaties are pushed into cities growing beyond what their infrastructures can handle, taking whatever jobs they can find.

We need to bring back America as a self sustaining nation and we can through our purchasing power for starters.

To find out how your incumbent voted on any of the destructive trade treaties, use a search engine and simply type in their name + on the issues. Example, type: John Boehner on the issues. That will take you to the on the issues web site.

It doesn't matter that Rubio and West have only been in office eight months. What matters is what they won't even talk about, much less introduce legislation to cure the cancer instead of more smooth talk. While we cannot stop the financial tsunami about to crash this country, we can begin rebuilding American jobs by taking action.

Important links:

1 - 'Create Jobs, Buy American, Go America!'
2 - Why Libertarians Are Wrong on Free Trade
3 - Economists Shocked, Shocked: We Really Are Losing Jobs to China!
4 - U.S. Congress, Obama/Soetoro are Anti-American Jobs
5 - Stop with the demand "Congress create jobs" rhetoric
6 - April 2004: Rebuttal to Dr. Blumenfeld's Partisan Defense of Outsourcing
7 - Nov. 2007: Free trade: cheap labor and expensive recalls
8 - WTO Sides With Chinese State Capitalism Against the U.S.

How to 'fix' a market

How to 'fix' a market

New York Post, August 9, 2011

headshotJohn Crudele

Relax, all Washington has to do is rig the stock market.

Yes, you heard me right: rig the market -- as in, make sure it doesn't go any lower and scare the hell out of all the good, conscientious investors who once again trusted Wall Street to do what was right by them.

Sure, it would be a black eye to the American way of life. We believe in free, fairly traded markets. But that was back when we were naive and thought that America would never lose its innocence, the Ryder Cup or its AAA bond rating.

O.K., you think I'm nuts. But consider this.

Word filtered out of Tokyo a few weeks ago that Japan had instituted what was being called a 1 percent rule. No government ever confirms this sort of thing (some still have their pride) but the rule is supposed to state that the Japanese government will prop up the stock market through the purchase of exchange traded funds if there is a 1 percent loss in a single trading session.

You still don't think we should rig our market, do you? Well, put your ear closer to the newspaper, and I'll let you in on a secret -- we probably already have. Lots of times.

Those quick turnarounds in the stock market in mid-2008, when the financial system was supposedly failing, were probably market riggings. And when the hedge fund Long Term Capital Management nearly sent the financial world into a tailspin in 1998, the stock market was probably propped up then, too.

The blueprint for this sort of hocus-pocus came from -- get really close to the page for this -- the Federal Reserve. Back in October 1989, a guy named Robert Heller, who had just quit his post as a Fed governor, suggested that the government should purchase stock index futures contracts to calm the markets in times of distress.

"The Fed could support the stock market directly by buying market averages in the futures market, thus stabilizing the market as a whole," Heller wrote in an op-ed piece in The Wall Street Journal after saying the same thing in a little-noticed speech. "The stock market is certainly not too big for the Fed to handle."

It's hard to believe Heller would have made this bold suggestion without the Fed's unofficial permission.

At the same time the President's Working Group on Financial Markets was assembled. Those of us who cover this sort of thing affectionately know it as the Plunge Protection Team.

Ah, but here's the problem.

Heller suggested that the stock market be rigged before the Fed does all the dangerous things it has already done -- like adding too much liquidity to the monetary system. That, he said, would be a bigger mistake than forfeiting our innocence by propping up stocks.

A couple more days like yesterday, and the riggers will be at work.

Read more:

How to bring central bankers to heel

How to bring central bankers to heel?
Ask them some questions
Section: Daily Dispatches

12:03p ET Wednesday, August 10, 2011

Dear Friend of GATA and Gold:

Ambrose Evans-Pritchard of the London Telegraph is a world-class financial journalist and his commentary today, appended here, analyzing the venality of the Federal Reserve is probably as incisive as anything in the financial press. But he poses and then fails to answer the question he concludes his commentary with: "How can we bring these central bankers to heel?"

Nothing will bring central bankers to heel faster than peppering them with detailed questions about their surreptitious market interventions -- particularly in regard to gold. Such questions are obvious and they abound. Here are some suggestions:

Like all mainstream financial journalists, Evans-Pritchard declines to pose any questions to central bankers, perhaps on the assumption -- a good one -- that they'll never answer, or never answer candidly. (As the Fed's former vice chairman, Alan Blinder, remarked on national television in the United States a couple of decades ago, "The last duty of a central banker is to tell the public the truth.")

But that doesn't mean that the public can't be informed by itemizing the questions that central bankers refuse to answer. Indeed, the full range of hidden central bank policy can be well outlined by itemizing these questions and trumpeting the subversion of democracy, the subversion Evans-Pritchard acknowledges at the end of his commentary.

So come on, Mr. E-P. Leaven your commentary with some journalism. Call up some central banks and ask them to describe the full range of their market interventions today, this week, this month, this year, and in the last 10 years. Start with gold, where the evidence already has been compiled for you in the most conscientious detail:

When they "no comment" you, report their unaccountability and the evidence of those interventions. Then seek comment from elected officials. And then ask your question about democracy.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

The Fed Is a Rogue Elephant

By Ambrose Evans-Pritchard
The Telegraph, London
Wednesday, August 10, 2011

The Fed is a Rogue Elephant (wonkish rant)

Ben Bernanke thinks the money data is a `Black Box’

Ben Bernanke thinks the money data is a `Black Box’

Ben Bernanke has moved the goal posts yet again.

Headline CPI inflation in the US is 3.4pc. There is no deflationary threat at this stage that can justify holding rates near zero until the moon turns into blue cheese, let alone embarking on emergency money printing.

The Bernanke Fed has more or less ignored headline inflation until now, arguing that what matters is “core” inflation. This strips out energy, fuel and food, which none of us consume of course.

Unfortunately, core inflation has been catching up lately. The Dallas Fed’s “trimmed mean” measure known as core PCE has risen (on a six-month annualized basis) from 0.9pc in January to 2.1pc in June.

So what the does the Fed do? It switches tack and says that headline inflation is not such a bad gauge after all. They do this knowing that the oil and food shock has subsided and that the headline rate will fall back for a while. This will create the impression that inflation is abating. “Cheeky,” said ING’s global economist Rob Carnell.


As you can see from the two charts below, the broad M2 money supply is growing robustly at 8pc and narrow M1 is growing at over 15pc.



Yes, I know, Ben Bernanke thinks the money data is a “Black Box” that cannot be understood, and ultimately a form of medieval witchcraft. Well, perhaps he should rethink. This is not picture of an economy facing imminent deflation.

Note how weak M2 was fifteen months ago (and broader M3 – which Bernanke has abolished, but others track – was actually contracting at 1930s rates). That was a very good lead indicator of the economic relapse we saw in the first half of 2011.

I am wary of Bernanke’s sudden change of heart on headline inflation. It confirms my suspicion (shared by many readers) that the Fed is deliberately bringing about inflation and currency debasement to cushion the effects of debt-deleveraging. This amounts to a soft default on America’s debts.

QE1 was an entirely appropriate response to the threat of spiralling collapse and an implosion of the money supply. I backed it whole-heartedly, and make no apologies for doing so.

QE2 was a different animal. The threat of imminent deflation was bogus. The effect was to juice stock prices and increase the asset wealth of the rich, hoping for a trickle down. In reality it punished poor people through rising food and fuel costs long before any trickle came through.

Needless to say, it also punishes prudent savers in order to rescue improvident and promiscuous borrowers. This has immense social and moral consequences over time, and risks undermining the virtues that made America the world’s paramount power.

Dallas Fed chief Richard Fisher said in a speech last March, further QE would “only prolong the injustice that we have inflicted on savers.”

He warned of the risk that the Fed will be viewed as “a pliant accomplice to Congress’ and the executive branch’s fiscal misfeasance,” if it carries on down this road. “Barring some frightful development, I will vote against any program that might seek to extend or enlarge the substantial monetary accommodation we already have provided. The liquidity tanks are full, if not brimming over. The Fed has done its job. What is needed now is for business to be incentivized to commit that liquidity to creating American jobs. This is the task of the fiscal authorities, not the Federal Reserve.”

Mr Fisher stuck to his word. He voted against the Fed’s promise yesterday to keep rates near zero until mid-2013.

The Fed is engaged in dangerous forms of social engineering. Central banks should never enter this territory.

Yes, I have been critical of the ECB for other reasons. It allowed the Club Med bubble to build up from 2004-2007, misread both the oil spikes of 2008 and 2011, has allowed M3 to gyrate wildly, but the ECB is not — or not yet — a rogue elephant trampling social norms under foot.

An intellectual case can be made that inflation should be raised to 4pc to 6pc in the western world to lift us out of our debt trap. EX-IMF chief economist Ken Rogoff and others have made exactly that argument. Fine. Let debate be joined.

But if so, the Fed needs to state this openly and not carry out a social revolution by subterfuge. Any such decision should be subject to democratic endorsement by elected parliaments.

How can we bring these the central bankers to heel?

mercoledì 10 agosto 2011

Analysis of Financial Terrorism in America

AmpedStatus Report )))
EXCLUSIVE: Analysis of Financial Terrorism in America: Over 1 Million Deaths Annually, 62 Million People With Zero Net Worth, As the Economic Elite Make Off With $46 Trillion

August 10th, 2011
Editor’s Note: The following report includes adapted excerpts from David DeGraw’s book, “The Road Through 2012: Revolution or World War III.” Release Date: 9.28.11
Analysis of Financial Terrorism in America
Analysis of Financial Terrorism in America: Over 1 Million Deaths Annually, 62 Million People With Zero Net Worth, As the Economic Elite Make Off With $46 TrillionBy David DeGraw, AmpedStatus Report

Abstract :: Welcome to World War III

Part One :: The Economic Devastation

I :: Poverty
II :: Food Insecurity
III :: Unemployment
IV :: Declining Income

Part Two :: The Economic Elite

V :: How Much Wealth Do The Economic Elite Have?
VI :: Who Rules America? Revealing The Economic Top 0.1%
VII :: Tax Breaks For The Rich, Budget Cuts For The Rest Of Us

Part Three :: The Perfect Storm Overhead
(Inequality = Debt = Austerity = Civil Unrest = Inflation + Deflation = Stagflation)

VIII :: Debt Slavery
IX :: Inflation
X :: The Beaten Masses

Part Four :: Fascism in America

XI :: Modern Day Slavery
XII :: The Death Toll
XIII :: Deliberate Systemic Attacks

Abstract :: Welcome to World War III

Despite increasing personal financial hardship, most Americans remain unaware of the economic world war currently unfolding. An all-pervasive corporate and government propaganda campaign has effectively obscured this blatant reality. After extensive analysis, it is evident that World War III is a war between the richest one-tenth of one percent of the global population and 99.9 percent of humanity. Or, as I have called it, The Economic Elite Vs. The People. This war has been a one-sided attack thus far. However, as we have seen throughout the world in recent months, the people are beginning to fight back. The following report is a statistical analysis of the systemic economic attacks against the American people.


The American public has sustained intensive economic attacks across broad segments of the population. While the attacks have been increasingly severe in scale over the past four years, they have been implemented with technocratic precision. They have been incrementally applied thus far, successfully keeping the population passive and avoiding any large-scale civilian unrest, while effectively reducing living standards for the majority of the population. As you will see in this report, the 55 million Americans that have been hit the hardest have thus far acquiesced due to temporary financial assistance, such as food stamps and extended unemployment benefits.

The global Economic Elite have been much more strategic in handling the American public, as they are potentially the greatest threat to their continued consolidation of wealth, resources and power. National populations that are not as powerful, and on the periphery of the Economic Elite’s global empire, have been dealt with in much harsher fashion. In many smaller and less powerful countries the dramatic rise in food prices and costs of living have led to all-out revolt — Tunisia, Algeria, Albania and Egypt were among the first to rebel. While the contagion of rebellion has rapidly spread throughout Northern Africa and the Middle East, it is also spreading in a decentralized manner throughout most of the world, now threatening popular rebellion throughout Europe. Like the US population, the geographically clustered European nations represent a potentially powerful countervailing force to the Economic Elite’s continued domination.

Within the United States, the technocratic suppression of the population has been extensive. Increasingly severe economic and governmental policies have systematically eroded civilian wealth, power and rights. Intensive propaganda has effectively distracted, confused, isolated, marginalized and divided the US population. Despite the success of these efforts thus far, given the severe, prolonged, unsustainable and escalating level of economic suffering, outbreaks of civil unrest are inevitable. The US population, if a critical mass is reached, represents the greatest threat to the Economic Elite. In this regard, the American people are their primary adversary.

In writing this report, I will clearly demonstrate the severity and scale of the deliberate systemic economic attacks against the US population, in hope that we can urgently build a critical mass of aware and engaged citizens.

Part One :: The Economic Devastation

Snapshot: According to most recent Census Bureau data, from 2005 – 2009, average US household wealth declined by 28%. This represents a loss of $27,000 per household. Currently, at least 62 million Americans, 20% of US households, have zero or negative net worth.

The Census figures cited above are based on statistics that have been consistently proven to be lowball estimates. The government and corporate media spread propaganda on vital economic statistics that mask the severity of our economic crisis. Deceptive inflation, unemployment, poverty and GDP measures, which cast the illusion of recovery, are easily exposed with some research and a closer look at the data. Throughout this report, we will explore significant examples of government economic propaganda. In several cases, the government has been forced to revise their numbers due to proven inaccuracies. The government’s “revisions” are most always for the worse, and are usually just a footnote correction that the public is rarely ever aware of. All that being said, for many statistics we are forced to use government data, as there are not any other extensive data sets available from alternative sources.

I :: Record Breaking Poverty

The Census Bureau poverty rate is a horribly flawed measurement that uses outdated methodology. The Census measures poverty based on costs of living metrics established in 1955 – 56 years ago. They ignore many key factors, such as the increased costs of medical care, child care, education, transportation, and many other basic costs. They also don’t factor geographically-based costs of living. The National Academy of Science measure, which gets little if any corporate media coverage, gives a much more accurate account of poverty, as they factor in these vital cost of living variables.

The most current Census data revealed that 43.6 million Americans, 14.3% of the population, lived in poverty in 2009. While that is a staggering number that represents the highest number of American people to ever live in poverty, and a dramatic increase of four million people since 2008, it significantly under-counted the total. Last year, in my analysis, extrapolating data from 2008 National Academy of Sciencefindings, I estimated that the number of Americans living in poverty in 2009 was at least 52 million. Recently, the National Academy of Science released their latest findings, backing up my claim by revealing that 52,765,000Americans, 17.3% of the population, lived in poverty in 2009.

The poverty rate for children is even worse. According to Census data, a total of 15.5 millionAmerican children lived in poverty in 2009, which is 20% of all children. The number of children in poverty increased 28% since 2000, and jumped 10% from 2008 to 2009. Extrapolating data from the 2009 National Academy of Science poverty rate, in relation to the Census childhood poverty data, the number of American children living in poverty in 2009 is more accurately 18.8 million, which is 24%, or nearly one in four.

Other than this rapidly increasing number children who are in families that have recently fallen into poverty, “every day in America 2,573 babies are born into poverty.”

As the chart to the right shows, even with the lower Census numbers, nine major American cities have a poverty rate over 25%.

It is important to note, based on many key indicators, as you will see throughout this report, the overall poverty totals have increased since 2009. Also consider that the recent deficit reduction plan is going to cut “anti-poverty” programs that currently assist tens of millions of Americans. A study by the National Bureau of Economic Research estimates that “the poverty rate would double without these programs.” It is predicted that the new deficit deal will cut the funding for these programs in half, which, based on these estimates, would bring the total number of Americans living in poverty up to 80 million people, 26% of the population.

II :: Record Breaking Food Insecurity

For another revealing statistic, which has been quickly increasing, we can look at the number of Americans currently surviving off of food stamps. In 2005, 25.7 million Americans needed food stamps, currently 45.8 million people rely on them. As the chart to the right shows, the number of people in need of food stamps has been rapidly increasing year-over-year.

Meanwhile, Congress is cutting the funding for the food stamp program at a time when the Department of Agriculture estimates that anadditional 22.5 million people will need them, bringing the total number of Americans in need of food assistance to a stunning 68.3 million people.

III :: Record Breaking Unemployment

While the “official” unemployment rate hovers around 9%, 14 million people, the government’s numbers are deceptively low once again. The only reason unemployment has stayed below 10% for the past few months is because millions of long-term unemployed, and part-time workers who are looking for full-time work, are not included in the baseline government unemployment rate. John Williams, from, has a consistently proven method of tracking unemployment that provides a much more accurate view of the overall situation. As shocking as it may sound, when you apply his SGS method, counting the total number people in need of employment, you get a current unemployment rate of 22.5%, which is an all-time record total of 34 million people currently in need of work. Here is how the SGS rate is calculated:

“The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.

The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.”

On top of these shocking figures, the labor force participation rate, which measures the percentage of the total population currently working, has fallen to a 27-year low of 63.9%.

Currently, an all-time record 6.3 million people have been unemployed for over six months. As the chart to the right shows, the average time it takes for a person to find a job has also just hit an all-time high of 40.4 weeks.

As companies continue to downsize and shift jobs overseas, unemployment is once again accelerating. Private-sector job cuts in July surged 60% to a16-month high. When accounting for population growth within the total labor force, from December 2007 to present, we have lost 10.6 million jobs.

With the implementation of state and federal budget cuts, public-sector unemployment is accelerating as well. According to the Center on Budget and Policy Priorities, since August 2008, state and local governments have cut 577,000 jobs. TheEconomic Policy Institute estimates that cuts in the new deficit deal will lead to an additional 1.8 million job losses.

Of the new jobs that have been added in 2010, 60% of them are in low-wage fields. Since December 2007, the official unemployment rate has masked the fact that 2.8 million of the news jobs created have been part-time jobs.

Breaking down the data, over the last 12 months, the National Employment Law Project found that well-paying jobs are rapidly decreasing, while low-paying jobs are helping to mask an increasingly dire employment crisis:

· Lower-wage industries constituted 23% of job loss, but fully 49% of recent growth
· Mid-wage industries constituted 36% of job loss, and 37% of recent growth
· Higher-wage industries constituted 40% of job loss, but only 14% of recent growth

IV :: Declining Income

While the cost of living from 1990 – 2010 increased by 67%, worker income has declined. According to the most recent available IRS data, covering the year of 2009, average income fell 6.1%, a loss of $3,516 per worker, that year alone. Average income has declined 13.7% from 2007 – 2009, representing a $8,588 loss per worker.

The decline in worker income is due to the dramatic increase in CEO pay. CEO pay has consistently increased year-over-year since the mid-1970s. From 1975 – 2010, worker productivity increased 80%. Over this time frame, CEO pay and the income of the economic top 0.1% (one-tenth of one percent) of the population quadrupled. The income of the top 0.01% (one-hundredth of one percent) quintupled.

To understand the affect CEO pay increases have had on workers’ declining share of income on an annual basis, after analyzing 2008 tax data, leading tax reporter David Cay Johnston summed upthe situation with these revealing statistics:

“Had income growth from 1950 to 1980 continued at the same rate for the next 28 years, the average income of the bottom 90 percent in 2008 would have been 68 percent higher…. That would have meant an average income for the vast majority of $52,051, or $21,110 more than actual 2008 incomes. How different America would be today if the typical family had $406 more each week…”

As shocking as that is, over the last two years, workers have lost an even higher share of income to CEOs. In the last year alone, CEO pay skyrocketed by 28%. Looking at 2009, according to a recent Dollars & Sense report, workers lost nearly $2 trillion in wages that year alone:

“In 2009, stock owners, bankers, brokers, hedge-fund wizards, highly paid corporate executives, corporations, and mid-ranking managers pocketed—as either income, benefits, or perks such as corporate jets—an estimated $1.91 trillion that 40 years ago would have collectively gone to non-supervisory and production workers in the form of higher wages and benefits.”

As bad as these numbers are, consider that the attack on American workers has increased significantly since 2009. From 2009 to the fourth-quarter of 2010, 88% of income growth went to corporate profits (i.e. CEOs), while just 1% went to workers.

As the NY Times reported in an article entitled, “Our Banana Republic,” from 1980 – 2005, “more than four-fifths of the total increase in American incomes went to the richest 1 percent.” Again, as bad as that was, since 2005 it has gotten even worse, as Zero Hedge recently reported, labor’s current “share of national income has fallen to its lowest level in modern history.” This chart shows how workers’ percentage of income has been rapidly declining:

The bottom line, as statistics clearly demonstrate, these trends are getting worse and the attacks against us, as severe as they have been over the past four years, are dramatically escalating.

Part Two :: The Economic Elite

“There’s class warfare, all right, but it’s my class,
the rich class, that’s making war, and we’re winning.”

– Warren Buffett, Chairman and CEO of Berkshire Hathaway

V :: How Much Wealth Do The Economic Elite Have?

While 68.3 million Americans struggle to get enough food to eat and wages are declining for 90% of the population, US millionaire household wealth has reached an unprecedented level. According to an extensive study by auditing and financial advisory firmDeloitte, US millionaire households now have$38.6 trillion in wealth. On top of the $38.6 trillion that this study reveals, they have an estimated $6.3 trillion hidden in offshore accounts.

In total, US millionaire households have at least $45.9 trillion in wealth, the majority of this wealth is held within the upper one-tenth of one percent of the population.

If all this isn’t obscene enough, to further demonstrate how the global economy has now been completely rigged, Deloitte’s analysis predicated, based on current trends, that US millionaire households will see a 225% increase in wealth to $87.1 trillion by 2020. Accounting for wealth hidden in offshore accounts, they are projected to have over $100 trillion in total within the next decade.

Most people cannot even comprehend how much $1 trillion is, let alone $46 trillion. One trillion is equal to 1000 billion, or$1,000,000,000,000. To put it in perspective, last year the entire cost of feeding all 40 million Americans on food stamps was $65 billion.

Now consider, according to the latest IRS data, only 0.076% of the population, less than one-tenth of one percent, earned over $1 million in 2009.

The graph below, based on data from the Tax Policy Center, shows how much income is earned by a household at any given percentile in income distribution:

The highest bracket for annual income is $50 million or more. Only 74 Americans are in this elite group. The average income within this category was $91.2 million in 2008. As astonishing as that is, in 2009 they averaged$518.8 million each, or about $10 million per week. This means, in the depths of the recession, the richest 74 Americans increased their income by more than 5 times within this one year. These 74 people made more money than 19 million workers combined.

In context, overall, the richest 400 people in the US have as much wealth as 154 million Americans combined, that’s 50% of the entire country. The top economic 1% of the US population now has a record 40% of all wealth, and have more wealth than 90% of the population combined.

VI :: Who Rules America? Revealing The Economic Top 0.1%

Here is an analysis from an investment manager with mega-wealthy clients breaking down the economic top 0.5% of the population, recently published by William Domhoff, sociology professor and author of Who Rules America?:

“Unlike those in the lower half of the top 1%, those in the top half and, particularly, top 0.1%, can often borrow for almost nothing, keep profits and production overseas, hold personal assets in tax havens, ride out down markets and economies, and influence legislation in the US. They have access to the very best in accounting firms, tax and other attorneys, numerous consultants, private wealth managers, a network of other wealthy and powerful friends, lucrative business opportunities, and many other benefits.

Folks in the top 0.1% come from many backgrounds but it’s infrequent to meet one whose wealth wasn’t acquired through direct or indirect participation in the financial and banking industries…. Most of the serious economic damage the US is struggling with today was done by the top 0.1% and they benefited greatly from it…. For example, in Q1 of 2011, America’s top corporations reported 31% profit growth and a 31% reduction in taxes, the latter due to profit outsourcing to low tax rate countries…. The year 2010 was a record year for compensation on Wall Street, while corporate CEO compensation rose by over 30%.…

In 2010 a dozen major companies, including GE, Verizon, Boeing, Wells Fargo, and Fed Ex paid US tax rates between -0.7% and -9.2%. Production, employment, profits, and taxes have all been outsourced….

I could go on and on, but the bottom line is this: A highly complex and largely discrete set of laws and exemptions from laws has been put in place by those in the uppermost reaches of the US financial system. It allows them to protect and increase their wealth and significantly affect the US political and legislative processes.

They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%….

… the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability. The odds of getting into that top 0.5% are very slim and the door is kept firmly shut by those within it.”

To get into the top economic 0.01% (one-hundredth of one percent) of the population, you have to have a household income of over $27 million per year.

If you look at some of the central players who caused this economic crisis, you will see that they are among this Economic Elite group.

Former Goldman Sachs CEO and Bush Treasury Secretary Hank Paulson had already amassed at least $700 million prior to moving to the US Treasury in 2006. Current Goldman Sachs CEO Lloyd Blankfein and a few other top executives at Goldman Sachs just received $111.3 million in bonuses. Blankfein just took home $24.3 million, as part of a $67.9 million bonus he was awarded. Goldman’s President Gary Cohn took home $24 million, as part of a $66.9 million bonus he was awarded. Goldman’s CFO David Viniar and former co-president Jon Winkelried both took home over $20 million in bonuses.

Citigroup CEO Vikram Pandit just took home $80 million, in what may eventually total more than $200 million in compensation and bonuses. Coming in at the top of the list is JP Morgan Chase CEO Jamie Dimon, who just took home $90 million.

If you think people in this income level don’t control the US political process, you are not paying attention. After they caused this economic crisis, they got the government to give them trillions of dollars in taxpayer support, and then, after taking our tax dollars, they gave themselves all-time record-breaking bonuses. 2009 was an all-time record-breaking year for Wall Street executives bringing in a total of $145 billion. And then, in 2010, they raised the bar even higher, breaking the all-time record set the year before by pulling in another $149 billion. The audacity of it all is stunning.

Finding people more grotesquely greedy than Wall Street executives would seem to be impossible. However, health insurance CEOs are giving them a run for their money. As the LA Timesreported:

“Leaders of Cigna, Humana, UnitedHealth, WellPoint and Aetna received nearly $200 million in compensation in 2009, according to a report, while the companies sought rate increases as high as 39%….

H. Edward Hanway, former chief executive of Philadelphia-based Cigna, topped the list of high-paid executives, thanks to a retirement package worth $110.9 million. Cigna paid Hanway and his successor, David Cordani, a total of $136.3 million last year….

Ron Williams, the CEO of Hartford, Conn.-based Aetna Inc., earned nearly $18.2 million in total compensation, down from $24.4 million in 2008.”

Aetna CEO Ron Williams has recovered from his down year in 2009 by making $72 million in 2010.

Given this level of obscene profiteering within the health care industry, it is not surprising that Americans pay more for medical care than any other nation in the world. In fact, Americans are forced to pay twice as much as most nations, and get lower quality care in return. As health insurance companies admitted, they have been reaping windfall profits because people with health insurance plans still cannot afford to go to the doctors and have stopped going unless it is an absolute emergency. With well over 50 million people unable to afford health insurance and the skyrocketing costs, it is not surprising that over 60% of all personal bankruptcies are the result of medical bills. In fact, 75% of the medical bankruptcies filed are from people who have health insurance.

Within this Economic Elite group, you also have the war profiteering oil companies, which themselves are in large part owned by the big Wall Street banks. The biggest five oil companies, while gas prices have been skyrocketing, reaped $36 billion in profit last quarter. These companies also receive an average of $6 billion per year in tax subsidies.

VII :: Tax Breaks For The Rich, Budget Cuts For The Rest Of Us

To further demonstrate how the mega-wealthy have seized control our political process, consider that the richest 400 Americans paid 30% of their income in taxes in 1995, but they now payonly 18%.

In fact, 1,470 Americans earned over $1 million in 2009 and didn’t pay any taxes.

The average tax rate for millionaires was 22.4% in 2009, down from 30.4% in 1995. The average millionaire saves $136,000 a year due to reduced tax rates.

Looking at the tax rate from a long-term perspective, the amount of money the richest people and most profitable corporations pay in taxes has fallen dramatically since 1955. Corporate tax accounted for 27.3% of federal revenue in 1955. In 2010, corporate tax accounted for only 8.9%of federal revenue. Corporate taxes accounted for 4.3% of overall GDP in 1955, in 2010 they accounted for only 1.3%.

Part Three :: The Perfect Storm Overhead:
(Inequality = Debt = Austerity = Civil Unrest = Inflation + Deflation = Stagflation)

The cuts in taxes for the mega-wealthy have led to record wealth inequality and resulted in a record national deficit. Meanwhile, to make up for the deficit that the richest one-tenth of one percent of the population has created, Democrats and Republicans are committed to making draconian budget cuts to vital social services, which target the poor, middle class, elderly and sick, while handing out billions more in corporate welfare annually. (Inequality = Debt = Austerity)

Just as the government has done, to make up for tax revenue lost to the mega-wealthy, Americans have made up for the decline in income by taking on large amounts of debt as well. (Inequality = Debt)

In a severely unequal society, massive debt will always be created, thus forming a vicious cycle of increasing inequality and increasing debt, until the fragmentation of society reaches a breaking point when those in debt cannot afford to pay back their debts without starving to death. We are now reaching that breaking point. (Inequality = Debt = Austerity = Civil Unrest)

VIII :: Debt Slavery

The Indentured Servant Has Become The Indebted Citizen

As for statistics on Americans being buried in financial debt, the indentured servant has evolved into the indebted citizen. As mentioned before, from 1990 – 2010 costs of living have increased 67%, while wages have stagnated and declined. As the national debt has reached a record $14.6 trillion, total personal debt is now over $16 trillion. Consumer debt is $2.5 trillion. Credit card debt is $805 billion and student debt now exceeds $1 trillion.

Obviously, the more severe your debts are, the more you have to cut back in spending and the less money you have to buy new items. (Debt = Austerity)

Meanwhile, a perfect storm circles overhead as society breaks down and falls into an economic death spiral – health care, food and gas costs are skyrocketing, while income and home values are plummeting. (Inflation + Deflation = Stagflation)

Given these conditions, it is not surprising that over 250 million Americans, another record-breaking number, are currently living paycheck-to-paycheck struggling to make ends meet.

IX :: Inflation

The following charts, from Advisor Perspectives, show the increase in costs of living since 2000:

As you can see, the price of basic necessities are consistently increasing, only clothing (apparel) has declined. The second chart highlights the crucial skyrocketing cost of energy:

The third chart highlights the pernicious skyrocketing cost of education:

The cost of education essentially buries a young person in a debt that they will spend a significant portion of their life attempting to get out of. Given the increasing costs of living, and the decreasing ability to make an expected income from such an expensive level of education, this young demographic will most likely live an entire life locked into spiraling levels of debt that they will never be able to get out of.

Propaganda Inflation

When reporting on inflation, the Bureau of Labor Statistics has twice, since 1980, revised their methodology to mask the severity of inflation, similar to how they mask the severity of unemployment. In their Consumer Price Index (CPI), which measures inflation, they have heavily discounted the measurement weight of energy, food and education – three of the most significant costs for most American households.

To understand the significance in their revised methodology, current “official” CPI is at a 3.6% annual rate. However, if calculated the way it was before former Federal Reserve Chairman Alan Greenspan altered it in 1980, it would be 11.1%, three times worse than officially stated.

So while the government and the Federal Reserve claim that inflation is low, at 3.6% over the past year, food prices have increased 39% and US gas prices have increased 34% over the same time frame.

The increase in gas cost over the past one-year masks the severity of total gas price inflation, which is currently 125% more expensive since December 2008, increasing from $1.67 per gallon to $3.75.

The Hidden Tax

The Federal Reserve’s strategic policy known as Quantitative Easing (QE) has been a significant factor in the rising cost of basic necessities by deliberately stimulating inflation, while decreasing the value of the dollar. Looking at their recent QE2 program, the dollar lost 7.5% of its value from January 2010 through March 2010. From August 2010 through March 2010, the dollar lost 17%of its value. To understand how this acts as a hidden tax, consider if you had $10,000 in the bank, over this time frame you would have lost $1700 in purchasing power. So your $10,000 would now be worth $8300. At the same time, the cost of gas and food drastically increased.

The Phantom Recovery

By decreasing the value of the dollar, the Federal Reserve is also inflating the stock market by creating the impression that stock prices are rising, which, when measured in dollars, they have. However, in real terms, their overall value has decreased. To understand how deceptive this strategy has been in giving the appearance of a rising market, instead of measuring overall stock value in dollars, let’s look at their overall value when measured in terms of gold:

Dow/Gold Chart from January 1, 2003 – August 8, 2011

As investor Michael Krieger explains:

“You can see from the chart above the downtrend of stock prices in real terms is completely intact and they have now hit a new low, below the previous low point in March 2009. In fact, although stocks did temporarily rise in real terms from the low in 2009 for the year as a whole, they were still down 5% in real terms. Then last year, stocks were 14% lower in terms of gold. Finally, despite a brief rally early in 2011, stocks in terms of gold are down 23% year-to-date.”

Dollar Vs. Gold

When comparing the value of the dollar to the value of gold, the dollar has lost a stunning 84% of its value since 2000. In 2000, gold was worth $279 per ounce, as of August 8, 2011, gold is $1,725 per ounce. In fact, the dollar continues to fall in value while gold continues to rise.


All these factors together create a perfect storm of stagflation. As 90% of Americans experience income declines, and the value of the dollar declines, the price of necessities are rising, while the one major asset many Americans have, a house, is also declining in value. Already, thanks to declining home values, 28% of US homeowners owe more on their mortgages than their home is currently worth. With 10.4 million American families having lost their homes to foreclosure since 2007, Amherst Securities, a leading broker/dealer focused on mortgage-related investments, estimates that another 10.8 million homes are at risk of default over the next six years. This will obviously continue downward pressure on home values.

X :: The Beaten Masses

Confronted With Severe Financial Hardship, Why Do Americans Remain Passive?

With an unprecedented sum of wealth, tens of trillions of dollars, held within the top one-tenth of one percent of the US population, we now have the highest and most severe inequality of wealth in US history. Not even the Robber Barons of the Gilded Age were as greedy as the modern day Economic Elite.

As famed American philosopher John Dewey once said, “There is no such thing as the liberty or effective power of an individual, group, or class, except in relation to the liberties, the effective powers, of other individuals, groups or classes.”

In The Economic Elite Vs. The People, I reported on the strategic withholding of wealth from 99% of the US population over the past generation. Since the mid-1970s, worker production and wealth creation has exploded. As the statistics throughout this report prove, the dramatic increase in wealth has been almost entirely absorbed by the economic top one-tenth of one percent of the population, with most of it going to the top one-hundredth of one percent.

If you are wondering why a critical mass of people desperately struggling to make ends meet are still not fighting back with overwhelming force and running the mega-wealthy aristocrats out of town, let’s consider two significant factors:

1) People are so busy trying to maintain their current standard of living that their energies are consumed by holding on to the little that they have left.

2) People have very little understanding of how much wealth has been consolidated within the top economic one-tenth of one percent.

Considering the first factor, it is obvious that people have become beaten down psychologically and financially. A report in the Guardian entitled, “Anxiety keeps the super-rich safe from middle-class rage,” suggests that people are so desperate to hold on to what they have that they are too busy looking down to look up: “As psychologists will tell you, fear of loss is more powerful than the prospect of gain. The struggling middle classes look down more anxiously than they look up, particularly in recession and sluggish recovery.”

Considering the second factor, people do not understand how much wealth has been withheld from them. The average person has never personally experienced or seen the excessive wealth and luxury that the mega-rich live in. Wealth inequality has grown so extreme and the wealthy have become so far removed from average society, it is as if the rich exist in some outer stratosphere beyond the comprehension of the average person. As the Guardian report mentioned above also states:

“… having little daily contact with the rich and little knowledge of how they lived, they simply didn’t think about inequality much, or regard the wealthy as direct competitors for resources. As the sociologist Garry Runciman observed: ‘Envy is a difficult emotion to sustain across a broad social distance.’… Even now most underestimate the rewards of bankers and executives. Top pay has reached such levels that, rather like interstellar distances, what the figures mean is hard to grasp.”

In fact, the average American vastly underestimates the severe wealth disparity that we currently have. This survey, featured in the NY Times, reveals that Americans think our society is far more equal than it actually is:

“In a recent survey of Americans, my colleague Dan Ariely and I found that Americans drastically underestimated the level of wealth inequality in the United States. While recent data indicates that the richest 20 percent of Americans own 84 percent of all wealth, people estimated that this group owned just 59 percent – believing that total wealth in this country is far more evenly divided among poorer Americans.

What’s more, when we asked them how they thought wealth should be distributed, they told us they wanted an even more equitable distribution, with the richest 20 percent owning just 32 percent of the wealth. This was true of Democrats and Republicans, rich and poor – all groups we surveyed approved of some inequality, but their ideal was far more equal than the current level.”

Here is a chart showing the results from their survey:

The fact of the matter is that the overwhelming majority of US population is unaware of the vast wealth at hand. An entire generation of unprecedented wealth creation has been concealed from 99% of the population for over 35 years. Having never personally experienced or known of this wealth, the average American cannot comprehend what is possible if even a fraction of it was used for the betterment of society as a whole.

In fact, given modern technology and wealth, not a single American citizen should live in poverty. The statistics clearly demonstrate that we now live in a Neo-Feudal society. In comparison to the wealthiest one-tenth of one percent of the population, who are sitting on top of tens of trillions of dollars in wealth, we are modern day serfs, essentially propagandized peasants.

The fact that the overwhelming majority of Americans are struggling to get by, while tens of trillions of dollars are consolidated within a small fraction of the population, is a crime against humanity.

The day the average American fully comprehends how much wealth is consolidated within just the top one-tenth of one percent of the population, there will be a massive uprising and all the paid off politicians will be run out of town.

The next time you are stressed out, struggling to make ends meet and pay off your debts, just think about the trillions of dollars sitting in the obscenely bloated pockets of one-tenth of one percent of the population. The first step in overcoming your peasant status is to understand that you are indeed a peasant. This is a bitter pill to swallow and most will prefer to, as they have been conditioned to do, continue on their path of media-induced delusion, denial, apathy and ignorance.

However, I still cling to the hope that once enough people become aware of this hidden and obscured fact, we can have the non-violent revolution we so urgently need. Until then, the rich get richer as a critical mass with increasingly dire economic prospects desperately struggles to make ends meet.

Part Four :: Fascism in America

Other than driving large segments of the American population into poverty, and pushing the majority into massive debt and a state of financial desperation, there is an ever darker side to what is unfolding today. The Economic Elite have turned America into a modern day fascist state.

Fascism is a very powerful word which evokes many strong feelings. People may think that the term cannot be applied to modern day America. However, as Benito Mussolini once summed it up: “Fascism should more properly be called corporatism, since it is the merger of state and corporate power.” In the early 1900s, the Italians who invented the term fascism also described it as “estato corporativo,” meaning: the corporate state.

Very few Americans would argue the fact that corporations now control our government and have the dominant role in our society. Through a system of legalized bribery – campaign finance, lobbying and the revolving door between Washington and corporations – the most power global corporations dominant the legislative and political process like never before. Senator Huey Long had it right when he warned: “When fascism comes to America, it will come in the form of democracy.”

As President Franklin D. Roosevelt once described fascism: “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it comes strong than their democratic state itself. That, in its essence, is fascism — ownership of government by an individual, by a group, or any controlling private power.”

The most blatant modern example of this was the bailout of Wall Street, when the “too big to fail” banks got politicians to promptly hand out trillions of tax dollars in support and subsidies to the very people who caused the crisis, without any of them being held accountable.

XI :: Modern Day Slavery

Another shocking example of how far we have descended into fascism is the American Legislative Exchange Council (ALEC), which is a group of corporate executives who literally write government legislation. They have gone as far as setting up a system that imprisons the poor and then puts them to work, instead of paying living wages to non-imprisoned workers. Make no mistake, this is a modern day system of slavery unfolding before our eyes.

At the leadership of ALEC and various other Economic Elite organizations, poverty has essentially become a crime. To demonstrate these attacks against the poor, there was $17 billion cut from public housing programs, while there was an increase of $19 billion in programs for building prisons, “effectively making the construction of prisons the nation’s main housing program for the poor.” Before laws began to be rewritten in 1980, with direct input from ALEC, we had a prison population of 500,000 citizens. After laws were rewritten to target poor inner city citizens with much more severe penalties, the US prison population skyrocketed to 2.4 million people.

We now have the largest prison population in the world. With only 4% of the world’s population, we have 25% of the world’s prison population. As I reported previously, in a report entitled, “American Gulag: World’s Largest Prison Complex“:

“The US, by far, has more of its citizens in prison than any other nation on earth. China, with a billion citizens, doesn’t imprison as many people as the US, with only 308 million American citizens. The US per capita statistics are 700 per 100,000 citizens. In comparison, China has 110 per 100,000. In the Middle East, the repressive regime in Saudi Arabia imprisons 45 per 100,000. US per capita levels are equivalent to the darkest days of the Soviet Gulag.”

XII :: The Death Toll

The dramatic increase in poverty has obviously torn many families apart and caused a devastating psychological toll, but consider the increase in deaths as a result of poverty and severe wealth inequalities. This is a very difficult statistic to accurately measure, but Columbia University’s School of Public Health conducted an intensive examination of mortality and medical data and estimated that “875,000 deaths in the US in 2000 could be attributed to a cluster of social factors bound up with poverty and income inequality.”

As a report by Debra Watson sums up the study, “There is no reason to believe, after a decade that has seen sustained attacks on social programs and consistently high unemployment rates, that the social mortality rate has declined. On the contrary, it has likely risen.” Indeed, poverty and income inequality have skyrocketed since 2000.

Now, let’s consider the fact that, according to the Census Bureau, 31.1 million people lived in poverty in 2000, and according to Columbia’s study 875,000 deaths came as a result. This means that 1 out of every 35.5 people living in poverty die annually as a result of their impoverishment. If you extrapolate this data to the 2009 total of 52.8 million people living in poverty, you get an estimate of 1,486,338 deaths within that year. Even if you use the lower poverty totals from the Census Bureau, 43.6 million people, you get an estimate of 1,228,169 deaths in 2009.

XIII :: Deliberate Systemic Attacks

The dramatic increase in economic inequality and poverty, along with the unprecedented rise in wealth within the top one-tenth of one percent of the population has not happened by mistake. It is the designed result of deliberate governmental and economic policy. It is the result of the richest people in the world, and the “too big to fail” banks, using the campaign finance and lobbying system to buy off politicians who implement policies designed to exploit 99.9% of the population for their financial gain. To call what is happening a “financial terrorist attack” on the United States, is not using hyperbole, it is the technical term for what is currently occurring.

Compare the million people who die annually as a result of these economic attacks, to the 2,977 that died on 9/11. As someone who lived three blocks from the World Trade Center, as tragic as 9/11 was, these economic attacks are much more severe and damaging to us as a nation, albeit a much slower and unseen death toll. Nonetheless, the result is of genocidal proportions. One can statistically compare the economic attacks on the US to the invasion of Iraq, which some estimate as leading to one million deaths. Once again, many of those deaths came in brutal and spectacular fashion in bombing campaigns known as “shock and awe.” However, the death toll compares to the hidden brutality of a four-year campaign of economic “shock and awe.” Just as Iraq was invaded, the US has been invaded by a global banking cartel.

As shocking as that is to realize, consider that this is happening throughout the world. While the US poverty death rate is probably higher than in most European countries, the Federal Reserve’s economic policies — along with policies from the International Monetary Fund, World Bank and Bank of International Settlements — have caused rioting and uprisings over skyrocketing food prices and costs of living throughout the world. The fact of the matter, and very harsh and unfortunate reality of this crisis, is that the global economic central planners are deliberatelycarrying out genocidal economic policies.

As Che Guevara, a man who took on the global financial elite, once said, “The amount of poverty and suffering required for the emergence of a Rockefeller, and the amount of depravity that the accumulation of a fortune of such magnitude entails, are left out of the picture, and it is not always possible to make the people in general see this.”

When tens of trillions of dollars deliberately flow to the top economic one-tenth of one percent of the global population, while large percentages live in poverty, you have to conclude, in technical terms, that a Neo-Feudal-Fascist state is upon us. The rich have never been richer, while their paid off politicians make budget cuts for the poor and middle class, and cause the cost of basic necessities to skyrocket.

You can call me extreme, but the reality of this is extreme, these people, the global economic top one-tenth of one percent, are genocidal fascists carrying out a holocaust. Fascism has evolved. There is no need to get blood on your hands while rounding up people and putting them into concentration camps when you can do it through economic policy while sitting in a jacuzzi on a corporate jet, or in a three-piece custom-made Armani, completely detached and insulated from the world in which you plunder.

However, as what happens with all empires, greed and arrogance makes them overreach. The beaten down masses get to a point where they literally can’t live under these conditions. This desperation spreads throughout the population until it reaches a critical mass, then, suddenly, they rise up and the empire begins to collapse… Tunisia, Algeria, Egypt, Israel, (Northern Africa, the Middle East), Albania, Greece, Spain, Britain (Europe), Wisconsin…

The Economic Elite are overreaching and their empire is collapsing.

The decentralized global rebellion has begun…

Welcome to World War III.

Which side of history do you want to be on?

As a wise old friend once said, “You can’t be neutral on a moving train.”

- David DeGraw is the founder and editor of His long-awaited book, The Road Through 2012: Revolution or World War III, will finally be released on September 28th. He can be emailed at David[@] You can follow David’s reporting daily on his new personal website: