What Socialism and Fascism have Brought to America Is Not Pretty
On Friday, September 10, 2010, Horizon Bank, Bradenton, FL was closed by the Florida Office of Financial Regulation and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
In site of intervention by “the Working Group on financial Markets”, gold has increased almost 16% year-to-date. It has done so for each of the past ten years, which has gone almost unnoticed by professionals and investors. Obviously some are watching or the price wouldn’t be where it is. Commodities have been up for 11 years and nine years for Treasuries. As you know we are trend followers, so gold and silver have been kind for our readers since June of 2000. That is after we bailed our subscribers out of the stock market in the second week of April of 2000. We were at a conference and Joe Granville made the same call on that sunny Saturday, so long ago.
As we pointed out in our last issue the administration will attempt to have $643 billion in stimulus passed by Congress between November 5th, and the end of the legislative session, this in the midst of 52.4% unemployment of people between 16 and 24 years old. No one needs to remind politicians and those who control them that this is the age group that fight wars and start revolutions. The corporations, which would receive tax breaks of $300 billion are making record profits and are sitting on over $1.5 trillion in cash.
These are the same corporations that continue to fatten their bottom line by laying off workers. Far be it for us to call this a political payoff, especially with the elections only seven weeks away. This reminds us of five years ago when Congress allowed American transnational conglomerates, the same companies that have cost America eight million jobs over the past nine years, via offshoring and outsourcing, to bring home $350 billion from their hideaway in the Cayman Islands. The deal was that these corporations would bring home their loot at a tax rate of 5-1/4% instead of paying the regular 35%. For this they would create jobs. Needless to say, few jobs were created. These are the kind of sweetheart deals our politicians arrange for those who pay them off. Incidentally, the tax scam is still flourishing and the corporations now have $1.6 trillion sitting offshore waiting for another dispensation. Some things never change and what the administration proposes is just more of the same. A reward for those destroying our country. Wall Street, of course, looks at this quite differently, because they have an attention span and time horizon of 30 seconds, or the time needed to make the next trade or to create the next scandal. We were 28 years on Wall Street and we didn’t miss much. Incidentally, administrations pull this, let’s payback our masters, about every 2-1/2 years, thus, if you take the time to look you will find this is nothing new. Another question is where did the $868 billion in the first stimulus program go too? We have seen no accounting and sources in Washington tell us $275 billion still hasn’t been spent. Perhaps it has ended up in the hands of some labor union.
The real help is needed for creating jobs, not adding to profits of transnational conglomerates. Hasn’t anyone told the President real unemployment is 21-3/8% and the jobless between 16 and 24 years old is 52.4%? These are the youth that demonstrate and cause revolutions. Could we be setting up a repeat of 1789’s French Revolution? This is the lowest employment level for this group since statistics began to be compiled in 1948. In spite of stimulus one, hiring intentions are 50% lower than they were 1-1/2 years ago.
In fact, large corporations intend to lay off even more workers. These are the same corporations that will receive, if passed, $300 billion in tax breaks, even though they have trillions in cash. In spite of the fact that Wall Street, banking, government, economists and analysts think all this is normal, it is not normal, this is a depression. Government is sustaining the depression along with the Fed. In spite of these efforts every economic statistic is lower today than it was almost three years ago. Everything is not fine and that is why the President has been told to inject $650 billion into the economy and that is why the Fed is again going to engage in quantitative easing of almost $2 trillion. The facts speak for themselves. Retail sales are 4% lower, housing starts 47% lower with an admitted 12-month inventory when in fact it is considerably higher, GDP has fallen 1% and employment has fallen 6% and is still falling. How far away can the riots be?
Some of the latest news is that a record number of loan resolutions in August softened the effect of $3.1 billion in new delinquencies. Recent defaults on five loans greater than $100 million contributed to a 23-basis point net increase taking the US CMBC delinquency rate to 8.48%. Those three giant loan failures are Innkeepers Portfolio $825.4 million, Hyatt Regency, Bethesda, Maryland for $140 million and Lynnewood Gardens for $129.5 million. More than 200 loans totaling $2.1 billion in delinquency in July did not appear in the August list. Three of those loans were for more for over $100 million.
Fitch’s ratings delinquency index includes 2,931 loans totaling $37 billion over 60 days overdue.
The administration has done a very poor job over 21 months. One in seven Americans are in poverty, that is 14.3%. Child poverty has risen from 19% to 20%, and in the 18-64 year group it has jumped from 11.7% to 12.4%. This takes us back to the War on Poverty and the late 1950s. The current anticipated poverty rate increase has moved from 13.2% to 15%. Forty-four million of Americans are on food stamps and 45 million live in poverty. Wall Street and banking get bailed out, but no jobs are created for the average American.
The formation of the European Union and the euro zone have taught us that putting together different countries as a group does not work. This lofty failure has been exacerbated by free trade and globalization, a benefit of WTO, the World Trade organization. With all the huffing and puffing about recovery, second quarter euro zone growth was 1% and that was the highest in four years. Taxes were recently raised and the zone is now imposing austerity due to excessive debt, the result of which can only be depression. They figure paying the bankers is far better than assisting the economy and the public. Sovereign debt ratings are being cut, and Europeans are rushing to buy gold, silver and Swiss francs. The 10-year Swiss franc note is yielding a puny 1%. We guess the real question is can Europe and England be worse than the US? We do not know, but what we do know is it’s all bad.
Then there is Greece, Europe’s poster child of failure. Mostly peaceful demonstrations abound as more and more workers are laid off. The IMF loan formula for $140 billion is deep austerity. As the people starve, PM George Papandreou, Bilderberg and Illuminist, wants taxes on corporations cut from 24% to 20%, so corporations will invest. The problem is if they get the tax cut there is no guarantee that they will use the money to increase plant and equipment, do research, or hire people. And, if the past is prologue then they will simply keep the difference for themselves. Unfortunately, that has been our experience. The budget deficit has to be cut from 13.6% of GDP to 8.1% over just seven months, which is economic and financial suicide, just to pay back European bankers and governments, which should have never made the loans initially. Cuts yes, but not in that time frame. They should be spread out over 3 to 4 years. Do not forget that this problem has existed for years. As the layoffs deepen tax revenues fall. Forty percent of judicial procedures presently in court concern tax disputes. Just like in Spain, $56 billion in environmentally friendly projects are underway, which will end in failure. Greece should just walk away from the bankers and default, dump their government and the IMF, leave the euro, reintroduce a cheap drachma, cut taxes and cut government spending 30% or over 3 or 4 years. Five years of depression is a lot better than 30 to 50 years under IMF dictates.
As we have seen already as stimulus programs abound and quantitative easing holds forth, this debt and monetary debasement is forcing the middle class and the populace as a whole into the arms of government dependence. This process is destroying the middle class worldwide. As consolidation takes place in order to form monopolies, middle sized and smaller companies are driven out of business and business formation comes to an end.
Personal taxes are rising, as are taxes on the sale of your home, and in the form of higher fees at all governmental levels. It doesn’t look like the Bush tax cuts will be canceled, but other taxes are being instituted every day. The new taxes passed within the Health Care Reform are some 19 in number and employers will pay 30% more in premiums, unless they opt out by paying a large penalty tax.
What has happened to America is that the private sector only is allowed to exist to keep banking in business and to supply funds for government, bureaucrats, other criminals and the elitists who actually run your country. Who wants to start or maintain a business under these conditions? Is it any wonder that there are few new jobs? Business at the middle and lower levels have no voice in Washington. Like in Germany in the 1930s, America is run by monopoly capitalists. A marriage of transnational conglomerates and government known as corporatist fascism. They are deliberately killing small business just as we have seen for 65 years in Europe. Next comes the jackbooted thugs from Homeland Security to keep order. Those with no place to live and without jobs will be relocated to interment camps and those who criticize the regime, like us, will be eliminated.
The current depression did not just happen â€“ it was planned that way to bring the citizens of the US and Europe to their knees economically and financially to bring about world government and the enslavement of all the world’s people. You might call this the triumph of the parasites. Over the next few years, taxation will increase until it reaches levels now seen of 60 to 83 percent in Europe. That is how they intend to strangle us just as they have Europe, with very high income taxes and value added taxes. Our industrial sector will migrate just as it is doing in Europe to the second and third worlds to bring about the great socialist leveling. The VAT tax is all consuming and in the end deeply retards growth. Just look at Europe, it is not capable of recovery. Their citizens are simply taxed to death. It’s all about control and that is what world government is all about. Taxation saps incentive and that is how countries and economies fail. There will be no end to government regulations and interference.
This all leads to a small coterie of the rich, a shrinking middle class and those with jobs and those without jobs. This gap, our President tells us, will be closed with his new $650 billion stimulus plan. Whether the items pass remains to be seen. We do know the employer of last resorts has been the federal government. We do know federal employees make double state and private workers and privately employed workers are three times more likely to be terminated. Federal workers are a privileged class, which could eventually start social conflict. Conflict federal workers could not win. That gap between federal and private employees is widening. Ninety percent of government employees receive lifetime pension benefits, while only 18% of private employees receive them.
Then there is the endemic political corruption at the federal level, although corruption is certainly present at the State level. Unions and corporate interests are the moving parties that manifest the corruption. In many states retirement benefits alone are growing at 15% annually. Worse yet, it is almost impossible to fire a public service employer. What do you do when you are broke and you must by law pay benefits? These problems go on and on and can only lead to a breakdown in society. This is what socialism and fascism have brought to America and it is not pretty.