Tarp Set-up

Well, I was outside trying a different tarp set-up and thought I would show you an easy design. Hope it helps.

More states considering pay-by-the-mile car taxes

http://content.usatoday.com/communities/driveon/post/2011/08/more-states-considering-pay-by-the-mile-taxes/1Well, you don't think you pay enough taxes, do you? It seems the politicians think you should pay more. Of course, Oregon will drop state gasoline taxes which now is at $0.30 per gallon.

Okay, let us say your fuel loving pick-up truck gets only 15 miles per gallon. That would mean you pay a $0.02 per mile in state taxes. And of course your tree hugging neighbor that drives a hybrid gets 60 mpg, so he only pays $0.005 per mile in state taxes. That seems fair, huh. Well now Oregon is considering to drop all that and charge you $0.85 PER MILE driven. So your Oregon state gasoline "tax" for that gallon of gas that get you 15 miles is $12.75. I don't live in Oregon, so I don't know what they are paying for a gallon of gasoline there, but here we are paying right at $3.50 as of today. Let us do the math. $3.50 minus the $0.30 in state gas taxes that they will stop charging is $3.20, for those 15 miles you you get in that pick up truck you will need to add $12.75 for the "new" per mile charge. So now your cost just went from $3.50 for 15 miles to $15.95 for the same 15 miles. Now that's fair, because what that neighbor pays will be the same you pay is what spin they will probably put on it. You see, it doesn't matter if you have a "good gas milage vehicle" you will be paying per mile, not per gallon. That ought to get the tree huggers panties in a wad!

But, wait....You don't think your state is considering the same thing? Think again. I would bet that any state that is having budget problems (which is most) would be looking at something similar.

Keep your eyes WIDE open folks.

Must Watch

You don't think the govt is watching you? They probably knew the words I was going to type before I typed them. Gotta go, there is someone knocking at the door and I think I hear a helicopter circling overhead.

Obama, Obama

Open Letter From Senator Rand Paul, (R) KY

Folks, this says it all. We have been played by our politicians. Thankfully, we have a few statemen left to tell the truth. Everyone of my CONgress critters that voted for this bill will not be receiving a vote from me during their next election cycle. I would encourage you to do the same.

http://paul.senate.gov/?p=press_release&id=280

Open Letter: Why I Oppose the Debt Ceiling Compromise

Aug 1, 2011

WASHINGTON, D.C. - Today Sen. Rand Paul issued an open letter on the subject of the debt ceiling compromise facing the Senate. Below is that letter.

To paraphrase Senator Jim DeMint: When you're speeding toward the edge of a cliff, you don't set the cruise control. You stop the car. The current deal to raise the debt ceiling doesn't stop us from going over the fiscal cliff. At best, it slows us from going over it at 80 mph to going over it at 60 mph.

This plan never balances. The President called for a "balanced approach." But the American people are calling for a balanced budget.

This deal does nothing to fix the overreaches of both parties over the past few years: Obamacare, TARP, trillion-dollar wars, runaway entitlement spending. They are all cemented into place with this deal, and their legacy will be trillions of dollars in new debt.

The deal that is pending before us now:

• Adds at least $7 trillion to our debt over the next 10 years. The deal purports to "cut" $2.1 trillion, but the "cut" is from a baseline that adds $10 trillion to the debt. This deal, even if all targets are met and the Super Committee wields its mandate - results in a BEST case scenario of still adding more than $7 trillion more in debt over the next 10 years. That is sickening.
• Never, ever balances.
• The Super Committee's mandate is to add $7 trillion in new debt. Let's be clear: $2.1 trillion in reductions off a nearly $10 trillion,10-year debt is still more than $7 trillion in debt. The Super Committee limits the constitutional check of the filibuster by expediting passage of bills with a simple majority. The Super Committee is not precluded from any issue, therefore the filibuster could be rendered moot. In addition, the plan harms the possible passage of a Balanced Budget Amendment. Since the goal is never to balance, having the BBA as a "trigger" ensures that the committee will simply report its $1.2 trillion deficit reduction plan and never move to a BBA vote.
• It cuts too slowly. Even if you believe cutting $2.1 trillion out of $10 trillion is a good compromise, surely we can start cutting quickly, say $200 billion-$300 billion per year, right? Wrong. This plan so badly backloads the alleged savings that the cuts are simply meaningless. Why do we believe that the goal of $2.5 trillion over 10 years (that's an average of $250 billion per year) will EVER be met if the first two years cuts are $20 billion and $50 billion. There is simply no path in this bill even to the meager savings they are alleging will take place.

Buried in the details of this bill is the automatic debt limit increase proposed a few weeks ago. The second installment of the debt ceiling increase is initiated by the President automatically and can only be stopped by a two-thirds vote of Congress. This shifts the Constitutional check on borrowing from Congress to the President and makes it easier to raise the debt ceiling. Despite claims to the contrary, none of the triggers in this bill include withholding the second limit increase.

Credit rating agencies have clearly stated the type of so-called cuts envisioned in this plan will result in our AAA bond rating being downgraded. Ironically then, the only way to avoid our debt being downgraded and the resulting economic problems that stem from that is for this bill to fail.

This plan does not solve our problem. Not even close. I cannot abide the destruction of our economy, therefore I vigorously oppose this deal and I urge my colleagues and the American people to do the same.

Sincerely,




Rand Paul, M.D.
United States Senator

This Speaks For Itself

A Senator Telling It Like It Really Is?

You have to watch it until the end. Senator Tom Coburn actually tells the truth! He admits that CONgress is and has been lying to the American people about all the "spending cuts". Like many have been saying, these "cuts" that have been proposed by both sides have been false. Watch this video and listen. I just hope people wake up and get a chance to hear this. PLEASE, forward this page to your friends and family. Get this message out so everyone can hear how we have been lied to by our elected officials.

Who Is Not Telling The Truth?

President Obama stated that 40 million people will not receive checks if the debt ceiling is not raised. Is he telling the truth, or is he trying to scare our seniors? You decide.

Cap and Balance...Will It Work?

Here is a good article I read from the Market Ticker Guy.

"Cut Cap And Balance": Scam Or Real?

 

Let's look at the proposal:

1.  Cut - We must make discretionary and mandatory spending reductions that would cut the deficit in half next year.

2.  Cap - We need statutory, enforceable caps to align federal spending with average revenues at 18% of Gross Domestic Product (GDP), with automatic spending reductions if the caps are breached.

3.  Balance - We must send to the states a Balanced Budget Amendment (BBA) with strong protections against federal tax increases and a Spending Limitation Amendment (SLA) that aligns spending with average revenues as described above.

Ok, so we go from ~$1,700 billion in deficits to $850 billion this coming fiscal year.

That's somewhere between $750 and $850 billion in spending cuts right now, depending on how you're looking at the deficit numbers (that is, if you're cheating or not.)

That will result in at least an immediate 5% hit to GDP.  Is the GOP willing and ready to accept that?  If so, let's see a statement on that, because this is the outcome of such a cut in government spending.  The reason is simple: GDP is defined as "C + I + G + (x-i)" and you're proposing to cut "G" by 5% of GDP.  Bingo.  The flow-through on that will result in an even larger decline (and economists can fight over how much that multiplier is, but it's greater than "1")

The cap does not enforce a maximum deficit size.  It therefore is defective in that the GOP can simply pass tax cut after tax cut and yank deficits back up to "stimulate", which makes the problem worse.

"Balance" fixes it, of course, but is a Constitutional Amendment and requires passage in both houses plus ratification.  It is thus not a "right now" solution.

With one modification I would support "CCB" without reservation: In year two and beyond total government debt, including public and intergovernmental, may not grow faster than GDP, with automatic spending reductions of double any violation if it does.  I would leave only one exception: In the event of Congressionally-declared war, in which case the exception would have to be voted upon and passed by a 2/3rds majority every six months.  Yes, this means that if GDP is declining debt must decline faster (that is, the government must run a surplus!)

The GOP is close on this.  Not there, but close.  Make that one change above and you're actually addressing the problem in a way that will fix it.

Incidentally, if you make that change you permanently fix the problem and avoid S&P and Moody's rating action.

Be aware, however, that such a plan, if enacted, will bring short-term economic pain, and lots of it.  You had better be prepared with a fundamental tax, "free trade" and medical system overhaul because that has to happen in short order once this goes into place as a buffer.

This plan, however, is progress compared to what we've heard from Congress and especially Obama thus far.

Another Reason To Vote Them Out

If the last video wasn't enough....

Vote Them All Out!

This needs to be passed along to everyone you know.

And to think we hard working Americans elected them.



Here is the link he spoke about in the video. You should view it and see some of the disgusting net worth increases some of them had.

Vote them all out, I say!

Do They Think We Are Idiots?

Well, there may be some fools out there that want to "volunteer", but I won't be. They won't even be giving you a tax break if you did give them some of your cash. I'm sure there will be some sheeple that will fall for this...if it even passes. Look for other ways they will want and get your money. After all, it is our fault that they are spending our money. Also, how much will this cost the employers? They will be responsible for withholding the money and sending it in to the Feds. I'm sure IRS will have to write some new rules as well into the 13,000 pages of current rules. We need to watch and make sure they don't change voluntary to mandatory. Oh wait, I'm sure they wouldn't even think of doing that!


H.R.2411 -- Reduce America's Debt Now Act of 2011 (Introduced in House - IH) 112th CONGRESS
1st SessionTo provide for an employee election on Form W-4 to have amounts deducted and withheld from wages to be used to reduce the public debt.

July 6, 2011

Mr. CRAWFORD (for himself, Mr. TIBERI, Mr. FINCHER, Mr. LANDRY, Mr. DENHAM, Mr. DOLD, Mr. FLORES, Mr. GRIFFIN of Arkansas, Mr. AUSTIN SCOTT of Georgia, Mr. HUIZENGA of Michigan, Mr. PALAZZO, and Mr. GUINTA) introduced the following bill; which was referred to the Committee on Ways and Means

---

To provide for an employee election on Form W-4 to have amounts deducted and withheld from wages to be used to reduce the public debt.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Reduce America's Debt Now Act of 2011'.

SEC. 2. VOLUNTARY WITHHOLDING FROM PAYROLL FOR REDUCTION OF THE PUBLIC DEBT.

(a) In General- An employee may elect for an employer to deduct and withhold upon the payment of wages by such employer amounts to be used to reduce the public debt.

(b) Requirement of Withholding- Every employer making payment of wages shall deduct and withhold upon such wages any amounts so elected, and shall pay such amounts over to the Secretary of the Treasury at such times and in such manner as the Secretary shall by regulation prescribe.

(c) Transfers to Account To Reduce Public Debt- The Secretary shall, not less frequently than monthly, transfer to the special account established by section 3113(d) of title 31, United States Code, amounts equal to the amounts paid over under subsection (b).

(d) Definitions and Special Rules- For purposes of this section--

(1) WAGES, EMPLOYEE, ETC- The terms `wages', `employee', and `employer' shall have the respective meanings given such terms under section 3401(a) of the Internal Revenue Code of 1986.

(2) AMOUNTS NOT DEDUCTIBLE- Notwithstanding section 170(c)(1) of such Code, no deduction shall be allowed for any amount deducted and withheld from wages under subsection (a).

(3) ELECTION TO BE INCLUDED ON WITHHOLDING EXEMPTION CERTIFICATE- Not later December 31, 2011, the Secretary of the Treasury shall modify withholding exemption certificates (described in section 3402(f)(2) of such Code) to include the election under subsection (a). The Secretary shall include on such certificates a reasonably conspicuous statement that any amounts deducted and withheld from wages under subsection (a) are not deductible as charitable contributions for Federal income tax purposes.

(e) Effective Date- This section shall apply to remuneration paid after December 31, 2011.

SEC. 3. EXCLUSION OF PUBLIC DEBT WITHHOLDING FROM WAGES.

(a) Social Security Taxes-

(1) AMENDMENT TO 1986 CODE- Subsection (a) of section 3121 of the Internal Revenue Code of 1986 is amended by striking `or' at the end of paragraph (22), by striking the period at the end of paragraph (23) and inserting `; or', and by inserting after paragraph (23) the following new paragraph:

`(24) any amount deducted and withheld pursuant to an election under section 2 of the Reduce America's Debt Now Act of 2011.'.

(2) AMENDMENT TO SOCIAL SECURITY ACT- Section 209(a) of the Social Security Act is amended by striking `or' at the end of paragraph (19), by striking the period at the end of paragraph (20) and inserting `; or', and by inserting after paragraph (20) the following new paragraph:

`(21) Any amount deducted and withheld pursuant to an election under section 2 of the Reduce America's Debt Now Act of 2011.'.

(b) Unemployment Taxes- Subsection (b) of section 3306 of the Internal Revenue Code of 1986 is amended by striking `or' at the end of paragraph (19), by striking the period at the end of paragraph (20) and inserting `; or', and by inserting after paragraph (20) the following new paragraph:

`(21) any amount deducted and withheld pursuant to an election under section 2 of the Reduce America's Debt Now Act of 2011.'.

(c) Wage Withholding- Subsection (a) of section 3401 of such Code is amended by striking `or' at the end of paragraph (22), by striking the period at the end of paragraph (23) and inserting `; or', and by inserting after paragraph (23) the following new paragraph:

`(24) any amount deducted and withheld pursuant to an election under section 2 of the Reduce America's Debt Now Act of 2011.'.

(d) Effective Date- The amendments made by this section shall apply to remuneration made after December 31, 2011.

A BILL
IN THE HOUSE OF REPRESENTATIVES
H. R. 2411

The Unanimous Declaration of the thirteen united States of America

Happy July fourth, my fellow Americans

The Declaration of Independence: A Transcription
________________________________________
IN CONGRESS, July 4, 1776.
The unanimous Declaration of the thirteen united States of America,
When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.--Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.

He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.

He has affected to render the Military independent of and superior to the Civil power.

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For Quartering large bodies of armed troops among us:

For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us in many cases, of the benefits of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:

For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.
Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.
We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

Take a few minutes and watch this video. Do not get caught up in who is reading, but instead, listen to the words and reflect on that moment in our nations history.

Can You Say Ponzi Scheme?

Tim Geithner's response to Senator Jim DeMint's May 26th letter.

I especially like this part...
If investors chose not to purchase a sufficient volume of new Treasury securities, the United States would be required to pay the principal on maturing debt, and not merely the interest, out of available cash. Yet the Treasury would be unable to make these principal payments without the continued confidence of market participants willing to buy new Treasury securities.

Be Careful Who You Listen To...

America, you are being played. The main streem media, or should they be called the lame stream media, are giving you the slant that they want you to hear. This may not be the truth though as this video shows.  Be careful who you watch and listen to, as you may not be getting the whole story (or even part of the real story).

America...A Third World Country? Is It Coming?

Well, I hope not, but reading this it sure sounds like we are heading towards trouble.

http://gainspainscapital.com/

Are You Ready For 3rd World America?

The US economy is literally on the ledge of a cliff.
Today, the Federal Government accounts for 35% of incomes and salaries in the US. That’s over one third of all income in the US coming from the Government’s ability to dole out funds.
What supports this largesse?
Money printing and our ongoing debt-orgy. And today, these are one and the same. The US Federal Reserve and Treasury have enacted policies so insane that the US Federal Reserve is now the single largest holder of US Debt with a balance sheet of  $2.8 trillion.
Let’s give that number some perspective. Germany, the world’s FOURTH largest economy is only $3.3 trillion in size. At $2.8 trillion the Fed’s balance sheet is larger than the economies of France, the UK, and Brazil.
Why is the Fed’s balance sheet so huge? Because US Treasuries are so unattractive to foreign Governments that the Fed has had to pick up the slack and buy our debt (usually within a week or two of it being issued).
Let me rephrase that: the US Fed is now printing money so it can buy US Debt because other investors are no longer interested in buying it.
This is just one of the various schemes Washington is employing to maintain its fiscal insanity. Another is the active raiding of pension funds to buy new US Debt (YES, the Treasury is doing this).
So… the US Government is now paying over 1/3^rd of US incomes… and it’s financing this by having the Fed buy new debt from the Treasury.
Do you think this entire system might end up collapsing in a horrific manner?
And this is just ONE ASPECT of the nightmare that is the US Financial system. I’m not even detailing the $600 TRILLION in derivatives, the clear insolvency of the big banks (you know who I’m talking about), the FDIC running a deficit (are our deposits REALLY insured?), erupting inflation in food and energy prices, (Fed data CLAIMS prices FELL in the last four months) and the hundred other issues all of which will end very, VERY badly.
Regardless of how we look at the US’s current situation, it is clear that 2008 will NOT go down in history as THE Financial Crisis for the US. No, 2008 will be considered the “warm-up.”
The reason for this is simple. 2008 was primarily the collapse of the private banking system in the US. The Fed’s response to this was to transfer the garbage debts that nearly took down the banks ONTO the US’s balance sheet.
Put another way, the Fed allowed the systemic risk to spread from private bank balance sheets ONTO the US’s public balance sheet… which means the next Crisis will involve not only Wall Street and the banks but the US as a whole.
I’m talking about a sovereign debt Crisis. The kind of collapse we’re now seeing in Greece… only for the single largest economy in the world as well as its reserve currency.
So what happens when this Crisis hits and a partial if not complete Government shutdown occurs? What happens when that 35% of incomes and salaries stops being paid? What happens when prisons and other Government paid services run out of money? What happens when the next major banking run reveals that there is no WAY on earth the FDIC can truly insure all the deposits in the US (other than more money printing from the Fed)? What happens when the US defaults on its debts?
THEN and only then will we experience the REAL Crisis of the US Financial system. It is coming. There is no doubt about it. And people are only just starting to wake up to it (nearly half of Americans now believe we’re going to have a Great Depression).
Smart investors and independent thinkers are already taking steps to get ready for this. With just a few key moves and strategies it WILL be possible to not only survive but thrive during the coming disaster.
On that note, I’m currently preparing my subscribers for what is going to be a REAL Crisis. We’re doing this by protecting our families, savings, and portfolios via several  high-impact protection strategies designed to keep these areas of our lives safe during the coming fall-out.
All in all, we’ve taken to prepare for any eventuality whether it be food shortages, hyperinflation, a stock market collapse, a government shutdown… ALL the disastrous outcomes I’ve described above.
So if you’ve yet to take action to prepare yourself and your loved ones for what’s coming… it’s not too late yet… but we’re getting close to it.
To find out more about how to prepare and even thrive during the coming economic fall-out…
Click Here Now
Graham Summers

Mark Of The Beast

Preparing!

Things seem to be happening quickly. I am using more of my spare time preparing and getting things ready for my family in case things should go downhill quickly. I still don't know when or what will happen, but I strongly believe something will. I try and read as many blogs, news sites, etc. so I can try and piece it together. If you have not started preparing, I would suggest you start.

About a year ago, not too long after I started this blog, I was contacted by a forum owner and asked if I would like to be the Medical Moderator at his newly formed forum. Being that he was a friend of mine, I said yes. I have spent more time there and posted more articles at that forum than here.

Hence, I will be posting more items at http://www.survivalandpreparedness.com/ in the coming days than here. If you have not yet checked it out I would suggest you do so. There are many people that post over there that are very knowlegable. The site is very friendly as well. And best of all it's FREE! Come join us.

The Greatest Depression Is Coming

I read this article today and it says it all. You may not be seeing the signs around us, but if you read this short article you should have your eyes opened. Many have said that America survived The Great Depression in 1929, but reading this article you may see why it will be a lot harder this time around. America needs to WAKE UP, or I fear it will not survive.

Here is the article in it's entirety.

Why the Greatest Depression of All Time Has Begun 

Thursday, June 2, 2011, 05:30 AM

By Wayne Allyn Root, Former Libertarian Vice Presidential Nominee


I am a successful small businessman and a patriot who loves America and always sees its greatness. I am also an optimistic, positive thinker who always sees the glass half full.

But not this time.

I predicted doom if Obama was elected. Sadly the results are far worse than imagined. The economy is in shambles. America is staring at economic disaster -- Armageddon. Even me, the eternal optimist is scared at what the future holds. We are the Titanic, headed straight for the iceberg.

America has always been a land of boom and bust. It’s just part of business cycle. But Obama and his socialist cabal have channeled Hoover and FDR, who turned an ordinary bust into The Great Depression with a toxic strategy of more government, more spending, more debt, more rules and regulations strangling business, higher minimum wages, more power to unions, more entitlements, higher taxes, more printing of money by Fed, and trade tariffs. This is the Obama blueprint squared.

The question this time is, is Obama doing it because he understands nothing about business? Or does he understand exactly what he's doing? Is Obama's goal to overwhelm the system, incite crisis, sow doubt about capitalism, and force the citizens to beg for government to save them, thereby opening the door to Socialism? Is Obama's plan to redistribute the wealth, and at the same time to bankrupt the people with wealth and power, thereby crippling his political opposition?

Does it really matter?

Here's where the story gets downright frightening. This time the results are going to be dramatically worse than 1929. This time we are facing The Greatest Depression ever.

Why? Because The Great Depression had NONE of problems and obligations we are now facing:

In 1929 America was not $100 trillion in debt and unfunded liabilities.

In 1929, most of our states were not bankrupt, insolvent and dependent on the federal government to survive.

In 1929, we had far fewer government employees living off taxpayers. Today 1 out of 5 federal employees earn over $100,000. California lifeguards and Las Vegas firemen earn $200,000. 77,000 federal employees earn more than the Governors of their states. Government employees retire at age 50 with $100,000 pensions for life. The postal service - without competition- loses $8 billion annually. Protected by their unions and the politicians they elect, government employees are bankrupting America. Even FDR said he could not imagine allowing public employees to unionize.

In 1929, Social Security, Medicare, and Medicaid didn’t exist. The federal government had no such obligations threatening to consume the entire federal budget within a few years.

In 1929, there was no such thing as welfare, food stamps, aid to dependent children, or English as a second language programs. American’s didn’t consider it the responsibility of government to pay for breakfast and lunch for school students - let alone illegal immigrants.

In 1929, we didn’t have millions of illegal immigrants and their children collecting billions of dollars in entitlements from U.S. taxpayers.

In 1929, legal immigrants wanted only to work. My grandparents from Russia and Germany received no government benefits. They worked day and night to provide for their family and become American citizens. It was sink or swim.

In 1929, we had 150 million citizens with a strong work ethic- all motivated to earn the American Dream for their children and grandchildren. Americans were hungry in 1929. Today the hungry, motivated citizens and entrepreneurs are in China and India.

In 1929, we had an education system that was the envy of the world. Today our public schools are in shambles. We spend the most in the world, and get among the worst results. The difference today? Teachers unions are in charge, instead of parents

Our students are taught socialism and the great benefits of big government. They graduate with few skills, qualified only for low paying manufacturing jobs that no longer exist- they've been shipped to China and India. What will this workforce do for the rest of their lives? Live off the government dole? Who will pay for it?

In 1929 children had hope for the future. Today they are hopeless, helpless, and clueless – an entire generation that only knows drugs, gangs, rappers, government handouts, teen pregnancy- and it goes downhill from there.

In 1929 taxes were much lower. Forget the tax rates- they were meaningless. In those days we had a cash economy, so most businesses paid little or no taxes. Sales and FICA taxes didn’t exist. Today the combined local, state, property, gas, sales, FICA and federal taxes are the highest burden in history. This stifles entrepreneurship and hinders the financial risk-taking necessary to create jobs and get out of a Great Depression.

Do you get the picture? Disaster looms. We are staring at the Greatest Depression ever.

Still doubt me? Did you read the recent news report of 80 teen girls all pregnant in one Memphis high school? That’s 80…eighty…in one high school. This is happening all over the USA. Who will pay the bills?

We are in deep, deep trouble. There is no easy way out. The noose is tightening. The economy is crumbling. The situation is turning more hopeless by the hour. The more government gets involved, the worse it gets. Coincidence?

The solution is simple- cut government, cut spending, cut entitlements, cut taxes, stop the wars, end the Fed, term limit politicians, and back the dollar with a gold standard. Or, like so many other great empires of history, America may never recover from this Greatest of All Depressions that Obama is driving us directly toward.

QE3?

Well it may be on the way. Mr. Blinder, a Princeton professor seems to have been the first to suggest we need it. He told his Bloomberg host the "US needs "somewhat more" fiscal stimulus once again in order to boost employment". In other words, keep the presses rolling until the unemployment number gets better. Apparently he wrote an article titled How We Ended The Great Recession back in July 2010.

US Debt Limit Reached

By Jeffrey Sparshott and Jeff Bater, Of DOW JONES NEWSWIRES

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201105111542dowjonesdjonline000477&title=treasury-auctions-to-take-us-over-debt-ceiling-on-monday

The highlighted sentances just about says it all!

Treasury Auctions To Take US Over Debt Ceiling On Monday

WASHINGTON -(Dow Jones)- The Treasury Department auctioned $56 billion in new debt Tuesday and Wednesday, enough to take the U.S. over its federal debt ceiling when the three- and 10-year notes settle on Monday.
Treasury officials last month flagged May 16 as the day the government would hit the $14.294 trillion debt limit.
The U.S. is selling $72 billion in new debt over three days this week. The Treasury auctioned $32 billion in three-year notes Tuesday and $24 billion in 10-year notes Wednesday, and will sell $16 billion in 30-year bonds Thursday. All of the auctions will settle Monday.
As of Tuesday, total debt subject to the limit was $14.274 trillion, according to the Treasury Department.
The Obama administration has asked Congress to raise the limit, warning that failure to act could lead the government to default by Aug. 2--and could spook investors even before then.
House Speaker John Boehner (R., Ohio) said Monday that any increase in the government's debt limit should be accompanied by trillions of dollars in spending cuts.
"It's true that allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt limit without simultaneously taking dramatic steps to reduce spending and to reform the budget process," he said.
The federal budget deficit widened in April, with the government spending $ 40.49 billion more than it collected last month, a Treasury Department report said Wednesday.
The deficit was the 31st monthly shortfall in a row. With seven months of fiscal 2011 elapsed, the government has spent $869.90 billion more than it has collected.
Even the most aggressive plans wouldn't wipe out budget deficits for years, meaning that debt will continue to mount.
-By Jeffrey Sparshott, Dow Jones Newswires; 202-862-9291; jeffrey.sparshott@ dowjones.com

Watch Your IRA, 401K Plans

The government has talked about taking over your 401k in the past. You say it can't be done? Of course it can, in fact it has been done in other countries, and, well it seems to be happening in Ireland.

Here is the announcement from the Treasury Department for the meeting held last September. Here is the agenda, so you can see who the speakers were.

Has it been done before now, well glad you asked. It was done in Argentina! Remember Argentina was once the second largest economy in Central America and if I'm not mistaken was in the top five economies in the world at one time.

Watch your money close. You may wish to put your money into something tangible and keep it under your mattress.

Watch The Dollar Index (USDI)

There are many numbers you should be watching nowdays. Many of the MSM talking heads just want you to watch one or two and those would be the DOW and NASDAQ. They rarely tell you what GOLD, SILVER or the USDI are. The USDI recently was flirting with a historic number, that is 72. We need to be watching this number closely.

This will tell you what some are thinking.

What Is Wrong With This....

It is estimated 59% of the 308.7 million Americans in this country get at least one federal benefit, according to the Census Bureau, based on 2009 data. An estimated 46.5 million get Social Security; 42.6 million get Medicare; 42.4 million get Medicaid; 36.1 million get food stamps; 12.4 million get housing subsidies; and 3.2 million get Veterans' benefits.

We are in BIG trouble here. Look at these quotes (in italics) from the article.

That is a tough feeding trough to take away from voters.
Politicians won't want to touch this during this re-election cycle.
Somehow the DNA of our country is changing. Wealth creation is coming from DC, not from America’s entrepreneurs.
What will the business do? How will they survive?
In short, Americans have the government, not private enterprise, to thank for their wealth growth.
This is what some want. No work, just "free money" from the .gov
...if indeed more households have the government to thank for their wealth, does that mean those households are more inclined to re-elect politicians who are pushing for more government handouts?
I believe the answer here will be YES.

Debt Ceiling or Debt Escalator

Well, soon the gov will need to act or not act on the Federal debt. We are currently, as I type this, at $14.25 Trillion with a debt limit (ceiling) of $14.3 Trillion. What does that mean? Well it means that the CONgress critters will need to decide on what to do. Spend more or seriously cut back. Now really, do you think that the Washington politicians can put a stop to their spending binge? I don't. They have not been able to in the past and they cannot now. Their reason will be that they cannot limit the debt or we will default on the debt or our economy will collapse. I hate to tell them, but our economy is collapsing, just slowly. We will see QE 3 probably by July, even though QE 1 and QE 2 have done nothing.

Remember the blog where I described debt and deficit? Well we are seeing both parties offering up plans to reduce our deficit by $4-5 Trillion over the next 10 years. Gosh, to most sheeple that sounds pretty good. I mean, we have a $14 trillion debt and we have a chance to reduce it by $4-5 Trillion, sounds good doesn't it? The problem is that they are talking about reducing the DEFICIT not the DEBT!!!! We currently have a predicted deficit for this year of about $1.65 Trillion. Let us look closer. $4-5 Trillion over 10 years means $400-500 Billion per year. If you keep running the same deficit as we are expected to have this year, which will likely climb, we would then subtract $500 Billion from $1.6 Trillion. This would still leave us a deficit of $1.1 Trillion! So over the next 10 years that our fabulous politicians are reducing our deficit we will be adding another $11 Trillion to our debt. By 2021 we could see a debt of $25 Trillion.

In 2010 we paid $413 Billion just in interest. Just since October 2010 until now we have paid $215 Billion in interest. At this pace we will pay $430 Billion in 2011. This is just interest payments. What do you think we will have to pay in 10 years if we have a debt of $25 Trillion? Some say the interest payments on the debt at $25 Trillion will be $1 Trillion!!

What is the solution? Well the politicians are saying we need to raise taxes on the rich. Again, that sounds good to the sheeple. I mean, the rich can afford it, right? Well, if I'm not mistaken it is usually "the rich" that start businesses, employ people and buy goods that keep other businesses in business.

Look at this Wall Street Journal article.
The Internal Revenue Service's income tax statistics for 2008, the latest year for which data are available. The top 1% of taxpayers—those with salaries, dividends and capital gains roughly above about $380,000—paid 38% of taxes. But assume that tax policy confiscated all the taxable income of all the "millionaires and billionaires" Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record.

Say we take it up to the top 10%, or everyone with income over $114,000, including joint filers. That's five times Mr. Obama's 2% promise. The IRS data are broken down at $100,000, yet taxing all income above that level throws up only $3.4 trillion.

The Obama administration's spending request contains $2.627 trillion in receipts and $3.729 trillion in outlays for 2012.^[6] The Republican plan contains $2.533 trillion in revenues and $3.529 trillion in outlays. Neither keeps us from adding debt.

This shows me that we cannot tax our way out of this mess. We have to make some serious cuts in spending. THIS WILL BE PAINFUL FOR ALL OF US!!! But it need to be done. Our government needs to spend what they take in. They need to stop discretionary spending, reduce social handouts, revise Medicare and Medicaid and repeal Obama Care. It won't be easy, but the pain will be worse if we put it off.

People I have been telling you to prepare for some time. Well, time is running out, get to it.

The Federal Reserve

You want to know about the Federal Reserve....

What Is Food Worth?

My last post spoke about what silver is worth...to you, but now I ask "what is food worth to you"?

You cannot eat silver, but silver can buy you food, if someone wants to sell it. But food is needed to live, silver is not.

Here are 20 Signs That A Horrific Global Food Crisis Is Coming. I'll list a couple, but you really need to read this article.

#13 According to the World Bank, the global price of food has risen 36% over the   past 12 months.

#14 The commodity price of wheat has approximately doubled since last summer.

#15 The commodity price of corn has also about doubled since last summer.

#16 The commodity price of soybeans is up about 50% since last June.

#17 The commodity price of orange juice has doubled since 2009.

And if you don't belive them, read this.

Buy-one-get-one when you can and put one away for hard times, if it comes.

What Is Silver Worth?

We all have read about how JP Morgan is manipulationg the Silver market, how the silver to gold ratio historiclly has been 16:1 and it is now 35:1, but moving closer to the historic mark and how silver is going to be worth more than gold because it it is limited and running low due to all the industrial uses. But again I ask you, how much is silver worth? Some might say that it is like anything else, it is worth only what someone will pay for it. That is true, but silver will always be wanted by someone, so it is different from, say a knife or a lawnmower. Silver has been and always will be wanted by somebody, that is why they call it a precious metal.

I look at it this way. If you have a dollar bill from 1962, it is worth today the same....$1.00. If you have 4 quarters from 1962, they are worth today over $31.00. If you have ten dimes from the same year, they are worth today the same as the four quarters, over $31.00.

I would say to you, how much do you think silver is worth....to you? That might be the better question. I will tell you, I own silver and plan on getting more.

Your Taxes To Be Doubled?

They will double if our leader(s) listens to the IMF.

So the IMF is saying that closing the U.S. fiscal gap, from the revenue side, requires, roughly speaking, an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act.

Maybe I'm Giving Up Beef?

We feed chicken manure to cattle because it's cheap; and because we produce far too much of it to properly dispose of as fertilizer.

Now that is one thing that I could/should have never read!

Doctors Leaving The Profession

ObamaCare Nightmare....
and you aren't worried about America?

Well, if it is all that great, why is Obama allowing more than 1000 companies to exempt out of the new and wonderful ObamaCare.

Have You Seen This On The MSM?

Don't you see this as a problem?

Debt Limit Breeched!

Bet you haven't heard this on the MSM!

Here are some excerpts...

Yesterday the Treasury sold 29 billion in bonds bringing the total U.S. debt to 14.311 trillion, the current debt ceiling is 14.294. Now with a 52.2 billion dollar buffer for the total debt, a technical default should happen within the next 10 trading days, let's see if that makes any news.

Bill Gross, the largest bond fund manager in the world, recently had this to say regarding U.S. debt, "unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies - inflation, currency devaluation, and low negative real interest rates."

Folks, read that again! This guy is not a fly by night guy, but a well respected person in the industry!

There are clues people, open your eyes and look. We have industry experts telling us what is coming. If only more people would stop worrying about who will be the next one voted off and learn what freight train is heading toward them.

Oh well, at least you are watching.

Preparing---Don't Procrastinate Any Longer!

For those that have talked about preparing, but not done so, you better start!

STOP TALKING ABOUT IT AND GET STARTED, NOW!

n

Are We Going To See Protests Here In America?

Remember last weekend when there were 500,000 people protesting in the UK? It was all non-violent correct.... Okay, maybe not so much. Well anyway it seems to have been organized/started by a group called UK uncut. Guess what...we now have a similar group called...you guessed it, US uncut. Look at the symbols, very similar. I'm not usually a betting man, but I have a feeling we are going to see something close to what the UK saw this weekend, here in America soon.

Keep your eyes open my friends...

What Are The Central Banks Telling Us?

Central banks around the world are dumping the reserve currency, the U.S. dollar, and investing in gold and silver. They see the writing on the wall and don't like what they are reading. Precious metals have been increasing due to the uncertainty in the world and due also to the gigantic U.S. debt which continues to increase.

I believe it is not too late to get into silver and gold. I feel silver will increase more than gold from a percentage standpoint. Watch for dips and get into some precious metals as a hedge against inflation, which is coming....or should I say it's here, but more is coming.

Is The Fed In Panic Mode?

Look at this graph...

Look at the two spikes. The first one was in October 2008. If you remember that was at the time QE1 was started. You might say that the second spike is just QE2, but if that was the case it should have spiked in October 2010.

Now, I don't know why we have seen a spike of close to $500 billion in just a couple months. Is there something happening that we don't know about? Is there a panic happening at the Fed?

Keep your eyes open, because when you hear about what is happening through the MSM it will be too late

Is This Your Economic Recovery?

Well, I keep hearing on the liberal lame stream media that we are in an "economic recovery". Boy that sounds great, but I wonder how they explain these facts.

1. Forty-four million people are are now on food stamps. This is up 13.1% from this time last year.

2. The U.S. trade deficits are getting larger. The trade deficit increased by 33% from 2009, and it is expected to grow even larger in 2011.

3. The housing market continues to suck I mean stink. The new year has brought little cheer to new-home builders: Their sales fell a shocking 11.2% between December and January and 18.6% from 12 months earlier.

4. Thank goodness that the government is stepping in to save the housing industry as we now guarantee or are writing close to 97% of all mortgages in the United States.

5. The U.S. National debt continues to grow at a rapid pace, more that a million dollars per minute. In fact, the budget deficit is projected to reach an astounding $1.65 TRILLION.

6. Foreclosures continue to rise at a rapid rate. It has been reported that just last year over a million families were foreclosed on in 2010.

7. The health of household budgets declined each quarter in 2010 and is at the lowest level since the first quarter of 2009.

8. According to the liberal leaning Huffington Post, there are approximately 15,000 empty buildings in Chicago and over 60,000 vacant homes in Las Vegas.

9. We know that there are several states that are in financial trouble, California and New Jersey and Illinois come to mind. But are you aware that there are several cities and municipalities that are in trouble as well.

10. Quantitative Easing 1 and 2 have gotten us nothing. Here are 9 reasons why QE is bad for the economy.

11. Prices for consumables are getting higher. Corn has increased 33% since December 2010. Cotton is at an all time high. Oil is up to $105 a barrel and is expected to rise with all the turmoil occuring in the Middle East.

12. The unemployment rate is predicted at 10.3% by Gallup and above 20% by shadowstats.com.

America is dying a slow and painful death. I cannot see a recovery in the picture. In case you do not remember one of my very first posts when I started this blog I explained what represents a trillion dollars. If you were to spend one dollar a second ($60 per minute or $3600 per hour), it would take you over 31,000 YEARS to spend one trillion dollars.

Tell me how you see a recovery happening!

We Are Doomed If This Continues

The U.S. Treasury is depleting its cash at an accelerating pace, drawing down its cash balance by $81.6 billion in the just the first four days of March, leaving the federal government with only $108.9 billion on hand, according to the Daily Treasury Statement released Monday afternoon.

At the beginning of February, the Treasury had $349.1 billion in cash on hand, but spent that down by $158.5 billion during the month, ending February with only $190.6 billion on hand.

Were the government to continue to draw down its cash balance at the $20.4 billion-per-day rate that prevailed in the first four days of March, it would spend its way through its final $108.9 billion in little more than five days.

Under current law, the U.S. Treasury may only run the national debt up to $14.294 trillion. At the end of February, according to the Treasury’s Monthly Statement of the Public Debt, the total debt subject to this legal limit was $14.142331 trillion—just $151.669 billion short of the limit.

Had the Treasury not spent down the $81.6 billion in its cash balance in the first four days of this month and borrowed that money instead, it would have significantly reduced its remaining legal borrowing authority.

For the Treasury to borrow more than the current $14,294 limit, Congress and President Barack Obama will need to enact new legislation authorizing the Treasury to increase the national debt up to whatever new limit they find agreeable.

The Treasury’s largest single expenditure in the first four days of March, according to the Daily Treasury Statement, was paying off maturing debt. During those four days, Treasury paid $128.477 billion to redeem old bonds. At the same time, it borrowed $133.196 billion by selling new bonds.

People wake up. We are sliding down the mountain faster than ever. Just in the month of February 2011 our defict was greater than the entire yearly deficit in 2007. That was just four years ago! Where will be in just another 4 months or 4 years? Get some GOLD and SILVER. Even at todays prices it will seem like a bargain in the future. I would not be surprised to see 1oz of gold to be able to purchase a nice home in the future.

Fed Needs A Miracle

Peter Schiff was on Fast Money and was hammered by the pundits. They wanted him to give them a date on when the collaspe will come. Everyone knows that nobody can predict the time. They were trying to make him look bad and discredit him and his predictions, I feel. I have not heard them ask Bernanke or Obama the exact date that the economy will be back to normal.

Listen to Peter, as I feel he and the others like him (Celente, Zell, etc) are on the right track.

China "Attacks The Dollar"

Well, this is kind of like a sequel to the last post about what Sam Zell was saying. I will highlight some key points.

In a surprising turn of events, today's biggest piece of news received a mere two paragraph blurb on Reuters, and was thoroughly ignored by the broader media. An announcement appeared shortly after midnight on the website of the People's Bank of China.

The statement, google translated as "Pragmatic and pioneering spirit to promote cross-border renminbi business cum on monitoring and analysis to a new level"...

Reuters provides a simple translation and summary of the announcement: "China hopes to allow all exporters and importers to settle their cross-border trades in the yuan by this year, the central bank said on Wednesday, as part of plans to grow the currency's international role. In a statement on its website www.pbc.gov.cn, the central bank said it would respond to overseas demand for the yuan to be used as a reserve currency. It added it would also allow the yuan to flow back into China more easily." To all those who claim that China is perfectly happy with the status quo, in which it is willing to peg the Renmibni to the Dollar in perpetuity, this may come as a rather unpleasant surprise, as it indicates that suddenly China is far more vocal about its intention to convert its currency to reserve status, and in the process make the dollar even more insignificant.

International Business Times provides further insight:

This is all part of China’s plan for the internationalization of its currency, which may, in the decades to come, threaten the global ‘market share’ of other currencies like the US dollar.

Previously, China also announced that bilateral trades with Russia and Malaysia will begin to be conducted with the yuan and the ruble and ringgit, respectively.

Other moves on the part of China to internationalize its currency include allowing foreign companies to issue yuan-denominated bonds and relaxing rules for foreign financial institutions to access the yuan.

Aside from the efforts of the Chinese government, fundamentals also point to the increasing international popularity of the Chinese currency.

China is already the leading trade partner with Australia and Japan. It’s also the leading or a large trade partner with many of its smaller neighbors. The purpose of having foreign currencies is to conduct foreign trade and investment, so the yuan is expected to become a more attractive currency for China’s trade partners, espeically as the government continues to relax restrictions.

The reason for this dramatic move may be found in what Stephen Roach wrote a few days ago in Project Syndicate:

In early March, China’s National People’s Congress will approve its 12th Five-Year Plan. This Plan is likely to go down in history as one of China’s boldest strategic initiatives.

In essence, it will change the character of China’s economic model – moving from the export- and investment-led structure of the past 30 years toward a pattern of growth that is driven increasingly by Chinese consumers. This shift will have profound implications for China, the rest of Asia, and the broader global economy.

Like the Fifth Five-Year Plan, which set the stage for the “reforms and opening up” of the late 1970’s, and the Ninth Five-Year Plan, which triggered the marketization of state-owned enterprises in the mid-1990’s, the upcoming Plan will force China to rethink the core value propositions of its economy. Premier Wen Jiabao laid the groundwork four years ago, when he first articulated the paradox of the “Four ‘Uns’” – an economy whose strength on the surface masked a structure that was increasingly “unstable, unbalanced, uncoordinated, and ultimately unsustainable.”

The Great Recession of 2008-2009 suggests that China can no longer afford to treat the Four Uns as theoretical conjecture. The post-crisis era is likely to be characterized by lasting aftershocks in the developed world – undermining the external demand upon which China has long relied. That leaves China’s government with little choice other than to turn to internal demand and tackle the Four Uns head on.

The 12th Five-Year Plan will do precisely that, focusing on major pro-consumption initiatives. China will begin to wean itself from the manufacturing model that has underpinned export- and investment-led growth. While the manufacturing approach served China well for 30 years, its dependence on capital-intensive, labor-saving productivity enhancement makes it incapable of absorbing the country’s massive labor surplus.

Instead, under the new Plan, China will adopt a more labor-intensive services model. It will, one hopes, provide a detailed blueprint for the development of large-scale transactions-intensive industries such as wholesale and retail trade, domestic transport and supply-chain logistics, health care, and leisure and hospitality.

Obviously, a reserve currency would be not only extremely useful, but quite critical in achieving the goal of China's conversion to an inwardly focused, middle-class reliant society. And even that would not guarantee a smooth transition. However, should China really be on a path to a step function in its evolution, the shocks to the system will be massive. Roach puts this diplomatically as follows:

But there is a catch: in shifting to a more consumption-led dynamic, China will reduce its surplus saving and have less left over to fund the ongoing saving deficits of countries like the US. The possibility of such an asymmetrical global rebalancing – with China taking the lead and the developed world dragging its feet – could be the key unintended consequence of China’s 12th Five-Year Plan.

A less diplomatic version implies that the relationship between China and the US would suffer a seismic shift in which the game theoretical model of Mutual Assured Destruction, and symbiotic monetary and fiscal policies, would no longer exist, allowing China to pursue its fate completely independent of any economic shocks that the increasingly distressed United States may be going through.

And confirming that the PBoC announcement is far more serious than the amount of airtime allotted to it by the mainstream media, is the just released article in Spiegel "China Attacked the Dollar" (google translated):

The Chinese central bank surprised with a spectacular announcement: The would-be superpower wants to handle their entire future foreign trade in yuan, not in dollars. Beijing shakes America's claim to represent the key currency - with serious consequences for the U.S..

The announcement was inconspicuous , but it has the potential, to permanently change the balance of power on the world currency market: China strengthens the international role of the yuan. All exporters and importers will, this year, be allowed to settle their business with their foreign partners in Yuan, the central bank said on Wednesday in Beijing.

This will respond to the growing importance of the yuan as a global reserve currency. "The market demand for cross-border use of the yuan rises," said the central bank. The PBoC had previously tested this plan by allowing 67 000 enterprises in 20 provinces to run their business abroad in yuan. The trade volume amounted to the equivalent of €56 billion.

Now the amount of yuan to be extended, it should be handled much more business in Chinese currency - and less in the U.S. Chinese companies trade at present often in dollars, they are thus dependent on the decisions of the U.S. Federal Reserve to pay on it in a rising oil price and will have pay higher transaction fees than necessary. That should change now.

Currently, the People's Republic can hardly take yuan out of the country and even that is monitored within the boundary of all legitimate capital flows. Chinese exporters have to change a large part of their euro, yen or dollars at a fixed rate revenue in yuan. Foreign companies wishing to do business in China must do so in Yuan, they can exchange their money in the People's Republic. Tourists are allowed a maximum of 20,000 yuan and exporting. Yuan an international market can not occur - and not on supply and demand-based exchange rate.

Needless to say, should the yuan be seen increasingly as a reserve currency, all of this, and virtually everything else is about to change.

The only question is whether or not the Yuan will cement its status at the top of the currency pyramid by allowing the backing of the currency with individual or a basket of commodities. If that were to happen, it would be the last nail in the coffin of the already terminally ill dollar.

You Heard Of Sam Zell?

He is a Billionaire! I have highlighted some comments I feel are very telling.

Look at what he is saying:

ZELL ON THE DOLLAR LONG:
"YOU ASK ME ME WHAT IS MY BIGGEST SINGLE FINANCIAL CONCERN IS THE LOSS OF THE DOLLAR AS THE RESERVE CURRENCY I CAN'T IMAGINE ANYTHING BEING MORE DISASTROUS TO OUR COUNTRY THAT IF THE DOLLAR LOST ITS RESERVE CURRENCY STATUS."

Zell: Dollar's Global Fall Will Be 'Disastrous’ for US Living Standard

Thursday, 03 Mar 2011 12:27 PM
Billionaire real-estate magnate Sam Zell warns that Americans should brace for a "disastrous" 25 percent decline in the standard of living if the U.S. dollar’s reign as the global reserve currency ever ends.

He says that there are signs in the market that it could eventually happen. As it is now, a Korean manufacturer who wants to sell to Brazil must first buy dollars to complete the deal. If countries decide to bypass the dollar, the effect would be a disaster, Zell says.
Sam Zell
"Frankly, I think we’re at a tipping point. What’s my biggest single financial concern is the loss of the dollar as the reserve currency," he told CNBC in an interview. "I can’t imagine anything being more disastrous to our country than if the dollar lost its reserve-currency status."

Although he is "hoping against hope" the dollar remains the standard for international exchange, he warns that "you’re already seeing things in the markets that are suggesting that confidence in the dollar is waning."

If that happens, the impact on the United States would be deep. "I think you could see a 25 percent reduction in the standard of living in this country if the U.S. dollar was no longer the world’s reserve currency," Zell said "That’s how valuable it is."

Zell says that the bond market seems remarkably complacent about the risk. But that could turn on a dime, he warns.

"The worry in the bond market is never there until it’s there. The dollar has gone down 20 percent in the last three or four years," Zell says. "I don’t know who is buying 30-year fixed-rate debt. I don’t understand TIPs (Treasury inflation-protected bonds) that are projecting 30 years of benign inflation."

Benchmark 10-year Treasury note yields are around 3.48 percent. TIPs maturing in 2041 have a yield of 1.96 percent.

Once the world turns on the U.S. dollar, if it does, things will change fast, Zell warns. "How could interest rates not go up? Either they go up or the dollar goes down, one or the other," Zell says.

As for inflation, he estimates that actual inflation is between 5 percent and 7 percent right now, despite government figures showing the CPI flirting with low single digits. Fear of deflation — prices falling out of control — has been the primary motivator at the Federal Reserve to pump up money supply by more than $2 trillion in recent months.

Nevertheless, oil is rising fast and food riots are breaking out in developing countries. The United States has been less affected until recently. Zell points out that our Consumer Price Index tends to hide inflation by counting depressed home prices at 42 percent of the index.

"If you adjusted the CPI to reality you’re probably looking at 5, 6, 7 percent inflation today," Zell says.

"The reality out there is the costs are going up. The fact that we’ve been massive beneficiaries of Chinese mercantilist policies that have allowed us to buy goods at much less than their fair value. That has hurt us on the manufacturing side, but it has been a subsidy to America. That subsidy is coming to an end."

Others agree with Zell that the dollar’s world dominance will soon fade.

Ray Dalio, founder & CIO of Bridgewater Associates, told CNBC that it is "inevitable that the dollar's role as the world's currency will diminish from the dominant world currency to one of a few."


"It will fade probably fairly quickly so the United States which accounts for almost two-thirds of the reserves will probably go down to 50 percent of the world's reserves and it will have an effect on lending," he added.

Meanwhile, Bill Gross, found of bond giant Pimco, recently told investors that the Fed’s heavy thumb on the scales on behalf of low interests was perhaps necessary given the magnitude of the crisis. The second round of easing known as "QE2," perhaps, also had a role to play.

However, as the deadline for the second round to end looms — it is set to expire in June — there are serious questions about whether a smooth transition to private demand for U.S. debt will appear, Gross said.

Stocks have doubled from the March 2009 bottom and marked steadily upward since the second round was announced in August, which has given some stock investors pause.

"Investors should view June 30, 2011 not as political historians view Nov. 11, 1918 (Armistice Day — a day of reconciliation and healing) but more like June 6, 1944 (D-Day — a day fraught with hope for victory, but fueled with immediate uncertainty and fear as to what would happen in the short term)," Gross said in recent commentary online.

"Bond yields and stock prices are resting on an artificial foundation of QE2 credit that may or may not lead to a successful private-market handoff and stability in currency and financial markets."

-END-


People, I have said this before (pretty much from the start of this blog) you need to PREPARE. We have seen inflation (just look at your grocery bill and gas bill) and after QE2 is finished (June 30, 2011) we may see hyperinflation. If you think things are expensive now, wait until hyperinflation hits. You will need food and supplies. Here is a good place to start http://www.jrhenterprises.com/.

People You BETTER Wake Up

United or Untied Nations?

This about says it all. I think we should say bye-bye to the U.N.

American Hero

Now here is a true American hero!  Once a sniper, always a sniper.

$200-$400 Oil?

I would hope not, but we all should pay close attention to Lybia and Saudi Arabia. Not to say Egypt (Suez Canal), Yemin and Bahrain are not players as well.

MSNBC Getting "Schooled" By A Harvard Professor

This is a must watch...

Obama's 2012 Budget

Obama spoke to the American people and told us that his new budget was not adding to the National debt. Take a look at this video and just see how much really is added to the debt.



For an example, if your monthly budget was $2000 and you reduced your budget the same percentage that Obama lowered the Federal budget, your monthly budget would be $1999.94. That's right, you only lowered your budget by 6 cents. So don't believe that he is doing much buy reducing the budget by $100 billion. Yes that sounds like a lot, but it is just pennies compared to what we are paying.

We will, in fact we are seeing inflation. Get your house in order as you may not have much more time.

Here Is Your Secretary Of Treasury

Sec. Geithner has to say about the proposed budget. Interesting though is the remarks he made about the interest we are paying. In 2009 we were paying $187,000,000,000 per year. Today we pay $844,000,000,000. You can thank the QE1 and QE2. If inflation continues to rise so will our payments. If you have not started to prepare, you better. We will be seeing massive inflation sooner that later.

Here Is Obama's Budget Director

Listen to what this guy has to say. He doesn't include the interest payments as part of the budget. WHAT!