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It's especially timely.
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Say you're 55 years old -- or younger -- and have been paying into Social Security your entire working career. And say you were counting on Social Security to last long enough to pay for your basic necessities. Say, a thousand or two a month.Social Security tax receipts for the first half of 2010: $346.9 billion; Social Security benefits payments for the same period: $347.3 billion. Before this year, projections have always been that Social Security wouldn’t cross that line into negative cash flow for five years or so. Now it’s a reality. Congress has been spending Social Security’s positive cash flow for years. Now there’s no positive cash flow to spend.
To see how the negative trend has accelerated, consider the same figures for the first half of 2009: Social Security tax receipts were $366.0 billion and Social Security benefits payments were $334.3 billion. A positive cash flow of $31.7 billion has disappeared in the course of just 12 months. Scary.
President George W. Bush tried to begin the necessary reformation of Social Security in 2005. He was absolutely shredded by the liberal media and Democrats -- but I repeat myself -- who used every fear tactic, every big lie imaginable to tell Seniors they were going to lose their monthly checks.Two men are found in a remote part of pinal county shot to death. The Pinal County Sheriff believes the men were shot by fellow smugglers. Paul Babeu tells KGUN9 News this is just another example of drug violence spilling deep into Arizona.![]()
It was just five weeks ago that deputy Louie Puroll was shot in a drug corridor in west Pinal County. On Sunday, more violence in the same area. Around 7:30 p.m. that night man calls 911 speaking Spanish. He says, "somebody shot me. While we were running."![]()
Sheriff Paul Babeu believes the caller was smuggling drugs with the second victim.
"A competing cartel or other people stole their product from them and also killed them," Babeu said.![]()
The sheriff admits the cartels are operating in his county and without the federal government's help they can't get control. KGUN 9 News asked Babeu flat out if cartels control parts of Arizona.
"Absolutely, they have in terms of the remote areas in the drug corridors in the desert here in west Pinal County. Our government has even erected signs warning citizens to beware this is a known drug corridor," Babeu said...![]()
...Deputies found an automatic rifle near one of the men who was killed. The pair has yet to be identified but Babeu believes one of the men has been caught illegally in the United States at least seven times.
But don't worry, folks -- anyone who opposes Arizona's law is a Nazi-winger for wanting to prevent drug- and human-smuggling operations from taking over large swaths of U.S. territory.
The economic destruction in the region is not due solely to the administration's inept handling of the Deepwater Horizon spill and cleanup. President Obama's ill-advised "moratorium" on offshore oil drilling is proving an economic disaster for the region and, indeed, the entire country.Brazil could benefit from the BP Gulf of Mexico spill as a U.S. moratorium on offshore drilling boosts available rigs for the country's deep water oil exploration program.Even as an ecological catastrophe makes the future of U.S. offshore drilling less certain, Brazil is plowing ahead with a $220 billion five-year plan to tap oil fields even deeper than BP's (BP.L) ill-fated Gulf well, which is still leaking crude.
With an estimated 35 rigs idled in the Gulf of Mexico, Brazil is already receiving inquiries from companies looking to move their rigs here, where vast discoveries in recent years may soon turn the country into a major crude exporter.
... "Since operators are shutting down at least temporarily in the U.S. Gulf, some companies are planning to move their rigs to Brazil now," he said, without offering details.
...Brazilian officials, including government leaders and Petrobras executives, have said Brazil has no intention of slowing its offshore development as a result of the spill.
The President appears completely unprepared to do anything but give speeches. That's what he's good at and that's what he always done throughout his career.1. GOLD IS RETURNING TO ITS TRUE HISTORIC ROLE AS MONEY
The role of gold in society was succinctly summed up by J.P. Morgan in 1912 when the renowned financier stated that “Gold is money and nothing else.” Ironically, he made that comment one year before the U.S. Federal Reserve was created. There have been long periods (1980-2000 being one) when this immutable fact was dismissed. The fact remains, however, that every fiat currency system in history has ended in ruins.
2. THE INEVITABILITY OF A COLLAPSE IN THE U.S. DOLLAR
The U.S. dollar is the world’s reserve currency and thus anchors the world’s monetary system. Unfortunately, by virtually any measurement we look at, the United States is beyond ‘the point of no return’ with respect to its financial position. Imbedded federal government debt of nearly $13 trillion, unfunded future liabilities in medicare, social security, etc. well in excess of $50 trillion and a current budget deficit of over 10% of GDP virtually ensures ongoing massive monetary debasement. When the near bankruptcy of the majority of the fifty states in the union is factored in, the situation looks even more dire.3. OTHER SIGNIFICANT WORLD CURRENCIES OFFER NO REFUGE
The current travails of the European Union are well advertised. The recent pledge of nearly $1 trillion in potential bailout money by Eurozone members and the IMF in the wake of Greece’s problems, coupled with the fear of contagion throughout southern Europe, effectively disqualifies the Euro from serious consideration. Great Britain is in such disarray that it doesn’t even deserve comment. Japan has a rapidly aging population and embedded government debt that already exceeds 200% of GDP. Even China, that paragon of all things financial and economic, is suspect. As the result of its bank lending spree in 2009, the country is dealing with considerable overcapacity, an emerging inflation issue and a potential bad debt crisis in its banking system.
4. THE DESTRUCTION OF GOVERNMENT BALANCE SHEETS AND THE WIDESPREAD IMPLEMENTATION OF ZERO INTEREST RATE POLICIES MAY ULTIMATELY RESULT IN HYPERINFLATION
As the result of the global financial crisis which enveloped the world between late 2007 and early 2009, the world’s governments were forced to step in and bail out the financial sector while propping up overall demand in the face of the collapse in the private sector. This unfortunately occurred as their own revenue streams were under severe pressure due to the issues in the private sector. To combat the massive deficits that inevitably resulted, widespread quantitative easing (i.e. unfettered money printing) was undertaken. That policy is here to stay and the fiscal deficits in many countries have now reached percentages of GDP that have almost always resulted in eventual currency collapse. Thus, the frightening term ‘hyperinflation’ is now being heard with increasing frequency...8. MINE SUPPLY IS NOT ANTICIPATED TO RISE FOR SEVERAL YEARS, IF AT ALL
Despite gold prices surging from a low of $252 per ounce in 1999 to over $1,200 recently, mine production has been eroding for nearly a decade. This suggests that mine supply is insensitive to higher gold prices, a fact confirmed in the 70’s when mine supply actually fell as gold made its historic rise from $35 per ounce to $850. Aaron Regent, the head of the world’s largest gold company, Barrick Gold, was quoted at a conference in late 2009 lamenting the state of the gold mining business. He
went so far as to suggest that global gold production was in terminal decline despite
record prices and the Herculean efforts by mining companies to discover new ore bodies in remote areas. He actually alluded to “peak gold” by implying that production has already reached levels that can’t be exceeded, an expression that is now commonplace in the oil industry...11. INCREASING SKEPTICISM ABOUT U.S. GOLD RESERVES
The U.S. has long been the world’s largest gold holder with a current reported position of 8,133 tonnes (over $300 billion worth). However, there have been recurrent rumors that the U.S. has mobilized an unknown portion of their gold reserves via swaps to facilitate leasing, a key component in the gold price suppression scheme. The absence of any outside audit of the reserves since the 1950’s and the Fed’s current intransigence towards being subjected to an audit only heighten suspicions that the U.S. does not have nearly as much gold as they claim...
14. [PRICE] SUPPRESSION IS EVIDENT IN THE CONTINUING EXTREME UNDERVALUATION OF GOLD
Measured by any number of metrics (gold price in relation to the staggering amount of money and credit that has been created over the past several decades, gold’s extreme undervaluation relative to platinum, the gold producers’ pathetic returns on capital at the current price, etc.), gold is far behind where we believe it should be. If gold had merely kept up with the reported rate of U.S. inflation since its peak price in 1980, it would presently be trading in excess of $2,300 per ounce.
Internal administration documents reveal that up to 51% of employers may have to relinquish their current health care coverage because of ObamaCare.Small firms will be even likelier to lose existing plans.
The "midrange estimate is that 66% of small employer plans and 45% of large employer plans will relinquish their grandfathered status by the end of 2013," according to the document... In the worst-case scenario, 69% of employers — 80% of smaller firms — would lose that status, exposing them to far more provisions under the new health law.
The 83-page document, a joint project of the departments of Health and Human Services, Labor and the IRS, examines the effects that ObamaCare's regulations would have on existing, or "grandfathered," employer-based health care plans.
Their thousands of employees cost taxpayers at least $11 billion a year in salary and overhead alone -- even before their new energy taxes go into effect. Through their unconstitutional dictates, they will set all industrial policy in the United States.
The ClimateGate revelations, put simply, are a series of cover-ups, deleted data, oddly positioned data collection sites, modified algorithms and scientists addicted to funding as they sought UN-approved results.
The EPA's new regulations are designed to:
Not content with nationalizing auto companies, banks, insurance companies and the health care industry... not content with trillion-dollar "Stimulus" programs that utterly fail to do that which was promised... not content with an utterly unconstitutional usurpation of Constitutional government, the radical left -- now in command of the Democrat Party -- has initiated the final phase of its plan to collapse Capitalism and the American way of life.
The essential summary of the Statist form of government comes to us courtesy of George Will:Like many North Koreans, the construction worker lived in penury. His state employer had not paid him for so long that he had forgotten his salary. Indeed, he paid his boss to be listed as a dummy worker so that he could leave his work site. Then he and his wife could scrape out a living selling small bags of detergent on the black market.It hardly seemed that life could get worse. And then, one Saturday afternoon last November, his sister burst into his apartment in Chongjin with shocking news: the North Korean government had decided to drastically devalue the nation’s currency. The family’s life savings, about $1,560, had been reduced to about $30...
Last month the construction worker sat in a safe house in this bustling northern Chinese city, lamenting years of useless sacrifice. Vegetables for his parents, his wife’s asthma medicine, the navy track suit his 15-year-old daughter craved — all were forsworn on the theory that, even in North Korea, the future was worth saving for.
“Ai!” he exclaimed, cursing between sobs. “How we worked to save that money! Thinking about it makes me go crazy.”
North Koreans are used to struggle and heartbreak. But the Nov. 30 currency devaluation, apparently an attempt to prop up a foundering state-run economy, was for some the worst disaster since a famine that killed hundreds of thousands in the mid-1990s...
“If you don’t trade, you die,” said [a] former teacher, a round-faced 51-year-old woman with a ponytail. She went from obedient state employee to lawbreaking trader, but could not escape her plight...
...The government periodically tries to rein in the markets, regulating prices, hours, types of goods sold, the sellers’ age and sex and even whether they haul their wares on bicycles or their backs...
...For the construction worker, his sister’s news of the coming devaluation unleashed a furious scramble to salvage the family nest egg. He emptied the living-room cabinet drawer that held their savings and split it with his wife and daughter, telling them, “Buy whatever you can, as fast as you can.”The three bicycled furiously to Chongjin’s market. “It was like a battlefield,” he said.
Thousands of people frantically tried to outbid one another to convert soon-to-be worthless money into something tangible. Some prices rose 10,000 percent, he said, before traders shut down, realizing that their profits soon would be worthless, too.
The three said they returned home with 66 pounds of rice, a pig’s head and 220 pounds of bean curd. The construction worker’s daughter had managed to purchase a small cutting board and a used pair of khaki pants. Together, he said, they spent the equivalent of $860 for items that would have cost less than $20 the day before...
• Our call is to go to cash, or cash-like instruments to the maximum of your mandate. Consider this our third and final warning/escalation
• Our view is based on the past and present state of the market (facts), and on what we see as the near-future condition of the market, which until it is fact, will be regarded by the naysayers as fiction.
• The risk for an asset manager is that he/she considers the current state (facts) of the market as fictitious, or irrelevant...• Our message of escalated concern may be summed up by one simple statement: If Asian credit moves with European credit, and the European credit story is not over, then the whole notion of Asian-led global growth goes out the window, as we will see capital flight away from Asia and out of risk assets in general...
...China needs to grow for the sake of social stability... China needs to grow for the sake of social stability (a standard PBOC fact line)... Asian growth needs to be funded, and yet escalating sovereign default risk has resulted in the closure of funding markets.
...The default risk of financial institutions is as great now as was the case during the Bear Stearns takeover and Lehman Brothers failure. In the months ahead, more banks will have deposited toxic assets into bad banks and/or government guarantee programs, effectively de-risking the corporations at the expense of the state and current shareholders who will see their stakes diluted.
...Sleep at Night Test: Can You Tell The Difference Between SocGen and BofA?• ...we have banks that are too interconnected to fail, and yet in Europe, the policy makers are too disconnected to yield comfort.
• Banks, evil as they are portrayed, are conduits for funding.
• Funding markets are shut.
• Shut means no bid.
• No bid markets ≠ happy markets.
Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents' (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian...How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.
...on every question the left did much worse. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%).
The survey also asked about party affiliation. Those responding Democratic averaged 4.59 incorrect answers. Republicans averaged 1.61 incorrect, and Libertarians 1.26 incorrect.
If you think the jobs situation has become pretty hopeless, you're not alone. Roughly 1.1 million workers have given up hope of finding employment.
The staggering level of "discouraged workers" as the government calls them has swelled to historic proportions in 2010, past the million barrier for the first time since the Bureau of Labor Statistics has been tracking the number.
Though a bit off its all-time high of 1.2 million recorded in February, the metric stands as perhaps the most daunting statistic of last Friday's gloomy jobs report, which showed that almost all the new employment is coming from temporary government Census jobs and not the kind that will sustain an economy.
"If it weren't for the plunge in the labor force, the US unemployment rate would have climbed to 10% in May," Gluskin Sheff chief economist David Rosenberg says in his morning note Monday. "[T]he household survey actually flagged a 35,000 outright decline in employment last month."
The long-term unemployed-those who haven't worked for at least 27 weeks, or more than half a year-remains mired at 6.8 million, a number that accounts for 46 percent of the total jobless figure.
"We don't expect any substantial improvement to the labor situation at all," says Richard Hastings, macro and consumer strategist at Global Hunter Securities in Newport Beach, Calif...
Some economists also worry that the government is providing a disincentive to work by extending unemployment benefits. It's a Catch-22 in which the government is hoping to help the long-term unemployed that could backfire as people become less interested in finding work the longer they remain idle.
"What's keeping people out of the job market is they're giving extended benefits," says Doug Roberts, chief investment strategist at Channel Capital Research. "A lot of people, especially those who are older, are figuring, 'I'll keep my unemployment benefits for as long as I can get them until I can figure out what to do.'"
Morici, for one, takes issue with the notion that public policy is not jeopardizing the jobs market. A harsh critic of the Obama administration, he says the $780 billion stimulus was squandered on projects that don't help sustain industry and manufacturing and thus will not provide lasting economic relief.
"By and large they don't have a grasp of the scope of the problems, and we're not creating that much demand for labor," he says. "They're not putting the stimulus in the right places. This administration is really being run like a Junior Achievement project."