Copyright © Steve Bell 2009
Saturday, November 7, 2009
The Return of the Inflation Tax
All of those twentysomethings who voted for Barack Obama last year are about to experience the change they haven't been waiting for: the return of income tax bracket creep. Buried in Nancy Pelosi's health-care bill is a provision that will partially repeal tax indexing for inflation, meaning that as their earnings rise over a lifetime these youngsters can look forward to paying higher rates even if their income gains aren't real.
In order to raise enough money to make their plan look like it won't add to the deficit, House Democrats have deliberately not indexed two main tax features of their plan: the $500,000 threshold for the 5.4-percentage-point income tax surcharge; and the payroll level at which small businesses must pay a new 8% tax penalty for not offering health insurance.
This is a sneaky way for politicians to pry more money out of workers every year without having to legislate tax increases. The negative effects of failing to index compound over time, yielding a revenue windfall for government as the years go on. The House tax surcharge is estimated to raise $460.5 billion over 10 years, but only $30.9 billion in 2011, rising to $68.4 billion in 2019, according to the Joint Tax Committee.
Associated Press
House Speaker Nancy Pelosi
Americans of a certain age have seen this movie before. In 1960, only 3% of tax filers paid a 30% or higher marginal tax rate. By 1980, after the inflation of the 1970s, the share was closer to 33%, according to a Heritage Foundation analysis of tax returns.
These stealth tax increases—forcing ever more Americans to pay higher tax rates on phantom gains in income—were widely seen to be unjust. And in 1981 as part of the Reagan tax cuts, a bipartisan coalition voted to index the tax brackets for inflation.
We also know what has happened with the Alternative Minimum Tax. Passed to hit only 1% of all Americans in 1969, the AMT wasn't indexed for inflation at the time and neither was Bill Clinton's AMT rate increase in 1993. The number of families hit by this shadow tax more than tripled over the next decade. Today, families with incomes as low as $75,000 a year can be hit by the AMT unless Congress passes an annual "patch."
The Pelosi-Obama health tax surcharge will have a similar effect. The tax would begin in 2011 on income above $500,000 for singles and $1 million for joint filers. Assuming a 4% annual inflation rate over the next decade, that $500,000 for an individual tax filer would hit families with the inflation-adjusted equivalent of an income of about $335,000 by 2020. After 20 years without indexing, the surcharge threshold would be roughly $250,000.
And by the way, this surcharge has also been sneakily written to apply to modified adjusted gross income, which means it applies to both capital gains and dividends that are taxed at lower rates. So the capital gains tax rate that is now 15% would increase in 2011 to 25.4% with the surcharge and repeal of the Bush tax rates. The tax rate on dividends would rise to 45% from 15% (5.4% plus the pre-Bush rate of 39.6%).
As for the business payroll penalty, it is imposed on a sliding scale beginning at a 2% rate for firms with payrolls of $500,000 and rising to 8% on firms with payrolls above $750,000. But those amounts are also not indexed for inflation, so again assuming a 4% average inflation rate in 10 years this range would hit payrolls between $335,000 and $510,000 in today's dollars. Note that in pitching this "pay or play" tax today, Democrats claim that most small businesses would be exempt. But because it isn't indexed, this tax will whack more and more businesses every year. The sales pitch is pure deception.
As for the Senate, instead of the 5.4% surcharge, the Finance Committee bill raises taxes on "high-cost" health care plans. But this too uses the inflation ruse. The Senate bill indexes its tax proposal for the inflation rate plus one percentage point. But that is only about half as high as the rate of overall health-care inflation, i.e., the rate of increase in health-care premiums. So the Joint Tax Committee has found that a Senate tax that starts in 2013 by hitting 13.8 million Americans will hit 39.1 million by 2019.
The return of the inflation tax demonstrates once again the stealth radicalism that animates ObamaCare. In the case of inflation indexing, Democrats would repeal a 30-year bipartisan consensus that it is unfair to tax unreal gains in income, thus hitting millions of middle-class Americans over time with tax rates advertised as only hitting "the rich." Oh, and the House vote on this exercise in dishonest government will come as early as Saturday.
Fed Signals “All Systems Go” for More Inflation
I have been adamant recently in saying that the Federal Reserve would not … would NOT … signal an end to the easy money environment at this week’s policy meeting. These guys simply lack the political willpower and the inclination to do what’s right. They want to keep the booze flowing to inflate assets, the long-term consequences be darned.
Sure enough, the Fed reiterated Wednesday that it’s not worried at all about the surge in asset or commodity prices. It said,
“Substantial resource slack [is] likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.”
Not only that, the Fed also said it will keep rates low until the cows come home. Specifically, it said that it …
” … continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”
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| The FOMC isn’t worried about inflation. |
The only change the Fed did signal? That it’ll buy up to $175 billion in so-called “agency” debt, slightly below its previous target of $200 billion. But it’s still going to buy $1.25 trillion in mortgage-backed securities.
And it’s not buying fewer bonds issued by Fannie Mae and Freddie Mac because it suddenly realized the folly of “monetizing” U.S. debt obligations …
… it’s because of the “limited availability of agency debt” to buy. In other words, the Fed is afraid it’s cornering and distorting the market … which it is!
Never Forget: “Proactive” Is A
Dirty Word in Washington
Why have I been saying you should forget the empty talk you’re hearing about tighter policy? Because action is what counts. And it is abundantly clear to me that the Fed won’t take action until it’s forced to by a dollar crash, a bond market collapse, or some combination of both.
Those events would be important signals that the market has lost confidence in the Fed’s ability to control inflation and in the U.S. government’s willingness to preserve the value of the dollar, necessitating a policy response.
“Proactive” is quite simply a dirty word in Washington. Politicians (and this includes Fed members, no matter how much they like to pretend they’re not political creatures) don’t like to move before a crisis … only after one gives them the political cover to do so.
Indeed, history is clear: Rather than proactively tighten monetary policy in the late-1990s to quell the insane speculation in tech stocks, the Fed ignored the bubble until it gutted the portfolios of millions of investors. Then the Fed ignored the 2003-2006 housing bubble until it ruined the lives of millions of homeowners.
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| The Fed just told the markets to let the good times roll! |
Now, the Fed is doing the same thing again, but on an even grander scale. It’s inflating virtually every asset under the sun — junk bonds, corporate bonds, gold, commodities, stocks, you name it. And rather than proactively taking steps to control the markets … before they get OUT of control … they just told the market this week to let the good times roll!
Regulators, Congress looked the other way while Fannie, Freddie, and mega-banks drove themselves off a cliff!
It’s not just Fed policymakers. It’s the banking regulators and Congress, too!
Look at Fannie Mae and Freddie Mac. People were warning for years that they were taking on too much risk … that they were too thinly capitalized … and that a housing crash would bury them.
But Washington allowed the two agencies to go on their merry way, piling up huge amounts of debt and risk. We all know what happened then: They blew up, requiring tens of billions of dollars in taxpayer-funded bailout money.
Ditto for the banks that were making reckless, high-risk home equity loans, mortgages, and commercial real estate loans. Many observers, including us, were shouting from the rooftops that this would end in disaster.
But rather than shut down the lenders making these loans, or FORCE them to cut back on their risky lending, all the regulators did was issue mealy-mouthed “guidance” letters. The banks ignored them because they had no teeth. And not too long after, those banks began to fall like dominoes.
Bottom line: I don’t LIKE the Fed’s current policy of asset inflation. I know it’s going to end in tears. But until those events I mentioned earlier (currency crash, bond crash, etc.) occur, forcing a change in policy and leading to a shift in momentum, the only thing we can do as individual investors is play along and try to make as much money as possible.
Until next time,
Mike
Americans’ income and spending drop, despite stimulus
Household disposable income stagnated in September, and spending fell 0.5 percent, the government reported. The figures call into question the strength of the economic recovery.
American households cut spending and saw income stagnate in September, despite a massive government stimulus program propping up their bank accounts.
Personal disposable income decreased 0.1 percent, after adjusting for inflation, the Commerce Department reported Friday. Personal spending fell 0.5 percent, after four months of gains.
The hit to household bank accounts would have been worse without the massive federal stimulus program designed to prop up economic activity. The nation’s inflation-adjusted personal income has been sloping downward during 2009, when government transfer payments are subtracted out. But including the transfer payments – which have risen because of the stimulus efforts since February – total personal income is about where it stood early in the year.
“Households are depending on transfer payments from the government just to stay even,” economists at the investment firm Goldman Sachs wrote in an analysis of the report. “While the downward momentum [in wages] has abated, it has not turned positive. Meanwhile, income on assets – interest and dividends – continues to drop.”
The report raises questions about the strength of the economic recovery that economists believe is now beginning.
Incomes have fallen for many Americans because of unemployment, while others have seen pay raises vanish. In this tough climate, consumers remain reluctant to spend. The end of one government stimulus program – the “cash for clunkers” incentive to buy a car – contributed to the overall weakness in consumer spending.
The concern about consumers helped push stock prices down Friday in morning trading. The news also came as the Obama administration released an estimate that its $787 billion stimulus program has saved or created 650,000 jobs. Critics say the stimulus so far failed to create genuine job growth in the economy.
Many of the stimulus provisions have bolstered disposable incomes, however. Americans are paying less in taxes because of the stimulus, and they are getting more money from programs like Social Security and unemployment insurance.
“Only an increase in government transfer payments prevented an overall decline in incomes,” says economist Nigel Gault of IHS Global Insight, in a written report Friday. “Consumer spending will probably continue to grow, but at a more subdued pace” than the 2.6 percent annual rate seen from June to September.
To some extent, transfer programs naturally go up during recessions, and people naturally pay less in taxes. That’s because of programs linked to economic hardship, such as unemployment insurance, and because a recession drags down taxable income for people who lose jobs or who have stock-market investments. But the stimulus measures this year have added greatly to that typical pattern.
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Why are shoppers so lackluster? Incomes are stagnant.
U.S. jobless rate surges to 10.2 percent
WASHINGTON (Reuters) - The U.S. jobless rate unexpectedly jumped to 10.2 percent last month, a 26-1/2-year high, adding to pressure on the Obama administration to do more to tackle unemployment even as signs of recovery mount.
The Labor Department said on Friday that employers cut 190,000 jobs in October, more than the 175,000 markets had expected but fewer than the 219,000 jobs lost in September.
Job losses for August and September were revised to show 91,000 fewer jobs were lost than previously reported, taking some of the sting out of the report.
While the revisions hinted at some improvement, economists had expected the jobless rate to rise to 9.9 percent from September's 9.8 percent. A wider gauge of labor-market slack that includes unemployed Americans who have given up looking for work hit a record 17.5 percent.
Speaking at the White House, President Barack Obama said the administration was considering infrastructure investments and business tax cuts to aid the economy's recovery.
"I can promise you that I won't let up until the Americans who want to find work can find work and all Americans can earn enough to raise their families and keep their businesses open," he said. For a graphic of the jobless rate over time, please see: here
Stocks on Wall Street ended higher after initially falling as investors looked past the jump in the jobless rate and focused instead on the moderation in payroll losses.
U.S. Treasury debt prices rose as traders saw the data as supporting a prolonged period of low interest rates.
"Unfortunately, the problem is becoming deeper and more protracted," Mohamed El-Erian, chief executive of bond giant Pacific Investment Management Co (PIMCO) told Reuters.
"It's not just the increase in the headline number," he said. "It's also about the longer-term nature of unemployment, the increase in underemployment and the prospect for only a very gradual recovery," he said.
While Obama sees job creation as his top priority, the scope for further steps to boost the economy is limited by record budget deficits.
Rising unemployment could pose problems for the Democrats who control Congress as they head into elections in November 2010. This week, Republicans wrested control of two state governorships away from Democrats in races where the weak economy figured prominently.
"President Obama promised jobs during his campaign for president and the elections in Virginia and New Jersey on Tuesday were a clear referendum on his failure to deliver on this promise," Republican National Committee Chairman Michael Steele said in a statement reacting to the jobs report.
ECONOMY GROWING, LABOR MARKET LAGS
The U.S. economy grew at a 3.5 percent annual rate in the third quarter, likely ending the most painful recession in 70 years, but the jobs data suggested employers are wary of the prospects for a strong, sustained recovery.A report from the Federal Reserve showed households again cut their debt rather than spend in September, pushing down total consumer credit for an eighth straight month. That is the longest downward streak since 1943.
The U.S. central bank on Wednesday held overnight interest rates close to zero and said it expected to keep them low for an "extended period."
Short-term interest rate futures prices showed the implied chances of a rate hike by mid-2010 slid to about 66 percent on Friday from 84 percent late on Thursday.
"I don't know how in the heck the Fed could justify tightening policy with the unemployment rate over 10 percent unless we have an imminent inflation danger," said Keith Hembre, chief economist at First American Funds in Minneapolis.
The U.S. Labor Department conducts two separate surveys. Economists generally place more faith in the survey of employers, which found the loss of 190,000 jobs.
The unemployment rate, however, is based on a smaller household survey. That survey showed 589,000 jobs were lost, while few Americans left the labor force, leading to the big jump in the jobless rate.
Employer payrolls have declined for 22 consecutive months now and 7.3 million people have lost their jobs since December 2007, when the recession started. In October, 35.6 percent of the unemployed had been out of work for six months or more.
However, the pace of layoffs has slowed sharply from early this year.
Job losses in October were widespread across almost all sectors, with education and health services and professional and business services bucking the trend.
Manufacturing employment fell 61,000 last month, while construction industries payrolls dropped 62,000. The service-providing sector cut 61,000 workers.
Offering a glimmer of hope, temporary help jobs increased by 34,000. It was the biggest gain in temporary employment since the economy fell into recession and suggested companies needed extra hands even if they were not prepared to hire permanently.
The average workweek, which yields clues as to when firms will start hiring, was steady at 33 hours. Average hourly earnings rose to $18.72 from $18.67 in September.
By Lucia MutikaniA separate report from the Commerce Department showed wholesalers reduced their stocks of unsold goods for the 13th straight month in September. Economists expect a rebuilding of depleted inventories to help support recovery. (Additional reporting by Lisa Lambert in Washington, Richard Leong, Lynn Adler and Jennifer Ablan in New York; Editing by Kenneth Barry)
Chomsky Confronted on 9/11
A 9/11 activist recently confronted Noam Chomsky on his previous, well-publicized disparaging remarks about 9/11 truth. After spending several minutes repeating his tired arguments about the impossibility of 9/11 as an inside job, Chomsky then concedes that the notion that the Bush Administration knew of an impending attack and let it happen on purpose is "conceivable." Watch footage of the confrontation in the video player below:
The video comes from a speaking engagement that venerated linguist and political commentator Noam Chomsky was giving at the First Unitarian Church of Portland on October 2, 2009. In his question, 9/11 activist Mark Abell first details the historical precedents of the Reichstag fire and FDR's foreknowledge of Pearl Harbor to establish that false flags and LIHOP events have been used in the past to justify warmongering. Then he asks why the notion of 9/11 as an inside job is such an "inconceivable idea" for Chomsky to a round of applause from the audience.
Chomsky then launches into a diatribe against the notion of a 9/11 inside job before bizarrely declaring the Bush Administration "absolved" of the crimes of 9/11 because it would have been "senseless" for them to use their CIA-created, DIA protected, State Department handled and White House sanctioned Sunni terrorists to carry out an attack they openly called for that Chomsky himself admits they benefited from. He then states that it is "conceivable" that the administration knew about an attack ahead of time and let it happen, but adds dismissively that he doesn't know of any evidence for the idea.
It would be truly surprising if Chomsky did not know of any of the evidence that the administration knew specific details of the plot ahead of time. Aside from well-covered issues like the Presidential Daily Briefing of August 6, 2001 (immortalized in this moment from the 9/11 Commission hearings), there is the still-unresolved issue of the 9/11 insider trading, the sworn testimony of FBI whistleblower Sibel Edmonds, the information provided by FBI informant Randy Glass, and literally hundreds of other pieces of evidence that directly demonstrate foreknowledge of administration officials about the 9/11 attacks. But perhaps Mr. Chomsky has not yet seen this information.
Despite seeming to be singularly uninformed on the relevant names, dates, figures and facts surrounding the issue of government complicity in 9/11, Chomsky apparently sees no intellectual dishonesty in calling this evidence "outlandish" while maintaining that Osama Bin Laden is most likely the mastermind behind the 9/11 attacks despite the fact that no solid evidence has ever been presented to suggest such a thing. Of course, the issue of Chomsky's intellectual dishonesty on 9/11 is by no means new. The Corbett Report released a two-part documentary last year entitled "Noam Chomsky: Manufacturing Dissent" which painstakingly details how Chomsky's 9/11 arguments are dishonest and inconsistent:
Noam Chomsky - Manufacturing Dissent: Part One
Noam Chomsky - Manufacturing Dissent: Part Two
Abell must be commended for using a focused, contextualized question to get Chomsky to go further than before on the possibility that we are being lied to about 9/11. One can only hope that others will take up this example to continue the work of confronting prominent politicians, intellectuals and decision makers about the lies of 9/11. Only by doing so can we supply the definitive answer to Chomsky's infamous two word dismissal of 9/11 truth: "who cares?"
Fannie Mae seeking extra $US15 billion in aid after quarterly loss
US mortgage lender Fannie Mae has posted another big quarterly loss, saying it needs an extra $US15 billion ($A16.46 billion) from taxpayers.
The state-controlled Fannie Mae reported a net loss of $US18.9 billion ($A20.74 billion) in the third quarter on Thursday, 35 per cent smaller than a year ago but sharply higher than its $US14.8 billion ($A16.24 billion) loss in the second quarter.Combined losses to date stand at $US56.8 billion ($A62.33 billion).
Fannie Mae said the third-quarter results were largely due to $US22 billion ($A24.14 billion) of credit-related expenses, "reflecting the continued build of the company's combined loss reserves and fair-value losses".
It attributed the losses to "the increasing number of loans that were acquired from mortgage-backed securities trusts in order to pursue loan modifications".
The bailed-out lender has been buying mortgage-backed securities whose value has soured, part of the Government's efforts to support the ailing housing market after a price bubble collapsed in 2006.
Fannie Mae said that, at the end of the third quarter, the company was in the hole for $US15 billion ($A16.46 billion) and, as a result, had turned to the Treasury Department on Wednesday to seek public funds to keep it operating.
"The acting director of the Federal Housing Finance Agency submitted a request for $US15.0 billion dollars from Treasury on the company's behalf. FHFA has requested that Treasury provide the funds on or prior to December 31."
Fannie Mae and its fellow state-controlled mortgage lender Freddie Mac have already received hundreds of billions of dollars as part of a Government takeover aimed at avoiding their collapse in the wake of the subprime mortgage crisis.
Why Does The U.S. Have An Empire In Asia?
The US government is now so totally under the thumbs of organized interest groups that “our” government can no longer respond to the concerns of the American people who elect the president and the members of the House and Senate.
Voters will vent their frustrations over their impotence on the president, which implies a future of one-term presidents. Soon our presidents will be as ineffective as Roman emperors in the final days of that empire.
Obama is already set on the course to a one-term presidency. He promised change, but has delivered none. His health care bill is held hostage by the private insurance companies seeking greater profits. The most likely outcome will be cuts in Medicare and Medicaid in order to help fund wars that enrich the military/security complex and the many companies created by privatizing services that the military once provided for itself at far lower costs. It would be interesting to know the percentage of the $700+ billion “defense” spending that goes to private companies. In American “capitalism,” an amazing amount of taxpayers’ earnings go to private firms via the government. Yet, Republicans scream about “socializing” health care.
Republicans and Democrats saw opportunities to create new sources of campaign contributions by privatizing as many military functions as possible. There are now a large number of private companies that have never made a dollar in the market, feeding instead at the public trough that drains taxpayers of dollars while loading Americans with debt service obligations.
Obama inherited an excellent opportunity to bring US soldiers home from the Bush regime’s illegal wars of aggression. In its final days, the Bush regime realized that it could “win” in Iraq by putting the Sunni insurgents on the US military payroll. Once Bush had 80,000 insurgents collecting US military pay, violence, although still high, dropped in half. All Obama had to do was to declare victory and bring our boys home, thanking Bush for winning the war. It would have shut up the Republicans.
But this sensible course would have impaired the profits and share prices of those firms that comprise the military/security complex. So instead of doing what Obama said he would do and what the voters elected him to do, Obama restarted the war in Afghanistan and launched a new one in Pakistan. Soon Obama was echoing Bush and Cheney’s threats to attack Iran.
In place of health care for Americans, there will be more profits for private insurance companies.
In place of peace there will be more war.
Voters are already recognizing the writing on the wall and are falling away from Obama and the Democrats. Independents who gave Obama his comfortable victory have now swung against him, recently electing Republican governors in New Jersey and Virginia to succeed Democrats. This is a protest vote, not a confidence vote in Republicans.
Obama’s credibility is shot. And so is Congress’s, assuming it ever had any. The US House of Representatives has just voted to show the entire world that the US House of Representatives is nothing but the servile, venal, puppet of the Israel Lobby. The House of Representatives of the American “superpower” did the bidding of its master, AIPAC, and voted 344 to 36 to condemn the Goldstone Report.
In case you don’t know, the Goldstone Report is the Report of the United Nations Fact Finding Mission on the Gaza Conflict. The “Gaza Conflict” is the Israeli military attack on the Gaza ghetto, where 1.5 million dispossessed Palestinians, whose lands, villages, and homes were stolen by Israel, are housed. The attack was on civilians and civilian infrastructure. It was without any doubt a war crime under the Nuremberg standard that the US established in order to execute Nazis.
Goldstone is not only a very distinguished Jewish jurist who has given his life to bringing people to accountability for their crimes against humanity, but also a Zionist. However, the Israelis have demonized him as a “self-hating Jew” because he wrote the truth instead of Israeli propaganda.
US Representative Dennis Kucinich, who is now without a doubt a marked man on AIPAC’s political extermination list, asked the House if the members had any realization of the shame that the vote condemning Goldstone would bring on the House and the US government. (View here). The entire rest of the world accepts the Goldstone report.
The House answered with its lopsided vote that the rest of the world doesn’t count as it doesn’t give campaign contributions to members of Congress.
This shameful, servile act of “the world’s greatest democracy” occurred the very week that a court in Italy convicted 23 US CIA officers for kidnapping a person in Italy. The CIA agents are now considered “fugitives from justice” in Italy, and indeed they are.
The kidnapped person was renditioned to the American puppet state of Egypt, where the victim was held for years and repeatedly tortured. The case against him was so absurd that even an Egyptian judge order his release.
One of the convicted CIA operatives, Sabrina deSousa, an attractive young woman, says that the US broke the law by kidnapping a person and sending him to another country to be tortured in order to manufacture another “terrorist” in order to keep the terrorist hoax going at home. Without the terrorist hoax, America’s wars for special interest reasons would become transparent even to Fox “News” junkies.
Ms. deSousa says that “everything I did was approved back in Washington,” yet the government, which continually berates us to “support the troops,” did nothing to protect her when she carried out the Bush regime’s illegal orders.
Clearly, this means that the crime that Bush, Cheney, the Pentagon, and the CIA ordered is too heinous and beyond the pale to be justified, even by memos from the despicable John Yoo and the Republican Federalist Society.
Ms. deSousa is clearly worried about herself. But where is her concern for the innocent person that she sent into an Egyptian hell to be tortured until death or admission of being a terrorist?
The remorse deSousa expresses is only for herself. She did her evil government’s bidding and her evil government that she so faithfully served turned its back on her. She has no remorse for the evil she committed against an innocent person.
Perhaps deSousa and her 22 colleagues grew up on video games. It was great fun to plot to kidnap a real person and fly him on a CIA plane to Egypt. Was it like a fisherman catching a fish or a deer hunter killing a beautiful 8-point buck? Clearly, they got their jollies at the expense of their renditioned victim.
The finding of the Italian court, and keep in mind that Italy is a bought-and-paid-for US puppet state, indicates that even our bought puppets are finding the US too much to stomach.
Moving from the tip of the iceberg down, we have Ambassador Craig Murray, rector of the University of Dundee and until 2004 the UK Ambassador to Uzbekistan, which he describes as a Stalinist totalitarian state courted and supported by the Americans.
As ambassador, Murray saw the MI5 intelligence reports from the CIA that described the most horrible torture procedures. “People were raped with broken bottles, children were tortured in front of their parents until they [the parents] signed a confession, people were boiled alive.”
“Intelligence” from these torture sessions was passed on by the CIA to MI5 and to Washington as proof of the vast al Qaeda conspiracy.
Ambassador Murray reports that the people delivered by CIA flights to Uzbekistan’s torture prisons “were told to confess to membership in Al Qaeda. They were told to confess they’d been in training camps in Afghanistan. They were told to confess they had met Osama bin Laden in person. And the CIA intelligence constantly echoed these themes.”
“I was absolutely stunned,” says the British ambassador, who thought that he served a moral country that, along with its American ally, had moral integrity. The great Anglo-American bastion of democracy and human rights, the homes of the Magna Carta and the Bill of Rights, the great moral democracies that defeated Nazism and stood up to Stalin’s gulags, were prepared to commit any crime in order to maximize profits.
Ambassador Murray learned too much and was fired when he vomited it all up. He saw the documents that proved that the motivation for US and UK military aggression in Afghanistan had to do with the natural gas deposits in Uzbekistan and Turkmenistan. The Americans wanted a pipeline that bypassed Russia and Iran and went through Afghanistan. To insure this, an invasion was necessary. The idiot American public could be told that the invasion was necessary because of 9/11 and to save them from “terrorism,” and the utter fools would believe the lie.
“If you look at the deployment of US forces in Afghanistan, as against other NATO country forces in Afghanistan, you’ll see that undoubtedly the US forces are positioned to guard the pipeline route. It’s what it’s about. It’s about money, it’s about energy, it’s not about democracy.”
Guess who the consultant was who arranged with then-Texas governor George W. Bush the agreements that would give to Enron the rights to Uzbekistan’s and Turkmenistan’s natural gas deposits and to Unocal to develop the trans-Afghanistan pipeline.
It was Karzai, the US-imposed “president” of Afghanistan, who has no support in the country except for American bayonets.
Ambassador Murray was dismissed from the UK Foreign Service for his revelations. No doubt on orders from Washington to our British puppet.
Jobs Question Jeopardizes Wind Farm’s Stimulus Deal
News that $450 million in federal stimulus money might go toward installing Chinese-made wind turbines in Texas prompted criticism on Thursday, with Senator Charles E. Schumer, Democrat of New York, calling on the Obama administration to deny federal financing.
According to partners in the deal, the proposed 600-megawatt wind farm, announced late last week, would be built on 36,000 acres in West Texas using 240 wind turbines manufactured by A-Power Energy Generation Systems of Shenyang, China.
Partners in the $1.5 billion deal said that while most of the financing would come from unnamed Chinese banks, they would seek about one-third of the project’s cost — $450 million — from money set aside in the American Recovery and Reinvestment Act, the huge stimulus bill that passed earlier this year.
But that stimulus money, Mr. Schumer said, “is supposed to create jobs in America.”
The Texas project — a joint venture between the American private equity firm U.S. Renewable Energy Group, Cielo Wind Power and A-Power Energy — would create about 300 construction and operational jobs in Texas, according to the partners, but substantially more manufacturing jobs in China.
Mr. Schumer pointed to a recent analysis by the Investigative Reporting Workshop, a nonprofit journalism project at American University, which found that 84 percent of the $1.05 billion in “green” stimulus funding distributed since September had gone to foreign companies building renewable energy projects in the United States — mostly wind projects.
In a letter he sent to Energy Secretary Steven Chu, the senator urged Mr. Chu to “reject any request for stimulus money unless the high-value components, including the wind turbines, are manufactured in the United States.”
But Walt Hornaday, the president of Cielo Wind Power, which is based in Austin and is the largest independently owned wind power developer in the United States, said in a statement that the project would need stimulus money to move forward, and that it was vital to “engineers, contractors and suppliers who will see millions of dollars of work at a time when energy-based jobs are difficult to find.”
China has vexed multinational corporations and American officials by blocking access by foreign companies to its own growing renewable energy market, though the country did ease its local-content requirements for wind turbines in talks with American officials last week.
The Energy Department noted in a statement that money for this type of project was provided as a tax credit, giving the agency little discretion. Stephanie Mueller, a spokeswoman, said that “if a taxpayer meets the eligibility requirements, they receive the tax credit.”Gold taps record as U.S. joblessness hits 10%
NEW YORK (MarketWatch) -- Gold futures finished at a record Friday, after earlier tapping $1,100 an ounce, as news that the U.S. unemployment rate topped 10.2% in October lifted expectations the Federal Reserve will keep interest rates near zero well into next year, pressuring the dollar.
Gold for November delivery rose $6.40, or 0.6%, to end at $1,095.10 an ounce, the highest closing level for a front-month contract.
The more-actively traded December contract gained $6.40, or 0.6%, to $1,095.70. December gold earlier hit a record intraday high of $1,101.90 on the Comex division of the New York Mercantile Exchange.
Industrial metals, such as copper, however, moved lower. Copper fell fractionally with the December contract ending at $2.94 a pound.
"With unemployment at 10%, the implications for Fed policy is that they have their hands tied and cannot defend the dollar," said Joe Foster, manager of the Van Eck International Investors Gold Fund.
"We're going to see lots of new records going forward," he said. "By year end, it wouldn't surprise me to [see gold] test $1,200 and then $1,300 by early next year before we see some consolidation."
The U.S. economy shed 190,000 jobs last month, lifting the unemployment rate above the 10% mark for the first time in 26 years, the Labor Department said. The report also revised statistics for September and August.
Economists surveyed by MarketWatch, were looking for a decline in nonfarm payrolls of 150,000 and for the unemployment rate to rise to 9.9%. See full story.
The dollar index /quotes/comstock/11j!i:dxy0 (DXY 75.77, +0.08, +0.10%) , which measures the U.S. unit against a basket of six major currencies, slumped to 75.648, down 0.2% on the day.
Bets that the Federal Reserve will eventually lift interest rates from near zero fell slightly after the report. Fed fund futures indicated traders pared bets the Fed would raise its target rate by mid-2010 to 0.31%, compared to a 0.33% rate before the data.
On Wednesday, the Fed left its target rate in a range of between 0% and 0.25%, and repeated its commitment to keep rates low for the foreseeable future, citing slack in the economy and little reason to worry about inflation.
"With today's [economic] numbers, we see that interest rates are still contracting and that quantitative easing is still in place for the foreseeable future," said Stephen Flood, executive director at GoldCore. "The move to $1,100 signals a continued global move to safe harbor investments."
The exceptionally low rates have fueled a dollar carry trade, whereby investors borrow dollars to invest in riskier assets, such as stocks and commodities, including gold.
On Wall Street, the Dow Jones Industrials Average /quotes/comstock/10w!i:dji/delayed (INDU 10,023, +17.46, +0.17%) rebounded from early weakness, to gain 10 points in afternoon trade. The S&P 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,069, +2.67, +0.25%) was up 0.2%.
The SPDR Gold Trust /quotes/comstock/13*!gld/quotes/nls/gld (GLD 107.43, +0.45, +0.42%) , the biggest gold exchange-traded fund, bucked the trend, rising 0.4%.
Also providing support for gold are expectations of more purchase by central banks. On Monday, the Reserve Bank of India surprised markets by purchasing 200 tons of gold from the International Monetary Fund, nearly half of the 403.3 tons the IMF plans to sell over the coming years.
"India was a surprise," Foster said. "We knew that China and Russia were buyers but to have India jump into this is very positive for gold. Many central bankers are worried about the dollar, so they're looking at alternatives."
In other metals action, silver for December delivery fell 3 cents, or 0.2%, to $17.38 an ounce, while January platinum slumped $14.70, or 1%, to $1,348.20 an ounce.
December palladium fell $1.15, or 0.3%, to $330.70 an ounce.
Nick Godt is MarketWatch's markets editor, based in New York.
Post Office Returns 107,831 Tax Refund Checks to IRS Due to Faulty Addresses
The IRS announced yesterday (IR-2009-101) that it has received 107,831 refund checks totaling $123.5 million (an average of $1,048) from the U.S. Postal Service due to mailing address errors. The number of undeliverable refund checks is up 16% this year. If you are awiting a refund check, you can update your address at Where's My Refund?
AIG posts profit of 455 million dollars
Bailed out insurance giant AIG on Friday announced a profit of 455 million dollars in the third quarter, a massive turnaround from a 24.4 billion dollar loss in the same period last year.
The earnings from group, the largest recipient of US government aid during the financial 
Excluding special items, the profit was 2.85 dollars per share, compared with a market forecast of 1.98 dollars per share.
It was the second consecutive quarterly profit for American International Group after the prior quarter's earnings of 1.8 billion dollars.
"Our results reflect continued stabilization in performance and market trends," said AIG president and chief executive Robert Benmosche.
"AIG employees are working to preserve the strength of our insurance businesses in a challenging market by working closely with our distribution partners, with third quarter 2009 showing signs of stabilization."
AIG was the largest single recipient of US bailouts with the government pumping more than 170 billion dollars into the firm to keep it afloat and taking a controlling stake in the group in the process.
Once the world's biggest insurer, AIG was on the brink of bankruptcy in September 2008 when the government offered a financial lifeline in exchange for an 80 percent stake in the company.
The company was in trouble after backing trillions of dollars in risky financial products amid a US home mortgage meltdown that triggered a global financial crisis.
The latest quarterly figures showed revenues fell 11.8 percent to 26 billion dollars as AIG sold off some or wound down of its operations.
AIG said it "continues to make progress on its disposition plan," having entered into agreements to sell or completed the sale of operations and assets to generate a total of 5.6 billion dollars.
A government report in September showed AIG still owed nearly 121 billion dollars in taxpayer aid.
The Government Accountability Office, an investigative arm of
Amador High Student Continues To Be Target Of Hate
A criminal investigation is underway at Amador High School following a student's report of a hate crime.
Justin Zysman is is the grandson of Holocaust survivors. He found a swastika carved into his desk during the middle of class this week. After he alerted his parents, they immediately called the police.
"It was off to like the bottom side of the desk," said Justin, describing where the carving was located on his desk.
Justin took a picture of the Nazi symbol with his cell phone camera.
"I don't walk around saying stuff about other people's religion, so I don't think it's a prank," he said.
The hateful symbol, carved crudely and apparently quickly, is not not Justin's first brush with anti-Semitism at Amador High.
His parents are already in a civil battle with the school after Justin found the words "burn Jew burn" carved into his locker. He has been a target of Nazi salutes and his clothing has been urinated on.
"We've had some complaints in the past. There may be some racially motivated hate communication, and we did a police investigation in hopes of clearing that up one way or another," says Sutter Creek Police Chief.
On campus, the investigation has students taking sides.
"Some are saying he purposely did it for attention, others are saying someone actually did it," says one Amador High School student.
But the photo of the swastika on a desk shows a different story, one that Justin hopes will end with an arrest.
"Finding out who did it, and things change, things go to the way they should be," said Justin.
Sutter Creek Police say they have taken that desk out of the classroom and into evidence.
The investigation is ongoing.
Justin Zysman is is the grandson of Holocaust survivors. He found a swastika carved into his desk during the middle of class this week. After he alerted his parents, they immediately called the police.
"It was off to like the bottom side of the desk," said Justin, describing where the carving was located on his desk.
Justin took a picture of the Nazi symbol with his cell phone camera.
"I don't walk around saying stuff about other people's religion, so I don't think it's a prank," he said.
The hateful symbol, carved crudely and apparently quickly, is not not Justin's first brush with anti-Semitism at Amador High.
His parents are already in a civil battle with the school after Justin found the words "burn Jew burn" carved into his locker. He has been a target of Nazi salutes and his clothing has been urinated on.
"We've had some complaints in the past. There may be some racially motivated hate communication, and we did a police investigation in hopes of clearing that up one way or another," says Sutter Creek Police Chief.
On campus, the investigation has students taking sides.
"Some are saying he purposely did it for attention, others are saying someone actually did it," says one Amador High School student.
But the photo of the swastika on a desk shows a different story, one that Justin hopes will end with an arrest.
"Finding out who did it, and things change, things go to the way they should be," said Justin.
Sutter Creek Police say they have taken that desk out of the classroom and into evidence.
The investigation is ongoing.
Another Casualty of the Retail Collapse: Borders to Close 200 Waldenbooks Locations
Borders(BGP) is the second-largest bookstore chain in the nation. A few years ago the company purchased Waldenbooks. Since that purchase Borders has struggled to keep its business profitable in a rapidly deteriorating economy.
Borders’ revenue loss over the last two years has resulted in a dramatic drop in the company’s share price. The stock currently trades for around $2.00 a share, a far cry from its $13.00 share price just two years ago.
Because of the company’s ailing financial condition they will close nearly two-thirds of the remaining Waldenbooks locations. The closings will be completed by January and cost about 1,500 employees to lose their jobs.
Forget the Audit: Just Go Ahead & Abolish the Federal Reserve
ON MARCH 17, 1993, I addressed the House of Representatives in one of the many “budget” debates. Over the past 16 years, many publications and books have reprinted my speech.
They viewed my speech as being on target. Researchers have written to me regarding the speech, confused because it was printed in two areas of the Congressional Record. My floor remarks were brief, but I inserted the entire speech into the “extension of remarks” section of the record.
Nevertheless, the speech stands today as prophetic. America is bankrupt, and it’s growing worse by the day. The U.S. government was technically dissolved by the “Emergency Banking Act” of March 9, 1933. THAT’S A FACT.
If you have any doubt, just look around. Foreclosures and unemployment run rampant. The dollar is dropping so low it could fit under a closed door with a top hat on, yet every day the mainstream media is trying to convince us that the recession is over. Who’s kidding whom? If you take Social Security and Medicare out of our economy, it’s a full-blown depression—a total belly-up depression.
The real rub emanates from the fact that the “trustees” who preside over U.S. bankruptcy are the international bankers, via the United Nations, the World Bank and the International Monetary Fund.
I proclaim that all U.S. offices, officials and departments are now operating within a de facto status in name only under “Emergency War Power.”
Our constitutional form of government was technically dissolved and replaced by a so-called “democracy,” a government in actuality being a socialist-communist order under a new governor for America.
You must be thinking that I’ve lost my marbles by now—I don’t blame you. But, here come the facts. This chicanery occurred when authority was transferred and placed in the Office of the Secretary of Treasury under the governor of the International Monetary Fund. [Public Law 94-564].
In essence, the dollar was changed from a “promise to pay a dollar in silver or gold” to a “federal reserve note.” Now think about it: the dollar became a “promise,” not “money.”
The U.S. dollar is a debt instrument, nothing more than another debt obligation of the American people. And where is this obligation to be paid? You probably guessed it, to the Federal Reserve Bank.
Let’s tell it like it is. Federal Reserve notes are literally unsigned checks written on a closed account. It’s nothing more than inflatable paper creating more debt through inflation every time our currency is devalued.
Truth is, inflation is actually another tax; invisible, never seen, but a tax just the same. I don’t know about you, but I always thought that a “contract” under common law is only valid if it involves an exchange of some “good and valuable consideration.”
If that’s not enough to frost your pumpkins, check this out: The Federal Reserve System is a sovereign power structure separate and distinct from the U.S. government. It is in fact, a private corporation.
We, the people of these United States, owe this private corporation consisting of international bankers a mountain of debt. The collateral on this debt is our very own homes and properties.
We the people are nothing more than tenants and sharecroppers, renting our own property from the Federal Reserve Bank. Most Americans are mortgaged to the hilt with few or no assets, working harder and profiting less, constantly in debt to a private corporation they know little or nothing about.
BEAM ME UP. This has gone on way too long—WAKE UP AMERICA.
This is nothing more than economic slavery to a bunch of international fat cats. Our Constitution has been turned upside down, violated and discarded like toilet paper. Unbelievable.
It’s not rocket science folks—CONGRESS SHALL COIN MONEY, so mandates the Constitution. It’s very clear to me: the Federal Reserve System should be abolished, not just audited so the politicians can feel good, but abolished. Enough is enough. In closing I say “audit this.”
Next week—AIPAC. You don’t want to miss it.
James A. (Jim) Traficant, Jr. was born in Youngstown, Ohio on May 8, 1941. He received B.S. and M.S. degrees from the University of Pittsburgh, where he was a well-known football star. He also received a M.S. degree from Youngstown State University in 1976. For ten years he served as executive director of the Mahoning County (Ohio) Drug Program and from 1981-1985 he served as sheriff of Mahoning County, prior to his election to the U.S. Congress as a Democrat in 1984. He was re-elected by overwhelming margins every year up until 2002 when, following his conviction on trumped up corruption charges, he was expelled from the House of Representatives. Despite his conviction and expulsion and being sent to prison for a seven year term Traficant still won 15% of the vote running for re-election to the House in the 2002 election as an independent. He recently completed a seven-year prison sentence, having refused to seek a pardon or clemency, refusing to admit to or apologize for crimes he did not commit.
They viewed my speech as being on target. Researchers have written to me regarding the speech, confused because it was printed in two areas of the Congressional Record. My floor remarks were brief, but I inserted the entire speech into the “extension of remarks” section of the record.
Nevertheless, the speech stands today as prophetic. America is bankrupt, and it’s growing worse by the day. The U.S. government was technically dissolved by the “Emergency Banking Act” of March 9, 1933. THAT’S A FACT.
If you have any doubt, just look around. Foreclosures and unemployment run rampant. The dollar is dropping so low it could fit under a closed door with a top hat on, yet every day the mainstream media is trying to convince us that the recession is over. Who’s kidding whom? If you take Social Security and Medicare out of our economy, it’s a full-blown depression—a total belly-up depression.
The real rub emanates from the fact that the “trustees” who preside over U.S. bankruptcy are the international bankers, via the United Nations, the World Bank and the International Monetary Fund.
I proclaim that all U.S. offices, officials and departments are now operating within a de facto status in name only under “Emergency War Power.”
Our constitutional form of government was technically dissolved and replaced by a so-called “democracy,” a government in actuality being a socialist-communist order under a new governor for America.
You must be thinking that I’ve lost my marbles by now—I don’t blame you. But, here come the facts. This chicanery occurred when authority was transferred and placed in the Office of the Secretary of Treasury under the governor of the International Monetary Fund. [Public Law 94-564].
In essence, the dollar was changed from a “promise to pay a dollar in silver or gold” to a “federal reserve note.” Now think about it: the dollar became a “promise,” not “money.”
The U.S. dollar is a debt instrument, nothing more than another debt obligation of the American people. And where is this obligation to be paid? You probably guessed it, to the Federal Reserve Bank.
Let’s tell it like it is. Federal Reserve notes are literally unsigned checks written on a closed account. It’s nothing more than inflatable paper creating more debt through inflation every time our currency is devalued.
Truth is, inflation is actually another tax; invisible, never seen, but a tax just the same. I don’t know about you, but I always thought that a “contract” under common law is only valid if it involves an exchange of some “good and valuable consideration.”
If that’s not enough to frost your pumpkins, check this out: The Federal Reserve System is a sovereign power structure separate and distinct from the U.S. government. It is in fact, a private corporation.
We, the people of these United States, owe this private corporation consisting of international bankers a mountain of debt. The collateral on this debt is our very own homes and properties.
We the people are nothing more than tenants and sharecroppers, renting our own property from the Federal Reserve Bank. Most Americans are mortgaged to the hilt with few or no assets, working harder and profiting less, constantly in debt to a private corporation they know little or nothing about.
BEAM ME UP. This has gone on way too long—WAKE UP AMERICA.
This is nothing more than economic slavery to a bunch of international fat cats. Our Constitution has been turned upside down, violated and discarded like toilet paper. Unbelievable.
It’s not rocket science folks—CONGRESS SHALL COIN MONEY, so mandates the Constitution. It’s very clear to me: the Federal Reserve System should be abolished, not just audited so the politicians can feel good, but abolished. Enough is enough. In closing I say “audit this.”
Next week—AIPAC. You don’t want to miss it.
James A. (Jim) Traficant, Jr. was born in Youngstown, Ohio on May 8, 1941. He received B.S. and M.S. degrees from the University of Pittsburgh, where he was a well-known football star. He also received a M.S. degree from Youngstown State University in 1976. For ten years he served as executive director of the Mahoning County (Ohio) Drug Program and from 1981-1985 he served as sheriff of Mahoning County, prior to his election to the U.S. Congress as a Democrat in 1984. He was re-elected by overwhelming margins every year up until 2002 when, following his conviction on trumped up corruption charges, he was expelled from the House of Representatives. Despite his conviction and expulsion and being sent to prison for a seven year term Traficant still won 15% of the vote running for re-election to the House in the 2002 election as an independent. He recently completed a seven-year prison sentence, having refused to seek a pardon or clemency, refusing to admit to or apologize for crimes he did not commit.
“Government explanations of 9/11 make no sense"
American actor and 9/11 activist Daniel Sunjata says that he supports an independent 9/11 investigation because there are too many disturbing questions that remain unanswered.
“I can point out one thing in particular – the 9/11 Commission. Not one word in the 9/11 Commission report on the collapse of Building Seven,” he said. ”That is just one particular item.”
“Seventy per cent of the questions proposed by the victims’ family members during the 9/11 Commission were completely ignored. That fact alone backs for a real investigation into the matter,” Sunjata added.
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