Minimum wage could be frozen or cut if it starts to cost jobs or damage economy, Government suggests

The minimum wage for millions of people could have to be capped or frozen in future if it risks damaging jobs or the economy, the Government has said.

 
It has told the Low Pay Commission, which sets the minimum wage, that it must formally consider its impact on 'employment and the economy', before agreeing future increases.

It has told the Low Pay Commission, which sets the minimum wage, that it must formally consider its impact on “employment and the economy”, before agreeing future increases.

The change, which will be written into the Commission’s new terms of reference, raises the prospect of the first ever across-the-board freeze or cut in the minimum wage for everyone if the economic uncertainty continues.

The national minimum wage is established in law and is traditionally announced in March every year by the Commission, after negotiations with employers, unions and the Government.

The rate increased from £6.08 to £6.19 for those aged over 21 last October, but the hourly rate employees aged 18 to 20 were frozen at £4.98.

A three-yearly review of the Commission disclosed that the Department for Business has been frustrated that not enough attention has been paid by the Commission to successive rises in the minimum wage on the economy.

The review was carried out by Department for Business which annually sets out what ministers want the Commission to consider when setting the annual minimum wage.
Previously, Commission has been in the past asked by ministers “to take account” of the impact on the wider economy. But the review uncovered evidence of “tension” between the department and the Commission over “strict adherence to the annual remit”.
It found that “the Government-endorsed goal to have ‘a minimum wage that helps as many low-paid workers as possible without any significant adverse impact on employment or the economy’, was not included explicitly in either the Act or remit”.
It said therefore that the Commission's new terms should include “the understood and accepted goal to raise the wages of the lowest paid without damaging employment or the economy”.
Ministers have repeatedly warned that the minimum wage was starting to have a “small adverse” impact on employment opportunities.
Employment minister Jo Swinson said in February: “The level of employment is now above its pre-recession peak, but the employment rate is below the pre-recession peak.
“This means that we believe that caution is required - particularly as the minimum wage rate is now at its highest ever level relative to average earnings for adults, and remains high for young people.”
Convenience stores have warned about the damaging effect of recent increases in the minimum wage. Research found that eight out of 10 small shops have had to lay off staff in the past year because of rising costs.
A similar proportion, according to the research by the Association of Convenience Stores, said the minimum wage should be frozen at its current level.
Last year a survey from off licences urged the Commission to freeze the minimum wage because they were struggling to cope with rising staff costs.
Last October, the Government hinted at the change when ministers said the case for a rise in the national minimum wage next year needed to be treated with “caution”, because of the “difficult” economic conditions.
Matthew Hancock, the business minister, said there is “evidence that in these tough economic times the minimum wage level may have an impact on the employment opportunities” of young people.
The news will alarm anti-poverty campaigners who have been urging the Government to adopt the higher “living wage”, which is estimated to be £7.45 this year.
Labour leader Ed Miliband is reported to be considering making the living wage, which is also set annually by campaigners, a key part of Labour’s 2015 election manifesto.
A Business, Innovation and Skills spokesman said: "The Government is committed to the minimum wage because of the protection it provides to low paid workers and the incentives to work it provides.
"It is important that we have a minimum wage that helps as many low paid workers as possible, while at the same time making sure that we do not damage their employment prospects by setting it too high."

Portugal PM holds urgent budget talks after court ruling

 

Many Portuguese have protested strongly against the austerity measures

Portugal's PM has criticised the top court's ruling that parts of the 2013 budget are unconstitutional, and has held urgent talks with the president.

PM Pedro Passos Coelho held an extraordinary cabinet meeting on Saturday and said the Constitutional Court had made meeting commitments to international lenders difficult.
The court had rejected four out of nine austerity measures in the budget.
The PM met the president late on Saturday to discuss the next steps.
President Anibal Cavaco Silva said after the talks that the coalition government should remain in office and that the country should honour its international commitments.
Rein in spending The government said it respected the court's ruling but did not agree with it, suggesting that the judges had failed to take into account steps taken by the government to make its austerity measures fair to all citizens.
After the cabinet meeting, the government said the court ruling had created "serious difficulties" for meeting budget targets agreed with international lenders.
The BBC's Alison Roberts in Lisbon says the PM is expected to make a statement on Sunday evening.
The court ruling would deprive the state of some 1.5bn euros (£1.3bn) in savings the government had said were necessary to meet the terms of a eurozone and International Monetary Fund bailout.
The terms require Portugal, which has already received 61bn euros of its bailout, to rein in spending sharply.
The court rejected a measure to scrap summer holiday bonuses for public sector workers and pensioners, as well as cuts to unemployment and sickness benefits.

Vito Nicastri 'The King of Wind' "Green" Entrepreneur Mafia links, €1.3bn Seized

Assets worth €1.3bn seized from Italian businessman 'with mafia links'


Vito Nicastri, known as the 'king of wind' for his renewable energy interests, loses companies, property, cars and boats



Anti-mafia investigators in Italy have made their largest confiscation of assets to date: €1.3bn (£1.1bn) worth of property, cash and alternative energy companies owned by a man known as the "king of wind".

In a decision hailed by Italy's anti-mafia police chief as unprecedented, a court in Sicily ordered the definitive confiscation of assets first seized and frozen in September 2010 from Vito Nicastri, 57, a former electrician and businessman believed to have close ties with the Cosa Nostra.

Among the assets were 43 companies, 98 properties, 66 bank accounts, credit cards, investment funds, cars and boats. Most were located in Sicily and in Calabria, the southern region of Italy that is home to the 'Ndrangheta criminal organisation, but the investigation also reached northern Lombardy and Rome.

Investigators said Nicastri, who made his name as an alternative energy entrepreneur, had "high-level" contacts in the mafia and invested money made from criminal activities. "This is a sector in which money can easily be laundered," Arturo de Felice, head of Italy's anti-mafia agency, told SkyTG24.

In separate comments, De Felice described the confiscation of the assets as "unprecedented".

Police said Nicastri had close ties to Matteo Messina Denaro, a Cosa Nostra kingpin who has been on the run since the early 1990s.

"Matteo Messina Denaro is behind many businessmen considered above suspicion who manage and take care of the assets of the real boss of Cosa Nostra," tweeted Ivan Lo Bello, vice-president of business lobby Confindustria. "The fight against money laundering is fundamental to the crushing of the mafia."

Italian police said the confiscation of assets would impact "in a significant way" on the economic power of Messina Denaro. "We are talking about productive businesses, which will now go to the state; in this particular economic context that we are living in, it's not to be sniffed at," said De Felice.

Nicastri has been placed under surveillance and told to remain in his home town of Alcamo, on the west coast of Sicily, for three years guardian

Gold-Run: “There is Not One Single Ounce of Gold Available for Sale in Bangkok!”

SD reader Anders has submitted a boots-on-the ground report from Bangkok Thailand, which is normally flooded with physical gold.
In the wake of this week’s massive gold take-down by the cartel, Anders reports that:
EVERY Gold-shop in Bangkok is out of Bullion…there is not 1 single ounce of gold bullion available for purchase in the entire city of Bangkok!  The Gold is going down in price like everyone is selling.. while there is no Phyzz to buy at all in all Thailand!

Full first-hand report from SD reader Anders: 
Hi Doc,
I live in Thailand and am 100% invested in PM.
Today when I walked by a Gold-shop here in Bangkok, there was a long queue outside.
Since I’m curious and also have seen how the cartel has smashed down the Gold the last 2 days I walked in and asked whats happening…
and not 1 ounce is possible to buy. (they only have some jewellery for sell)
To buy Bullion you must order and wait (at least) 5 days.. and you can only order 2.5 ounce per person.
And they stopped taking orders at 3pm today as well.
I saw later long long queue outside many Gold-shops.. and the info I got was that there is not 1 ounce of Gold-bullion to buy in the whole Bangkok.
(possibly the whole Thailand)
The Gold is going down in price like everyone is selling.. while there is no Phyzz to buy at all in the whole Thailand.
The cartels naked -shorting is hilariously obvious now.
(Btw. Thaigold is 96.5%, not 99.9 like the Eagle/Maple leafs Etc)
But anyway.. all Thailand is out of Gold and there is a limitation on how much you can order.. and it will take at least 5 days to get it.
Frankly.. I’m shocked… Thailand is a huge Gold community.. so no one has ever heard of gold being sold out here before.
I just thought this would be of some interest for you.
Regards,
Anders

Time To Sequester Air Force One Vacation Flights

The last Hawaii vacation cost taxpayers $7.5 million.
Excellent clip.  Start watching at 1:10 if you're pressed for time.
Air Force One costs taxpayers $179,750 per hour.  It's time to sequester President Obama's use of Air Force One and limit it to official business rather than vacations, politics and sight-seeing tours.
New video from AFP California released yesterday.
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Must read from Daily Caller:
Taxpayers Spent $1.4 Billion On Obama Family Last Year

Michelle's Last Four Years - One Long Vacation

Hank Paulson: 'I Had To Pinch Myself Over Fannie'

Hank Paulson is back.  Keep an eye on your wallet.
Short clip from an interview with Judy Woodruff to be broadcast tonight on Bloomberg.
Henry Paulson "pinched himself" over Fannie Mae profit

"I could hardly believe what I was reading.  I had to pinch myself at first.  When housing recovers, of course they’re going to make more money, and that’s a good thing now, because the government losses will end being – or the taxpayer losses will be less than projected."

Further reading:
Paulson Says Fannie Mae’s Profits Shouldn’t Deter Overhaul
Paulson Urges Revamp of Entitlements Along With Tax Code

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 Flashback
 
Paulson on bailing out Fannie and Freddie.

GRAND THEFT BANK: 80% Of Your Money Will Be Stolen In Cyprus

Grand Theft Bank: Cyprus and the 80% solution.
---
More confirmation on the 80% number from the WSJ last night.
Wall Street Journal
After two attempts at securing a bailout deal in March that pushed Cyprus to the brink of exiting the euro, the country faces major obstacles. To secure the aid, it agreed to wind down its second-largest lender, Cyprus Popular Bank PCL, and radically restructure the largest, Bank of Cyprus PCL.
In the process, Cyprus became the first country in the three-year-long euro-zone crisis to hit depositors to fund its survival: Cyprus Popular's uninsured depositors will probably take losses of as much as 80% of their holdings over the guaranteed limit of €100,000; Bank of Cyprus depositors stand to incur losses of as much as 60% of their uninsured deposits, according to initial government estimates.
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Cyprus Finance Minister: Uninsured Laiki Depositors Could Face 80% Haircut
Cyprus's finance minister said Tuesday that large deposit holders at Cyprus Popular Bank, the island's second biggest lender, could face losses of as much as 80% on their deposits as the government moves to wind down its operations.
Speaking in a television interview with state broadcaster RIC, Michalis Sarris indicated that it could also take years before those depositors see any of their money returned.

"Realistically, very little will be returned," Mr. Sarris said.

Bonus clips:

 
Cyprus residents burn EU flags.

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Laiki Bank employees protest at Cyprus parliament.

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Bank employees demand Central Bank chief resign.

Christine Lagarde Speaks On Cyprus Bailout

It Should Be Clear That Financial Markets Are Heading Towards Disaster

The Scary Thing Is That This Bad Jobs Report Wasn’t Even About The Sequester Which Hasn’t Even Kicked In Yet.

The March jobs report has come in very mediocre.
It’d be nice to blame the sequester (the automatic spending cuts that started in March) but it doesn’t even appear to be about that.
A series of tweets from WaPo’s Zachary Goldfarb points out that this really more likely to be about the expiry of the Payroll Tax Holiday (as the job losses fell in the retail sector) rather than the sequester (seeing as there was not a big decline in professional services).

Zachary A. Goldfarb @Goldfarb

This jobs report is more a story of the impact of the payroll tax hike than the sequester.

…
zerohedge‏@zerohedge2 min
U.S. Postal Service employment fell by 12,000 in March. Much more to go here…

ACHUTHAN: The Key Jobs Metric I Follow Has Dropped To A 19-Month Low

Prime earners are losing jobs.
…

“Contrary to all the recent happy-talk, year-over-year jobs growth has been falling for a while,” said Lakshman Achuthan in an email to Business Insider. (Click here for his chart.)
Achuthan, the head of the Economic Cycle Research Institute, has long argued that the U.S. economy is in recession.
He notes that, year-over-year growth in nonfarm payrolls and household jobs have fallen to 19 and 18 month lows, respectively.
“The key issue is the pressure on income: people between 35 and 54, i.e., those in their prime earning years, have actually lost jobs since the start of the so-called jobs recovery,” he continued.
…

It’s Deja Vu, All Over Again: This Time Is… Completely The Same

It was the deep of winter… CNBC was talking about “animal spirits”, had just touted “the best January in 14 years“, was quoting Raymond James’ Jeff Saut as saying that “The market “is amazingly resilient, and is no longer overbought” and desperately doing everything it could to get retail back into stocks, and was succeeding: retail inflows into stocks were surging and seemed unstoppable… The Chicago PMI had just printed at its highest level in decades… the VIX was dropping fast… Stocks were soaring… Bonds were sliding… NYSE margin debt had just risen to the highest level since 2008… A few brief months earlier the Fed had unleashed a new, massive round of unsterilized bond buying…  Bank of America was blaring about the “great rotation” for stocks, and yes – just shortly prior “global currency warfare” had broken out. Name the year?
If you said 2013, you would be right. And wrong.
Because the right answer is… 2011.
That’s right: with institutional and trader memories so short, everyone has (again) forgotten that it truly is deja vu, all over again.
To wit:
Stock performance in the winter of 2011 and the winter of 2013:

Bond performance in the winter of 2011 and the winter of 2013:

…

Market Responds To NFP – Great Rotation To Safety

Payrolls Plunge To 88K, Biggest Miss Since December 2009, Participation Rate At New 30 Year Low

So much for “open-ended QE driven recovery“. Moments ago the March Non-farm payroll hit and it was a doozy, printing at 88K, below the lowest forecast of 100K, well below the expected number of 190K, and a tragedy compared to the February revised print of 268K (was 236K). This was the biggest miss to expectations since December 2009 and the worst print since June 2012. The unemployment rate declined to 7.6%, but this was due entirely to the collapse in the labor force participation rate, which declined by 20 bps to 63.3%, a new 30 year low.
And now the time to come up with excuses is here.


500,000 people dropped out of the labor force. 500,000!!! 500K people could not find work and gave up. Imagine that. NO ONE wants to hire you when that is another cost due to ObamaCare. Of course the libtards all want to see their glorious leader and say that he dropped the unemplyment number:
http://money.cnn.com/2013/04/05/news/economy/march-jobs-report/index.html?iid=Lead)

Bank Of England Admits “Stocks Don’t Reflect Economic Reality”

The Bank of England’s Financial Policy Committee (BoEFPC) warns there is “evidence of the re-emergence of… behavior in financial markets not seen since before the financial crisis,” citing the increased issuance of synthetic products and added that banks have “little margin for error against a backdrop of low growth in the advanced economies,” despite what we are told about their ‘fortress balance sheets. Bloomberg Businessweek adds that the BoE were careful not to scare the public, they add, events currently“did not appear indicative of widespread exuberance in markets. But developments would need to be monitored closely.” This following the Fed’s warnings of ‘froth’ in the credit markets suggests central bans are considerably more concerned at blowing bubbles than they want to admit in public. ECB’s Weber recently commented that he feared, “the recent rally in financial markets could be a misleading signal,” which appears confirmed by the BoEFPC noting that equity performance since mid-2012, “in part reflected exceptionally accommodative monetary policies by many central banks… But market sentiment may be taking too rosy a view of the underlying stresses.”
…
Wall Street’s Core Culture Means We’ll See More Collapses Like MF Global
Read more: http://www.thereformedbroker.com/2013/04/04/wall-streets-original-sin/#ixzz2PbKqDuLy

Entitlement cuts to come in Obama budget: report

After months of speculation, we’ll soon learn the specifics of President Barack Obama’s proposed “modest” and “sensible reforms” to social insurance plans. As Michael Kitchen reports in a Market Pulse this morning, Obama’s budget proposal, expected out next Wednesday, will feature cuts to Social Security and Medicare, including backing for so-called “chained CPI,” according to a New York Times report Friday, citing unnamed administration officials. The chained consumer price index, which uses more modest price adjustments to shrink cost-of-living increases to the programs, is backed by Republicans but opposed by many in Obama’s own party, though the report said the White House budget would include protections for low-income and very old beneficiaries….
Social Security would grow under ‘cuts’
Record 8,853,614 Americans on Disability
81,804 added in March!

U.S. Government Preparing for Collapse (and Not in a Nice Way

Welfare reform: £53 a week... You do the maths

Gas £5, Water £3, Electricity £8, Food £15, Travel £13, Debt £4, Phone £5, Social life £0. Iain Duncan Smith claims that he could live on £53 a week. But for many people it is the miserable reality

Many of those on state benefits say they are trapped in an enforced idleness. They cannot afford to progress Photo: Getty Images

 

 

 

Life on £55 a week is no stunt for Debbie Garrity. It is laid out in painstaking detail in separate labelled compartments of a plastic box she keeps next to her armchair. Gas £5, Water £4, Bus Pass £12.50, Food £10. Inside a newly labelled section – Bedroom Tax – is a crisp £10 note, which means she has had to halve her shopping budget. In the Social Fund section, there is nothing at all.

“Sometimes I would like to saw a pound in half to make it go further,” says the 45-year-old, who has a 2:1 BSE degree in health and social care and worked full-time for decades before losing her job several months ago. Outside the window of her neat flat on the sprawling Newbiggin Hall estate on the edge of Newcastle, seagulls roll in the wind. The A1 roars faintly in the distance.

“I just feel stuck and I can’t go anywhere,” she says. “You would have thought that by my age you’d be able to have some luxuries, but sadly not. This is no quality of life at all.”

As of last night, more than 437,000 people had signed a petition calling for Iain Duncan Smith to live this way. Well, to be more precise, they would like the Work and Pensions Secretary to live on £53 a week. For Garrity, that £2 would mean a difference of two more meals. She says she can only afford to eat once a day. The petition follows a challenge on the Today programme that arose out of the Government’s sweeping changes to the benefits system that took effect on April 1.

Duncan Smith was asked if he could live on £53 a week, the amount one caller claimed he had left to live on following cuts to his housing benefit. “If I had to, I would,” came the reply. It was later revealed that the caller lived on £156 a week, but the gauntlet had been thrown down. And, as the Telegraph reports here, many do struggle to live on such meagre sums.

Later this week, in an interview with his local paper, the Wanstead and Woodford Guardian, Duncan Smith dismissed the petition as a “complete stunt”.
He is right. Two decades ago, Matthew Parris, then a Tory MP, came to the same conclusion in the nearby neighbourhood of Scotswood, just four miles from Newbiggin Hall. He’d agreed to live there on the dole for a week for a Granada documentary, despite an order from Margaret Thatcher not to. This week he wrote of the futility of the task.
Those in Garrity’s position agree. A week, even six months, spent this way does not accurately convey how crushing it is to be struggling constantly to scrape together enough money to live on. Or what it’s like to be trapped in a dehumanising system of welfare that punishes progress and makes it impossible to escape. The true face of poverty in modern Britain is as far removed from the sponger lifestyle of “shameless” Mick Philpott, who raked in £100,000 a year on state benefits and was jailed for life this week for killing six of his 17 children in a house fire, as it is from Duncan Smith’s comfortable Buckinghamshire home. Those, like Garrity, who know it best agree that the welfare system is in desperate need of an overhaul.
She has watched some of the debate raging this week on her small television. Although not much. In order to save on bills, she is careful with her use of electricity, switching off her fridge and hanging food items out of the window to keep them cold. Like other residents on the estate, she occasionally heads to the local swimming baths for a shower, to save herself the cost of hot water.
“I don’t put the heating on,” she says, “although I do give myself a small treat every now and then and put the electric fire on for a bit. It can get very cold here. You can ring up the electricity company to find out how much it costs for 10 minutes of hoovering – although I haven’t quite got to that stage yet.”
Garrity grew up in the Northumberland town of Rothbury and moved to Newcastle about 25 years ago for work.
“I’ve always worked,” she says. “My whole family has a strong work ethic. My dad was a bricklayer and my mum worked in lots of part‑time jobs. At first, I trained to be a chef and worked in the Lake District. I started washing dishes and worked my way up.”
After moving to Newcastle, she combined chef work with a job in the social-care sector and studying for a degree with the Open University. “When I was 32, I was working about 70 hours a week,” she says. “I did a BSE in health and social care and got a 2:1. My plan is to go and do a master’s and then work with people who have disabilities.”
She is reluctant to discuss personal details, but after her marriage ended a decade ago, she moved into a rented house. Two years ago, her landlord sold the house. No longer able to afford to rent privately, she moved into her current two-bedroom council flat, despite having asked for a one-bedroom home. After losing her full-time job in the health and social sector a few months ago, she was forced to contact the housing charity, Crisis. She currently receives an employment support allowance of £71 a week, which goes on council and now bedroom tax, as well as housing benefit of £61 a week, which goes straight on rent. “I’ve been waiting to hear back on a few voluntary posts,” she says. “But there are very few jobs out there.”
She continues: “The thing that I miss most is driving my car and being able to go where I want, when I choose. I last had a car two years ago, but I couldn’t afford one now. I’m fortunate that I know how to cook. I try to eat healthily, and have worked out how to cook a meal for 75p.
“I only eat one meal a day. I go to cheap shops and find the cheapest deals; I look for anything for 10p or 20p. I never buy vegetables unless they are reduced. I’ve just bought a packet of reduced parsnips, though, so it will be nice to do something with those. I don’t buy red meat – I would love a rare rump steak one of these days.”
Much of Garrity’s time is spent walking. She wanders through the rundown Sixties housing estate to use the public library and welfare office (which stands next to a derelict working men’s club) to study and look for jobs, or just to keep out of her flat. When she can afford it, she takes the bus into the city and uses the university library. “It can be very, very isolating,” she says. “You need to keep trying to have a purpose to your day.”
Duncan Smith and George Osborne, the Chancellor, have stressed this week that the Coalition’s reforms are “restoring the original values of the welfare state”. Key to their motives is tackling “idleness”, the fifth Giant Evil that Beveridge identified in 1942. But ,any of those in receipt of state benefits say they are trapped in an enforced idleness. They cannot afford to progress. Cases such as that of 23-year-old Abbigail Aziz are depressingly routine. The Scarborough shop worker tells me she was recently promoted, but has asked her boss to demote her again as it has meant her benefits have been reduced to the point where she cannot afford to live.
Mother-of-three Lorna Sculley is in a similar predicament. She works 16 hours a week as a school kitchen assistant in Tower Hamlets (the maximum permitted before her benefits become automatically reduced) from which she earns around £90 a week on top of benefits of £371. After paying bills and outstanding debts, she is left with £50 a week to feed and clothe her family. They have spent the past two Christmases in a nearby food bank – one of hundreds now established across the country. Her three boys, aged 12, eight and two, share a bedroom in their tiny flat in the shadow of Canary Wharf, with the two eldest sleep on mattresses on the floor.
“The weekends are the worst,” says 33‑year-old Sculley. “By then the money has been spent. I sit here and think about trying to take the kids swimming or something, and then I look at the budget and realise I can’t. Sometimes I can’t afford to put anything in the electric meter and know it will run out. We sit here with quilts around us.
“I look out of the window at Canary Wharf, and see all the lights on those buildings and all the heat coming off them at 11pm or midnight, and wonder who on earth is in them at that time of night. I can’t work any more than my 16 hours a week, it doesn’t matter what I earn. I’m a working mum trying to do better for myself and it’s really wrong.”
Sean, her eldest tells me at one point that his mother often goes hungry in order to feed them. She nods and falls silent.
As the Sculleys gaze up at the glittering wealth towering over them, so Debbie Garrity glimpses a better life in the Northumberland hills beyond her estate. One where they are not dependent on a welfare trap that reduces life to a weekly wait for the next handout.
“I stay in touch with my friends in the countryside and my dream is to move back,” she says. “But I’m pretty worried about the future.”

New White House Push To Offer Home Loans To People With Weaker Credit -RPT

New White House Push To Offer Home Loans To People With Weaker Credit -RPT

Dirty Harry to World Savers “You’ve got to ask yourself – Do you Feel Lucky?”

Liberty Gold and Silver News
For all those savers and investors young enough not to remember the 1971 American film classic, “Dirty Harry,” there is a scene in the beginning of the film in which the protagonist, San Francisco Detective Harry Callahan (played by Clint Eastwood) interrupts an afternoon bank robbery by shooting the three perpetrators as they try to escape.
Harry kills two of the robbers but one wounded bandit lying on the street contemplates picking up his fallen shot gun to shoot Harry. At this juncture, Clint Eastwood levels his .44 magnum hand gun at the wounded robber who is trying to recall if Callahan has fired all the rounds in his revolver. Callahan says, “I know what you’re thinkin’. Did he fire six shots or only five?… You’ve got to ask yourself one question…Do you feel lucky?… Well, do you, punk?”  
In a complete role reversal of the good guys and the bad guys, the world banking elite has been, for some time now, pointing a great big dangerous gun at the heads of all savers and investors on the planet.  The bullets in that gun are each a little different but still extremely deadly.  Here is what investors worldwide are facing:
1. Between $600 trillion and $1.25 quadrillion of extraordinarily risky derivative bets made by major world banks that have been placed on extremely shaky and suspect sovereign national debt (think Greece, Portugal, Spain, etc., etc.). These bets in the form of loans and/or credit default swaps have placed the participating banks’ capital at extreme risk. How extreme? Take a look at these statistics. The five largest US banks (JPMorgan Chase, Citibank, Bank of America, Goldman Sachs, and HSBC) are estimated to have a total derivative exposure in excess of $220 trillion. Weigh that against the combined assets of those same top five banks, $4.8 trillion, and you get a staggering 46 to 1 leverage! Want to fade that risk? Looking at it another way, America’s five “too big to fail” banks are carrying on their books, a notional trading value that is more than three times the gross domestic product of planet earth! Quoting Dirty Harry, “Do you feel lucky” enough to entrust your life savings to this type of insane risk taking? Just last year, JPMorgan’s commodity desk reported losing almost $6 billion in one week and this could well be just a tip of the iceberg.
2. Massive inflationary money printing by the world’s central banks.  The world’s central banks continue to accelerate unabated both their money printing and zero interest rates policy (ZIRP). Everybody by now should be well aware of the Federal Reserve’s Quantitative Easing 3 and 4, by which the Fed is extending its balance sheet to acquire toxic real estate and business loans along with federal debt at a $90 billion per month pace. Not to be outdone in this currency race to the bottom, the Bank of Japan announced today its intention to unleash the world’s most intensified monetary stimulus to date. According to Reuters, the B of J is “promising to inject about $1.4 trillion into the economy in less than two years, a radical gamble that sent the yen reeling and bond yields to record lows…The policy was viewed as a radical gamble to boost growth and lift inflation expectations and is unmatched in scope even by the US Federal Reserve’s quantitative easing program.” Monetary inflation coupled with low interest rates are robbing savers from both ends. Monetary inflation results in continual price increases that relentlessly punish consumers, whereas miniscule rates of return on bonds and savings accounts brutalize savers, especially retirees. Their yields on investment go down while their cost of living skyrockets.
3. Seizure and subordination of both public and private pension funds.  (see our last blog IT’S HEAD FOR “THE MATTRESSES” TIME FOR SAVERS WORLDWIDE) National governments, buried under spiraling debts and continual revenue shortfalls, have reverted to borrowing from or outright nationalizing the public and private pension funds of their citizens. Plans for this continue on all continents.

4. Last but not least, the outright confiscation of the savings accounts of trusting depositors to help pay off sovereign loans to private banks. If you think the seizure of between $10 to $20 billion from Cypriot bank accounts by that government was just a one time event on a small island nation, you had better think again. The Cypriot government, broke and unable to make payments on sovereign loans to large European banks, caved in to the pressure of the European Central Bank and the IMF. Cypriot savers were literally robbed blind of their life savings in one night! However, Cyprus is a proverbial canary in the coal mine – it is but a harbinger of what surely is to come in many, many other debt ridden governments and banking systems throughout Europe, the Americas, and elsewhere.
Like a little more proof real close to home? The Economic Collapse blog is reporting that the new Canadian budget is proposing to implement a “bail-in” scheme to help protect “systemically important banks in Canada.” What is important here is that this proposal was included in Canada’s “Economic Action Plan 2013,” which means that this “bail-in” was likely being planned long before the crisis in Cyprus erupted. According to this “Economic Action Plan 2013,” the Canadian government is proposing a “robust set of options for resolving these institutions without the use of taxpayer funds, in the unlikely event that one (i.e. large Canadian bank) becomes nonviable.”
In other words, “if the banks take extreme risk with their money and lose, ‘certain bank liabilities’ (i.e. deposits) will be rapidly converted into ‘regulatory capital’ and the banks will be saved.” To put it another way, “The banks will just be allowed to grab money out of your bank accounts to recapitalize themselves.” (Source The Confiscation of Savings in Canada? Cyprus-Style “Bail-Ins” Proposed by Ottawa Government)
Cyprus, and now Canada? Any more surprises out there? The answer is a resounding yes. Last week, Reuters reported that a new template for dealing with bank failure is being readied for full scale EU law, whereby in the case of a needed bail out for a failing bank, savings accounts of over 100,000 euros will be directly confiscated and “are not protected and shall be treated as part of the capital that can be bailed in.” This is according to European Parliament member Gunnar Hokmark.
So there you have it, the deadly arsenal aimed at trusting savers worldwide: outrageous bank-risk exposure, central bank monetary inflation, pension fund confiscation, and NOW, outright bank deposit confiscation. That’s a deadly combination that should make even Dirty Harry nervous.
From our perspective, no traditional savings institution or vehicle is safe from the rapacious insanity and greed of the world banking cartel. For real safety, your best bet is physical ownership of gold and silver.
To learn more about the rewards of precious metals investing, including how to fund your existing IRA with gold or silver, call Liberty Gold and Silver seven days a week at 888.751.3330. To learn about the most generous referral program in the precious metals industry, please visit the Liberty Gold and Silver Referral Program.
We’re happy to spend as much time as you need to discuss the details with you.
http://www.libertygoldandsilver.com/GoldandSilverBlog/?p=161

ChaseDown Mega-Rich Tax Cheats and Recover the Offshore Trillion$

NO CUTS! NO TAX INCREASES ON ORDINARY PEOPLE!

by: Dave Lindorff

Sat, 04/06/2013 - 09:25

Hold everything!
I mean it. Stop talking about cutting school budgets, Social Security benefits, Medicare, Veteran’s pensions. Stop cutting subsidies to transit systems, to foreign aid. Stop cutting unemployment benefits. Stop it all. There can not be any justification for budget cutting while wealthy criminals, corrupt politicians and business executives are hiding what reportedly totals between $29 trillion and $32 trillion in offshore tax havens.

A massive data dump by the Washington-based International Consortium of Investigative Journalists (ICIJ), working in conjunction with dozens of news organizations around the globe, has exposed the secret files of over 120,000 dummy offshore companies that have been used for years to hide the wealth -- much of it ill-gotten, all of it tax-dodged -- of the world’s rich and mega-rich.

Before we go further, let’s think about those numbers, which are really mind-boggling.
The US annual federal budget for 2012 was $3.7 trillion. The total US economy, largest in the world by far, was $15.8 trillion in 2012. That federal budget deficit that we hear so much about, which is growing by $1 trillion a year, totals about $16 trillion.

Now by comparison, the Philadelphia school system -- fifth-largest in the country -- is in crisis, with 27 schools being closed down because of a budget shortfall of $304 million. That shortfall (the direct result of tax breaks given to wealthy corporations in the city), is approximately one ten-millionth of a percent of the amount of money criminal politicians and business leaders -- many and probably the vast majority of them, Americans -- are reportedly squirreling away abroad in hidden accounts each year!
The British Virgin Islands: Where the super rich are hiding our money

The total shortfall in the US Social Security system, that is leading a huge number of politicians in Washington, Republican and Democrat, to claim that the sky is falling and that the system will go “bankrupt” in 2036, is $8.6 trillion. Even that huge deficit, caused by the large number of Baby Boomers born between 1946 and 1964 reaching retirement age over the next two decades, could be totally erased by simply taking back a quarter of the money illegally shipped abroad by our and other countries’ ruling elites.

Given that the US economy is roughly one quarter of the global economy, we can assume that at least a quarter of the hidden offshore money, or about $8 trillion, belongs to Americans, but in truth, the US legal system is so skewed in favor of the super rich, and the US ruling elite is so incredibly greedy and corrupt, that I’d guess that it’s more likely that half of that dirty money, or about $15-16 trillion, comes from this country.

Are you pissed off yet?
I am.

Even if, as the articles being written about this grand heist of our national wealth and the national wealth of other nations, is technically legal, the only reason it is legal is because these same politicians and greedy executives have used a minuscule portion of their ill-gotten gains to bribe politicians to jerry-rig the tax laws and make hiding money from taxation legal. Anyhow, the main reason for hiding most of that money abroad is almost certainly because it has been obtained corruptly. That is, it’s not just that the money should be getting taxed, meaning that fully a third of it, at a minimum, should be going into national treasuries, including the US treasury, but that most of it should be recovered in full and returned to its rightful owners. (By the way, in cases of fraud, there is no statute of limitations for tax liability. I’m just sayin’.)

That would be in a decent world.

If this country were an honest and genuine democracy, Congress would be up in arms today about the news of all this hidden money, and would be setting up hearings even as you’re reading this article to investigate how it happened and how to recover it. There would be loud, impassioned calls for the Justice Department, the SEC and the IRS to launch massive legal probes to arrest and convict the crooks and to bring back the money.

Have you seen any of this happening? Have you heard any such calls for action from Congress? No. The New York Times, the nation’s supposed leading newspaper, relegated its news report on the ICIJ documents exposing this crime of the millennium to an inside page and a few columns on Friday and focused on how scared and embarrassed it was making some rich people. Most Americans probably don’t even know what has been discovered, or even understand what a trillion dollars is. Just to give you a sense of things, in case you are (perhaps courtesy of an underfunded school) one of America’s many number-challenged: the entire US military budget for a year, not counting interest on the military-caused debt, is less than $1 trillion! That is also about the size of the annual US budget deficit, about which we hear so much blather in Congress.

We need a massive outcry demanding: “No cuts! Bring back the stolen money!” As for the IRS, we should be demanding: “No more audits of ordinary taxpayers! Audit the rich!”

This isn’t a right/left political issue. This is flat out criminality by the richest people and corporations the world has ever seen.

People of all political persuasions need to join together and demand: “Enough! We want justice, not budget cuts and tax hikes!” This is take-it-to-the-streets stuff. They're already doing it in Europe and that was before this latest disclosure about the depth of the greed, depravity and sociopathy of the global ruling class. Now it's time for Americans -- the 99% -- to get up off the sofa and join in the revolt. Chained CPI my ass!

No child should go hungry, no classroom should have more than 20 students, no teacher should be working for $30,000 a year, no veteran should be homeless, no road should be potholed, no transit system should be raising fares, no EPA air quality monitoring station should be shut down, no Social Security check should be cut, and no one should be denied medical care while the rich are being allowed to stash trillions of dollars a year in dummy companies in the Cayman Islands, British Virgin Islands, Singapore or some other tropical hideaway!

It's torches-and-pitchforks time in America. Make the rich pay, and bring back the stolen $trillions!

FDIC closes Arizona bank, makes 5th failure of '13

The Associated Press • Published April 05, 2013

WASHINGTON – Regulators have closed a small bank in Arizona, bringing the total number of U.S. bank closures to five for this year.

The Federal Deposit Insurance Corp. said Friday that state regulators closed Gold Canyon Bank, in Gold Canyon, Ariz.

The bank had about $45.2 million in assets and $44.2 million in deposits as of Dec. 31.

First Scottsdale Bank, N.A., based in Scottsdale, Ariz., agreed to assume all of Gold Canyon's deposits and buy essentially all of the failed lender's assets.

The failure of Gold Canyon Bank, which had two branches, is expected to cost the deposit insurance fund $11.2 million.

U.S. bank closures have been declining since they peaked in 2010 in the wake of the financial crisis and the Great Recession.

In 2007 just three banks went under. That number jumped to 25 in 2008, after the financial meltdown, and ballooned to 140 in 2009.

In 2010 regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. The FDIC has said 2010 likely was the high-water mark for bank failures from the recession. They declined to a total of 92 in 2011.

Last year bank failures slowed to 51, but that's still more than normal.

In a strong economy an average of only four or five banks close annually. The sharply reduced pace of closings shows sustained improvement.

From 2008 through 2011, bank failures cost the deposit insurance fund an estimated $88 billion, and the fund fell into the red in 2009. But with failures slowing, the fund's balance turned positive in the second quarter of 2011. By Sept. 30 of this year it stood at $25.2 billion, up from $22.7 billion at the end of June.

The FDIC expects bank failures from 2012 through 2016 to cost $10 billion.

Japan Has Shown Us the Way To Our Own Monetary Disaster

by Phoenix Capital Research

Japan is the ultimate basket case for monetization. The country buys its own bonds, stocks, ETFs, foreign bonds, even REITs. All in all, the country has spent over 20% of its GDP in QE… and its economy continues to slow.
And yet, despite its complete, abject failure to produce any significant pick up in economy activity or employment via these policies, the Bank of Japan has decided to do EVEN MORE OF THEM.
Just this morning, the Bank of Japan decided to increase its QE efforts with a new program to spend ¥ 7 trillion month buying bonds per month. It’s complete and utter insanity, especially since there is literally not one single instance in history in which debt monetization has produced economic growth.
Instead, it always produces the same thing: INFLATION.
Japan’s efforts to fight the economic slump by weakening its currency yen have led to a side effect: higher prices. Rising costs of daily necessities, ranging from petrol to food, have started to take a toll on the public.
At a petrol station in Sapporo, one of Japan’s largest cities, soaring petrol prices have kept many price-sensitive motorists away from fully filling their tanks.
A motorist said:”It’s hard for us. For us ordinary folks, even the smallest price rise is not easy to digest.”
Source: CNTV

And this is precisely the policy Ben Bernanke is engaging in. The Fed is spending $85 billion per month, that’s roughly $2.8 billion per day, buying debt and other garbage.

He, like the people running the Bank of Japan, somehow believes that printing money will result in economic growth. This is a bit ironic given that GDP growth is collapsing in the US, DESPITE him launching both QE 3 and QE 4 last year. Indeed, when we account for the real increase in inflation, 4Q12 GDP growth was over NEGATIVE 1%.
We all know how this will end: with higher inflation/ costs of living and now very likely with a market crash. Every bubble the Fed has blown has resulted in disaster. This time will be no different.
With that in mind, now is the time to be preparing your portfolio for what’s coming. The lessons from Cyprus are obvious: the warning signs of disaster show up very early (Cyprus first requested a bailout in June 2012). However, once things get messy… it happens ALL AT ONCE.
Cyprus’s entire banking system shut down in one weekend. At that point 99% of people couldn’t get access to their money. Those who prepared in advance were fine. Those who didn’t ended up losing 60% of their wealth in less than a week.
Don’t let this happen to you.
We’ve just released a Special Investment Report outlining the threat of inflation to your financial well-being.
To read this report and start taking action to prepare yourself and your loved ones for what’s coming…


Best Regards,
Graham Summers

FDR’s Gold Confiscation, 80 Years On

FDR’s Gold Confiscation, 80 Years On
by Ben Traynor, BullionVault
Thursday, 4 April 2013

“I, Franklin D Roosevelt…do declare that said national emergency still continues to exist and…do hereby prohibit the hoarding of gold…”

EXECUTIVE ORDER 6102, issued by US president Franklin Delano Roosevelt 80 years ago, on April 5th 1933, banned private gold ownership in the United States, forcing gold owners to take their bullion to a bank and exchange it for Dollars at the prevailing rate.

This order has become notorious among gold investors. Some fear a similar gold confiscation could happen again – that their government might seek to take away their bullion and ban “gold hoarding” as part of some trumped up solution to a “national economic emergency”.

Events in Cyprus, where at one point it looked like the state was going to levy a 6.75% on deposits below €100,000 – despite these coming under the deposit protection scheme – have only served to heighten fears that private wealth can, under certain circumstances, simply be appropriated. Governments change laws from time to time, and yes it’s possible that under the right circumstances some governments might try to confiscate their citizens’ gold. But it is important to realize that the motivation for confiscating gold that existed for FDR in 1933 has largely disappeared.

Back then the US was still on the Gold Standard (the UK had been forced off 18 months earlier. The rest of the world would follow by the eve of WWII, never to return). Gold was the foundation of the American currency and economy; at the time of FDR’s order the Dollar’s value was tied to gold at a rate of $20.67 per ounce – the price at which the government offered to buy and sell physical bullion. Making private “gold hoarding” illegal, FDR in fact nationalized what had been private property, using the bullion turned in to the banks to boost Washington’s finances and imposing 10-year jail terms and $10,000 fines (almost half-a-million dollars at today’s gold price) for disobedience. Only one case relating to the confiscation ever reached court (and only then because the gold owner, Manhattan attorney Frederick Barber Campbell, sued for return of his property) but the threat alone pulled in 60% of privately-circulating gold bullion within six months.

Following 6102, Roosevelt was then able to devalue the Dollar against gold by raising the gold price, something the government could now do as it controlled the entire domestic supply, plus a big chunk of the international market, which now poured metal into the US in exchange for ever-more dollars per ounce. FDR was acting on the advice of Cornell agricultural economist George Warren, whose background observing commodity prices had left him with the belief that the best way of solving a deflationary depression was to inject some inflation and push prices higher. This was the reasoning behind devaluing the Dollar; in the weeks following 6102, FDR and his advisers would sit at the breakfast table and decide what the gold price should be, nudging it higher a bit at a time until they settles on the $35 an ounce that prevailed until Nixon closed the gold window in August 1971.


So in a way, FDR gold confiscation and his raising of the gold price was a Gold Standard-era version of quantitative easing, a policy aimed at fighting deflation by raising asset prices at the expense of the monetary unit. Whereas today central banks can simply create the Dollars or Pounds necessary to do this, under the Gold Standard that was not possible. So Roosevelt instead confiscated gold and changed its price, the aim being to raise prices in the economy even though there was no additional gold to back the quantity of currency.

The situation that we have today is very different to that faced by Roosevelt in 1933. Gold is not the foundation of the world’s monetary system. Few people own gold – compared to (for example) real estate and regular financial assets. They also tend to own it in ways that make it relatively inaccessible to governments. The gains to a government from confiscating people’s gold would be much, much smaller than those that accrued to FDR.

Nonetheless, one can never say never. In our opinion, a good way to own gold is directly (i.e. not through a trust), in allocated physical form, and offshore, in a place with a strong tradition for protecting international investors’ property. This makes it a harder target for confiscation by your government, and one that could risk upsetting other countries for relatively little reward.

Aside from gold bullion owned offshore there are many other sources of private property which are much easier targets for confiscation (including domestically held gold) and which would yield more value for less trouble.

BullionVault offers vaults in four separate jurisdictions, all of which have a reasonable (if imperfect) tradition of defending private property rights. These choices are London, New York, Zurich and we have recently started vaulting in Singapore, after receiving numerous enquiries from customers interested in owning gold in Asia.

We do not claim to have resolved every risk involved in storing wealth; we don’t believe a 100% strategy exists. But we do argue there are clear potential benefits to diversifying across international jurisdictions.

A version of this article first appeared in The Daily Telegraph last Saturday.



Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Producer of BullionVault’s informative videos on YouTube he can also be found on Google+

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

There are now an astonishing 90 million people absent from the US labor force

• Discouraged job seekers behind shrinking labor force

“The number of working-age Americans counted as part of the labor force — either with a job or looking for one — tumbled by 496,000 in March, the biggest fall since December 2009, the Labor Department said on Friday. That pushed the so-called workforce participation rate to a 34-year low of 63.3 percent.”

• Civilian Labor Force Participation Rate (CIVPART)

2013-03: 63.3  Percent    Last 5 Observations
2013-02:  63.5
2013-01:  63.6
2012-12:  63.6
2012-11:  63.6

It was nice knowing you, America
There are now an astonishing 90 million people absent from the US labor force.
NPR reports: “Every month, 14 million Americans get a disability check from the government.”
“In Hale County, Alabama, nearly 1 in 4 working-age adults is on disability.”
As of December 2012, 47 million Americans were on food stamps. The USDA assesses the annual cost of the program at $71.8 billion.
Separate from food stamps, and apparently not including other members of a household where at least one person is receiving government payments, we have 4.3 million Americans on welfare.
Medicaid, the government medical-care program for the poor, lists 50.1 million people enrolled in 2011. If you include Americans who were on Medicaid for at least one month in that year, the number swells to 70.4 million. As a result of Obamacare, the US Dept. of Health and Human Services predicts 20 million new people will be added to Medicaid in 2019.
Forbes Magazine states the annual cost of healthcare in the US is $2 trillion. And yet, concealed from the public, this money is used to wreak incredible destruction on the people.

Read more at http://investmentwatchblog.com/there-are-now-an-astonishing-90-million-people-absent-from-the-us-labor-force/#7egdCTy6MQX7SwIM.99

Fed Prez: "QE Is Like Ritalin, You Just Can't Overprescribe"

Fed President Richard Fisher on the Bernanke Doctrine.
Start watching at 1-minute mark.
April 4 (Bloomberg) -- Dallas Federal Reserve President and CEO Richard Fisher discusses Japan, Bernanke, QE, the stock market rally, housing, and his plan to break up the "too big to fail" banks.
Classic line on the difference between the U.S. and Japan.

"We breed here in America."

Fisher is entertaining as usual.  Here are some of the quotes.

• The Bernanke doctrine is not perfect.
• There is no QEinfinity.  It doesn't go on forever.
• I supported the first round of QE and nothing since.
• We're not going to do something crazy like take the balance sheet to $5 trillion.
• There are limits to Fed policy.  We just have to figure out what those limits are.
• QE is like ritalin or adderall, you just can't overprescribe.
• QE can't go on forever because you will kill the patient.

And we save the best, or at least most ridiculous, for last:
"All central bankers try to do the same thing -- which is to improve the welfare of their fellow citizens."

Why A Fed President Wants To Break Up The Banks

Image by William Banzai7...

Congressman Who Created The TSA Flips Out Over Waste

DHS Regret Syndrome.  Mica annihilates Big Sis.
The Oversight Committee hearing examines the excessive and wasteful spending in the face of sequestration.  Janet Napolitano gets busted, jobs are threatened, Mica gets seriously pissed by the end.  Hearing took place March 19.
More on Mica: Congressman Who Created The TSA Says It's Time To Dismantle It
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Why Is DHS Stockpiling 2 Billion Bullets?

PHOTO - Donald Rumsfeld Groped By The TSA

ACLU accuses Ohio courts of enacting ‘debtors’ prisons’

Topics: ACLU ♦ american civil liberties union

 

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A report by the American Civil Liberties Union has accused courts in Ohio of jailing indigent defendants for not being able to pay court fines, an apparent revival of the 19th century practice of “debtors’ prisons.”
According to the Cleveland Plain-Dealer, the organization named seven courts in the state in its report (PDF), compiled over the course of 2012.
“Today across Ohio, municipalities routinely imprison those who are unable to pay fines and court costs despite a 1983 United States Supreme Court decision declaring this practice to be a violation of the Equal Protection Clause of the Constitution,” the ACLU’s report said.
Courts in Cuyahoga, Erie and Huron counties were singled out in the report as the “worst offenders.” The ACLU said a survey of booking statistics for Huron County Jail revealed that 22 percent of the 1,171 people booked between May and October 2012 were incarcerated for not being able to pay their fines. And municipal courts in Parma and Sandusky counties jailed 45 and 75 people, respectively, between July 15 and August 31, 2012.
“Based on the ACLU of Ohio’s investigation, there is no evidence that any of these people were given hearings to determine whether or not they were financially able to pay their fines, as required by the law,” the report said.
Parma County Municipal Court Judge Deanna O’Donnell said the court had received a letter from the ACLU detailing its findings and that she was contacting the group for more information. She also said the court is treating the letter as “advisory” and not a complaint.
Ohio Supreme Court Justice Maureen O’Connor has also promised to meet with the ACLU to discuss the report.
[h/t Think Progress]
[Image via Shutterstock]

The Death Of Free Enterprise - Breaking Down Obamanomics - Wake Up America

The Death Of Free Enterprise - Breaking Down Obamanomics - Wake Up America

Major computer malfunctions at three of the Dutch too big to fails

This week three banks, ING, Rabo and SNS, simultaneously suffered major computer malfunctions, leading to a temporary closure of their on-line facilities. Their problems were ‘unrelated’. It is completely unprecedented. The chances of a coincidence are close to zero. For years some in the blogosphere have speculated that ‘computer problems’ might be a good excuse for the Money Power to call a bank holiday and ‘reorganize’ their system. This looks like a drill.
By Anthony Migchels for Henry Makow and Real Currencies
ING’s problems were the worst, it’s off-line again today. ING is one of the biggest banks in Europe with a trillion plus balance and one of the living dead. It’s a zombie bank, propped up with massive credit lines from the ECB and handouts and guarantees from the Dutch taxpayer. It has 40 billion of Spanish debt on its books and it needs to write off untold billions, maybe as much as hundreds of billions, from its commercial real estate portfolio. Obviously this would vaporize the Dutch economy over night, should it have to bail out ING.
The Dutch economy is one of the worst in the world in terms of debt. All the nonsense about ‘lazy Greeks’ and ‘thrifty and frugal Dutch’ is just that: complete baloney. We have a usurious debt based monetary system. However hard one works, eternally growing debt and interest charges are inevitable, it has nothing to do with character.
Meanwhile, the economy is being destroyed with ridiculous austerity, 45 billion was taken out of the budget over the last two years. The Government loses 80 cents in income due to falling aggregate demand in the economy for every euro it takes out of the economy through taxation or austerity. Same thing that destroyed Southern Europe. It’s incredible that this kind of insanity can happen in the modern age.
Considering the situation in Cyprus and depositors now knowing they are fair game, it seems clear that the Money Power is organizing a bank run to further the depression it wants so badly.
However unpleasant it is to be on the same side as these vultures in this case, the advice remains the same: get your money out of the bank now. The advice is now not just correct because of moral imperative, it is becoming a matter of personal financial survival. True, it is becoming harder and harder to find safe havens, but the bank is absolutely not one of those, that’s for sure.
Why is the Money Power busting its own banks? They don’t really care: all the major banks own each other. 100% market share remains guaranteed, even if some of them drop. Also, the smaller banks go first and they are gobbled up by the big boys, often with ECB/Fed/taxpayer financial support. So this crunch is also a major consolidation effort by the Money Power. Busting the banks is a good way to plausibly sell the many that the good days are over.
So what does this computer malfunction mean? It’s an exercise. And probably not for Holland itself. The Dutch economy is midsized and a good place for a drill for something bigger. Like the US, which is the real target here. Two weeks ago, Chase Manhattan had some problems too: accounts were suddenly drained and set to zero. Interestingly, this was also going on with ING.
The US has been coasting relatively unscathed through the crunch up to now. Because the Fed printed like crazy, all in all some 16 trillion were lent out to its buddy insider banks worldwide to prop up their balances. This money never enters the real economy, because it used as capital to replace losses to the Mortgage Backed Securities scam that popped in 2008. Hence no inflation.
But this is coming to an end and in the next round of the crunch something major is going to go down.
Conclusion
We have the funniest stockmarket boom ever, bankers resigning all over the place, Cyprus, and now this.
Something’s on. And it’s big.

It’s Official

Mark this day. For the first time in history, a Democratic president has officially proposed to cut the Democratic Party’s signature New Deal program, Social Security:

President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say.
In a significant shift in fiscal strategy, Mr. Obama on Wednesday will send a budget plan to Capitol Hill that departs from the usual presidential wish list that Republicans typically declare dead on arrival. Instead it will embody the final compromise offer that he made to Speaker John A. Boehner late last year, before Mr. Boehner abandoned negotiations in opposition to the president’s demand for higher taxes from wealthy individuals and some corporations.

The way this was explained to me is that the liberal Democrats in the House put out a leftward proposal and the Democrats in the Senate put out a moderate proposal, which the president tacitly endorsed. The Crazy Republicans then came back with a rightward proposal so now the president has simply set forth a compromise between the Senate Dems and the Crazy Republicans. And it’s his final, final offer this time.
God help us if the Republicans wise up and take this deal. After all, it’s a more conservative budget than even their hero Ronald Reagan ever submitted.
This is what he proposes:

I’m going to quote Mike Lux here:

If Obama includes it in his budget, he is claiming this as a policy idea he supports before he even starts negotiations with the Republicans. This is terrible policy and terrible politics at the same time. In a budget document that has no actual policy impact but that symbolically represents what he stands for and who he wants to fight for, he will alienate senior citizens and the families who worried about taking care of them, he will split his political party down the middle, and– by being the first one to formally propose cuts to Social Security– he will hand Republicans a big political weapon to hurt Democrats in 2014.
I understand the president has political reasons he wants to do this. He wants to look like the most reasonable guy in the room, and he wants the Republicans to look like they are the extremists who won’t compromise. He doesn’t want the attacks that will come from the deficit hawk crowd if offers nothing on “entitlement reform,” and he feels like this is a modest cut compared with the budget ax the Republicans are threatening. He feels like he can lessen the impact of the Social Security cuts by adjusting the formula to protect the oldest and poorest recipients.
But, folks, this is rotten public policy, and all those political reasons pale in comparison to the damage he is doing here. With the demise or curtailment of most pensions, the drop in family wealth due to the collapse of the housing sector in 2008, the big unemployment numbers cutting into many families’ life savings, the flattening or decrease of wages for most workers, and the inflation in many essentials among those who are working driving down the ability to save for retirement, this is the absolute last time we should be looking at cutting incomes for retirees.
As to the idea that Obama will keep the most vulnerable low-income seniors from harm, I am very appreciative of that fact that he cares about them and is trying to preserve them from cuts. Obama’s compassion for the poorest of the poor is something to be lauded, one of his best values. But I used to do a lot of organizing with moderate income senior citizens, and I know a lot of middle-income seniors. I can tell you that even for those a little above the cut-off line but still living mostly on Social Security, they are not living in luxury, they are in fact just making it. When groceries or utilities or out-of-pocket health care expenses spike, it hurts and hurts bad. I have been in the apartments of seniors when utility prices were going on one of their periodic jumps, have seen what they can afford to eat, have felt the cold in their apartments in the winter because they can’t heat their place. I know in my heart, because I have seen the evidence up close and personal, that for a lot of seniors the $500 a year they will have lost from chained CPI a few years from now if this cut goes into effect will result in more seniors dying of hypothermia or malnutrition.
Most Americans, over 80 percent in polls I have seen, understand that cutting Social Security benefits is a terrible idea, and I believe that if that is what happens people will be angry. But even if the politics were not on our side, this is a moral issue pure and simple. The president should not propose cutting Social Security, and Democrats in Congress should raise hell and oppose him if he does. As Democrats, according to all that rhetoric I kept hearing during the campaign last year, we believe in fighting for the middle class, and this proposal punches the middle class– both older Americans and the families who care for them– in the gut.

Ok, so what do we do now?
First, we cannot simply sit back and expect the GOP to do our dirty work for us. After all, the way things are going, the Prsident or could start offering up new tax cuts for all we know. He’s either a terrible negotiator or he really, really wants these cuts. Either way, counting on him holding the line is probably not a good idea.
So, we have to buck up the Democrats. I know, I know. But they still have to face voters while the president has run his last election. They should be made very, very aware of what they are contemplating: attacks from both the left and the right in the next election. Any incumbent Democrat who could face a primary challenge will be facing withering criticism for voting to cut SS, veterans benefits and medicare. And if they are lucky to fight them off and win they will be attacked by the Republicans challenger on exactly the same issues. These are very, very popular programs which, by the way, don’t actually need to be cut. Anyone who votes for this will hear about it. If you have a Democratic congressional rep, give them a call and let them know that you will hold it against them. (Also too, if you have a Republican representative. They have to face voters too and it can’t hurt to remind them of that. And after all, they are just looking for reasons to oppose this …)
And call your Senators starting today. The pattern so far has been that Speaker Boehner will only suspend the Hastert Rule (allowing legislation to the floor without a Republican majority) if it is already passed with a bipartisan Senate vote. Best to try to stop it here first.
Meanwhile prepare for a barrage of savvy, world weary commentary from your fellow liberals telling you that this is no big thing and that Democrats will not suffer even a tiny bit if they vote for a common sense proposal like this one. You will be shushed and told to calm down and take a chill pill. In other words, you will be gaslighted by fellow liberals who are embarrassed that you aren’t being coolly accepting of something that is completely unacceptable. This is how this works. Tell them to STFU and move out of the way.
And recall this:

Responding to a flood of angry phone calls and letters from their elderly constituents, a growing number of Congressmen and Senators are seeking to repeal or revise the “Medicare Catastrophic Coverage Act of 1988″ enacted in June of that year. The amount and the tenacity of elderly opposition to the law, particularly to the new taxes that will fund it, took many Congressmen by surprise. It also has provoked an open and widespread grass-roots rebellion within the nation’s largest senior citizen lobby, the American Association of Retired Persons (AARP), whose national office pushed hard for the original legislation. Already, some 30 bills have been introduced to repeal the catastrophic act in whole or in part or to change the way it is financed. More bills are expected.

The cool kids should think twice before predicting a complacent acceptance of this proposal because sometimes the people do stand up and object. Especially when it comes to these programs. They don’t call it the third rail for nothing.

Europeans slammed by austerity measures now enraged by political corruption

 

By Agence France-Presse

 

Topics: austerity measures ♦ silvio berlusconi

 

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A wave of corrosive political scandals at a time of economic woe is exacerbating the outrage of European citizens, who are channelling resentment into street protests or at the polls.
Italy, Spain and Greece have all been hit by fraud or graft cases allegedly involving the top brass. France joined the ranks of scandal-hit nations this week after its former budget minister was charged with tax fraud.
“Everything is coming together to reinforce populist theories — the theory that ‘they’re all rotten’,” said Eddy Fougier, a researcher at the Paris-based IRIS think tank, which analyses international issues.

In France, outrage over the budget minister scandal has yet to erupt into popular protests.
But in some countries of southern Europe, which for several years have been hit by austerity measures more severe than in France, fury has coiled into potent blowback.
Italy, for instance, is currently in the midst a major political impasse triggered in part by voter discontent over a string of scandals.
Ex-prime minister Silvio Berlusconi is involved in tax fraud, sex-for-money and other cases.
Fed-up Italians registered their anger en masse in February general elections, giving former comedian Beppe Grillo’s new anti-corruption, anti-austerity party — the Five Star Movement — 25 percent of the votes.
That led to a three-way split between the parties of Grillo, Berlusconi and a centre-left party run by Pier Luigi Bersani. The result was a failure to form a new government in the eurozone’s third-largest economy.
“No political party must be under any illusion. Even if they did not all act in the same way, there is rage against them,” said Giacomo Marramao, a professor of political philosophy at Roma Tre University.
A series of scandals has also sparked anger in Spain, where citizens brandish drawings of envelopes — a reference to hiding wads of cash in a symbol of graft — in street protests and on the Internet as a sign of their disgust.
“In Spain, people have never really forgiven the act of pocketing money, and if it coincides with a period of general crisis, then it spawns incredibly hostile feelings,” said Emilio de Diego, professor of contemporary history at the Complutense University of Madrid.
The country’s ruling Popular Party, in power since the end of 2011, has been rocked by two separate probes.
It has been accused of using a slush fund to make secret payments to senior members, including Prime Minister Mariano Rajoy — a claim he denies — and is also involved in a corruption scandal related to awarding state contracts.
The royal family has also been drawn into the storm, with a Spanish judge naming Princess Cristina as a suspect in a graft case centred on allegations of embezzlement and influence-peddling against her husband and his ex-business partner.
In Greece, where tax evasion is widespread, thousands have over the months taken to the streets to denounce the “thieves” sitting in parliament, in protest against tough austerity measures.
A scandal involving more than 2,000 prominent Greek politicians, media and industry moguls with Swiss bank accounts has also made waves.
The scandal is based on a list of names originally sent from Paris in 2010 but kept buried for two years and under two successive governments. It recently resurfaced in the press, with calls to use it in the battle against tax evasion.
Even in northern Europe, the crisis has exacerbated public anger over abuse of power and corruption.
In Belgium, the creation in late 2012 of a private foundation by Queen Fabiola sparked a public uproar, as it was widely perceived as a way to avoid paying the country’s 70 percent inheritance tax.
The 84-year-old has since dissolved the charitable vehicle, and her annual income from the state has been reduced from 1.4 million euros ($1.8 million) to around 900,000 euros.