Monday, June 6, 2011

Wikileaks: Children under care of Irish government ended up in brothels

Government agency admits they didn’t keep track of numbers

US embassy cables, revealed via Wikileaks, show that children who have gone missing from Irish state care over the last three years have ended up working as sex slaves in brothels. During a private briefing with diplomats from the American Embassy, in Dublin, the Health Service Executive (HSE) made this shocking admission.

The cables showed that foreign-born children, who were under the care of the HSE, went missing and ended up in the sex-trade as far back as 2008. The HSE made these admissions while US diplomats were conducting research for an annual report into people trafficking in Ireland.

The HSE told diplomats that some foreign children had been retraced to brothels, restaurants and private households where they were being used as slaves. According to reports in the Irish Independent, the children were found in various towns throughout Ireland.

HSE officials, also terrifyingly, admitted that they were not keeping statistics on the numbers. A HSE briefing, in February 2009, said gardai had located two children, both missing from HSE care, working in the sex industry.

The annual report was forwarded to US Secretary of State Hillary Clinton.

Irish pimps have links to foreign gangs and human trafficking

Irish group proposes men be charged for purchasing sex - SEE POLL

The cables showed that HSE officials believe Chinese children were at greatest risk. The HSE also said that traffickers bringing these children to Ireland were most likely non-national, and had preyed on their compatriots.

In Ireland, if a child under the age of 17, arrives in Ireland without a parent or guardian, they are automatically placed in foster care or in a hostel facility run by the HSE. Every year dozens of children go missing. It is suspected that they end up with the traffickers who brought them into the country in the first place.

Irish police maintain that traffickers were actually targeting Ireland due to the ease with which children can escape from HSE facilities.

Briefings received by the US embassy between 2006 and 2008 indicated that there was no evidence to point to the fact that children were being trafficked into the sex trade. However, the HSE now acknowledges that children are in fact being trafficked into the sex trade in Ireland.

'We can live the American dream' says Obama as jobs take massive hit... and almost half those created are at McDonald's

President Barack Obama flew to the Midwest today in an attempt to promote his economic agenda - the same day a damning report revealed the number of jobs plunged in May making it the weakest month this year.

Far fewer workers than expected were hired last month painting a bleak picture for the U.S. economy while the unemployment rate edged up to 9.1 per cent.

The U.S added a minuscule 54,000 new jobs in May and of that 20,000 were created by McDonald's.


American Dream: President Obama making a speech at a Chrysler plant in Toledo today


Impromptu: President Obama makes an unannounced stop at Rudy's Hot Dog in Toledo, Ohio, today

The President visited the Chrysler plant in Ohio today to highlight the auto industry's rebound, a rare bright spot in an otherwise sluggish economy.

He told plant workers: ''We can live out the American dream again… that’s what drives me every day I step into the Oval office.

We’ve got to live within our means, everybody’s got to do their part. Middle-class workers like you, though, shouldn’t be bearing all the burden. You work too hard for someone to ask you to pay more so that somebody who’s making millions or billions of dollars can pay less.'

The President added: 'We are people who will forge a better future because that is what we do… when we come together, no-one can stop us.

'We’re still feeling the sting of the recession… even though the economy is growing, even though it has created more than two million jobs in the last 15 months.'

Republicans mocked Mr Obama’s speech and economic record.

Former GOP Rep. Fred Grandy told Fox News: '[The speech] was political response to an economic question… an attempt to distract our attention from the looming financial crisis that we’re capable of handling.'

Today's monthly employment report revealed the jobless rate increased and employers hired the fewest number of workers in eight months in May, raising concerns the economy might be stuck in a painful slow-growth mode.


Shopping: Mr Obama looks at gardening gloves for first lady today during his trip


Gear shift: President Obama visits the Chrysler plant in Ohio to focus on the auto industry's rebound, amidst reports of a sharp slowdown in U.S. hiring

The 54,000 jobs created in May are only one-quarter of the February-April pace, the Labour Department said.

Economists had expected payrolls to rise 150,000 and private hiring to increase 175,000. The government revised employment figures for March and April to show 39,000 fewer jobs created than previously estimated.

Economists said the report did not suggest the economy was heading into recession, but they said job growth could prove frustratingly slow.

With downwardly-revised figures for employment in the previous two months, today's report confirmed the sharp slowdown in economic growth since the beginning of 2011, despite government efforts to power up a job-creating recovery.

The bad numbers could in part be blamed on the impact on U.S. manufacturers of Japan's March 11 earthquake-typhoon disaster, as well as the jump in oil prices, economists said.


Hungry for work: The U.S. economy generated a minuscule 54,000 new jobs in May with McDonald's accounting for 20,000 of that


Trouble: A graph on unemployment. The jobless total rose 0.1 per cent in May

But they were likely to fuel the raging political battle over government spending and how to repair the economy while nearly 14 million people remained unemployed, more than a year after the country's deep recession ended.

Underscoring the challenge to President Obama as his campaign for re-election in 2012 gets under way, Republican House leader Eric Cantor blamed the White House's poor policies for the high jobless rate.

'It is astounding that despite the warning signs and economic indicators, President Obama and congressional Democrats still have failed to offer any concrete plan to create jobs, reduce our debt, or grow our economy,' he said in a statement.

The chairman of the White House's council of economic advisers, Austan Goolsby, played down the report.

He said: 'There are always bumps on the road to recovery, but the overall trajectory of the economy has improved dramatically over the past two years.

'The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. Therefore, as the administration always stresses.'

'Overall, this is horrible,' said Ian Shepherdson, U.S. economist for High Frequency economics. But he said it was likely a short-term dip.

'We think it is largely a reaction -- an overreaction we would say - to the rise in oil prices, and a very real hit to autos and tech from the Japan earthquake.'


  • Consumers believe the chances of bringing home more money one year from now are at their lowest in 25 years, according to analysis of survey data by Goldman Sachs.

  • Goldman’s economist Jan Hatzius looked at the University of Michigan and Thomson Reuters poll, which asks consumers whether they believe their family income will rise more than inflation in the next 12 months.

  • Wage pessimism is at its lowest in more than two decades as real hourly wages have dropped 2.1 percent on an annualized basis over the past six months, a rate of decline not seen in 20 years.

  • A typical recovery pattern goes like this: stock market bottoms, economic growth bottoms and then hiring and wage increases return. What’s unique and scary about this recovery is that the last piece of the recovery is not there.

  • 'Households are already very pessimistic about future real income growth. A slowdown in job growth would presumably translate into a further deterioration in (expected and actual) real income growth.' Wrote Goldman’s economist to clients.

The Imperial Obama Administration,The Corrupt U.S. Senate,States Rights and the Nightmare of the 17th Amendment

It is time to bring the case forward on the ratification of the 17th Amendment taking way the power of the States any representation in the Federal government. We are now looking at what has happened almost 100 years later. We have to call into question state by state by each legislator the legality of elections of US Senators by popular vote. Can we say the 17th Amendment legally is ratified without a doubt? We all know the 16th was not ratified creating the IRS and the income tax. The meaning of the founder’s intent of the word Senator was really an ambassador representing the State Governments in Washington DC. The District of Columbia is a neutral territory separate unto itself, not part of any state, which at one time to be a foreign power in the eyes of the states. This Bicameral Congress had an upper chamber and a lower chamber. The upper chamber is the Senate. This chamber is a creature of the states. The lower chamber is the House of Representatives we call the people’s House.

This is how the Federal Government has checks and balances on itself. Not only the Congress was keeping check on the court and the executive branch overstepping its power. Also, states kept a check on Federal power through the US Senate. State legislators appointed two senators. They cannot go to Washington by popular elections as the House of Representatives are sent. When a Senator did not vote the will of the state government as ordered. These appointed Senators are under order to return at the will of the state legislator and replaces the person to fulfill the rest of the term. All legislation is started in the House. If passed, it would move to the Senate were the states advised their Senators how to vote. The US Senate had some distinct functions the house did not have. They presided over the impeachment trials of the President. The President had to seek advice and consent of the US Senate over ratification of Treaties that required two thirds of the Senate for treaties under the process of ratification. The President needed the Senate’s confirmation in appointing Supreme Court Justices and Judges in the lower courts.

The State legislators decided over the ratification of treaties,and the president's appointment of Judges. The state government decided if a President was guilty or innocent by the impeachment process. The Senators would sit in judgment for the state as a juror in the trial of impeachments. The framers of the Constitution designed our form of government had in mind the states have a very active role in the federal process. Having the Senators appointed by the State government was also a firewall from bribery and corruption from special interest. The Senators were accountable to the State governments they represented. It served as a check on congress. This included the president’s executive powers and courts if there was misconduct from the bench. The US Senate would remove judges from the bench by impeachment if the Judge were a threat to State's rights and sovereignty. It is not a perfect system by any means. Nevertheless, it did keep corruption in check. Not all corruption was stopped. It was certainly a better system back then. A lot better than we have now.

Today the US Senate is unrecognizable. How did this happen? In 1913 in the height progressive era in full swing, Calvin Coolidge pushed for US Senators to fill vacancies by popular vote. The reason because the states had vacancies in the Senate that was a problem. Sometimes because of disagreements deciding who to send because of political infighting. The other reason some vacancies were because the Legislator was not in session to select who will represent the state in Washington DC. It was a problem. This is one of the flaws in the Constitution. They should have given the power to the governor to appoint Senators to fill vacancies until Legislator came into session. Many of these governors could have called a special session to fill the vacancies too if the governor did not have the power to do recess appointments while legislator was in recess. The governors should have been delegated the power of recess appointments or call a mandatory special session until the vacancies were filled. This provision should have been included in the Constitution so all states are present in Washington with no vacancies in the Senate.

The year 1913 was the year the United States ceased to be a representative republic and became a nation ruled by oligarchs. Prior to the passage of the Federal Reserve Act. The money powers had to make sure of the two things. The states would not be able to kill the bank through the US Senate and the Income tax as a surety to pay the private central bank for the issuance of currency through the income tax. The US Senate in 1811 was voting to renew the Private Central Bank's Charter. The First Central Bank’s charter was up for renewal in 1811. Vice President Clinton voted breaking the tie going against the moneychangers not in favor of renewing the Bank's charter.The vice President can only cast a vote if there is a tie on the floor of the Senate. The states have been a threat to the central bankers ever since President Andrew Jackson killed the second Bank of the United States. The crimes of the Central Bank were exposed. This caused the states not to have a central bank because of the abuses in the past by private central bankers. That all changed by 1913. When the 17th Amendment was proposed and passed congress. It was announced by the Secretary of State the Amendment was ratified. The truth is the 17th Amendment has never been ratified by three fourths of the states. Many state legislators were not in session to vote on ratification. This Amendment like the 16th becomes legal by fraudulent means. This was a globalist coup to start eroding state sovereignty. Before the Federal government can erode national sovereignty. They had to subjugate the states first. They tried to erode American sovereignty with the League of Nations after World War one. The congress with the states wanted no part of it and failed to ratify the charter. It would be until 1945 when the UN charter was ratified starting the road of attacking US sovereignty. First, they had to attack the states undermining their sovereignty first.

Now it is close to 100 years later. We have seen usurping the power of the states with legislation like the War Powers Acts, The National Security Act, FDR's New Deal, The UN Charter, The great society and the Administrative Procedures Act all usurped powers from the states. For many decades, the states are hostage with the threat of withholding federal funds if they dared assert sovereignty. Secretary of Transportation Elizabeth Dole threatened States to withhold highway funds if they did not increase the drinking age from 18 to 21. We have a national debt of 14 trillion now. Many of the states under their constitutions cannot spend more than they take in maintaining sound fiscal policy to stay out of debt. The States have no control over fiscal policy in Washington. We can see the expansion of the Federal government and power over the states. We have a standing army now that can now subjugate the states at the will of the Federal Government. A Standing Army in peacetime without a declaration of war from congress was what the founders feared would be a potential abuse of power over the people. A threat to our liberties indeed.

As we look at the Obama Administration today. We have so much abuse of power from the executive branch of government. The US Senators are so far in a remote place so out of touch with the States and the people who reside in it. They are now selling out to the global agenda. Senators like John McCain, Lindsey Graham, Joe Lieberman, Barbara Boxer and over half of the Senate wants to attack Free speech with the rest of the Bill of Rights. The States have no control over them and have no way to hold them accountable. They are agents of big corporations. The ratification of treaties are lobbied by special interest and the not the several states. The US Senate has thumbed its nose at the states and the people with destructive free trade deals like NAFTA, GATT, the NAU or SPP, CAFTA and the WTO. The flipped the middle finger at the American people with Amnesty and visas for cheap foreign labor taking away jobs from Americans. They will not secure the border because many people in big business desire the cheap labor and Democrats their voting block. These entrenched Senators want to censor the internet not because of cyber security. It is because we are exposing the powers that are in these Senator's back pockets. They do not want free speech because of the internet. We are kicking their ass everyday. This institution is corrupt with 100 empty suits who feel they are no longer accountable to the people or the state legislator.

Congress does not intend to reign in the power of the President who has far exceeded his authority. We have Cap and trade enforcement without a law from congress, The UN Small Arms Treaty. The Law of the Sea treaty, The Waterways legislation was the Federal Government claims the power to seize control of all water sources. Through the EPA that prohibited the states from using their own natural resources to save a field mouse on the endangered species list. They cannot drill for oil. Build refineries or construct new coal power plants. We have Obamacare which is the worst law passed in my lifetime. There are so many egregious laws that are further attacking the rights of the states. The congress is willing to give Obama a blank check on the powers to make war or go after American citizens he deems threats. The States are not part of the process keeping this federal power in check. Congress keeps ceding its constitutional authority the Constitution delegates to them. They gave over the power to coin money to a Private Central Bank that has wrecked our economy. They have given away the power to declare war to the President. His will to act as he wishes without oversight. Now he can declare wars and go into countries without the approval of congress. Even raise an Army to invade its own country. The Federal Government has become a law unto itself without any constraints of the State Governments to stop them because of the 17th Amendment is one of the big reasons why.

Then US Senate has played a major part in the rise of monopolies. These big trans national corporations ignoring Anti trust laws now use the power of the government to shut down competition. They played a part of keeping Goldman Sachs from any criminal prosecution looting the American people. They obstructed the auditing of the Federal Reserve Bank that was veto proof passed by the House. They have not gone after British Petroleum for the spill in the gulf. They passed laws giving immunity to big Pharmaceutical companies from being sued for injuries or deaths caused by vaccines. They passed laws were the States cannot protect its people from the abuses from the Federal government and the big corporations. The state have no say in what the Federal government says and does anymore.

If these states are serious about their rights as they proclaim to be. They should first come to the realization the 17th amendment was not ratified. If they have the fortitude start recalling these Senators back to the legislator to answer questions why they voted against the interest of the state and why they did if their actions caused harm to the people of the state. The state rebelled over the real ID act with success saying no so far. They are starting to push back. However, it is not enough. It is great they are pushing backing against Obamacare, gun control with the Firearms Freedom Act and the latest in Texas stopping the TSA abuses. The states must act now further not allowing another power grab by the TSA coming to the streets of America.

The state has lost the power to say no to the Federal government when it oversteps its power. The states need to see the root of the problem looking for the reason why they are being a doormat by draconian laws and mandates coming out of Washington DC. They must face reality their authority of state governments is ignored by fraud daily .Now the states must act. This means subpoenas to appear before a joint committee of the legislator to hold them accountable. Making statements under oath with the threat of arrest if they fail to appear or commit perjury giving false testimony. Forcing the Senators to answer questions why they voted the way they did and who paid them off. The states must find a way to reign in Federal power and put them back on a leash. Consequences follow if they do not act or take it seriously their sovereignty as a state. They will lose the power to say no. If states rights suffer for lack of moral fortitude of the states then we all get hurt. This is a great time for states to take back what rightfully belongs to them and that is declaring the seventeenth amendment has not been ratified. The first step taking back state's rights by dispelling the lie

* If the grammar NAZI who likes to insult my use of the English language and not leave an email address. I will delete your comment off my webpage because I can do it. I think you do this because you feel inferior because you can not get a girl or get laid. Tearing down people is the only way to not look at your own pathetic lives.If you are not willing to start your own blog. Then keep your mouth shut and get out of the way of those who at least make the effort. No one is perfect and people use the English language is different depending were they live.If you show me your blog. I bet I can break out my red pen and pick you apart too. If you grammar Nazis are so quick to scrutinize other people. Show yourself so we can give you the same dose of medicine you give to others.If you will not show yourself. I will delete your comments every time. A real man or woman would show themselves and not hide behind being anonymous.Only cowards will.

Barack Obama’s betrayal of Abraham Lincoln’s ideals

Paul J. Balles argues that US President Barack Obama has defiled the ideals of his idol, Abraham Lincoln, and instead of working to bring about government “of the people, by the people, for the people”, he has presided over government “controlled by corporate barons, lobbies and Wall Street”.

One of the most interesting stories in the history of the United States involved Abraham Lincoln’s Gettysburg address.

President Lincoln had a minor role in dedicating a cemetery at Gettysburg, Pennsylvania, for the burial of those who had died for the union in the American Civil War.

As is true of many wars, Lincoln had lost popularity as a result of the loss of lives. He was also given a short time to prepare his dedication speech.

"’By the people’ informed much of Obama's rhetoric that stimulated so many people to vote for him... Unfortunately, once he got into office, he no longer reflected a government ‘by the people’. The government, controlled by corporate barons, lobbies and Wall Street, devoured Obama.”

After a two-hour oration by Edward Everett, Lincoln's address took only a few minutes devoted to maintaining support for the war.

Lincoln's moving address was completed in 10 powerful sentences beginning with: “Four score and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal.”

He then noted briefly their purpose in being there: "to ... dedicate ... a final resting place for those who here gave their lives that that nation might live".

Lincoln summed up his position by reminding his audience of "...the great task remaining before us – that from these honoured dead we take increased devotion to that cause for which they gave the last full measure of devotion – that we here highly resolve that these dead shall not have died in vain".

His conclusion: “that this nation, under God, shall have a new birth of freedom – and that government of the people, by the people, for the people, shall not perish from the earth".

President Barack Obama's presidential ideal has been Abraham Lincoln, the man who made famous the phrase "Of the people, by the people, for the people".

One can see why the author of that captivating rubric for a democracy would have endless appeal to Obama, a natural icon "of the people".

Obama is one of the few presidents not from the highest stratosphere of an elite oligarchy, but descendant from ordinary people.

"By the people" informed much of Obama's rhetoric that stimulated so many people to vote for him. The appeal of his arguments and promises for change earned him the presidency.

Unfortunately, once he got into office, he no longer reflected a government "by the people". The government, controlled by corporate barons, lobbies and Wall Street, devoured Obama.

Equally pernicious, Obama totally reneged on his promise of change to a government for the people.

The bailouts of his early days in office did not benefit the people. Help for home owners whose mortgages were being foreclosed would have. Instead, the help went to the financial institutions of Wall Street to save them.

The ideals of Lincoln's of, by and for the people and the unfulfilled promises of Obama have lessons to be learned.

These are the ideals of democracy. The ideals don't become reality simply by stating them in a speech or by marching with flags and slogans in a demonstration.

They don't become reality through protests or speeches promising change. As English journalist and novelist Arnold Bennett said: "Any change, even a change for the better, is always accompanied by drawbacks and discomforts."

America still hasn't achieved the democracy that Abe Lincoln's words revered or that Obama's campaign hopes nourished.

One of America's leading senators, J. William Fulbright, said "It's unnatural and unhealthy for a nation to be engaged in global crusades for some principle or idea while neglecting the needs of its own people."

Instead of exerting pressure on others for democracies, America needs to focus on improving its own.

Housing Prices Have Already Fallen More than During the Great Depression ... How Much Lower Will They Go?

I noted in January that the housing slump is worse than during the Great Depression.

The Wall Street Journal noted Tuesday:

The folks at Capital Economics write in with this gloomy tidbit: “The further fall in house prices in the first quarter means that, on the Case-Shiller index, prices have now fallen by more than they did during the Great Depression.

By their calculations, prices are now down 33% from their 2006 peak, compared with the 31% decline during the Depression.

The Independent agreed on Wednesday:

The ailing US housing market passed a grim milestone in the first quarter of this year, posting a further deterioration that means the fall in house prices is now greater than that suffered during the Great Depression.

The brief recovery in prices in 2009, spurred by government aid to first-time buyers, has now been entirely snuffed out, and the average American home now costs 33 per cent less than it did at the peak of the housing bubble in 2007. The peak-to-trough fall in house prices in the 1930s Depression was 31 per cent – and prices took 19 years to recover after that downturn.

How Bad Could It Get?

The above-quoted Wall Street Journal also notes:

The remarkable thing about this downturn is that even though prices have fallen by more than in the Great Depression, the bottom has yet to be reached. We think that prices will fall by at least a further 3% this year, and perhaps even further next year.
I pointed out in December:

[Nouriel] Roubini said that the United States “real estate market, for sure, is double dipping”, and and predicted that banks could face another $1 trillion in housing-related losses.

Now Zillow is forecasting that U.S. home values are poised to drop by more than $1.7 trillion this year.

In a real worst-case scenario, how far could housing decline?

Dean Baker argued in January 2010:

Real [i.e. inflation-adjusted] house prices are still 15-20 percent above long-term trend.

In March of this year, Gary Shilling predicted that housing would decline another 20%, and wouldn't recover for 4-5 years.

I reported last year:

The co-creator of the leading house price index - Robert Shiller - says that he is worried housing prices could decline for another five years. He noted that Japan saw land prices decline for 15 consecutive years up to 2006.

Indeed, it is possible that housing prices may never return to their peak bubble levels. See this, this and this.
I noted in 2008:
In the greatest financial crash of all time - the crash of the 1340s in Italy ... real estate prices fell by 50 percent by 1349 in Florence when boom became bust.

So Shilling's prediction is within the realm of historical events: it is already worse than the Great Depression, it could get as bad as the worst depression of all time ... 1349 Florence.

Moreover, while the 1349 was limited to one city-state, the current crash is more or less global. I pointed out in 2008:

The [current] bubble was not confined to the U.S. There was a worldwide bubble in real estate.

Indeed, the Economist magazine wrote in 2005 that the worldwide boom in residential real estate prices in this decade was "the biggest bubble in history". The Economist noted that - at that time - the total value of residential property in developed countries rose by more than $30 trillion, to $70 trillion, over the past five years – an increase equal to the combined GDPs of those nations.

Housing bubbles are now bursting in China, France, Spain, Ireland, the United Kingdom, Eastern Europe, and many other regions.
Why Is This Happening ... And What Can We Do to Fix It?

Government economic policy that does nothing meaningful to tackle unemployment and the failure to prosecute mortgage fraud are largely responsible for the slump in housing.

Until those policies are reversed, housing could keep declining for a long time.

As I explained last year, the government's entire policy regarding housing is counter-productive in the long run:

When housing crashed in 2007 and 2008, the government had two choices. It could have:

(1) Tried to artificially prop up housing prices;
(2) Created sustainable jobs, broken up the big banks so that they stop driving our economy into a ditch, and restored honesty and trustworthiness to the economy and the financial system. All this would have meant that the economy would recover, and people would have enough money to afford to buy a new house. (See this).

The government opted to try to prop up prices.

Indeed, as I have repeatedly pointed out, the government's entire strategy has been to try to artificially prop up the prices of all types of assets.

For example, I noted in March:

The leading monetary economist told the Wall Street Journal that this was not a liquidity crisis, but an insolvency crisis. She said that Bernanke is fighting the last war, and is taking the wrong approach. Nobel economist Paul Krugman and leading economist James Galbraith agree. They say that the government's attempts to prop up the price of toxic assets no one wants is not helpful.

The Bank for International Settlements – often described as a central bank for central banks (BIS) – slammed the easy credit policy of the Fed and other central banks, the failure to regulate the shadow banking system, "the use of gimmicks and palliatives", and said that anything other than (1) letting asset prices fall to their true market value, (2) increasing savings rates, and (3) forcing companies to write off bad debts "will only make things worse".


David Rosenberg [former chief economist for Merrill Lynch] writes:

Our advice to the Obama team would be to create and nurture a fiscal backdrop that tackles this jobs crisis with some permanent solutions rather than recurring populist short-term fiscal goodies that are only inducing households to add to their burdensome debt loads with no long-term multiplier impacts. The problem is not that we have an insufficient number of vehicles on the road or homes on the market; the problem is that we have insufficient labour demand.

Indeed, as I pointed out in April, unemployment is so bad that 1.2 million households have "disappeared", as people move out of their own houses and move in with friends or family.

BIS wrote in 2007:

Should governments feel it necessary to take direct actions to alleviate debt burdens, it is crucial that they understand one thing beforehand. If asset prices are unrealistically high, they must fall. If savings rates are unrealistically low, they must rise. If debts cannot be serviced, they must be written off.


Baker said last November that the government hasn't really helped homeowners, but has really been helping out the big banks instead:

The big talk in Washington these days is "helping homeowners". Unfortunately, what passes for help to homeowners in the capitol might look more like handing out money to banks anywhere else.


So, who benefits from "helping homeowners" in this story? Naturally the big beneficiaries are the banks. If the government pays for a mortgage modification where the homeowner is still paying more for the mortgage than they would for rent, then the bank gets a big gift from the government, but the homeowner is still coming out behind.


There are simple, low-cost ways to help homeowners who were victims of the housing bubble and lending sharks.... But this would mean hurting the banks rather than giving them taxpayer dollars, and we still don't talk about hurting banks in Washington DC.

Similarly, Zack Carter wrote yesterday:

The Treasury Dept.'s mortgage relief program isn't just failing, it's actively funneling money from homeowners to bankers, and Treasury likes it that way.


Economics whiz Steve Waldman [writes]:
The program was successful in the sense that it kept the patient alive until it had begun to heal. And the patient of this metaphor was not a struggling homeowner, but the financial system, a.k.a. the banks. Policymakers openly judged HAMP to be a qualified success because it helped banks muddle through what might have been a fatal shock. I believe these policymakers conflate, in full sincerity, incumbent financial institutions with "the system," "the economy," and "ordinary Americans."


Instead of fixing the real problems with our economy or genuinely helping struggling homeowners, the government has made everything worse by trying to artificially prop up asset prices in a way that only helps the big banks.
And as banking analyst Chris Whalen wrote last month:
An aggressive combination of reflation by the Fed and restructuring of the housing and banking sectors is the way to restore US economic growth, but you won’t hear about restructuring large banks from adherents of the neo-[i.e. faux] Keynsian faith.


Instead of embracing a permanent state of inflation, as has been the case in the US since the 1970s, we need to deflate the bubble and start again. It is not too late for President Obama and Congress to restructure the US financial system, fix the housing market and create the conditions for true economic growth.
Lest you think I am unfairly criticizing Keynesian economics, I pointed out last year:

"Deficit doves" - i.e. Keynesians like Paul Krugman - say that unless we spend much more on stimulus, we'll slide into a depression. And yet the government isn't spending money on the types of stimulus that will have the most bang for the buck ... let alone rebuilding America's manufacturing base. See this, this and this. [Indeed, as Steve Keen demonstrated last year, it is the American citizen who needs stimulus, not the big banks.]


Today, however, Bernanke ... and the rest of the boys haven't fixed any of the major structural defects in the economy. So even if Keynesianism were the answer, it cannot work without the implementation of structural reforms to the financial system.

A little extra water in the plumbing can't fix pipes that have been corroded and are thoroughly rotten. The government hasn't even tried to replace the leaking sections of pipe in our economy.

In truth and in fact, the government's policies are not only not working to stem the rising tide of unemployment, they are making it worse.

Forget the whole "Keynesian" versus "deficit hawk" debate. The real debate is between good and bad policy.

Portugal set for $114 billion EU-IMF bailout

New Al Qaeda Video: American Muslims Should Buy Guns, Start Shooting People

In a new video message released on the internet Friday, American-born al Qaeda spokesman Adam Gadahn calls on Muslims living in America to carry out deadly one-man terrorist acts using fully automatic weapons purchased at gun shows, and to target major institutions and public figures.

"What are you waiting for?" asks Gadahn in English, and then adds that jihadis shouldn't worry about getting caught, since so many have been released. "Over these past few years, I've seen the release of many, many Mujahideen whom I had never even dreamed would regain their freedom."

The two-part, two hour video appeared on jihadi websites Friday with images of jihadi leaders as well as snapshots of alleged underwear bomber Umar Farouk Abdulmutallab and accused Fort Hood shooter Major Nidal Hasan. Both Hasan and Abdulmutallab are charged with carrying out attacks inside the U.S.

Called "Do Not Rely on Others, Take the Task Upon Yourself" and produced by al Qaeda's media arm, as Sahab, the tape mixes Gadahn's new message with clips from old videos of Osama bin Laden, Ayman al-Zawahiri and other al Qaeda leaders praising one-man attacks. They call on jihadis in the West to carry out lone wolf operations.

Gadahn sounds the same theme in his message, a series of soundbites interspersed throughout the video and accompanied by images of U.S. airliners, bombmaking and the logos of U.S. companies. "Muslims in the West have to remember that they are perfectly placed to play an important and decisive part in the Jihad against the Zionists and crusaders, and to do major damage to the enemies of Islam, waging war on their religion, sacred places, and things, and brethren," says Gadahn. "This is a golden opportunity and a blessing."

He urges Muslims to pursue attacks with whatever is available. "Let's take America as an example. America is absolutely awash with easily obtainable firearms. You can go down to a gun show at the local convention center and come away with a fully automatic assault rifle, without a background check, and most likely without having to show an identification card. So what are you waiting for?"

Gadahn suggests targeting major institutions -- after a clip showing the logos of such firms as Exxon, Merrill Lynch and Bank of America -- and "influential public figures." "Getting to these criminals isn't as hard as you might think," says Gadahn. "I mean we've seen how a woman knocked the Pope to the floor during Christmas mass, and how Italian leader Berlusconi's face was smashed during a public appearance. So it's just a matter of entrusting the matter to Allah and choosing the right place, the right time, and the right method."

He claims that many Western born or raised jihadis, the "brothers who came from abroad" are now thinking about returning to their "Crusader" countries to "discharge their duty of jihad." He also says not to worry about imprisonment, since so many have been jihadis have been set free. "If it's Allah's will that you be captured, then it's not the end the world, and it doesn't necessarily mean that you're going to spend the rest of your life in prison." Many mujahideen who were locked up "are now back home with their families, or back on the frontlines, fighting the enemies."

Proud of losing $14B

It's a sign of grim times indeed when the Obama administra tion is touting a potential $14 billion loss to the taxpayers as a great economic success.

The White House is running on its auto bailouts as courageous acts that saved the industrial Midwest. It's a telling point of pride. In bragging about the bailouts of GM and Chrysler, the administration is boasting of a process shot through with lawlessness and political favoritism -- not to mention reckless disregard for taxpayer dollars.

The administration believes it trumps all criticism with one data point: GM and Chrysler are still with us. GM has even been making money, and had the biggest IPO in American history last November.

Yet, as The Atlantic's Megan McArdle tartly observes, it shouldn't have been in doubt that if government threw $80 billion at two companies, not expecting to get all of it back, it could save them. She points out that the loss from the bailouts (the administration's estimate is $14 billion) will be close to the entire market capitalization of GM in 2007. It will be several times as big as the company's 2008 market capitalization.

McArdle figures that, at a cost of roughly $10 billion to $20 billion, we might as well have given GM's pre-bankruptcy workforce of 75,000 hourly workers $250,000 each and called it a day.

The government has also given GM a special tax break that will save it $14 billion on its US tax bill, and is trying to induce consumers to buy GM's signature new product, the absurdly expensive electric Chevy Volt, by giving them a $7,500 tax credit on its $41,000 sticker price.

With all this support, GM should be the world's greatest industrial concern. It's hardly that, although it's much improved. We can thank Chapter 11, the tried-and-true method for turning around bankrupt companies that still have value.

Writing in the journal National Affairs, Todd Zywicki makes a distinction between "economically failed" companies that disappear when they go bankrupt and "financially distressed" companies that can still work. With a skilled workforce, advanced factories and prized brands, GM was clearly the latter. "Virtually every major airline has been through bankruptcy at least once, as have K-Mart, Macy's and a host of other familiar brands that are still very much in business," Zywicki writes.

Somewhere in GM there was a viable car company trying to get out. Through Chapter 11, GM pared down wages and benefits, shed uneconomical dealerships and ditched unnecessary brands. This was a classic restructuring. If anything, without government intervention, it would have been more thorough-going and effective.

As an exercise in what Zywicki calls "state capitalism," the bailout was a procedural horror show:

* It was probably illegal to funnel TARP funds into the companies -- they may not have been car companies worthy of the name any longer, but they certainly weren't "financial institutions."

* Chrysler's creditors, who held secured bonds and were guaranteed repayment first, got forced into taking 29 cents on the dollar. In contrast, the United Auto Workers' pension plan got 40 cents on the dollar.

* The creditors of both Chrysler and GM were denied their usual right to have a say in the reorganizations. The government was in a strong position to bully some of these creditors, because they themselves received TARP funds.

* Once they had their hooks in them, the Obama administration and Congress made the companies do their bidding, insisting they build politically correct hybrid cars and keep open politically favored dealerships.

Ultimately, the moral stature of capitalism depends on a structure of rules that applies to firms large and small, politically connected and not. By this standard, the auto bailouts fail miserably, and so perfectly distill Obamanomics.


McJobs: Fast food career the new American dream?

Fed Lawyer Alvarez: “The Federal Reserve Does NOT Own Any Gold at All”

Thats right. The Fed owns NO gold. Zero, zip, ziltch.

For those of you who did not watch yesterday’s monetary policy hearing in the house of representatives, you most likely missed this bombshell exchange between Federal Reserve lawyer Scott Alvarez and committee chairman Dr. Ron Paul. My jaw literally dropped when I heard the Fed’s general counsel declare that the Federal Reserve owns no gold. After 1934, Alvarez explains that the Fed handed its gold over to the Treasury in exchange for gold certificates. When pressed further, Alvarez noted that the gold certificates do not represent any interest whatsoever in the gold itself. He explained the gold certificate listings on the Fed balance sheet, not as a claim to gold, but at most a claim to dollars from the Treasury. See the quotes here (and watch the videos at the bottom of the post):

Scott Alvarez: “The Federal Reserve does not own any gold at all… we have not owned gold since 1934, um, so we have not engaged in any gold swap. Before 1934 the Federal Reserve did, we did own gold. We turned that over by law to the Treasury and received in return for that gold certificates.”

Ron Paul: “…You have the securities for essentially all the gold?”

Scott Alvarez: “No. No we have no interest in the gold that is owned by the Treasury. We have simply an accounting document that is called gold certificates that represents the value at a statutory rate that we gave to the Treasury in 1934″

This issue is even more complicated than may appear and after doing some research we seem to have settled some of the quirks in this odd Treasury-Fed scheme. Bare with us when reading through this.

What appears to have happened under the Gold Reserve Act of 1934 is the Treasury seized the Fed’s gold, taking full ownership and claim to its proceeds. The Treasury as an aside transferred a sum of special 1934 series gold certificates to the Fed amounting to the statutory value of gold ($20.67 per ounce) times the quantity of gold transfered from the Fed to the Treasury. The official gold price was later revalued to $35 an ounce, an effective devaluation of the currency, but the quantity of gold certificates issued to the Fed was not amended to reflect revaluation until the passing of the Par Value Modification Act of 1972. Under this act, gold was revalued again, this time to $38 an oz, and the Fed’s gold certificate account was credited upwards by $822 million worth of certificates to reflect the change in the gold price from $35 to $38. The gold was revalued one last time in 1973 to $42.22 and again the Federal Reserve was credited with more gold certificates, $1.157 billion to be exact, to account for this. After everything, the Federal Reserve was left with $11.16 billion dollars worth of gold certificates.

So what exactly are the gold certificates the Fed holds? For one, the Fed’s gold certificates are unlike previous gold certificate issues, and are not publicly trade-able. They are also not direct claims to gold, but rather reflect claims only to US issued currency or coin held by the Treasury. The Fed can take claim to this currency on demand, and their certificates are an accounted for liability of the Treasury as listed in Note 19. Treasury’s “Other Liabilities”. In addition, if the Treasury is unable to satisfy a demand by the Fed for the funds, the Fed is able to gain access to the gold, since the gold stands as collateral for the gold certificates issued by the Treasury. This fact is taken from this statement in Note 2, from the Treasury’s balance sheet:

“Gold totaling $11.1 billion as of September 30, 2010, and 2009, was pledged as collateral for gold certificates issued and authorized to the FRBs by the Secretary of the Treasury.

Given that the Fed has an indirect claim to the Treasury’s gold, it is questionable what line of reasoning the Fed’s general counsel was using when stating so broadly that the Fed has “no interest in the gold that is owned by the treasury”.

In any case, we can analyze the implications of the basic facts and come to a couple of conclusions:

1) The widespread notion that the Fed owns gold is false. The corollary to this is the mistaken belief that the Fed understates its gold holdings on its balance sheet by only reporting certificates based on the $42.22 statutory gold value. The Fed does not in fact own the US gold stock multiplied by the market price of gold, unless the Treasury defaults and even then its not clear. The Fed does, however, own a claim to currency totaling $11.1 billion and this value has a remote chance of going up significantly if the Treasury revalues its gold and maintains the practice initiated in the Par Value Modification Act.

2) The fact that the Fed owns no gold, nor claims to any gold, means the fundamental value of the dollar lacks any backing besides dollars themselves, not including Fed building and equipment. Dollars are in essence worth a lot less than many people thought, and the Fed is much more impotent in using the prowess of their assets, and conducting monetary policy in general, than many believed. In all, Alvarez’s clarification strengthens the case for gold’s high dollar value immensely.

see the specific exchange between Alvarez and Ron Paul about the Fed’s gold here:

watch the whole hearing here:

Banks foreclose on homes that they don't own

Worldwide Freedom is Being Hacked

Dees Illustration
Will the "cyber threat" be the next bin Laden?

John Galt
Activist Post

Osama bin Laden and the shadowy network of terrorists he supposedly spawned has been the perfect template for controlling physical reality. The fear created by 9/11, and the even worse fear of having it happen again, has bludgeoned common sense from the average person. The Constitution itself has been overthrown, unleashing roving bands of state-sponsored goons to interrogate, molest, and kill with impunity.

And this is only what is happening in America. The engineered financial collapse of the planet has led to a near-worldwide insurrection, whether it is directed specifically toward banksters, or merely in response to soaring food prices in areas already on the verge of starvation. Globalists are attempting to head off Arab unrest by staging controlled opposition to bring the masses back in line, and to an extent it has worked, albeit in predictably messy fashion. However, formerly isolated collapse/revolts such as Iceland, Ireland, and Greece are beginning to spread across Europe in a seemingly unstoppable wave of largely non-violent protest. The response by government to this threat has been to restrict peaceful assembly and bash heads in lieu of proposing sound solutions and redressing legitimate grievances.

The acceleration of the violent police state response has not been without consequence for the controllers. An increasing number of people are beginning to see what living under hot tyranny can really be like. More importantly, it is evident from videos in France, particularly, that people the world over are beginning to awaken to the true culprits who are bringing about their debt slavery and loss of freedom. This is due in large part to the one place where freedom still rings: the Internet.

Activism of all stripes is increasing on a worldwide scale via a mass awakening in the (still) free market of ideas to be found on the Internet. Many of the deceptions that formerly took years to expose, are now routinely uncovered by alternative media in a matter of weeks or even days. Much of the on-the-ground organization and rapid deployment owes to the quick communication lines in cyberspace. From the controllers' problem-reaction-solution paradigm, something must be done.

Enter the next shadowy terrorist threat.

Against the backdrop of a spate of hack attacks on corporate and government targets, China has been singled out as the most likely originator. China has offered its response as a denunciation of the United States, saying, "The so-called statement that the Chinese government supports hacking attacks is a total fabrication . . . It has ulterior motives." Those ulterior motives were spelled out in a later statement from China when it called the U.S. the culprit in an Internet War designed to take down Arab regimes and other governments. Indeed, there has been virtual saber rattling from both the Pentagon and NATO, as they have reiterated their cooperation; virtual attacks will lead to a real-world response, leading one military official to state: "If you shut down our power grid, maybe we will put a missile down one of your smokestacks."

Today's story reported on by AFP marks a change in tone from the U.S. lashing out specifically toward China, as U.S. Defense Secretary Robert Gates said from a security conference in Singapore: "We take the cyber threat very seriously and we see it from a variety of sources, not just one or another country." More ominously, British Defence Secretary Liam Fox alluded to a London-based security conference that will be held at the end of the year to address the "war of the invisible enemy."

At least they pretended that bin Laden was real and hiding around every corner, but by openly labeling the cyber threat as "invisible" we see the stage set for total, permanent control over the infrastructure of the Internet, as well as the ideas finding a home there. The London conference, as Fox tells us "will include discussions on a potential legal framework."

There seems to be an orchestrated political theater at work in the backdrop of accusations and denials between the U.S. and China. China already has strict Internet controls in place, and the U.S. is working at warp speed to outdo them, as DHS is already seizing domains for merely linking to copyrighted material, while bills are being proposed to use copyright infringement as the pretext for arbitrarily shutting down even the dissemination of information that is supposedly protected under fair use, as stated in section 107 of U.S. Copyright Law. Additionally, the rules of war are already spelled out in current treaties, which Gates conveniently ignores when he states:
'serious international tensions' could be avoided if there were rules 'that let people know what kinds of acts are acceptable, what kinds of acts are not, and what kinds of acts may in fact be an act of war.' ...
Gates said this would help achieve a 'clearer understanding of the left and right lanes, if you will, so that somebody doesn't inadvertently or intentionally begin something that escalates and gets out of control.'
We are already supposed to have forgotten that the United States and Israel were conclusively revealed to be the authors of the Stuxnet virus; an offensive act of war on Iran by any definition.

This latest theater only exposes the wider agenda; one that intends to define an international legal framework of rules and regulations that govern the free Internet in response to a shadowy, undefined enemy . . . most likely funded and controlled from within our own borders. It certainly worked after 9/11, which begs the question: is a large-scale Internet false flag on the way to hack into the final bastion of human freedom?

Feeding the Homeless Might Be a Illegal?Has the Government Declared War on the Homeless and the Good Samaritan ?

The very same government that has created the economic conditions.Those very destructive policies that are responsible for wrecking the livelihoods of many people. The cost of these corrupt mandates contributed to the high unemployment numbers, the housing foreclosures and the dismal economic conditions for us all.At the same time enriching Wall Street money junkies and the Bankster gangsters at our expense. The very politicians that created the problem forcing people to live on the streets with no food or shelter is something baffling to me. In some cities, it is illegal to be homeless by the very municipalities that chased off jobs or business for revenue enhancement for the local coffers. The very police state who says they care about us so much. This same government threw many people out on the streets of no fault of their own with illegal foreclosures. The very same corrupt governments who just by force pushed people into a condition of being homeless now want to make against the law or a crime.

The first amendment protects freedom of religion. Many Christians see their moral duty and obligation to feed the homeless and help the less fortunate in society. It has always been are characteristic as Americans to be generous and to help our fellow man in need. Providing food to the homeless is a part of the Christian faith being a servant for Christ. Jesus did not need a permit from Caesar to feed 4000 people with bread and fish. I can see the corruption of many politicians in elected office. They are a part of the out of control city governments and the state health agencies. They do more harm than good because they care. Feeding the homeless may now be against the law or more complicated with government red tape to get a permit. Feeding the Homeless will be more expensive to stay in compliance with bureaucrats than operating a soup kitchen without government interference. Government is too costly to have involved in charity. This lunacy by big government is taking away funds that can used better just to help more people rather than costly measures to comply with irrelevant standards just to keep the government off their backs.

When did anyone need a license or a permit to feed the homeless? They are not the Olive Garden or McDonalds. They do not run restaurants. Now decent and law-abiding people are now criminals for feeding the homeless. The crime of helping the less fortunate in the city parks in Orlando Florida. Is now being a Good Samaritan a crime? Will it become illegal altogether now to help our neighbor in need? The day will come that we might go to jail for making a ham sandwich in the near future for a homeless family? So what is the government solution?I think everyone will be issued an EBT cards in the name of food safety because of the dirty soup kitchens can make someone sick. In the governments eyes buying all that GMO food is so much healthier and so much safer than the food at the Baptist church basement. What a crock of BS.

We should not let stupid government regulations and ordinances stop us from doing what is right. If our neighbor is in need.It does not matter if it is legal or not. We have a moral obligation to resist and ignore an unjust government. Before the welfare state was part of American society. Churches and communities took care of their own. There were no food stamps. People united and responded when a neighbor was in distress. No matter how great the need Local communities through charities and the churches took care of people with a helping hand and not a handout. They seen to it that a family was able to provide for itself and not depend on one for assistance. Now the government took over what was once the duty of the people. Social Security took the place of the family looking after the elders of the family in their old age. Social Services took over the welfare of the child. A state institution was the last resort. A family member or a good neighbor stepped forward and raised the child rather then put them in foster care. Religious organizations once owned and operated hospitals that were not for profit.The best medical treatment not compromising quality care regardless of income was the norm. Now since the government took over. Everything is a mess. The health care system was better back in the day when government was not involved then today.

The government has gone heartless and cruel against the homeless. People living in their cars losing all what they owned .The automobile will be lost because the owner has no insurance or valid registration. Leaving a person with just the clothes on their backs on the side of the road is really a cruel thing to do. CPS taking kids way from parents homeless is the real carouse thing to do. Parents can handle losing a home, possessions and a car. Nevertheless, losing their children is something is a knife through the heart. Police in St Petersburg Florida slicing tents with knives that was a person’s personal property trying to drive away the homeless shows our government does not care about the people they hurt or harmed. We are all just peasants and slaves to feed off to them,

We must put a stop to this out of control lawless government. It should not be against the law being homeless and it should not be a crime to feed them either. The people arrested in Florida will keep feeding the homeless. For me it is a right under my religious freedom to feed and help the less fortunate regardless of the laws prohibiting this act of charity. I say just leave them alone if they want to feed the homeless. This is what made American great. It was not bombs and bullets. The government does not define our greatness. Our goodness and generosity define our greatness as a people. Americans never hesitated to step up when people were in need here and abroad. We always responded. Generosity and being charitable is a crime just because the government says it is. It still does not make it immoral or wrong with a vote by politicians making it law. It is just turning law abiding and the innocent into criminals. This is the very definition of a police state gone mad.

Dreaded Double-Dip Is Here

I have been telling you the economy is not in any kind of real recovery for more than a year. Sources I have been quoting have been proven right, and all the economic cheerleaders dead wrong. Reuters reported yesterday, “Data showing a double-dip in home prices, pessimistic consumers and a slowdown in regional manufacturing raised concerns on Tuesday that the economy’s soft patch could become protracted.” (Click here to read the complete Reuters report.) “Could become protracted?” It is protracted, and now the data is suggesting the economy is getting ready for another cliff dive.

Let’s concentrate on what has been a huge driver of the economy—housing. A double-dip in housing could start a daisy chain of very bad news for the big banks exposed to derivatives and residential real estate. According to the latest S&P/Case-Shiller home price report released yesterday, prices hit a new low in the first quarter–plunging 4.2% in just three months! If you look back six months, prices are off nearly 8% according to Case/Shiller. If you look on the chart on the first page of the Case/Shiller press release (click here), it clearly shows a double dip in housing. That is exactly what was predicted nearly a year ago on this site. One of the many people I quoted was renowned banking analyst Meredith Whitney who said last June, “Unequivocally, I see a double-dip in housing. There’s no doubt about it . . . prices are going down again.” (Click here to read my original post from a year ago.) At the time, many people thought Ms. Whitney was being overly pessimistic. In fact, her dire prediction has come true. This is despite the more than $2 trillion spent in QE1 and QE2 (printing money out of thin air to buy government and private debt) by the Federal Reserve. QE1 &QE2 helped fuel the stock market and artificially held mortgage interest rates at absurdly low levels and, yet, housing continues to crash. Good call Ms. Whitney!

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Ron Paul "I Didn't Want The Troops To Go Over There In The First Place & I Want Them To Come Home"