The Federal Reserve goes against everything that our founders believed to be running up so much government debt and we need to educate the American people about the Fed while there is still time.

By Michael Snyder

What would happen if the Federal Reserve was shut down permanently?  That is a question that CNBC asked recently, but unfortunately most Americans don’t really think about the Fed much. Most Americans are content with believing that the Federal Reserve is just another stuffy government agency that sets our interest rates and that is watching out for the best interests of the American people.  But that is not the case at all.  The truth is that the Federal Reserve is a private banking cartel that has been designed to systematically destroy the value of our currency, drain the wealth of the American public and enslave the federal government to perpetually expanding debt.  During this election year, the economy is the number one issue that voters are concerned about.  But instead of endlessly blaming both political parties, the truth is that most of the blame should be placed at the feet of the Federal Reserve.  The Federal Reserve has more power over the performance of the U.S. economy than anyone else does.  The Federal Reserve controls the money supply, the Federal Reserve sets the interest rates and the Federal Reserve hands out bailouts to the big banks that absolutely dwarf anything that Congress ever did.  If the American people are ever going to learn what is really going on with our economy, then it is absolutely imperative that they get educated about the Federal Reserve.

The following are 10 things that every American should know about the Federal Reserve….
#1 The Federal Reserve System Is A Privately Owned Banking Cartel
The Federal Reserve is not a government agency.
The truth is that it is a privately owned central bank.  It is owned by the banks that are members of the Federal Reserve system.  We do not know how much of the system each bank owns, because that has never been disclosed to the American people.
The Federal Reserve openly admits that it is privately owned.  When it was defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve stated unequivocally in court that it was “not an agency” of the federal government and therefore not subject to the Freedom of Information Act.
In fact, if you want to find out that the Federal Reserve system is owned by the member banks, all you have to do is go to the Federal Reserve website….

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations–possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

Foreign governments and foreign banks do own significant ownership interests in the member banks that own the Federal Reserve system.  So it would be accurate to say that the Federal Reserve is partially foreign-owned.
But until the exact ownership shares of the Federal Reserve are revealed, we will never know to what extent the Fed is foreign-owned.
#2 The Federal Reserve System Is A Perpetual Debt Machine
As long as the Federal Reserve System exists, U.S. government debt will continue to go up and up and up.
This runs contrary to the conventional wisdom that Democrats and Republicans would have us believe, but unfortunately it is true.
The way our system works, whenever more money is created more debt is created as well.
For example, whenever the U.S. government wants to spend more money than it takes in (which happens constantly), it has to go ask the Federal Reserve for it.  The federal government gives U.S. Treasury bonds to the Federal Reserve, and the Federal Reserve gives the U.S. government “Federal Reserve Notes” in return.  Usually this is just done electronically.
So where does the Federal Reserve get the Federal Reserve Notes?
It just creates them out of thin air.
Wouldn’t you like to be able to create money out of thin air?
Instead of issuing money directly, the U.S. government lets the Federal Reserve create it out of thin air and then the U.S. government borrows it.
Talk about stupid.
When this new debt is created, the amount of interest that the U.S. government will eventually pay on that debt is not also created.
So where will that money come from?
Well, eventually the U.S. government will have to go back to the Federal Reserve to get even more money to finance the ever expanding debt that it has gotten itself trapped into.
It is a debt spiral that is designed to go on perpetually.
You see, the reality is that the money supply is designed to constantly expand under the Federal Reserve system.  That is why we have all become accustomed to thinking of inflation as “normal”.
So what does the Federal Reserve do with the U.S. Treasury bonds that it gets from the U.S. government?
Well, it sells them off to others.  There are lots of people out there that have made a ton of money by holding U.S. government debt.
In fiscal 2011, the U.S. government paid out 454 billion dollars just in interest on the national debt.
That is 454 billion dollars that was taken out of our pockets and put into the pockets of wealthy individuals and foreign governments around the globe.
The truth is that our current debt-based monetary system was designed by greedy bankers that wanted to make enormous profits by using the Federal Reserve as a tool to create money out of thin air and lend it to the U.S. government at interest.
And that plan is working quite well.
Most Americans today don’t understand how any of this works, but many prominent Americans in the past did understand it.
For example, Thomas Edison was once quoted in the New York Times as saying the following….

That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt.
Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.
But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good.

We should have listened to men like Edison and Ford.
But we didn’t.
And so we pay the price.
On July 1, 1914 (a few months after the Fed was created) the U.S. national debt was 2.9 billion dollars.
Today, it is more than more than 5000 times larger.
Yes, the perpetual debt machine is working quite well, and most Americans do not even realize what is happening.
#3 The Federal Reserve Has Destroyed More Than 96% Of The Value Of The U.S. Dollar
Did you know that the U.S. dollar has lost 96.2 percent of its value since 1900?  Of course almost all of that decline has happened since the Federal Reserve was created in 1913.
Because the money supply is designed to expand constantly, it is guaranteed that all of our dollars will constantly lose value.
Inflation is a “hidden tax” that continually robs us all of our wealth.  The Federal Reserve always says that it is “committed” to controlling inflation, but that never seems to work out so well.
And current Federal Reserve Chairman Ben Bernanke says that it is actually a good thing to have a little bit of inflation.  He plans to try to keep the inflation rate at about 2 percent in the coming years.
So what is so bad about 2 percent?  That doesn’t sound so bad, does it?
Well, just consider the following excerpt from a recent Forbes article….

The Federal Reserve Open Market Committee (FOMC) has made it official:  After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years.  The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.

#4 The Federal Reserve Can Bail Out Whoever It Wants To With No Accountability
The American people got so upset about the bailouts that Congress gave to the Wall Street banks and to the big automakers, but did you know that the biggest bailouts of all were given out by the Federal Reserve?
Thanks to a very limited audit of the Federal Reserve that Congress approved a while back, we learned that the Fed made trillions of dollars in secret bailout loans to the big Wall Street banks during the last financial crisis.  They even secretly loaned out hundreds of billions of dollars to foreign banks.
According to the results of the limited Fed audit mentioned above, a total of $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010.
The following is a list of loan recipients that was taken directly from page 131 of the audit report….
Citigroup – $2.513 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion
So why haven’t we heard more about this?
This is scandalous.
In addition, it turns out that the Fed paid enormous sums of money to the big Wall Street banks to help “administer” these nearly interest-free loans….

Not only did the Federal Reserve give 16.1 trillion dollars in nearly interest-free loans to the “too big to fail” banks, the Fed also paid them over 600 million dollars to help run the emergency lending program.  According to the GAO, the Federal Reserve shelled out an astounding $659.4 million in “fees” to the very financial institutions which caused the financial crisis in the first place.

Does reading that make you angry?
It should.
#5 The Federal Reserve Is Paying Banks Not To Lend Money
Did you know that the Federal Reserve is actually paying banks not to make loans?
It is true.
Section 128 of the Emergency Economic Stabilization Act of 2008 allows the Federal Reserve to pay interest on “excess reserves” that U.S. banks park at the Fed.
So the banks can just send their cash to the Fed and watch the money come rolling in risk-free.
So are many banks taking advantage of this?
You tell me.  Just check out the chart below.  The amount of “excess reserves” parked at the Fed has gone from nearly nothing to about 1.5 trillion dollars since 2008….

But shouldn’t the banks be lending the money to us so that we can start businesses and buy homes?
You would think that is how it is supposed to work.
Unfortunately, the Federal Reserve is not working for us.
The Federal Reserve is working for the big banks.
Sadly, most Americans have no idea what is going on.
Another example of this is the government debt carry trade.
Here is how it works.  The Federal Reserve lends gigantic piles of nearly interest-free cash to the big Wall Street banks, and in turn those banks use the money to buy up huge amounts of government debt.  Since the return on government debt is higher, the banks are able to make large profits very easily and with very little risk.
This scam was also explained in a recent article in the Guardian….

Consider this: we pretend that banks are private businesses that should be allowed to run their own affairs. But they are the biggest scroungers of public money of our time. Banks are lent vast sums of money by central banks at near-zero interest. They lend that money to us or back to the government at higher rates and rake in the difference by the billion. They don’t even have to make clever investments to make huge profits.

That is a pretty good little scam they have got going, wouldn’t you say?
#6 The Federal Reserve Creates Artificial Economic Bubbles That Are Extremely Damaging
By allowing a centralized authority such as the Federal Reserve to dictate interest rates, it creates an environment where financial bubbles can be created very easily.
Over the past several decades, we have seen bubble after bubble.  Most of these have been the result of the Federal Reserve keeping interest rates artificially low.  If the free market had been setting interest rates all this time, things would have never gotten so far out of hand.
For example, the housing crash would have never been so horrific if the Federal Reserve had not created such ideal conditions for a housing bubble in the first place.  But we allow the Fed to continue to make the same mistakes.
Right now, the Federal Reserve continues to set interest rates much, much lower than they should be.  This is causing a tremendous misallocation of economic resources, and there will be massive consequences for that down the line.
#7 The Federal Reserve System Is Dominated By The Big Wall Street Banks
Even since it was created, the Federal Reserve system has been dominated by the big Wall Street banks.
The following is from a previous article that I did about the Fed….

The New York representative is the only permanent member of the Federal Open Market Committee, while other regional banks rotate in 2 and 3 year intervals.  The former head of the New York Fed, Timothy Geithner, is now U.S. Treasury Secretary.  The truth is that the Federal Reserve Bank of New York has always been the most important of the regional Fed banks by far, and in turn the Federal Reserve Bank of New York has always been dominated by Wall Street and the major New York banks.

#8 It Is Not An Accident That We Saw The Personal Income Tax And The Federal Reserve System Both Come Into Existence In 1913
On February 3rd, 1913 the 16th Amendment to the U.S. Constitution was ratified.  Later that year, the United States Revenue Act of 1913 imposed a personal income tax on the American people and we have had one ever since.
Without a personal income tax, it is hard to have a central bank.  It takes a lot of money to finance all of the government debt that a central banking system creates.
It is no accident that the 16th Amendment was ratified in 1913 and the Federal Reserve system was also created in 1913.
They have a symbiotic relationship and they are designed to work together.
We could fill Congress with people that are committed to ending this oppressive system, but so far we have chosen not to do that.
So our children and our grandchildren will face a lifetime of debt slavery because of us.
I am sure they will be thankful for that.
#9 The Current Federal Reserve Chairman, Ben Bernanke, Has A Nightmarish Track Record Of Incompetence
The mainstream media portrays Federal Reserve Chairman Ben Bernanke as a brilliant economist, but is that really the case?
Let’s go to the videotape.
The following is an extended excerpt from an article that I published previously….
———-
In 2005, Bernanke said that we shouldn’t worry because housing prices had never declined on a nationwide basis before and he said that he believed that the U.S. would continue to experience close to “full employment”….

“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”

In 2005, Bernanke also said that he believed that derivatives were perfectly safe and posed no danger to financial markets….

“With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”

In 2006, Bernanke said that housing prices would probably keep rising….

“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

In 2007, Bernanke insisted that there was not a problem with subprime mortgages….

“At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”

In 2008, Bernanke said that a recession was not coming….

“The Federal Reserve is not currently forecasting a recession.”

A few months before Fannie Mae and Freddie Mac collapsed, Bernanke insisted that they were totally secure….

“The GSEs are adequately capitalized. They are in no danger of failing.”

For many more examples that demonstrate the absolutely nightmarish track record of Federal Reserve Chairman Ben Bernanke, please see the following articles….
*”Say What? 30 Ben Bernanke Quotes That Are So Stupid That You Won’t Know Whether To Laugh Or Cry”
*”Is Ben Bernanke A Liar, A Lunatic Or Is He Just Completely And Totally Incompetent?”
But after being wrong over and over and over, Barack Obama still nominated Ben Bernanke for another term as Chairman of the Fed.
———-
#10 The Federal Reserve Has Become Way Too Powerful
The Federal Reserve is the most undemocratic institution in America.
The Federal Reserve has become so powerful that it is now known as “the fourth branch of government”, but there are less checks and balances on the Fed than there are on the other three branches.
The Federal Reserve runs the U.S. economy but it is not accountable to the American people.  We can’t vote those that run the Fed out of office if we do not like what they do.
Yes, the president appoints those that run the Fed, but he also knows that if he does not tread lightly he won’t get the money from the big Wall Street banks that he needs for his next election.
Thankfully, there are a few members of Congress that are complaining about how much power the Fed has.  For example, Ron Paul once told MSNBC that he believes that the Federal Reserve is now actually more powerful than Congress…..

“The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress.”

As members of Congress such as Ron Paul have started to shed some light on the activities of the Federal Reserve, that has caused many in the mainstream media to come to the defense of the Fed.
For example, a recent CNBC article entitled “If The Federal Reserve Is Abolished, What Then?” makes it sound like there is absolutely no other rational alternative to having the Federal Reserve run our economy.
But this is not what our founders intended.
The founders did not intend for a private banking cartel to issue our money and set our interest rates for us.
According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress has been given the responsibility to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”.
So why is the Federal Reserve doing it?
But the CNBC article mentioned above makes it sound like the sky would fall if control of the currency was handed back over to the American people.
At one point, the article asks the following question….

“How would the U.S. economy then function? Something has to take its place, right?”

No, the truth is that we don’t need anyone to “manage” our economy.
The U.S. Treasury could be in charge of issuing our currency and the free market could set our interest rates.
We don’t need to have a centrally-planned economy.
We aren’t China.
And it goes against everything that our founders believed to be running up so much government debt.
For example, Thomas Jefferson once declared that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing….

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

Oh, how things would have been different if we had only listened to Thomas Jefferson.
Please share this article with as many people as you can.  These are things that every American should know about the Federal Reserve, and we need to educate the American people about the Fed while there is still time.

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Ian56 @Ian56789

The Federal Reserve is part of, or controlled by, the US gov & works for you http://themindunleashed.org/2014/01/10-things-everyone-know-federal-reserve.html … #LiesToldToUs

Top 10 Reasons Why Ginni Rometty Will Fail as IBM’s New CEO

Author: Steven Zolman
IBM’s first female CEO, Virginia “Ginni” Rometty, is in after Sam Palmisano parachutes out with $127 million, but not until he leaves a wake of wreckage in his trail.  Ginni will have big challenges to overcome if she is to be successful leading IBM, and in this blog, I will outline the Top 10 Reasons Why Ginni Rometty Will Fail as IBM’s new CEO.

1. IBM Forgot Who They Were.  The “M” in IBM is for Machines.  Machines for International Businesses; that is who IBM was.  Who is IBM today?  Somewhere along the way, IBM figured out that it was much cheaper to sell services than it was to produce goods, and so they focused their efforts on these “high margin” services instead of equipment that was capitally intensive, was quickly commoditized, and was not able to sustain such a strong business model.  What has happened since is that the services business is now impaired, not able to generate the kinds of profits IBM wants, and is now the source of huge cost cutting measures to try to save it (or prepare it for sale).  Ironic to be sure, but IBM used to build things, they used to build things of high quality, and they used to service those things extremely well.  Now, they are increasingly focusing their business around sales guys who sell services, and services people who are increasingly low skilled because they are cheaper than highly skilled resources.  Hmmm, something may be wrong with this strategy.  If Ginni’s not able to create a new understanding of who IBM is, she will fail as its new CEO.

2. Ginni Has No Vision for the Future of IBM.  Or if she does, she hasn’t told anyone yet.  Since becoming CEO, Ginni only promises more of the same from IBM — continuing to pursue more “high margin” areas in the business — YAWN!  IBM needs a new vision for the future, not the same old boring rhetoric.  What will *her* vision be for IBM, and how will she make that a reality?  When Gerstner devised this high margin pursuit strategy, it was a tactic to save a dying company, not a complete vision for the future.  IBM hasn’t been able to move beyond this temporary fix to the next evolution of what it will become in the future.  If Ginni’s not able to clearly articulate her vision for the future of IBM, and if it’s not substantively different from what it is today, people won’t believe in it and won’t rally around her, and she will not be able to save IBM, and will fail as its new CEO.

3. IBM Executives are out of Touch.  IBM has gone through major transformations before, and the last major transformation was designed to make the company more lean, more efficient, and able to make better decisions.  One of the stated objectives of that reorganization was to reduce bloat, simplify management, and connect the company to the decision makers so they would make better business decisions faster and more effectively.  Today, IBM has more layers of management than it did before these efforts, and that executive bloat has not only cost the organization more money, it has further insulated top decision makers from developing a real understanding of the business, and therefore their decisions are not as good as they can be.  What’s worse; there is no real accountability for these bad decisions because they don’t see the real field impact, and are not able to decipher what’s working and what isn’t, rendering them as useless politicians that merely manage their careers.  Her closest advisors will be giving her junk advice.  If she can’t figure that out and slash through it, she’s done.  Also, if Ginni can’t slash management layers, improve decision making, and create more accountability with (far fewer of) these career IBM politicians, she will fail as IBM’s new CEO.

4. IBM’s Sales Culture is Poison.  IBM’s sales culture has nearly ruined the company as many of its executives have no real knowledge about the products and services they sell, rather an obsessive desire for more “high margin” sales.  IBM’s sales aspirations, and its plan to achieve those objectives, will ruin the company if not revised.  IBM has developed growth objectives for earnings, and all indicators of the plan to achieve these aggressive targets seem to come at the expense of jobs, primarily jobs based in the USA – in favor of shipping them overseas, as this is thought to be ‘less costly’.  The scale of a reduction required to achieve the aggressive growth targets for earnings suggest that while executives and sales folks will stay, most everyone else will need to go.  The staff changes will require massive cuts in technical folks.  The very same technical wizards who invent the products, get the patents, establish a new and innovative technology that can create a dominant market position are the ones that will need to go to achieve the targets.  IBM’s sales culture and its current strategic plan will kill IBM if Ginni can’t stop it, and so far, she is only promising more of the same.

5. IBM’s Executive Compensation is Misaligned.  IBM has aligned executive compensation to its earnings per share targets, and if the executives achieve their targets, again, primarily by downgrading skilled workers in the USA, and moving labor from the USA to lower cost countries, which will be a move that kills the ability of the company to innovate and solve complex problems, they get stock incentives.  This executive compensation misalignment continues to drive behaviors towards activities that are killing the organization, yet the strategic plan hasn’t changed, nor has the executive compensation arrangement changed since Ginni’s arrival.  If this continues under the current model, the executives will make out, IBM customers will suffer, a great number of IBM employees will lose their jobs, and a great American institution will go down in flames.  Ginni needs to change where she places the cheese if she wants to change the behaviors of her executives, but again, that starts with a new strategic vision, and that has not yet been espoused in a clear, articulate and compelling way; in fact, quite the opposite.  If Ginni can’t reset IBM’s executive compensation plans to better align them to the right behaviors to foster growth, innovation, quality and excellent service, she will fail as IBM’s new CEO.

6. IBM’s Rape, Pillage & Burn Acquisition Strategy.  This is an area where IBM deserves some credit.  At least they get the sequencing right.  If they were to burn first, they wouldn’t be able to rape & pillage, so at the very least, let’s give them credit for knowing how to ruin a company properly.  One of the ways IBM has cloaked its demise is to continue to buy highly profitable businesses with the hoards of cash the company controls.  Once they do buy a new company, however, as a matter of routine, they saddle those organizations with bloated IBM processes, force them through standards processes that strip out much that was special, unique and cool about the acquired entity, they increase charges back to the mother ship to siphon off profits, and ultimately, they make the company no longer able to satisfy its customers, who eventually leave.  Once IBM has sucked out all the blood, they leave the body for dead and go find another new company to buy (and subsequently ruin).  If Ginni would change this model to be one of finding innovative companies that offer excellent services and provide high quality products, and helping those companies grow and develop, IBM could turn it around, but all internal signs indicate a continued focus on lowering skills, slashing R&D, eliminating innovation, and selling more promises with fewer deliveries of those promises.  If this acquisition strategy persists, Ginni will fail as IBM’s new CEO.

7. IBM’s Offshore Model will kill its Services Business.  I hear a lot of people say that IBM is a services company.  Well if that’s the case, they are actively trying to commit suicide by killing off their services business.  Over the last five years, IBM has aggressively pursued an offshore staffing model, seemingly believing that more unskilled workers are a more effective way to do business than having fewer higher skilled workers.  Apparently, IBM doesn’t understand that you can’t outsource making a baby in a month to nine women in India.  Not only does this create problems with logistics, language, communications and other issues, it eliminates the organization’s ability to solve complex problems.  Many of our clients who subscribe to this model are dramatically disappointed with IBM’s lack of effectiveness on resolving issues, and amazed at how long it takes, and how many people it requires to get resolution.  The aggressive offshore model particularly affects IBM Global Services, which represents a disproportionate share of revenue and employee head count, so the impact here will be severe.  In the last 18 months, NET(net) has noticed a sharp increase in the number of disenfranchised clients who have terminated their agreements with IBM and sought arrangements with other suppliers.  If Ginni allows the IBM Offshore model to continue in Global Services, the company will further convolute its ability to execute, become less able to solve complex problems, and will continue to lose more business at a faster rate.

8. IBM Sells Futures.  What is IBM’s strategy?  Smarter Planet?  No, my laundry machine doesn’t do the wash when it knows I have plenty of excess hot water.  No, my irrigation system doesn’t water the lawn when water prices are the lowest.  No, my refrigerator doesn’t order groceries for me from the store when I’m running low.  No, my car doesn’t sense when I am driving angry and schedule me in for a massage.  IBM needs to stop selling futures, and just make stuff that works, service it well, and help its customers get value from it.  IBM seems less capable more so today than perhaps at any time in recent history to solve complex problems, and it’s too busy worrying about airing commercials that look like a United Nations conference than it is about building stuff that works.  It seems like IBM has been selling futures for as long as everyone can remember, and for decades, they have gotten away with it.  It seems more and more however, customers are less willing to buy the hype, and are more concerned about buying stuff that works.

9. Watson is not the Panacea.  One thing is clear, as IBM has studied various business models, it has determined that vertically integrated systems like those found in Big Data, (where the hardware and the software of these systems are sold together as a bundle) are highly profitable, and do not require a lot of people to service them.  This idea is seen predominantly in Watson, IBM’s enterprise version of Apple’s Siri, a hugely expensive and likely a highly profitable, amalgamation of hardware and software, bundled together in a highly valuable enterprise application.  Could this be where IBM is heading?  They want to make huge enterprise class iPhones with Watson instead of Siri?  Who knows.  What is clear is that many of IBMs investments have been around enterprise infrastructure, enterprise applications, analytics and Big Data, many of the key ingredients for Watson-like functionality.  This is a general industry trend as organizations like HP, EMC, Oracle and others are on a similar path of selling vertically integrated systems with hardware and software bundled into a supposedly “highly tuned” bundle that offers greater overall value.  In our experiences, buying the integrated system certainly costs a lot more than buying its individual parts, but our clients have questioned the supposed “highly tuned” claims, and don’t report any more value than they would have otherwise achieved by buying the parts on their own.

10. IBM Seems to be Preparing to Sell is Services Business.  Like IBM jettisoned the PC business years ago, citing a highly commoditized market and the inability to make enough profit, IBM’s services business is under similar pressure and may be being secretly prepared for sale.  Feedback from insiders suggests that the cuts are so deep in recent months, that there is really no other viable explanation other than the services business is being prepared for sale.  If this is true for services, it is also true for many other business units at IBM.  Will Ginni’s legacy be overseeing a garage sale of IBM businesses?  If Ginni can’t stop IBM from selling off its business units that do not drive enough bottom line profit, she will not only fail as its new CEO, she will go down in history as IBM’s worst CEO of all time.

Ginni, you have many challenges ahead of you, and we wish you all the best!  It would be great to see you turn IBM around, but that leadership starts with a strategy that’s designed to impress more than just Wall Street investors.  To this point, we have not seen much that would change our views on the top 10 points above, which makes us concerned that your leadership at IBM is “more of the same”.  Our clients could really benefit if IBM became great again, so we are hopeful you will announce a new vision for IBM that includes making great things, helping clients get great value from those things, and servicing those things extremely well.  Our clients benefit with a strong IBM in their corner, helping to deliver high value low cost solutions that result in an improved business.
UPDATE:   It seems Ginni may be failing faster than even I had predicted.  Read my recent blog on this topic:  IBM CEO Ginni Rometty:  Failing Fast
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Investors Should Be Worried

Global investors should be concerned about potential economic turmoil as the United States is embarking on a recession and the greenback continues to be unsound, says Jim Rogers, chairman of Rogers Holdings and bestselling author of “Hot Commodities.”

Rogers spoke with Bloomberg TV India on Tuesday and told the media outlet that the U.S. is “over-indebted” and maintains the largest amount of debt in the planet’s history.
He further explained that the U.S. dollar is not sound, and with potential turmoil on the horizon, investors believe that the U.S. dollar is a safe haven for them. This is wrong, says Rogers, who thinks the economic downturn will get worse and thus the dollar will grow and transform into a bubble. This is when he’ll sell the dollar and perhaps buy more gold or even the Chinese renminbi.

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It’s Official: Over A Trillion Dollars A Year Will Be Added To The Debt During Obama’s Presidency

Michael Snyder

(RINF) – Under Barack Obama, the U.S. national debt has risen from $10,626,877,048,913.08 on January 20th, 2009 to $18,795,033,928,275.59 on December 21st, 2015.  That means that the debt that we are passing on to future generations has increased by 8.16 trillion dollars since Barack Obama was inaugurated.  There is still a little more than a year to go in Obama’s presidency, and it is already guaranteed that Obama will add more than a trillion dollars a year to the national debt during his presidency.  In fact, when you do the math, we are stealing more than 100 million dollars from future generations of Americans every single hour of every single day.  It is a crime of a magnitude that is almost unimaginable, and at this point it is mathematically impossible for the U.S. government to pay off all of this debt.  To say that we are in trouble would be a massive understatement.
And of course not all of the blame goes to Obama.  The Republicans have had control of the House of Representatives for all but two years while Obama has been in the White House, and they have gone along with all of this reckless spending.  Without the approval of the House, Obama could not spend a single penny, but the Republicans have consistently chosen not to stand up to him.  In fact, the Republicans in Congress just approved another massive 1.2 trillion dollar spending bill that essentially gave the Democrats every single thing that they wanted.  House Minority Leader Nancy Pelosi even admitted that the Republicans “were willing to concede so much” during the negotiations.
So why do we even have a Republican Party?  They always just go along with pretty much whatever the Democrats want anyway.  Why shouldn’t we just disband the Republican Party and let the Democrats completely run things?  How would Washington D.C. be any different if the Republicans didn’t even exist?
At this point, even Rush Limbaugh is completely disgusted with the Republican Party…

I have a headline here from the Washington Times:  “White House Declares Total Victory Over GOP in Budget Battle.” That headline’s a misnomer.  There was never a battle.  None of this was opposed.  The Republican Party didn’t stand up to any of it, and the die has been cast for a long time on this.  I know many of you are dispirited, depressed, angry, combination of all of that. But, folks, there was no other way this could go. Because two years ago when the Republican Party declared they would never do anything that would shut down the government and they would not impeach Obama, there were no obstacles in Obama’s way and there were no obstacles in the way of the Democrat Party.

Do you remember when Republican politicians were running around promising that they would defund Obamacare?
That didn’t happen.
Do you remember when Republican politicians were running around promising that they would defund Planned Parenthood?
That didn’t happen.
Do you remember when Republican politicians were running around promising that they would defund Obama’s refugee program?
That didn’t happen.
In this new spending deal, the Republicans got nothing.  It was a sham, a farce and a total insult to the American people.  Here is more from Rush Limbaugh…

It fully funds Planned Parenthood.  That, to me, is unforgivable, with everything now known about what goes on behind closed doors at Planned Parenthood, and that the federal government, led by a Republican Party, sees fit to pay for it.  It is beyond comprehension, and it is a total squandering of moral authority to fully fund the butchery at Planned Parenthood.  This spending bill fully pays for Obama’s refugee plans, fully.  This spending bill, this budget bill quadruples the number of visas Obama wants for foreign workers.  This is even a slap at American union workers.  Not the leaders.  The union leaders seem to be in favor of it, but blue-collar people, known as working people, have been sold down the river along with everybody else here.
This spending bill even fully pays for every dime asked for by Obama on all of this idiocy that’s tied up into climate change.  Everything Obama wanted, everything he asked for, he got.  You go down the list of things, it’s there.

Even after watching all of the undercover Planned Parenthood videos that came out over the past year, the Republicans in Congress still voted to fund the harvesting and sale of body parts from aborted babies.
And surveys have found that the American people support the continued funding of Planned Parenthood by about a 2 to 1 margin.  After everything that we have seen, the vast majority of Americans still want to continue giving those butchers hundreds of millions of taxpayer dollars a year.
No wonder so many people are comparing America to Nazi Germany these days.  We truly have become an exceedingly wicked nation.
We like to think that we are an “example” for the rest of the planet, but in reality the only example that we are is a bad one.  Our guilt has been put on display for all the world to see, and yet we just continue to race toward even more evil.
Not only did the Republicans not defund Planned Parenthood, the truth is that not a single pro-life amendment of any sort even got into the bill thanks to Paul Ryan.  The following comes from lifesitenews.com…

“The bill failed to include a single major pro-life policy rider, despite the requests of over 120 members of Congress and the disturbing revelations about Planned Parenthood brought to light this year,” said Congresswoman Diane Black, R-TN, who voted against the bill.
The House Freedom Caucus offered a series of amendments to the bill defunding Planned Parenthood, strengthening conscience protections for pro-life physicians and organizations, and ending all U.S. funding for the United Nations Population Fund (UNFPA). The House Rules Committee rejected these riders earlier this week, as Speaker Paul Ryan said he did not want conservative amendments added to the bill that would drive away his Democratic colleagues.
The committee also rejected an amendment to increase vetting of refugees who enter the United States from the terrorist hotbeds of Syria and Iraq, which had previously passed the House, with 47 Democrats adding strong bipartisan support.

Like I said, the Republicans completely capitulated, just like they always do.
Now the U.S. national debt is nearly double the size that it was just before the last financial crisis struck, and our leaders continue to borrow and spend as if there is no tomorrow.
Perhaps they have convinced themselves that there will never be any consequences for acting so foolishly.
Perhaps they believe that in the end everything will turn out okay somehow.
Perhaps they are able to rationalize the theft of more than a hundred million dollars an hour from future generations of Americans.
But nothing can erase what they have done to us.  The promising future that our children and our grandchildren should have had has been completely wiped out, and the leading edge of the greatest economic crisis that any of us has ever known is now upon us.
If we had done things differently, things wouldn’t have had to turn out this way.  But now the die is cast, and we are all going to pay a very high price for the mistakes that have been made in Washington.

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Debt lesson not learned: Balance sheets will get more unbalanced in 2016.

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Debt lesson not learned: Balance sheets will get more unbalanced in 2016. http://www.breakingviews.com/21230054.article?h=0fbd8a815090e706b871a083cc524890&s=2 …

8:38 PM - 28 Dec 2015

 

The lesson that too much debt is dangerous has sunk in. But for many companies, the corollary proposition, that too little cash is a killer, seemingly hasn’t. If there’s one thing investors ought to remember heading into the eighth year since the financial crisis, it’s that without healthy cashflows, balance sheets won’t stay balanced for long.
Trading house Glencore is a prime example. As commodity prices continued to plunge in 2015, its net debt of around $30 billion, which investors had previously tolerated, started to look scary. The shares went into freefall. As cashflows dwindled, so did the amount of debt investors would stomach, forcing boss Ivan Glasenberg to hack the dividend, sell assets, cut production and target reduced borrowings of $18 billion.
Weak commodities will wreak more havoc, but rising U.S. interest rates could make matters worse. That’s especially true for emerging markets, which have loaded up on U.S. dollar debt. A currency mismatch is one factor weighing on Brazilian oil major Petrobras. Borrowings in U.S. dollars by non-financial companies had reached $2.3 trillion in developing countries by the end of June, according to the Bank for International Settlements. Mexican, Indonesian and South African borrowers have all roughly doubled their dollar debts since 2009.

http://www.breakingviews.com/21230054.article?h=0fbd8a815090e706b871a083cc524890&s=2
 

What Are The Chances For Peace in 2016? — Ron Paul

Each year more than one trillion dollars goes up in smoke. More accurately, it is stolen from the middle and working classes and shipped off to the one percent. I am talking about the massive yearly bill to maintain the US empire. Washington’s warmongers have sold the lie that the military budget has been gutted under President Obama, but even when the “Sequester” was in effect military spending continued to increase. Only the pace of increase was reduced, not actual spending.

None of this trillion dollars taken from us is spent to keep us safe, despite what politicians say. In fact, this great rip-off actually makes us less safe and more vulnerable to a terrorist attack thanks to resentment overseas at our interventions and to the blowback it produces.

The money is spent to maintain existing conflicts and to create new areas of conflict overseas that in turn feeds the demands for more military spending. It is an endless cycle of theft and deceit.

Billions were spent not long ago overthrowing an elected government in Ukraine and provoking Russia. A new Cold War is a bonanza for the military industrial complex, the pro-war think tanks, and the politicians. NATO is on the move in eastern Europe, placing heavy weapons right on Russia’s border and then blaming the Russians when they complain about the rising militarism. NATO military exercises on Russia’s border have increased and become more confrontational.

In the Middle East, more billions have been spent attempting to overthrow the secular government of Syria over the past five years. The big winners in this grand scheme have been the Islamist extremists, who are funded directly and indirectly by the US and its allies. NATO is planning to go back into Libya, an admission that its 2011 “liberation” of that country has been a disaster.

In Asia, the US empire challenges and provokes China, sending military ships and aircraft into territory China claims in the South China Sea. How much will they continue to escalate before China gets fed up?

The more money sent to the Pentagon and other parts of the Washington war apparatus, the more danger we are in.

Meanwhile, almost all of the presidential candidates promise more military spending and more war if they are elected. Did no one tell them we are broke and making enemies fast with our interventions? Do they think Fed-created money will really continue to fuel the US empire indefinitely?

What are the prospects for a u-turn toward peace and prosperity in 2016? We must be realistic. Presently the numbers are not on our side. But the good news is we do not need a majority to succeed in our fight for peace and liberty. We need only a dedicated and uncompromising critical mass to make great headway.

What can we do to work for peace in 2016? First we must tune out the lying propaganda served up by the US mainstream media. We must educate ourselves so that we can help educate others. We can be sure to tune in and support alternative sources of news and analysis like the Ron Paul Liberty Report, LewRockwell.com, Antiwar.com, and many others. We can tell others about the wealth of truth available to those who seek and question. We must not compromise and never accept the lesser of two evils.

If the people demand peace, the politicians will follow. Let’s demand peace in 2016!

The Best of Ron Paul

Copyright © 2015 by RonPaul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.

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By Ron Paul

The Ron Paul Institute

Jim Rogers Urges Investors to be Worried About Financial Crisis When Fed Raises Rates For Third Time

Global investors should be concerned about potential economic turmoil as the United States is embarking on a recession and the greenback continues to be unsound, says Jim Rogers, chairman of Rogers Holdings and bestselling author of “Hot Commodities.”

Rogers spoke with Bloomberg TV India on Tuesday and told the media outlet that the U.S. is “over-indebted” and maintains the largest amount of debt in the planet’s history.

He further explained that the U.S. dollar is not sound, and with potential turmoil on the horizon, investors believe that the U.S. dollar is a safe haven for them. This is wrong, says Rogers, who thinks the economic downturn will get worse and thus the dollar will grow and transform into a bubble.

This is when he’ll sell the dollar and perhaps buy more gold or even the Chinese renminbi.

“I expect nearly all economies around the world to slow down. In America, we have had nearly six or seven years without a correction in the economy or the markets. It is long overdue. Normally, we have corrections every four to seven years in the United States. So we are overdue,” Rogers stated.

“The debt is going higher and higher. Many of our customers are slowing down — China is slowing down and Japan is in recession. Now, I certainly expect more slowdown to come worldwide.”

Rogers talked once again of the Federal Reserve’s 25 basis points move last week. He noted that he wasn’t impressed and thinks the various moves performed by the Fed lead to more harm than anything else for the U.S. economy.

“The Fed is just made up of bureaucrats and academics. They don’t know very much,” he said. Rogers added that the first rake doesn’t mean much. When the Fed raises rates for the third time then “you have to start worrying.” As part of the Federal Open Market Committee’s (FOMC) statement last week, the Fed expects to increase interest rates a couple of more times in 2016.

“If the Fed raises rates three or four times, then it is usually all over for the stock market. So just keep watching, be worried and be prepared,” he averred.

So just what is Rogers’s investment strategy? To hold gold and silver.

“I expect gold to go under $1,000 an ounce. What does that mean for silver — $12 or $10 an ounce — I haven’t figured it out. But certainly under a $1,000 for gold at which point I hope I am smart enough to take my hedges off and buy a lot of gold — whether its $950 or $900, I don’t know,” he concluded.

At the time of this writing, gold is trading at just under $1,070, while silver is around $14.25.