Yes, even the wonderful residents of Malibu have to put up with the thieves of Sacramento. Jon Coupal is now reporting gangster-like taxing threats from the thieves in Sacramento!
Capone Would Be Proud
By Jon Coupal
Cue the opening theme from the old “Untouchables” TV show that portrayed federal agents fighting Prohibition Era organized crime. In this week’s episode, two men carrying baseball bats enter a small store and tell the proprietor they are selling “insurance.” The first payment is due now.
This is referred to by law enforcement as a “protection racket.”
Today, two Sacramento politicians have come up with a new approach to the old extortion game. In the updated version of the protection racket, those being extorted aren’t just shopkeepers, but everyday working people and their families, and those selling protection, Senate Pro Tem Darrell “The Enforcer” Steinberg and state Treasurer Bill “Leg Breaker” Lockyer may not be wearing fedoras, but they are nearly as menacing as the old gangsters. The threat? If you don’t make a payoff by agreeing to higher taxes, you will be targeted with the loss of state services.
That’s right, in a recent interview, Bill Lockyer recommended that services to California residents whose Representatives refuse to support higher taxes. “If you don’t want to pay for government, well then, you get less of it,” he said. Steinberg agreed saying, he is open to cutting basic services for adults in districts represented by Republicans who oppose increasing taxes.
With their approach, it would not be surprising to find out “The Enforcer” and “Leg Breaker” learned their trade as schoolyard bullies, shaking down weaker students for their lunch money. Now that they have grabbed the levers of government power they are holding up beleaguered Californians who are already paying some of the highest taxes in all fifty states. If you refuse to support additional taxes that will cost the average family a $1000 annually, your services will be cut and your share will be redistributed to areas represented by lawmakers who support the “bosses’” agenda.
This is not a frivolous matter. For example, a vital service provided by the state is Cal Fire. Does this mean that in the event of a major conflagration, Steinberg and Locker will be out with clipboards checking off whose homes are to be saved and whose are to burn? And what about emergency services in the event of a disastrous earthquake?
Californians already feel beaten down. The economy is sputtering and unemployment remains at record highs. Businesses and the jobs they provide are fleeing the state because of high taxes and a government that continues to be hostile to the private sector. Although the number of foreclosures seems to be declining, this may be due to the fact that the homes of the most vulnerable have already been seized, certainly nothing to celebrate.
Still, the politicians in Sacramento refuse to accept the fact that the reason the state has less money is because Californians have less money and these “bully boys” have continued to spend too much. As the old saying goes, “You can’t get blood out of a turnip,” but this does not seem to make any difference to the politicians who are willing to use strong arm tactics to squeeze every last dollar from taxpayers.
It is clear, those who will suffer from this political thuggery are the regular people regardless of party affiliation and these “protection salesmen” don’t care what pain is imposed upon average folks as long as they get their way.
Jon Coupal is president of the Howard Jarvis Taxpayers Association -– California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.
To read this column on the HJTA website, click here.
~ ~ ~
At Malibu Real Estate Confidential, we’d love to hear from you – about real estate, freedom, citizenship and home ownership. You can reach Peter Fleming directly at 310-454-1373 or email him at peterfleming@earthlink.net. For all your home buying and selling needs shouldn’t you choose a real estate agent with a seasoned attitude and a commitment to home ownership?
A Heroic Defense of Taxpayers . . . So Far by Peter Fleming, Malibu Real Estate Confidential
Greetings from Peter Fleming, Malibu’s Citizen Realtor:
For every Malibu property Multiple Listed openly on the market today, there are at least two more distressed properties known as SHADOW INVENTORIES, not listed on the market: preforeclosure; scheduled for auction or bank owned.
It’s clear to me as your Citizen Realtor, that I can help you as an experienced professional, to find the very best property for the amount of money you want to invest, and also, that I can alert you to the weaknesses and political foolishness taking place in California. Call or email me anytime your time, day or night, UK, Greece, China, wherever you are !
Here: a precise update on tyranny, dictatorship, tax madness in Sacramento, from one of our best California citizen friends, JON COUPAL, president of Howard Jarvis Taxpayers Assoc.
A Heroic Defense of Taxpayers . . . So Far
By Jon Coupal
California taxpayers are reminded of the guy who fell off the roof of a high-rise building. As he passed each floor, office workers would call out, “How’s it going?” and to each, he would politely respond, “So far, so good.”
For taxpayers, each day that goes by without having to confront a tax increase is like passing another floor without a bad outcome.
In the movies, the falling man might be saved by a conveniently placed awning that would slow his fall and allow him to survive unscathed. In the real world, the only barrier between average Californians, and the perpetuation of a crushing tax burden, are Republican legislators who have heroically withstood the complaints and threats of the tax-and-spend lobby (and their enablers in the media) and refused to provide the votes to place Gov. Brown’s taxes on the ballot. Although Brown has cajoled and screamed – one lawmaker reports that he was yelled at for an hour at a recent meeting by Brown and company – in an effort to get Republicans to agree to place his massive tax increase on a June special election ballot, these lawmakers have held firm.
Those who want to continue to ride the spending gravy train are trying to portray those who oppose placing five years of high taxes on the ballot as democracy despising, heartless primitives who care nothing about the most vulnerable in our society. They prefer to ignore that their regressive tax program falls disproportionally on those of modest means.
Latest polls show that public support for the governor’s proposed taxes is waning, so why would opponents of higher taxes hesitate to put the matter to a vote? For an answer, one only has to look back to the special election of May, 2009 which featured this same tax package – an extension of temporary taxes that had just been imposed by the Legislature. The well-heeled special interest backers of the taxes, that included some of the largest government employee unions, spent over twenty million dollars on deceptive advertising to try to convince voters to approve tax increases. Television ads and direct mail asking for a yes vote on what was the largest tax increase in the history of all 50 states, never once mentioned the word “taxes.” Although tax promoters outspent the opponents of new taxes by ten-to-one, voters saw through the charade and said no.
Still, this was at the beginning a temporary two year tax increase and the government employee unions, who represent the highest paid public workers in all 50 states, did not feel the same level of desperation as they do now that the taxes are about to expire. Some observers believe the unions are prepared to spend $60 million to guarantee passage of Brown’s tax program.
If the taxes go to the ballot, we can expect to be deluged with expensive television ads showing teachers and firefighters receiving pink slips, as school gates clang shut and calls to 911 go unanswered. They will portray the issue to be about the poor, elderly and disabled – the recipients of government services — when the tax increases are actually to satisfy the government employee union providers of these services. This is why taxpayers see no need to go through the expense of a special election. They do not want to risk that voters will be bamboozled by tens of millions of dollars of misleading advertising when they already spoke clearly on this issue just two years ago.
So it is “So far, so good” for taxpayers and if none of the currently courageous Republicans turns Benedict Arnold, we may still look forward to a soft landing of a return to lower tax rates. Although, even then, Californians will continue to be some of the most heavily taxed citizens in the nation.
Jon Coupal is president of the Howard Jarvis Taxpayers Association -– California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.
Some Rare Common Sense from California, by Peter Fleming, Malibu Real Estate Confidential
As a Citizen Realtor, real estate ownership and fiscal responsibility go together. As a responsible citizen, I believe attorney Jon Coupal, who is President of Howard Jarvis Taxpayers Association is one of California’s finest journalist researchers reporting on the perils of our corrupted, big spending State government in Sacramento, where most of the spending damage is done. Again, I hope you enjoy his intelligence, and even subscribe to COMMENTARY.
Here, Jon describes a new spending cap bill to make balancing the budget California Law…… Senate Constitutional Amendment 10.
It’s the Spending, Stupid
By Jon Coupal
“Government is like a baby,” Ronald Reagan was fond of saying. “An alimentary canal with a big appetite at one end and no sense of responsibility at the other.” If the former California governor were observing Sacramento today, he would probably add that our state government functions more like “triplets,” and has been doing so for more than ten years.
Back at the beginning of the millennium, the California treasury was overflowing due to capital gains tax receipts from what has become known as the “dot.com bubble.” Almost everyone in the state understood that these tax producing profits were the result of a short-term business cycle, and the excessive flow of tax revenue would not be a permanent condition. Unfortunately, there were a small group of Californians who did not understand these basic economic principles, including the majority in the state Legislature and Governor Gray Davis.
These officials responded to the increased revenue by spending it all and committing Californians to pay for expensive long-term programs, like radically increased pensions for government workers, that now have state and local governments facing nearly a half-trillion dollars in unfunded liabilities.
This profligate approach to governing was a contributing factor to the successful recall of Davis. However, governor Schwarzenegger, and the party-hearty lawmakers that continued to dominate the Legislature carried on like there was never a problem. When the state came up short, they used accounting gimmicks that allowed them to carry on spending as if there were no tomorrow.
Between 2003 and 2007, spending increased by one-third. Then the housing bubble burst, and these same suspects imposed the largest tax increase in the history of all 50 states. They had learned their lesson, they said, and pledged to taxpayers they would use the two years of massively higher taxes to buy time to reorganize and reform their spending ways. Two years later, and in spite of California families having paid about two-thousand dollars in extra taxes, the state is now facing a $26 billion shortfall. The “spendaholics” have fallen off the wagon, again.
All of this could have been avoided if the malefactors, who clearly lack self-control, had been compelled to work under a hard spending cap.
Because the politicians that control the Legislature and our current governor – the Department of Finance shows that Governor Brown’s budget will grow 31% by 2015 – are still in a state of denial regarding spending, there is an urgent need to take measures to restore a strict spending limit on state government.
This is why Senator Tony Strickland has introduced Senate Constitutional Amendment No. 10, sponsored by the Howard Jarvis Taxpayers Association, that would impose a firm spending cap on lawmakers. The expenditure limit includes General Fund and special funds, and contains no exemptions for education or local government funding. It creates a reserve of up to 10% of spending; this reserve can only be tapped to backfill revenue shortfalls in the current budget year and to fund non-fiscally related emergencies. Funds could only be used by a Declaration of the Governor and two-thirds vote of the Legislature. Half of the excess revenues beyond the 10% cap would be used to pay off existing debt.
Back when Bill Clinton was running for president, a big sign that read, “It’s the economy, stupid” was placed on his campaign office wall. In an ideal world every member of the Legislature would be required to post a sign on their office wall that said, “It’s the spending, stupid.” Sen. Strickland’s SCA 10 is the taxpayers’ way of sending this message.
Jon Coupal is president of the Howard Jarvis Taxpayers Association -– California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.
As your Citizen Realtor, I believe it’s important to know more about the whole, than just the single, beautiful Malibu property you are considering for purchase. Thinking of moving to Malibu? Consider this as a part of the value of your future purchase.
Too many cities, too much gross spending: City of Los Angeles is right in there with the worst
16 U.S. Cities That Could Face Bankruptcy in 2011
Posted Dec 21, 2010 06:06pm EST by Gus Lubin and Leah Goldman in Recession, Politics
2011 will be the year of the municipal default. At least that’s what analysts like Meredith Whitney predict, as do bond investors that have been fleeing the muni market. There are many reasons to be worried. First, the expiration of Build America Bonds will make it harder for cities to raise funds. Second, city revenues are crashing and keep getting worse. Property taxes haven’t reflected the total damage from the housing crash. High joblessness is cutting into city revenues, while increasing costs for services.
Los Angeles, CA
- Deficit through June 2012: $438 million
- Budget in FY2011: $6.7 billion
- Annualized gap: 4.4%
The Los Angeles City Administration Office plans to cut 225 civilian positions in the LAPD, reduce firefighting staffing, and eliminate a dozen positions in the City Attorney’s Office and General Service Department. The deficit will only get worse unless an effort to privatize parking garages is approved. If not, the city will require more layoffs, furloughs, and curtailed hiring.
Last year’s deficit was even larger, totaling nearly $700,000.
Click HERE to see other big cities in trouble.
At Malibu Real Estate Confidential, we’d love to hear from you – about real estate, freedom, citizenship and home ownership. You can reach Peter Fleming directly at 310-454-1373 or email him at peterfleming@earthlink.net. For all your home buying and selling needs shouldn’t you choose a real estate agent with a seasoned attitude and a commitment to home ownership?
Bernanke: 60 Minutes, 2 Big Lies
Financial Advisor and Fox News personality, PETER SCHIFF delivers a short explosive article on the THE LIES OF Ben Bernanke, from the 60 Minutes interview, as it appeared on Schiff’s site, and posted by Michael Pento.
December 7, 2010
Bernanke: 60 Minutes, 2 Big Lies
This past Sunday on the CBS program “60 Minutes”, Americans received a massive dose of mendacity from our Fed Chairman. Mr. Bernanke’s shaky delivery, and even shakier logic may cause faith in America’s economic leadership to evaporate faster than the value of our dollar. In particular, Bernanke delivered two massive distortions:
Lie #1 – The Fed isn’t printing money. Bernanke stated: “The amount of currency in circulation is not changing…the money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying Treasury securities.” Given that it is the Treasury Department’s Bureau of Engraving and Printing, not the Fed, that actually prints paper money, his statement is technically correct while substantively false. However, Bernanke is buying bank assets with Fed credit. With such an arrangement, printing becomes unnecessary.
According to gentle Ben, credit created to buy something should not be considered money and has no affect on asset prices? But if that’s true, why is he concentrating his buying in the middle of the Treasury yield curve. His stated purpose is to boost bond prices and lower yields in order to stimulate borrowing and aggregate demand. So pushing up bond prices is an act of inflation. Bernanke similarly contradicts himself by saying that he isn’t creating inflation, while at the same time claiming that his easing campaign is designed to boost asset prices to combat the phantom of deflation.
And by the way, the Fed is causing money supply to increase significantly. The compounded annual growth rate of M2 is over 7% in the last quarter. Apparently in the eyes of the Chairman, a 7% annualized increase in the broad money supply isn’t considered significant.
Lie #2- Bernanke is “100 % confident” that, when necessary, the Fed can control inflation and reverse its accommodative monetary policy. He stated, “We’ve been very, very clear that we will not allow inflation to rise above 2 percent. We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time.” He failed to mention that the Fed doesn’t have the will to drain money from the system, without which all tools are useless. The Fed has consistently demonstrated its unwillingness to take the appropriate actions when necessary. In claiming he is 100% confident in his ability to control inflation, Mr. Bernanke ignores the record that during his tenure he has misdiagnosed the economy.
In June of 2006, Bernanke culminated his inflation fighting efforts by raising the Fed Funds target rate to 5.25%, after CPI inflation reached 4.2%. But that interest rate was enough to help burst the housing bubble and to spark an international credit crisis. Bernanke was completely unaware that the Fed actions had created an economy that had become completely addicted to artificially-produced low interest rates and inflation.
Shortly after the collapse of the real estate market and the ensuing truncated deflationary-depression, Bernanke took interest rates to near zero percent. But if the Fed was ever really serious about unwinding excessive leverage, the time had clearly arrived. Instead, the U.S. economy has become more addicted to free money than at any other time in our history.
Commodity prices are soaring once again and the real estate market, banking sector, and the overall economy cling precariously on the arm of government induced bailouts and low interest rates. Even worse, our government has massively increased its level of debt, which now stands at just below $14 trillion. Once the rate of inflation eclipses the Fed’s 2% target rate, which appears likely, how then will the Fed raise rates to contain it? Could the economy then withstand an increase in the cost of home ownership? Most importantly, when will Mr. Bernanke find it politically tenable to dramatically increase debt service payments for the Federal government? In truth, there is never a convenient time to have a severe recession or a depression. Unfortunately, reality can be extremely inconvenient.
Bernanke was accurate in saying that the economy is not expanding at a sustainable pace. Of course, his prescription was the same as it always is; print more money in the misguided belief that inflation will lead to growth. As such, he indicated that it’s possible that the Fed may actually expand bond purchases beyond the $600 billion announced last month. (Remember that the $600 billion comes after the $1.7 trillion that has already been printed, which failed to produce anything much beyond a weaker dollar). Therefore, the country can look forward to yet more inflation, continued anemic GDP growth, a poorer citizenry, and a vastly lower standard of living.
On the bright side, the next segment on 60 Minutes outlined some of the new social networking capabilities being created by Mark Zuckerberg and Facebook. In other words, although our economic misery will likely increase, it should become much easier to share the bad news with friends.
-Michael Pento
Posted by Michael Pento at 10:18 AM
At Malibu Real Estate Confidential, we’d love to hear from you – about real estate, freedom, citizenship and home ownership. You can reach Peter Fleming directly at 310-454-1373 or email him at peterfleming@earthlink.net. For all your home buying and selling needs shouldn’t you choose a real estate agent with a seasoned attitude and a commitment to home ownership?
Financial Advisor DOUG CASEY and his Review of Ben Bernanke on 60 Minutes submitted as a series by Peter Fleming, Malibu Citizen Realtor
The last few blogs we began a detailed look at an article by Gary North featuring an interview Ben Bernenke had with Scott Pelley on 60 Minutes that aired December 5th. Bernenke was indicating he wants the public to believe that the FED can achieve this perfection, despite the fact that the FED’s economists did not see the recession coming, and that he promises that the FED will know when to reverse policy.
Pelley should have asked:
When you reverse the present policy, why won’t the economy go right back into the recession that the FED’s total of $2 trillion in asset purchases, 2008-2011, supposedly will have overcome?
The FED made its announcement on November 3.
On that day, the 10-year T-bond rate was 2.67%. One month later, on Friday, December 3, the weekend of the interview, the rate was 3.03%.
In short, one month after the FED’s announcement, the 10-year rate had climbed by 13.4%. I would hardly call this a ratification by the bond market of the FED’s interest rate-cutting program.
HE MISINFORMS WITH GUSTO
Let’s review his statement again.
We’re not printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way. What we’re doing is lowing interest rates by buying Treasury securities.
To which Pelley might have responded:
Excuse me, professor. The 10-year T-bond rate fell from just under 4% in late 2009 to 2.7% in late 2010, yet the monetary base was stable, year to year. The FED bought nothing, net. In other words, the FED did nothing, yet the rate fell. Now you say that the FED will do something to lower rates – buy T-bonds – and will continue to do this, yet rates have started back up. How do you explain this?
This is the question that Bernanke has been trying to avoid. The explanation is here: “The money supply is not changing in any significant way.” Why is the money supply no higher? Because the banks are not lending. But if they are not lending, because of excess reserves held at the FED, then the fall of T-bond rates had nothing directly to do with the FED’s monetary policy. It had everything to do with its payment of interest, however low, to banks that increased their excess reserves at the FED. If the FED ever imposed a fee to hold both excess reserves and vault cash, the banks would start lending.
Then the man had the audacity to announce this:
We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time. Now, that time is not now.
To which Pelley might have asked:
Excuse me, professor. If T-bond rates fell while the Federal Reserve did nothing for a year, and are now rising after the Federal Reserve has promised to buy T-bonds, exactly what could the FED do that would raise T-bond rates in 15 minutes?
Bernanke wants the public to believe that the FED can produce miracles at no cost: digits into jobs. He says this is not inflationary.
We’re not printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way.
Technically, the FED is not printing money – currency – but that response is deliberately deceptive. The M1 money supply has not changed in any significant way. Over the last year, the monetary base also did not change. The FED says it will increase the purchase of T-bonds by $600 billion. Where will it get the money to do this? Not a printing press, but its functional equivalent: the legal right to create digits in a computer. If this is not the functional equivalent of a printing press, then where will the FED get the money to buy all that debt?
Pelley did not pursue this, because he is not an economist. Let us hope that Ron Paul is allowed to pursue this, beginning next year.
THE CONFIDENCE MAN
I especially enjoyed this exchange.
What we’re trying to do is achieve a balance. We’ve been very, very clear that we will not allow inflation to rise above two percent or less.
Pelley: Can you act quickly enough to prevent inflation from getting out of control?
Bernanke: We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time. Now, that time is not now.
Pelley: You have what degree of confidence in your ability to control this?
Bernanke: One hundred percent.
The man is so sure. He is so confident. The man was equally sure in May of 2007 that the housing market was secure. Let us enjoy this blast from the past.
The rise in subprime mortgage lending likely boosted home sales somewhat, and curbs on this lending are expected to be a source of some restraint on home purchases and residential investment in coming quarters. Moreover, we are likely to see further increases in delinquencies and foreclosures this year and next as many adjustable-rate loans face interest-rate resets. All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system. The vast majority of mortgages, including even subprime mortgages, continue to perform well. Past gains in house prices have left most homeowners with significant amounts of home equity, and growth in jobs and incomes should help keep the financial obligations of most households manageable.
THE THREAT TO THE UNEMPLOYED
Bernanke did his best to scare viewers regarding the long-term effects of unemployment on workers. The longer that an unemployed worker is out of a job, he said, the more rusty he becomes. This rustiness begins to threaten his job prospects.
The other aspect of the unemployment rate that really concerns me is that more than 40 percent of the unemployed have been unemployed for six months or more. And that’s unusually high. And people who are unemployed for such a long time, their skills erode. Their attachment to the labor force diminishes and it may be a very, very long time before they find themselves back in a normal working position.
Think about this. He is talking about six months out of the labor force. In that time, he says, the person’s skills begin to erode. This depends on the nature of the work. If it is hard physical labor, he will get out of shape. But he can get back in shape pretty fast.
In a job requiring technical skills, the technology will not pass him by. Companies do not upgrade software that often. What Bernanke did not say was this: The mindset of the unemployed worker will move from confidence to lack of confidence. That is the big threat, not dexterity with a piece of software.
The real threat is to a person’s self-image. To get back into the job market, he will have to take a pay cut. He is now competing with younger workers who will work for less. He also is facing competition from his peers, who also got laid off. His ability to persuade an employer to take him on as a replacement for someone who was let go has declined.
If he is out for two years, his technical skill sets are likely to erode. Here is the threat. No one imagined in 2008 that this could happen to him. Now it has.
CONCLUSION
Bernanke had no problem fielding Scott Pelley’s questions. He will have a lot more trouble fielding Ron Paul’s, beginning in 2011, assuming the Republican House Establishment allows him to take over as chairman of the subcommittee on monetary policy, and also forces Bernanke to testify before that subcommittee.
If it doesn’t, then we will know for sure that the Republican Establishment is no more a threat to the banking cartel than Barney Frank was.
December 8, 2010
Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com.He is also the author of a free 20-volume series, An Economic Commentary on the Bible.
Copyright © 2010 Gary North
At Malibu Real Estate Confidential, we’d love to hear from you – about real estate, freedom, citizenship and home ownership. You can reach Peter Fleming directly at 310-454-1373 or email him at peterfleming@earthlink.net. For all your home buying and selling needs shouldn’t you choose a real estate agent with a seasoned attitude and a commitment to home ownership?
Peter Fleming – Malibu Citizen Realtor’s Year End Summary Continued
Part Two Federal Reserve Series
I have long enjoyed calling 60 Minutes “The High Ministry of Propaganda”….and this recent Bernanke “privileged” interview exposes the ultimate scam of the Federal Reserve. It is fine proof.
Here is the first of three of the most important articles of 2010 Gary North accurately describes the big propaganda moment, on the recent Sunday, 60 Minutes’ Bernanke interview, where Ben LIES about the Federal Reserve that he oversees, the private bank that monopolizes what’s left of our depreciating official fiat debt paper money system … WHERE BERNANKE LOOKS INTO THE CAMERA, SAYS THERE IS NO INFLATION WHEN THERE IS INFLATION
This is a little thick reading precisely because the over sincere 60 Minutes interviewer, Scott Pelley, doesn’t know his ass, and sincere Ben Bernanke, is trying to act like the former prestidigitator, Alan Greenspan, who preceeded Ben in his own destructive reign.
HOWEVER, Gary North shows the reader what questions Pelley SHOULD HAVE ASKED if he’d known his ass about Austrian School Economics.
AGAIN I think of this as a SAVER… READ IT AGAIN on a cold night..…READ IT in the SPRING TIME….read it until the Fed Deception is BUSTED.
Ron Paul has started ! to bust one of the great thieving scams of both centuries.
Bernanke LIED His Way Through ’60 Minutes’
by Gary North
Recently by Gary North: WikiLeaks’ Marketing Strategy: A Stroke of Genius
Ben Bernanke ought to write country music songs on the side. They would all have the same theme: I cheated on you honey, but take me back one more time.
His appearance on “60 Minutes” on Sunday, December 5, was clearly his attempt to deal with criticism of the Federal Reserve’s policy of purchasing up to $600 billion of Treasury debt – or more, as he admitted.
As part of his justification of his policy – and it really is his policy – he argued that the unemployment rate will not otherwise come down.
The unemployment rate is just not going down. Unemployment is just about the same as it was in mid-2009, when the economy started growing. So, that’s a major concern. And it looks that at current rates, that it may take some years before the unemployment rate is back down to more normal levels.
This is a good public relations approach. The public is legitimately concerned about unemployment. The fact that the government two days before had announced an increase from 9.6% to 9.8% made this issue the main one that the interviewer, Scott Pelley, wanted to talk about. Bernanke did, too.
He is positioning the decision to implement the stimulus as necessary to avoid years of high unemployment.
Between the peak and the end of last year, we lost eight and a half million jobs. We’ve only gotten about a million of them back so far. And that doesn’t even account the new people coming into the labor force. At the rate we’re going, it could be four, five years before we are back to a more normal unemployment rate. Somewhere in the vicinity of say five or six percent.
His sales pitch – for that was what it was, and is – rests on the assumption that, by lowering the 10-year T-bond rate from 3% to (say) 2%, the FED will provide an enormous boost for business. Businessmen will rush into the labor market and begin hiring people.
Why? Why should demand for T-bonds give confidence to businessmen and bankers that the economy is about to recover across the boards?
LOWER T-BOND RATES: SO WHAT?
Pelley is not an Austrian School economist. He was therefore not in a position to ask Bernanke the really tough questions. The toughest question of all is this one:
Why do you think that a reduction of the 10-year T-bond rate, if it even happens, will be sufficient to get banks lending again and businesses hiring again?
He had the opportunity to ask this. He got close to Bernanke’s jugular with this question:
The major banks are racking up profits in the billions. Wall Street bonuses are climbing back up to where they were. And yet, lending to small businesses actually declined in the third quarter. Why is that?
Bernanke had to admit that this has been the case. More than this: the refusal of banks to lend has been the reason why there has been neither a job recovery or mass price inflation. But Pelley did not follow up, and Bernanke skirted the issue.
A lot of small businesses are not seeking credit, because, you know, because their business is not doing well, because the economy is slow. Others are not qualifying for credit, maybe because the value of their property has gone down. But some also can’t meet the terms and conditions that banks are setting.
This is indeed the case. Then the question should have been this:
Then why will your plan work? If T-bond rates are at historic lows, yet small businesses will not or cannot get loans, what will an extra percentage point off the existing rate structure for the Treasury do for private industry?
He of course did not ask this. Instead, he asked:
Is this a case of banks that were eager to take risks that ruin the economy being now unwilling to take risks to support the recovery?
That’s not too bad a question. Better yet would have been this:
Since we know that the Big Four banks – Morgan, Citigroup, Bank of America, and Wells Fargo – have over 50% of the nation’s assets, what did they do with the FED’s bailout money, which enabled them to make record-setting profits?
That would have been impolite, even though the statistic is accurate. (http://bit.ly/BigBankAssets) So, Bernanke spun a self-serving fantasy scenario.
We want them to take risks, but not excessive risks. We want to go for a happy medium. And I think banks are back in the business of lending. But they have not yet come back to the level of confidence that, or overconfidence, that they had prior to the crisis. We want to have an appropriate balance.
Here is the goal: Goldilocks lending. Not too cold (what has been taking place so far), not too hot (not enough loans to convert monetary base inflation to M1 inflation and then price inflation), but just right!
He wants the public to believe that the FED can achieve this perfection, despite the fact that the FED’s economists did not see the recession coming.
Well, this fear of inflation, I think is way overstated. We’ve looked at it very, very carefully. We’ve analyzed it every which way. One myth that’s out there is that what we’re doing is printing money. We’re not printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way. What we’re doing is lowing interest rates by buying Treasury securities. And by lowering interest rates, we hope to stimulate the economy to grow faster. So, the trick is to find the appropriate moment when to begin to unwind this policy. And that’s what we’re gonna do.
Ah, yes: the appropriate moment! At that moment, the FED will reverse its policy. He promises – cross his heart – that the FED will know when to reverse policy.
For the next question that Pelley should have asked, watch for the continuation of this saga tomorrow.
At Malibu Real Estate Confidential, we’d love to hear from you – about real estate, freedom, citizenship and home ownership. You can reach Peter Fleming directly at 310-454-1373 or email him at peterfleming@earthlink.net. For all your home buying and selling needs shouldn’t you choose a real estate agent with a seasoned attitude and a commitment to home ownership?
Peter Fleming – Malibu Citizen Realtor’s Year End Summary
Part One Federal Reserve Series
This is the first of a mini series summarizing our dangerous economy and the relative safety of real estate ownership in the greatest country in the world.
And, within this great country, California is the most beautiful state to live in, and in my personal life experience, within our State, Malibu makes the ideal home.
Although it is made up of a cross roads of intelligent, normal Malibuites, it does attract the rich and famous like a magnet to prove out its worldly value.
The bad news is that Washington carries the nation into massive debt, and our crazed leaders in the State capitol of Sacramento, are racing to ruin us, too.
It’s amazing to drive anywhere in California and see, in plain view, the fabulous natural gifts, farming, the fruit groves, grape growing, the gorgeous residences, new buildings, office structures, industrial parks, residential communities, the massive worldwide shipping harbors, the nations center for computer technology and aerospace engineering, the Hollywood Glamour capitol of the world…and, of course, the endless beaches, for the finest surfing! California is widely declared the twelfth largest business community in the world ! In the real world of private business financially, too.
Despite all this capitalistic, entrepreneurial genius, there are children, greedy irresponsible psychos, bureaucrats, unions and Arnold Schwarzenegger, all doing their damnedest trying to tear down and duplicate another collapsing Greece.
No matter how corrupt, drunken and greedy are our political leaders in their attempts to break down our economy with massive paper debt of devalued dollar there are a few things they cannot control, touch, cannot destroy. Commodities cannot be inflated, printed by the Federal Reserve, and real estate the same.
As paper Euro destroys itself, along with our destruction of paper dollar, hard items will be the mainstay. Real estate, nationwide, is in a great downhill slump.
But, the very upper end Malibu beach properties are starting to reach for new sales highs!. It’s just an indicator, but it’s a powerful one. And it leads to this: key commodities, precious metals mining, metals are all on the rise against the falling dollar. They are first and most sensitive indicators. But I herewith predict that premium real estate is next because it is stable, usable, cannot be duplicated or made to disappear. Land is a rock that will always be there.
Throughout these next few weeks in December, I am presenting several clear cut, reliable financial analysts and their critical comments on Ben Bernanke’s fraudulent 60 Minutes interview that was aired several weeks ago. The fraud of the Federal Reserve is the basic information you and your loved must know and understand for the years ahead.
At Malibu Real Estate Confidential, we’d love to hear from you – about real estate, freedom, citizenship and home ownership. You can reach Peter Fleming directly at 310-454-1373 or email him at peterfleming@earthlink.net. For all your home buying and selling needs shouldn’t you choose a real estate agent with a seasoned attitude and a commitment to home ownership?
Part 2 of a Revealing Dialogue about the Federal Reserve by Malibu Citizen Realtor, Peter Fleming
Continuing from yesterday’s dialogue, you may agree with me that in the long run, with devaluation of our money’s value in fast decline, it’s not going to be too long before real estate values will get back on the inflation bandwagon just like gold and silver are doing. Let’s face it, like precious metals, you just can’t PRINT more real estate. There is no Federal Reserve and Goldman Sachs conspiring to PRINT more land and homes.
The way these con artists do print dollars.
This is really clever and shockingly TRUE dialogue. I would like everybody to read this Q & A about the crookedness of the Federal Reserve. (you know, the privately owned money printers)
Thanks to the AMERICAN REALIST
Peter Fleming, Citizen Realtor
An American realist explains Quantitative Easing 2:
“P” is the American Realist
“JL” is just an American
________
JL So has the Fed ever been right about anything?
P Let me see if I can think of anything. [3 second pause]
No, nothing
JL Who runs the Fed?
P The Fed is run by Ben Bernanke
JL Does Ben Bernanke have a lot of business experience?
P No, Ben Bernanke has no business experience.
JL Does Ben Bernanke have a lot of policy experience?
P No, Ben Bernanke has no policy experience at all.
JL Has Ben Bernanke ever run in an election?
P No, Ben Bernanke has never run in an election.
JL So what qualifies Bernanke to run the Fed?
P I don’t know, maybe it is his real classy beard.
JL But my plumber has a classy beard, and I’d never trust my plumber to play GOD with our economy.
P No, but when you call your plumber to fix something that is broken, he usually comes and fixes it, not make it worse.
JL This is true, my plumber is smarter than Ben Bernanke in that respect.
P Well, that is why he became a plumber, and not an economist.
JL Tell me how the Fed executes this “Quantitative Easing”
P They create the money on computers from nothing, then they buy U S Treasury Bonds.
JL Do they buy the U S Treasury Bonds from the U S Treasury?
P No, they buy the U S Treasury Bonds from Goldman-Sachs.
JL You’ve got to be kidding me.
P No.
JL So let me get this straight. If I want to buy Treasury Bonds with my money I can buy them direct from the U S Treasury.
P Yes.
JL And if you want to buy Treasury Bonds with your money you can buy them direct from the U S treasury.
P Right.
JL But if Bernanke wants to buy Treasury Bonds with the American People’s money, he does not buy them direct from the U S Treasury, he buy them from Goldman-Sachs.
P Exactly
JL And does Goldman-Sachs give Bernanke a good price?
P Of course not, they are Goldman-Sachs, they make their living ripping off the America People.
JL But how is Goldman-Sachs able to do this?
P The Fed announces what it is going to buy and when it is going to buy before it make the purchase.
JL So Goldman-Sachs in effect runs the Fed, and can give them the worst price on U S Treasury Bonds?
P Yes. Exactly.
JL And the Fed is OK with this obvious, blatant theft from the American People?
P Obviously, otherwise the Fed would just buy the bonds direct from the U S Treasury.
JL Who inside the Fed is responsible for buying U S Treasury Bonds in this way?
P The buying of U S Treasury Bonds is conducted by the New York Branch of the Federal Reserve Banks.
JL And who is in charge of the New York Branch of the Federal Reserve Bank?
P William Dudley is in charge of the New York Branch of the Federal Reserve Bank.
JL What did William Dudley do before running the New York Federal Reserve Bank?
P Before running the New York Federal Reserve Bank , William Dudley was a Partner at Goldman-Sachs.
JL So the guy in charge of the American Peoples’ money when dealing with Goldman-Sachs used to be a Partner with Goldman-Sachs?
P Yes.
JL And nobody has a problem with this arrangement?
P Apparently not.
JL Is this an episode of “The Twilite Zone”?
P I don’t think so.
JL Are you sure?
P I am pretty sure
JL So what you are telling me is: The Fed thinks prices are going down when in fact they are going up?
P Yes.
JL And the Fed think that during this current recession, with high unemployment it is better if the things people need to buy costs more money?
P Correct. According to Ben Bernanke, the inflation from his doings will create more jobs and improve the housing market.
JL Has this ever been tried before?
P Yes, just last year. The Fed tried Quantitative Easing with $2 Trillion.
JL Did that create jobs?
P No.
JL Did that help the housing market?
P Not at all.
JL Did it help anybody at all?
P Absolutely. It helped Goldman-Sachs.
JL How much money will they print this time?
P $600 Billion.
JL So even though the first $2 Trillion did not create jobs or help the housing market, Bernanke & The Fed decided to do an additional $600 Billion anyway?
P Yes!!
JL Who put Ben Bernanke in charge of this?
P Bernanke was first put in charge by President Bush, then he was re-appointed by President Obama.
JL But I thought President Obama was supposed to bring change.
P Yes.
JL how is putting in charge the same fool who has been wrong about everything “change we can believe in”?
P Well, under President Bush, Ben Bernanke only blew up the American Economy. Under President Obama, Bernanke is working on blowing up the entire Global Economy.
JL That does not sound like change we can, or should, believe in.
P Definitely not…
JL Who else supports Ben Bernanke?
P Most Economists around the world think that Bernanke’s Quantitative Easing is very, very dangerous.
JL Does anyone think it is a good idea?
P Yes, the people at Goldman-Sachs.
JL Is this some kind of nightmare?
P No, this is very, very real.
JL I want to bang my head against the wall.
P You should not do that
JL Why not?
P Because health care is too expensive, even after Obama’s “reforms”
JL But I thought President Obama & Pelosi fixed Health Care…
P No, but that is a whole new topic, and I have to go. Buh-bye!!
Part 1 of a Revealing Dialogue About Fed Reserve from Malibu’s Citizen Realtor, Peter Fleming
After you’ve read this entertaining Fed Lesson, we’ll call it, you may agree with me that in the long run, with devaluation of our money’s value in fast decline, it’s not going to be too long before real estate values will get back on the inflation bandwagon just like gold and silver are doing. Let’s face it, like precious metals, you just can’t PRINT more real estate. There is no Federal Reserve and Goldman Sachs conspiring to PRINT more land and homes.
The way these con artists do print dollars.
This is really clever and shockingly TRUE dialogue. I would like everybody to read this Q & A about the crookedness of the Federal Reserve. (you know, the privately owned money printers)
At holiday family gatherings, two bright kids can read this! My children loved imitating Bill Cosby, and your kids too, might love this sort of smart home entertainment. I think you’ll agree with me…… it’s The Learning Tree!
Thanks to the AMERICAN REALIST
Peter Fleming, Citizen Realtor
An American realist explains Quantitative Easing 2:
“P” is the American Realist
“JL” is just an American
____________
P Did you hear about the Fed?
JL No, what about the Fed?
P They announced another round of Quantitative Easing.
JL What does Quantitative Easing mean?
P It means the Fed is going to make large asset purchases with money they create from nothing.
JL What does that mean?
P It means they are going to expand their balance sheet and buy Treasuries.
JL What does that mean?
P It means they are going to print a ton of money.
JL So why do they call it Quantitative Easing? Why dont they just call it what it is, printing a ton of money?
P Because the printing a ton of money is the final refuge of failed economic Economic Empires and Banana Republics and The Fed does not want to admit this is their only idea.
JL So why does the Fed want to print money?
P Because they say we have deflation, and deflation is very bad.
JL What is deflation?
P Deflation is when the prices of the things we buy go DOWN
JL Isn’t deflation good? Doesn’t deflation mean people can buy more stuff?
P Yes, but the Fed says this is BAD. Especially during a recession.
JL So they think that during a recession, when people have less money to buy stuff they need, it is bad that prices go down?
P Yes. The Fed would prefer to have inflation.
JL So why does the Fed think we have deflation?
P Because the Consumer Price Index said so.
JL But aren’t food prices higher than a year ago?
P Yes.
JL Aren’t gasoline prices higher than a year ago?
P Yes.
JL Aren’t Health Care costs higher than a year ago?
P Yes.
JL Aren’t Tuition prices higher than a year ago?
P Yes.
JL Aren’t Taxes higher than a year ago?
P Yes.
JL Aren’t subway and bus fares higher than a year ago?
P Yes.
JL Aren’t Stock prices higher than a year ago?
P Yes.
JL Aren’t Bond prices higher than a year ago?
P Yes.
JL So exactly what is deflating right now?
P The only thing deflating that I can see right now is the Fed’s credibility.
JL Did the Fed have a lot of credibility to start with?
P No.
JL Why not?
P Because the Fed has been wrong about every major Economic Development in America in the past 20 years, minimum.
JL You mean they didn’t foresee the major internet stock Bubble in 1999?
P No. In fact, the Fed helped to fuel the internet stock bubble back then.
JL And they didn’t foresee the recent Housing Bubble?
P No. In fact, the Fed helped to create the housing bubble.
JL And they didn’t see the sub-prime/ derivatives crisis?
P No, the Fed said that the sub-prime/ derivatives problems were contained right before the crap hit the fan and Lehman Brothers collapsed. In reality, Lehman Bros was cobbled-up at a fire sale price by a competitor, but that’s another story…
JL So has the Fed ever been right about anything?
STAY TUNED FOR PART TWO….
~ ~ ~
At Malibu Real Estate Confidential, we’d love to hear from you – about real estate, freedom, citizenship and home ownership. You can reach Peter Fleming directly at 310-454-1373 or email him at peterfleming@earthlink.net. For all your home buying and selling needs shouldn’t you choose a real estate agent with a seasoned attitude and a commitment to home ownership?
