Wealth Creation and the Meaning of Life

The Greatest Distance Is Very Short

2010-05-31T09:14:00.000-07:00

You've probably heard the saying "Success is not a destination, but a journey". It is not something achieved quickly. Also, it is almost always begun in the mind first. In a word, it is hope. You have to first make a decision on what you want and what will motivate you to overcome any obstacles along the way. You can learn how if you know what and you have a big enough why.

A new friend of mine put it in perspective for me. She said, "I'm in the transportation business. I help people get from where they are to where they want to go." How eloquent! So where do you want to go? You must know the direction you're headed. A person headed nowhere does not need your help to get there.

How often does this happen - someone else says something to you and all of a sudden the answer just clicks in your brain. How did that happen?

There are two different sides of your brain, the left and right. The left side is where logic and very detailed processes are executed. The right side contains your creativity and imagination. Over time, people tend to develop one side of the brain more than the other. They typically rely on the one side they are most comfortable with. Sometimes it takes just a word to two from someone else to bridge that gap between the left and right side of your brain - a matter of inches.

So what if that bridge didn't exist or was inaccessible? How far can you go on your own? There are people that proclaim to be self-made millionaires. However, in what position were they when they were born? Who fed them when they were little? Who taught them in school? Who put a roof over them while growing up? No man or woman is an island. Everyone needs help to accomplish success.

So I will add this thought to my friend's statement - many times the distance is only an inch or two, but the destination is miles from where they were. Who will be your bridge?

You can learn how if you know the what and you have a big enough why. The journey first begins in your mind. Where are you going?

Thanks Cass!

As iron sharpens iron,
so one man sharpens another. Proverbs 27:17 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire2@hushmail.com

What Is Your Currency?

2010-05-19T08:18:00.000-07:00

Bailouts. Stimulus packages. Bank failures. Foreclosures. All of these things indicate that there is a sickness in our economy, a grave one. Is there really a shortage of money? No. The government proves this every day by printing more and more of it - now by the trillions.

The problem is that too many people don't have enough of it (money, currency) to continue in what they were doing. There is an imbalance. However, let us remember that our currency is only special green paper with numbers on it. Currency is only an accepted medium of exchange. It represents something. It represents faith or stability in our economy. Obviously, we do have a sickness, because things are not very stable.

Consider this - suppose you wake up tomorrow and the currency we are used to has no value at all. It is totally worthless. What would you do?

Obviously, you still need to eat and provide for your loved ones. How would you get those provisions? Would you barter (an exchange of goods and services without money)? What do you have that someone else wants or needs?

Now you really have to think to survive. You would have to use your thoughts, talents, abilities, etc. for real exchange without the convenience of money. Do you have enough?

I assure you that you do have enough if you really think about it. Physical strength, insight, attractiveness, friends, faith, family, health, problem solving capability, etc. are just some of the possessions you already have (in no particular order).

What would you use to survive? What things would you turn to first? What is most easily transferable?

Things are changing. It is likely to get worse, a lot worse. Our dollar is getting worth less and less each time they crank up the printing press. We have less to provide for our loved ones.

What can we do to prepare for more financial sickness when it comes? Now you will have to think on that. If you continue the way things have been, it is likely you will get financially sick also, like the many millions in this country that are under extreme financial pressure. Maybe you are already are. Can you get out from underneath that pressure?

What you do with these questions will likely impact the rest of your life.

As always, the choice is yours.

This bears repeating:
Train a child in the way he should go,
and when he is old he will not turn from it.

The rich rule over the poor,
and the borrower is servant to the lender.

He who sows wickedness reaps trouble,
and the rod of his fury will be destroyed.

A generous man will himself be blessed,
for he shares his food with the poor. Proverbs 22:6-9 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire2@hushmail.com

Quick Tips

2010-03-15T06:51:00.000-07:00

By the way, I'm still alive! I ran across a couple of quick tips that I had to pass along.

For those who would like to end the constant pre-qualified credit offers in the mail - check out www.optoutprescreen.com. It is simple and takes less than a minute to complete. This tip is courtesy of Patrick Kelly, author of Tax Free Retirement. I personally feel that this book is a must read for anyone who would like to achieve financial health, stability, and peace of mind. It is a very concise, effective, and easy read. The book value is priceless!

Also, from Patrick Kelly's endnotes - US National Debt Clock - www.brillig.com/debt_clock/.

Train a child in the way he should go,
and when he is old he will not turn from it.

The rich rule over the poor,
and the borrower is servant to the lender.

He who sows wickedness reaps trouble,
and the rod of his fury will be destroyed.

A generous man will himself be blessed,
for he shares his food with the poor. Proverbs 22:6-9 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire2@hushmail.com

A New Dawn

2010-03-03T09:14:00.000-08:00

In these troubling economic times, things can look pretty bleak. Well, I have received some news that some major changes are coming down the road over the coming months. So hang in there!

"Consider how the lilies grow. They do not labor or spin. Yet I tell you, not even Solomon in all his splendor was dressed like one of these. If that is how God clothes the grass of the field, which is here today, and tomorrow is thrown into the fire, how much more will he clothe you, O you of little faith! And do not set your heart on what you will eat or drink; do not worry about it. For the pagan world runs after all such things, and your Father knows that you need them. But seek his kingdom, and these things will be given to you as well. Luke 12:27-31 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire2@hushmail.com

Starting Over

2009-12-31T10:22:00.000-08:00

On this New Year's Eve for 2009, let us all remember reflecting on the past can serve multiple purposes. First, we can look back on all the good things that we can be thankful for, especially family and friends. If we have our health, we certainly must be thankful for that. Without our health, everything becomes dire.

Second, if we have had challenges, we can be thankful that we survived them or at least we are continuing on. Hope is strictly reserved for those that persevere.

Third, we can forget about our mistakes and grievances. Fretting about personal failures of one form or another does no good. The only good from these are the lessons applied to our lives.

Fourth, we have the opportunity to change our lives for the better in the New Year. Starting over is such a good thing, especially if things have gone badly. We don't have to wait for New Year's Day to do this, we can do this every day. New Year's resolutions don't do anyone any good unless a new good habit is formed. Activities must be done everyday for 21 days to become a habit. 3 short weeks! Who will stick to it? Once the habit is formed, it becomes more difficult to break it. 3 short weeks to a better life - isn't that worth it?

Remember my IKC principle:
Information is not knowledge without action.
Knowledge creates choices.
Choices allow us to change our lives.

As always, the choice is yours!

"The time is coming," declares the LORD,
"when I will make a new covenant
with the house of Israel
and with the house of Judah.

It will not be like the covenant
I made with their forefathers
when I took them by the hand
to lead them out of Egypt,
because they broke my covenant,
though I was a husband to them."
declares the LORD.

"This is the covenant I will make with the house of Israel
after that time," declares the LORD.
"I will put my law in their minds
and write it on their hearts.
I will be their God,
and they will be my people.

No longer will a man teach his neighbor,
or a man his brother, saying, 'Know the LORD,'
because they will all know me,
from the least of them to the greatest,"
declares the LORD.
"For I will forgive their wickedness
and will remember their sins no more." Jeremiah 31:31-34 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire2@hushmail.com

Are You Ready?

2009-10-24T14:48:00.000-07:00

For what? This is the obvious question to this question (unless he replies "for some football!!!).

This depends on you. What are you ready to change in your life? Do you really want to lose weight but have tried nearly everything with no success? Are you tired of the crushing debt with no relief? Are you tired of being alone and want a partner? Maybe you want to reconnect with someone you love but have no idea how to?

The answer lies within you. Motivation to change must come from within, not from someone else. Sure, a friend might make suggestions. A professional might steer you through the maze of legalese. A minister might get you in touch with what is really driving you.

However, it still relies on you to initiate the change. Until then nothing will happen. You have to take the first step. Next, there will always be obstacles. Change is never easy. If it was, you would have already done it long again. You must have the persistence and the willpower to push through or go around those obstacles.

This is the main reason why people do not change. It is too much work to push through the obstacles. They get too used to the idea of the way things are, whether good or bad. It is called their "comfort zone" or "status quo". "Why fix what isn't broken" is a common response of the uninspired.

Here is another way to put it. "Unless you try to do something beyond what you have already mastered, you will never grow." Some are so very comfortable where they are at, they never want to grow.

Some may never start for fear of failing again. Let me address this statement in two parts. Fear is really False Expectations Appearing Real. False expectations are just limits the we place on ourselves. It's our own internal walls or boundaries that we do not want to cross.

The second part of that statement is dealing with failure. Failure is always part of success. I will repeat that. Failure is always part of success. We always learn more from our mistakes than we learn from our successes.

So what is really stopping you. The simple answer - you. Only you can stop you.

"Do or do not, there is no try" is the great quote from Yoda in Star Wars: The Empire Strikes Back.

The simple truth is that if you really want to change, if it's really important to you, you will find a way. There are many words to describe this - persistence, determination, sheer willpower, drive, ambition, etc. All of these ideas come from within you.

As always, the choice is yours.

To those who by persistence in doing good seek glory, honor and immortality, he will give eternal life. Romans 2:7 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@hushmail.com

Pay It Forward

2009-09-19T17:26:00.000-07:00

What have we done to make the world a better place? Think on that a moment. Is humanity better off because of our existence? This is a big responsibility that few have lived up to. Before we start to complain about this or that, ask yourself what you have done to change things, not only for yourself but for others also.

This concept is truly an eye opening experience. It is one that not only could change your life, but change the whole world as well.

In the 2000 movie "Pay It Forward", Social Studies teacher Eugene Simonet played by Kevin Spacey, gives his class an extra credit assignment. He challenges his class to come up with an idea that could change the world, and put it into action.

Trevor McKinney, a bright but troubled 7th grader played by Haley Joel Osment, comes up with the idea that you have to do 3 acts of kindness to others. They are not allowed to repay this act of kindness to the person who did it for them, but to in turn do 3 acts of kindness to others. Thus, they pay the debt forward to the next 3 people challenging them to continue the movement. The rules of multiplication take over, exponentially soon affecting countless numbers.

The rules of the concept are simple. It must be something that they cannot do for themselves.

The characters in this movie have plenty of flaws and problems, just as this world does. From drunkenness, to child abuse, to molestation, to car accidents, to the homeless, to desertion, and on and on.

Trevor tries this concept himself and discovers it is difficult. His attempts do not seem to change anything at first. He helps a homeless man get back on his feet by giving him food and shelter, but angers his mother played by Helen Hunt. His matchmaking attempt with his mother and his teacher does not go very well. Even once he discovers his own boundaries that he cannot cross when he sees another kid from school getting beat up by bullies. He wants to help, but freezes and cannot.

Just like in life, things do not go our way at first and too often we think we failed. But we do not always realize the impact that those actions have on others and the subsequent actions they take. Parents can certainly relate to this, both positively and negatively.

Trevor later is interviewed by a journalist, played by Jay Mohr. The journalist was impacted by the "Pay it forward" movement. He was given a brand new Jaguar after a car accident, and was dumbfounded by the explanation the stranger gave that he is "paying it forward". He begins to investigate the trail of persons affected by the chain reaction of the movement back to its original source of Trevor.

As Trevor is being interviewed, he expresses hope for the concept, but voices concern that people may be too afraid to change their own lives to make the world a better place.

Well, I won't spoil the rest of the movie for those who haven't seen it. It is not one to miss.

This movie was based on a book by the same title written by Catherine Ryan Hyde. Catherine Ryan Hyde's book has also inspired a foundation by the same name.

However, the concept has been around for ages. The term "pay it forward" was popularized by Robert A. Heinlein in his book "Between Planets" in 1951.
"The banker reached into the folds of his gown, pulled out a single credit note. "But eat first — a full belly steadies the judgment. Do me the honor of accepting this as our welcome to the newcomer."
His pride said no; his stomach said YES! Don took it and said, "Uh, thanks! That's awfully kind of you. I'll pay it back, first chance."
"Instead, pay it forward to some other brother who needs it."
The Heinlein society still carries on the philosophy.

Another hero of mine, Theodore P. Kalogris, lived by a motto that was passed to him from his grandfather. "Be ashamed to die until you have scored a victory for mankind". The Kalogris foundation still carries on this philosophy. www.relivkalogrisfoundation.org/US/EN/home.html

Benjamin Franklin wrote about it in a letter to Benjamin Webb dated April 22, 1784.

"I do not pretend to give such a Sum; I only lend it to you. When you [...] meet with another honest Man in similar Distress, you must pay me by lending this Sum to him; enjoining him to discharge the Debt by a like operation, when he shall be able, and shall meet with another opportunity. I hope it may thus go thro' many hands, before it meets with a Knave that will stop its Progress. This is a trick of mine for doing a deal of good with a little money."

Even before that, Jesus shares the parable of the Good Samaritan found below.

So, are we too afraid to embrace this concept? Can we not find 3 instances that we can positively affect the lives of others and instruct them to pay it forward to 3 others? You can only change lives one at a time, but it must start with changing your own to work.

Together, we can all make a difference. Choose to pay it forward.

Where there's life, there's hope.

As always, the choice is yours.

The Parable of the Good Samaritan
On one occasion an expert in the law stood up to test Jesus. "Teacher," he asked, "what must I do to inherit eternal life?"

"What is written in the Law?" he replied. "How do you read it?"

He answered: " 'Love the Lord your God with all your heart and with all your soul and with all your strength and with all your mind'; and, 'Love your neighbor as yourself.'"

"You have answered correctly," Jesus replied. "Do this and you will live."

But he wanted to justify himself, so he asked Jesus, "And who is my neighbor?"

In reply Jesus said: "A man was going down from Jerusalem to Jericho, when he fell into the hands of robbers. They stripped him of his clothes, beat him and went away, leaving him half dead. A priest happened to be going down the same road, and when he saw the man, he passed by on the other side. So too, a Levite, when he came to the place and saw him, passed by on the other side. But a Samaritan, as he traveled, came where the man was; and when he saw him, he took pity on him. He went to him and bandaged his wounds, pouring on oil and wine. Then he put the man on his own donkey, took him to an inn and took care of him. The next day he took out two silver coins and gave them to the innkeeper. 'Look after him,' he said, 'and when I return, I will reimburse you for any extra expense you may have.'

"Which of these three do you think was a neighbor to the man who fell into the hands of robbers?"

The expert in the law replied, "The one who had mercy on him."
Jesus told him, "Go and do likewise." Luke 10:25-37 NIV

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@hushmail.com

The Second Wave

2009-08-15T15:38:00.000-07:00

The second wave of many bank failures is now here. Last year, 25 banks failed. 77 banks have already failed this year. On Friday another large bank, Colonial BancGroup, is now being gobbled up by one of its rivals BB&T. The troubled Colonial was closed earlier by state regulators and a federal judge froze its $25 billion in assets. BB&T is now purchasing $22 billion of Colonial's assets.

Colonial is the sixth largest bank in US history to fail, and by far the largest of 2009 failures. 4 more regional banks also failed on Friday, two in Arizona, one in LasVegas, and one in Pittsburgh.

What does this have to do with the economy or the public? Banks typically fail before violent economic upheavals. They are usually a strong warning of things to come. The FDIC was created to protect deposits in troubled banks. They have raised their protection to $250,000 per depositor. However, what happens if the FDIC runs out of money?

On July 18, 2008, I posted a blog titled "The FDIC" and went into detail about what it does. The FDIC has $49 billion in funds to protect troubled banks, but insures more than $3 trillion in deposits. Is that really enough? The fund took a $35.1 billion hit in 2008, and an additional $4.3 billion decline in the first quarter of this year, leaving it with assets of only $13 billion as of March 31. But most of last year's decline was due to $25 billion the agency set aside to cover future losses.

Last year, financial behemoths such Bear Stearns, Washington Mutual, and Indy Mac all failed. The trickle down effect are now hitting the medium and smaller banks. All of this leads to consolidation. The bigger banks are gobbling up the smaller banks. How much of the government's TARP funds are being used to buy up other assets, rather than loan it to consumers and businesses to get the economy moving again?

My last post on July 31, 2009 included an article from Dan Caplinger about the ultimate sucker's rally that was forming over the last 5 months. In it, he compared the current times to the Great Depression and what happened in early 1930 after the horrendous October market drops of 1929.

I also did a post on March 17, 2008 when Bear Stearns first failed. The next day I reported on how the Federal Reserve responded, and predicted that the stock market will fall in September 2009, six months before it happened! JP Morgan reported to stockholders in March of 1929 to get out of the stock market before the October crash. In early 1930, the market rallied as pointed out by Dan Caplinger. Sounds familiar, doesn't it?

Many times I've pointed out in this blog that history repeats itself. Why? Because the manipulators that have used scenarios already have a model to predict behavior and consequences. The action created in early 1930s was to ultimately acquire more than two thirds of the farms of America and make the farmers tenants on their own lands.

In this century's Great Depression, the aim is different, but similar. Their aim this time will be to grab as much residential and commercial real estate as possible. Once a majority of homeowners are renters again, their level of control will be greater and they will have another piece of their plan is place. That is how it is in most of Europe.

If this sounds too far fetched, go back to the week of August 4, 2008 in this blog where I shared John Loeffler's article "The Sad Road to Socialism". Isn't Obama getting criticized for being a socialist?

These bank failings again only act as a warning. Bloomberg reported yesterday that more than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

The biggest banks with nonperforming loans of at least 5 percent include Wisconsin’s Marshall & Ilsley Corp. and Georgia’s Synovus Financial Corp., according to Bloomberg data. Among those exceeding 10 percent, the biggest in the 50 U.S. states was Michigan’s Flagstar Bancorp. Are these the next victims in the near future?

On August 8, 2008, I shared excerpts of John Loeffler's article "What Will Stop It?" Here are a couple reminders.
Americans have enjoyed so much freedom for so long, they have forgotten that freedom is a fluke in the history of the world; not the norm. Our freedoms were hard-won over hundreds of years of human tears. The current view that freedoms are somehow self-sustaining and "obvious" ignores a primary rule of the political universe, well established in human history: governments and those in them always gravitate toward power, money and control; power for themselves, confiscating money and property from their people, who then have to be controlled lest they protest too much.

The founding fathers thoroughly understood this, having experienced a lack of protections first hand. They understood that government is a necessary evil, not a paternalistic good. In assembling the Constitution, they knew that only a clear statement of citizens' rights would prevent power money and control from having their way.

Every one of our rights was established to protect individual citizens, the minority against the majority and to block abuse of power. "Shall not be infringed" was designed to prevent government encroachment; not as a guide for a "delicate balance" between "liberty" and "security." Delicate balances always collapse uni-directionally toward power, money and control and away from individual freedom!

In a free society, rights protect the individual from the government. In a dictatorship, rights protect the government from the people. If enough legal precedents for end-runs of all the protections contained in the Bill of Rights are allowed to continue unchecked, where will those precedents be taken by future leaders when all protections have been dismantled? What will stop the tyranny that will invariably follow? Nothing.

In essence, when a government goes from being a protector of private property to a plunderer of it, it places itself on a course of chaos, economic ruin and its own ultimate self-destruction.

Are we concerned enough to take action?

As always the choice is yours.

Here is a lesson from Biblical times of Nehemiah.
When I heard their outcry and these charges, I was very angry. I pondered them in my mind and then accused the nobles and officials. I told them, "You are exacting usury from your own countrymen!" So I called together a large meeting to deal with them and said: "As far as possible, we have bought back our Jewish brothers who were sold to the Gentiles. Now you are selling your brothers, only for them to be sold back to us!" They kept quiet, because they could find nothing to say.

So I continued, "What you are doing is not right. Shouldn't you walk in the fear of our God to avoid the reproach of our Gentile enemies? I and my brothers and my men are also lending the people money and grain. But let the exacting of usury stop! Give back to them immediately their fields, vineyards, olive groves and houses, and also the usury you are charging them—the hundredth part of the money, grain, new wine and oil."

"We will give it back," they said. "And we will not demand anything more from them. We will do as you say."

Then I summoned the priests and made the nobles and officials take an oath to do what they had promised. I also shook out the folds of my robe and said, "In this way may God shake out of his house and possessions every man who does not keep this promise. So may such a man be shaken out and emptied!"

At this the whole assembly said, "Amen," and praised the LORD. And the people did as they had promised. Nehemiah 5:6-13 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@hushmail.com

Sucker's Rally?

2009-07-31T20:48:00.000-07:00

I found this today in one of my subscriptions and thought I would share. It is from Motley Fool.

Is This the Ultimate Sucker's Rally?

By Dan Caplinger
July 27, 2009

After seeing the stock market lose more than half its value, the recent rally has brought welcome relief to battered investors. But as stocks continue to plow higher, the question on everyone's mind is whether they'll continue to rise -- or whether smart investors are starting to tiptoe toward the exits before a next wave down.

Of course, how you answer that question depends on a lot on your view of not just the stock market but the overall economy as well. If you believe that the economy has bottomed and that things will only get better from here, then the gains we've seen so far could be just the beginning of the next bull market. On the other hand, many believe that plenty of bad news is yet to come -- and that the stage has been set for the biggest sucker's rally since 1930.

The Great Depression's post-crash rally
For some perspective, take a look at the situation right after the 1929 stock market crash:

From early September 1929 to mid-November, the Dow lost almost 50% of its value.
Then, though, the market rebounded over the next five months until mid-April 1930, as the Dow jumped over 50% and recovered more than half of its previous losses.
Only then did the worst of the fall begin, as the Dow plunged an astounding 85% before bottoming in 1932.

Now compare that to the situation we've faced lately:

From late 2007 to March 2009, the S&P lost about 58% of its value.
Since the March lows, though, the market has rebounded, and the S&P has jumped 47% and recovered about a third of its losses.

So what comes next? If you believe that the Great Depression serves as a reasonable model for what's going on today, then two things pop out. First, the 1930 sucker's rally lasted about five months -- only a few weeks longer than the current rally has run. Second, the current rally has roughly matched the Dow's 50% bounce in 1930, although for the S&P to recover half of its losses since late 2007, it would have to jump to around 1,120, about 15% higher than its current level.

Of course, there are plenty of other models that would lead you to different conclusions. After the 1987 crash, for instance, stocks recovered quickly and kept on moving to new highs in relatively short order. During the 1970s, on the other hand, a substantial recovery for stocks hit a ceiling, and markets traded roughly sideways for much of the rest of the decade.

OK, but what should I do now?
History can't tell you whether stocks will rise or fall tomorrow, but it can give you some good long-term basic rules to follow.

Perhaps the most important lesson is that even in the worst economic downturns, some companies survive and later thrive. While it's difficult to track back long-term returns over 80 years, look at how these Depression-era survivors have done in recent decades:

Stock	Stock Data Available	Average Annual Return
Ford Motor (NYSE: F)	30 years	8.9%
General Electric (NYSE: GE)	45 years	9.4%
JPMorgan Chase (NYSE: JPM)	25 years	10.7%
Procter & Gamble (NYSE: PG)	35 years	11.8%
General Mills (NYSE: GIS)	25 years	15.2%
PepsiCo (NYSE: PEP)	30 years	16.0%
Coca-Cola (NYSE: KO)	45 years	9.4%

Source: Yahoo! Finance.

It's easy to get caught up in markets rising and falling. Obviously, many stocks will track the overall market, and as we've seen over the past two years, it's tough for even the best companies to see good stock performance when the market is plummeting.

But remember: Market barometers like the Dow and S&P 500 are only averages. They're important for index fund investors, but if you've singled out individual stocks to invest in for the long haul, don't let the overall market's direction sway you too much. It’s far more important to focus on the particular business conditions that your companies face and whether they can meet their own unique challenges to keep producing profits for shareholders.

Don't get suckered
I don't know whether this is a sucker's rally or not. But the best way to get suckered is to let the current uncertainty lure you into abandoning your long-term investing plan. Although stocks will inevitably drop again at some point in the future, the best rewards come from promising companies that will survive no matter what happens.

Dan Caplinger

Sounds like good advice to me. Don't get suckered and change your long term approach. However, that is assuming you have a long time before you need your funds. If you approaching retirement, I would not want to be heavily into the stock market now.

As always, the choice is yours.

Wail, you who live in the market district;
all your merchants will be wiped out,
all who trade with silver will be ruined.

At that time I will search Jerusalem with lamps
and punish those who are complacent,
who are like wine left on its dregs,
who think, 'The LORD will do nothing,
either good or bad.'

Their wealth will be plundered,
their houses demolished.
They will build houses
but not live in them;
they will plant vineyards
but not drink the wine. Zephaniah 1:11-13 (NIV)

If you have questions or comments, please feel free to contact me at the address below.

Email: DeltaInspire@hushmail.com

Invisible Prisons

2009-07-01T19:33:00.000-07:00

My last post talked about prisons of the mind. I did an earlier post on November 8, 2008 about invisible boundaries. Both have relevant lessons for all of us.

We learn from our experiences and our environments. However, far too often we learn of what doesn't work, what we shouldn't try, what we failed at, etc. Why don't we spend some energy on learning what works. And more importantly, why don't we spend more time sharing those valuable lessons with others.

Part of the problem with this is we are educated from early on to rely on outside influences such as the school system, the government, the company, the health care system, etc. When what we really should be relying on is our family, our friends, our neighbors, and our faith. Restrictions vs. enablement, entitlement vs. self-sufficiency, reactive vs. proactive. Well, you get the idea. These are lessons taught to us.

When life or the system continually beats us down, we start succumbing to these external forces rather than relying on our inner strength, our drive, our willpower, our belief systems. Once the behavior is witnessed and reinforced, it becomes a recurrent theme. This theme over time becomes an invisible boundary, a internal prison that we confine ourselves to.

So when did this happen to you first? Your childhood? From your parents? In school? When did you stop dreaming about what 'you want to do when you grow up'? Maybe it was during college or after getting your first real job. The reality of working for someone else who controls when you work, when you have vacation, what functions you perform, - all for a meager existence that we may call "a living". Is it really though? Or is it really a confinement that we may never escape from? Ultimately, a prison that the only parole we get is when we die. That is not a living! That is merely an existence, a controlled one with invisible prison bars around us.

America used to be called the land of the free. That is hard to imagine now - what freedom really is. It certainly resembles the land of the enslaved, entitled servants. We are getting more and more dependent on the government, the credit system, the medical and big pharma community, and other systems powered by big multinational conglomerate corporations.

When did we lose our independence? When we stopped using our imagination, our ingenuity, our collective knowledge base that can solve problems! We can get it back any time we want to.

As always, the choice is yours.

You have seen many things, but have paid no attention;
your ears are open, but you hear nothing.

But this is a people plundered and looted,
all of them trapped in pits
or hidden away in prisons.
They have become plunder,
with no one to rescue them;
they have been made loot,
with no one to say, "Send them back."

Which of you will listen to this
or pay close attention in time to come? Isaiah 42:20,22-23 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@hushmail.com

Released from Prison

2009-06-24T20:43:00.001-07:00

Today, I have released myself from prison. I'm not talking about the actual gray bars and cement walls, I'm referring to the prisons of the mind.

How many times do we confine ourselves to be overcome by obstacles? How many problems do we let control our lives? Why do we let others or situations dictate our life rather than making our life what it should be - our life?!!

The answers are simple. We do not search hard enough for solutions. We limit our thinking to what we know, what we believe, what we are capable of. What if we expanded that scope to what others who have already mastered that solution and solved that particular problem? Can we learn from others? Can we use other resources than our own meager intellect?

There are very few problems that are unsolvable. And depending on your faith, there are no problems that God cannot solve. Why don't we let Him? Who is to say that He may lead you to the person that has already solved that problem?

These mental bars prevent us from living our lives the way that we should live them. Release yourself!

As always, the choice is yours.

There will be more to come. Stay tuned ...

And he that searcheth the hearts knoweth what is the mind of the Spirit, because he maketh intercession for the saints according to the will of God.

And we know that all things work together for good to them that love God, to them who are the called according to his purpose.

For whom he did foreknow, he also did predestinate to be conformed to the image of his Son, that he might be the firstborn among many brethren.

Moreover whom he did predestinate, them he also called: and whom he called, them he also justified: and whom he justified, them he also glorified.

What shall we then say to these things? If God be for us, who can be against us?

He that spared not his own Son, but delivered him up for us all, how shall he not with him also freely give us all things?

Who shall lay any thing to the charge of God's elect? It is God that justifieth. Romans 8:27-31 (KJV)

If you have questions or comments, please feel free to contact me at the address below. Email: DeltaInspire@hushmail.com

A New Global Currency

2009-03-31T20:29:00.000-07:00

I ran across this article today and I thought I'd share it. Also, I thought a quick post to let my readers know I'm still kicking.

The following complete article is from Paul Proctor, a freelance writer and regular columnist for NewsWithViews.com - very interesting stuff.

A NEW GLOBAL CURRENCY

By Paul Proctor
March 26, 2009
NewsWithViews.com

It was reported recently that two of the world’s superpowers, Russia and China, have called for a new global currency. I believe they’re doing this because they know that the U.S. is printing huge amounts of dollars right now to pay on its own massive debts – debts that other countries, like China, have been financing for years by purchasing U.S. Treasury Bonds. They understand something that most Americans do not – that the more paper money you print, the less it’s worth – and right now, we’re printing it as fast as we can.

We owe China alone over a trillion dollars. And, that’s just one of many countries that we owe money to – countries that have also been buying our bonds.

You see, when you buy a bond, you’re loaning money and charging interest to the issuer of that bond to be paid upon maturity. If you buy a U. S. Treasury bond, you’re loaning the U.S. government money for them to spend as they see fit.

When you think of bonds, think of bondage.

Well, for years now, other countries have been buying our bonds so we could in turn buy all of their made-overseas stuff. They were essentially loaning their biggest customer the money we needed to buy from them.

That put us in financial bondage to them.

But, now that we’re not buying nearly as much from anyone anymore, resulting in millions of workers being laid off overseas as foreign factories close down, those countries are not buying as many of our Treasury bonds anymore either. In other words, they’re not loaning us near as much money as they once did.

So now, to get America’s bills paid, The Federal Reserve is purchasing those U.S. Treasury bonds other countries used to buy – and to do that, a lot more dollars have to be printed to buy them – and I mean a lot more, because, as most everyone knows by now, our debts are quite extraordinary and growing fast.

Well, who controls the printing of money?

You guessed it – the same folks who are loaning it to us by purchasing our bonds – a very secret and very private institution called The Federal Reserve. I’ll bet you thought they belonged to Uncle Sam, didn’t you? Nope, Uncle Sam belongs to them because, as the bible teaches, “the borrower is servant to the lender” and the lender here is The Federal Reserve.

For those who have a hard time understanding how all this affects the average person, let me put it as simply as I know how: It means that the price of everything you and I buy is going to start going up and up as The Federal Reserve has more and more money printed over the coming months and years until even the basic necessities of life here become unaffordable – or until the U.S. government steps in and starts initiating price controls, which frankly, is just more socialism.

When prices go up, it’s called “inflation.” And, if prices go up really high and really fast, it’s called “hyperinflation.” I prefer to call it what it really is: the deflation of the dollar. In other words, the goods and services we purchase day-to-day are not really increasing in value as much as the dollars we use to buy them with are decreasing in value.

They’re decreasing in value because The Federal Reserve has entirely too many of them printed up to loan out. Again, the more there is of something, including money, the less it’s worth.

This sleight-of-hand system, used by The Federal Reserve for decades, makes consumers blame producers, manufacturers, distributors and retailers for rising prices, when they should be blaming those who print all of that paper money for Congress to waste (I mean spend) – money that is not given to the U.S. government by the Federal Reserve, you understand, but is in fact loaned.

And guess who makes the payments on those loans from The Federal Reserve and pays all of the interest on those piles of paper money created out of nothing?

That’s right – you and I do – in the form of new and higher taxes.

So, every time a new “stimulus” package is announced, recognize it for what it really is: another huge loan to the American taxpayer to benefit somebody else with payments and interest you and I and our children and grandchildren after us (as taxpayers) will be responsible for paying back to that little private bank called The Federal Reserve.

Would you say the name is a little deceiving?

Over time, the American taxpayer gradually goes broke, even with money in the bank, and becomes the slave of a financial system built upon debt that he or she has absolutely no control over and can never repay.

You see, the loan can never be repaid in full because only the principal is created and loaned out by The Fed. You and I, the taxpayer, have to somehow come up with the interest. The Fed doesn’t print interest – only the principal – which means the taxpayer has to keep borrowing principal to repay interest that was never created to begin with.

Breathtaking, is it?

Now, Russia and China are calling for a new global currency because they know what’s coming: The dollar’s collapse into absolute worthlessness. Good grief, it’s barely worth 4 cents now compared to what it was when The Federal Reserve Act was passed back in 1913. So, frankly, it doesn’t have that far to fall; but fall it will, because The Federal Reserve is now mass-producing dollars to loan the U.S. government to pay its bills – which will all have to be paid back with interest (that was never created) to the very same people who made the money out of nothing but ink and paper and then loaned it to us.

Brilliant, huh?

Now, it’s becoming painfully clear to other countries, who have been footing our bills via U.S. Treasury bonds, that some other currency needs to be created ASAP to replace the dollar they’ve been forced to use (as the world’s reserve currency) before it collapses completely and leaves everyone around the world scrambling.

How this will actually play out over the next few years is anyone’s guess. Some believe regional currencies will emerge, like the controversial “Amero” which would purportedly serve the needs of Mexico, Canada and the U.S. in preparation for a world currency later, while others suggest the accelerating global financial crisis will compel the issuance of a world currency straightaway.

In the meantime, here are some questions for you to consider as all this unfolds in the coming days:

1. What’s going to happen to the dollars you have in the bank?

2. Will those dollars be exchangeable for the new currency, whatever it is?

3. If they are exchangeable, will they be worth what the new currency is worth or a lot less?

This is the fiscal future we face, my friends – a future of financial uncertainty.

In spite of these disturbing events, let’s remember that ultimately, our fate is not in the hands of corrupt politicians and greedy bankers who are only men themselves, but rather in the hands of the Lord Jesus Christ who Himself was betrayed for 30 pieces of silver and hung on a cross 2000 years ago to pay an enormous debt that you and I could not, so that we might enjoy the eternal treasures of a kingdom not of this world.

But, even if we lose it all here, by trusting Him as both Lord and Savior, we stand to gain so much more hereafter.

“Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal: But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal” – Matthew 6:19-20.

Related articles:

1. China calls for new reserve currency
2. At G20, Kremlin to pitch new currency
3. Geithner to open China proposal
4. China's U.S. Debt Quandary
5. Fed begins move that could sink dollar

If you have questions or comments, please feel free to contact me at the address below.

Email: DeltaInspire@hushmail.com

Words of Encouragement

2009-02-06T18:13:00.000-08:00

Sorry, it has been way too long since I last made a post.

Here is something I ran across today that is very appropriate, so I thought I would share it.

The world economy is in a downturn, people are getting laid off in mass, governments are bailing out financial institutions, unscrupulous financial gurus bilk billions out of unsuspecting clients, countries are at war, and the list goes on. The media continues to bombard us daily with images and words about scarcity and suffering. If we pay attention to everything they report it only reinforces negativity and makes us withdraw from life robbing us of our personal power.

We have within us the power to create our own world, but in order to awaken this power we need to stop listening to what’s going on with the outside world, especially the media, and concentrate on what we can do with our given space in this world. One by one we can awaken others to do the same and create a world of blessing and abundance. It’s been said that one person can make a difference; so why can’t that person be YOU?

Here’s a quote from Mahatma Gandhi that sums it up best…
“you must be the change you wish to see in the world”

YOU can make a difference beginning today by simply changing the way you think!

Here’s another quote that is still a classic…”for things to change…you’ve got to change and for things to get better…you’ve got to get better.”

Don’t try to change anyone around you, just refocus on changing the only person you can change, and that’s YOU.

As I always point out, the choice is yours.

For everything that was written in the past was written to teach us, so that through endurance and the encouragement of the Scriptures we might have hope.

May the God who gives endurance and encouragement give you a spirit of unity among yourselves as you follow Christ Jesus, so that with one heart and mouth you may glorify the God and Father of our Lord Jesus Christ.

Accept one another, then, just as Christ accepted you, in order to bring praise to God. Romans 15:4-7 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@hushmail.com

Auld Lang Syne

2008-12-31T07:37:00.000-08:00

Nearly everyone is familiar with the popular song sung on New Years Eve. But most have probably wondered what the words actually mean. These three words were the title of a Scottish poem by Robert Burns in 1788 according to www.wikipedia.org. The words literally translated mean "old long since" or more commonly used as "long, long ago".

So as you sing the popular verse tonight, think about what the words really mean.
Should auld acquaintance be forgot,
And never brought to mind ?
Should auld acquaintance be forgot,
And days o' lang syne ?

Should we really wait until the end of the year before we think about our past relationships and friends? What about the people we care about now? As our fast paced lives get more and more hectic year by year, we need to remind ourselves about the truly important people in our lives, past and present.

Let me give you some examples.

I know parents will be able to relate to this. Imagine your loud and obnoxious teenager leaves with the car one afternoon to go to the mall. Hours later he has not returned. You begin to wonder why he has been gone so long. Your anxiety builds with each passing minute. Your imagination begins to think of countless possibilities for the delay, each one becoming more and more distressing. Minutes seem like hours. Hours begin to turn into eternity fearing the most dreadful possible outcomes.

Later that evening, he strolls in the door like nothing has happened. Your frantic nerves are shot. You barrage him with questions about where he was and your concern. You convey that you were about to call the police. He casually answers that he met some friends and went to movie and forgot to call, wondering what the big deal is. How precious is that relationship now when you think that it could have been gone in an instant?

Or, think about what Jimmy Stewart learned in the movie "It's a Wonderful Life". With the help of his guardian angel Clarence, he got to learn what things would be like without him. The town was totally different, the people he cared about did not know him and were much worse off. He was not there to save his little brother from drowning in the frozen pond, and because of that, his little brother never became a war hero saving the lives of many fellow soldiers on a plane. And on and on.

After this lesson sunk in with Jimmy, everything had new meaning. From the movie theater in town to the rickety banister that kept popping off. And of course, his wife, children, friends, and all the other people he helped through his family's savings and loan bank meant so much more to him.

Do we really have to experience some drastic occurrence before we too realize what is really important in our lives? Do we only think about our departed friends and loved ones lost long long ago only one day a year?

Our relationships are precious. From the time God gave Adam a helpmate to him from one of his ribs, we were meant to have others around us to help us and strengthen us.

Let us never forget our loved ones and friends. Not one day a year, but all the time.

But for Adam no suitable helper was found. So the LORD God caused the man to fall into a deep sleep; and while he was sleeping, he took one of the man's ribs and closed up the place with flesh. Then the LORD God made a woman from the rib he had taken out of the man, and he brought her to the man.

The man said,
"This is now bone of my bones
and flesh of my flesh;
she shall be called 'woman,'
for she was taken out of man."

For this reason a man will leave his father and mother and be united to his wife, and they will become one flesh. Genesis 2:20-24 (NIV)

If you have questions or comment, please feel free to contact me at the address below:
Email: DeltaInspire@hushmail.com

The Bucket List

2008-12-20T19:19:00.000-08:00

I apologize to my regular readers for the prolonged absence. The past six months have been very challenging for me personally, so I have not been able to post frequently.

As stated before, I am somewhat of a movie buff. I just had a chance to see the movie "The Bucket List" released last year starring Jack Nicholson and Morgan Freeman. Both men meet in a hospital room where they each are dealing with terminal cases of cancer. One is a billionaire, the other a mechanic. Outside of their imminent futures, they have nothing in common.

They decide to make a list of things to do before they "kick the bucket", but want it to be a positive experience rather than just waiting to die. This brings me back to the title of this blog and why I started writing these posts 15 months ago. What is the meaning of life? How do we want to be remembered? What is our purpose for our lives?

The most telling thing about the movie can be summed up in two questions asked while looking at the Great Pyramids in Egypt. Have you experience joy in your life? Have others experience joy because of you?

There is a lot to contemplate in the last two paragraphs. The question is, do you want to answer those questions?

The past 15 months I've tried to share many insights and things I've picked up over the years. The more I learn, the more questions I have. I don't have all the answers. No one does. I have tried to make a positive difference in the lives of others. I have no regrets. One life at a time. One person at a time.

What about you? What is important to you? What gives your life meaning? On your deathbed, what do you have to say? How do you want to be remembered? Did you have an impact on others?

The last several months the financial markets have been in turmoil to say the least. If you create wealth, does that really change things? In the movie, the billionaire still faced imminent death. It did allow them to do their final wish list and enjoy those experiences that they never had before. But nonetheless, we all die. We cannot take material things with us.

Wealth only allows more choices while you are alive. Because of wealth, you may be able to impact far more people, either positively or negatively. As I like to say, the choice is yours.

What will you put on your bucket list? Don't wait until you have a terminal disease to do it.

Live each day as if it is your last. As always, the choice is yours.

The LORD is my shepherd, I shall not be in want.

He makes me lie down in green pastures,
he leads me beside quiet waters,

he restores my soul.
He guides me in paths of righteousness
for his name's sake.

Even though I walk
through the valley of the shadow of death,
I will fear no evil,
for you are with me;
your rod and your staff,
they comfort me.

You prepare a table before me
in the presence of my enemies.
You anoint my head with oil;
my cup overflows.

Surely goodness and love will follow me
all the days of my life,
and I will dwell in the house of the LORD
forever. Psalm 23 (NIV)

If you have questions or comments, please feel free to contact me at the address below.

Email: DeltaInspire@hushmail.com

New contact information

2008-12-15T18:42:00.000-08:00

Due to a number of reasons, I have a new email account for those who wish to contact me. It is DeltaInspire@hushmail.com.

Please feel free to use it for questions or comments.
DeltaInspire

Being Grateful

2008-11-22T03:27:00.000-08:00

We are fast approaching the holiday of Thanksgiving in America. It is a time when we are to be grateful of the blessings that we have received. It has its roots as being a autumn harvest festival starting with the Plymouth Pilgrims in 1621. There are even records of previous Thanksgivings held at St. Augustine in Florida beginning in 1565, but the Pilgrims are most remembered.

On a lighter note, some in 2008 are simply thankful that the presidential election is over, and the end to constant bombardment in the media of sound bites and commercials trying to sway voters.

This has been a very trying year for many. The stock market is down more than 40%, the economy has been sluggish at best and with a very dim outlook on the near future. What do we have to be grateful for?

Let's just start with the basics. Each of us are still alive and breathing. Nearly everyone of us certainly look like we have not missed a meal in some time. Most of us have loving and caring families that despite differences, tend to make up and come together for the holidays. Most of us have jobs or a way to earn an income for the time being at least. Providing for our families has always been a priority even dating back far before the Pilgrims. And on a more spiritual sense, most believe in a loving God that will provide for our needs.

Despite all that will seem to be the bleakest of times, there are always things to be thankful for. To fall back to the analogy of the half-full glass, there are always positives to be looked at in every situation. Perception is a very personal thing as I have pointed out before. You control what you think and respond, no one else does. When you think otherwise, you are out of control. You become a slave to the situation or person. Exercise your brain. Exercise your freedom to choose.

As always, the choice is yours.

I ask again, what do you have to be grateful for?

O give thanks unto the LORD; for he is good: for his mercy endureth for ever. Psalm 136:1 (KJV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Also please note that you should now be able to leave anonymous comments to this blog without having a Google account (I finally found the settings tab!). If you find an interesting post in the past, feel free to comment.

Invisible Boundaries

2008-11-08T21:07:00.000-08:00

I apologize to my regular readers for my recent absence. I've been out of town for two weeks.

Did you ever think about why your life is the way it is? Before I get into this, read the following sentence and count the number of times the letter f appears.

FINISHED FILES ARE THE RESULT OF YEARS OF SCIENTIFIC
STUDY COMBINED WITH THE EXPERIENCE OF YEARS

How many did you count? Three? Would you be surprised to learn that there are actually six f's in that statement? How many times did you see the word 'of'? It's so simple, that our brain sometimes ignores the obvious even though it might be right in front of us.

Facts do not cease to exist because they are ignored.
--Aldous Huxley

Let me give you something else to think on. Consider the following social experience.

Start with a cage containing five monkeys.

Inside the cage, hang a banana on a string and place a set of stairs under it. Before long, a monkey will go to the stairs and start to climb towards the banana. As soon as he touches the stairs, spray all of the other monkeys with cold water.

After a while, another monkey makes an attempt with the same result - all the other monkeys are sprayed with cold water. Pretty soon, when another monkey tries to climb the stairs, the other monkeys will try to prevent it.

Now, put away the cold water. Remove one monkey from the cage and replace it with a new one. The new monkey sees the banana and wants to climb the stairs. To his surprise and horror, all of the other monkeys attack him.

After another attempt and attack, he knows that if he tries to climb the stairs, he will be assaulted.

Next, remove another of the original five monkeys and replace it with a new one. The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment with enthusiasm! Likewise, replace a third original monkey with a new one, then a fourth, then the fifth. Every time the newest monkey takes to the stairs, he is attacked.

Most of the monkeys that are beating him have no idea why they were not permitted to climb the stairs or why they are participating in the beating of the newest monkey.

After replacing all the original monkeys, none of the remaining monkeys have ever been sprayed with cold water. Nevertheless, no monkey ever again approaches the stairs to try for the banana. Why not? Because as far as they know that's the way it's always been done round here.

So what does bananas and monkeys or counting f's have to do with invisible boundaries? The point is we see what we want to see. We do what we want to do as long as it is accepted among those around us. But is the world that we have around us reality, or is it just the boundaries we constructed to make us comfortable? Did the replaced monkeys ever feel the cold water? No. But they did feel the attacks and learned what not to do. There is an English proverb that says One who makes no mistakes, never makes anything.

Meanwhile, there are opportunities all around us every day to change our lives. Some may be attractive, some not. Just as when we don't see the 'of' because it is so simple, many times others have to point out the obvious before it registers with our brain.

Now, let me add another level of complexity to the situation. Everyone understands what 2 dimensional means such as a piece of paper - length times width, but no depth. 3 dimensional adds depth such as a box or a cube so that something can be stored inside it. The fourth dimension is usually referred to as time. For example, a person can occupy the same space that another person did earlier, such as in a bathroom. For many reasons, it's not a good idea to share the same space at the same time!

So where am I going with all of this? What if you had a chance to meet yourself 30 years from now? What do you think 'your older self' would tell you to do now? Do you think your older self would tell you take more risks or play things more cautiously?

The answer to this really depends on the choices your have made with your life to date. Have you made horrible decisions in the past that carry consequences you are dealing with? Or, have you played it safe and are stuck with your life being boring and uneventful?

Earlier today I was driving to an event with some friends. We were talking about the location of our destination. Since I was driving, I was familiar with one way to go. My friends knew the area better and suggested an alternate route. Let's say it took the same time to get to the destination. Which way was better? Was it the way I had gone hundreds of times or the new way? Was there something wrong with the new way? No.

It's just because I was comfortable with what I knew. Habits are familiar. Our lives are probably comfortable because we are used to our surroundings. But are those lives truly fulfilled? Is living a fulfilled life even a possibility?

Now that we have a new president-elect of Barack Obama, many think that he can bring change. Obviously, this is why he was elected. But I will challenge you this - name one example of just one person you know that their life was made significantly better by a decision made by the government. I would be greatly shocked if there is one.

All the time we wait for someone else to act. It's easy to blame our misfortunes on the economy or the government or the current target of society's persecution. What about us? Don't we make the decisions that direct our lives? Aren't we driving the car of our own life?

As I have described my motto in this blog many times, here it is one more time.

Information is not knowledge without action!
Knowledge creates choices
Choices allow us to change our lives

As always, the choice is yours! Choose your own path wisely.

When pride comes, then comes disgrace,
but with humility comes wisdom.

The integrity of the upright guides them,
but the unfaithful are destroyed by their duplicity.

Wealth is worthless in the day of wrath,
but righteousness delivers from death.

The righteousness of the blameless makes a straight way for them,
but the wicked are brought down by their own wickedness. Proverbs 11:2-5 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

The Boy Who Cried Wolf

2008-10-10T19:35:00.000-07:00

Most have heard the story of the boy who cried wolf! It was one of Aesop's fables written in 1673. For those who haven't heard it, here is a condensed version.

There was a Shepherd Boy who tended his sheep at the foot of a mountain near a dark forest. It was lonely for him, so he devised a plan to get a little company. He rushed down towards the village calling out "Wolf, Wolf," and the villagers came out to meet him. This pleased the boy so much that a few days after he tried the same trick, and again the villagers came to his help. Shortly after this a Wolf actually did come out from the forest. The boy cried out "Wolf, Wolf," still louder than before. But this time the villagers, who had been fooled twice before, thought the boy was again lying, and nobody came to his aid. So the Wolf made a good meal off the boy's flock.

The moral of the story is that a liar will never be believed, even when he is telling the truth.

So why I am writing about this? Well, for the last year, I've included many stories and warnings about the sagging economy and its likely demise. My last post recapping many of those warnings document this fact. I am certainly no liar, but because my warnings may have sounded incredible, they were not listened to by many.

Well, look at what is happening to the economy and the stock market now. Was I lying? Here are a few notes from today's headlines.

US stocks fell for an eight consecutive day during a roller coaster session that sent the Dow Jones Industrial Average to its biggest point swing ever.
The Dow posted its steepest weekly slide ever in its history falling to 8,451.19
The S&P 500 index had its worst week since 1933 falling to 899.22
The Dow and S&P 500 index are down 18.2% for the week, reaching lowest levels in 5 1/2 years
The S&P 500's eight day losing streak is its longest since 1996
Both the Dow and the S&P 500 are down more than 40% since their peaks reached last October
The price of oil dropped below $80 per barrel for the first time in a year on concern the weakening economy will hurt demand
The Main Street Bank of Northville, Michigan and the Meridian Bank of Eldred, Illinois were closed by regulators today, boosting the total to 15 banks that have failed this year
Sellers of credit-default protection on bankrupt Lehman Brothers Holding Inc. will have to pay 91.375 cents on the dollar to settle the contracts, setting up the biggest-ever payout in the $55 trillion derivatives market

That was just today. Earlier in the week, central banks from around the world including the Federal Reserve all lowered their key interest rates by .5 percent or 50 basis points. The federal funds rate in the US is now down to 1.5%. This was a desperate attempt to instill confidence on the crumbling stock markets from around the world. Not even after the $700 billion bailout package which was approved last week eased fears of the rapidly slumping economy.

U.S. Treasury Secretary Henry Paulson signaled his top priority, having secured $700 billion rescue package from Congress, will be to buy equity in financial companies to restore market stability and ensure economic growth.

The International Monetary Fund earlier this week said banks around the world would need $675 billion in fresh capital in the next several years to recover from the credit crisis. The IMF also raised its estimate of losses tied to U.S. loans and securitized assets to $1.4 trillion -- roughly half of which have already been written down or recognized as losses.

Wolf! Maybe someone will listen now.

So what does this all mean? Ordo ab chao. Latin for "order from chaos". If you have read the History of Money series beginning January 28, 2008, you will find that the manipulators have used this formula time and time again throughout history. This is the Hegelian dialect of thesis, antithesis, and synthesis. An event is created to cause a problem, resources are made available to combat or correct the conditions of the problem, and then a solution is created that they always wanted that would not have been possible if the problem didn't exist.

First, the sub-prime mortgage crisis was initially created by the Federal Reserve knocking interest rates down to 1% in 2003. This started a mad frenzy of banks and mortgage companies allowing prospective homeowners to buy homes with little or no money down because money was so cheap. Many got suckered into interest only loans on these mortgages on homes that they could barely afford. When interest rates went back up to 5% in 2005, the corresponding adjustable rate mortgages (ARMs) went up as well. Many ARMs have caps on them allowing only a 1% increase per year. Thus, it took 2-3 years for many of these mortgages to hit monthly payment levels the mortgagees couldn't pay. They start defaulting on these loans (August 2007). The banks and mortgage companies start getting into trouble.

Meanwhile, the big banks and investment firms start bundling big blocks of mortgages as security for investments (credit-default swaps, CDS). Nothing is more secure than real estate, right?! It's like an insurance policy for an investments. But because they called them credit-default swaps, the regulation is not as strict as for insurance. For several years, these investments do really well. Everyone is making money and happy. Little did the buyers of these credit-default swaps know that the mortgages the investments were secured by were very shaky to begin with. (By the way, CDSs are just the tip of the iceberg when you consider the magnitude of the $400 trillion derivative market.)

When the sub-prime mortgage crisis started to unravel, the investment banks and mortgage companies started to sweat. But, most of these derivative investments were sold off to other investors, so they would probably be OK. Then, more and more homes were foreclosed on because people couldn't make their payments. As the foreclosures mounted, the banks could no longer hide their tenuous position. Liquidity dropped because the monthly payments were not being made. This would weaken their reserve requirement with the Federal Reserve of keeping approximately 10% of all money loaned out. Hence, you begin to have bank failures. This also caused many of the mortgage companies that underwrote the loans to have liquidity problems such as Fannie Mae and Freddie Mac.

So the dominoes start falling. Bear Stearns, IndyMac, Fannie Mae, Freddie Mac, Wachovia, Washington Mutual, Lehman Brothers Holding, American Internation Group, etc. etc. Many of the smaller banks and investment companies are getting sold off at pennies on the dollar to the larger banks and to the Treasury. Can the US taxpayer afford this? Absolutely not! But what the heck, what is another trillion or so in debt. The $700 billion bailout is just the beginning.

Gross U.S. debt, which includes debt held by the public and by government agencies, this year reached about $9.6 trillion, or about 68 percent of gross domestic product. The rescue legislation increased the government's debt limit to more than $11.3 trillion from $10.6 trillion. The additional borrowing could push the national debt well past 70 percent of GDP, the highest since the immediate aftermath of World War II, when the U.S. was still paying off war debt.

Let me get back to "order from chaos". This was the plan all along. The World Bank and IMF could not implement all of their plans the way they wanted to. Consolidation was necessary. So it took 5 or 6 years to accomplish. So what! No one really understands the workings of the economy anyway. Who will understand that the Federal Reserve dramatically lowering interest rates in 2003 (after which the economy was already recovering from the high tech bubble burst from 2000-2002) would set off a chain of events that will rapidly consolidate the financial world down to a few major players (Citigroup, JP Morgan Chase, Bank of America, Goldman Sachs, all of which own shares in the privately held Federal Reserve Corporation)? Oh, and whatever these institutions can't buy themselves, the federal government will take over to stabilize the economy throught the bailout packages and the FDIC (another private corporation owned by the Federal Reserve). Sythesis - a solution never before possible.

Many of these lessons were first learned by no other than J.P. Morgan himself when he orchestrated the bank panic of 1907. History repeats itself.

Wolf! Few believed me.

Are you one of the sheep eaten by the big bad wolf? If you haven't been, your time will come soon enough. We are a long way from this sad story being over.

Will fear from the big bad wolf stop you from taking action?

As always, the choice is yours.

O LORD, do not your eyes look for truth?
You struck them, but they felt no pain;
you crushed them, but they refused correction.
They made their faces harder than stone
and refused to repent.

I thought, "These are only the poor;
they are foolish,
for they do not know the way of the LORD,
the requirements of their God.

So I will go to the leaders
and speak to them;
surely they know the way of the LORD,
the requirements of their God."
But with one accord they too had broken off the yoke
and torn off the bonds.

Therefore a lion from the forest will attack them,
a wolf from the desert will ravage them,
a leopard will lie in wait near their towns
to tear to pieces any who venture out,
for their rebellion is great
and their backslidings many.

"Why should I forgive you?
Your children have forsaken me
and sworn by gods that are not gods.
I supplied all their needs,
yet they committed adultery
and thronged to the houses of prostitutes. Jeremiah 5:3-7 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Did You Read the Signs?

2008-10-03T22:17:00.000-07:00

Again, I apologize for the long delays between postings. It has been a very trying time for me. In the future, I will not be able to post as often as I did in the past. The conditions have changed that would make that impossible. But, I will still try to make sense of this crazy financial world and share that with you.

Since we have been in some extremely crazy times in the last several weeks (especially the last two with all the talks of the bailout packages), I thought it fitting to review some of the warnings I issued in this blog. You can be the judge on how accurate I was.

Friday, November 2, 2007
... gold is $806.40, silver is $14.55, oil is $95.93 per barrel ...
The Federal Reserve lowered interest rates another quarter point to 4.5% on Wednesday to bolster the money supply and keep the economy moving. ...
The foreign exchange rates for the Great British Pound, the Euro, the Swiss Franc were all at multi-decade highs against the US dollar.

What does all this mean? The US dollar is getting weaker and weaker, eroding purchasing power of all consumers, increasing the US trade deficit and sending more money out of the country and even less entering. All of this leads to increased pressure for inflation. Now, with the Fed lowering interest rates again this week, they are trying to increase the money supply which further increases inflationary pressures. ... Gas prices will just be one of many things that will cost a lot more.

The road up ahead curves ... stay tuned.

Saturday, November 17, 2007
We are not looking at an eruption, but an implosion of the economy resulting from many factors. The sub prime crash is only one indicator. The declining real estate market, the eroding value of the dollar, the rising prices of more intrinsic precious metals are climbing such as gold and silver, and the continued rising price of oil. All of these are signs.

Now, to fast forward some. When you factor in Social Security facing insolvency within the next decade; and add in the imminent failure of MediCare and MediCaid coupled with the rising number of baby boomers retiring (or trying to), and inflation rising. All of these indicators are leading up to a 'perfect storm' developing. Never before have all of these factors come together at once.

Wednesday, November 21, 2007
When the sub-prime loan issue started happening in August, adjustable rate mortgages were going up and people who couldn't afford the increases started defaulting on their payments. The decrease of incoming funds to the banks started restricting what they could lend out. Private banks had to bail out smaller banks by lending federal funds to keep them open. Then the loans started going into foreclosure, and more money had to be loaned to keep the banks open. Still, thousands of people lost their homes.

This was really bad for our economy, but it was leading to something far worse. The Federal Reserve, dropped the discount rate by 1/2 of percent in their September meeting, a big drop. They had to create more credit to keep the money moving. They again lowered the discount rate another 1/4 percent in October. They were willing to risk inflation to keep the economy from completely stalling. The sudden influx of cash and credit spurred on inflation. With the increasing cost of gas and now consumer goods, everything started going up. As mentioned yesterday, when costs rise and wages don't keep up, the overall economic situation for the consumer decreases each year.

Saturday, December 1, 2007
... Based on the beginning of wave 1 around Aug. 20 at $660 per ounce, gold will very likely go up to a minimum of $960 from its point now in the coming months. The upper target is $1250 per ounce. This wave 3 will likely happen over the next six months. ...
The Elliott Wave target prices for silver on the low end is $18.00 per ounce and the upper target is around $24.50.

Saturday, December 8, 2007
Did you ever notice that the price of gas at the pump goes up almost immediately when oil prices go up? However, when the price of oil goes down, the price at the pump is slow to react. Interesting. Someone is making a lot of money on those slow fluctuations.

Monday, December 10, 2007
The first thing you have to understand is that oil is the currency of the world. Every 1st world country is heavily influenced by the price of oil because of its dependency on oil for energy, transportation, and manufacturing. How long could you or anyone you know last without filling up your car with gas?

The key thing to remember that as one asset classes increases, other classes will either follow suit because they are linked, or act conversely because of the inverse relationship.

Friday, December 14, 2007
So when the flow of money is controlled globally and nationally, it has a direct correlation to how businesses and consumers respond. The price of oil and interest rates are just some of the key variables that they use to dramatically influence the state of the world. Their ultimate goal is to have a world government and complete control over all financial matters. If we ever get to a cashless society, they would control who could buy or sell anything. Naturally, credit card companies would love this idea. Controlling the rates of exchange and money supply is not enough for them. Absolute power corrupts absolutely.

Saturday, December 15, 2007
This past week I've been discussing the inter-relationships among a number of key indicators that drive the world economy. With the price of oil at near record highs and the fallout of the sub-prime mortgage crisis, the global economy was at an edge and was in danger of going into hyperinflation followed by depression. Thousands had lost their homes to defaults, and many banks were on the verge of bankruptcy due to the reduced cash flow from the defaults.

On Thursday Dec. 13th, the 5 major central banks from around the world (the Federal Reserve, the Bank of England, the European Central Bank, the Swiss National Bank, and the Bank of Canada), pooled $114 billion to prop up the global economy by injecting cash into the money markets. On Monday, the Fed will auction off $20 billion in loans and accept a wide range of collateral to spur on the economy. The Bank of England will auction off 11.35 billion pounds on Tuesday. "The banks hope that the new term auction facility at favourable rates will boost liquidity, ultimately benefiting their economies by making it easier for businesses and consumers to borrow money to invest and spend on goods and services."

My personal take on this latest move is that the imminent collapse of the US economy was happening faster than expected. Drastic measures never taken before had to be implemented because some elements of the plan were not fully in place.

Saturday, December 29, 2007
...gold and silver both shot up in value to $839.50 per ounce and $14.81 per ounce respectively.

In January, I expect this trend to continue and even pick up speed. Since putting 114 billion available to banks in loans has not encouraged spending, the value of the dollar will continue to plummet. This will spur on inflation. Double digit inflation for 2008 will almost be assured. The Fed will continue to reduce interest rates, but it will likely slow things down just temporarily as it has since Sept. Gold and silver and other precious metals will continue to climb in value as I mentioned on my Dec. 1st post. The target price I set for gold is $1250 and silver is $24.50 per ounce within 6 months. Those even may be low considering the perfect economic storm that is developing.

The wildcard that remains is what will happen to the price of oil. If oil continues to go up significantly in early 2008, that will accelerate things considerably. If oil inches up, it will be more gradual. The other major developments that can strengthen the economic storm will be events like the US invasion of Iran and the replacement of the US dollar with the Amero. However, I do not expect these events to happen until 2009.

Saturday, January 12, 2008
I've also mentioned that the US dollar has been losing its value over the last year. This has been one of many reasons why gold and silver has been appreciating significantly. The dramatic steps that the Federal Reserve has taken to prop up the dollar has risen the value of the dollar temporarily, as stated in previous Saturday posts. However, since Christmas, the value has started to plummet again, just as I pointed out it would. This week, the US dollar index fell to 76.02.

This is having a ripple effect on other markets as well, as I have also pointed out in previous posts. The stock market is starting to feel the pinch of the sluggish economy. Since the beginning of the 4th quarter, the NASDAQ has fallen more than 6%. The Dow Jones Industrial Average has also dropped 5.6%.

The point I am reiterating is that the economy is headed for a fall. Over the past several months I've given many reasons for this, but the facts are being validated each week. The signs are there.

Saturday, January 26, 2008
This week was very interesting in the financial world. On Monday, the markets were closed in the US because of Martin Luther King, Jr. day; however, stock markets worldwide sank drastically amid concerns about the overall health of the US economy and a pending recession. The current credit crunch as result of last August's sub-prime mortgage meltdown makes the matters worse. These concerns heightened this week due to declining corporate profits and the worse housing report on record. For the first time on record, year-over-year housing prices dropped 13% against 2007 prices. This caused the Federal Reserve to take a drastic step.

Before trading opened on Tuesday, the Fed slashed interest rates three quarters of a percent or 75 basis points. The federal funds rate now is 3.5% and the discount rate was lowered to 4.0%. This was the largest rate drop in 24 years. This move came 8 days before their next scheduled meeting suggesting that they are responding to a problem that couldn't wait. Immediate stimulus to the economy is needed to prevent the market from going into a free-fall.

Saturday, February 2, 2008
The biggest economic problem in history has not been of wars, but what has led to those wars. That is greed.

This week gold closed at $908.70. Silver continued its upward trend to close at $16.84 per ounce. The US dollar index continued its slide to close at 75.47 against the other world currencies. It is nearing an all time low of 74.50, set just a couple months ago.

On Wednesday, the Federal Reserve cut interest rates another 50 basis points, knocking the federal funds rate to 3.0% and the discount rate to 3.5%. The Fed is doing everything it can to keep the economy moving by making cheap money available to banks and businesses. Even the analysts are having a hard time denying that a recession is in full swing.

Nathan Rothschild manipulated the market when Napoleon lost at Waterloo. He sold British bonds at the top of the market and bought them back for a fraction of their worth later that afternoon. By the way, do we have a war going on now? Do we have huge companies and a few bigwigs that are getting rich over the miseries of others in Iraq and Afghanistan? Incidently, what is Iraq and Afghanistan known for? Iraq has lots of oil fields and Afghanistan is the closest path to the sea for oil pipelines from rich oil fields in the southern part of the former Soviet Union. Is the war really on terror or is it just a way to get immense profits?

Furthermore, there will be others today that buy houses, loans, commodities, etc. when prices hit rock bottom. However, we have not come close to hitting rock bottom yet. The economic storm is only getting started. We still have Social Security, Medicare, and Medicaid facing insolvency in the coming years. How will millions of baby boomers pay for their "necessary" prescription drugs after they retire?

Rest assured, there will be people that will profit immensely from these contrived events. Will you just be another victim of their greed?

Saturday, February 9, 2008
The sub-prime mortgage debacle means nothing to most people except the thousands that lost their homes. A recession doesn't mean much to people until their jobs are downsized. A depression starts waking people up, but usually too late. Bank failures are not new (remember the Savings & Loan scandals of the 1980s), but that will wake up some more people. How many banks have been bailed out in the last several of months?

Saturday, February 16, 2008
Today our dollar has the same buying power of 4 cents when compared to the same dollar in 1913. That year we had no national debt, today it is above $9 trillion and rapidly growing.

Is it going to take another stock market crash similar to 1929 where it lost more than 33% of its value in a month before we awake to the implications? The price of gold has gone up more than 50% in the last 18 months to $902.50 as of Friday from $560 per ounce in October of 2006. Silver has also gone up more than 50% in the same time period from $11.01 per ounce to $17.11 on Friday. Oil has hit again $95 a barrel, closing at $95.69 on Friday. The US dollar index closed at 76.03, less than one and one half points off an all time low against the other major world currencies. Can we not see the signs?

Incidentally, we should be aware of an escape clause that we have. This is the very one that presidential candidate Ron Paul is just hoping he can invoke if elected. The last provision of the Federal Reserve Act of 1913, Sec. 30, states, "The right to amend, alter or repeal this Act is expressly reserved." This language means that Congress can at any time move to abolish the Federal Reserve System, or buy back the stock and make it part of the Treasury Department, or to alter the system as it sees fit. It has never done so.

Monday, February 18, 2008
It is interesting to note that President Bush and his administration has spent more money than all other presidents combined. And that was just in his first term! Melanie Hunter, a CNSNews.com Senior Editor, on November 4, 2005, reported that according to the Treasury Department, from 1776-2000, the first 224 years of US history, 42 US presidents borrowed a combined $1.01 trillion from foreign governments and financial institutions, but the Bush administration borrowed $1.05 trillion in his first term as president alone. Do you think spending has gone down in his second term?

Saturday, March 1, 2008
This last Friday, gold closed higher again at $975.10 per ounce. Silver, also up, closed at $19.86 per ounce. Oil rose again and closed at $101.79 per barrel. The US dollar index closed at an all time low of 73.77 against the other major world currencies. If you've made no changes in the last year, and with inflation being over 10%; your net worth has eroded by at least 10%. The immediate future does not see any major signs of improvement either.

Saturday, March 15, 2008
Gold rose again, finally topping the $1000 per ounce barrier closing on Friday at $1003.30 per ounce, of course a record. Silver also gain again this week closing at $20.72 per ounce. The price of oil hit another record closing at $110.15 per barrel. As pointed out many times in this blog, oil is very key to inflation and the price of many things we buy. The price of oil and food are the main components on why real inflation has been in double digits the last couple of years, with no letup in sight. Also, the value of the US dollar index has dropped to a new all-time low at 71.65, again for the 3rd week in a row. This index measures the strength of the dollar against the other world currencies including the Euro, the British pound, the Swiss franc, Japanese Yen, Australian dollar, and others.

Monday, March 17, 2008
On Friday, the Wall Street investment bank Bear Stearns became the first major casualty of the Great Depression of this century. The Federal Reserve, the US central bank, is leading a desperate struggle to prop up one of Wall Street's largest and most historic investment banks, as the credit crisis threatened to spiral into a full-blown banking crisis. The Federal Reserve agreed to offer financing for a proposed buyout from JP Morgan Chase bank and accept $30 billion of Bear Stearns' illiquid assets as collateral. Fed chairman, Ben Bernanke, who pumped $200 billion of loans to cash-strapped institutions last week, said more would be available to help others in distress.

Meanwhile, one UK economist warned that the world is now close to a 1930s-like Great Depression, while New York traders said they had never experienced such fear. The Fed's emergency funding procedure was first used in the Depression and has rarely been used since.

Obviously, as I've been pointing out for months, there will be many problems with the economic storm that has been brewing. Bear Stearns is just the first of many banks that will have to close their doors. We will be examining in more detail the effects of these problems this week and the conditions that have led up to the problems. Ultimately though, this is all part of a planned event by the international bankers that run the World Bank and International Monetary Fund (IMF).

Tuesday, March 18, 2008
Today, the Federal Open Market Committee meeting voted and lowered the federal funds rates to banks by 75 basis points down to 2.25% from 3.00%. This means the Fed is continuing to try and keep the economy moving by making credit more readily available for banks and businesses alike. The banks will find it easier to lend to businesses with a lower rate and in turn can open new loans with the deposit and interest payments made by the businesses.

The good news in all of this is the Fed is not currently repeating the mistakes made in the first Great Depression that began in 1929. After the initial fall of the stock market in October, 1929, the Fed raised interest rates to 6% on November 1, 1929 making the liquidity problem at that time even worse. That constricted an already short money supply and caused the nation to sink deeply into the depression. That action then was by design to ultimately acquire more than two thirds of the farms of America and make the farmer tenants on their own lands.

I've received credible information that the international bankers will collapse the US economy in September 2008. This was linked to the closed door session of Congress last Thursday on March 14th, 2008, letting our policymakers in Washington know ahead of time. Whether this will hold true, only time will tell.

In this century's Great Depression, the aim will be different, but similar. Their aim this time will be grab as much residential and commercial real estate as possible. Once a majority of homeowners are renters again, their level of control will be even greater and they will have another piece of their plan in place.

Thursday, March 27, 2008

$200 billion is the approximate total amount of write-downs announced so far as a result of the current credit crisis.

$14.1 trillion is the size of the entire U.S. economy

And $53 trillion is (drum roll please) the approximate size of this country's bill for the Social Security and Medicare promises we've made.

According to the latest Social Security and Medicare Trustees report (and I use that term loosely since it has the word "trust" in it) released earlier this week, the economic asteroid will first make impact in the year 2019 when the Medicaid trust fund becomes insolvent.

Realizing that Americans have become pretty much numb to these kinds of ridiculous sounding proposals, U.S. Treasury Secretary Henry Paulson tried to up the ante this week. "Without change," he said, "Rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues, and threaten America's future prosperity."

Translation: Every single tax dollar that is sent to Washington will be used to pay for just these two programs.

Monday, March 31, 2008
Over the weekend, the Federal Reserve has sponsored a plan to revamp regulation of the financial system. Did anyone see this coming? ... Their new plan will broaden the control the Federal Reserve has significantly.

For example, the Treasury plan calls for the merger of the Securities and Exchange Commission and the Commodity Futures Trading Commission. The powers of the Securities and Exchange Commission would go into a super agency responsible for business conduct and consumer protection. What does this have to do with the credit crisis in the subprime mortgage industry? Over-leveraged mortgage backed securities is what caused the problem with Bear Stearns.

Here comes the Fed with a solution - give us more control so these events won't happen in the future. If you go back to previous posts in this blog on the History of Money, JP Morgan did this in the Panic of 1907. Franklin D. Roosevelt (at direction from the Federal Reserve) did this in 1933 with the Executive Order 6102 making it illegal to hoard gold by US citizens. The Great Depression was caused by the international bankers. Many farms were lost and handed over to the banks. These events all have one goal, to strip the money from the public and send it to the international bankers who do control the Federal Reserve. How much more can we put up with? When do we actually stand up and say "No more!"?

Take at look at this comment from a finance professor at Drexel University. "These proposals address regulatory problems that may be generally necessary, but none of the suggestions provide ways of dealing with the crisis and economic roots of the crisis," said Joseph Mason.

Wednesday, April 2, 2008
The spiral continues. Even though the Fed and JP Morgan came to the rescue of Bear Stearns, as I pointed out a couple of weeks ago, this is only the first casualty. Freddie Mac and Fannie Mae have received billions in credit from the Fed to continue operation while writing off some of these bad loans. What major bank or investment company will be next?

As banks and companies merge when the weaker companies are gobbled up, more control over the public is gained. Here's an insight. JP Morgan Chase, Goldman Sachs, Lehman Brothers, and Citibank will survive no matter what because they own shares in the Federal Reserve. Other banks and financial institutions may be suspect.

Saturday, April 19, 2008
All of the current moves are designed to increase federal control and minimize the rights of the citizens. With the future plans of the manipulators, the population must be docile and controlled. Remember when I described during the History of Money series the Hegelian dialect of thesis, antithesis, and synthesis. An event is created to cause a problem, resources are made available to combat or correct the conditions of the problem, and then a solution is created that they always wanted that would not have been possible if the problem didn't exist. This formula is used over and over again in history.

Well, the current plan that Tom Raum refers to is to have the Federal Reserve to have more and much broader power and eliminate the "smaller" agencies currently in charge of financial regulation like the SEC (Securities and Exchange Commission) and the FTC (Federal Trade Commission). Again, they are trying to consolidate the power base. Fewer players and more power make is easier to implement their plans. Beware of the changes coming later this year!

The price of oil will likely really shoot up the next month as the travel industry prepares for the upcoming vacation season in the United States. The price at the gas pump always spikes right before Memorial Day so that early vacationers of the summer season are hit with the increased prices. This makes for some huge profits for the oil companies.

Saturday, April 26, 2008
So, now many of the pieces are in place for their plan. You have heard many of these topics discussed in this blog over the last several months - government, politics, business leaders, markets, judicial system, military, the media, entertainment, etc. As long as they have a few key people in every major area listed, they are able to steer the public and policy to favorable terms for their goals. However, because most people do not like being deceived, their plans must be made in secret. That is why you don't hear much about groups like the Council on Foreign Relations, The Trilateral Commission, and the Bilderberg group. Furthermore, they have quasi government agencies to carry out many of their directives such as the World Bank, the International Monetary Fund, the United Nations, the Federal Reserve, the IRS, etc.

Is total control such a far fetched idea now?

... the price of oil continued setting new record levels closing at $118.91 per barrel. The US dollar index rose slightly to 72.67 against the other major world currencies. It should be noted that the Euro, set a all time record against the dollar this week hitting $1.60 USD for one euro before retreating.

Saturday, May 3, 2008
For months, I have passed a lot of information to my readers about many topics. Most of them are extremely important to my future, your future, the future of our country, and the future of the entire world. Have you recognized the importance? Have you acted on the information? Have you taken steps to protect yourself? Or, have you confined yourself to wait and see what happens? As always, the choice is yours.

As I have mentioned in previous posts in this blog regarding one of my mottoes
(the IKC principle) -
Information is not Knowledge without Action,
Knowledge creates Choices,
Choices allow us to Change our lives.

Saturday, May 10, 2008
The increased price of oil not only drives up the price of gasoline, but also everything else. Food will cost more because of increased transportation costs. This also affects most other markets as well, so inflation as a whole goes up. In previous posts in this blog (November 20, 2007), it is important to understand the distinction of core inflation and real inflation. Core inflation, which is reported on news programs, measures the prices of selected consumer goods, but excludes the costs of food and energy. Thus, this figure means very little because everyone is truly affected by the price of food and gas. Therefore, they use this to core inflation number to soften and confuse the public on the real effects. Real inflation is well into double digits.

That is why inflation is really an invisible tax, affecting everyone. The Federal Reserve has so much more power than most people realize.

Thursday, May 15, 2008
a war or preemptive tactical nuclear strike on Iran will not be about their nuclear program, but about the macroeconomic reasons behind the American hegemony being eroded and the Iranian Oil Bourse trading in oil transactions other than the USD.

When an event does happen, it will likely happen in the Strait of Hormuz, the narrowest point between Iran and Saudi Arabia is 34 miles. Roughly 40% of all oil traded globally pass through this strait on way to global oil ports. Currently, some 16-17 million barrels of oil are carried through the narrow channel on oil tankers every day according to the U.S. Energy Information Administration (EIA). Ninety percent of oil exported from Gulf producers is carried on oil tankers through the Strait. Over 75 percent of Japan's oil passes through the Strait.

Because of the strategic location of the Strait, Iran has installed sophisticated anti-ship missiles on the Island of Abu Musa, and therefore controls the critical Strait of Hormuz – where all of the Persian Gulf bound oil tankers must pass. Iran also has a very robust military capability.

Friday, May 16, 2008
When a wayward and corrupt fiscal policy and fiat currency, coupled with runaway government spending, forces a nation to only be able to sustain the value of its currency with bullets, the citizenry of the country involved in wars primarily to sustain its currency have historically first became slaves to their government, and then to the nations that finally conquer them. ... towards the end of the Roman reign, the Roman Empire was doing exactly what America is doing today; attempting to sustain a failed fiat money system with bullets.

Understanding fiat money is not an easy task, and the Federal Reserve, World Bank, and International Monetary Fund have purposely made it that way. They do not want the American people to realize that the money in their wallet loses its value with each new dollar that they print. They do not want people to understand that our money does not become money until it is borrowed. When the Federal Reserve has money printed, when it is in uncut sheets of paper, it is not yet money. After it is cut, bundled, and placed into the Federal Reserve vaults, it still is not money. It only becomes money once it is borrowed.

Saturday, May 24, 2008
The price of gold increased this week to close on Friday at $925 per ounce. Silver also increased to $18.22 per ounce, up more than a dollar per ounce from last week. The price of oil continued to set new weekly highs closing at $131.70 per barrel. The US dollar index also fell to close at 71.99. How long can the credibility of the dollar last?

Over the last few weeks I have made comments about several invisible taxes - one being inflation and the other being the increased costs of fuel (oil, gas, and all the derived products). These invisible taxes are devastating on the general public unless their income is going up substantially. This is why a economic collapse of our markets is very likely, the only question being the timing.

Monday, July 14, 2008
Back on March 17th, 2008, I reported in this blog about the first casualty of the Great Depression of this century. That report was about the imminent collapse and subsequent bailout of Bear Stearns, one of America's longest tenured investment banks. At that time, I mentioned that this would only be the first of many bank failures. Today, we will look at the second casualty - IndyMac, a California based bank that closed its doors on Friday.

IndyMac is ground-zero of the sub-prime crisis and the poster-child of imprudent lending. Founded in 1985 by Countrywide Bank, whose own recent failure was masked by its acquisition by Bank of America, IndyMac pioneered the issuance of so-called Alt-A mortgages to borrowers who do not fully document their income or assets, which typically means borrowers with blemished credit histories or real estate speculators looking to 'flip' houses during the bubble years. Alt-A mortgages were considered to be less risky than the subprime loans which started the current financial crisis last year, so IndyMac's plight may cause everyone to re-think that credit quality fairy tale.

Tuesday, July 15, 2008
The FDIC deposit fund only has $53 billion of assets, and around 10% or perhaps more of that is now going to be used to bail-out IndyMac. So how safe is the FDIC?

Saturday, July 19, 2008
I will disagree slightly with James Turk as to the timing of the imminent collapse of the US dollar. I do not think it will happen this summer, but I believe it will happen in September or October for a lot of reasons. First, the Fed is unlikely to shake things up by raising rates during the summer. Many traders and power brokers on Wall Street take vacations during the summer usually causing the markets to remain fairly stagnant. Once fall returns, all bets are off. Third, the earlier closed door session of Congress in March was rumored to prepare the legislature for financial collapse in the fall. The powder keg is prepared, all that is needed is a spark. Time will tell.

Gold closed slightly lower on Friday from last week at $955.40 per ounce. Silver also closed lower this week at $18.14 per ounce. The price of oil fell $16 per barrel the last four days closing at $128.50 per barrel. Despite these moves, the US dollar index still is languishing but rose slightly to close at 72.17.

Saturday, August 2, 2008
The financial system will collapse before "zero-hour" actually occurs. I think we are seeing signs of it in the desperate measures being employed to nationalize companies which trade on market exchanges as private enterprises. There is simply no way to defend the SEC's decision to selectively enforce the prohibition of naked short selling for 17 ‘fragile' financial companies and to not enforce it for the over 5000 other companies which trade on US stock market exchanges. And plans to rescue Fannie Mae and Freddie Mac breathe of a sort of corporate nationalism. Over time this will deal a massive psychological blow to financial markets.

A couple of weeks ago, William Poole, formerly of the St, Louis Fed warned that Fannie (Mae) and Freddie (Mac) were insolvent. These aren't the warnings of bombastic flamethrowers. These are former respected and responsible government officials who courageously dare to speak the truth!

Saturday, August 9, 2008
... the manipulators do not want a total breakdown of the system. If that happens, too many things are unpredictable such as a revolution. They slowly and methodically control the movements of the economies in their favor, so that they can reap the benefits and have more power and control.

With the bank failure of IndyMac, the insolvency pressures on Fannie Mae and Freddie Mac, and the SEC's decision to prohibit the naked short selling of 17 high profile financial institutions, all of these factors signify that they are losing control on the system. The financial 'wind shear' of inflation (rising prices) and deflation (shortage of liquidity due to the credit crunch) was threatening to tear the economy to pieces.

So, they come up with a new trick. No longer can they play games with the federal funds interest rate by the Federal Reserve (currently at 2%, the lowest since 2004), they began to play more with the price of oil to affect the economy and the global currencies. I ask you, what has transpired in the last three weeks that would cause oil to drop from $147 all the way to $115?

So between the drop in the price of oil and the weakening of the European currencies, the US dollar rose remarkably in strength reaching 75.90 yesterday, a gain of 2.5 index points, the highest since Feb. 21. This is steepest weekly rally by the US Dollar Index since January 2005. This action spurred the S&P 500 to its biggest weekly gain since April. The S&P added 2.9 percent to 1,296.32, the highest since June 25. The Dow Jones Industrial Average increased 3.6 percent to 11,734.32.

Every American is starting to breathe a little easier at the news and will likely resume their spending habits, exactly as the manipulators expected.

Saturday, August 23, 2008
Gold closed on Friday at $824.20 per ounce from $786.00 per ounce last week. Silver also closed higher at $13.41 per ounce from $12.70 per ounce last week. The price of oil closed slightly higher at $114.78 per barrel from last week before retreating after nearly hitting $122 per barrel on Thursday. The US dollar index closed slightly lower at 76.74. Oil has driven these other prices dramatically over the last several weeks.

Well, how do you think I did at reading the signs and predicting the future?

Obviously, I was wrong about the demise of the dollar and the recent drop in oil prices. But in hindsight, that was part of the manipulators plans to give the Fed more power to print more money and have the much bigger banks swallow up the smaller ones at bargain basement prices. The current huge financial bailout is going to be the burden of the taxpayer, and they get more control of the system.

How have you fared over the last year? Are you getting worried? Are you taking action?

As always, the choice is yours.

Set up road signs; put up guideposts. Take note of the highway, the road that you take. Jeremiah 31:21

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Life Lessons

2008-09-19T17:54:00.000-07:00

I apologize to the regular readers for my absence. I have been going through some personal challenges. There are always challenges, but some cause you to really stop and examine elements of your life from top to bottom. This is the case for me at this time.

This brings me back to the title of the blog. What is the meaning of life? More importantly (for everyone), what is the meaning of my life? Wealth can be fleeting. Wealth can create choices. Severe lack of wealth can make you desperate. Of course, there are many kinds of wealth, obviously the financial kind. But how many of you have thought about the other kinds of wealth?

What about the wealth of friendship? Having lots of friends can make tough times so much easier. Having no friends can make the tough times suicidal. Friends are something that we all choose. We choose people as friends because of similar likes and interests, similar experiences, similar goals, similar personalities, even similar misfortunes. Remember, misery loves company. What does it say about you with the friends you have chosen?

On the other side, your family is not chosen, it is inherited. There may be things you hate about your family, things you cherish, things you admire, things you abhor (every teenager can relate to this!), things you emulate, things you strive to change (usually without much luck, unless you exhibit severe perseverance). Whenever we don't have strong feelings toward something, we emulate behaviors we have witnessed. That is why it is inevitable that we display traits of our parents, whether we like it or not. They were around when we were more vulnerable, formative, less experienced as children are. The older we get, the more experience we can draw on to make more informed decisions (choices), but we are always likely to repeat behaviors witnessed previously. History always repeats itself. When things get bad (or sometimes incredibly good as in the case of love), emotions cause us to change. However, change takes incredible energy and usually sacrifice. That is why most prefer their comfort zone, which is one degree or more away from mediocrity.

We are always running away from something, running toward something, or are just plain confused and have no idea which way to go. Keep in mind when it comes to running, are you actually making progress or just running on the hamster wheel getting nowhere? These are things to ponder.

What about emotional wealth? Are you a strong, level-headed person that can be counted on in all situations, or an emotional basketcase that falls apart all the time? Do you have rich, fruitful, deep, meaningful relationships that bless life in every sense of the word? Or is your life filled with shallow, empty, meaningless relationships that are fleeting as the dandelion spores in the wind? Where do fit in the spectrum?

What about spiritual wealth? Many will argue that this is the most important. Have you ever experience the peace of faith? Do you ever realize the power of prayer to lay your troubles at the feet of the Divine Almighty? Have you ever realized that you receive just the things you need when you truly need them, regardless of what you might think at the time? Faith is hope. Despair is unbelief. Think on this.

Tempus fugit (Latin for "time flies"), or more importantly time escapes, never to return. When you think about it, our life is usually very short in the grand scheme of things. Eternity, on the other hand, lasts forever. How long is forever? What do want to be doing forever? Do you have a choice? Free will vs. predestination? Many things to ponder there.

As always, the choice is yours as I constantly remind you in this blog.

Choices are great. They give us some control in this crazy world, but can also be condemning when we choose badly. Some choices are easy, some are hard. Some are simple, many are complex. Many times, you don't know whether your choice was good or bad - maybe for a very long time, maybe indefinitely. But undeniably, it is your choice. As much as we'd like to blame others, or become a victim, we chose elements that put us in nearly every situation. I say nearly, because life always loves a curveball from time to time. One way or another, it is what makes life interesting and unpredictable. How we choose to respond to those situations is again, our choice.

I have heard an analogy that is very good about making life decisions. It involves an airplane flying from London to New York. Because of wind, airplanes never fly straight. They are constantly making tiny corrections to direction to get where they want to go. That plane that takes off from London, being just one degree off continuously, will end up in Venezuela in South America. That is very far from New York.

What about your life? Do you know where you want to go? Are you asleep at the wheel or just uninterested? Or, do you want your life to be carefree and driven by the wind? Maybe you will love Venezuela and hate New York.

All of these questions provide insight into why the human race (very appropriate) is so diverse, so different. That is why we have spectrums of personality, of goals, of behaviors, of ambition, of meaning. You have heard the cliche "variety is the spice of life". Variety is life. No one is the same as another, but we all share common traits. Talk about paradoxes.

Are you going to New York or are you driven by the wind?

Choices. They are such a double edged sword that cuts both ways. They can slay your enemy or cause a mortal wound to yourself.

Be careful. It's your life and you only have one.

The LORD is my shepherd, I shall not be in want.

He makes me lie down in green pastures,
he leads me beside quiet waters,

he restores my soul.
He guides me in paths of righteousness
for his name's sake.

Even though I walk
through the valley of the shadow of death,
I will fear no evil,
for you are with me;
your rod and your staff,
they comfort me.

You prepare a table before me
in the presence of my enemies.
You anoint my head with oil;
my cup overflows.

Surely goodness and love will follow me
all the days of my life,
and I will dwell in the house of the LORD
forever. Psalm 23 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Time Off

2008-08-25T18:55:00.000-07:00

I've decided to take this week off from posting. Enjoy your life, you only have one!

What Americans Want Part II

2008-08-23T18:18:00.000-07:00

Yesterday, I discussed how the captains of industry have used the school system to create an environment of an endless supply of simple docile workers for their businesses. Whenever anyone creates wealth, it is from leverage. This comes from using other resources such as other people's time, energy, money, skills, or even looks.

Some people call this exploitation. Wikipedia defines this with two distinct meanings.

The act of utilizing something for any purpose. In this case, exploit is a synonym for use.
The act of utilizing something in an unjust or cruel manner.

The second definition gets discussed further as involving a persistent social relationship in which certain persons are being mistreated or unfairly used for the benefit of others, or treating others as mere "objects" with little or no consideration for their well-being. This can take the following basic forms.

taking something off a person or group that rightfully belongs to them
short-changing people in trade
directly or indirectly forcing somebody to work
using somebody against his will, or without his consent or knowledge
imposing an arbitrary differential treatment of people to the advantage of some and the disadvantage of others

Most often, the word exploitation is used to refer to economic exploitation; that is, the act of using another person's labor without offering them an adequate compensation. Of course, it depends on which perspective you have to whether this is moral, efficient, intelligent, or good business sense.

This is the backdrop that most Americans today define their lives. Are they getting enough pay for the job they do? Do they get respect and gratitude for their work, or are they just an expendable company asset with a number?

Beyond this, most do not think about the bigger picture of this leverage, about Marxist theory (primarily concerned with the exploitation of an entire segment or class of society by another), or Neoclassical economics (organizational exploitation, whether as an employee is being abused as an asset or conversely as a free loader on the system). Is capitalism just a inherent breeding ground for exploitation?

No, generally Americans do not think about this. Besides the groups fighting for rights of workers, whether here or in third world countries, this does not come up. Is it morally right for global corporate conglomerates to have sweat shops that hire children? The corporate perspective is that they are improving the economic structure of the third world country allowing the employee to have jobs to pay for food for their families. Obviously, the employees may have a different perspective or they may be grateful for the chance at continued existence.

In America today, things are not quite so extreme, but the question still remains. Most do not like their job, their boss, their working conditions, etc., but continue to work their job out of necessity. Do they agree with the idea that America is still the "Land of Opportunity"? Not likely.

In order to numb these thoughts, they seek escape in a variety of forms. TV, movies, sports, travel, vacations, etc. because they lack the resources, skills, or desire to change things. They simply want to forget about the drudgery of their lives by indulging in entertainment. They want to live their lives vicariously through the drama and excitement of others with no risk to themselves. Did you ever think about why the entertainment and sporting industries are so large?

Americas love to immerse themselves in inane but hilarious sitcoms and movies telling themselves that they could not be so silly. They love to root for their favorite team or person in sports at any level of competition, because their livelihood are not on the line if they win or lose. There are even parents that drive their kids relentlessly to achieve the things that they never could. Subconsciously, it's saying "let someone else take the risk and time of developing excellence".

Employees rarely have the power or resources to change things. Employees by definition leave the risk and decisions to others. They offer their time and skill to others for hopefully enough compensation. Is this exploitation or continued existence?

Some attempt to change things, but usually have a number of friends and relatives that discourage them from trying saying it is too risky or doomed to failure. You know the cliche - 'misery loves company'.

Successful entrepreneurs know that failure is a big part of success. You must be willing to fail to achieve success. Success is a process that learns from failure until the right conditions are met.

This is why there are so few that succeed to the upper levels of anything. Most are comfortable in their lives of mediocrity, the norm. There is nothing wrong with this as long as it is economically sustainable.

The problem today is that the middle class of America is being eliminated. People will not go to movies and sporting events if they can't pay their rent or mortgage. Many have been using credit to enjoy these temporary indulgences, always hoping that they will be able to pay for it later. Well, the credit is drying up because the banks can't afford to give any out to people who can't pay it back. Too many financial institutions are failing or starting to become insolvent. Also, all the money printed by the Federal Reserve to keep the economy going is becoming worth less and less due to inflation.

The lesson here is that all things come to an end. The Roman empire didn't last forever. Neither has any other dynasty. American capitalism will end too. The replacement will not be pretty.

So, as to what Americans want will definitely change as conditions change. However, it will likely take drastic times before most will realize that they had chances to change or prevent disaster. Some will never realize the opportunity was within their reach. Others will blame their favorite scapegoat.

Think about it.

As always, the choice is yours.

As with all Saturdays, I will recap the key financial indicators that drive the markets. Precious metals rebounded slightly this week from more than eight month lows. Gold closed on Friday at $824.20 per ounce from $786.00 per ounce last week. Silver also closed higher at $13.41 per ounce from $12.70 per ounce last week. The price of oil closed slightly higher at $114.78 per barrel from last week before retreating after nearly hitting $122 per barrel on Thursday. The US dollar index closed slightly lower at 76.74. Oil has driven these other prices dramatically over the last several weeks. This should not come as a surprise to regular readers.

Do not exploit the poor because they are poor
and do not crush the needy in court,

for the LORD will take up their case
and will plunder those who plunder them. Proverbs 22:22-23 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

What Americans Want

2008-08-22T18:27:00.000-07:00

For the past ten months, I've done what I could to help make a difference in the lives of others. There are many topics on this blog that are about the financial markets and what makes them work, and why things are the way they are. Part of the problem with this, most Americans do not understand finances. This is mostly because the basics financial concepts are not taught in schools. Thus, people tend to gloss over or ignore things that they really don't understand.

As I have pointed out many times in this blog, this is by design. The manipulators want the general population to be uneducated about finances. It makes it easier to change conditions in their favor to gather more of the population's money and thus more control over their lives.

Let's look at this for a moment. A hundred and twenty years ago, most Americans were self-employed. Many were farmers, shopkeepers, tradesmen, etc. They all picked a business that they had interest in and tried to make a living at it. Many of these people were immigrants from other countries who came here because America was the "Land of Opportunity". It was the chance to start over and form a new life for themselves in the manner they chose. They wanted freedom, a chance at financial independence, autonomy. In Europe, everything was controlled by the monarchies and the ruling class.

America became strong because of these independent entrepreneurs. The captains of industry in the 19th century and early 20th century knew that this would not do. Thus, the families of the Rockefellers, Carnegies, Morgans, Harrimans, Vanderbilts, Astors, Hills, Fords, etc. wanted to create an environment that would produce many simple docile workers for the many factories that were going up around America. They knew it would take time, but they knew that success would happen if they were patient. They chose the school system to do this. If they would teach the children to be intimidated by math and finances, they would ignore these subjects later in life. They will want others to make decisions in these areas for them.

This plan has worked with extraordinary success. The current recipe for success is "go to school, get good grades, get a good job". How much autonomy do you have in your job? How much of a chance at financial independence do you have? What kind of security do you have with a job, especially during uncertain financial times rife with lay offs and downsizing?

Now, think about for a minute that the average credit card debt is well over $8,000 per person. Bankruptcies are at an all time high. Foreclosures are at a record pace. The main stream financial markets are all producing dismal investment results. Everyone is feeling the pinch in their wallet. Is this no longer the "Land of Opportunity"?

Today, Federal Reserve chairman Ben Bernanke said that inflation will come under control now that the dollar is stronger and commodity prices are down. He also reiterated that he wants more power for the Federal Reserve to help resolve failing investment banks and a new comprehensive supervision of systemic risk. What total BS! It's like putting the fox in charge of the hen house. The Fed is responsible for the conditions that caused the subprime mortgage crisis to begin with, along with the ailing dollar, and the highly leverage mortgage derivatives that Fannie Mae and Freddie Mac have that put the real estate industry in panic mode.

Tomorrow, I will get more into how this all affects the daily decisions of Americans. Stay tuned ...

The lot is cast into the lap,
but its every decision is from the LORD. Proverbs 16:33 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Fabrication Bottleneck Part II

2008-08-21T18:09:00.000-07:00

Today, I will share the conclusion to James Turk's article titled "A Fabrication Bottleneck or Something More" published on August 17, 2008. James is the founder of www.GoldMoney.com.

Incidentally, though GoldMoney - like many other companies - had a record week, GoldMoney has not experienced any shortages of metal because we transact only in large bars, namely, those that meet the standards of the London Bullion Market Association (LBMA). These bars come into the market daily from refiners and existing stocks, such as those held by central banks. But the shortage of fabricated product has caused me to ponder whether a shortage of LBMA-sized bars might also develop at these low prices. In other words, could gold go into backwardation, meaning the spot month (i.e., physical metal) trades at a premium to future months (i.e., paper promises to pay metal in the future)? A backwardation would be unthinkable in normal times, but these are not normal times.

The extraordinary demand for coins and small bars can be viewed as an early sign that the market is moving into backwardation. In other words, the backwardation is in effect being reflected by higher premiums above spot for physical metal, rather than spot itself rising and going into backwardation.

Central banks do not transact in small bars and their coin transactions are inconsequential compared to the size of the market. So the market for fabricated product is relatively free from government influence. But central banks of course exert a dominant influence on the market for LBMA-sized bars by using their existing gold stocks, and they can keep the spot price for gold (which is determined by the buying/selling of LBMA-sized bars) artificially low by dishoarding gold from their vaults.

So my thought is that if gold does not climb back above at least $900 quickly, a shortage of LBMA-sized bars will develop unless central banks allow their vaults to be cleaned out, much like Ft. Knox was drained in the weeks leading up to the 2-tiered London gold price created in March 1968, with an official price at $35 per ounce and a free-market price well above that level. If central banks allow their vaults to be cleaned out at these current low prices, then look for some contrived government imposed dictum on the gold market, just like they did in March 1968. Price controls would be one possible dictum.

To conclude, the present situation reminds me of August 1976, just weeks before the Democratic Convention confirmed Jimmy Carter as that party's presidential candidate. Gold slid down to $100 per ounce even as the inflation and economic outlooks were worsening. Gold looked dirt-cheap back then even though its price had risen three-fold from just a few years before.

By the end of 1976, gold had climbed 32.3% from its August low. By the end of Carter's presidency four years later, gold climbed more than eight-fold. I wonder where gold will be at the end of the next president's first term in office?

Importantly, the precious metals remain within the clear uptrends. For the past twelve months ending Friday, August 15th, gold is up 17.5% and 7.8% against the US dollar and euro respectively. Silver, however, during the past twelve months is down -6.2% against the euro, but up 2.3% against the US dollar. And while silver's performance may look bad, it is worthwhile keeping in mind that the Dow Jones Industrial Average during this same period is down -9.3%.

James Turk, August 17, 2008

If you would like more detail and to see the historical price charts James is referring to, go to his website at www.GoldMoney.com.

Incidentally, just within the last couple days since August 15, gold rose from $772 per ounce to its current level of $835. Silver also rose from $12.11 per ounce on the 15th to its current level of $13.89.

I personally ran into this situation with Kitco the last couple weeks. I was helping someone purchase silver on August 5th. Today, Kitco claims that they are backlogged with orders and cannot confirm receipt of payment, thus they can not ship the physical silver bars and coins. As alluded to in this article, this is just a made up excuse to give Kitco time to try and find the inventory to fill the demand.

Needless to say, I am not very happy with them, but there is little I can do about it.

These are historic times, whether you realize it now or not. Protect yourself and take the needed steps. If you need assistance in analyzing your options, please contact me.

A good name is more desirable than great riches;
to be esteemed is better than silver or gold.

Rich and poor have this in common:
The LORD is the Maker of them all.

A prudent man sees danger and takes refuge,
but the simple keep going and suffer for it. Proverbs 22:1-3 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Fabrication Bottleneck

2008-08-20T18:50:00.000-07:00

With all of the recent startling market moves and huge other world events such as the attack on Georgia and the Olympics, people are looking for a safe haven. However, there are very few out there. The major financial markets are deeply in the red this year. The traditional safe haven in times of economic uncertainty are precious metals and real estate. Real estate has been brutally beaten down the last year or more. With the sudden dollar rebound, precious metals are at 12 month or more lows. This makes precious metals at "super saver prices" on sale the day after Christmas when shoppers are out in force.

Considering this, I will share the beginning of an article published on August 17, 2008 by James Turk, founder of www.GoldMoney.com. James discusses how precious metal dealers are dealing with the sudden rush of customers when they may not have inventory to satisfy the demand.

A Fabrication Bottleneck or Something More

The Internet is abuzz with reports that precious metal dealers have stopped selling coins and small bars because they have run out of inventory.

For example, Franklin Sanders reports on goldprice.org that his inability to purchase product from his suppliers is something that he has never seen before in his "twenty-eight years of brokering silver and gold." On Friday afternoon, Kitco posted the following notice: "Due to market volatility and higher demand in the entire industry, we are anticipating delays in supply of all bullion products."

The rush out of fiat currency and into precious metals on this latest drop in prices is not just a North American phenomenon. The Times of India reports: "There is a shortage of the yellow metal in the bullion banks and traders."

The bottom line is that it is difficult, if not impossible, to buy coins and small bars. Mints and refiners are back-ordered. Dealer shelves are bare. But the question is, why? Is it just a fabrication bottleneck, or is something else happening?

When I see or hear that store "shelves are bare", my first reaction is that government price controls have been imposed. Price controls always create shortages. But there are no price controls on the precious metals - at least not yet anyway. So absent price controls, the answer to dealer shortages is simply that the price of gold and silver is just too cheap.

To explain this point, there are two different gold markets - the physical market where real bullion is exchanged between hands. And the paper market, where people buy and sell pieces of paper purportedly backed by gold, much of which is highly leveraged. The selling carnage in the paper market from over-leveraged hedge funds has created a buying frenzy by retail investors for fabricated product in the physical market, with many dealers reporting that they have sold out and cannot get their hands on coins and small bars, particularly silver.

In other words, there is presently a huge disconnect between the paper market and the physical market. The demand for physical metal is soaring.

Normally the market is supplied by new material being fabricated and existing products being sold back into the market, but no old products are being sold. In contrast to the paper market where over-leveraged positions have caused distressed and forced selling, existing fabricated product is in strong hands, and unlikely to be dislodged except at much higher prices.

I suspect that this disconnect between the paper market and the physical market means that gold will climb back as rapidly as it fell, creating a "V" bottom. Consequently, the precious metals are likely to snap back as rapidly as they dropped. After all, inflation is a growing problem everywhere, the US federal deficit is ballooning, the global banking system is imploding from losses, inflation-adjusted interest rates in every major currency remain negative, and the euro is reeling because of massive current account gaps in Spain, Portugal and Greece. All of these factors are very gold bullish.

To give you a true picture of just how bad inflation has become, here is what John Williams of Shadow Government Statistics reports in his latest newsletter: "The SGS-Alternate Consumer Inflation Measure, which reverses gimmicked changes to official CPI reporting methodologies back to 1980, rose to a 28-year high of roughly 13.4% in July, up from 12.6% in June." It's no wonder that the demand for precious metal coins and small bars is so strong.

Tomorrow, we will conclude with James Turk's article and how the precious metal dealers are responding to the huge demand.

Listen, for I have worthy things to say;
I open my lips to speak what is right.

My mouth speaks what is true,
for my lips detest wickedness.

All the words of my mouth are just;
none of them is crooked or perverse.

To the discerning all of them are right;
they are faultless to those who have knowledge.

Choose my instruction instead of silver,
knowledge rather than choice gold,

for wisdom is more precious than rubies,
and nothing you desire can compare with her.

"I, wisdom, dwell together with prudence;
I possess knowledge and discretion. Proverbs 8:6-12 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Wag the Dog Part II

2008-08-19T02:10:00.000-07:00

Today, we will continue with Ellen Brown's article titled "Wag the Dog: How to Conceal Massive Economic Collapse". As usual, the manipulation going on is far beyond just the financial markets. Money is one thing, total control is another.

"There’s a crisis in the White House, and to save the election, they’d have to fake a war."

Perhaps that explains the sudden breakout of war in the Eurasian country of Georgia on August 8, just 3 months before the November elections. August 8 was the day the Olympic Games began in Beijing, a distraction that may have been timed to keep China from intervening on Russia’s behalf. The mainstream media version of events is that Russia, the bully on the block, invaded its tiny neighbor Georgia; but not all commentators agree. Mikhail Gorbachev, writing in The Washington Post on August 12, observed:

"What happened on the night of Aug. 7 is beyond comprehension. The Georgian military attacked the South Ossetian capital of Tskhinvali with multiple rocket launchers designed to devastate large areas. Russia had to respond. To accuse it of aggression against "small, defenseless Georgia" is not just hypocritical but shows a lack of humanity. . . . The Georgian leadership could do this only with the perceived support and encouragement of a much more powerful force."

Bruce Gagnon, coordinator of the Global Network against Weapons and Nuclear Power, commented in OpEdNews on August 11:

"The U.S. has long been involved in supporting ‘freedom movements’ throughout this region that have been attempting to replace Russian influence with U.S. corporate control. The CIA, National Endowment for Democracy . . . , and Freedom House (includes Zbigniew Brzezinski, former CIA director James Woolsey, and Obama foreign policy adviser Anthony Lake) have been key funders and supporters of placing politicians in power throughout Central Asia that would play ball with ‘our side’. . . . None of this is about the good guys versus the bad guys. It is power bloc politics . . . . Big money is at stake . . . . [B]oth parties (Republican and Democrat) share a bi-partisan history and agenda of advancing corporate interests in this part of the world. Obama’s advisers, just like McCain’s (one of his top advisers was recently a lobbyist for the current government in Georgia) are thick in this stew."

Brzezinski, who is now Obama’s adviser, was Jimmy Carter’s foreign policy adviser in the 1970s. He also served in the 1970s as director of the Trilateral Commission, which he co-founded with David Rockefeller Sr., considered by some to be the "master spider" of the Wall Street banking network. Brzezinski later boasted of drawing Russia into war with Afghanistan in 1979, "giving to the Soviet Union its Vietnam War." Is the Georgia affair an attempted repeat of that coup? Mike Whitney, a popular Internet commentator, observed on August 11:

"Washington’s bloody fingerprints are all over the invasion of South Ossetia. Georgia President Mikhail Saakashvili would never dream of launching a massive military attack unless he got explicit orders from his bosses at 1600 Pennsylvania Ave. After all, Saakashvili owes his entire political career to American power-brokers and US intelligence agencies. If he disobeyed them, he’d be gone in a fortnight. Besides an operation like this takes months of planning and logistical support; especially if it’s perfectly timed to coincide with the beginning of the Olympic games. (another petty neocon touch) That means Pentagon planners must have been working hand in hand with Georgian generals for months in advance. Nothing was left to chance."

Part of that careful planning may have been the unprecedented propping up of the dollar and bombing of gold and oil the week before the curtain opened on the scene. Gold and oil had to be pushed down hard to give them room to rise before anyone shouted "hyperinflation!" As we watch the curtain rise on war in Eurasia, it is well to remember that things are not always as they seem. Markets are manipulated and wars are staged by Grand Chessmen behind the scenes.

Ellen Brown, August 14, 2008

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, and Forbidden Medicine.

Ellen Brown is a frequent contributor to Global Research.

This is all pretty heavy stuff. But, unfortunately business as usual for the Grand Chessmen. Starting wars and profiting from them is as old as war itself.

Are you still psyched about getting a new President this fall? Think again. Whomever replaces Bush will have the same agenda and the same orders from the same small group of Grand Chessmen.

Are you ready for a change? Take a look at Ron Paul. Ron Paul wants to eliminate the Federal Reserve and unlock the hold these money trust people have on America.

Rescue me, O LORD, from evil men;
protect me from men of violence,

who devise evil plans in their hearts
and stir up war every day.

They make their tongues as sharp as a serpent's;
the poison of vipers is on their lips. Psalm 140:1-3 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Wag the Dog

2008-08-18T20:07:00.000-07:00

I'm glad to be back from my trip. I hope that my time away was not missed too much.

Unfortunately, nothing much has changed in the financial markets since last week. The price of oil has been mainly hovering, edging slightly lower several days. This continues to keep the US dollar artificially stronger for the moment.

News for Freddie Mac and Fannie Mae continue to be bleak. Bloomberg reported today that the two government-chartered companies will fail to raise the equity they need to offset credit losses, prompting the U.S. Treasury to bail out the mortgage behemoths at taxpayer expense. The two tumbled in New York trading to their lowest levels in more than 17 years on concern of the likely government bail out which will wipe out common stockholders. A rescue of the companies, which own or guarantee 42 percent of the $12 trillion in U.S. home loans, would include preferred stock with a seniority, dividend preference and convertibility that would wipe out common stockholders, Barron's reported.

Today, we will begin an article published on August 14, 2008 by Ellen Brown, author of the book "Web of Debt". In this article titled "Wag the Dog: How to Conceal Massive Economic Collapse", she explore how the "Grand Chessmen of the Money Trust" control these market moves from behind the scenes.

Last week, Fannie Mae and Freddie Mac had just announced record losses, and so had most reporting corporations. Unemployment was mounting, the foreclosure crisis was deepening, state budgets were in shambles, and massive bailouts were everywhere. Investors had every reason to expect the dollar and the stock market to plummet, and gold and oil to shoot up. Strangely, the Dow Jones Industrial Average gained 300 points, the dollar strengthened, and gold and oil were crushed. What happened?

It hardly took psychic powers to see that the Plunge Protection Team had come to the rescue. Formally known as the President’s Working Group on Financial Markets, the PPT was once concealed and its very existence denied as if it were a matter of strict national security. But the PPT has now come out of the closet. What was once a legally questionable "manipulator" of markets has become a sanctioned stabilizer and protector of markets. The new tone was set in January 2008, when global markets took their worst tumble since September 11, 2001. Senator Hillary Clinton said in a statement reported by the State News Service:

"I think it’s imperative that the following step be taken. The President should have already and should do so very quickly, convene the President’s Working Group on Financial Markets. That’s something that he can ask the Secretary of the Treasury to do. . . . This has to be coordinated across markets with the regulators here and obviously with regulators and central banks around the world."

The mystery over what was going on with the dollar the first week in August was solved by James Turk, founder of GoldMoney, who wrote on August 7:

"The banking problems in the United States continue to mount, while the federal government’s deficit continues to soar out of control. . . . So what happened to cause the dollar to rally over the past three weeks? In a word, intervention. Central banks have propped up the dollar, and here’s the proof."

"When central banks intervene in the currency markets, they exchange their currency for dollars. Central banks then use the dollars they acquire to buy US government debt instruments so that they can earn interest on their money. The debt instruments central banks acquire are held in custody for them at the Federal Reserve, which reports this amount weekly."

"On July 16, 2008 . . . , the Federal Reserve reported holding $2,349 billion of US government paper in custody for central banks. In its report released today, this amount had grown over the past three weeks to $2,401 billion, a 38.4% annual rate of growth. . . So central banks were accumulating dollars over the past three weeks at a rate far above what one would expect as a result of the US trade deficit. The logical conclusion is that they were intervening in currency markets. They were buying dollars for the purpose of propping it up, to keep the dollar from falling off the edge of the cliff and doing so ignited a short covering rally, which is not too difficult to do given the leverage employed in the markets these days by hedge funds and others."

Just as central banks manipulate currencies in concert, so gold can be manipulated by massive selling of central bank reserves. Oil and any other market can be manipulated as well. But markets can be manipulated by only so much and for only so long without fixing the underlying problem. There is more bad news coming down the pike, news of such magnitude that no amount of ordinary manipulation is liable to conceal it.

For one thing, roughly $400 billion in ARMs (adjustable rate mortgages) have or will reset between March and October of this year. Assuming 3 to 6 months for strapped debtors to actually hit the wall with their payments, a huge wave of defaults is about to strike, continuing through March 2009 – just in time for the next huge wave of resets, in option ARMs.³ Option ARMs are loans with the option to pay even less than just the interest on the loan monthly, increasing the loan balance until the loan reaches a certain amount (typically 110% to 125% of the original loan balance), when it resets. The $800 billion credit line recently opened to Fannie Mae and Freddie Mac may be not only tapped but tapped out, at taxpayer expense. The underlying problem is little discussed but impossible to repair – a one quadrillion dollar derivatives scheme that is now imploding. Banks everywhere are facing massive writeoffs, putting the whole banking system on the brink of collapse. Only public bailouts will save it, but they could bankrupt the nation.

What to do? War and threats of war have been used historically to distract the population and deflect public scrutiny from economic calamity. As the scheme was summed up in the trailer to the 1997 movie "Wag the Dog".

"There’s a crisis in the White House, and to save the election, they’d have to fake a war."

Tomorrow, there will be more from Ellen Brown's article and how the government continues to use misdirection to accomplish their means. Stay tuned ...

My companion attacks his friends;
he violates his covenant.

His speech is smooth as butter,
yet war is in his heart;
his words are more soothing than oil,
yet they are drawn swords.

Cast your cares on the LORD
and he will sustain you;
he will never let the righteous fall.

But you, O God, will bring down the wicked
into the pit of corruption;
bloodthirsty and deceitful men
will not live out half their days.
But as for me, I trust in you. Psalm 55:20-23 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

The Dollar Rebound

2008-08-13T19:36:00.000-07:00

The last couple weeks have seen some extraordinary moves in the financial markets. Analysts are all over the board in trying to explain the movements. Depending on what camp they are in, there are a myriad of data to support whatever angle they are trying to prove.

I simply have no angle to promote or any ax to grind. I simply want to educate and help prepare those who see that there is very dark economic times ahead, times that will forever change history. Some may think that is melodramatic or alarmist, but the facts don't lie.

No one can deny the existence of the subprime mortgage collapse and the huge ripple effects it created and still is creating.

[Banks' losses from the U.S. subprime crisis and the ensuing credit crunch crossed the $500 billion mark as writedowns spread to more asset types.

The International Monetary Fund in an April report estimated banks' losses at $510 billion, about half its forecast of $1 trillion for all companies. Predictions have crept up since then, with New York University economist Nouriel Roubini predicting losses to reach $2 trillion.]

No one can deny the price of oil rose to a record $147.27 on July 11, 2008, causing inflationary pressures on goods and services combined both now and well into the future. Estimates on real inflation prior to the record price were already in excess of 14% for 2008 and growing.

No one can deny the real estate market is in serious trouble and looking to get worse before it gets better. This includes the much tougher lending requirements across the board and the financial insolvency trouble facing Freddie Mac and Fannie Mae.

[Fannie Mae, the largest U.S. mortgage- finance company, cut its dividend 86 percent after posting a loss that was more than three times analysts' estimates and said the worst housing slump since the Great Depression is deepening.

Fannie, which owns or insures about 25 percent of all U.S. mortgages, said credit losses rose 66 percent to $5.3 billion as delinquencies rose. Chief Executive Officer Daniel Mudd forecast a "significant'' increase in reserves for the rest of the year as the housing market deteriorates. Fannie's results, combined with a loss by Freddie Mac that was also wider than analysts anticipated, may boost the need for Treasury Secretary Henry Paulson's bailout plan announced last month.

Fannie Mae, will stop buying or guaranteeing Alt-A home loans, such as those that require little or no documentation of borrower incomes or assets, by yearend.

Freddie Mac, which reported an $821 million quarterly loss Aug. 6th, said that Alt-A mortgages were the biggest reason for a surge in its foreclosure losses. The delinquency rate for the $190 billion of the loans owned by Freddie Mac or underlying the bonds the company guarantees jumped to 3.7 percent on June 30, from 1.8 percent on Dec. 31.]

No one can deny that the US dollar index slumped to a near record low of 71.87 on July 15, 2008, the lowest since the all time low previously set in April. Since then, the dollar has staged a remarkable turnaround and have gained for the last 9 consecutive days closing today at 76.39.

Many factors have contributed to that. Oil has dropped more than $30 a barrel in the last 3 weeks. There are a number of reports indicating weak economic data from Europe and the European Central Bank saying that economic results will be weak well through the third quarter of 2008 and hinting that they will likely lower interest rates sooner rather than later.

Also, the United Kingdom reported today that claims for jobless benefits climbed 20,100 in July to 864,700, the biggest increase since December 1992. Unemployment grew for the sixth straight month. The Bank of England signaled it could cut interest rates sooner rather than later. The pound sterling's trade-weighted index hit its lowest since January 1997. The pound dropped more than 3 cents against the dollar today to a 21 month low.

All of these factors provide some relief for the dollar, but none of them have changed the economic conditions in the US except for the decrease in the price of oil. Thus, the recent rebound of the dollar will very likely be short lived.

No one can deny that there are many banks and financial institutions in trouble. From Bear Stearns, IndyMac, Freddie Mac and Fannie Mae as previously mentioned, Wachovia, and more than 90 other banks have very precarious balance sheets due to bad credit risks. The FDIC is there to bail out troubled institutions, but how long can $49 billion in insurance funds insure more than $3 trillion in deposits if many institutions start failing?

I could certainly go on and on, but I think you get the point. All of these occurrences are leading to a 'perfect economic storm' that we will have to reckon with sooner or later. For those who ignore these warnings will simply be one of the nameless masses that are swept away.

So, will you heed the warnings and take steps to be prepared?

As always, the choice is yours.

As mentioned yesterday, I will not post any more entries the rest of the week due to travel plans.

then if anyone hears the trumpet but does not take warning and the sword comes and takes his life, his blood will be on his own head. Since he heard the sound of the trumpet but did not take warning, his blood will be on his own head. If he had taken warning, he would have saved himself. Ezekiel 33:4-5 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Market Movers

2008-08-12T21:38:00.000-07:00

The last couple days I've focused on the reasons for the extraordinary gains the US dollar has made the last week and a half. Today, we will get another perspective on what has transpired to fuel the moves.

The following alert is from John Williams (www.shadowstats.com) who comprises analysis and data behind and beyond government economic reporting. John has a annual subscription service available.

U.S. Dollar Strength Has No Fundamental Basis Other Than Temporary War Effects
U.S. Dollar Has Not Bottomed
Gold and Oil Prices Have Not Topped

The ongoing powerful rally in the U.S. Dollar and related heavy sell-offs in the oil and precious metals markets have no basis in the underlying fundamentals that usually drive activity in those arenas. Accordingly, irrespective of extreme near-term volatility in the various markets, the broad long-term outlook remains unchanged: along with further intensification of the inflationary recession and a deepening systemic and banking solvency crisis, the U.S. dollar, equities and bonds should suffer terribly, while gold and silver prices should boom. As with the longer range outlook for the markets, however, key to the current circumstance is the performance of the U.S. dollar.

Despite orchestrated media and market hype to the contrary, there has been absolutely no positive shift in underlying fundamentals driving the still-unfolding economic, financial-market and systemic-stability crises. The U.S. dollar's sharp gains reflect instead uncertainties tied to the outbreak of and rapid intensification in war in the Caucasus, with the greenback taking on its traditional flight-to-safety role. Those effects should be relatively short-lived, shy of the circumstance evolving into World War III. If anything, the slightly longer-term impact of that conflict should be bullish for both oil and gold.

Per the financial media, though, the dollar's strength reflects improving economic conditions in the United States versus the rest of the world. That is nonsense. Shy of gimmicked GDP reporting that few believe, the U.S. continues to see a deepening recession as evidenced in most other economic reporting. Usually, when the U.S. economy contracts the rest of the world follows. There is little news there.

The other factor at play is related, seen in the nature of finance ministers and central bankers to lie. There has been some heavy, but effective, spinmeistering and jawboning and possibly supportive covert intervention in support of the dollar. Central banks often do their best to trigger or enhance a desired move in currencies. Such factors exaggerate near-term volatility but do not have lasting impact.

Not reflecting any lasting change in real-world conditions, the dollar's happy gains should prove to be fleeting. Related to dollar buying has been the heavy selling of oil and gold, which also has not been driven by fundamental changes. Oil markets are volatile by nature, and, despite recent sharp swings, prices remain highly inflationary at current levels. The markets and financial system remain vulnerable to the least surprise and are highly unstable, at present. The inflationary recession continues to intensify, and gold remains the best long-term hedge against all the real risks facing investors and the system.

These matters are discussed more completely in the full newsletter, which is near going to press. The markets are moving faster than my writing, which is being finished here at the Outer Banks of North Carolina, hence this quick update in an Alert. Posting of the newsletter will be within the next day or so and will be advised by e-mail.

Best wishes to all,

John Williams

Based on the last couple posts in this blog, none of this information should surprise anyone. However, it is always helpful to get others' view of situations. There will be more tomorrow. Stay tuned ...

Special thanks go to John Williams and his insight on these extraordinary moves in the last couple weeks.

Please note that I will be out of town later this week and will not post after tomorrow for the remainder of the week.

"You live in the midst of deception;
in their deceit they refuse to acknowledge me,"
declares the LORD. Jeremiah 9:6 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Spreading Global Economic Weakness

2008-08-11T21:44:00.000-07:00

To continue on with the market analysis presented here on Saturday, today we will look at the situation from a slightly different perspective. Is it possible that are sub-prime mortgage fiasco and US bank failures are impacting the global economy? If it is, could those problems experienced elsewhere in the global community actually improve the situation in the US?

Jack Crooks explores that possibility in an article published on August 10, 2008 titled "Spreading Global Economic Weakness Is Positive for US Dollar".

Here are excerpts from the article.

Yesterday, the dollar rallied hard against the euro. And today I want to tell you what I think is happening. Let's start with a question ...

What happened to decoupling, the idea that other economies were immune to weakness in the U.S.?

Well, it seems as though the subprime fiasco has created bigger problems for the U.S. financial system than most people anticipated. And now we're seeing this economic virus spread across other areas of the globe.

If you want some evidence of contagion in other developed economies, look no further than these recent news items ...

German industrial orders dropped sharply — by 2.9% in June. What's most disconcerting is that Germany's economy makes up one-third of total Eurozone output. And speaking of the rest of the Eurozone, many of those economies are bogged down by housing busts.
The International Monetary Fund (IMF) called out the U.K. economy. Predictions for economic growth in the UK for 2008 and 2009 stood at 1.8% and 1.7%, respectively. Kiss those numbers goodbye. The IMF's latest forecast calls for a seriously lower 1.4% in 2008 and 1.1% in 2009.
Australia is battling sluggish household spending and their financial sector is being challenged. The National Bank of Australia recently reported a huge second quarter write down which it attributed to massive holdings of CDOs.
And the New Zealand Treasury anticipates a second consecutive quarter of negative GDP growth. By definition, New Zealand will have entered recession once official numbers are released. They'd be the second OECD-member country since Denmark to sink to official recessionary status.

The reality is that the big three in the developed world — the U.S. the U.K., and the Eurozone — are staring into the face of recession.

For All These Reasons, We Should Revisit The Commodities-Currencies Connection

If the global economy is slowing, and China is forced to work through excess inventory, demand for commodities will be impacted. My bet is that crude oil prices, in particular, will suffer from the realities I just described.

And remember, commodity prices and currencies influence each other in a self-feeding circle.

For example, falling crude prices may be the one force that allows central banks in the U.K. and Europe to begin lowering their interest rates.

If and when that occurs, the dollar will become more attractive relative to those currencies.

It wouldn't take a bold move on the part of the U.S. Federal Reserve, either. (Nor do I expect one.)

A narrowing interest rate disadvantage between the dollar and euro — or the dollar and the pound — would be hugely supportive for the greenback.

In fact, this may very well be why the dollar HAS ALREADY been holding up given such incredibly dismal news day after day from the U.S. economy.

Over the last year or so almost everyone's been pointing to the inverse relationship between the U.S. dollar and crude oil.

[During March through mid July], that's when the dollar bounced higher from its all-time low. Crude soared well beyond its record high at the same time.

Crude rallying and the dollar drifting slowly higher simultaneously? That was certainly no inverse correlation.

[However in the last month], this is where the tight inverse correlation has resumed. Only this time, the direction is in favor of the dollar . And it comes exactly after a new all-time high for crude prices.

Translation: The buck could be back.

The dollar has been able to continue its rally this week, even amidst a blitzkrieg of central bank announcements. While it has a long way to go — and recovery may not be swift — I think it's time to keep the dollar rally scenarios in clear sight. Especially now that other economies are catching the bug.

Jack Crooks

Although I don't agree with everything Jack states, it is true that our financial problems will affect other financial markets. If those markets are affected seriously, that may give our feeble dollar a little strength, however long that may last. It doesn't change our situation at all, but the focus is temporarily adverted to other problems. Notice that all the statistics sited were from the IMF or from the central banks of countries. These are the people that control the markets. This is a case for classic misdirection to obscure other moves. Be aware and prepared.

There will be more on the current financial market moves this week. Stay tuned ...

For the foolishness of God is wiser than man's wisdom, and the weakness of God is stronger than man's strength. I Corinthians 1:25 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

A New Trick

2008-08-09T20:28:00.001-07:00

This week the focus has been about the road to Socialism, a disastrous ride from a free market system to one that only a very small group of people have control over everything. Everyone else is there to work the system. As part of this, there is no more ownership of private property. Americans, whether they are aware or not, are well on their way down this road. The internet has certainly changed the way society works, because information passes much more freely than corporate controlled media. This may be the only vehicle left to stop the US from going down that road to Socialism.

That being said, the manipulators do not want a total breakdown of the system. If that happens, too many things are unpredictable such as a revolution. They slowly and methodically control the movements of the economies in their favor, so that they can reap the benefits and have more power and control.

This week has seen some truly remarkable occurrences in the financial markets. To me, this is clear evidence that the manipulators are still calling the shots. Going back to the post on Friday, August 1, 2008 (The Government's Answer), the US banking industry is on the brink of financial collapse. With the bank failure of IndyMac, the insolvency pressures on Fannie Mae and Freddie Mac, and the SEC's decision to prohibit the naked short selling of 17 high profile financial institutions, all of these factors signify that they are losing control on the system. The financial 'wind shear' of inflation (rising prices) and deflation (shortage of liquidity due to the credit crunch) was threatening to tear the economy to pieces.

So, they come up with a new trick. No longer can they play games with the federal funds interest rate by the Federal Reserve (currently at 2%, the lowest since 2004), they began to play more with the price of oil to affect the economy and the global currencies. I ask you, what has transpired in the last three weeks that would cause oil to drop from $147 all the way to $115?

[If the Fed lowers the interest rate, that would bring more inflationary pressures on the economy. If the Fed raises the interest rate, the decreased liquidity could stall the economy completely, compounded with the credit crunch and the depressed real estate market.]

Crude oil fell to a three-month low, dropping to $115.15 per barrel. This eases the inflationary pressures on the economy and in effect, offers all mobile Americans an incentive stimulus package to continue spending. Crude oil, precious metals and crop prices all fell yesterday as the dollar climbed, reducing the appeal of commodities as a currency hedge. Oil dropped to a low of $115.06 a barrel since touching the record of $147.27 on July 11. Gold fell to $857.50 per ounce, Silver dropped all the way to $15.37 per ounce from $17.53 last week.

Meanwhile, the European Central Bank (ECB) also does not change their interest rates but ECB's President Jean-Claude Trichet said Aug. 7 economic growth will be "particularly weak'' through the third quarter. This had a disastrous effect on the value of the euro, which dropped the most in more than three years this week, pushing the currency to a six-month low against the U.S. dollar, as traders pared bets the European Central bank will raise interest rates as the economy slows. The currency fell the most in almost eight years on Friday, dropping below $1.50 for the first time since February. The currency tumbled 2.08 percent yesterday, from $1.5336 touching $1.499, in what the second biggest one-day decline since the introduction for the euro in 1999.

Since reaching a record high of $1.6038 on July 15, the euro has dropped 6.4 percent. The so-called trading envelopes, which measure how far from the mean a price has strayed, show the euro's decline has doubled the typical changes versus the dollar in the past 20 days. This is truly a remarkable occurrence.

"The most important aspect of the dramatic collapse in the euro dollar is the absence of confirmation from other markets,'' said David Woo, global head of currency strategy at Barclays Capital Inc. in London yesterday. "None of the typical drivers of the euro-dollar in the past couple of years could have accounted for the magnitude of this move, which leads one to conclude that this is a technical-driven (controlled) move. From that point of view, we do not think that this move is sustainable.''

So between the drop in the price of oil and the weakening of the European currencies, the US dollar rose remarkably in strength reaching 75.90 yesterday, a gain of 2.5 index points, the highest since Feb. 21. This is steepest weekly rally by the US Dollar Index since January 2005. This action spurred the S&P 500 to its biggest weekly gain since April. The S&P added 2.9 percent to 1,296.32, the highest since June 25. The Dow Jones Industrial Average increased 3.6 percent to 11,734.32.

Every American is starting to breathe a little easier at the news and will likely resume their spending habits, exactly as the manipulators expected.

Do you feel more relieved because of the lower prices? Or, do you feel more manipulated than ever and want things to change? Are you just a cog in the system, or do you want economic and political freedom that this country was founded on?

As always, the choice is yours.

They dress the wound of my people
as though it were not serious.
"Peace, peace," they say,
when there is no peace.

Are they ashamed of their loathsome conduct?
No, they have no shame at all;
they do not even know how to blush.
So they will fall among the fallen;
they will be brought down when they are punished,
says the LORD.

" 'I will take away their harvest,
declares the LORD.
There will be no grapes on the vine.
There will be no figs on the tree,
and their leaves will wither.
What I have given them
will be taken from them. Jeremiah 8:11-13 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

What Will Stop It?

2008-08-08T18:51:00.000-07:00

This week, I've shared a very insightful article from John Loeffler about the very dangerous road to socialism. Americans are well on their way going down this road. Today, I will share some additional insights from John Loeffler in excerpts from another article titled "What Will Stop It?".

What Will Stop It?
Lesson #1 en Route to the Gulag

Americans have enjoyed so much freedom for so long, they have forgotten that freedom is a fluke in the history of the world; not the norm. Our freedoms were hard-won over hundreds of years of human tears. The current view that freedoms are somehow self-sustaining and "obvious" ignores a primary rule of the political universe, well established in human history: governments and those in them always gravitate toward power, money and control; power for themselves, confiscating money and property from their people, who then have to be controlled lest they protest too much.

The founding fathers thoroughly understood this, having experienced a lack of protections first hand. They understood that government is a necessary evil, not a paternalistic good. In assembling the Constitution, they knew that only a clear statement of citizens' rights would prevent power money and control from having their way.

Every one of our rights was established to protect individual citizens, the minority against the majority and to block abuse of power. "Shall not be infringed" was designed to prevent government encroachment; not as a guide for a "delicate balance" between "liberty" and "security." Delicate balances always collapse uni-directionally toward power, money and control and away from individual freedom!

Witness the worldview changes that have occurred since the radical left flower child revolution of 1960s. Americans have experienced such historical revisionism in schools that few can tell you what the Bill of Rights contains and why those rights are so important. America has been in a constant state of self-demonization to the extent that Constitutional rights are viewed as the obsolete product of dead white slave owners.

Americans have come to accept the core belief of Postmodernism; that there is no such thing as absolute truth or morals. Since there is no such thing as absolute truth, there is no such thing as absolute law. It all depends on what your definition of "is" is and the law can be tortured to say what we want it to say. As such, it can be used to convict anyone who needs to be convicted, since their rights can be defined away because it's all a matter of definition. Besides, many Americans believe that rights are something that are "deserved" rather than inalienable. And, after all, politically incorrect people don't deserve rights.

The Bill of Rights itself is under severe attack by means of thousands of laws which curtail the exercise of the rights or end run its prohibitions. The Bush administration seems determined to abolish habeas corpus and to suspend individual rights at will, merely by definition of an enemy combatant. The list of abuses is virtually endless. Every day, American citizens are routinely having their rights violated thanks to some legal precedent, which was established early on - usually leaving them little recourse because the law has been distorted so badly and the system has been rigged against them. The slide towards money, power and control is proceeding virtually unabated.

In a free society, rights protect the individual from the government. In a dictatorship, rights protect the government from the people. If enough legal precedents for end-runs of all the protections contained in the Bill of Rights are allowed to continue unchecked, where will those precedents be taken by future leaders when all protections have been dismantled? What will stop the tyranny that will invariably follow? Nothing.

John Loeffler

This gives us all something to think about. Do we take for granted the freedoms that our forefathers of our country fought and won a war for? Do we ever consider the possibilities of living in a socialistic state?

The point is that unless we change things, and soon, we will lose all our rights, including the ones guaranteed in the Bill of Rights. Are we not concerned enough to take action?

As always, the choice is yours.

"Therefore, this is what the LORD says: You have not obeyed me; you have not proclaimed freedom for your fellow countrymen. So I now proclaim 'freedom' for you, declares the LORD -'freedom' to fall by the sword, plague and famine. I will make you abhorrent to all the kingdoms of the earth. Jeremiah 34:17 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

The Sad Road to Socialism Part IV

2008-08-07T18:13:00.000-07:00

Today, we will conclude with John Loeffler's article titled "The Sad Road to Socialism - What happens When Private Property is No Longer a Right". This will be Stage Three of the steps leading to Socialism and the dire consequences.

Stage Three: Dies Irae: A Day of Wrath and Mourning

Ultimately the dragon cannot keep its promises. This last stage is where events turn nasty and chaotic. It is a dangerous time. It is a time no country should ever wish to reach.

Politicians are perceived as ravenous wolves. Blame and finger-pointing frenzies among politicians erupt to deflect responsibility for the chaos they have caused as they attempt to hold onto their privileged status.

Faith in government dissolves along with faith in the currency. Widespread flouting of law is common and tax payments quit. If it gets bad enough, crime flourishes, both organized and random. The domestic economy collapses into a depression and the currency just collapses.

By this time there are several violently outraged groups of people: the first group consists of those who have been dependent on the dragon for their free programs, and once the dragon reneges on its promises to provide these, they are outraged at the violation of their imagined rights to a free lunch. This group can include pensioners who paid the dragon money but discover the dragon spent it all before they retired.

The second group is the middle class, who have been beaten to death to feed the dragon and his cronies. They have lost all their livelihood and property. This is the point where many revolutions occur. Sometimes the revolutions are non-bloody and occur only at the voting booths; sometimes they are bloody and violent. It is a dangerous time because the chaos caused by the breakdown of economic and political order coupled with the collapse of morality often requires brute force to restore order, and brute force is the fertile ground for dictators and the destruction of rights.

One of the great ironies of history is that those who started the mess and benefitted greatly from it are rarely ever called to pay for the crimes and carnage they caused.

Finally the dragon dies.

Conclusion

No country trapped in socialism goes through all the events described above, which is a composite of past histories. It can turn itself at any time providing it is prepared to discipline itself the undergo the pain required to get off the public dole, much like coming off an addiction. Few societies ever want to face that, so they condemn themselves to all three stages. And the longer they wait to enact the necessary changes, the worse the pain becomes.

From currency, to energy to property rights, issues today are clouded with so much static and partisan bickering that the average person has little real comprehension of what is happening. Frequently Democrats and Republicans blame each other when often they’re both responsible and fiddle while Rome burns.

America is truly at an economic and moral crossroad, having already started into Stage Two of the sad road to socialism. Whether or not we plow through all three stages remains to be seen. It takes great moral courage to prevent this but politicians tend to be neither moral or courageous.

Thus it is up to what actions are moral, legal and necessary to see us, our families and friends safely through the tempest. But as a ray of hope, it is here where Americans in times past have always shown themselves most noble.

John Loeffler, July 23, 2008

John Loeffler is 40-year broadcast news veteran and host of the nationally syndicated talk show on the IRN/USA Radio Network, Steel on Steel (www.steelonsteel.com) and co-host of The Financial Sense Newshour (www.financialsense.com).

Special thanks go to John Loeffler and his great description of the cycle that leads to Socialism. As John pointed out, no country goes through every scenario depicted here, but the lesson is crystal clear - the road ahead will be very painful. If we do not turn the tide now, there will be no country left to be proud of. Many have already fled (expatriated to another country) and moved their assets to other safe harbors.

What will you do? Will you be one of the nameless victims of the dragon? Will you succumb to having all your work, livelihood, and possessions stripped away for nothing?

As always, the choice is yours.

He seized the dragon, that ancient serpent, who is the devil, or Satan, and bound him for a thousand years. He threw him into the Abyss, and locked and sealed it over him, to keep him from deceiving the nations anymore until the thousand years were ended. After that, he must be set free for a short time. Revelation 20:2-3 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

The Sad Road to Socialism Part III

2008-08-06T11:41:00.000-07:00

Today, we will continue on with Part III of John Loeffler's article titled "The Sad Road to Socialism - What happens When Private Property is No Longer a Right". This is the second part of Stage Two when things start to really escalate.

The second half of Stage Two of the war kicks into gear as the dragon responds to the rising opposition and imposes a growing panoply of laws and regulations with increasing fines, penalties and prison sentences. To block the rampant flouting of law, the dragon wants to monitor everything the citizens do in order to assure that plunder shall be paid, all in the name of the rule of law, public order and morality. (Can you say Patriot Act and public eavesdropping on Americans?) Civil rights break down, all in the name of morality and public security.

Every once in a while the beleaguered middle class pleads with the gentle politicians to fix the problem, unaware that it was the gentle politicians, who created it all in the first place. But politicians are more than happy to be seen as dragon slayers, and create a series of scapegoats for the problem, transferring blame for the mess and enacting a new series of programs to supposedly fix the problem. In reality, they just delay the pain, put the dragon on steroids and making the problem far worse.

The war is not without casualties. As it becomes ever more difficult for small businesses to function in the poisoned atmosphere of taxes, fees, fines, regulations and prosecutions, more of the middle class throws up its hands and goes elsewhere or becomes part of the the dependent poor. Small business goes out of business or operates illegally. As inflation devours life savings, people are wiped out. Retirees have a difficult time getting on as their lifetime achievements are destroyed. Most of the middle class slides inexorably down the slope into poverty.

There is a moral consequence as scandals erupt in the politico and monied classes. Disrespect of law is common. In the free-for-all, everyone is in it for himself and no one can afford to obey the law. Jails swell with those unfortunate enough to get caught. As more complex laws are steadily passed, finally all citizens become law-breakers.

This enables the dragon to seek pretexts for seizing the assets of citizens. Businesses are nationalized. Wage and price controls are instituted. Property ownership is forcibly transferred from those who oppose the dragon to those who support it. Retirement plans are brought under the “protection” of government and their owners left with government-issued IOUs. Assets are seized on the mere allegation of criminal activity. Indeed, law enforcement agencies encourage their members to plunder. They even make arrangements with organized crime at times. The list of plunder-and-defend possibilities is astounding.

In an effort to stem the hemorrhage, the middle class starts throwing out the rascal politicians, only to elect another group of rascals. This has little effect, since the dragon is now a self-existing monster that doesn’t require gentle politicians. By this stage it’s clear: Small and middle class businesses, ranchers and farmers all know who the enemy is: the dragon. There is no illusion that the politicians are gentle or acting in their best interests.

As the security of property ownership declines, investments flee and the economic environment becomes unstable, no one wants to invest where earnings will be heavily taxed, or even the possibility of direct confiscation on the allegation of having violated a plethora of unknowable, unobservable laws. Doing business is just too dangerous.

As doing business becomes dangerous, investments die, jobs go out of existence, increasing the pain of the working lower and middle classes. Small business is always the primary creator of employment and it is the most abused. In the end, the rich are never soaked, the middle class is destroyed and the poor discover that there is no free lunch.

Tomorrow, we will continue with Stage III and the drastic implications of the cumulative deceit and horrendous appetite of the dragon. Stay tuned ...

And I saw a beast coming out of the sea. He had ten horns and seven heads, with ten crowns on his horns, and on each head a blasphemous name. The beast I saw resembled a leopard, but had feet like those of a bear and a mouth like that of a lion. The dragon gave the beast his power and his throne and great authority. One of the heads of the beast seemed to have had a fatal wound, but the fatal wound had been healed. The whole world was astonished and followed the beast. Men worshiped the dragon because he had given authority to the beast, and they also worshiped the beast and asked, "Who is like the beast? Who can make war against him?" Revelation 13:1-4 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

The Sad Road to Socialism Part II

2008-08-05T20:24:00.000-07:00

Today, we will continue with John Loeffler's article titled "The Sad Road to Socialism - What happens When Private Property is No Longer a Right".

The Magic Dragon Isn’t Cute Anymore

Somewhere along the line, the gentle legislators discover that their baby dragon has grown and it’s snarling at them a lot. It wants much food. They’re not controlling it; it’s controlling them. However, in order to retain their prestigious position, ever-increasing sources must be found to feed their growing rapacious raptor.

The food source (tax burden) shifts rapidly downward into the middle class, as the gentle politicians coo that only the rich are being soaked. Concomitant with the increase of taxation, the miracle of hidden taxation through monetary inflation is discovered as central banks print more and more money to allow the good times to continue over and above what direct taxation will allow.

This process of monetary inflation results in debasement of the currency, causing the citizens to work harder and harder and run faster and faster to keep up with the loss of their currency’s value and the concomitant rise of prices. It’s slow at first but accelerates along an insidious exponential path. Ultimately it destroys everything the middle class works for.

Additional reptilian food sources called “revenue streams” are created. More fees, fines, “mitigation payments” and permits are required to do almost anything, driving the cost of doing everything upwards. Coupled with this is a bewildering array of regulation and laws making the business of life more and more difficult to accomplish. Big businesses can absorb this but the middle class ultimately buckles under the strain. The dragon is never satisfied.

Stage 2: Silent War Between Government and Its Citizens

At some point, the unwashed masses suspect their politicians aren’t really gentle any more much less benevolent. This is where a silent war between government and people erupts. It’s a blurry transition through never-never land when the politicians still claim to be gentle but the people sense that they have gone from being protectors of the public good and private property to a plunderers of it; from morality to immorality.

The “Bastiat” transition doesn’t take place all at once but, one by one, members of the working class realize they’re toiling like mad and getting nowhere. What they do make is confiscated in taxes or destroyed in inflation. They have little left over and their life’s savings are being destroyed while the politicians tell them all is just fine, creating cognitive dissonance between the hardship workers experience and the good times the politicians promise.

But those friends of the dragon on the dole still insist the dragon’s intentions are moral, even if its methods are not. As tax rates push ever higher into confiscatory ranges, self-preservation kicks in and the people take defensive action against what they no longer perceive as moral duty but legally-sanctioned plunder. They do this at the same time they pretend the gentle politicians are correct even though they know better.

The rich catch on and move their assets offshore and sometimes themselves out of the reach of the dragon; they expatriate. They have the means to structure their finances in such as way as preserve wealth. Besides, the politicians are frequently among this class so they aren’t about to let the dragon loose on themselves.

Unfortunately, the middle class doesn’t have this option, so it fights the dragon by engaging in evasive maneuvers. Citizens cheat on taxes, and seek to conceal taxable assets. Whenever possible transactions are shielded from the ever-prying eyes of the hungry dragon.

As the ravages of taxation and inflation eat out the middle class’s substance, a vibrant underground economy springs up, utilizing barter, cash, foreign currencies, precious metals or other means to conceal taxable activity. Regulatory laws are flouted as people try to “see what they can get away with.” Often times this underground economy has an organized crime component vis a vis the former Soviet Union.

Tomorrow, we will continue with John's article and find out the scary, unsatiable appetite of the dragon during the second half of Stage Two. Stay tuned ...

Then another sign appeared in heaven: an enormous red dragon with seven heads and ten horns and seven crowns on his heads. His tail swept a third of the stars out of the sky and flung them to the earth. Revelation 12:3-4 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

The Sad Road to Socialism

2008-08-04T19:12:00.000-07:00

This week the focus will be on the effects of governmental power that continually grows. If unchecked, the government eventually becomes so big that it consumes itself. To illustrate this, I will share an article published on July 23, 2008 by John Loeffler. John is a 40-year broadcast news veteran and host of the nationally syndicated talk show on the IRN/USA Radio Network, Steel on Steel (www.steelonsteel.com) and co-host of The Financial Sense Newshour (www.financialsense.com).

Here is Part I of John's article titled "The Sad Road to Socialism - What happens When Private Property is No Longer a Right".

“But if the government undertakes to control and to raise wages, and cannot do it; if the government undertakes to care for all who may be in want, and cannot do it; if the government undertakes to support all unemployed workers, and cannot do it; if the government undertakes to lend interest-free money to all borrowers, and cannot do it; if .... ‘The state considers that its purpose is to enlighten, to develop, to enlarge, to strengthen, to spiritualize, and to sanctify the soul of the people’ -- and if the government cannot do all of these things, what then? Is it not certain that after every government failure -- which, alas! is more than probable -- there will be an equally inevitable revolution?”

-Frederic Bastiat, “The Law,” June, 1850

It’s been more than 150 years since Frederic Bastiat wrote his treatise, The Law, a small work, challenging the ravages of failing socialism thrust upon France as a result of the French revolution.

In that unique pamphlet, Bastiat points out that when the law of any country supports the moral belief systems of a people, defends the rights of said people and their property, the law is perceived as being moral; a defense against evil and those who flaunt it as being immoral. Payment of taxes and civic obligations are perceived as a virtue and those who flout this as criminals.

However, when the law becomes a source of plunder or pits itself in opposition to the morals of the people, the people perceive the law to be immoral and widely despise it. Indeed, in those times, flouting the law is extolled as virtue.

Another book by contemporary author Hernando Desoto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, points out much the same thing, that the security of ownership of private property guaranteed by law for the lower and middle classes has been the essential ingredient resulting in the prosperity enjoyed by many western countries. Without this security, where the state becomes an impediment to commerce or property ownership, the people are forced to operate their economies outside of law, which is once again perceived as evil, rather than a force for good.

In essence, when a government goes from being a protector of private property to a plunderer of it, it places itself on a course of chaos, economic ruin and its own ultimate self-destruction.

The Three Steps of Socialism

Socialism is the mechanism which transforms government from its noble role as a protector into a predator and, since the citizens of our fine country seem determined to plow through socialism to its bitter end, we should examine the territory through which these three sad steps lead. The core result of socialism is the destruction of private property and wealth.

The events described in this piece are a composite of the ravages of socialism experienced in other countries. While each country does experience all the events portrayed, all socialist countries follow the same miserable path. The U.S. doesn’t have to go down this path, but it seems determines to do so.

We’re Off to See the Wizard

One of the great dangers of any government by the people is that sooner or later their politicians discover they can vote largess from the public trust. Their first experiment at this bold new adventure invariably revolves around social programs enacted in the name of morality and the public good or even solving some current crisis. Who could oppose that? “After all,” it will be argued, “don’t you care about people, or the welfare of the country, or the environment?”

The lure of this argument has been absolutely irresistible from the Roman Empire to the French and Bolshevik revolutions to Socialist Parties (D) and (R) in the USA today.

Step One - The Moral Argument: A Promise of Something for Nothing

The moral argument that we can finally solve poverty, pain, sickness, and hunger with “free” money seems just to good to be true. It usually is but it sells to the public. To fund these allegedly moral programs, the assets of the gentle citizens must be quietly taxed in the name of the public good.

Only a few wise and isolated voices warn that this baby dragon they have just hatched will grow up to be a fire-breathing monster. But not to fear, the wise voices are generally shouted down by the gentle politicians, who fiercely demonize protestors as selfish “whabbledygots” blocking the road to the perfect society. After all, how could something so noble do anything bad to the country?

At first the rich are the only ones asked to pay more of their “fair share.” In the U.S. income tax originally only affected upper-bracket individuals. In this early stage, few complain and everyone seems happy, except for those nagging voices still warning of dire consequences ahead; the ones the gentle legislators wish would just shut up. Other than that they have little to fear because the gentle legislators appear to be heroes placing our feet firmly on the road to utopia. Soon they promise all the have-nots will have and those who do have, will have just a little less. After all, as we said, it’s just their “fair share.”

Ah but time rumbles onward, and the number of people dependent upon these programs swells along with the number of “free” government programs. Free things do sell, and that’s what politicians want to do: sell their programs.

As the programs swell, they become unwieldy, requiring large bloated bureaucracies to administer them to ward off the inevitable fraud and corruption, consuming an ever greater part of the tax booty and servicing less to the originally intended recipients. In order to control the chaos of a large group of people cueing up to get something for nothing, large volumes of laws and regulations have to be written to control who gets what and where and when and who the givers and who the takers are. Now, the bureaucrats who administer these programs are also dependent on them for their livelihoods. This entrenches the program and assures its progression to Stage Two.

Tomorrow, we will continue on with John's article and why the promise of something for nothing never seems to work out. Stay tuned ...

When I heard their outcry and these charges, I was very angry. I pondered them in my mind and then accused the nobles and officials. I told them, "You are exacting usury from your own countrymen!" So I called together a large meeting to deal with them and said: "As far as possible, we have bought back our Jewish brothers who were sold to the Gentiles. Now you are selling your brothers, only for them to be sold back to us!" They kept quiet, because they could find nothing to say.

So I continued, "What you are doing is not right. Shouldn't you walk in the fear of our God to avoid the reproach of our Gentile enemies? I and my brothers and my men are also lending the people money and grain. But let the exacting of usury stop! Give back to them immediately their fields, vineyards, olive groves and houses, and also the usury you are charging them—the hundredth part of the money, grain, new wine and oil."

"We will give it back," they said. "And we will not demand anything more from them. We will do as you say."

Then I summoned the priests and made the nobles and officials take an oath to do what they had promised. I also shook out the folds of my robe and said, "In this way may God shake out of his house and possessions every man who does not keep this promise. So may such a man be shaken out and emptied!"

At this the whole assembly said, "Amen," and praised the LORD. And the people did as they had promised. Nehemiah 5:6-13 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Darkest Before Dawn

2008-08-02T12:38:00.000-07:00

Today, we will continue with the topic of the imminent banking collapse and what the government can or will do. The excerpts of the article published July 24, 2008 is from Kurt Kasun, a contributing writer to www.GreenFaucet.com.

This article is titled "It's Always Darkest Before the Dawn...Of An Economic Depression".

The financial system will collapse before "zero-hour" actually occurs. I think we are seeing signs of it in the desperate measures being employed to nationalize companies which trade on market exchanges as private enterprises. There is simply no way to defend the SEC's decision to selectively enforce the prohibition of naked short selling for 17 ‘fragile' financial companies and to not enforce it for the over 5000 other companies which trade on US stock market exchanges. And plans to rescue Fannie Mae and Freddie Mac breathe of a sort of corporate nationalism. Over time this will deal a massive psychological blow to financial markets. They are currently rallying on the sense of relief that the efforts to prevent Fannie and Freddie from dragging US financial markets into the abyss have succeeded and the inevitable day of reckoning has been postponed once again.

In a commentary just written by Ron Paul, titled "The Crisis is Upon Us," he writes, "There are reasons to believe this coming crisis is different and bigger than any the world has ever experienced." He is largely dismissed as a quack by the mainstream for being "Chicken-Little" and for not being as polished as our current crop of focus-group-driven politicians. He subscribes to an economic philosophy not taught in our American schools called Austrian economics.

Congressman Paul makes two points in his commentary. One, each financial crisis over the past 35 years has not been actually been solved in a final, sustainable manner; rather, they have been papered over which have created the conditions for a bigger crisis that will have to be dealt with in the future. And, two, the crisis will be magnified because it is globalized in nature and "Instead of using globalism in a positive fashion, it's been used to globalize all the mistakes of the politicians, bureaucrats, and central bankers."

If your eyes are glazing over all of this, then perhaps you might understand a reference to inflation in all of the Austin Powers movies. In the movies, the characters of Austin Powers and Dr. Evil, both played by Michael Myers, travel back and forth between the late 1960s and the late 1990s. In the first movie, not understanding the power of inflation, Dr. Evil, still caught in the 1990s, demands a ransom for threat of destroying the world in the amount of $100 billion for a world in the 1960s. The 1960s world leaders explain to him that $100 billion is more than all of the money in the world. Today, $100 billion would barely qualify as a bailout or stimulus package.

Now the lesson here is that the unthinkable has occurred. We have expanded the money supply (and commensurate debt) more than 1000-fold in less than 40 years, yet no one really thinks that we have expanded economic growth and real wealth to anything near that level.

Rather, the excess money has resulted in a series of rotating inflationary bubbles. Bubbles in commodities, consumer prices, and wages are seen as bad, while inflation in stock and real estate assets are seen as good. But both are symptomatic of an unsustainable system doomed to failure, as Congressman Paul explains:

"Ironically, in the past 35 years, we have benefitted from this very flawed system. Because the world accepted dollars as if they were gold, we only had to counterfeit more dollars, spend them overseas...and enjoy our unearned prosperity. Those who took our dollars and gave us goods and services were only two anxious to loan those dollars back to us. This allowed us to export our inflation and delay the consequences we are now starting to see. But it was never destined to last, and we now have to pay the piper....Printing dollars over long periods of time may not immediately push prices up -- yet in time it always does. Now we're seeing catch-up for past inflating of the money supply. As bad as it is today with $4 a gallon gasoline, this is just the beginning."

The days of highly-leveraged, borrowed investment speculation (especially if you want to short a government-protected asset) and" living la vita leveraged" for consumers are over. The credit contraction and deleveraging process is going to at the very least serve as a torturous economic headwind as the effects of 35 years of irresponsible financial behavior are unwound. (Do you recall the point about wind shear in yesterday's post?)

While Treasury Secretary Paulson and most in Congress are desperately looking to employ measures that prevent a systemic collapse of world financial markets, such tools will only serve to feed the beast and make the day of reckoning that much more devastating. Another development which distinguishes this crisis from others in years past is the lack of support shown by some free marketer Congressional leaders. I side with them and believe that we should be trying to starve the beast. This is going to get a lot worse. Kill this beast now.

Last week, Richard Fisher, head of the Dallas Federal Reserve Bank, "speaking solely in [his] own capacity," alerts us that "the unfunded liabilities from Medicare and Social Security...comes to $99.2 trillion over the infinite horizon." Fisher goes on to warn:

"This comes to $1.3 million per family of four - over 25 times the average household's income....No combination of tax hikes and spending cuts, though, will change the total borne by current and future generations....We know from centuries of evidence in countless economies, from ancient Rome to today's Zimbabwe, that running the printing press to pay off today's bills leads to much worse problems later on. The inflation that results from the flood of money into the economy turns out to be far worse than the fiscal pain those countries hoped to avoid."

Congressman Paul is a Republican and Richard Fisher was appointed by a Democrat. But both appear to be drinking from the same Texas tap water, however regarding the nefarious and inevitable effects of money printing and inflation. Maybe one day they will be able to bottle it up and persuade others to drink it. It appears that Fisher could be auditioning to team up with former Comptroller, David Walker, another "economic Paul Revere", to serve on Pete Peterson's team in an effort to save the Republic from economic disaster before it is too late.

A couple of weeks ago, William Poole, formerly of the St, Louis Fed warned that Fannie (Mae) and Freddie (Mac) were insolvent. These aren't the warnings of bombastic flamethrowers. These are former respected and responsible government officials who courageously dare to speak the truth!

So things are bad, but how bad? Nouriel Roubini, Chairman of RGE Monitor and Professor of Economics at the NYU Stern School of Business, is now being recognized by the financial media for having correctly predicted many of the afflictions which currently ails our economy. He believes that:

This is not just a subprime mortgage crisis; this is the crisis of an entire subprime financial system: losses are spreading from subprime to near prime and prime mortgages; to commercial real estate; to unsecured consumer credit (credit cards, student loans, auto loans); to leveraged loans that financed reckless debt-laden LBOs; to muni bonds that will go bust as hundred of municipalities will go bust; to industrial and commercial loans; to corporate bonds whose default rate will jump from close to 0% to over 10%; to CDSs where $62 trillion of nominal protection sits on top an outstanding stock of only $6 trillion of bonds and where counterparty risk - and the collapse of many counterparties - will lead to a systemic collapse of this market.

This will be the most severe U.S. recession in decades with the U.S. consumer being on the ropes and faltering big time as soon as the temporary effect of the tax rebates will fade out by mid-summer (July). This U.S. consumer is shopped out, saving less, debt burdened and being hammered by falling home prices, falling equity prices, falling jobs and incomes, rising inflation and rising oil and energy prices. This will be a long, ugly and nasty U-shaped recession lasting 12 to 18 months, not the mild 6 month V-shaped recession that the delusional consensus expects.

While I agree with the devastating effects due to the harmful complex inter-linkages in the world financial markets and the negative feedback loops between the financial world and the real economy that Roubini cites above, I believe that the our fate will be much worse than Roubini's 12-18 months U-shaped recession, a prediction that already exceeds the most bearish forecast among the mainstream economists.

While I expect the Keynesians to win out and for us to receive the biggest fiscal expansion of government, coupled with continued loose monetary policy, in the history of the world in order to limit the fallout of the economic collapse Roubini outlines above, I expect it to blow the budget through the roof to crash the dollar. There will be no starving of any beasts. There will only be the creation of bigger wealth-sucking leviathan bureaucracies. Other governments will reject our paper, painful as it might be for them initially, and the US dollar will lose its status as the world's reserve currency. Yields on US treasuries will soar. Other governments are inflating their currencies as well, so gold be the only real winner in this race to the bottom for fiat money.

Sadly, we will reject willfully accepting the consequences as paying the piper today in return for a road that will lead us down the path of unrecoverable ruin that will permanently harm our place in the world. The time to heed the warnings of Ron Paul is growing short:

"I have for the past 35 years, expressed my grave concern for the future of America . The course we have taken over the past century has threatened our liberties, security, and prosperity. In spite of these long held concerns, I have days - growing more frequent all the time - when I'm convinced that time is now upon that some Big Events are about to occur. These fast approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed."

Kurt Kasun

I cannot add anything to this that I haven't stated before in this blog. We are going to be witnessing firsthand historic times. All of this is not gloom and doom as pointed out yesterday. If you choose to do nothing, it will definitely be gloom and doom as you will just be one of the nameless masses that loses everything. You will have plenty of company.

As always, the choice is yours.

As with all Saturdays, I will recap the key financial indicators that provide clues as to what is happening in the markets. Prices remained rather stagnant this week allowing the dollar to strengthen a bit further. This show of support will be very temporary. The big plunge is not long off. Gold went down from last week closing on Friday at $911.30 per ounce. Silver roses slightly closing Friday at $17.53 per ounce. The price of a barrel of oil inched up from last week closing at $125.30. The US dollar index, as mentioned above, gained further ground this week closing at 73.36.

Next week, we will look at the steps of socialism. Believe it or not, these times are often repeated if you look back at history. If we are fortunate, we will learn from past mistakes. Time will tell.

The two men said to Lot, "Do you have anyone else here—sons-in-law, sons or daughters, or anyone else in the city who belongs to you? Get them out of here, because we are going to destroy this place. The outcry to the LORD against its people is so great that he has sent us to destroy it."

So Lot went out and spoke to his sons-in-law, who were pledged to marry his daughters. He said, "Hurry and get out of this place, because the LORD is about to destroy the city!" But his sons-in-law thought he was joking.

With the coming of dawn, the angels urged Lot, saying, "Hurry! Take your wife and your two daughters who are here, or you will be swept away when the city is punished." Genesis 19:12-15 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

The Government's Answer

2008-08-01T17:15:00.000-07:00

Over the last couple days, the topic was about many reasons why the banking system is on the brink of collapse. Today, we will focus on what the government is prepared to do to prop up the system and preserve the empire.

The following are excerpts from an article titled "The Greatest Transfer of Wealth in History is About to Unfold" by Ty Andros from www.TraderView.com.

The horrible economics of the US presidential contenders and the gang of 535 (US Congress) will become priced into the markets in an increasing manner. Their economic illiteracy and inability to understand what and who create wealth pose inconceivable threats. The socialization of the risks to the banking system will continue to unfold; as it must unless a deflationary depression is allowed to unfold as the G7 money and investment banking system are increasingly insolvent. Ben Bernanke and Hank Paulson spoke to congress this past week and their message was clear:

Inflation be damned, job one is to rescue the financial system! Of course they will, keep in mind that the Federal Reserve is OWNED by the very banks which they are RESCUING! They will have their hands full in doing so.

There is NO shortage of cash sitting in the world. There are trillions and trillions of Dollars, Euros, British Pounds, and more FIAT currencies are ROLLING off the presses and keyboards (money is now digital to save on paper) on a daily basis; money is abundant and worldwide interest rates are NEGATIVE. But the amount of money creation required to save the BANKS' balance sheets from their unregulated SPAWN known as CDO's, CLO's, MBS's, (Collateralized Debt, Loan, Obligations and Mortgage Backed Securities, etc.) and CREDIT DEFAULT swaps is almost uncountable and still undefined as we speak. One thing you can count on: THEY WILL PRINT THE MONEY OUT OF THIN AIR one way or another and steal it out of the purchasing power of the G7 currencies and bonds as you hold them. Then they will rescue their masters in the G7 banking and financial systems with that same money! A stealth theft of purchasing power from where you hold it in your bank and brokerage accounts.

Capital raising is about through as all the patsies have been fleeced, now it comes to selling the family silverware as Citigroup and Merrill Lynch are now beginning to do, when that is done it will be the respective governments turn at the wheel. Trillions and trillions of Euros, Dollars and UK Pounds are set to roll off the presses and computer keyboards at the G7 central banks and treasuries (the Swiss are caught in this as well). Hundreds of banks are still left to fail, and trillions will be needed to clean up the messes and a new RTC (Resolution Trust Corporation) looms soon. It's inflate or die, and since central bank and financial officials are not suicidal, they will inflate…

The greatest transfer of wealth in history is beginning to unfold, as those who store their wealth in paper lose it to those who DON'T! It will take years to unfold.

This is the greatest OPPORTUNITY in history. Do not be afraid. Do your homework and thrive. Markets will zoom all over the place as investment assumptions that have held for years are now FALSE. We are not close to the end game here, cash is still spoken of as SAFE and risk free which is the most outrageous of LIES. Paper is poison and the sooner you invest with that in mind the sooner you will be on your way to the penthouse. People that hold their wealth in G7 paper are headed to the OUTHOUSE and they will be able to use their wealth as high priced toilet paper.

What is Wind Shear? WIND SHEAR - A change in wind speed and/or wind direction in a short distance resulting in a tearing or shearing effect. It can exist in a horizontal or vertical direction and occasionally in both . It happens when very high winds are blowing in opposite directions. When an airplane is caught in wind shear it can be RIPPED apart.

It can happen to economies and financial systems and it can RIP them apart too and deflation and inflation are trying to do so.

This is how I would define today's G7 economies: The high upward winds represent inflation in things which we all consume on a daily basis. The downward wind is DEFLATION in incomes, spending and household wealth in the G7.

CPI (Consumer Price Index) was reported up 5.6%, PPI (Producer Price Index) was up 9.2% and www.shadowstats.com is reporting year over year CPI at 12.2% (most accurate measure). This is the definition of inflation, and corrective activity may occur.

On the flip side with deflation, household wealth, jobs, and consumer spending are all headed lower. This is the definition of deflation.

Special thanks go to Ty Andros for his thoughts today - www.TraderView.com.

So, are you prepared for the wind shear of the economies blowing in opposite directions? The time to act is now. Choose how you store your assets wisely - toilet paper or tangible assets.

As always, the choice is yours.

Solomon answered God, "You have shown great kindness to David my father and have made me king in his place. Now, LORD God, let your promise to my father David be confirmed, for you have made me king over a people who are as numerous as the dust of the earth. Give me wisdom and knowledge, that I may lead this people, for who is able to govern this great people of yours?"

God said to Solomon, "Since this is your heart's desire and you have not asked for wealth, riches or honor, nor for the death of your enemies, and since you have not asked for a long life but for wisdom and knowledge to govern my people over whom I have made you king, therefore wisdom and knowledge will be given you. And I will also give you wealth, riches and honor, such as no king who was before you ever had and none after you will have." II Chronicles 1:8-12 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

On The Brink Part II

2008-07-31T08:05:00.000-07:00

Today, I will continue with Mike Shedlock's list of reasons why the US banking system is on the brink of collapse, starting with #14.

14. Bernanke openly solicits private equity firms to invest in banks. Is this even close to a remotely normal action for Fed chairman to take?

15. Bear Stearns was taken over by JPMorgan (JPM) days after insuring investors it had plenty of capital. Fears are high that Lehman will suffer the same fate. Worse yet, the Fed had to guarantee the shotgun marriage between Bear Stearns and JP Morgan by providing as much as $30 billion in capital. JPMorgan is responsible for only the first 1/2 billion. Taxpayers are on the hook for all the rest. Was this a legal action for the Fed to take? Does the Fed care?

16. Citigroup needed a cash injection from Abu Dhabi and a second one elsewhere. Then after announcing it would not need more capital is raising still more. The latest news is Citigroup will sell $500 billion in assets. To who? At what price?

17. Merrill Lynch raised $6.6 billion in capital from Kuwait Mizuho, announced it did not need to raise more capital, then raised more capital a few week later.

18. Morgan Stanley sold a 9.9% equity stake to China International Corp. CEO John Mack compensated by not taking his bonus. How generous. Morgan Stanley fell from $72 to $37. Did CEO John Mack deserve a paycheck at all?

19. Bank of America (BAC) agreed to take over Countywide Financial (CFC) and twice announced Countrywide will add profits to B of A. Inquiring minds were asking "How the hell can Countrywide add to Bank of America earnings?" Here's how. Bank of America just announced it will not guarantee $38.1 billion in Countrywide debt. Questions over "Fraudulent Conveyance" are now surfacing.

20. Washington Mutual agreed to a death spiral cash infusion of $7 billion accepting an offer at $8.75 when the stock was over $13 at the time. Washington Mutual has since fallen in waterfall fashion from $40 and is now trading near $5.00 after a huge rally.

21. Shares of Ambac (ABK) fell from $90 to $2.50. Shares of MBIA (MBI) fell from $70 to $5. Sadly, the top three rating agencies kept their rating on the pair at AAA nearly all the way down. No one can believe anything the government sponsored rating agencies say.

22. In a panic set of moves, the Fed slashed interest rates from 5.25% to 2%. This was the fastest, steepest drop on record. Ironically, the Fed chairman spoke of inflation concerns the entire drop down. Bernanke clearly cannot tell the truth. He does not have to. Actions speak louder than words.

23. FDIC Chairman Sheila Bair said the FDIC is looking for ways to shore up its depleted deposit fund, including charging higher premiums on riskier brokered deposits.

24. There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. IndyMac will eat up roughly $8 billion of that.

25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.

What cannot be paid back will be defaulted on. If you did not know it before, you do now. The entire US banking system is insolvent.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Wow! Do you still think that I've been crying "Wolf!" all this time? This is fact. This is clear evidence from a variety of angles that the banking system is severe trouble. As usual, this is just the tip of the iceberg.

Tomorrow, there will be more on the government's role in this demise. Stay tuned ...

The following scripture talks about the demise of the city of Tyre. Substitute the United States and the current times, and you have a good picture of what will happen.

"This is what the Sovereign LORD says to Tyre: Will not the coastlands tremble at the sound of your fall, when the wounded groan and the slaughter takes place in you? Then all the princes of the coast will step down from their thrones and lay aside their robes and take off their embroidered garments. Clothed with terror, they will sit on the ground, trembling every moment, appalled at you.

Then they will take up a lament concerning you and say to you:
" 'How you are destroyed, O city of renown,
peopled by men of the sea!
You were a power on the seas,
you and your citizens;
you put your terror
on all who lived there.

Now the coastlands tremble
on the day of your fall;
the islands in the sea
are terrified at your collapse.'

"This is what the Sovereign LORD says: When I make you a desolate city, like cities no longer inhabited, and when I bring the ocean depths over you and its vast waters cover you, then I will bring you down with those who go down to the pit, to the people of long ago. I will make you dwell in the earth below, as in ancient ruins, with those who go down to the pit, and you will not return or take your place in the land of the living. I will bring you to a horrible end and you will be no more. You will be sought, but you will never again be found, declares the Sovereign LORD." Ezekiel 26:15-21 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

On The Brink

2008-07-30T20:29:00.000-07:00

Over the past couple weeks, the topics have gone from bank failures to illegal government spying on our citizens. The rest of the week we will look further at problems in the banking industry and the government's role in the matter.

Today, I will share the first part of a blog post from Mike Shedlock from July 24, 2008 titled "Evidence of the US Banking System Teetering on the Brink of Collapse". In it, Mike lists 25 reasons why we are on the brink of collapse in the banking world.

Here is Mike's list of reasons:

1. Paulson (US Treasury Secretary Henry Paulson) appears on Face The Nation and says "Our banking system is a safe and a sound one." If the banking system was safe and sound, everyone would know it (or at least think it). There would be no need to say it.

2. Paulson says the list of troubled banks "is a very manageable situation". The reality is there are 90 banks on the list of problem banks. IndyMac was not one of them until a month before it collapsed. How many other banks will magically appear on the list a month before they collapse?

3. In a Northern Rock moment, depositors at IndyMac pull out their cash. Police had to be called in to ensure order.

4. Washington Mutual (WM), another troubled bank, refused to honor IndyMac cashier's checks. The irony is it makes no sense for customers to pull insured deposits out of IndyMac after it went into receivership. The second irony is the last place one would want to put those funds would be Washington Mutual. Eventually Washington Mutual decided it would take those checks but with an 8 week hold. Will Washington Mutual even be around 8 weeks from now?

5. Paulson asked for "Congressional authority to buy unlimited stakes in and lend to Fannie Mae (FNM) and Freddie Mac (FRE)" just days after he said "Financial Institutions Must Be Allowed To Fail". Obviously Paulson is reporting from the 5th dimension. In some alternate universe, his statements just might make sense.

6. Former Fed Governor William Poole says "Fannie Mae, Freddie Losses Makes Them Insolvent".

7. Paulson says Fannie Mae and Freddie Mac are "essential" because they represent the only "functioning" part of the home loan market. The firms own or guarantee about half of the $12 trillion in U.S. mortgages. Is it possible to have a sound banking system when the only "functioning" part of the mortgage market is insolvent?

8. Bernanke testified before Congress on monetary policy but did not comment on either money supply or interest rates. The word "money" did not appear at all in his testimony. The only time "interest rate" appeared in his testimony was in relation to consumer credit card rates. How can you have any reasonable economic policy when the Fed chairman is scared half to death to discuss interest rates and money supply?

9. The SEC issued a protective order to protect those most responsible for naked short selling. As long as the investment banks and brokers were making money engaging in naked shorting of stocks, there was no problem. However, when the bears began using the tactic against the big financials, it became time to selectively enforce the existing regulation.

10. The Fed takes emergency actions twice during options expirations week in regards to the discount window and rate cuts.

11. The SEC takes emergency action during options expirations week regarding short sales.

12. The Fed has implemented an alphabet soup of pawn shop lending facilities whereby the Fed accepts garbage as collateral in exchange for treasuries. Those new Fed lending facilities are called the Term Auction Facility (TAF), the Term Security Lending Facility (TSLF), and the Primary Dealer Credit Facility (PDCF).

13. Citigroup (C), Lehman (LEH), Morgan Stanley(MS), Goldman Sachs (GS) and Merrill Lynch (MER) all have a huge percentage of level 3 assets. Level 3 assets are commonly known as "marked to fantasy" assets. In other words, the value of those assets is significantly if not ridiculously overvalued in comparison to what those assets would fetch on the open market. It is debatable if any of the above firms survive in their present form. Some may not survive in any form.

by Mike Shedlock
http://globaleconomicanalysis.blogspot.com

Tomorrow, we will get into the rest of Mike's list of reasons our banking system is in dire straits and on the brink of collapse. Stay tuned ...

" 'Because they lead my people astray, saying, "Peace," when there is no peace, and because, when a flimsy wall is built, they cover it with whitewash, therefore tell those who cover it with whitewash that it is going to fall. Rain will come in torrents, and I will send hailstones hurtling down, and violent winds will burst forth. When the wall collapses, will people not ask you, "Where is the whitewash you covered it with?" Ezekiel 13:10-12 (NIV)

If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

More on NSA Spying

2008-07-29T21:45:00.000-07:00

Today, I will share another article from the ACLU (American Civil Liberties Union) after the House of Representatives passed the unconstitutional surveillance legislation. This legislation will allow phone companies to have immunity from lawsuits for their participation in turning over personal records to the government.

Washingon DC. Following a vote in the House of Representatives
sanctioning warrantless wiretapping and handing immunity to
telecommunications companies for their role in domestic spying, the
American Civil Liberties Union expressed outrage at representatives
who voted for the unconstitutional legislation. The bill, H.R. 6304,
or The FISA Amendments Act of 2008, passed the chamber by a vote of
293 (yes) -129 (no), and is expected to be voted on in the Senate next
week.

Caroline Fredrickson, director of the ACLU's Washington Legislative
Office said: "It's Christmas morning at the White House thanks to this
vote. The House just wrapped up some expensive gifts for the
administration and their buddies at the phone companies.

Watching the House fall to scare tactics and political maneuvering is
especially infuriating given the way it stood up to pressure from the
president on this same issue just months ago. In March we thought the
House leadership had finally grown a backbone by rejecting the
Senate's FISA bill. Now we know they will not stand up for the Constitution.

"No matter how often the opposition calls this bill a 'compromise,' it
is not a meaningful compromise, except of our constitutional rights.
The bill allows for mass, untargeted and unwarranted surveillance of
all communications coming in to and out of the United States.

The courts' role is superficial at best, as the government can
continue spying on our communications even after the FISA court has
objected. Democratic leaders turned what should have been an easy
FISA fix into the wholesale giveaway of our Fourth Amendment rights.

"More than two years after the president's domestic spying was
revealed in the pages of the New York Times, Congress' fury and shock
has dissipated to an obedient whimper. After scrambling for years to
cover their tracks, the phone companies and the administration are
almost there. This immunity provision will effectively destroy
Americans' chance to have their deserved day in court and will kill
any possibility of learning the extent of the administration's lawless
actions."

"The House should be ashamed of itself. The fate of the Fourth
Amendment is now in the Senate's hands. We can only hope senators
will show more courage than their colleagues in the House."

by the American Civil Liberties Union, www.aclu.org

Since this was covered extensively last week, we now know that the Senate did approve the same bill. Now they are just waiting for President Bush to sign this into law.

This is just reprehensible that we have let our country be effectively ruled by special interests groups and big business of corporate America. It's bad enough that the President gets to do whatever he wants, but now the government is giving immunity to companies for going along with his actions. It looks as though democracy really is "mob rule".

When will we demand these actions to stop?

As always, the choice is yours.

The following scripture is very appropriate to the last couple posts. It describes the Jewish leaders looking to place Jesus in prison.

Finally the temple guards went back to the chief priests and Pharisees, who asked them, "Why didn't you bring him in?"

"No one ever spoke the way this man does," the guards declared.

"You mean he has deceived you also?" the Pharisees retorted. "Has any of the rulers or of the Pharisees believed in him? No! But this mob that knows nothing of the law—there is a curse on them."

Nicodemus, who had gone to Jesus earlier and who was one of their own number, asked, "Does our law condemn anyone without first hearing him to find out what he is doing?" John 7:45-51 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Disturbing Legal Victory

2008-07-28T20:48:00.000-07:00

Last week, I hit on some very disconcerting facts about our government. More specifically, that the President can do whatever he wants without virtually any recourse by Congress or the Supreme Court. I will continue on that topic with the following article from the International Herald Tribune, the global edition of the New York Times. The article is titled "White House Wins a Disturbing Legal Victory", published on July 20, 2008.

The Bush administration has been a waging a fierce battle for the power to lock people up indefinitely simply on the president's say-so. It scored a disturbing victory last week when a federal appeals court ruled that it could continue to detain Ali al-Marri, who has been held for more than five years as an enemy combatant. The decision gives the president sweeping power to deprive anyone - citizens as well as noncitizens - of their freedom. The Supreme Court should reverse this terrible ruling.

Al-Marri, a citizen of Qatar legally residing in the United States, was initially arrested in his home in Peoria, Illinois, on ordinary criminal charges, then imprisoned by military authorities.

The government, which says he has ties to Al Qaeda, designated him an enemy combatant, even though it never alleged that he was in an army or carried arms on a battlefield. He was held on the basis of extremely thin hearsay evidence.

Last year, a three-judge panel of the U.S. Court of Appeals for the 4th Circuit, based in Richmond, Virginia, declared that the government could not hold al-Marri, or any other civilian, simply on the president's orders. If it wanted to prosecute him, the court ruled, it could do so in the civilian court system.

That was the right answer. Unfortunately, last week the full 4th Circuit reversed the decision, and with a tangle of difficult-to-decipher opinions, upheld the government's right to hold al-Marri indefinitely. The court ruled that al-Marri must be given greater rights to challenge his detention. But this part of the decision is weak, and he is unlikely to get the sort of procedural protections necessary to ensure that justice is done.

The implications are breathtaking. The designation "enemy combatant," which should apply only to people captured on a battlefield, can now be applied to people detained inside the United States. Even though al-Marri is not a U.S. citizen, the court's reasoning appears to apply equally to citizens.

Equally troubling, the ruling supports President George W. Bush's ludicrous argument that when Congress authorized the use of force against those responsible for the Sept. 11 attacks, it gave the president essentially unlimited powers. If a president ever wants to round up Americans on vague charges and detain them indefinitely, this ruling gives him a dangerous green light.

Al-Marri's lawyers say they will ask the Supreme Court to review the ruling. Without doubt, it should. The case raises critically important issues for a free society, and the 4th Circuit's convoluted set of opinions is too confusing to give proper guidance to other courts, the executive branch, or the people.

The jumble reflects how badly the administration has butchered the law in this area. People accused of bad deeds should be tried in court - not in sham proceedings. They should be put in jail - not in secret detention. If they are not proved guilty, they should be set free. It is up to the Supreme Court to restore these principles of American justice.

International Herald Tribune, July 20, 2008

This is a sad state of affairs when the courts are acquiescing to the power of the presidency. Regardless of the legality of the detaining of citizens and non-citizens, the courts go through the motions and do nothing to stop the President from doing whatever he wants. King George rules again. The last time this happened, we fought the Revolutionary War and won our freedom. What will happen this time?

What happened to our freedom? What happened to rule by the people? Our founding fathers set up a republic with a weak central (federal) government. That is a far cry away from the government that exist today. Nonetheless, our government including the judicial branch are mere puppets of the manipulators.

It is not up to our government to govern us. It is up to the people. When will we resume our rights specified in the Declaration of Independence that we are sovereigns giving consent to the government to be governed. If we give up those rights, then we are mere vassals to be sold at the whim of the masters. Is this what you want?

As always, the choice is yours.

A ruler who oppresses the poor
is like a driving rain that leaves no crops.

Those who forsake the law praise the wicked,
but those who keep the law resist them.

Evil men do not understand justice,
but those who seek the LORD understand it fully. Proverbs 28:3-5 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

The Challenge to Illegal Spying

2008-07-26T17:57:00.000-07:00

To continue on with this week's theme of illegal spying on Americans by the government, today's post will delve into what response the ACLU (American Civil Liberties Union) did to fight for our rights after the initial story broke in the New York Times. The following is taken directly from the ALCU website www.aclu.org.

It's been nearly two years since we first found out that our own government has been tapping our phones and reading our e-mails. In 2005, the nation learned that President Bush has repeatedly authorized the National Security Agency to monitor the phone calls and emails of people inside the United States, without a warrant and in violation of the Constitution. Authorized days after September 11, 2001, this warrantless wiretapping program is part of a broad pattern of the executive branch using "national security" as an excuse for encroaching on the privacy and free speech rights of Americans without adequate oversight.

The ACLU won the first round of its legal challenge in August 2006, when U.S. District Court Judge Anna Diggs Taylor ruled the NSA program violates the First Amendment, the Fourth Amendment, and the Foreign Intelligence Surveillance Act in her ACLU v. NSA decision. "It was never the intent of the Framers to give the President such unfettered control," Taylor wrote in the decision, "particularly where his actions blatantly disregard the parameters clearly enumerated in the Bill of Rights."

After this initial victory, the ACLU returned to court on January 31, 2007, where the Sixth Circuit Court of Appeals heard arguments from both sides. Despite the Bush administration's January announcement that wiretapping warrants are now subject to FISA court approval, the president is still claiming the "inherent authority" to engage in warrantless eavesdropping - even his own attorneys acknowledged that nothing would stop him from resuming warrantless surveillance at any time. Then ACLU Associate Legal Director Ann Beeson urged the court to exercise its proper authority and require the president to follow the law.

In July 2007, the Sixth Circuit Court of Appeals dismissed the case, ruling the plaintiffs in the case - which includes scholars, journalists, and national nonprofit organizations - had no standing to sue because they could not state with certainty that they have been wiretapped by the NSA.

The decision "insulates the Bush administration's warrantless surveillance activities from judicial review and deprives Americans of any ability to challenge the illegal surveillance of their telephone calls and e-mails," said ACLU Legal Director Steve Shapiro. He added the ruling "did not uphold the legality of the government's warrantless surveillance activity. Indeed, the only judge to discuss the merits clearly and unequivocally declared that the warrantless surveillance was unlawful."

Because the appeals court refused to rule on the legality of the program, Americans were denied the chance to contest the warrantless surveillance of their telephone calls and e-mails. In October 2007, the ACLU appealed the ruling to the Supreme Court of the United States. The Court declined the case in February 2008.

In August 2007, following the passage of the so-called Protect America Act - a law that vastly expands the Bush administration's authority to conduct warrantless wiretapping of Americans' international phone calls and emails - the ACLU filed a request with the Foreign Intelligence Surveillance Court for court orders and legal papers pertaining to the government's authority to secretly wiretap Americans.

In December 2007 the FISC ruled that, despite the fact that release of the orders would inform the public about the government's surveillance powers, the court would not conduct a review to determine whether the legal rulings were properly determined to be classified.

The Senate Judiciary Committee has asked the Bush Administration no less than nine times for information about the NSA's illegal spying. On June 27, 2007, the Senate Judiciary Committee issued subpoenas to the White House, Vice President and the Justice Department for documents about this warrantless surveillance program. After missing a second deadline in August, Committee Chairman Patrick Leahy (D-VT) declared he would move towards holding the adminstration in contempt. In October, after nearly four months without meaningful reply, the ACLU once again asked the Committee to go forward with contempt proceedings against White House officials for refusing to cooperate with the subpoenas and reminded Congress of its constitutional authority to do so.

www.aclu.org

This is just further confirmation that the manipulators have total control of the government at all levels, including the judicial branch. Thus, having faith in our democracy, separation of powers, checks and balances, etc. are all mute when considering we are a bankrupted country. The receivership of that bankruptcy, the Federal Reserve (operating on behalf of the shareholders of the World Bank), gets to make the decisions on how things are done. This includes the President, Congress, and the Supreme Court. This has been the case since 1933 when Roosevelt signed the bankruptcy agreement.

Notice above in red that the Supreme Court denied hearing the case. They didn't want to have egg on their face by exposing that they are not in control of the law and that the President can do whatever he wants, or more accurately, what he is directed to do. They know that the President is in violation of the FISA law when he ordered the eavesdropping on American citizens. And despite all the raucous raised by the ACLU and other government watchdogs, none of that matters. The slaves can not rule the plantation. The slaves have to be freed before they can make the rules.

Did I just blow your mind? Unless you are already aware of all of this information, I should have. Go back and read the History of Money series in this blog beginning on January 28th, 2008 for more of the details. Do a little research on these topics and you will find that it is all true. That is of course, unless you want to live in a state of ignorant bliss and think that all of the present anomalies in the markets are normal.

The greatest transfer of wealth in the history of the world will happen in the next few years and most people are not even aware that this is all being planned and executed by very smart individuals. Their simple plan - control everything. When that happens (if it hasn't already), everyone on the planet will answer to their every whim. Think on these things for a minute. Is this the kind of world you want to live in? Is this what you want for your children and grandchildren? If it is, do nothing.

As always, the choice is yours.

As with all Saturdays, I will recap key financial indicators that provide many clues as to what is happening in the financial world and the overall plan of what lies ahead. The US dollar strengthened for the second week in a row mainly due to the fall of the price of oil. That drove precious metal prices down again, but not significantly. Gold closed Friday afternoon at $929.20 per ounce. Silver also closed lower at $17.37 per ounce. The price of oil as mentioned, went down for the second straight week closing at $123.43 per barrel. This strengthened the US dollar index, a measure of stability against the other major world currencies. It closed on Friday at 72.81.

With the decrease in the price of oil, the manipulators are stalling the markets until the conditions are right for execution of their plan. Since the dollar has been falling for most of the year, this was accelerating the demise of the economy too fast. By this stalling action, it allows for the victims to get comfortable with the market actions before the rug is swept out from beneath their feet. This is just normal, or that is what they want you to believe. Believe me, the conditions down the road are anything but normal. As I said above, the greatest transfer of wealth in the history of the world will happen in the next several years. Are you ready for that?

Ignore this warning at your peril.

To repeat the consequence from yesterday's scripture passage:
The Israelites persisted in all the sins of Jeroboam and did not turn away from them until the LORD removed them from his presence, as he had warned through all his servants the prophets. So the people of Israel were taken from their homeland into exile in Assyria, and they are still there. II Kings 17:22-23 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

The Legality of Spying

2008-07-25T16:31:00.001-07:00

This week the topics have focused on the illegal eavesdropping the government does on its citizens. For a minute, let's entertain the thought that the law actually matters when the President is concerned. Today, I will share excerpts from an article in response to this issue when the story broke in December, 2005 from the ALCU (American Civil Liberties Union).

NSA Spying on Americans Is Illegal (12/29/2005)

What if it emerged that the President of the United States was flagrantly violating the Constitution and a law passed by the Congress to protect Americans against abuses by a super-secret spy agency? What if, instead of apologizing, he said, in essence, "I have the power to do that, because I say I can." That frightening scenario is exactly what we are now witnessing in the case of the warrantless NSA spying ordered by President Bush that was reported December 16, 2005 by the New York Times.

According to the Times, Bush signed a presidential order in 2002 allowing the National Security Agency to monitor without a warrant the international (and sometimes domestic) telephone calls and e-mail messages of hundreds or thousands of citizens and legal residents inside the United States. The program eventually came to include some purely internal controls - but no requirement that warrants be obtained from the Foreign Intelligence Surveillance Court as the 4th Amendment to the Constitution and the foreign intelligence surveillance laws require.

In other words, no independent review or judicial oversight.

That kind of surveillance is illegal. Period.

The day after this shocking abuse of power became public, President Bush admitted that he had authorized it, but argued that he had the authority to do so. But the law governing government eavesdropping on American citizens is well-established and crystal clear. President Bush's claim that he is not bound by that law is simply astounding. It is a Presidential power grab that poses a challenge in the deepest sense to the integrity of the American system of government - the separation of powers between the legislative and executive branches, the concept of checks and balances on executive power, the notion that the president is subject to the law like everyone else, and the general respect for the "rule of law" on which our democratic system depends.

Flouting a long history
The tensions between the need for intelligence agencies to protect the nation and the danger that they would become a domestic spy agency have been explicitly and repeatedly fought out in American history. The National Security Act of 1947 contained a specific ban on intelligence operatives from operating domestically. In the 1970s, America learned about the extensive domestic political spying carried out by the FBI, the military, the CIA, and the NSA, and Congress passed new laws to prevent a repeat of those abuses. Surveillance laws were debated and modified under presidents Ford, Carter, Reagan, Bush Sr. and Clinton.

But, President Bush would sweep aside this entire body of democratically debated and painstakingly crafted restrictions on domestic surveillance by the executive branch with his extraordinary assertion that he can simply ignore this law because he is the Commander-in-Chief. In a December 17 radio address, for example, Bush asserted that the spying was "fully consistent with my constitutional responsibilities and authorities." But his constitutional duty is to "take care that the laws be faithfully executed" (Article II, Section 3); the law here clearly establishes well-defined procedures for eavesdropping on U.S. persons, and the fact is, Bush ordered that those procedures not be followed.

Government eavesdropping on Americans is an extremely serious matter; the ability to intrude on the private realm is a tremendous power that can be used to monitor, embarass, control, disgrace, or ruin an individual. Because it is so invasive, the technology of wiretapping has been subject to carefully crafted statutory controls almost since it was invented. Ignoring those controls and wiretapping without a court order is a crime that carries a significant prison sentence (in fact, criminal violations of the wiretap statute were among the articles of impeachment that were drafted against President Nixon shortly before his resignation).

Clearly Illegal
Unfortunately, although the law in this matter is crystal clear, many Americans, faced with President Bush's bold assertions of "inherent" authority for these actions, will not know what to believe. There are only 5 points they need to understand:

Point #1: Electronic surveillance by the Government is strictly limited by the Constitution and Federal Law

The law on surveillance begins with the Fourth Amendment to the Constitution, which states clearly that Americans' privacy may not be invaded without a warrant based on probable cause.

United States Constitution
Fourth Amendment

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. (emphasis added)

The US Supreme Court (US v. Katz 389 US 347) has made it clear that this core privacy protection does cover government eavesdropping. As a result, all electronic surveillance by the government in the United States is illegal, unless it falls under one of a small number of precise exceptions specifically carved out in the law.

United States Code Title 50, Chapter 36, Subchapter 1
Section 1809. Criminal sanctions

(a) Prohibited activities
A person is guilty of an offense if he intentionally-

(1) engages in electronic surveillance under color of law except as authorized by statute

In other words, the NSA can only spy where it is explicitly granted permission to do so by statute. Citizens concerned about surveillance do not have to answer the question, "what law restricts the NSA's spying?" Rather, the government is required to supply an answer to the question "what law permits the NSA to spy?"

Point #2: There are only three laws that permit the government to spy
There are only three laws that authorize any exceptions to the ban on electronic eavesdropping by the government. Congress has explicitly stated that these three laws are the exclusive means by which domestic electronic surveillance can be carried out (18 USC, Section 2511(2)(f)). They are:

Title III and ECPA. Title III and the Electronic Commnunications Privacy Act make up the statutes that govern criminal wiretaps in the United States.
FISA. The Foreign Intelligence Surveillance Act is the law that governs eavesdropping on agents of "foreign powers" within the United States, including suspected foreign terrorists.

Point #3: The Bush-NSA spying was not authorized by any of these laws
Title III and ECPA govern domestic criminal wiretaps and are not relevant to the NSA's spying. FISA is the law under which the NSA should have operated. It authorizes the government to conduct surveillance in certain situations without meeting all of the requirements of the Fourth Amendment that apply under criminal law, but requires that an independent Foreign Intelligence Surveillance Court oversee that surveillance to make sure that Americans who have no ties to foreign terrorist organizations or other "foreign powers" are not spied upon.

FISA was significantly loosened by the Patriot Act (which, for example, allowed it to be used for some criminal investigations), and parts of it now stand in clear violation of the Constitution's Fourth Amendment in the view of the ACLU and many others. However, even the post-Patriot Act version of FISA does not authorize the president to conduct warrantless eavesdropping on U.S. citizens or permanent legal residents in the U.S. without an order from the FISA Court. Yet it is that very court order requirement - imposed to protect innocent Americans - that the President has ignored.

In fact, one member of the FISA Court, Judge James Roberston, has apparently resigned from the court in protest of President Bush's secret authorization of this program. And the New York Times reported that the court's chief judge complained about the program when she was (belatedly) notified of it, and refused to allow information gathered under the program to be used as the basis for FISA wiretap orders.

Point #4: Congress's post-9/11 use-of-force resolution does not legitimize the Bush-NSA spying
Congress after 9/11 approved an Authorization to Use Military Force against those responsible for the attacks in order to authorize the president to conduct foreign military operations such as the invasion of Afghanistan.

But that resolution contains no language changing, overriding or repealing any laws passed by Congress. Congress does not repeal legislation through hints and innuendos, and the Authorization to Use Military Force does not authorize the president to violate the law against surveillance without a warrant any more than it authorizes him to carry out an armed robbery or seize control of Citibank in order to pay for operations against terrorists. In fact, when President Truman tried to seize control of steel mills that were gripped by strikes in 1952, the Supreme Court decisively rejected his authority to make such a seizure, even in the face of arguments that the strike would interfere with the supply of weapons and ammunition to American troops then under fire on the battlefields of the Korean War.

U.S. Supreme Court
YOUNGSTOWN CO. v. SAWYER, 343 U.S. 579 (1952)

"The order cannot properly be sustained as an exercise of the President's military power as Commander in Chief of the Armed Forces. . . .

"Nor can the seizure order be sustained because of the several constitutional provisions that grant executive power to the President. . . . The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute. . . .

"The Founders of this Nation entrusted the lawmaking power to the Congress alone in both good and bad times."

The Supreme Court also rejected similar assertions of inherent executive power by Richard Nixon.

In fact, FISA contains explicit language describing the president's powers "during time of war" and provides that "the President, through the Attorney General, may authorize electronic surveillance without a court order under this title to acquire foreign intelligence information ." for a period not to exceed fifteen days following a declaration of war by the Congress 50 U.S.C. §1811 (emphasis added). So even if we accept the argument that the use-of-force resolution places us on a war footing, warrantless surveillance would have been legal for only 15 days after the resolution was passed on September 18, 2001.

Point #5: The need for quick action does not justify an end-run around the courts
The FISA law takes account of the need for emergency surveillance, and the need for quick action cannot be used as a rationale for going outside the law. FISA allows wiretapping without a court order in an emergency; the court must simply be notified within 72 hours. The government is aware of this emergency power and has used it repeatedly. In addition, the Foreign Intelligence court is physically located in the Justice Department building, and the FISA law requires that at least two of the FISA judges reside in the Washington, DC area, for precisely the reason that rapid action is sometimes needed.

If President Bush still for some reason finds these provisions to be inadequate, he must take his case to Congress and ask for the law to be changed, not simply ignore it.

The president is bound by the rule of law
President Bush's claim that he has "inherent authority" as Commander-in-Chief to use our spy agencies to eavesdrop on Americans is astonishing, and such spying is clearly illegal. It must be halted immediately, and its origins must be thoroughly investigated by Congress and by a special counsel.

Given the extensive (indeed, excessive) surveillance powers that the government already possesses, the Administration's blatantly illegal use of warrantless surveillance raises an important question: why? One possibility, raised by the New York Times in a Dec. 24, 2005 story ("Spy Agency Mined Vast Data Trove, Officials Report"), is that the NSA is relying on assistance from several unnamed telecommunications companies to "trace and analyze large volumes of communications" and is "much larger than the White House has acknowledged."

This, as security expert Bruce Schneier has noted, suggests the Bush Administration has developed a "a whole new surveillance paradigm" - exploiting the NSA's well known capabilities to spy on individuals not one at a time, as FISA permits, but to run communications en masse through computers in the search for suspicious individuals or patterns. This "new paradigm" may well be connected to the NSA program sometimes known as "Echelon," which carries out just that kind of mass collection of communications (see www.nsawatch.org). This "wholesale" surveillance, as Schneier calls it, would constitute an illegal invasion of Americans' privacy on a scale that has never before been seen. (See Schneier, "NSA and Bush's Illegal Eavesdropping," Salon.com)

According to the Times, several telecommunications companies provided the NSA with direct access to streams of communications over their networks. In other words, the NSA appears to have direct access to a large volume of Americans' communications - with not simply the assent, but the cooperation of the companies handling those communications.

We do not know from the report which companies are involved or precisely how or what the NSA can access. But this revelation raises questions about both the legal authority of the NSA to request and receive this data, and whether these companies may have violated either the Federal laws protecting these communications or their own stated privacy polices (which may, for example, provide that they will only turn over their customers' data with their consent or in response to a proper order).

Regardless of the scale of this spying, we are facing a historic moment: the President of the United States has claimed a sweeping wartime power to brush aside the clear limits on his power set by our Constitution and laws - a chilling assertion of presidential power that has not been seen since Richard Nixon.

www.aclu.org

If anyone had any doubt of the legality of this spying by the NSA, this should resolve those doubts. Now you can see why this has developed such as controversy. But, since its involves the President, there are little or no consequences on his actions.

The Israelites secretly did things against the LORD their God that were not right. From watchtower to fortified city they built themselves high places in all their towns.

They set up sacred stones and Asherah poles on every high hill and under every spreading tree. At every high place they burned incense, as the nations whom the LORD had driven out before them had done. They did wicked things that provoked the LORD to anger. They worshiped idols, though the LORD had said, "You shall not do this."

The LORD warned Israel and Judah through all his prophets and seers: "Turn from your evil ways. Observe my commands and decrees, in accordance with the entire Law that I commanded your fathers to obey and that I delivered to you through my servants the prophets."

The Israelites persisted in all the sins of Jeroboam and did not turn away from them until the LORD removed them from his presence, as he had warned through all his servants the prophets. So the people of Israel were taken from their homeland into exile in Assyria, and they are still there.

II Kings 17:9-13, 22-23 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

NSA Spying on Americans

2008-07-24T21:29:00.000-07:00

Yesterday, I shared an article about the US Senate passing a bill to grant immunity from lawsuits to telecom companies that participated in illegal monitoring of emails, internet usage, text messaging, and phone calls of Americans. Today, we will get further into this issue and how it became a big issue.

On December 16, 2005, the New York Times broke the story after they learned that the Bush administration was considering seeking a court injunction to block its publication. In the story, Americans learned that the President authorized the National Security Agency (NSA) to wiretap phone and email communications involving United States persons within the U.S. without obtaining a warrant or court order pursuant to the Foreign Intelligence Surveillance Act of 1978 (FISA). FISA prohibits unauthorized electronic surveillance. Shortly afterwards Americans also learned that the major telecoms participated in warrantless surveillance, handing over billions of their customers private communications and communications records.

The controversy that ensued has lasted years all the way to the present month as reflected in yesterday's post. This concerns surveillance of persons within the United States incident to the collection of foreign intelligence by the NSA as part of the war on terror. The legality of surveillance involving US persons and extent of this authorization is at the core of this controversy which has steadily grown to include:

Constitutional issues concerning the separation of powers and the Fourth Amendment immunities.
The effectiveness and scope of the program.
The legality of the leaking and publication of classified information and the implications for U.S. national security arising from the disclosure.
Adequacy of FISA as a tool in the war on terror

Under this program, referred to by the Bush administration as the "terrorist surveillance program", the NSA is authorized by executive order to monitor, without warrants, phone calls, emails, Internet activity, and text messaging, and other communication involving any party believed by the NSA to be outside the U.S., even if the other end of the communication lies within the U.S. The exact scope of the program is not known, but the NSA is or was provided total, unsupervised access to all fiber-optic communications going between some of the nation's major telecommunication companies' major interconnect locations, including phone conversations, email, web browsing, and corporate "private network" traffic.

Shortly before Congress passed a new law in August of 2007 that legalized warrantless surveillance, the Protect America Act of 2007, critics stated that such "domestic" intercepts required FISC authorization under the Foreign Intelligence Surveillance Act of 1978. The Bush administration maintains that the authorized intercepts are not domestic but rather "foreign intelligence" integral to the conduct of war and that the warrant requirements of FISA were implicitly superseded by the subsequent passage of the Authorization for Use of Military Force Against Terrorists (AUMF).

FISA, on the other hand, makes it illegal to intentionally engage in electronic surveillance under appearance of an official act or to disclose or use information obtained by electronic surveillance under appearance of an official act knowing that it was not authorized by statute; this is punishable with a fine of up to $10,000 or up to five years in prison, or both. In addition, the Wiretap Act prohibits any person from illegally intercepting, disclosing, using or divulging phone calls or electronic communications; this is punishable with a fine or up to five years in prison, or both.

The 1978 Foreign Intelligence Surveillance Act regulates U.S. government agencies' carrying out of physical searches, and electronic surveillance, wherein the main purpose is the gathering of foreign intelligence information. "Foreign intelligence information" is defined in 50 U.S.C. § 1801 as information necessary to protect the U.S. or its allies against actual or potential attack from a foreign power, sabotage, or international terrorism. FISA defines a "foreign power" as a foreign government or any faction(s) of a foreign government not substantially composed of US persons, or any entity directed or controlled by a foreign government. FISA provides for both criminal and civil liability for intentional electronic surveillance under color of law except as authorized by statute.

FISA provides two documents for the authorization of surveillance. First, FISA allows the Justice Department to obtain warrants from the Foreign Intelligence Surveillance Court (FISC) before or up to 72 hours after the beginning of the surveillance. FISA authorizes a FISC judge to issue a warrant for the electronic cameras if "there is probable cause to believe that… the target of the electronic surveillance is a foreign power or an agent of a foreign power." 50 U.S.C. §1805(a)(3). Second, FISA permits the President or his delegate to authorize warrantless surveillance for the collection of foreign intelligence if "there is no substantial likelihood that the surveillance will acquire the contents of any communication to which a United States person is a party". 50 U.S.C. §1802(a)(1).

This last statement is the crux of the issue. FISA expressly allows warrantless surveillance only if there is no substantially likelihood that it is tied to a US person. All of President Bush's program involves communications tied to US persons. That is why Senator Feingold accused the President of breaking the law in yesterday's post. These are all illegal intrusion on our rights.

But, as I stated in yesterday's posts, the federal government does not have a good track record on preserving our rights. Once they can hear and read everything that we say and write on electronic media, where will it stop? Do we have any rights remaining? Not really. We are living in a Constitutional dictatorship. President Bush thinks and acts like he can do anything he wants through executive order even though it may violate existing laws as long as he thinks it is vital to the national interest or to fight the war on terror. This sounds like a dictatorship to me.

When do we stop this madness? When do we wake up to these atrocities and change things?

As always, the choice is yours.

This matter arose because some false brothers had infiltrated our ranks to spy on the freedom we have in Christ Jesus and to make us slaves. We did not give in to them for a moment, so that the truth of the gospel might remain with you. Galatians 2:4-5 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Immunity for Eavesdroppers

2008-07-23T20:02:00.001-07:00

Yesterday, I shared an article regarding the deal the US and the European Union is working on to share private personal information on its citizens among the governments. Today, I will show you what is going on back here in the states regarding our private data.

The following are excerpts from an article published on July 9, 2008 by the Associated Press titled "Senate Passes Eavesdropping Bill".

Bill Grants Immunity To Phone Companies That Listened In On Americans

The Senate sent the White House a bill overhauling bitterly disputed rules on secret U.S. government eavesdropping Wednesday, bowing to President George W. Bush's demand to shield telecommunications companies from lawsuits complaining they helped the U.S. spy on Americans.

The relatively one-sided vote, 69-28, came only after a lengthy and heated debate that pitted privacy and civil liberties concerns against the desire to prevent terrorist attacks. It ended almost a year of wrangling in the Democratic-led Congress over surveillance rules and the president's warrantless wiretapping program that was initiated after the Sept. 11, 2001, terrorist attacks.

The House of Representatives passed the same bill last month, and Bush said he would sign it soon.

Opponents assailed the eavesdropping program, asserting that it imperiled citizens' rights of privacy from government intrusion. But Bush said the legislation protects those rights as well as Americans' security.

"This bill will help our intelligence professionals learn who the terrorists are talking to, what they're saying and what they're planing," he said in a brief White House appearance after the Senate vote.

The long fight in Congress centered on one main question: whether to protect from civil lawsuits any telecommunications companies that helped the government eavesdrop on American phone and computer lines without the permission or knowledge of a secret court created by the Foreign Intelligence Surveillance Act.

The White House had threatened to veto the bill unless it immunized companies such as AT&T Inc. and Verizon Communications Inc. from wiretapping lawsuits.

Forty-six lawsuits now stand to be dismissed because of the new law, according to the American Civil Liberties Union. But the fight has not ended. Civil rights groups are already preparing lawsuits challenging the bill's constitutionality, and four suits, filed against government officials, will not be dismissed.

Numerous lawmakers had spoken out strongly against the no-warrants eavesdropping on Americans, but the Senate voted its approval after rejecting amendments that would have watered down, delayed or stripped away the immunity provision.

The lawsuits center on allegations that the White House circumvented U.S. law by going around the FISA court, which was created 30 years ago to prevent the government from abusing its surveillance powers for political purposes, as was done in the Vietnam War and Watergate eras. The court is meant to approve all wiretaps placed inside the U.S. for intelligence-gathering purposes. The law has been interpreted to include international e-mail records stored on servers inside the U.S.

"This president broke the law," declared Sen. Russell Feingold, a Democrat from Wisconsin.

The Bush administration brought the wiretapping back under the FISA court's authority only after The New York Times revealed the existence of the secret program. A handful of members of Congress knew about the program from top secret briefings. Most members are still forbidden to know the details of the classified effort, and some objected that they were being asked to grant immunity to the telecoms without first knowing what they did.

Just under a third of the Senate, including Democratic presidential candidate Barack Obama, supported an amendment that would have stripped immunity from the bill. They were defeated on a 66-32 vote. Republican rival John McCain did not attend the vote.

Obama ended up voting for the final bill. Feingold voted no.

The bill tries to address concerns about the legality of warrantless wiretapping by requiring inspectors general inside the government to conduct a yearlong investigation into the program.

The measure effectively dismisses about 40 lawsuits that have been bundled together. But at least three other lawsuits against government officials will go forward.

The Associated Press

On Monday, I commented that our federal government does not have a good record in protecting our rights. Here is just one of too many examples to list. Our rights exist only in the classroom or in the debate forums, but do not exist in the government or the courtrooms. Too often are country is listed as the Land of the Free. This is evidence to the contrary. We are actually living in a Constitutional dictatorship, where by the President's own admission admits that the Constitution is just a piece of paper.

When will we stand up and demand change? Why should companies get immunity for illegally eavesdropping on our conversations, text messages, and emails? This is just wrong. As for the ever convenient stop terrorism reason, when have you heard of any details that all these illegal spying activities on our citizens actually resulted in the arrest and conviction of anyone doing any terrorist type activities? Think on this question for a minute. Why are there no arrests? Because our citizens are not doing terrorist actions. They just want the excuse to exhibit more control over us and want us to live in fear.

If we do nothing, we condone these detestable policies and actions.

As always, the choice is yours.

Men cry out under a load of oppression;
they plead for relief from the arm of the powerful. Job 35:9 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Goodbye Fourth Amendment

2008-07-22T19:56:00.000-07:00

This week the topics center on privacy. Yesterday, I reported that the US and the European Union are getting close to a deal that will allow the countries to share personal data with the US. Although they cite that this is needed to crack down on terrorists activities, this is the reason they will use for almost anything that involves infringing on our rights as citizens.

Today, I will share another article by asset protection guru Mark Nestmann. This entry in his blog was published on June 23, 2008 titled "Warrantless Eavesdropping: Goodbye Fourth Amendment".

The Fourth Amendment to the U.S. Constitution reads:

"The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."

Contrast this language with the terms of the recent "compromise" legislation governing warrantless surveillance of Americans' electronic communications that Congress is set to approve. The bill amending the Foreign Intelligence Surveillance Act (FISA) gives the U.S. National Security Agency—the world's largest intelligence agency—carte blanche to engage in wholesale "data mining" of e-mail communications, telephone calls, faxes, etc. And there's absolutely no requirement that the government describe "the place to be searched, and the persons or things to be seized."

Instead, the NSA's "Terrorist Surveillance Program" (TSP) appears to rely on mining the data streams of U.S. telecommunications companies to analyze transactional records of telephone and e-mail traffic in search of patterns that might point to terrorist suspects. In other words, are you—or anyone else in the United States—acting in a way that merits eavesdropping?

If you match one of these profiles, the NSA apparently assigns a human analyst to listen in on your telephone calls and read your e-mail. Again, there's no warrant required. This apparently happens tens of thousands of times annually. Most of the time, the NSA doesn't find anything suspicious. Perhaps a few thousand times each year, the NSA passes on information to domestic law enforcement agencies, but most of inquiries drop out due to lack of evidence. Only a handful of inquiries—fewer than 10 annually—merit a full investigation.

What about a warrant backed by probable cause? Apparently, only in those 10 or so cases that merit a full investigation does the FBI obtain a search warrant or domestic wiretap warrant.

The only role of the courts under the new FISA law is to approve the computer algorithms the NSA uses to decide which messages merit further investigation. That decision is in the hands of the secret court set up 30 years ago to oversee wiretaps in national security investigations. In its 30-year history, this "Foreign Intelligence Surveillance Court" has turned down only a handful of NSA surveillance requests. But now, its role will simply be to rubber-stamp the explanation by a NSA technician of what a particular algorithm purportedly accomplishes.

Nor is there any assurance that the program is limited to terrorist investigations. There's an obvious potential for politically motivated surveillance here. Already, evidence has emerged that the government uses the TSP to fight drug smuggling.

What stops the NSA from using this authority, e.g., to snoop on political opponents of the ruling party? (Can you say Watergate?) Only judges technically savvy enough to really understand the mathematical underpinnings of the NSA algorithms they're asked to approve. How many judges do you think have the technical background to do that?

The remainder of the law is a joke, although I'm not laughing. It grants retroactive immunity to the telecom companies that cooperated with NSA eavesdropping after the attacks of Sept. 11, 2001. It also stipulates that the government must use FISA and the criminal wiretap laws as the exclusive means to conduct electronic surveillance. Of course, this is the provision of the FISA law that President George W. Bush unilaterally decided to ignore when he approved the original Terrorist Surveillance Program shortly after Sept. 11, 2001.

The bottom line: the FISA amendments shift the decisions about which U.S. citizens to spy on from the courts to virtual priesthood of NSA technicians operating in secret and creating surveillance algorithms that only they understand.

It's hardly an oversight to state that this type of wholesale surveillance makes the Fourth Amendment a quaint anachronism.

Goodbye, Fourth Amendment.

Mark Nestmann

If you are a regular reader of this blog, this should not come as a shock to you. The Constitution is paid lip service only and is not be followed in our courts. UCC1 (Uniform Commercial Code) Contract Law rules and everything else is secondary.

Is this the country you want to live in? When will we demand change?

As always, the choice is yours.

If you see the poor oppressed in a district, and justice and rights denied, do not be surprised at such things; for one official is eyed by a higher one, and over them both are others higher still. The increase from the land is taken by all; the king himself profits from the fields. Ecclesiastes 5:8-9 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

Data Privacy Deal

2008-07-21T18:35:00.000-07:00

This week the focus will be centered around privacy. One of the definitions of privacy is freedom from unauthorized intrusion. This of course can be done by individuals or even by governments. Today, we will get into how the US and the European Union (EU) have been in discussion for 18 months trying to nail down how the governments will share data of private individuals.

A senior EU official said on Tuesday, July 2 the European Union could strike a deal with the United States as early as next year to protect personal data collected on their citizens to bolster the fight against terrorism but warned that important questions still needed to be resolved.

The EU and the US have been in talks on the sensitive issue of data protection and sharing ever since US officials demanded access to passenger name records (PNR) on flights from the EU to the US in the wake of the terrorist attacks of September 11, 2001.

While both the EU and the US want to further push data sharing among police and counter-terrorism officials, there is acknowledgment the topic is a sensitive one and both sides say they need to cooperate on data privacy to build trust.

In recent years, privacy advocates and rights groups in Europe have strongly criticized deals with Washington including one giving it access to private data on air passengers traveling to the US and the right to keep the information for 15 years. Another allowed the US government to consult records of Swift, a consortium that tracks global bank transfers, including those of European customers in anti-terrorism investigations.

Reacting to criticism by European lawmakers and rights groups that data-sharing deals lacked privacy protection, a panel of EU and US justice officials set up more than a year ago has sought to assuage fears about privacy erosion.

In a report, the panel concluded that a binding deal on data privacy would be the best way to boost cooperation in fighting crime and terrorism.

The negotiators, meeting since February 2007, have mostly worked out draft language for 12 major issues at the heart of a "binding international agreement". This pact would make clear that European governments and companies could lawfully exchange personal information with the US.

They have already agreed on 12 principles, including security, what constitutes sensitive data, the purpose of its use and effective and independent oversight of exchanges. Among the principles agreed by the EU-US panel was that information revealing a person's racial or ethnic origins, political, religious or philosophical views and health or sexual orientation may not be processed unless domestic legislation provides appropriate safeguards.

They also agreed people should be told about use of their data, which must be supervised by an independent authority.

There are however some sticking points that are not resolved as of yet.

But the two sides are still at odds on several other matters, including whether European citizens should be able to sue the US government over its handling of their personal data. Europeans currently do not have the same legal rights in the United States as US citizens do in Europe. Currently, US law does not allow foreigners to sue the US government for damages resulting in improper handling of personal data.

Another concern that the EU does not appear willing to compromise on is whether Washington would eventually be able to access data contained in the vast computer system monitoring control border crossings in Europe's so-called Schengen passport-free zone.

Negotiators are trying to work out minimum privacy rights standards, such as limiting access to information to "authorized individuals with an identified purpose" for seeing it.

"I am very worried that once this will be adopted, it will serve as a pretext to freely share our personal data with anyone, so I want it to be very clear about exactly what it means and how it will work," said Sophia in't Veld, a Dutch member of the European Parliament and privacy rights advocate.

Our federal government does not have the best track record at respecting our right to privacy. So I personally am very skeptical at what the standards will be and how they will be used. We will get more into this later this week. Stay tuned ...

Speak up for those who cannot speak for themselves,
for the rights of all who are destitute.

Speak up and judge fairly;
defend the rights of the poor and needy. Proverbs 31:8-9 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

On The Edge

2008-07-19T19:05:00.000-07:00

This week the focus has been on the overall weakening of the US economy that has triggered many problems including bank failures, rising inflation, a credit crunch, a dismal and declining real estate market, etc. These are just a few of the problems. All of this spells possible doom for the US dollar.

To illustrate my point, I will again share some insights from www.GoldMoney.com founder James Turk. The article is titled "On the Precipice" (precipice means a very steep or overhanging place).

On the Precipice

It has been my view expressed in these alerts and elsewhere over the past several months that there will be a currency crisis this summer caused by a plummeting US dollar. The US dollar is now standing on the edge of the precipice. In fact, it is already peering over the edge as we can see in the following chart of the US Dollar Index.

There are several important observations to make from this chart. First, the dollar is in a major bear market. It peaked at 120.97 on July 5, 2001 and has been declining ever since within the major downtrend channel delineated by the red parallel lines.

Trends do not change unless there is some solid fundamental reason for them to change. There is only one way to strengthen a currency - raise interest rates. The Federal Reserve again failed at its FOMC meeting this past week to raise rates. So the only logical and prudent assumption is that the downtrend in the dollar will continue.

The second observation from the above chart is that the Dollar Index has been in a steep decline since early 2006, and more to the point, that decline gathered momentum along the way. The arrow on the chart marks the dollar's descent over this period. Note particularly how the arrow curves downward. It highlights the building momentum that caused the Dollar Index to fall last year to a record low on September 29, 2007.

Third, after making that record low, the Dollar Index bounced for only a few days, and then reversed course and resumed its downtrend. That action signaled profound weakness in the dollar, and sure enough, from its reaction high of 78.67 on October 8, 2007, the path for the dollar was basically straight down. It fell to a new record low of 71.33 on April 22, 2008, which equates to a stunning 17.3% annualized rate of depreciation.

The fourth and final observation is that since making this record low the Dollar Index has bounced. It is correcting the previous decline within the narrow uptrend channel marked by the green parallel lines. It is truly a so-called 'dead-cat' bounce. The best the Dollar Index could do was bounce to 74.15, retracing only 38% of its previous decline. But that is an overstatement because the Dollar Index traded above 74 on only one day, and did so simply because of the jawboning from Bernanke, Paulson and everyone else they could enlist to talk up the dollar.

As I stated in the last alert, which was posted just after the barrage of rhetoric, Bernanke and Paulson "are trying to change monetary history by ignoring this most basic principle of central banking. Rather than raise dollar interest rates, they are instead just jawboning" and "higher interest rates rather than more rhetoric are needed to save the dollar from a total collapse...[because]...the fundamentals for the dollar are horrific." In particular, as the rate of inflation worsens daily, inflation-adjusted interest rates become more negative. This condition is extremely bearish for the dollar. So will the dollar collapse this summer? Yes, I expect so.

The odds still favor a collapse. Nothing has happened - so far at least - that could cause the major long-term downtrend illustrated in the above chart to change. So assume this trend will continue, and more to the point, that the collapse in the dollar I have been expecting for this summer begins when the Dollar Index breaks down from its current uptrend channel marked by the green parallel lines.

Given that the Dollar Index is now sitting on the bottom line of that uptrend channel, it is peering over the precipice. The dollar may get pushed over the precipice this Thursday if the European Central Bank raises euro interest rates to fight the worsening inflation menace.

Get ready for whatever the central banks throw at us by their mismanagement of national currencies. Own gold and silver.

James Turk, June 28, 2008

Now, I've read in other sources that the Fed will start raising interest rates to combat the surge of inflation. This will fight inflation, but with the credit crunch already in place, raising interest rates will very likely stall the economy and send the US into the worse depression since the 1930's.

In November 1929, the Fed raised overnight federal funds rates of banks forcing them to close their doors because they could not meet the deposit requirements. This triggered many bank failures. If the Fed raises the interest rates too much now, the same thing will likely happen.

So, I sincerely endorse James Turk's recommendation to own silver and gold, as stated many times in this blog. This is one of the few defenses during uncertain economic times that everyone can agree on. There are of course, other alternatives, but not likely as safe.

I will disagree slightly with James Turk as to the timing of the imminent collapse of the US dollar. I do not think it will happen this summer, but I believe it will happen in September or October for a lot of reasons. First, the Fed is unlikely to shake things up by raising rates during the summer. Many traders and power brokers on Wall Street take vacations during the summer usually causing the markets to remain fairly stagnant. Once fall returns, all bets are off. Third, the earlier closed door session of Congress in March was rumored to prepare the legislature for financial collapse in the fall. The powder keg is prepared, all that is needed is a spark. Time will tell.

As with all Saturdays, I will recap several key indicators that provide insight into the financial markets and where they are likely to go. Precious metals went lower this week due to the fall in the price of oil. Gold closed slightly lower on Friday from last week at $955.40 per ounce. Silver also closed lower this week at $18.14 per ounce. The price of oil fell $16 per barrel the last four days closing at $128.50 per barrel. Despite these moves, the US dollar index still is languishing but rose slightly to close at 72.17.

These certainly are interesting times.

He will judge the world in righteousness;
he will govern the peoples with justice.

The LORD is a refuge for the oppressed,
a stronghold in times of trouble.

Those who know your name will trust in you,
for you, LORD, have never forsaken those who seek you. Psalm 9:8-10 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

The FDIC

2008-07-18T18:44:00.000-07:00

Earlier this week, I posted an article about the second largest bank failure in American history. This of course was the closing of California based IndyMac, a bank that specialized in Alt-A loans. These loans are traditionally defined as loans that have less than full documentation (incomplete or no documentation) behind the application. Another way to describe these loans are ones that have a lower credit grading, usually with an A minus grade or lower.

Immediately, the FDIC was named conservator by the Office of Thrift Supervision, a department of the US Department of the Treasury. All non-brokered insured deposit accounts and substantially all of the assets of IndyMac Bank, F.S.B. have been transferred to IndyMac Federal Bank, F.S.B. (IndyMac Federal Bank), Pasadena, CA a newly chartered full-service FDIC-insured institution. So, they created a new bank name to continue operations and to facilitate depositors to get their federally insured funds.

So, who is the FDIC and what do they do?

This is directly from their website (www.fdic.gov/index.html):
The Federal Deposit Insurance Corporation (FDIC) preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $100,000; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails.

An independent agency of the federal government, the FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. Since the start of FDIC insurance on January 1, 1934, no depositor has lost a single cent of insured funds as a result of a failure.

The FDIC receives no Congressional appropriations – it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. With an insurance fund totaling more than $49 billion, the FDIC insures more than $3 trillion of deposits in U.S. banks and thrifts – deposits in virtually every bank and thrift in the country.

The FDIC insures deposits only. It does not insure securities, mutual funds or similar types of investments that banks and thrift institutions may offer.

The FDIC directly examines and supervises about 5,250 banks and savings banks, more than half of the institutions in the banking system. Banks can be chartered by the states or by the federal government. Banks chartered by states also have the choice of whether to join the Federal Reserve System. The FDIC is the primary federal regulator of banks that are chartered by the states that do not join the Federal Reserve System. In addition, the FDIC is the back-up supervisor for the remaining insured banks and thrift institutions.

To protect insured depositors, the FDIC responds immediately when a bank or thrift institution fails. Institutions generally are closed by their chartering authority – the state regulator, the Office of the Comptroller of the Currency, or the Office of Thrift Supervision. The FDIC has several options for resolving institution failures, but the one most used is to sell deposits and loans of the failed institution to another institution. Customers of the failed institution automatically become customers of the assuming institution. Most of the time, the transition is seamless from the customer's point of view.

The FDIC is managed by a five-person Board of Directors, all of whom are appointed by the President and confirmed by the Senate, with no more than three being from the same political party.

So, let me translate this information and tell you how it fits in the grand scheme of fraction reserve banking and the Federal Reserve System. The Fed needs another agency to regulate those institutions not under its control. The have to protect this fraudulent system of fractional reserve banking to maintain credibility with the public. Since there is no real assets of gold or silver backing the currency, there has to be very tight control when any institution does fail or risk a leak in the massive dam of consolidated debt of Americans.

Note from above that the FDIC is an independent agency of the federal government. They are a separate corporation that is under control of the Federal Reserve. They have to step in to preserve the faith in the system to prevent bank runs (a situation in which numerous bank customers try to withdraw their bank deposits simultaneously and the bank's reserves are not sufficient to cover the withdrawals). They insure each depositor up to $100,000 of deposits, but not other financial products offered by banks such as mutual funds, annuities, stocks, bonds, insurance policies, and any other financial products. They only protect checking accounts including money market accounts, savings accounts, and CDs. These are all the financial vehicles that return the lowest rate of return. Thus, most people have their money in products that are not covered.

But, that prominent statement of being insured up to $100,000 gives people confidence that their money is secure. Yeah, right! Also note that the FDIC has an insurance fund of $49 billion, but insures deposits of more than $3 trillion. If there are a lot of bank failures in a short period of time, how long will the $49 billion last with more than $3 trillion of deposits out there. And, this is only deposits! What about the many trillions of other financial products out there that are not covered? In short, there is very little assurance that this insurance could really protect the public on massive bank failures.

Also note that the usual tactic for resolving institution failures is to sell the deposits and loans of the failed institution to another institution. If a loan is bad and not going to be repaid, why will another bank think it is good and that they will get their money? When will they realize that you can not continue to throw good money after bad? As long as they don't get stuck with the bill at the end, they don't care.

IndyMac is only the second casualty. There will be many more. The house of cards will eventually fall. The only hope that you have is to not have your assets in with the house of cards.

As always, the choice is yours.

The LORD detests differing weights,
and dishonest scales do not please him. Proverbs 20:23 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

An Inflation History Lesson Part II

2008-07-17T17:15:00.000-07:00

Yesterday, I shared an article from James Turk, founder of www.GoldMoney.com. This article notes the comparisons between the inflationary pressures today versus the similar conditions in post World War I Germany. In today's excerpts, we will get into what concerned US citizens are doing to cope with the situation and some possible alternatives.

The first paragraph is repeated from yesterday's post for continuity.

Weimar Inflation in America (continued)

Sadly, the problems of Weimar

Germany

are now appearing in the

. To survive the impact of rising prices, Americans today – like Germans did eight decades ago – are selling cherished possessions, as explained in a recent story by Associated Press entitled “Americans unload prized belongings to make ends meet”. The full article is available at the following link: http://abcnews.go.com/Business/Economy/story?id=4750846&page=1

AP explains how some Americans are trying to cope with the ravages of inflation: “To meet higher gas, food and prescription drug bills, they are selling off grandmother's dishes and their own belongings. Some of the household purging has been extremely painful - families forced to part with heirlooms.” It is indeed no doubt painful, just as it was for the Germans in the photograph above, who surely must have been putting on a brave face for the photographer.

Confirmation of the AP story came a few days later on May 14^th from an article in the Washington Post, which reported: “Nearly seven in 10 Americans are worried about maintaining their standard of living, as concern has spiked higher in just the past five months, according to a new Washington Post-ABC News poll. Soaring consumer prices are a major challenge, with many people struggling under the weight of the rising costs of fuel, food and health care. The poll shows that the weak economy and rising prices are high among voters' concerns, and contribute to a souring national mood in this presidential election year. More than eight in 10 said the country has veered pretty seriously off-track, and a separate poll released yesterday by ABC showed economic anxiety at its highest level on record since 1981. Overall, 68 percent of people surveyed in the new Post-ABC poll said they were concerned about their ability to keep up their lifestyles, a jump of 17 percentage points since December. The increase cuts across party and income lines.”

Crude oil is $132. Corn is $6. The cost of everything is rising. Inflation is worsening, and it’s not hard to understand why. M3, the total quantity of dollars, is now growing by 17% per annum. Weimar inflation has arrived in

America

.

The Federal Reserve is following the footsteps of the central bank in Weimar

Germany

. It is the same path taken by many central banks that have issued countless fiat currencies based on nothing but government promises. It is the path to the fiat currency graveyard, and the once almighty US dollar – which long ago used to be “as good as gold”, just like the Reichsmark once held that same exalted title – is knocking at the graveyard’s gate.

This insight about the importance of gold and shortcomings of fiat currency is not suprising, nor is it new. Here is what Rep. Howard Buffett, father of Wall Street legend Warren Buffett, had to say on May 4, 1948. “Our finances will never be brought into order until Congress is compelled to do so. Making our money redeemable in gold will create this compulsion.”

Absent that compulsion, the dollar is going the way of the Reichsmark. Don’t count on the US government to do the right thing and make the dollar redeemable into gold. Instead, take those steps necessary to protect yourself and your family to prepare for the dollar’s inflationary collapse. Buy gold. Buy silver. Avoid the US dollar.

James Turk, May 28, 2008

This of course, is simply another warning. There have been many. At this point, I believe it is only a matter of time before the collapse of the US dollar becomes history. In its place, the US government will offer a new currency, the Amero. This will be the combined currency (like the Euro) for the North American Union, made up of Canada, the United States, and Mexico. (For more information on this topic, please refer to the post in this blog from Monday, April 21, 2008.)

When exactly this will happen is known only to those that are involved in the plan to do this. Some have guessed that it will happen as early as September, 2008. Others have predicted that this will happen in 2012. Time will tell. The question is "Will you be prepared?".

If all of your assets are based in US dollars, can you handle the devaluation? If the conversion to the Amero has a negative ratio, can you survive? Don't be caught unaware. Be prepared.

As always, the choice is yours.

What if God, choosing to show his wrath and make his power known, bore with great patience the objects of his wrath—prepared for destruction? What if he did this to make the riches of his glory known to the objects of his mercy, whom he prepared in advance for glory. Romans 9:22-23 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com

An Inflation History Lesson

2008-07-16T17:58:00.000-07:00

As in many previous posts, I've shared that there are many lessons from history that we can learn from. This includes what happens when banks and other financial institutions fail like Bear Stearns and more recently like IndyMac. You can counter that no one in history have ever bundled mortgages into jumbo mortgages like IndyMac has done, but the same could be said for the wild speculation that occurred during the roaring 20's before the stock market crash of 1929. Never before the 20's could you buy securities for a fraction of the amount on deposit (leverage) without disastrous consequences down the road.

In both cases, money lessons can be learned. You can't continue to throw good money after bad. Sooner or later, someone has to take the fall. The same is true with fractional reserve banking. You cannot continue to create money from nothing but accounting ledger entries and spend wildly forever. Sooner or later, the devalued currency will crash.

To illustrate this point, I will share another James Turk article from Wednesday, May 2008. In this article, the founder of www.GoldMoney.com compares our inflationary times to that of the Weimar German government immediately after World War I. The hyper-inflationary times that resulted ultimately precipitated the rise of the Third Reich, Adolf Hitler, and the Nazi party.

Here is the first part of the article titled "Weimar Inflation in America" by James Turk.

Probably almost everyone is familiar with the hyperinflationary episode that engulfed Germany after the First World War. That nation’s economy was crippled by monetary problems that resulted in dreadful personal hardships, even though up to that time Germany had achieved one of the highest living standards in the world.

The newly formed German government, named for the city where their constitution was drafted after the Kaiser’s abdication in 1918, kept pumping up the money supply. The process started relatively slowly, but quickly the pace of money creation accelerated.

The Weimar government was paying its bills on credit – just like Zimbabwe is now doing. The Weimar government was issuing currency in exchange for valuable goods and services that it was receiving, and the vendors of those goods and services accepted the newly issued currency in the expectation that they would be able to exchange it for goods and services of like value. However, they soon realized that they were deluding themselves. Prices were rising rapidly, with the consequence that a flight from the currency into commodities and other tangibles began.

There was no discipline on the creation of new currency, with the result that it was being issued to excess. Within a few short years, the German government eventually destroyed the Reichsmark, the currency it had been issuing, making the words Weimar Germany synonymous with hyperinflation, economic collapse, deprivation and personal hardship. All the wealth saved in Reichsmarks was wiped out.

For example, in his classic book, “Paper Money”, penned three decades ago under the pen name of Adam Smith, George J.W. Goodman recounts the story of Walter Levy, an internationally known German-born oil consultant in New York. Levy told him: “My father was a lawyer, and he had taken out an insurance policy in 1903. Every month he had made the payments faithfully. It was a 20-year policy, and when it came due, he cashed it in and bought a single loaf of bread.”

As the inflation worsened, people sold whatever they could to survive. Widdig succinctly describes it in the caption to the above photo as follows: “The impoverished middle class has to sell its cherished possessions.” He should have correctly stated though that it was the “newly impoverished middle class”. They only became destitute after the inflation had destroyed their savings and ability to maintain their standard of living.

Sadly, the problems of Weimar Germany are now appearing in the US. To survive the impact of rising prices, Americans today – like Germans did eight decades ago – are selling cherished possessions, as explained in a recent story by Associated Press entitled “Americans unload prized belongings to make ends meet”. The full article is available at the following link: http://abcnews.go.com/Business/Economy/story?id=4750846&page=1

Tomorrow, we will continue with this article from James Turk and the pressures currently on Americans resulting from inflation, just like in Germany from nearly 90 years ago. Stay tuned ...

Will evildoers never learn—
those who devour my people as men eat bread
and who do not call on the LORD ?

There they are, overwhelmed with dread,
for God is present in the company of the righteous.

You evildoers frustrate the plans of the poor,
but the LORD is their refuge. Psalm 14:4-6 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com