This comment censored by Huffington Post. About Jack Lews confirmation as Treasury Sec

Obama IS a crony capitalist or Corporatist - just LIKE the Republicons have been for some time. 

When he said change - he didn't mean it. 
He meant to say he was keeping right along with the GW Bush agenda, for Bush's 4th term. 

Both domestically and internationally. 

Government of the rich, by the rich and for the rich. 

Government of the monopolists, by the monopolists and for the monopolists. 

And to hell with the economy, America and 99.9%+ of Americans. 


In response to this article about Jack Lew's confirmation. 
http://www.huffingtonpost.com/2013/02/27/jack-lew-confirmed_n_2773791.html


Some of my comments do actually get published from time to time. 

Like these :- 

"Another sad day for America. 
Another sad day for Americans. 

Another Wall Street insider goes to Treasury. 
Another Wall Street insider as Treasury Sec who will work for the banks and to the great detriment of the people."

“Contrary to the article, Jack Lew is no budget expert - otherwise he would be proposing something like this. 

Cutting $1.3tn a year of Corporate Welfare.
It's easy to do.

Reducing taxes on middle earners and below. 
I favor raising the tax thresh hold from $8,700 to $45,000 as the simplest way. 
That would cost $500bn a year straight into the pockets of people who would spend it to help the economy - ORDINARY people not fat cats. 

COMPLETELY reform Corporation Tax. 
A flat rate of 25% - no loopholes or tax breaks whatsoever. 
Stop the multinationals tax avoidance schemes. 
Make the first $100,000 of profit tax free to give a huge tax break for SMALL businesses. 

I would stop the Fed pumping $1tn a year to the speculative big banks. 
This is causing inflation in food and gas prices and further eroding ORDINARY people's disposable incomes. 

The Corporate cartels which now operate in each major industry need to be broken up. 
For the banks that means the immediate reinstatement of Glass Steagal as a first step. 

Corporate profits are at record levels - a symptom of a lack of competition in the market. 

Poverty and the number of people on food stamps are also at record levels. 
A symptom of policies that help the 0.1% to the great detriment of the 99%. 

For details see :- 

http://ian56.blogspot.co.uk/2013/02/why-sequester-is-giant-con-trick.html” 

“I agree. 

Jack Lew's "expertise" will be to bail out the big banks again, when next they come running. 

And to drive middle America into the ground.”

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Censored by Huffington Post. One more step on the road to a Fascist Police State

This comment censored by Huffington Post :-

One more step on the road to a Fascist Police State.

In response to this article :- 

http://www.huffingtonpost.com/2013/02/26/clapper-v-amnesty-international-warrantless-wiretapping-supreme-court_n_2765931.html

Clapper v. Amnesty International, Warrantless Wiretapping Challenge, Struck Down By Supreme Court 

NEW YORK -- Journalists and human rights advocates worried they are being swept up in an electronic dragnet cannot challenge the U.S. government's secretive warrantless wiretapping program in a lawsuit, the Supreme Court ruled in a 5-4 decision on Tuesday. The court's decision, handed down in a case called Clapper v. Amnesty International USA, will complicate civil libertarians' efforts to push back against the post-9/11 expansion of surveillance.

Jameel Jaffer, the deputy legal director of the American Civil Liberties Union and the lawyer for the plaintiffs, said in a statement the ruling was a "disturbing decision" that "insulates the [warrantless wiretapping] statute from meaningful judicial review and leaves Americans’ privacy rights to the mercy of the political branches."

At issue is the government's warrantless wiretapping program, begun in secret and without congressional authorization under the George W. Bush administration. In the wake of a 2008 federal law passed to legalize that program, the National Security Agency and other agencies are supposed to be able to read emails and listen in on phone calls without a warrant -- but only when they are targeting foreign nationals. 

N.B. The wiretapping program was deliberately set up to be able to listen in on all domestic phone calls. 

The eavesdropping could of been set up in the 37 locations where international calls are routed into and out of the United States.  

Instead the eavesdropping was set up in every major domestic telephone hub within the United States.

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Geopolitical power plays in the Middle East and Syria

Russia is back.  President Vladimir Putin wants the world to acknowledge that Russia remains a global power.  He is making his stand in Syria.

The Soviet Union acquired the Tardus Naval Port in Syria in 1971 without any real purpose for it.  With their ships welcomed in Algeria, Cuba or Vietnam, Tardus was too insignificant to be developed.  After the collapse of the Soviet Union, Russia lacked the funds to spend on the base and no reason to invest in it.

The Russian return to the Middle East brought them first to where the Soviet Union had had its closest ties.  Libya had been a major buyer of arms and many of the military officers had studied in the Soviet Union.  Russia was no longer a global power, but it could be used by the Libyans as a counter force to block domination by the United States and Europeans.

When Gaddafi fell, Tardus became Russia’s only presence in the region.  That and the discovery of vast gas deposits just offshore have transformed the once insignificant port into a strategic necessity. 

Earlier at the United Nations, Russia had failed to realize that Security Council Resolution 1973 that was to implement a new policy of “responsibility to protect” cloaked a hidden agenda.  It was to be turned from a no-fly zone into a free-fire zone for NATO.  That strategic blunder of not vetoing the resolution led to the destruction of Gaddafi’s regime and cost Russia construction contracts and its investments in Libyan gas and oil to the tune of 10 billion dollars.

That was one more in a series of humiliating defeats; and something that Putin will not allow to happen again while he is president.  Since his time as an officer in the KGB, he has seen the Soviet Empire lose half of its population, a quarter of its land mass, and most of its global influence.  He has described the collapse of the Soviet Union as a “geopolitical catastrophe.”

In spite of all of the pressure from Washington and elsewhere to have him persuade Bashar Al-Assad to relinquish power, Putin is staying loyal to the isolated regime.  He is calculating that Russia can afford to lose among the Arabs what little prestige that it has remaining and gain a major political and economic advantage in Southern Europe and in the Eastern Mediterranean.

Continued at :- 

http://www.zerohedge.com/news/2013-02-26/guest-post-be-careful-russia-back-stay-middle-east

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Why the sequester is a giant con trick. Why the government and the Federal Reserve are on the wrong path. Updated 02/28

The sequester is a giant con trick perpetrated by BOTH parties.

BOTH parties are scaremongering about a mere $85bn of cuts when there are well over $1tn of cuts to Corporate Welfare and other government waste that can be easily made.
Taxes on the middle class just got hiked by $200bn in the fiscal cliff deal.

BOTH parties are talking about cutting things that almost no one wants to see cut, so that eventually it is agreed that almost no cuts to government spending are made.

$85bn is a trivial amount when the government is spending $3.6tn a year.
It is less than 2.4%.

BOTH parties are scamming you in the worst possible way.

You could not make it up if you tried.

Examples of Corporate Welfare that can easily be cut.

$105bn a year for 7,000 mercenaries still in Iraq.
$170bn on building new and supplying existing foreign military bases.
$88bn per year on the Afghan war. Get out now.
$100bn+ of Medicare fraud.
Reduce the price of prescription drugs. America pays by far the highest prices in the world.
Stop the $200bn of new Corporate Pork a year.
Stop the futile war on drugs and save $200bn a year.
Fine the big banks $200bn+ for the harm they have done - it is easy to do.

Completely reform Corporation Tax.
Ending the tax avoidance by offshoring US generated profits and other tax breaks given to multinationals, banks and arms companies would bring in $200bn a year.

End the personal tax avoidance schemes like carried interest and hedge fund managers diverting their remuneration through reinsurance schemes would also bring in more revenues.

Make the taxation system FAIR. Don't favor the rich and large multinationals over the little guy and small businesses.

There are many other ways of saving money and making the marketplace fairer.
The above adds up to $1,300bn a year. 
A lot more than that is possible.
Details in here :-
http://ian56.blogspot.co.uk/2012/11/it-is-very-easy-to-cut-1tn-from-federal.html

The sequester is a giant con trick in other ways too.
Congressional spending plans state that Federal spending will rise by nearly 50% in just 8 short years, to over $5tn in 2020.
The sequester makes a negligible difference - just $100bn of government spending in 2020 out of over $5tn.

The sequester is a mechanism for the large Corporations to keep all of their government subsidies, by distracting the public from what should really be being done.
ALL current policy by both parties is transferring the wealth of the middle class to large Corporations and a few selected rich elites.
Corporate profits are at record levels and so is poverty and the number of people on food stamps.

Current policy ensures there will be hundreds of millions of poor people in America and a handful of rich elites.
Current policy needs to be COMPLETELY REVERSED.

Cut well over $1tn a year from Corporate Welfare.
Use that money to reduce taxes on middle earners and below to raise disposable incomes and get bottom up spending going again.

Give a huge tax break to middle earners and below.
I favor increasing the tax thresh hold from $8,700 to $45,000 as the simplest way.
That would cost $500bn a year.

Give small businesses tax breaks and completely reform Corporation Tax.
Make Corporation Tax a 25% flat rate. No loopholes or tax breaks whatsoever.
This would slightly increase Corporate Tax revenues.

Make the first $100,000 of profits tax free.
That would give a huge tax break to small businesses.
It would also dramatically change for the better the risk/reward ratio of starting up a small business in the first place. There would be more small business start ups.

Simplifying the 7,200 page tax code would also reduce business overheads.
It would put a few accountants and tax lawyers out of a job. That is no bad thing - they are paper pushers and are an overhead to the productive economy.

Appendices     



Details of what should be being done to avoid a deep and prolonged recession and the demise of the Middle Class as a demographic in America.
http://ian56.blogspot.co.uk/2013/02/the-us-government-and-federal-reserve_22.html

Why the Federal Reserve is making things WORSE with more printing and increasing it's balance sheet.
The speculative banks already have $2tn of excess reserves.
They are using that money to speculate on things like food and gas.
They are pushing up food and gas prices and reducing disposable incomes that can be spent on everything else .
Goldman Sachs made $400m in 2012 pushing up food prices.
The price of gas just hit an all time record for February.
http://ian56.blogspot.co.uk/2013/01/the-2tn-of-excess-bank-reserves-is.html

Why the Federal Reserve is making a sure fire losing bet and is going to hand taxpayers a HUGE multi trillion bill for their losses.
The frightening path that the Federal Reserve and the government have set out upon.
http://ian56.blogspot.co.uk/2013/02/there-is-no-way-out-for-federal-reserve.html

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Who funds the perpetual war party?

American Enterprise Institute 
Heritage Foundation 
PNAC/Foreign Policy Initiative 
Center for American Freedom (sic) / Washington Free Beacon (sic again) 
AIPAC 

Read more on just how well funded these war lobbyists and "think tanks" are, at :- 
"Who funds the war party?" 
http://original.antiwar.com/justin/2013/02/24/who-funds-the-war-party/

These people are the enemies of every middle class American. 
Their sole purpose is to transfer the wealth of the Middle Class to the arms companies and the bankers.

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Senate report finds torture ineffective, counter productive and did not help to find Osama Bin Laden. #Government Lies

The report is the most detailed independent examination to date of the agency’s efforts to “break” dozens of detainees through physical and psychological duress, a period of CIA history that has become a source of renewed controversy because of torture scenes in a forthcoming Hollywood film, “Zero Dark Thirty.”

Officials familiar with the report said it makes a detailed case that subjecting prisoners to ­“enhanced” interrogation techniques did not help the CIA find Osama bin Laden and often were counterproductive in the broader campaign against al-Qaeda.

http://articles.washingtonpost.com/2012-12-13/world/35812850_1_harsh-interrogation-measures-network-of-secret-prisons-coercive-interrogation

In other news, the guy who reported illegal CIA torture gets sent to prison while the people who performed the illegal torture escape scot free.

John Kirakou gets a luxury send off from his many friends and supporters.
This guy is a patriot - the guys who are sending him to prison are not.

The first duty of a patriot is to question your own government and make them accountable for any wrong doing or misbehavior.

http://www.washingtonpost.com/lifestyle/style/cia-whistleblower-kiriakou-gets-posh-send-off-to-prison/2013/02/21/b3f0a2b8-7c7c-11e2-a044-676856536b40_story.html

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Comment censored by Huffington Post. Gov't trying to scaremonger you into accepting $2tn of Corporate Welfare and a $200bn a year tax hike

The government is now trying to scaremonger you into accepting zero cuts to the $2tn of Corporate Welfare being handed out to large Corporations every year, while giving the middle class and below a huge $200bn a year tax hike. 

90%+ of Americans are so dumb and ignorant they will probably fall for it hook, line and sinker.

Just like they fell for Cheney's obvious lies about Iraq. 


In response to this scaremongering article :-
http://www.huffingtonpost.com/2013/02/22/ray-lahood-sequester_n_2741950.html 

N.B. If Huffington Post did not think my comment was true they wouldn't of censored it. 
They would of got someone to ridicule it instead. 

The comment got removed AFTER it started getting getting recommendations.

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The US government and the Federal Reserve seem intent on committing economic suicide

Current policies are EXACTLY the OPPOSITE of those required to turn things around.
The government (both parties) and the Federal Reserve seem intent on commiting economic suicide.

There will never be any real economic recovery in America unless disposable incomes of ordinary people start to rise instead of plummeting as they have done since 2001.

Current policies accelerate the current trend of  lower disposable incomes of the middle class and ordinary people, they are already falling at an alarming rate.

The middle class and the poor have recently been additionally hit by :-

A huge $200bn tax hike on the middle class and working poor in the Fiscal Cliff deal.
Increasing food and gas prices due to the Federal Reserve policy of stepping up their printing from $500bn a year to $1tn a year.
This double whammy has already started to show up in things like Walmarts February sales figures and $4 gas in California.

Current government and Federal Reserve policy ensures a prolonged and deep US recession starting in 2013.
You can add in Europe's recession - Europe is America's largest export market.  

In order to turn the American economy around the following things need to be done.

Immediate cuts of over $1tn a year in Corporate Welfare.
Give a huge tax break to middle earners and below. I favor immediately raising the personal income tax thresh hold from $8,700 to $45,000. 
Stop the $1tn a year bailout to the big banks and Fed printing. 
Break up the Corporate cartels that now operate in each major industry. 
Reinstate the Rule of Law. 
Jail senior bankers for 30+ years for their white collar crimes. Fine the big banks $200bn for the same.
Completely reform Corporation Tax. Current policy is strongly in favor of large multinationals and strongly against small businesses. 

It looks like the Chinese are now realising the increasing level of stupidity within the American government and the Federal Reserve and are now trying to delay the date of the collapse in the US Dollar and American economy.
http://ian56.blogspot.co.uk/2013/02/china-is-now-trying-to-delay-date-of-us.html  



What needs to happen in more detail to turn things around



Immediate cuts of over $1tn a year in Corporate Welfare. 
Corporate profits are at record levels. 
It is VERY EASY to see how this can be done - here is a list of actions to take. 
http://ian56.blogspot.co.uk/2012/11/it-is-very-easy-to-cut-1tn-from-federal.html


A COMPLETE REVERSAL of current policy to RAISE disposable incomes of ordinary people instead of seeing them continue to plummet.   
I advocate raising the income tax thresh hold from $8,700 to $45,000 as a first measure.
That would cost $500bn a year.  

Stop the Federal Reserve bailing out the big banks to the tune of $1tn a year. 
Ordinary people will pay for ALL of these handouts eventually.
They have already starting paying in the shape of higher gas and food prices. 
They will pay more in the future in the shape of higher levels of unemployment, higher levels of poverty and lower disposable incomes for over 99% of Americans.  
http://ian56.blogspot.co.uk/2013/01/the-2tn-of-excess-bank-reserves-is.html
http://ian56.blogspot.com/2013/02/there-is-no-way-out-for-federal-reserve.html

Break up the Corporate cartels that now operate in each major industry. 
Banks, oil, pharma, food, arms (hardware), arms (software), Media, Food, Monsanto etc. and soon to be Healthcare. 
Immediately reinstate Glass Steagal for the banks. 
Record Corporate profits are a symptom of a lack of competition in the market place. 
INCREASE COMPETITION. 

Reinstate the Rule of Law 
The strength or otherwise of the Rule of Law is THE most important factor in determining future GDP growth rates.
The Rule of Law no longer applies to rich elites whatever white collar crimes they commit. Barack Obama has openly stated he will not prosecute the persons responsible. 
Bernie Madoff got 102 years for stealing $8bn in his Ponzi scheme. 
Several people have stolen far more than this from ordinary Americans. 
I would prosecute and handout 30 years+ hard jail time to Lloyd Blankfein, Jamie Dimon, Hank Paulson, Tim Geithner and at least a couple of dozen of other senior bankers. 
I would fine the big banks $200bn+ for their crimes. 
It is easy to see how the 12 big banks that manipulated Libor could be fined an average of $10bn each.
Then there are the various mortgage frauds, massive and endemic money laundering and outright thefts (such as $1.5bn from MF Global segregated client accounts) etc. 
http://ian56.blogspot.co.uk/2013/02/a-governments-duty-is-to-protect-its.html

Completely reform Corporation Tax. 
Multinationals pay next to nothing while small and medium sized businesses pay 25% to 30%. 
As a first step I advocate a flat tax of about 25% - no loopholes, no tax breaks whatsoever. 
I would make the first $100,000 of profits TAX FREE as a huge tax break for small businesses. 

The current practice of large Corporations diverting US generated profits to off shore tax havens to avoid Corporation Tax would be stopped - this alone would generate additional revenues of about $200bn a year. 
There are a multitude of other tax breaks for large Corporations that are industry or company specific. These also would be stopped.  (I would lower Corporation Tax later after a HUGE reduction of income taxes for middle earners and below.) 
Small and medium businesses are the TRUE job and wealth creators - they are being discriminated against and suffering unfair competition because of current government policy. 
http://ian56.blogspot.co.uk/2013/02/bernie-sanders-identifies-128bn-of.html

Scrap Obamacare
It will be a huge burden on the middle class. 
It is the equivalent of a 3.8% income tax hike - but the estimated costs are forever rising so it will no doubt turn out to be higher. 
It will lower disposable incomes, lower the average standard and quality of Healthcare, raise price inflation of just about everything (businesses are already putting up prices to cover their expected increases in costs) and make seniors die off quicker.
Somebody has to pay to cover the currently uninsured, that someone will be the middle class. 
Obamacare was specifically designed to make lots of profits for large Healthcare companies - that is why Romney is so much in favor of it.
http://ian56.blogspot.co.uk/2013/01/the-affordable-care-act-should-be.html

Stop the pointless wars that are only being pursued in order to increase the Corporate profits for the bankers, the arms companies and the big oil companies. 
This would save about $800bn a year (some of which has been included in Corporate Welfare above). 
Obama is now expanding the resource wars into Africa. Stop it.
Withdraw from the Middle East and leave them to it. If the Arabs and the Muslims want to fight amongst themselves - let them. Don't give them a unifying cause to fight against or attack or be enemies of America. 

Restore civil rights for ordinary people.
ALL of the recent laws, EO's and measures listed in here should be immediately reversed. 
http://ian56.blogspot.co.uk/2012/11/obamas-civil-rights-violations.html

Stop the expansion of the Police state.
$10's of billions are now being spent each year in order to spy on every single American - including their bank account transactions.

Reverse the current policy of increasing petty regulations.
It is killing entrepreneurship and small businesses in this country.
Large businesses are better able to absorb and overcome the cost of government bureaucracy - they have economies of scale.
For small businesses, the obstacles placed in their way by the government often mean they never start up in the first place, let alone expand into the job creators of the future.

Restore the system that made America GREAT.
A system of friendly competition between relatively small political and economic units called States.
We now have a MONOPOLY system.
Governance is almost completely monopolized by the Federal government and the states retain very little power.
The Federal government now takes the vast majority of taxes - completely opposite to the system the Founders envisaged and the system that made America great in the first place.
There is now monopoly control of the money supply and market manipulation of interest rates by the privately owned  Federal Reserve bank - for their owners profits and against the interests of all but a handful of Americans.
Competition is ALWAYS GOOD.
Monopolies are ALWAYS BAD - except for the monopolist.
http://ian56.blogspot.co.uk/2012/10/the-case-against-barack-obama.html
http://ian56.blogspot.co.uk/2012/11/the-case-against-barack-obama-democrat.html


The Fiscal Cliff Deal - a financial analysis
http://ian56.blogspot.co.uk/2013/01/fiscal-cliff-deal-obamas-corporate-sell.html 

I believe. I have a DREAM. I have a DREAM that America's problems will one day be widely recognized and thence be fixed. 
I BELIEVE that one day the electorate will wake up from their torpor. I BELIEVE in America.
http://ian56.blogspot.co.uk/2013/01/i-beleive-i-have-dream-i-have-dream.html

The global and US economy in general and what needs to be done to fix things.
http://ian56.blogspot.co.uk/2013/01/a-global-economic-summary-why-paul.html

Still Report SR70 State of the Union 2013

Other economic facts, charts and figures 
None of them paint a pleasant picture at all.
http://ian56.blogspot.co.uk/2012/11/unemployment.html

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China is now trying to delay the date of the US dollar collapse

They have now issued a statement backing the US Dollar after sending a letter to the G20 in June 2012 that a new Global Reserve Currency is required to replace the dollar.

http://www.telegraph.co.uk/finance/currency/9881410/China-loves-the-US-dollar-again-as-America-roars-back.html

Perhaps the Chinese are now trying to delay the collapse in the dollar until they are more prepared.
Perhaps they can see how close the US now is to a dollar and economic collapse with current US government and Federal Reserve policy.
They must of been amazed at the level of stupidity in the terms of the Fiscal Cliff deal for example.

I find it difficult to believe they haven't looked into the numbers. Government deficits of $2.5tn in 2020 and rapidly rising due to increases in debt servicing, pensions and Healthcare costs.

http://ian56.blogspot.co.uk/2013/01/fiscal-cliff-deal-obamas-corporate-sell.html

(The retirement age and Medicare qualification age will have to significantly rise at some point - there isn't another solution. The retirement age will have to be at least 70, perhaps as high as 75 by 2050.)

National Debt of $36tn by 2022 - but then you have to add in this which will take it to $40tn+. 

NOBODY has yet factored this into deficit or National Debt calculations - the Federal Reserve charging the Treasury for their multi trillion future trading losses on trades they are making now.

http://ian56.blogspot.co.uk/2013/02/there-is-no-way-out-for-federal-reserve.html

The Chinese are not yet ready for a dollar collapse. They have their own domestic problems with the slow down in exports to Europe and the US. Some realistic estimates put current Chinese GDP growth as low as 0% (the government has always overstated official GDP growth and are saying it is about 6%).

The Chinese HAVE already conducted rough surveys to determine America's net worth.
Principally it's natural resource assets but also the value of it's farmland and water resources.
The Chinese are expecting a fire sale of America's assets at some point in the future.
They are currently putting their foot in the door with things like buying up 3 small chains of retail banks and chunks of farmland in Idaho.

The Chinese are still working on plans to marginalise, isolate and then replace the dollar. 

They have already done several non USD trade deals with several countries. 

These countries include, Russia, Japan, India, Brazil, Australia, Chile and South Africa. 

Half of Africa is becoming interested and the rest of SE Asia is too. 

Even Germany are considering their options.

http://ian56.blogspot.co.uk/2012/02/greek-scenario-and-us.html

There is no mention of Gold in the article - why not? China has bought hundreds of tonnes of Gold in the last few years and continues to buy large quantities of it. Russia and Brazil are also now becoming large buyers. 

Previous talk out of China was that the new Global Reserve currency (after the US dollar) should have a proportion of Gold in it - as well as a mixture of a few currencies and SDR's.

The US is already nett energy neutral. It still imports oil but it has an excess of natural gas. Gas production is being slowed down by energy companies, because it is on the economic margins.
The US would now be producing a lot more natural gas, if the price was say 10% higher. A relatively small switch between the current gas and oil usage in the US would mean it was economic to produce more natural gas in the US.
The US needs to use less oil and more natural gas to become completely energy independent. 

The US will become a significant nett exporter of energy and the largest producer of energy in the world (overtaking Russia) in the next few years.  

The US government is actually trying to stop this from happening and keep the US energy dependent on some politically dodgy sources (like Venezuela) by things like stopping more energy exploration in 1.6 million acres of Dakota.

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Too Big To Fail banks bankrupting America with endless taxpayer subsidies

Taking away the implicit government guarantee of Too Big To Fail banks would increase the interest costs on all their liabilities by 0.8%.

This amounts to $83bn for the top 10 banks.
Taking this implicit government guarantee away would wipe out all of the big banks profits.

The top 5 banks have $9tn in assets equivalent to more than 50% of the US annual economy.
The top 5 banks account for $64bn of the implicit government subsidy for TBTF.

N.B. these implicit government guarantees are exactly the same as the government guarantees for Fannie Mae and Freddie Mac. Private companies with implicit government guarantees that went bust and had to be bailed out at a huge cost to the tax payer.

Source : Research by Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz 
http://www.imf.org/external/pubs/ft/wp/2012/wp12128.pdf

N.B. If the big banks did not get these subsidies, smaller banks would be able to compete on a level playing field.
Smaller banks that are managed much better. Like the state owned bank of North Dakota.
Well managed smaller banks would grow their businesses and the poorly managed big banks would wither and decline to the benefit of everyone except the big bank execs.
That is how a market is supposed to operate - not endless government subsidies to certain companies for ever. That is a recipe for disaster - as we have already seen and will see again in the not too distant future when the banks call round for the next TARP bailout.



But there are far more government subsidies than this.
Without government subsidies the big banks would continually make huge losses.

Currently the Federal Reserve bank is buying impaired mortgage loans from the big banks at more than they are worth at the rate of $480 bn a year.
The losses the Federal Reserve make by recycling these assets, buying high and selling low, would otherwise be returned to the Treasury and taxpayers as part of the Federal Reserves annual profit and is a direct taxpayer subsidy of the big banks.

Then there is the $540bn a year the Fed is printing to buy up more US Treasuries.
This is also a direct subsidy to the big banks.

The banks are using the $1tn a year of newly printed Fed money to speculate with.
The stock market, bonds, food, oil, other commodities etc.
Speculation in all sorts of things. Speculation that is pushing up prices in al sorts of things - like your grocery shopping and the cost to fill up your gas tank.

The big banks are borrowing this money from the Fed at 0.25% interest.
It is not difficult to make money in all sorts of ways if you can borrow pretty much unlimited quantities of money at 0.25% interest.

The taxpayer will eventually pay for all of this huge quantity of free money the big banks are being given every year.
They will pay for it with higher food and gas prices, they will pay for it with higher unemployment and they will pay for it with higher prices of just about everything as companies pass on their increased costs to consumers.



Then there is all the Corporate Pork the big banks are getting from the government every year.
Direct taxpayer subsidies.

These items were specifically included in the actual Fiscal Cliff bill - I don't know how much more is included in other bills.

Some of the Corporate goodies injected into the Fiscal Cliff deal

"Sec. 328 extends “tax exempt financing for York Liberty Zone,” which was a program to provide post-9/11 recovery funds. Rather than going to small businesses affected, however, this was, according to Bloomberg, “little more than a subsidy for fancy Manhattan apartments and office towers for Goldman Sachs and Bank of America Corp.” Michael Bloomberg himself actually thought the program was excessive, so that’s saying something. According to David Cay Johnston’s The Fine Print, Goldman got $1.6 billion in tax free financing for its new massive headquarters through Liberty Bonds. 

$9.4B a year Off-shore financing loophole for banks – Sec. 322 is an “Extension of the Active Financing Exception to Subpart F.” Very few tax loopholes have a trade association, but this one does. This strangely worded provision basically allows American corporations such as banks and manufactures to engage in certain lending practices and not pay taxes on income earned from it. According to this Washington Post piece, supporters of the bill include GE, Caterpillar, and JP Morgan. Steve Elmendorf, super-lobbyist, has been paid $80,000 in 2012 alone to lobby on the “Active Financing Working Group.” 

Tax credits for foreign subsidiaries – Sec. 323 is an extension of the “Look-through treatment of payments between related CFCs under foreign personal holding company income rules.” This gibberish sounding provision cost $1.5 billion from 2010 and 2011, and the US Chamber loves it. It’s a provision that allows US multinationals to not pay taxes on income earned by companies they own abroad. 

   

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How the government and the Federal Reserve are WRECKING the US economy

Fixing America's current economic ills won't come about by Fed printing - which makes things much WORSE. 

It will only come about if ordinary people's disposable incomes start rising instead of plummeting as they currently are. 

Both government and Federal Reserve policy are the EXACT opposite of what is required to improve things.

What needs to happen to fix America's economic ills 

Immediate cuts of over $1tn a year in Corporate Welfare.

Immediately raise the personal income tax thresh hold from $8,700 to $45,000. More than reversing the huge $200bn tax hike handed out to the middle class and the working poor in the fiscal Cliff deal. It would be a $500bn TAX BREAK, almost all of it going to middle earners and below.  

Stop the $1tn a year bailout to the big banks which is increasing food & gas prices.

Break up the Corporate cartels that now operate in each major industry. 
Reinstate the Rule of Law. 
Jail senior bankers for 30+ years for their white collar crimes. Fine the big banks $200bn for the same.

Completely reform Corporation Tax. Current policy is strongly in favor of large multinationals and strongly against small businesses. 
Set a flat Corporate tax rate of about 25% - no loopholes, no tax breaks whatsoever.
Make the first $100,000 tax free to give a huge tax break for small and medium businesses.

What needs to happen in more detail 

http://ian56.blogspot.co.uk/2013/02/why-do-so-many-dems-continue-to-support.html

Nick Leeson and Barings bank vs the Federal Reserve and America

The Fed are behaving in exactly the same way as Nick Leeson, who kept doubling down on his bets that the Nikkei would  turn around and start rising again in the early 1990's.
The Nikkei was way over valued at the time - just like US Treasuries are now.
It was a sure fire losing trade.
Nick Leeson broke Barings Bank.
Barings Bank had been a profitable institution for 230 years - it was founded in 1762.
The Federal Reserve private bank is going to do the same thing to the whole of America.
America has also been a profitable institution for about 230 years.


The Federal Reserve's sure fire losing bet

The Fed is currently making healthy profits from it's greatly expanded balance sheet - $96bn for 2012.
But just a small rise in interest rates will turn these current profits into losses.


The Fed is now doubling and tripling down on a 100% sure fire losing bet (they are exactly akin to the worst kind of rookie trader).

They are increasing their balance sheet by $1tn a year ad infinitum, by buying US Treasuries at record high prices and overpaying for impaired mortgage debt in QE3.

WHEN (not if) interest rates start rising back towards normal historical levels the Fed will start making losses.
The longer the Fed continues with their current policy of buying huge quantities of debt at extremely high prices the greater these future losses will be.

Instead of returning a health sum to the US Treasury each year, the Fed will call upon the US Treasury (i.e. taxpayers) to pay for their losses. 

These future payments by the US Treasury to the Federal Reserve private bank have not been factored into future deficit or National Debt calculations.

The Federal Reserve will not be able to escape the path that it is on.
There is no way out.
The Fed is already buying US debt equivalent to the ENTIRE annual government deficit every year.
There is an extreme shortage of other buyers at current rates.
The Fed will not be able to reduce their balance sheet at any stage in the future without taking a very substantial loss.  

Any selling by the Fed in any quantity would lead to a dramatic decrease in the price of US Treasuries (and other US debt held on the Federal Reserve's balance sheet).
The Federal Reserve is by far the largest player in the market for US debt - they are greater than all the other Central Banks put together.
The market has already priced in that the Fed will be buying $1tn of US debt a year ad infinitum and any change in that policy (even without actually buying or selling anything) would dramatically lower the perceived worth of US debt.

The interest rate for 10 year government debt averaged over the last 200 years is between 5 and 6%.
An interest rate of between 5 and 6% is the historical norm.
Markets ALWAYS revert back to historical norms sooner or later (unless they cease to exist entirely).

Source : Société Générale Institutional Research

10 Year US Treasuries currently have an interest rate of 2%.
Some estimates put the break even point for the Fed at 4.5% at the end of 2013 (below this and the Fed makes a profit).
Some estimates put it as low as 2.5%.
There is no doubt it is closer to the latter number.
You have to factor in the future losses on the huge amounts of debt the Fed has already bought while the 10 year note has averaged between 2.5% and 3% over the last 4 and a half years ($2.1tn from mid 2008 to January 2013).
You have to factor in the $1tn of US debt the Fed will be buying each year while the 10 Year note is paying around 2% interest, as it currently is.

The future Federal Reserve bank crisis is already set in stone alongside the US sovereign debt and bank crises.
By the end of 2013, if not earlier, the future will of already been set in stone. It is only a question of when these future events happen. 

Continued at :- 
http://ian56.blogspot.co.uk/2013/02/there-is-no-way-out-for-federal-reserve.html

It wouldn't be so bad if taking these huge future Fed trading losses was helping now but the current Fed printing is making things MUCH WORSE.
It is raising food and gas prices and lowering the disposable incomes of ordinary people.
http://ian56.blogspot.co.uk/2013/01/the-2tn-of-excess-bank-reserves-is.html

Anyone else read about Wal Mart's abysmal latest sales numbers or $4 gas in California? 
The ordinary consumer is tapped out, disposable incomes are falling and the government and the Federal Reserve are making it MUCH WORSE. 

It is really funny (and extremely sad too) when press articles somehow suggest the Federal Reserve is somehow helping or somehow knows what it is doing when it has repeatedly demonstrated on numerous occasions over many years that it is completely clueless and makes things MUCH WORSE. 

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