August 29, 2010

Taking from the Poor to Give to the Rich: The Top 20% Percent of Americans Own 85% of All Wealth and the Top 400 Wealthiest Earn $345 Million Per Year

The Plundering of America

By Jeff Nielson
March 7, 2010

In several previous commentaries, I have criticized our system of income taxation as being fatally flawed. The primary flaw is that for the people at the top of the economic pyramid, income is usually only a tiny component of their increasing wealth. Generally, the vast majority of new wealth for the ultra-wealthy comes from the appreciation of assets, which are never (and can never) be taxed by an income-based system of taxation.

The ultimate result of an income-tax system is that wealth is relentlessly transferred out of the hands of the poor and middle class -- and into the hands of the ultra-wealthy. I have previously illustrated the net result of decades of income taxation in the United States, through some horrifying demographic data.

The top 20% of wealthiest Americans hold an obscene 85% of all wealth. Put another way, the “little people” who comprise the bottom 80% of U.S. society hold only a pitiful 15% of U.S. wealth -- the most lop-sided wealth distribution among all Western societies. However, while that data is bad enough, it gets much worse when we focus upon the top 1% of wealthiest Americans. These pseudo-aristocrats hold 35% of all wealth and 56% of all stocks held by Americans.

Put another way, as the Wall Street Oligarchs crow about the “amazing rally” in U.S. equity markets, 56 cents of every dollar of profit goes to just 1% of Americans. Meanwhile, the “little people,” the 80% of Americans on the bottom hold less than 15% of all stocks -- meaning that this Wall Street-manufactured “rally” is doing nothing to alleviate the economic suffering of the vast majority of Americans.

However, some new, economic data out of the U.S. has left me completely flabbergasted. While I was well aware of the Bush-era tax hand-outs to the wealthy, I did not truly understand the magnitude of that windfall. The numbers are totally shocking.

In 1995, during the Clinton-era, the top-400 wealthiest Americans 'earned' an average of $50/million per year in income, while paying an effective tax rate of 30% on those earnings. In 2007, a mere 12 years later, the effective tax rate for the “400” had fallen by 45%, thanks to the Bush hand-outs.

What is even more shocking (and despicable), however, was the rise in incomes of the “400.” In just 12 years, their average incomes rose from $50 million/year to $345 million/year -- a nearly 700% rise in incomes in just 12 years, or an average wage-hike of well over 50% per year. What makes this all the more despicable is that during this same period of time, the U.S. government (and Canada's government, as well) have been doing everything in their power to prevent the “little people” from getting any wage increases, at all.

In aggregate terms, this unequivocal decision to “take from the poor to give to the rich” has produced a wealth schism which literally has not been seen in our societies in over 70 years.

As you can see in the chart above, it is “deja vu all over again” as the share of increases in income for those Americans at the top is now at virtually the same level it was in 1929 -- just before the Great Depression began. While it would be inaccurate to say the Great Depression was “caused” by this grossly disproportionate schism in incomes, I will remind readers of one of my favorite quotations, from Greek philosopher, Plutarch -- nearly two thousand years ago:

An imbalance between rich and poor is the oldest and most fatal ailment of all Republics.

Thus, while the obscene plundering of America's wealth by the top 1% (courtesy of the Bush regime) did not cause the second “Greater Depression” in the United States, it will certainly make it much, much worse.

It goes without saying that the top 1% of Americans do not “earn” over 60% of all pay-raises in the U.S. Rather, this massive wealth-grab has been enabled by a society which has willingly submitted to what is nothing less than “economic rape.” Indeed, unlike real “rape victims,” we literally “asked for it.”

How could “the little people” (who now wield little, real power in our societies) be responsible for having most of our wealth stolen from us? Apart from the fact we continue to submit to a system of taxation which (inevitably) robs-from-the-poor to give-to-the-rich, we willingly endorsed the destruction of trade unions in our societies -- swallowing the economic propaganda fed to us by the corporate media-empire, like the moldy tripe that it was. Unions are corrupt.” “Unions are greedy.” “Unions cause inflated wages for their members -- which hurts our economy.”

Let me be perfectly clear here: I am not defending unions as “bastions of economic purity.” Having worked in four different unions while I was working my way through seven years of university, I saw (first-hand) all the flaws exhibited by these organizations. Yes, there is “corruption.” Yes, there is “greed.” Yes, unions do result in higher wages for their members than if they were not in a union. However, the issue here is perspective.

Power corrupts. Absolute power corrupts absolutely.” This tautology applies to all members of our society, and as these words of wisdom make explicitly clear, they are more applicable to those on top (i.e. those who come closest to “absolute power”), who are corrupted the most.

Is there any other group of people in the world more corrupt than the Wall Street Oligarchs? In previous commentaries, I pointed out how these Oligarchs are the most-ruthless and most-hypocritical people on the planet.

As for “greed,” the numbers above clearly demonstrate that the greed of the rich makes the (supposed) “greed” of the little people appear to be nothing but a pathetic joke, in comparison. However, that data merely represents the “tip of the iceberg.”

Notice how during the years when trade unions were their strongest (during the 1960's) -- and supposedly at their “greediest” point -- that the little people still didn't come close to getting their share of the income pie. The bottom 99% at their absolute best only obtained 65% of total wage increases, only 2/3 of their rightful share. Keep in mind that even that statistic is badly skewed by the fact that the wealthiest members of the bottom-99% (i.e. the rest of the top-20%) took home most of those wage-increases. Thus, when trade unions were at their absolute peak of power, they were able to extract only about half the wage increases which their members (i.e. the people) were rightfully entitled to.

Thanks to the apathy of the flocks of sheep who masquerade as “citizens” in our societies, unions in North America have been nearly destroyed, and the public sector unions are virtually the only unions which have been allowed to survive.

What is the attitude of the average American toward these public sector unions? They want to see them crushed, if not abolished, altogether. Having learned nothing from the last 40 years of their economic oppression, instead of looking to increase union-representation for themselves (as the first step in reversing this scenario), instead, these petty, ignorant people can only think of stripping away the same rights and benefits which these sheep willingly threw away for themselves.

Yes, U.S. public sector unions do much better for their members than for the non-union knuckle-draggers who did away with their own unions. However, as the economic data clearly indicates, the wages and benefits which public sector unions have obtained for their members are nothing but 'economic crumbs' compared to the obscene fortunes which the ultra-wealthy have plundered from American society.

Let me return to the final (faulty) accusation which has been directed at trade unions: that their “excessive” wage increases “hurts our economy.” The “evidence” which the propagandists use to supposedly justify this economic fiction dates back to the 1970's.

First, Nixon defaulted on the gold-obligations of the United States, taking the entire, global monetary system off of a “gold standard” -- for the first time in history -- meaning that none of the world's currencies were “backed” (officially) by any hard asset. This also allowed the banksters (for the first time in history) to engage in their dilutive, money-printing without any economic restraints.

Inflation immediately began to soar, and (along with concurrent political events) this led to the “Energy Crisis” of the 1970's -- where the newly-formed OPEC cartel announced they would no longer allow the United States to plunder all of their petroleum wealth at only a fraction of its real value.

There can be no questioning the legitimacy of OPEC's grievances, since the numbers are unequivocal. As I have often discussed in my commentaries on silver, it is a very basic truth of economics that any good which is “under-priced” will be “over-consumed.” If McDonald's announced that it would start selling “Big Mac's” for a penny apiece, we would all start eating hamburgers (or eating more of them) and cows would become “an endangered species.”

The obvious fact that we have a “supply crisis” in the crude oil market today is unequivocal proof that crude oil has been under-priced throughout most of the last several decades.

With the “spike” in the price of oil, an inflation-spiral began in our societies. I would ask all the union-bashers out there to please let me know which of the preceding events was the “fault” of trade unions? Nixon's gold default? The abolition of the gold standard? The reckless money-printing of the banksters? The plundering of Arab oil-wealth, which led to the formation of OPEC. Pardon my ignorance, but I fail to see how trade unions played any role at all, in the creation of the 1970's inflation-spiral.

However, once that spiral began, to the horror of the wealthy, all of our trade unions became “radical. They made the “unreasonable” demand to their employers that if inflation was at a 10% annual rate that they wanted 10% raises for their members -- so that their members weren't being punished for Nixon's gold default, the abolition of the gold standard, the reckless money-printing of the banksters, and the formation of OPEC.

It was at this time that large corporations had finally managed to acquire a virtual monopoly over the “free press” of our societies. They immediately took advantage of this ability to control the “news” by re-writing history.

Suddenly, it was not Nixon's gold-default, the abolition of the gold standard, the reckless money-printing of the banksters, and the back-lash from Arab oil producers which had “caused” the inflation-spiral in the world's economies. Indeed, the propaganda-machine even changed the name of this economic phenomenon. It changed from an “inflation spiral” to a “wage-price spiral.”

In other words, instead of characterizing events truthfully; namely, that unions responded to the inflation created by our governments by seeking compensatory wage-increases, the propaganda which was sold to the sheep was that this entire “wage-price spiral” was caused by the 'evil' trade unions -- whose “crime” was that they did not believe their members should be getting poorer every year.

The rest, as they say, “is history.” The sheep turned on their own unions. They allowed our governments to “fix” the inflation problem they created by destroying our societies' trade unions. Concurrently, these same governments refused to shorten the work-week -- to reflect the beginnings of “structural unemployment” which had started to take hold in our labour markets.

For those unfamiliar with this term, “structural unemployment” is unemployment which is permanently “structured” into our labour markets so that even at the peak of each business cycle, a growing number of people would never find employment.

This has been a basic dynamic of our economies since the birth of capitalism, and the original “work week”: seven days a week, twelve hours a day. Since technology always eliminates jobs faster than it creates new applications, every few decades it was necessary to shorten the work week -- otherwise a steadily growing number of workers would never find a job.

Our governments stopped this evolution, freezing our work week at the current five-day, forty-hour work-week, which has been a standard for more than half a century. At the same time that our unions were destroyed (the only protection for workers) our governments have allowed “structural employment” to reach its highest level in history.

Thus, in addition to workers having no protection, they also had all of their “job security” robbed from them, since unlike a generation earlier, where a worker could quit a job if he was unhappy -- and look for a new/better one; with millions of permanently unemployed workers ready/willing/able to take the jobs of existing workers and work for even lower wages, we effectively became a society of “slaves” totally dependent on pleasing our “masters” for our economic survival.

Even this level of economic oppression is not enough to sate the relentless greed of the ultra-wealthy. While the majority of us have been turned into slaves, we have not yet had all of our wealth stolen from us. That will take place as the U.S. Greater Depression unfolds.

The key difference between the first”Great Depression” and today's “sequel” is that in the 1930's, despite the economic hardship which the “little people” suffered, the vast majority managed to hang onto their homes. The Wall Street Oligarchs plan to correct that “mistake” this time around.

While roughly 10 million American homeowners have already lost their homes to the Oligarchs, this doesn't come close to meeting their “target.” Ideally, they would like all of the little people to lose their homes. Taking a quote from “The Bankers Manifesto of 1892”:

When through the process of law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of government, applied to a central power of imperial wealth under the control of the leading financiers [i.e. the banksters].

Thus, the “game plan” of the Wall Street Oligarchs was written well over a century ago; however, it has taken all this time for the Oligarchs to gain such complete control over the “levers of power” that they are now in a position to achieve their dreams.

Quite simply, they want to steal the homes of every American, while the iron-fist of a Fascist government keeps the masses from rising up against them: hence the need to invent “The War on Terror” in order to 'justify' the creation of the Homeland Security Department: the instrument of U.S. facism.

Thanks to “The Patriot Act,” Americans no longer have any “constitutional rights.” Instead, they have constitutional privileges which can be completely revoked simply by uttering the magic word “terrorism.” Should U.S. “terrorists” seek to oppose their political/economic oppression, in some meaningful sense, such “terrorists” will simply disappear -- without “wasting” a lot of time with formal charges or lawyers or even trials.

Meanwhile, the Obama regime has created a second U.S. housing-bubble (see “The U.S. Government's Zero-Downpayment Mortgages”). It has created a brand-new “sub-prime sector” -- except this time around, the U.S. government (i.e. U.S. taxpayers) is “guaranteeing” nearly 100% of all these loans, while the Oligarchs allow none of their own money to be put at risk in this second bubble.

And the “risks” are as obvious as they are numerous. Millions of already-foreclosed homes have been held off of the market, allowing the propaganda-machine to pretend that housing inventories are only half as large as they really are, which in turn, has allowed some momentary price stability. This is totally a mirage.

With the U.S. economy still plummeting downward (putting aside the totally fictional “GDP” numbers of the U.S. government), job losses are about to re-accelerate, interest rates can only go higher, millions of hopelessly-insolvent “option-ARM” mortgages are about to reset, and retiring baby-boomers need to dump trillions of dollars of real estate onto the market (to partially compensate for a $3 trillion short-fall in their pensions and their own lack of savings).

And, at some point, the millions of homes which the Oligarchs have hidden from the market will show up in inventories. Indicating that this second “crash” has now begun, recent figures for the sale of both new and existing-homes have shown a sudden collapse.

There is a real “war” taking place today: an economic war, which has been instigated by the ultra-wealthy, prosecuted by the U.S. government, and directed at the American people. Having already robbed Americans of their political power through the establishment of the Wall Street-owned, two-party dictatorship, the Oligarchs now want to rob the people of their last vestiges of “economic power” -- in order to turn Americans into “serfs,” which they consider to be the only rightful place for the “little people.”

Given how we have meekly submitted to the plans of the Oligarchs, it becomes harder and harder each day to argue that we do not deserve to be serfs.

The Rise of the New Global Elite
Two separate economies are emerging from the economic crisis as the elite get richer and the middle class join the ranks of poor.

August 28, 2010

The Financial Oligarchy's Plan for the World

Is an International Financial Conspiracy Driving World Events?

By Richard C. Cook, Global Research
Originally Published on March 27, 2008

"They make a desolation and call it peace." -Tacitus

Was Alan Greenspan really as dumb as he looks in creating the late housing bubble that threatens to bring the entire Western debt-based economy crashing down?

Was something as easy to foresee as this really the trigger for a meltdown that could destroy the world’s financial system? Or was it done, perhaps, "accidentally on purpose"?

And if so, why?

Let’s turn to the U.S. personage that conspiracy theorists most often mention as being at the epicenter of whatever elite plan is reputed to exist. This would be David Rockefeller, the 92-year-old multibillionaire godfather of the world’s financial elite.

David Rockefeller at Harvard in 2006

The lengthy Wikipedia article on Rockefeller provides the following version of a celebrated statement he allegedly made in an opening speech at the Bilderberg conference in Baden-Baden, Germany, in June 1991:
"We are grateful to the Washington Post, the New York Times, Time magazine, and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during these years. But the world is now more sophisticated and prepared to march towards a world government which will never again know war, but only peace and prosperity for the whole of humanity. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in the past centuries."
This speech was made 17 years ago. It came at the beginning in the U.S. of the Bill Clinton administration. Rockefeller speaks of an "us." This "us," he says, has been having meetings for almost 40 years; if you add the 17 years since he gave the speech, it was 57 years ago—two full generations.

Not only has "us" developed a "plan for the world," but the attempt to "develop" the plan has evidently been successful, at least in Rockefeller’s mind. The ultimate goal of "us" is to create "the supranational sovereignty of an intellectual elite and world bankers." This will lead, he says, toward a "world government which will never again know war."

Just as an intellectual exercise, let’s assume that David Rockefeller is as important and powerful a person as he seems to think he is. Let’s give the man some credit and assume that he and "us" have in fact succeeded to a degree. This would mean that the major decisions and events since Rockefeller gave the speech in 1991 have probably also been part of the plan or that they have at least represented its features and intent.

Therefore by examining these decisions and events we can determine whether in fact Rockefeller is being truthful in his assessment that the Utopia he has in mind is on its way or has at least come closer to being realized.

In no particular order, some of these decisions and events are as follows:

The implementation of the North American Free Trade Agreement (NAFTA) by the Bill Clinton and George W. Bush administrations has led to the elimination of millions of U.S. manufacturing jobs as well as the destruction of U.S. family farming in favor of global agribusiness.

Similar free trade agreements, including those under the auspices of the World Trade Organization, have led to export of millions of additional manufacturing jobs to China and elsewhere.

Average family income in the U.S. has steadily eroded while the share of the nation’s wealth held by the richest income brackets has soared. Some Wall Street hedge fund managers are making $1 billion a year while the number of homeless, including war veterans, pushes a million.

The housing bubble has led to a huge inflation of real estate prices in the United States. Millions of homes are falling into the hands of the bankers through foreclosure. The cost of land and rentals has further decimated family agriculture as well as small business. Rising property taxes based on inflated land assessments have forced millions of lower-and middle-income people and elderly out of their homes.

The fact that bankers now control national monetary systems in their entirety, under laws where money is introduced only through lending at interest, has resulted in a massive debt pyramid that is teetering on collapse. This "monetarist" system was pioneered by Rockefeller-family funded economists at the University of Chicago.

The rub is that when the pyramid comes down and everyone goes bankrupt, the banks which have been creating money "out of thin air" will then be able to seize valuable assets for pennies on the dollar, as J.P. Morgan Chase is preparing to do with the businesses owned by Carlyle Capital. Meaningful regulation of the financial industry has been abandoned by government, and any politician that stands in the way, such as Eliot Spitzer, is destroyed.

The total tax burden on Americans from federal, state and local governments now exceeds forty percent of income and is rising. Today, with a recession starting, the Democratic-controlled Congress, while supporting the minuscule "stimulus" rebate, is hypocritically raising taxes further, even for middle-income earners. Back taxes, along with student loans, can no longer be eliminated by bankruptcy protection.

Gasoline prices are soaring even as companies like Exxon-Mobil are recording record profits. Other commodity prices are going up steadily, including food prices, with some countries starting to experience near-famine conditions. 40 million people in America are officially classified as "food insecure."

Corporate control of water and mineral resources has removed much of what is available from the public commons, and the deregulation of energy production has led to huge increases in the costs of electricity in many areas.

The destruction of family farming in the U.S. by NAFTA (along with family farming in Mexico and Canada) has been mirrored by policies toward other nations on the part of the International Monetary Fund and World Bank. Around the world, due to pressure from the "Washington consensus," local food self-sufficiency has been replaced by raising of crops primarily for export. Migration off the land has fed the population of huge slums around the cities of underdeveloped countries.

Since the 1980s the U.S. has been fighting wars throughout the world either directly or by proxy. The former Yugoslavia was dismembered by NATO. Under cover of 9/11 and by utilizing off-the-shelf plans, the U.S. is now engaged in the military conquest and permanent military occupation of the Middle East. A worldwide encirclement of Russia and China by U.S. and NATO forces is underway, and a new push to militarize space has begun. The Western powers are clearly preparing for at least the possibility of another world war.

The expansion of the U.S. military empire abroad is mirrored by the creation of a totalitarian system of surveillance at home, whereby the activities of private citizens are spied upon and tracked by technology and systems which have been put into place under the heading of the "War on Terror." Human microchip implants for tracking purposes are starting to be used. The military-industrial complex has become the nation’s largest and most successful industry with tens of thousands of planners engaged in devising new and better ways, both overt and covert, to destroy both foreign and domestic "enemies."

Meanwhile, the U.S. has the largest prison population of any country on earth. Plus everyday life for millions of people is a crushing burden of government, insurance, and financial fees, charges, and paperwork. And the simplest business transactions are burdened by rake-offs for legions of accountants, lawyers, bureaucrats, brokers, speculators, and middlemen.

Finally, the deteriorating conditions of everyday life have given rise to an extraordinary level of stress-related disease, as well as epidemic alcohol and drug addiction. Governments themselves around the world engage in drug trafficking. Instead of working to lower stress levels, public policy is skewed in favor of an enormous prescription drug industry that grows rich off the declining level of health through treatment of symptoms rather than causes. Many of these heavily-advertised medications themselves have devastating side-effects.

This list should at least give us enough to go on in order to ask a hard question. Assuming again that all these things are parts of the elitist plan which Mr. Rockefeller boasts to have been developing, isn’t it a little strange that the means which have been selected to achieve "peace and prosperity for the whole of humanity" involve so much violence, deception, oppression, exploitation, graft and theft?

In fact it looks to me as though "our plan for the world" is one that is based on genocide, world war, police control of populations, and seizure of the world’s resources by the financial elite and their puppet politicians and military forces.

In particular, could there be a better way to accomplish all this than what appears to be a concentrated plan to remove from people everywhere in the world the ability to raise their own food? After all, genocide by starvation may be slow, but it is very effective. Especially when it can be blamed on "market forces."

And can it be that the "us" which is doing all these things, including the great David Rockefeller himself, are just criminals who have somehow taken over the seats of power? If so, they are criminals who have done everything they can to watch their backs and cover their tracks, including a chokehold over the educational system and the monopolistic mainstream media.

One thing is certain: The voters of America have never knowingly agreed to any of this.

Richard C. Cook is a former U.S. federal government analyst, whose career included service with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, NASA, and the U.S. Treasury Department. His articles on economics, politics, and space policy have appeared on numerous websites. His book on monetary reform entitled We Hold These Truths: The Promise of Monetary Reform is in preparation. He is also the author of Challenger Revealed: An Insider’s Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age, called by one reviewer, "the most important spaceflight book of the last twenty years." His website is at

August 27, 2010

Insulate Yourselves from the Coming Economic Collapse

10 Practical Steps That You Can Take to Insulate Yourself (at Least Somewhat) from the Coming Economic Collapse

The Economic Collapse
August 26, 2010

Most Americans are still operating under the delusion that this “recession” will end and that the “good times” will return soon, but a growing minority of Americans are starting to realize that things are fundamentally changing and that they better start preparing for what is ahead. These “preppers” come from all over the political spectrum and from every age group.

More than at any other time in modern history, the American people lack faith in the U.S. economic system. In dozens of previous columns, I have detailed the horrific economic problems that we are now facing in excruciating detail. Many readers have started to complain that all I do is “scare” people and that I don’t provide any practical solutions. Well, not everyone can move to Montana and start a llama farm, but hopefully this article will give people some practical steps that they can take to insulate themselves (at least to an extent) from the coming economic collapse.

But before I get into what people need to do, let’s take a minute to understand just how bad things are getting out there. The economic numbers in the headlines go up and down and it can all be very confusing to most Americans.

However, there are two long-term trends that are very clear and that anyone can understand:

  • The United States is getting poorer and is bleeding jobs every single month.
  • The United States is getting into more debt every single month.
When you mention the trade deficit, most Americans roll their eyes and stop listening. But that is a huge mistake, because the trade deficit is absolutely central to our problems.

Every single month, Americans buy far, far more from the rest of the world than they buy from us. Every single month tens of billions of dollars more goes out of the country than comes into it.

That means that every single month the United States is getting poorer.

The excess goods and services that we buy from the rest of the world get “consumed” and the rest of the world ends up with more money than when they started.

Each year, hundreds of billions of dollars leave the United States and don’t return. The transfer of wealth that this represents is astounding.

But not only are we bleeding wealth, we are also bleeding jobs every single month.

The millions of jobs that the U.S. economy is losing to China, India and dozens of third world nations are not going to come back. Middle class Americans have been placed in direct competition for jobs with workers on the other side of the world who are more than happy to work for little more than slave labor wages. Until this changes the U.S. economy is going to continue to hemorrhage jobs.

The U.S. government has helped to mask much of this economic bleeding by unprecedented amounts of government spending and debt, but now the U.S. national debt exceeds 13 trillion dollars and is getting worse every single month. Not only that, but state and local governments all over America are getting into ridiculous amounts of debt.

So, what we have got is a country that gets poorer every single month and loses jobs to other countries every single month and that has accumulated the biggest mountain of debt in the history of the world, which also gets worse every single month.

Needless to say, this cannot last indefinitely. Eventually the whole thing is just going to collapse like a house of cards.

So what can we each individually do to somewhat insulate ourselves from the economic problems that are coming?….

1 - Get Out of Debt: The old saying, “the borrower is the servant of the lender,” is so incredibly true. The key to insulating yourself from an economic meltdown is to become as independent as possible, and as long as you are in debt, you simply are not independent. You don’t want a horde of creditors chasing after you when things really start to get bad out there.

2 - Find New Sources of Income: In 2010, there simply is not such a thing as job security. If you are dependent on a job (“just over broke”) for 100% of your income, you are in a very bad position. There are thousands of different ways to make extra money. What you don’t want to do is to have all of your eggs in one basket. One day when the economy melts down and you are out of a job, are you going to be destitute or are you going to be okay?

3 – Reduce Your Expenses: Many Americans have left the rat race and have found ways to live on half or even on a quarter of what they were making previously. It is possible – if you are willing to reduce your expenses. In the future, times are going to be tougher, so learn to start living with less today.

4 – Learn to Grow Your Own Food: Today the vast majority of Americans are completely dependent on being able to run down to the supermarket or to the local Walmart to buy food. But what happens when the U.S. dollar declines dramatically in value and it costs ten bucks to buy a loaf of bread? If you learn to grow your own food (even if is just a small garden), you will be insulating yourself against rising food prices.

5 – Make Sure You Have a Reliable Water Supply: Water shortages are popping up all over the globe. Water is quickly becoming one of the “hottest” commodities out there. Even in the United States, water shortages have been making headline news recently. As we move into the future, it will be imperative for you and your family to have a reliable source of water. Some Americans have learned to collect rainwater and many others are using advanced technology, such as atmospheric water generators, to provide water for their families. But whatever you do, make sure that you are not caught without a decent source of water in the years ahead.

6 – Buy Land: This is a tough one, because prices are still quite high. However, as we have written previously, home prices are going to be declining over the coming months, and eventually there are going to be some really great deals out there. The truth is that you don’t want to wait too long either, because once Helicopter Ben Bernanke’s inflationary policies totally tank the value of the U.S. dollar, the price of everything (including land) is going to go sky high. If you are able to buy land when prices are low, that is going to insulate you a great deal from the rising housing costs that will occur when the U.S dollar does totally go into the tank.

7 – Get Off the Grid: An increasing number of Americans are going “off the grid.” Essentially what that means is that they are attempting to operate independently of the utility companies. In particular, going “off the grid” will enable you to insulate yourself from the rapidly rising energy prices that we are going to see in the future. If you are able to produce energy for your own home, you won’t be freaking out like your neighbors when electricity prices triple someday.

8 – Store Non-Perishable Supplies: Non-perishable supplies are one investment that is sure to go up in value. Not that you would resell them. You store up non-perishable supplies because you are going to need them someday. So why not stock up on the things that you are going to need now before they double or triple in price in the future? Your money is not ever going to stretch any farther than it does right now.

9 – Develop Stronger Relationships: Americans have become very insular creatures. We act like we don’t need anyone or anything. But the truth is that as the economy melts down we are going to need each other. It is those that are developing strong relationships with family and friends right now that will be able to depend on them when times get hard.

10 – Get Educated and Stay Flexible: When times are stable, it is not that important to be informed, because things pretty much stay the same. However, when things are rapidly changing, it is imperative to get educated and to stay informed so that you will know what to do. The times ahead are going to require us all to be very flexible, and it is those who are willing to adapt that will do the best when things get tough.

August 26, 2010

The Financial Elite Are Intentionally Tanking the Economy to Usher in a One-world Government

Is the U.S. Economy Being Tanked By Mistake or By Intent?

By Bill Sardi,
January 19, 2010

The government wants Americans to believe the greatest economic collapse in history was the result of ineptness and mistakes yet still have confidence in their financial institutions.

Should American bankers be let off the hook because they self-declare, before an investigative panel, that the failure of their newly-invented risk swaps, and other highly-leveraged investment schemes, was simply due to "mistakes"? Not malfeasance – just every-day mistakes? Bankers just fell asleep at the helm at a critical juncture in American history. Is that what we are being led to believe?

Oh well, it’s just 18 million American homes that now lay empty in the wake of unprecedented foreclosures, and the bankers have collected obscene bonuses for reckless lending of their depositors’ money. It’s like the captain and crew of a ship saying, not to worry, twenty-percent of the passengers were lost overboard, but this was due to unavoidable mistakes, and then being rewarded with bonuses when they reach port.

Are Americans to believe that the Federal Reserve lowered interest rates to create a false bubble in the economy at the same time the Securities Exchange Commission allowed investment banks risky reserve ratios and exerted lax control over investment tycoons like Bernie Madoff, and in lock step, the credit rating agencies (Fitch, Moody’s and Standard & Poor’s) handed out sterling A+ credit ratings on risky mortgage-backed securities, while the US Treasury Department stood by and did nothing?

Shall Americans conclude the world’s largest economy is beyond the management skills and regulation of virtually every financial arm of government and the private sector? If so, widespread incompetence would suggest Americans had better come up with some institution or instrument of their own invention to protect their money.

Whatever or whomever did bring down the American economy, it appears to be an orchestrated effort. If one arm of the financial industry had objected or performed their job responsibly, the whole economic collapse could have been averted. The credit rating agencies alone could have put an abrupt halt to what amounts to a financial collapse of western civilization.

Lenses into the future: a planned default?

Americans cannot see the economy as the elites do. The elites have lenses into the future. They have access to information that foretells the future of our economy. They can see a better picture of when mounting debt will rise beyond the ability to repay.

They certainly can see pension funds, private and public, are under-funded; and there is no way, with Baby Boomers now entering their retirement years, these obligations can be met. Medicare expenses are totally out of control, with recipients able to rack up bills in the tens of thousands of dollars beyond what they ever paid into the system.

At some point, seeing no way out, maybe a decision was made to default on our debts. There are rumblings that the world economy is being intentionally brought to its knees in order to usher in a one-world currency.

There are other hints that the US is intentionally tanking its economy.
  • Normally the US Patent & Trademark Office could be seen as a pathway to jump-start the economy. Some 6300 patent examiners hold the future fate of the American economy in their hands. But the patent office is backlogged. It embarrassingly has six years of patent applications, what amounts to over one million filings, waiting to be evaluated. Over $700 million of fees have been siphoned off by Congress to pay for other extraneous government projects, slowing the patent approval process to an agonizingly pace. About 7 of every 10 applicants were granted a patent in the past. But today, less than half are approved.

  • In the past decade there also appeared to be an effort to drive States into debt. Colorado, a State that had a mandated spending limit, was belittled for stifling its economy. Lies were told that Colorado was so bogged down with this limitation, that it repealed its spending limit bill. That was far from the truth.

  • Another business stifling practice has been to limit the amount of large funds actually available to the economy in what is called M3 money supply. M1 is the amount of currency and traveler’s checks in circulation outside banks, along with demand deposits and other checkable deposits. M2 is M1 plus savings deposits, such as money market accounts. M3 is M2 plus large time-restricted deposits, institutional money-market funds and other large liquid assets. M3 is the best official measure of the total supply of money.
As of March 23, 2006, the M3 money supply is no longer published by the US central bank. So Americans can’t get a full view of what government is doing with the total money supply. The M3 is now estimated by two websites: and A severe contraction in the M3 money supply began to be reported in August of 2008. It appears there has been a sudden downturn in M3 funds, which could choke the economy at a critical time.

By plan or mistake?

It would be difficult for the American public to even contemplate the idea that their government may be intentionally tanking the economy. So we are left with the commonly-heard claim that people in government are just incompetent, that there is no conspiracy of any kind. Regardless, heads should roll; and we still have the same derelict captains (Bernanke, Geithner) at the helm.

Whatever is planned for the future US economy, there certainly must be contingency plans in place to:

  • devalue the dollar,
  • issue new currency,
  • declare banking holidays,
  • reappraise the value of real estate to true market value (~ 30% drop),
  • sell off government-held real estate assets to hedge funds,
  • confiscate guns,
  • invoke marshal law, etc.
If these events occur, they won’t be without forethought. Call it conspiracy if you will.

On November 21, 1933, President Franklin Roosevelt stated,
"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the United States since the days of Andrew Jackson."
Few Americans recognize the merger of state and corporate powers, with the news media also subservient to those in power. How gullible the public has been over recent decades to not see how government and business have conspired to raise the price of goods.

The oil embargo of the 1970s

I can recall the gasoline crisis/OPEC oil embargo of the 1970s. I was traveling around the US on business at the time, and I noticed that shortages of gasoline were not nationwide but were actually being staged in different regions. In Seattle there was no shortage of gasoline, but there were long lines at gas stations in Los Angeles. There was no scarcity of gasoline in Atlanta, but later there were long lines at gas pumps throughout Georgia. TV screens around the nation made it falsely appear the shortage was nationwide.

The 1970s gasoline crisis was a concerted effort between government, oil producers, and the news media to fool Americans into thinking there was a pervasive shortage of gasoline despite the fact OPEC, the oil-producing cartel, was founded because of an over-abundance of oil.

I recall reading an article in Fortune Magazine in 1963 about how oil companies longed to find a way to raise the price of gasoline to European levels. Pre-OPEC, oil was sold at competing prices. That couldn’t be tolerated. A spot-price had to be introduced. Then one country couldn’t undersell another and prices would "stabilize." The OPEC cartel eliminated competition, except for Hugo Chavez in Venezuela in recent times. Of course, Chavez is demonized. We do not have free markets; we have controlled markets based upon contrived events.

Graph of oil prices from 1861–2007, showing a sharp increase in 1973 and again during the 1979 energy crisis. The orange line is adjusted for inflation.

Examine this map of failed banks in 2008–2009.

There are over 2000 failed banks the FDIC indicates it needs to dissolve. Notice, in the map above, how evenly the bank failures are spread geographically across the US. The geographical locus of home foreclosures is centered in California, Nevada, Arizona and Florida. But bank closures appear to be more evenly spread, as if to create public awareness (and fear) in every geographic region that banks are in trouble. This is eerily similar to the geographically revolving gasoline shortages in the 1970s.

Tax cut or payoff to oil companies?

Another example of complicity between government and industry is the most recent run up in gasoline prices which began early in the past decade. The news media failed to note that when GW Bush passed his first tax cut in 2001, early in his first term in office, it was rapidly followed by an increase in gasoline prices at the pump. Had President Bush cut taxes in order to put money into consumers’ hands so they could then pay ghastly high gasoline bills? The tax cut appears to have been a hand-in-hand arrangement between oil producers and the federal government. Gasoline prices rose till the public began curtailing their driving. The oil companies had now determined the top price they could get for their refined oil without collapsing demand.

There is nothing wrong with companies determining the top price consumers will pay for their goods, but there is something wrong when government secretly schemes with oil companies to create false market value, as they have also done in real estate.

Looking back in recent American history, there were also shortages of coffee and bananas in the 1970s and 80s, all staged events blamed on storms in South America that ruined crops. In those days, Americans didn’t have easy access to weather maps and information via the internet. These shortages were prolonged, and prices rose until usage declined. Then the barons who ruled the coffee and banana industries had found the top price they could sell their products at without dampening demand. Suddenly, the shortages disappeared. The public never imagined these shortages were all artificially created.

Is currency being gamed today in the same fashion that the price of oil, bananas and coffee was covertly engineered by a hidden alliance between government, industry and news outlets? If so, current economic events are not by mistake.

Since President Roosevelt banned citizens from owning gold in 1933, the people were left holding increasingly worthless pieces of paper.

Americans can’t imagine how monetary policy has eroded their purchasing power. The US was officially taken off the gold standard in 1971. Issuance of silver certificates ceased in 1964. Had the US dollar continued to be backed by gold, the rise in the value of gold would have offset recent increases in gasoline prices at the pump, a fact Ron Paul has brought to the public’s attention.

For example, a portion of the rise in oil prices in recent years is due to erosion in the value of the dollar. Had the dollar remained strong, the relative price of a barrel of oil would only have been around $65 in 2007-2008. If you compare the spot price of oil to gold, there has been almost no increase. Imagine what a gold-backed currency would do for America? Again, government (the Federal Reserve) has now admitted that it has arranged gold swaps with foreign banks in a prearranged way to suppress the value of gold.

Is inflation inevitable or is it planned? Will the American public ever imagine the value of their money has long been manipulated just as the price of coffee, bananas, gasoline and gold has been engineered in an unholy alliance between government, bankers and corporate enterprise? Will the American public ever realize their government is working against them, plundering their wealth in a growing fascist alliance with American corporations? The enemy is not the underpants airplane bomber as we are falsely being led to believe. The enemy is not a towelhead in Afghanistan. The enemy is not China.

As Pogo once said, "we have met the enemy, and he is us."
Bill Sardi [send him mail] is a frequent writer on health and political topics. His health writings can be found at He is the author of You Don’t Have To Be Afraid Of Cancer Anymore.

August 25, 2010

The Impact of the Housing Crash on Wealth and Retirement

The Plundering of America

March 7, 2010

Bullion Bulls Canada - ... While roughly 10 million American homeowners have already lost their homes to the Oligarchs, this doesn't come close to meeting their “target.” Ideally, they would like all of the little people to lose their homes. Taking a quote from “The Bankers Manifesto of 1892”:
When through the process of law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of government, applied to a central power of imperial wealth under the control of the leading financiers [i.e. the banksters].
Thus, the “game plan” of the Wall Street Oligarchs was written well over a century ago; however, it has taken all this time for the Oligarchs to gain such complete control over the “levers of power” that they are now in a position to achieve their dreams. Quite simply, they want to steal the homes of every American, while the iron-fist of a Fascist government keeps the masses from rising up against them ...

Millions of already-foreclosed homes have been held off of the market, allowing the propaganda-machine to pretend that housing inventories are only half as large as they really are, which in turn, has allowed some momentary price stability. This is totally a mirage.

With the U.S. economy still plummeting downward (putting aside the totally fictional “GDP” numbers of the U.S. government), job losses are about to re-accelerate, interest rates can only go higher, millions of hopelessly-insolvent “option-ARM” mortgages are about to reset, and retiring baby-boomers need to dump trillions of dollars of real estate onto the market (to partially compensate for a $3 trillion short-fall in their pensions and their own lack of savings).

And, at some point, the millions of homes which the Oligarchs have hidden from the market will show up in inventories. Indicating that this second “crash” has now begun, recent figures for the sale of both new and existing homes have shown a sudden collapse [see stories below].

There is a real “war” taking place today: an economic war, which has been instigated by the ultra-wealthy, prosecuted by the U.S. government, and directed at the American people. Having already robbed Americans of their political power through the establishment of the Wall Street-owned, two-party dictatorship, the Oligarchs now want to rob the people of their last vestiges of “economic power” -- in order to turn Americans into “serfs,” which they consider to be the only rightful place for the “little people.”

New Home Sales Decline to Record Low in July

August 25, 2010

CalculatedRisk - The Census Bureau reports New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 276 thousand. This is an decrease from the record low of 315 thousand in June (revised down from 330 thousand).

New Home Sales Monthly Not Seasonally Adjusted Click on graph for larger image in new window.

The first graph shows monthly new home sales (NSA - Not Seasonally Adjusted).

Note the Red columns for 2010. In July 2010, 25 thousand new homes were sold (NSA). This is a new record low for July.

The previous record low for the month of July was 31 thousand in 1982; the record high was 117 thousand in July 2005.

New Home Sales and Recessions The second graph shows New Home Sales vs. recessions for the last 47 years.

Sales of new single-family houses in July 2010 were at a seasonally adjusted annual rate of 276,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.4 percent (±10.8%) below the revised June rate of 315,000 and is 32.4 percent (±8.7%) below the July 2009 estimate of 408,000.
And another long term graph - this one for New Home Months of Supply.

New Home Months of Supply and RecessionsMonths of supply increased to 9.1 in July from 8.0 in June. The all time record was 12.4 months of supply in January 2009. This is still very high (less than 6 months supply is normal).
The seasonally adjusted estimate of new houses for sale at the end of July was 210,000. This represents a supply of 9.1 months at the current sales rate.
New Home Sales Inventory The final graph shows new home inventory.

The 276 thousand annual sales rate for July is the all time record low (May was revised up a little). This was another very weak report. New home sales are important for the economy and jobs - and this indicates that residential investment will be a sharp drag on GDP in Q3.

Existing Home Sales Dive to 15-year Low

August 24, 2010

Reuters – Sales of previously owned U.S. homes took a record drop in July to their lowest pace in 15 years, suggesting further loss of momentum in the economic recovery.

As the National Association of Realtors issued the report, Chicago Federal Reserve President Charles Evans warned that the risk of a double-dip recession was higher than six months ago although he did not think output would contract, describing the recovery as ongoing but modest.

Existing home sales dropped a record 27.2 percent from June to an annual rate of 3.83 million units, the lowest since May 1995. June's sales pace was revised down to a 5.26 million-unit pace from a previously reported 5.37 million.

Analysts polled by Reuters had expected sales to fall 12 percent to a 4.70 million-unit rate last month.
"This is a worrisome report and while it reflects the volatility caused by the end of the (government home-buyer) tax credits, it also indicates a deterioration in the underlying trend for housing demand," said Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch in New York.

"For the overall economy, the dangerous link to housing is home prices and this report signifies that home prices should fall considerably faster, which could tip the economy back into a recession. We are, however, not quite there yet but this is a worrisome report."
U.S. stocks added to losses on the report, while prices for safe-haven government debt extended gains. The U.S. dollar fell against the yen and euro.

The housing market has been mired in weakness following the end of a homebuyer tax credit in April, which pulled forward sales and building activity.

The surprisingly weak home sales data added to signs that the economy was rapidly losing strength, even though the drop may have been exaggerated by the end of a popular housing tax credit. Stubbornly high unemployment has burdened recovery from the longest and deepest recession since the Great Depression.

The government on Friday is expected to revise down growth in second-quarter gross domestic product to an annual pace of 1.4 percent from 2.4 percent, according to a Reuters survey.

The recovery which started in the second half of 2009 has largely been driven by government stimulus and manufacturing as businesses replenish depleted inventories.

With home sales tumbling, the inventory of previously owned homes for sale rose 2.5 percent to 3.98 million units from June, representing a supply of 12.5 months -- the highest since at least 1999 and up from June's 8.9 months.

The jump in the supply of homes was almost double the six to seven months' supply considered to be a healthy level.

Last month foreclosed properties accounted for 22 percent of sales while short sales made up 10 percent. First-time buyers accounted for 38 percent of transactions, the lowest in 12 months.

The national median home price rose 0.7 percent from July last year to $182,600.

The Impact of the Housing Crash on Family Wealth

Dean Baker, co-director of the Center for Economic and Policy Research, estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. After adjusting for inflation, values will never catch up. - Housing Fades as a Means to Build Wealth, Analysts Say, The New York Times, August 22, 2010

Originally Published in July 2008

Center for Economic and Policy Research - This paper extrapolates from data from the 2004 Survey of Consumer Finance to project household wealth, by age cohort and wealth quintile, in 2009 under three alternative scenarios.
  1. The first scenario assumes that real house prices fall no further than their level as of March 2008.

  2. The second scenario assumes that real house prices fall an additional 10 percent for a 2009 average.

  3. The third scenario assumes that real house prices fall an additional 20 percent for a 2009 average. (Real house prices are currently falling at the rate of almost 2.0 percent a month.)
The projections show that as a result of the collapse of the housing bubble, families in all age cohorts will see a substantial reduction in their wealth compared to the levels for the same age cohort in 2001 or 2004, the years in which the last two surveys were fielded.

In percentage terms, the sharpest falloffs are projected to occur for the youngest families. In the second scenario, the median family in the age cohort from 18-34 will have 67.6 percent less in net worth in 2009 than in 2004. The median family in the 35-44 age cohort will have 56.8 percent less in 2009 than in 2004. This corresponds to a decline of $41,000 in median wealth.

The typical family in the age cohort from 45 to 54 will have 34.6 percent less in 2009 than did families in the same age group in 2004. The median family in the 55-64 age cohort will have $121,000 less wealth than their counterparts in this age group in 2004, a decline of 43.9 percent.

The projections show that the crash of the housing bubble is likely to eliminate most, if not all, of the gains that families had made in accumulating wealth over the last two decades. The median family in the cohorts from age 35-44 is actually projected to have less wealth in 2009 than their counterpart in this age group in 1989. The median family in the cohort from ages 45-54 is projected to have 31.2 percent less wealth in 2009 than the median family in this age cohort in 1989.

The sharp projected reduction in wealth compared to the prior two years in which the survey was fielded stems from the collapse of the housing bubble. Homes are the major financial asset held by the bulk of the population. It was inevitable that the sharp downturn in the housing market that we have seen over the last two years would have a substantial impact on the wealth of most families.

As these projections should demonstrate, homeownership is not everywhere and always an effective way to accumulate wealth. For those who owned a home in the last few years, the collapse of the housing bubble led to the destruction of much or all of their wealth.

Net Worth and Financial Wealth Distribution in the U.S. in 2007

Wealth Distribution By Type of Asset, 2007: Other Assets

How the Housing Crash Hurts Your Retirement

Originally Published on September 2, 2008

Professor Piggington - ... The housing bubble had another perverse effect on our planning: It led us to save less. "Many people thought, 'I'm wealthier, I already have a big chunk of my nest egg thanks to my house, so I don't have to save as much,' " says Moody's chief economist Mark Zandi.

Using asset gains as an excuse to cut back on saving can be dangerous, especially when those gains come during a period of unprecedented returns. Bloated asset values can be illusory -- and temporary. So even if your retirement accounts balloon during your career, keep making contributions. If nothing else, you'll give yourself a wider safety margin to deal with setbacks.

Many homeowners exacerbated the damage done by falling prices by borrowing heavily from their homes. Federal Reserve economist James Kennedy estimates that from 2002 through 2007 owners pulled $2.5 trillion in equity out of their homes via cash-out refinancings and home-equity loans ...

Government-sponsored speculation and the housing market crash
The housing bubble and the financial crisis
States Budgets Blow as Housing And Credit Markets Crash
Household Wealth in Freefall
The Housing Crash and the Retirement Prospects of Late Baby Boomers
Housing crash will leave millions of homeowners dependent on Social Security in retirement
Boomers, Housing and Retirement: A Symbiotic Relationship Unravels

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