Category Archives: economy

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Scandal Rocks Washington by Eric Margolis

Scandal Rocks Washington

by Eric Margolis

The US has lost one war and is fast losing a second, yet what really upsets Americans seems to be a juicy sexual scandal; beautiful female general groupies; US brass in Tampa, Florida, living like potentates; the FBI investigating CIA; and the fall of America’s most important intelligence official, former top general, David Petraeus.

After America’s ugly, dreary election, it’s fun seeing the great and good caught with their pants down. Petreaus’ slinky paramour, the ambitious femme fatale, Paula Broadwell, is easy on the eyes. So are voluptuous Tampa temptresses Jill Kelley and her sister who ignited this scandal by sending catty emails to the FBI.

What business has FBI in monitoring extra-marital escapades of the military brass – provided they are not bedding Chinese or Russian agents?

This combined boudoir farce and inter-governmental feud raises serious questions about the emergence of America’s surveillance state.

We see the FBI reading thousands of Petraeus’ emails and those of another senior officer dragged into the scandal, Marine Gen. John Allen, the US commander in Afghanistan. This is the same FBI long locked in bitter institutional rivalry with CIA.

Meanwhile, CIA is being transformed from an intelligence gathering and analysis agency into a militarized outfit with its own fleets of lethal drones and combat units that will rival that other top secret military organization, the Joint Special Operations Command – America’s version of Britain’s elite killers, the SAS.

Thanks to legal changes made by the Bush administration during the post-9/11 hysteria, the FBI, CIA and National Security Agency can read emails and text messages of anyone vaguely termed a “threat to national security.” Anyone who has ever sent a message to the person of interest can also be investigated, and anyone who has sent them email, and so on.

Welcome the era of Big Internet Brother.

There’s an even bigger question. Every war produces generals glorified into heroes by government, media and their own public relations efforts. Gen. Petraeus, who commanded US occupation forces in first Iraq, then Afghanistan, continues to be hailed as a “military genius” and “war hero.”

Look again. Petraeus and his fellow generals used every weapon in the US arsenal against Iraq’s eleven resistance groups (deceptively misnamed “al-Qaida” by Washington), including the mass ethnic cleansing of two million Sunni Iraqis, death squads, torture, and brutal reprisals.

UN officials assert that some 500,000 Iraqis, mostly children, died due to the US-led blockade under Saddam Hussein. At least another half million died from the US 2003 invasion until 2011. Yet after all this, the US forces were forced pull out of Iraq at the end of what Saddam Hussein vowed would be the “Mother of All Battles.”

Cost of Iraq: $1.6-2.4 trillion; almost 5,000 US soldiers dead, 35,000 seriously wounded. Some triumph. America has yet to accept the painful fact that while it won all the tactical engagements in Iraq, it lost the bigger war.

Petraeus was then sent to work his magic in Afghanistan before returning to Washington to head CIA. There, the brainy general, who had a knack for self-promotion and public relations, tried again to crush the Pashtun resistance by massive bombardments, billions in high tech gear, reprisals that wiped out entire villages, search and destroy missions. Torture and executions were as common as during the Soviet occupation.

A disgusted American public now wants out of the endless 11-year conflict, the longest in US history. Most of the US garrison is supposed to withdraw by 2014. Petraeus and other senior US commanders had the audacity to publically criticize President Barack Obama’s withdrawal plans. They should have been dismissed at once, but the president lacked the nerve to stand up to the ever-more powerful military establishment. The incoming US commander in Afghanistan just said he wants to keep US troops there after 2014.

Cost of Afghan War: $1 trillion and rising. Afghan dead unknown. US military, some 2,100 dead, 17,000 wounded.

The US military has clearly been fought to a standstill in Afghanistan by medieval tribesmen with AK-47’s, reconfirming its name – “graveyard of empires.”

As for the military genius of Gen. Petraeus, recall the famous cry of King Pyrrhus, “one more such victory and we are lost.”

via Scandal Rocks Washington by Eric Margolis.

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Keiser Report: ‘Crash JP Morgan’ – 2nd Anniversary Special (E368) – YouTube

In this episode, Max Keiser and Stacy Herbert present the two year anniversary special of their Crash JPM, Buy Silver campaign. They discuss JP Morgan doing everything to protect the Queen of their massive silver short position – a position that has DOUBLED in the past two years according to Rob Kirby of GATA and Kirby Analytics. They also discuss Central Banks pullling on their own little bungee cords by printing money. In the second half, Max Keiser talks to James Turk of Goldmoney.com about the link between liberty and gold and the shooting war to follow the currency war. The also discuss the gold/silver ratio and why silver today is like gold at $600.

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Guest Post: So How Many Ounces Of Gold (Or Silver) Should You Own? | ZeroHedge

Submitted by Adam Taggart of Peak Prosperity,

This week, Chris talks with Jeff Clark, Senior Precious Metals Analyst at Casey Research, where he serves as editor of their Big Gold newsletter.

They tackle head-on many of the questions weary precious metals investors are wondering after enduing the volatile yet range-bound price action of gold and silver over the past year:

  • Have the fundamentals for owning gold & silver changed over the past year? No
  • What are they? currency devaluation/crisis, supply-chain risk, ore grade depletion
  • How should retail investors own gold? Mostly physical metal, some quality mining majors (avoid the indices), and ETFs only for trading
  • Is gold in a bubble? No
  • Could gold get re-monetized? Quite possibly
  • Where is gold flowing? From the West to the East. At some point, capital controls will be put in place

What the politicians are doing is the exact opposite of what they need to be doing. We continue adding to our debt, we continue raising the debt ceiling, we continue deficit spending, we continue borrowing money, and, of course, we continue printing money. We are doing the exact opposite of all the things that would lead us away from inflation. So yes, I think that is an important point.

I will add that inflation has occurred very quickly, very rapidly, very suddenly many times in the past, just in recent history. If you look back at the high inflationary times, just in the past 100 years here in the U.S., many of those that hit 12%, 14%, 15% — two years prior to then, the CPI was completely benign. It was 1%, 2% – I think at one point it was 4% – and then all of a sudden within 24 months, it was 12%, 14%. So it can happen very suddenly, and my fear is that is what is going to happen this time. People are in a lull; no one is expecting it: the CPI is low; nothing is really happening with all this money printing; there has been no fallout. But I think that is the critical point. You cannot do these kinds of things we are doing forever and not experience any consequences. Sooner or later there are going to be consequences to what we are doing, and my fear is that it is going to be nasty, catch a lot of people off guard, and really hurt our society. The bottom line for me is, that is why I am buying gold and silver, still, to this day.

For these reasons and others, Jeff strongly believes everyone should have exposure to gold and silver as a defense for preserving the purchasing power of their wealth. The key question is: how much exposure?

You want to focus on how many ounces you own, not necessarily looking at whether the price is $5 higher today than it was yesterday. How many ounces do you own? That is really the question you want to ask yourself, so you can focus on how much you are really going to need, and the amount really comes down to this.

For me, I am probably going to use some of this gold if we get high inflation. How are you going to protect your standard of living if we get some kind of runaway inflation? And let’s say it’s not runaway hyperinflation; let’s just say it’s high inflation, 10%, 15%. Remember it was 14% in 1980, so the odds of us getting high inflation are realistic. So if I am going to use that gold to cover my standard of living, you are going to need about two thirds of an ounce of gold for every thousand dollars of monthly expenses. If you want to protect your standard of living and not have your house be ravaged by inflation, so to speak, so that is a good guideline to follow.

So if inflation lasts a couple years, well, you are going to need 15 ounces of gold for every thousand dollars of monthly expenses. That is a good guideline to think about. And if your expenses are more per month, you are going to need more gold than that. If inflation lasts longer than two years, you are going to need more than that, but you can actually use the sales of gold and silver to protect your standard of living. You sell some gold and silver, you are going to get U.S. dollars or Canadian dollars with it and you can use the increase in the gold and silver price to offset the increase in the goods and services you are buying.

So I think that is the way to view it, to look at how you are going to use it. And so the focus again comes back to how many ounces do you own? So if you do not have any, you need to obviously start buying.

Here are two tables — one for gold and the other for silver — Jeff offers in his newsletter to help investors calculate the requisite ounces needed to protect against rising inflation over time:

The point here is that you’re probably going to need more ounces than you think. Look at your bank statement and assess how much you spend each month – and do it honestly.

The other part of the equation is how long we’ll need to use gold and silver to cover those expenses. The potential duration of high inflation will dictate how much physical bullion we need stashed away. This is also probably longer than you think; in Weimar Germany, high inflation lasted two years – and then hyperinflation hit and lasted another two. Four years of high inflation. That’s not kindling – that’s a wildfire roaring through your back yard.

So here’s how much gold you’ll need, depending on your monthly expenses and how long high inflation lasts.

Ounces of Gold Needed to Meet Expenses During High Inflation
Monthly expenses in US dollars Monthly expenses in gold, oz* Inflation Duration
6 months 1 year 18 months 2 years 3 years 4 years 5 years
$500
0.31
1.9
3.7
5.6
7.5
11.2
15.0
18.7
$1,000
0.63
3.8
7.5
11.3
15.0
22.5
30.0
37.5
$2,000
1.25
7.5
15.0
22.5
30.0
45.0
60.0
75.0
$3,000
1.88
11.3
22.5
33.8
45.0
67.5
90.0
112.5
$4,000
2.50
15.0
30.0
45.0
60.0
90.0
120.0
150.0
$5,000
3.13
18.8
37.5
56.3
75.0
112.5
150.0
187.5
$10,000
6.25
37.5
75.0
112.5
150.0
225.0
300.0
375.0
$20,000
12.50
75.0
150.0
225.0
300.0
450.0
600.0
750.0
*Based on $1,600 gold price

If my monthly expenses are about $3,000/month, I need 45 ounces to cover two years of high inflation, and 90 if it lasts four years. Those already well off should use the bottom rows of the table. How much will you need?

Of course many of us own silver, too. Here’s how many ounces we’d need, if we saved in silver.

Ounces of Silver Needed to Meet Expenses During High Inflation
Monthly expenses in US dollars Monthly expenses in silver, oz* Inflation Duration
6 months 1 year 18 months 2 years 3 years 4 years 5 years
$500
17.9
107.1
214.2
321.3
428.4
642.6
856.8
1,071.0
$1,000
35.7
214.3
428.5
642.8
857.0
1,285.6
1,714.1
2,142.6
$2,000
71.4
428.5
857.0
1,285.6
1,714.1
2,571.1
3,428.2
4,285.2
$3,000
107.1
642.8
1,285.7
1,928.5
2,571.4
3,857.0
5,142.7
6,428.4
$4,000
142.9
857.1
1,714.2
2,571.3
3,428.4
5,142.6
6,856.8
8,571.0
$5,000
178.6
1,071.4
2,142.8
3,214.3
4,285.7
6,428.5
8,571.4
10,714.2
$10,000
357.1
2,142.6
4,285.0
6,427.8
8,570.4
1,2855.6
17,140.8
21,426.0
$20,000
714.3
4,285.7
8,571.4
12,857.0
17,142.7
25,714.1
34,285.4
42,856.8
*Based on $28 silver price

A $3,000 monthly budget needs 1,285 ounces to get through one year, or 3,857 ounces for three years.

I know these amounts probably sound like a lot. But here’s the thing: if you don’t save now in gold and silver, you’re going to spend a whole lot more later. What I’ve outlined here is exactly what gold and silver are for: to protect your purchasing power, your standard of living.

Jeff discusses the Hard Assets Alliance as a solution worth considering when purchasing bullion. For more information on the HAA can be found here.

Click the play button below to listen to Chris’ interview with Jeff Clark (46m:01s):

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Keiser Report: Tourettes Traders & Bleeping Bankers (E366) (ft. Teri Buhl) – YouTube

Be sure to listen to the second half…

In this episode, Max Keiser and Stacy Herbert discuss foul mouthed foreigners with banker tourettes in Singapore, while in America, traders at Barclays send each other expletive-filled emails admitting to manipulating energy prices down in order to have their big bets on declining prices pay off. They also discuss financial activists creating a rolling jubillee reverse vulture fund designed to liberate the population from unpayable debts. In the second half, Max Keiser talks to Teri Buhl about the investigation into fraud at Sun Trust Bank where whistleblowers allege the bank mis-sold mortgages to Fannie Mae, the government sponsored enterprise. Max and Teri also talk about recent developments in the case of residential mortgage back securities fraudulently sold to investors by JP Morgan’s Bear Stearns holding and Teri proposes a million man march on the SEC and the NY Fed.

 

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Marc Faber: Prepare for a Massive Market Meltdown —  Business News – CNBC

The markets are going to go into meltdown soon, so expect stocks to lose 20 percent of their value, Marc Faber, author of the Gloom, Boom and Doom report told CNBC on Tuesday.

Continued:

via Marc Faber: Prepare for a Massive Market Meltdown —  Business News – CNBC.

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Keiser Report: Wacko Wizard World (E365) – YouTube

In this episode, Max Keiser and Stacy Herbert discuss central bankers and governments from Iceland to Argentina attempting to tilt the global pinball game so that the ball goes in the ‘right’ hole while ‘invincibility’ tattoos fail to protect from the guns and knives of financial weapons in the real world. In the second half, Max Keiser talks to Tuur Demeester of Macrotrends.be about the recent report from the European Central Bank suggesting they are concerned about the new breed of decentralized digital currencies threatening their seignorage rights. They also discuss the financial jungle of Argentina where capital controls and economic chaos prove a great testing ground for new currencies

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The UK’s Most Disturbing Number: Total Unfunded Pension Obligations = 321% Of GDP | ZeroHedge

For all our UK readers, who hope some day to collect pension benefits, we have two messages: i) our condolences, and ii) you won’t.   Why? The answer comes straight from the ONS:

The new supplementary table published by ONS in Levy (2012)10 includes the following headline figures for Government pension obligations as at end December 2010:

Social security pension schemes (i.e. unfunded state pension scheme obligations): £3.843 trillion, being 263 per cent of gross domestic product (GDP) (£3.497 trillion at end of December 2009)

Centrally – administered unfunded pension schemes for public sector employees (i.e. unfunded public service pension scheme obligations): £852 billion, being 58 per cent of GDP (£915 billion at end of December 2009)

Funded DB pension schemes for which government is responsible: £313 billion, being 21 per cent of GDP (£332 billion at end of December 2009).

In summary, the estimates in the new supplementary table indicate a total Government pension obligation, at the end of December 2010, of £5.01 trillion, or 342 per cent of GDP, of which around £4.7 trillion relates to unfunded obligations.

Or visually:

Of course, US-based readers should not get their hopes up too much either. With total underfunded liabilities – including SSN and healthcare, in the US well over $100 trillion (on under $16 trillion of GDP) it is only a matter of time before the entire welfare state ponzi scheme blows up.

Source: ONS

via The UK’s Most Disturbing Number: Total Unfunded Pension Obligations = 321% Of GDP | ZeroHedge.

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Jesse’s Café Américain: Thomas Jefferson On the Danger of a Concentration of Power On Government

Thomas Jefferson, Collected Papers and Correspondence Vol. 12, Letter to George Logan:

Poplar Forest near Lynchburg, Nov. 12, 1816

Dear Sir,

I received your favor of Oct. 16, at this place, where I pass much of my time, very distant from Monticello…

Your idea of the moral obligations of governments are perfectly correct. The man who is dishonest as a statesman would be a dishonest man in any station. It is strangely absurd to suppose that a million of human beings collected together are not under the same moral laws which bind each of them separately.

It is a great consolation to me that our government, as it cherishes most its duties to its own citizens, so is it the most exact in its moral conduct towards other nations. I do not believe that in the four administrations which have taken place, there has been a single instance of departure from good faith towards other nations. We may sometimes have mistaken our rights, or made an erroneous estimate of the actions of others, but no voluntary wrong can be imputed to us.

In this respect England exhibits the most remarkable phaenomenon in the universe in the contrast between the profligacy of its government and the probity of its citizens. And accordingly it is now exhibiting an example of the truth of the maxim that virtue and interest are inseparable.

It ends, as might have been expected, in the ruin of its people, but this ruin will fall heaviest, as it ought to fall, on that hereditary aristocracy which has for generations been preparing the catastrophe.

I hope we shall take warning from the example and crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country.

Present me respectfully to Mrs. Logan and accept yourself my friendly and respectful salutations.

Thomas Jefferson

via Jesse’s Café Américain: Thomas Jefferson On the Danger of a Concentration of Power On Government.