"We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.
I can only say: I'm sorry, America.
As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street.
But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.
...Chairman Ben Bernanke made clear that the Fed's central motivation was to "affect credit conditions for households and businesses": to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn. For this reason, he originally called the initiative "credit easing."
...I had left the Fed out of frustration, having witnessed the institution deferring more and more to Wall Street. Independence is at the heart of any central bank's credibility, and I had come to believe that the Fed's independence was eroding. Senior Fed officials, though, were publicly acknowledging mistakes and several of those officials emphasized to me how committed they were to a major Wall Street revamp...
In its almost 100-year history, the Fed had never bought one mortgage bond. Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets.
...QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.
...several other Fed managers also began voicing the concern that QE wasn't working as planned. Our warnings fell on deaf ears. ...the only obsession seemed to be with the newest survey of financial-market expectations or the latest in-person feedback from Wall Street's leading bankers and hedge-fund managers.
Sorry, U.S. taxpayer.
...the U.S. central bank's bond purchases had been an absolute coup for Wall Street. The banks hadn't just benefited from the lower cost of making loans. They'd also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed's QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.
You'd think the Fed would have finally stopped to question the wisdom of QE. Think again. Only a few months later—after a 14% drop in the U.S. stock market and renewed weakening in the banking sector—the Fed announced a new round of bond buying: QE2. Germany's finance minister, Wolfgang Schäuble, immediately called the decision "clueless."
That was when I realized the Fed had lost any remaining ability to think independently from Wall Street.
...The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history.
...aggressive QE over five years has generated only a few percentage points of U.S. growth.
...QE isn't really working. Unless you're Wall Street.
...Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a real crisis: that of a structurally unsound U.S. economy. Yes, those financial markets have rallied spectacularly, breathing much-needed life back into 401(k)s, but for how long? Experts ...are suggesting that conditions are again "bubble-like."
Meanwhile, the country remains overly dependent on Wall Street to drive economic growth.
Even when acknowledging QE's shortcomings, Chairman Bernanke argues that some action by the Fed is better than none (a position that his likely successor, Fed Vice Chairwoman Janet Yellen, also embraces).
The implication is that the Fed is dutifully compensating for the rest of Washington's dysfunction.
But the Fed is at the center of that dysfunction.
Case in point: It has allowed QE to become Wall Street's new "too big to fail" policy."
http://online.wsj.com/news/articles/SB10001424052702303763804579183680751473884
Tuesday, November 12, 2013
Monday, November 11, 2013
Legal Theft, by Whoever Votes for Greensboro's City Council Agenda Item 34
34. Resolution authorizing a loan of $100,000 to Samet Corporation and authorizing a loan for $100,000 to McConnell Center Partners, LLC to be used for grading of qualified industrial sites.
http://www.greensboro-nc.gov/Modules/ShowDocument.aspx?documentid=15233
On the recommendation of Andy Scott and Kathi Dubel.
And also Zack;
And Hoffmann;
And another couple of Samet's for Hoffmann;
http://www.co.guilford.nc.us/elections_cms/docs/2013/midyr/HOFFMANN_NANCY_midyr13-amended.pdf
And David Howard of Windsor Investments for Robbie; Page 10 of 30;
http://www.co.guilford.nc.us/elections_cms/docs/2013/preprim/PERKINS_ROBBIE_preprim13.pdf
ROBBIE PERKINS 09/25/09 David R. Howard Windsor Commercial TREBIC MEMBER Real estate-development
ROBBIE PERKINS 09/27/09 William S. Seymour Windsor Commercial TREBIC MEMBER Real estate-development
ROBBIE PERKINS 09/16/07 Tom Hall Windsor Investments TREBIC MEMBER Real estate developer
http://www.greensboro-nc.gov/Modules/ShowDocument.aspx?documentid=15233
On the recommendation of Andy Scott and Kathi Dubel.
And also Zack;
And Hoffmann;
 |
| http://www.co.guilford.nc.us/elections_cms/docs/2013/preprim/HOFFMANN_NANCY_preprim13.pdf |
http://www.co.guilford.nc.us/elections_cms/docs/2013/midyr/HOFFMANN_NANCY_midyr13-amended.pdf
And David Howard of Windsor Investments for Robbie; Page 10 of 30;
http://www.co.guilford.nc.us/elections_cms/docs/2013/preprim/PERKINS_ROBBIE_preprim13.pdf
ROBBIE PERKINS 09/25/09 David R. Howard Windsor Commercial TREBIC MEMBER Real estate-development
ROBBIE PERKINS 09/27/09 William S. Seymour Windsor Commercial TREBIC MEMBER Real estate-development
ROBBIE PERKINS 09/16/07 Tom Hall Windsor Investments TREBIC MEMBER Real estate developer
November 12, Greensboro City Council Agenda with Attachments
http://www.greensboro-nc.gov/Modules/ShowDocument.aspx?documentid=15233
8. PUBLIC HEARING - Ordinance changing the name of the portion of East Lee Street, West Lee Street and High Point Road from I-40 westward to its intersection with Groometown Road to East Gate City Boulevard and West Gate City Boulevard.
9. Resolution supporting the Greensboro Partnership’s Development of a Entrepreneurship Ecosystem including a Business Accelerator Program.
10. Resolution approving changing the loan and security agreement with the Nussbaum Center for Entrepreneurship, Inc. to a grant.
15. Resolution Approving Inter-local Agreement with Guilford County regarding additional funding for the Greensboro Public Libraries.
18. Resolution authorizing conveyance of a portion of 2110 Phillips Avenue by the Redevelopment Commission to Glandon Forest Equity, LLC.
19. Resolution authorizing purchase of a portion of property located at 2800 High Point Road for the High Point Road Streetscape Project.
34. Resolution authorizing a loan of $100,000 to Samet Corporation and authorizing a loan for $100,000 to McConnell Center Partners, LLC to be used for grading of qualified industrial sites.
Number 10;
8. PUBLIC HEARING - Ordinance changing the name of the portion of East Lee Street, West Lee Street and High Point Road from I-40 westward to its intersection with Groometown Road to East Gate City Boulevard and West Gate City Boulevard.
9. Resolution supporting the Greensboro Partnership’s Development of a Entrepreneurship Ecosystem including a Business Accelerator Program.
10. Resolution approving changing the loan and security agreement with the Nussbaum Center for Entrepreneurship, Inc. to a grant.
15. Resolution Approving Inter-local Agreement with Guilford County regarding additional funding for the Greensboro Public Libraries.
18. Resolution authorizing conveyance of a portion of 2110 Phillips Avenue by the Redevelopment Commission to Glandon Forest Equity, LLC.
19. Resolution authorizing purchase of a portion of property located at 2800 High Point Road for the High Point Road Streetscape Project.
34. Resolution authorizing a loan of $100,000 to Samet Corporation and authorizing a loan for $100,000 to McConnell Center Partners, LLC to be used for grading of qualified industrial sites.
Number 10;
"we're worried about whether there's much [Fed] gas left in the tank and what will happen if there isn't."
"In the old days central banks moved interest rates to run monetary policy. ...All that changed when interest rates hit 0%; "printing money" (QE) replaced interest-rate changes. Because central banks can only buy financial assets, quantitative easing drove up the prices of financial assets and did not have as broad of an effect on the economy...
...the marginal effects of wealth increases on economic activity have been declining significantly.
The Fed's dilemma is that its policy is creating a financial market bubble that is large relative to the pickup in the economy that it is producing.
...the Fed is ...losing its effectiveness.
...quantitative easing is a much less effective tool when asset prices are high and thus have low expected returns than it is for managing financial crises.'
Quantitative easing today is driving asset prices to unsustainable levels, without stimulating much additional activity.
...interest rates are at zero and US asset prices have been driven up to levels that imply very low levels of returns relative to the risk, so there is very little ability to stimulate from here if needed.
...we're not worried about whether the Fed is going to hit or release the gas pedal, we're worried about whether there's much gas left in the tank and what will happen if there isn't."
http://www.zerohedge.com/news/2013-11-10/ray-dalios-bridgewater-feds-dilemma-were-worried-theres-no-gas-left-qe-tank
...the marginal effects of wealth increases on economic activity have been declining significantly.
The Fed's dilemma is that its policy is creating a financial market bubble that is large relative to the pickup in the economy that it is producing.
...the Fed is ...losing its effectiveness.
...quantitative easing is a much less effective tool when asset prices are high and thus have low expected returns than it is for managing financial crises.'
Quantitative easing today is driving asset prices to unsustainable levels, without stimulating much additional activity.
...interest rates are at zero and US asset prices have been driven up to levels that imply very low levels of returns relative to the risk, so there is very little ability to stimulate from here if needed.
...we're not worried about whether the Fed is going to hit or release the gas pedal, we're worried about whether there's much gas left in the tank and what will happen if there isn't."
http://www.zerohedge.com/news/2013-11-10/ray-dalios-bridgewater-feds-dilemma-were-worried-theres-no-gas-left-qe-tank
Happening Now; Global Currency/Competitive Devaluation War amid Economic Slowdown
As the world enters what looks like a simultaneous recession, central banking and political authorities are moving to protect their own sovereign economies relative to all the others.
As the 2008 financial crisis led to coordinated moves by central banks, it seems they are now at war with each other to protect the competitiveness of currency; The lower the currency, the more commerce, as exports become more attractive relative to other currencies.
If the US dollar is worth 100 to 100 Euros = Equality of price for exports and imports
If 95 dollars can purchase 100 Euro's worth of goods, the Eurozone should be able to "sell more for less" to US importers, while US businesses trying to sell to Europe should find it is more expensive to sell their goods.
.
.
"The European Central Bank cut its key rate last week in a decision some investors say was intended in part to curb the euro after it soared to the strongest since 2011. The same day, Czech policy makers said they were intervening in the currency market for the first time in 11 years to weaken the koruna. New Zealand said it may delay rate increases to temper its dollar, and Australia warned the Aussie is “uncomfortably high.”
“It’s a very real concern of these countries to keep their currencies weak”...
...ECB President Mario Draghi, “persistently since earlier this year, has been trying to talk down the euro”
With the outlook for the global economy being downgraded by the International Monetary Fund and inflation slowing to levels that may hinder investment, countries and central banks are revisiting policies that tend to boost competitiveness through weaker currencies.
...The euro slumped as much as 1.6 percent against the dollar on the day of the rate cut, the most in almost two years...
...“There are places in the world where economies are generally quite weak, where inflation is already low,”
...The Czech National Bank’s drove its koruna down by 4.4 percent versus the euro on Nov. 7, the most since the single currency’s creation in 1999, when it intervened to spur inflation. Governor Miroslav Singer pledged to keep selling koruna “for as long as needed” to boost growth.
Peru’s central bank on Nov. 4 unexpectedly reduced borrowing costs for the first time in four years as slower export growth imperils the commodity-dependent economy.
The IMF last month cut its forecast for global economic growth to 2.9 percent in 2013 and 3.6 percent in 2014, from July’s projected rates of 3.1 percent and 3.8 percent...
Growth in global trade may slow to 2.5 percent in 2013, ...down from the organization’s previous estimate in April of 3.3 percent.
...At the same time the ECB is easing, the U.S. Federal Reserve said it will keep printing enough dollars to buy $85 billion of bonds each month because the economy is still too weak to stand on its own. The Bank of Japan is also employing a policy of quantitative easing.
...The Reserve Bank of Australia lowered its growth estimate for next year to 2 percent to 3 percent, compared with 2.5 percent to 3.5 percent three months ago. South Korea’s finance ministry said last month it may act to counter “herd behavior” in the currency, as the Bank of Korea lowered its outlook for the economy.
http://www.bloomberg.com/news/2013-11-11/race-to-bottom-resumes-as-central-bankers-ease-anew-currencies.html
.
.
The rest of the world is trying to keep up with the Federal Reserve's money printing;
The more we print to "recover" from the last economic bubble mostly created by the Federal Reserve, the more other central banks have to print to keep their economies competitive.
For instance, Venezuela's official exchange rate, which doesn't match its black market rate, which is much higher;
What cost $2 US dollars in 2010, now costs more than $6.
Previously;
What Hyperinflation reads like; "Venezuelan shoppers amass outside seized stores" "Venezuela Stock Market Up 454% for the Year"
.
.
By forcing the rest of the world to buy American made stuff for less, the rest of the world that chose not to keep pace with our money printing now has to print even more to catch up, which should be financial market inflationary until something goes wrong.
.
.
Can stability destabilize?
If a nation prints more money,
like cutting a large pizza into 16 slices instead of 8,
is each slice worth less?
What if the pizza shrinks while the number of slices rise?
So what happens if the whole world does something at the same time, which has almost always had the same historical outcome?
As the 2008 financial crisis led to coordinated moves by central banks, it seems they are now at war with each other to protect the competitiveness of currency; The lower the currency, the more commerce, as exports become more attractive relative to other currencies.
If the US dollar is worth 100 to 100 Euros = Equality of price for exports and imports
If 95 dollars can purchase 100 Euro's worth of goods, the Eurozone should be able to "sell more for less" to US importers, while US businesses trying to sell to Europe should find it is more expensive to sell their goods.
.
.
"The European Central Bank cut its key rate last week in a decision some investors say was intended in part to curb the euro after it soared to the strongest since 2011. The same day, Czech policy makers said they were intervening in the currency market for the first time in 11 years to weaken the koruna. New Zealand said it may delay rate increases to temper its dollar, and Australia warned the Aussie is “uncomfortably high.”
“It’s a very real concern of these countries to keep their currencies weak”...
...ECB President Mario Draghi, “persistently since earlier this year, has been trying to talk down the euro”
With the outlook for the global economy being downgraded by the International Monetary Fund and inflation slowing to levels that may hinder investment, countries and central banks are revisiting policies that tend to boost competitiveness through weaker currencies.
...The euro slumped as much as 1.6 percent against the dollar on the day of the rate cut, the most in almost two years...
...“There are places in the world where economies are generally quite weak, where inflation is already low,”
...The Czech National Bank’s drove its koruna down by 4.4 percent versus the euro on Nov. 7, the most since the single currency’s creation in 1999, when it intervened to spur inflation. Governor Miroslav Singer pledged to keep selling koruna “for as long as needed” to boost growth.
Peru’s central bank on Nov. 4 unexpectedly reduced borrowing costs for the first time in four years as slower export growth imperils the commodity-dependent economy.
The IMF last month cut its forecast for global economic growth to 2.9 percent in 2013 and 3.6 percent in 2014, from July’s projected rates of 3.1 percent and 3.8 percent...
Growth in global trade may slow to 2.5 percent in 2013, ...down from the organization’s previous estimate in April of 3.3 percent.
...At the same time the ECB is easing, the U.S. Federal Reserve said it will keep printing enough dollars to buy $85 billion of bonds each month because the economy is still too weak to stand on its own. The Bank of Japan is also employing a policy of quantitative easing.
...The Reserve Bank of Australia lowered its growth estimate for next year to 2 percent to 3 percent, compared with 2.5 percent to 3.5 percent three months ago. South Korea’s finance ministry said last month it may act to counter “herd behavior” in the currency, as the Bank of Korea lowered its outlook for the economy.
http://www.bloomberg.com/news/2013-11-11/race-to-bottom-resumes-as-central-bankers-ease-anew-currencies.html
.
.
The rest of the world is trying to keep up with the Federal Reserve's money printing;
The more we print to "recover" from the last economic bubble mostly created by the Federal Reserve, the more other central banks have to print to keep their economies competitive.
For instance, Venezuela's official exchange rate, which doesn't match its black market rate, which is much higher;
What cost $2 US dollars in 2010, now costs more than $6.
Previously;
What Hyperinflation reads like; "Venezuelan shoppers amass outside seized stores" "Venezuela Stock Market Up 454% for the Year"
.
.
By forcing the rest of the world to buy American made stuff for less, the rest of the world that chose not to keep pace with our money printing now has to print even more to catch up, which should be financial market inflationary until something goes wrong.
.
.
Can stability destabilize?
Governments cannot create but merely redirect.
When the government spends, the money has to come from somewhere.
If the government doesn't have a surplus, then it must come from taxes.
If taxes don't go up, then it must come from increased borrowing.
If lenders won't lend, then it must come from the printing press...
each additional dollar printed
diminishes the value of those already in circulation.
Something cannot be effortlessly created from nothing.
Peter Schiff
If a nation prints more money,
like cutting a large pizza into 16 slices instead of 8,
is each slice worth less?
What if the pizza shrinks while the number of slices rise?
Where under the [Roman] Principate
the strategy had been to tax the future to pay for the present,
the Dominate paid for the present by undermining the future’s ability to pay taxes.
The Empire emerged from the third century crisis,
but at a cost that weakened its ability to meet future crises.
Joseph Tainter
The Collapse of Complex Societies
So what happens if the whole world does something at the same time, which has almost always had the same historical outcome?
Sunday, November 10, 2013
Saturday, November 9, 2013
What Hyperinflation reads like; "Venezuelan shoppers amass outside seized stores" "Venezuela Stock Market Up 454% for the Year"
"As soon as Dorisbell Pena received a text message informing her that President Nicolas Maduro seized control of a nationwide chain of appliance stores Friday, she rushed to the nearest outlet in the hopes of finding what's become one of the scarcest items of all these days in Venezuela: a bargain.
A 34-year-old teacher, Pena has watched as the price of a new stove she needs has doubled in recent weeks to 40,000 bolivars even as her 2,500 bolivar-a-month salary stays the same.
"I've got to take advantage of this opportunity today because tomorrow the prices keep going up," Pena said while huddled among friends on the concrete sidewalk outside the Tiendas Daka store in the eastern Caracas neighborhood of Bello Monte.
She's not alone. At 1:30 a.m., shoppers were still arriving to join the hundreds who began amassing in the afternoon after price inspectors said they found evidence of "usury" and Maduro ordered the chain's "occupation." In a televised address Friday night, the president vowed to reopen the stores Saturday and unload their stock of plasma televisions, washing machines and other seized merchandise at "fair prices."
..."I heard the owners of this store don't even live in Venezuela, they're in Miami," said Solano, a 49-year-old salesman of engine varnish...
"Leave nothing on the shelves, leave nothing in the warehouses," he said. ...he also ordered the military to shut down businesses found hoarding products or speculating on prices.
The Friday night frenzy, described by one bargain hunter as an "organized looting," cut across Venezuela's normally insurmountable political divide — a reflection of how near-record 54 percent inflation and shortages of basic goods such as milk and toilet paper are affecting all families in South America's biggest oil producer.
Come nightfall, National Guardsmen, some brandishing assault rifles, helped maintain order..."
http://news.yahoo.com/venezuelan-shoppers-amass-outside-seized-stores-134255341.html
"Venezuela Stock Market Up 24% For Week -- Up 454% for the Year
The Venezuela Stock Market is now up 454% for the year to date in bolivar terms, though only 278% in official rate dollar terms because of a February devaluation, but still making it the best performing stock market in the world."
http://www.laht.com/article.asp?ArticleId=1145054&CategoryId=10717
.
.
What does Quantitative Easing mean?
If Germany’s central bank suspended the right
to redeem gold backed Reichsmarks during World War I
and 170 Reichsmarks bought an ounce of gold in January 1919,
why did an ounce of gold cost 87,000,000,000,000 Reichsmarks
in November 1923?
A 34-year-old teacher, Pena has watched as the price of a new stove she needs has doubled in recent weeks to 40,000 bolivars even as her 2,500 bolivar-a-month salary stays the same.
"I've got to take advantage of this opportunity today because tomorrow the prices keep going up," Pena said while huddled among friends on the concrete sidewalk outside the Tiendas Daka store in the eastern Caracas neighborhood of Bello Monte.
She's not alone. At 1:30 a.m., shoppers were still arriving to join the hundreds who began amassing in the afternoon after price inspectors said they found evidence of "usury" and Maduro ordered the chain's "occupation." In a televised address Friday night, the president vowed to reopen the stores Saturday and unload their stock of plasma televisions, washing machines and other seized merchandise at "fair prices."
..."I heard the owners of this store don't even live in Venezuela, they're in Miami," said Solano, a 49-year-old salesman of engine varnish...
"Leave nothing on the shelves, leave nothing in the warehouses," he said. ...he also ordered the military to shut down businesses found hoarding products or speculating on prices.
The Friday night frenzy, described by one bargain hunter as an "organized looting," cut across Venezuela's normally insurmountable political divide — a reflection of how near-record 54 percent inflation and shortages of basic goods such as milk and toilet paper are affecting all families in South America's biggest oil producer.
Come nightfall, National Guardsmen, some brandishing assault rifles, helped maintain order..."
http://news.yahoo.com/venezuelan-shoppers-amass-outside-seized-stores-134255341.html
"Venezuela Stock Market Up 24% For Week -- Up 454% for the Year
Athenian money…defined a pattern
which was to repeat in other empires which were to follow
dominance of trade
influx of gold to balance exports
public wealth
liberty
overconfidence
the discovery of loosely managed money
as a stimulating solution to stagnation in an economy near its zenith…
before finally the emptiness of the monetary promise was exposed
leading to rapid national collapse
which was to repeat in other empires which were to follow
dominance of trade
influx of gold to balance exports
public wealth
liberty
overconfidence
the discovery of loosely managed money
as a stimulating solution to stagnation in an economy near its zenith…
before finally the emptiness of the monetary promise was exposed
leading to rapid national collapse
Paul Tustain
The Venezuela Stock Market is now up 454% for the year to date in bolivar terms, though only 278% in official rate dollar terms because of a February devaluation, but still making it the best performing stock market in the world."
http://www.laht.com/article.asp?ArticleId=1145054&CategoryId=10717
.
.
What does Quantitative Easing mean?
When national debts have once been accumulated to a certain degree
[there has never been] a single instance
of their having been fairly and completely paid
The liberation of the public revenue...
has always been brought about by bankruptcy
though frequently by a pretended payment [through inflation]
Adam Smith
Moral philosopher and Father of Modern Economics
If Germany’s central bank suspended the right
to redeem gold backed Reichsmarks during World War I
and 170 Reichsmarks bought an ounce of gold in January 1919,
why did an ounce of gold cost 87,000,000,000,000 Reichsmarks
in November 1923?
Ponzi finance units must increase its outstanding debt
in order to meet its financial obligations
A transition occurs over the course of an expansion
as increasingly risky positions are validated by the booming economy
that renders the built in margins of error superfluous
encouraging adoption of riskier positions
Eventually, either financing costs rise
or income comes in below expectations
leading to defaults on payment commitments
"frequently by a pretended payment [through inflation]"
Hyman Minsky
The United States is doing the same thing, except we have the world's reserve currency at the moment. When Venezuela's currency becomes worthless, the population will most likely adopt the US Dollar as a means of commerce, much like the black market does currently.
Next up may be Argentina, Vietnam or some other more centrally run nation who are functionally bankrupt as we are, but without the military firepower and financial infrastructure. Having oil and other commodities priced in US dollars is key to maintaining a better position than Europe, Russia and China.
How a single 50 year old in Greensboro, NC who makes $46,000 can game Obamacare for $2,994
MAGI = $46,000
Health Insurance premium in 2014 (for a silver plan, before tax credit): $4,666 per year
You could receive a government tax credit subsidy of up to: $0 per year
(which covers 0% of the overall premium)
Amount you pay for the premium: $4,666 per year
.
.
Same 50 year old who contributes $6,500 to a traditional IRA,
or who maxes out a 401k etc... for the same amount, or deducts the same for business etc...;
MAGI = $39,500
Health Insurance premium in 2014 (for a silver plan, before tax credit): $4,666 per year
You could receive a government tax credit subsidy of up to: $914 per year
(which covers 20% of the overall premium)
Amount you pay for the premium: $3,753 per year
.
.
$6,500 x 25% = $1,625 Federal Tax Savings
$6,500 x 7% = $455 State Tax Savings
$914 per year Obamacare savings
Total Savings = $1,625 + $455 + $914 = $2,994
.
.
Are they going to recheck everyone's tax filings every year?
Previously;
How to Game Obamacare
Affordable Care Act (ACA aka Obamacare) Calculator etc... from Kaiser
Health Insurance premium in 2014 (for a silver plan, before tax credit): $4,666 per year
You could receive a government tax credit subsidy of up to: $0 per year
(which covers 0% of the overall premium)
Amount you pay for the premium: $4,666 per year
.
.
Same 50 year old who contributes $6,500 to a traditional IRA,
or who maxes out a 401k etc... for the same amount, or deducts the same for business etc...;
MAGI = $39,500
Health Insurance premium in 2014 (for a silver plan, before tax credit): $4,666 per year
You could receive a government tax credit subsidy of up to: $914 per year
(which covers 20% of the overall premium)
Amount you pay for the premium: $3,753 per year
.
.
$6,500 x 25% = $1,625 Federal Tax Savings
$6,500 x 7% = $455 State Tax Savings
$914 per year Obamacare savings
Total Savings = $1,625 + $455 + $914 = $2,994
.
.
Are they going to recheck everyone's tax filings every year?
Previously;
How to Game Obamacare
Affordable Care Act (ACA aka Obamacare) Calculator etc... from Kaiser
How to Game Obamacare
"Under the Affordable Care Act, eligibility for ...subsidized health insurance through the Exchanges will be calculated using a household’s Modified Adjusted Gross Income (MAGI).
Modified Adjusted Gross Income (MAGI) includes Wages, Taxable interest, Taxable amount of pensions, annuity or IRA distributions, some Social Security benefits, Business income, Capital gains, Ordinary dividends, Alimony received, Real estate rental income, etc...
Modified Adjusted Gross Income (MAGI) deducts 401(k) and 403(b) savings, Certain self-employed expenses, Student loan interest, Educator expenses, IRA deductions, Moving expenses, Penalty on early withdrawal of savings, Alimony paid, Domestic production activities, etc...
http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf
.
.
According to Kaiser's Family Foundation's Subsidiy Calculator, an average US family of four making $88,000 MAGI, would not recieve an Obamacare subsidy for a Silver plan costing $8,290 per year.
http://kff.org/interactive/subsidy-calculator/
.
.
If both parents are over 50 years old, contributing the maximum $6,500 each to a traditional IRA would lower taxable compensation for the above family making $88,000 by $13,000, leaving a MAGI of $75,000, which would create an Obamacare subsidy of $1,165 per year.
.
.
If the $13,000 IRA contributions are not taxed at a hypothetical 25% Federal income tax rate, the Federal government would have to pay out $1,165 plus lose $3,250 in taxes that otherwise would have been recieved.
$1,165 + $3,250 = $4,415 net loss to Federal tax revenues.
.
.
If 20 million households do the same thing to qualify for Obamacare subsidies, the Federal government could lose about $88,300,000,000 in tax revenues by the end of 2013's tax season.
Modified Adjusted Gross Income (MAGI) includes Wages, Taxable interest, Taxable amount of pensions, annuity or IRA distributions, some Social Security benefits, Business income, Capital gains, Ordinary dividends, Alimony received, Real estate rental income, etc...
Modified Adjusted Gross Income (MAGI) deducts 401(k) and 403(b) savings, Certain self-employed expenses, Student loan interest, Educator expenses, IRA deductions, Moving expenses, Penalty on early withdrawal of savings, Alimony paid, Domestic production activities, etc...
http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf
.
.
According to Kaiser's Family Foundation's Subsidiy Calculator, an average US family of four making $88,000 MAGI, would not recieve an Obamacare subsidy for a Silver plan costing $8,290 per year.
http://kff.org/interactive/subsidy-calculator/
.
.
If both parents are over 50 years old, contributing the maximum $6,500 each to a traditional IRA would lower taxable compensation for the above family making $88,000 by $13,000, leaving a MAGI of $75,000, which would create an Obamacare subsidy of $1,165 per year.
.
.
If the $13,000 IRA contributions are not taxed at a hypothetical 25% Federal income tax rate, the Federal government would have to pay out $1,165 plus lose $3,250 in taxes that otherwise would have been recieved.
$1,165 + $3,250 = $4,415 net loss to Federal tax revenues.
.
.
If 20 million households do the same thing to qualify for Obamacare subsidies, the Federal government could lose about $88,300,000,000 in tax revenues by the end of 2013's tax season.
Allen Johnson; The Hartzman Factor
"[September 17, 2013's] League of Women Voters mayoral forum drew an overflow audience, the biggest I’ve seen at one of these affairs.
WXII (Channel 12) streamed the event live.
Other current and former elected officials crammed into the big room, including several council members.
That speaks well of the interest in city politics, and the value of a compelling and competitive mayoral race.
The perceived frontrunners, Mayor Robbie Perkins and Councilwoman Nancy Vaughan, are evenly matched and well-experienced.
But dark horse/wild card/long shot challenger George Hartzman also adds to the appeal of these sessions in an odd and interesting way.
You never know what Hartzman will say or do.
He mentioned his kids, his wife and each of his household pets in his introduction.
Sure, he can be reckless with his charges of corruption and cronyism.
But he also can be funny and charming.
And sometimes he touches a nerve or says something that needs saying – for instance, by reminding us of the power and influence of real estate interests in city politics.
Or by questioning city spending.
So he’s more than comic relief.
I wouldn’t be surprised if one reason that crowd was so big was because Hartzman was there."
http://www.news-record.com/blogs/thinking_out_loud/article_e9b51fce-1ffa-11e3-a700-0019bb30f31a.html
WXII (Channel 12) streamed the event live.
Other current and former elected officials crammed into the big room, including several council members.
That speaks well of the interest in city politics, and the value of a compelling and competitive mayoral race.
The perceived frontrunners, Mayor Robbie Perkins and Councilwoman Nancy Vaughan, are evenly matched and well-experienced.
But dark horse/wild card/long shot challenger George Hartzman also adds to the appeal of these sessions in an odd and interesting way.
You never know what Hartzman will say or do.
He mentioned his kids, his wife and each of his household pets in his introduction.
Sure, he can be reckless with his charges of corruption and cronyism.
But he also can be funny and charming.
And sometimes he touches a nerve or says something that needs saying – for instance, by reminding us of the power and influence of real estate interests in city politics.
Or by questioning city spending.
So he’s more than comic relief.
I wouldn’t be surprised if one reason that crowd was so big was because Hartzman was there."
http://www.news-record.com/blogs/thinking_out_loud/article_e9b51fce-1ffa-11e3-a700-0019bb30f31a.html
Affordable Care Act (ACA aka Obamacare) Calculator etc... from Kaiser
http://kff.org/interactive/subsidy-calculator/
Questions About Health Insurance Subsidies;
"How will premium subsidies be provided?
Premium tax credits would be refundable and advanceable. A refundable tax credit is one that is available to a person even if he or she has no tax liability. An advanceable tax credit allows a person to receive assistance at the time that they purchase insurance rather than paying their premium out of pocket and waiting to be reimbursed when filing their annual income tax return.
...The cost of the subsidies is a function of the number of people that are eligible for subsidies, and how generous the subsidies are."
http://kaiserfamilyfoundation.files.wordpress.com/2013/01/7962-02.pdf
Modified Adjusted Gross Income under the Affordable Care Act;
http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf
"you could enroll in a Bronze plan for about $6,264 per year... For most people, the Bronze plan represents the minimum level of coverage required under health reform. Although you would pay less in premiums by enrolling in a Bronze plan, you will face higher out-of-pocket costs than if you enrolled in a Silver plan."
.
.
$40,000;
Household income: 170% of poverty level
Maximum % of income you have to pay
for the non-tobacco premium, if eligible for a subsidy:..........4.91%
Health Insurance premium in 2014 (for a silver plan, before tax credit): $8,543 per year
You could receive a government tax credit subsidy of up to: $6,578 per year
(which covers 77% of the overall premium)
Amount you pay for the premium:$1,965 per year
(which equals 4.91% of your household income and covers 23% of the overall premium)
"you could enroll in a Bronze plan for about $0 per year"
.
.
$50,000;
You could receive a government tax credit subsidy of up to: $5,178 per year
Amount you pay for the premium: $3,365 per year
"you could enroll in a Bronze plan for about $1,086 per year"
.
.
$45,000;
You could receive a government tax credit subsidy of up to: $5,893 per year
Amount you pay for the premium: $2,650 per year
"you could enroll in a Bronze plan for about $371 per year"
.
.
$35,000;
You could receive a government tax credit subsidy of up to: $7,171 per year
Amount you pay for the premium: $1,373 per year
"you could enroll in a Bronze plan for about $0 per year (which is 0% of your household income). By enrolling in a Bronze plan, you would receive $6,264 in subsidies, which would cover the entire amount of your Bronze premium."
.
.
$32,500;
Household income in 2014: 138% of poverty level
Health Insurance premium in 2014 (for a silver plan, before tax credit): $8,543 per year
You could receive a government tax credit subsidy of up to: $7,472 per year
Amount you pay for the premium: $1,071 per year
"...you could enroll in a Bronze plan for about $0 per year (which is 0% of your household income). By enrolling in a Bronze plan, you would receive $6,264 in subsidies, which would cover the entire amount of your Bronze premium."
Questions About Health Insurance Subsidies;
"How will premium subsidies be provided?
Premium tax credits would be refundable and advanceable. A refundable tax credit is one that is available to a person even if he or she has no tax liability. An advanceable tax credit allows a person to receive assistance at the time that they purchase insurance rather than paying their premium out of pocket and waiting to be reimbursed when filing their annual income tax return.
...The cost of the subsidies is a function of the number of people that are eligible for subsidies, and how generous the subsidies are."
http://kaiserfamilyfoundation.files.wordpress.com/2013/01/7962-02.pdf
Modified Adjusted Gross Income under the Affordable Care Act;
http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf
"you could enroll in a Bronze plan for about $6,264 per year... For most people, the Bronze plan represents the minimum level of coverage required under health reform. Although you would pay less in premiums by enrolling in a Bronze plan, you will face higher out-of-pocket costs than if you enrolled in a Silver plan."
.
.
$40,000;
Household income: 170% of poverty level
Maximum % of income you have to pay
for the non-tobacco premium, if eligible for a subsidy:..........4.91%
Health Insurance premium in 2014 (for a silver plan, before tax credit): $8,543 per year
You could receive a government tax credit subsidy of up to: $6,578 per year
(which covers 77% of the overall premium)
Amount you pay for the premium:$1,965 per year
(which equals 4.91% of your household income and covers 23% of the overall premium)
"you could enroll in a Bronze plan for about $0 per year"
.
.
$50,000;
You could receive a government tax credit subsidy of up to: $5,178 per year
Amount you pay for the premium: $3,365 per year
"you could enroll in a Bronze plan for about $1,086 per year"
.
.
$45,000;
You could receive a government tax credit subsidy of up to: $5,893 per year
Amount you pay for the premium: $2,650 per year
"you could enroll in a Bronze plan for about $371 per year"
.
.
$35,000;
You could receive a government tax credit subsidy of up to: $7,171 per year
Amount you pay for the premium: $1,373 per year
"you could enroll in a Bronze plan for about $0 per year (which is 0% of your household income). By enrolling in a Bronze plan, you would receive $6,264 in subsidies, which would cover the entire amount of your Bronze premium."
.
.
$32,500;
Household income in 2014: 138% of poverty level
Health Insurance premium in 2014 (for a silver plan, before tax credit): $8,543 per year
You could receive a government tax credit subsidy of up to: $7,472 per year
Amount you pay for the premium: $1,071 per year
"...you could enroll in a Bronze plan for about $0 per year (which is 0% of your household income). By enrolling in a Bronze plan, you would receive $6,264 in subsidies, which would cover the entire amount of your Bronze premium."
Friday, November 8, 2013
Billy Jones on George Hartzman
"When George first asked me to endorse him as a candidate for mayor of Greensboro I gave him my standard reply, everyone I endorse looses. George replied, "I would prefer to have your endorsement and lose than not have it and win. Don't think you didn't help make this happen."
I'm honored that George believes I've played a roll in pushing him to the top if indeed he gets to the top but I'm not taking credit. It was George Hartzman's hard work that got him there. Like yesterday when he had already made over 100 personal campaign calls before coming to my house to introduce me to his brother who is visiting from Washington, DC.
George moves at 300 miles an hour. I've never seen anyone like him. He's right at home in big money circles and yet can come to east Greensboro and not make people feel as if he thinks himself somehow better than the rest of us...
And that's where George differs. Sure George has his own ideas but George will ask folks what they want to do with their own neighborhoods and talk about how to make that happen... Case in point: the Bessemer Shopping Center. George spoke out for my neighbors when the Greensboro City Council voted to give the shopping center to Skip Alston's development group...
George isn't scared of calling it like he sees it or saying no to the elite status quo. For those who might not be aware, George Hartzman is known nationally for an article, Secrets and Lies of the Bailout: One Broker's Story By Matt Taibbi of Rolling Stone Magazine in which George blew the whistle on Wells Fargo for cheating Greensboro's working class out of their hard earned retirement funds...
The Banksters and Federal government was doing then what the Banksters, Developers and the City of Greensboro does today: picking winners and loosers. George fought it then, he's fighting it now and as Mayor of Greensboro he'll work to put a stop to this corrupt practice in our city...
But I wasn't immediately sold on George. His unusual way of delivering his message threw me at first just as it threw many. But I knew what so many others didn't know. Like George, I have long known that cutting through the barriers established by the status quo and getting your message before the people is impossible if the status quo doesn't want the people to know what you have to say. If you play by the rules of the status quo your voice will never be heard. So like me, George forged new ground, wrote his own rules and got his message before the people in ways the elite continues to criticize right up to the point of passing rules at city council meetings to attempt to silence George Hartzman.
Why? Because George scares the hell out of them. Otherwise they would simply ignore him and wait for George to give up and go away like so many others before him. Another reason to vote George Hartzman.
And finally, I'm voting for George because of what he says at the end of this video.
Billy Jones
I'm honored that George believes I've played a roll in pushing him to the top if indeed he gets to the top but I'm not taking credit. It was George Hartzman's hard work that got him there. Like yesterday when he had already made over 100 personal campaign calls before coming to my house to introduce me to his brother who is visiting from Washington, DC.
George moves at 300 miles an hour. I've never seen anyone like him. He's right at home in big money circles and yet can come to east Greensboro and not make people feel as if he thinks himself somehow better than the rest of us...
And that's where George differs. Sure George has his own ideas but George will ask folks what they want to do with their own neighborhoods and talk about how to make that happen... Case in point: the Bessemer Shopping Center. George spoke out for my neighbors when the Greensboro City Council voted to give the shopping center to Skip Alston's development group...
George isn't scared of calling it like he sees it or saying no to the elite status quo. For those who might not be aware, George Hartzman is known nationally for an article, Secrets and Lies of the Bailout: One Broker's Story By Matt Taibbi of Rolling Stone Magazine in which George blew the whistle on Wells Fargo for cheating Greensboro's working class out of their hard earned retirement funds...
The Banksters and Federal government was doing then what the Banksters, Developers and the City of Greensboro does today: picking winners and loosers. George fought it then, he's fighting it now and as Mayor of Greensboro he'll work to put a stop to this corrupt practice in our city...
But I wasn't immediately sold on George. His unusual way of delivering his message threw me at first just as it threw many. But I knew what so many others didn't know. Like George, I have long known that cutting through the barriers established by the status quo and getting your message before the people is impossible if the status quo doesn't want the people to know what you have to say. If you play by the rules of the status quo your voice will never be heard. So like me, George forged new ground, wrote his own rules and got his message before the people in ways the elite continues to criticize right up to the point of passing rules at city council meetings to attempt to silence George Hartzman.
Why? Because George scares the hell out of them. Otherwise they would simply ignore him and wait for George to give up and go away like so many others before him. Another reason to vote George Hartzman.
And finally, I'm voting for George because of what he says at the end of this video.
Billy Jones
Thursday, November 7, 2013
"3Q GDP DECREASED $58.4 Billion" instead of plus $196.6 billion with Federal Reserve
"Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.8 percent in the third quarter of 2013"
Bureau of Economic Analysis
.
.
"The Fed is "creating" $85 billion a month in "QE", injecting it into the economy.
These funds... "count" in GDP
So the actual amount of economic activity for which trade occurs must have the QE amount subtracted back out.
The BEA's GDP tables tell us that the gross change in GDP from 2Q -> 3Q was $196.6 billion.
But the Fed's QE program injected $255 billion, so in fact the economy shrank during the 3rd quarter.
http://market-ticker.org/akcs-www?post=225788
.
.
$196.6 billion GDP change - $255 billion QE = -$58.4 Billion
Bureau of Economic Analysis
.
.
"The Fed is "creating" $85 billion a month in "QE", injecting it into the economy.
These funds... "count" in GDP
So the actual amount of economic activity for which trade occurs must have the QE amount subtracted back out.
The BEA's GDP tables tell us that the gross change in GDP from 2Q -> 3Q was $196.6 billion.
But the Fed's QE program injected $255 billion, so in fact the economy shrank during the 3rd quarter.
http://market-ticker.org/akcs-www?post=225788
.
.
$196.6 billion GDP change - $255 billion QE = -$58.4 Billion
"High earners are seeing a combination of federal tax increases for 2013"
"High earners are seeing a combination of federal tax increases for 2013: a top marginal rate of 39.6 percent, up from 35 percent; a 20 percent tax on long-term capital gains and dividends, up from 15 percent; and a new 3.8 percent tax on investment income. Also, limits on exemptions and deductions are taking effect for this tax year.
Some top earners are only now realizing they may owe much more by April 15 because they’ve been paying quarterly estimated taxes based on their liability for 2012...
...For wealthy taxpayers, the rate on long-term capital gains and qualified dividends now can be as much as 25 percent, including the new surtax and limits on deductions..., that’s a 67 percent increase from 2012.
The rate on other investment income such as royalties, interest and rents can exceed 43 percent.
...two new taxes to help finance the 2010 health-care law -- a 3.8 percent surtax on investment income and 0.9 percent added levy on wages -- apply to income of more than $250,000 a year for married couples and $200,000 for individuals.
Lawmakers also reinstated phaseouts of personal exemptions and itemized deductions for adjusted gross income exceeding $250,000 for individuals and $300,000 for married couples.
...With less than two months left in the tax year, advisers and accountants are focusing on clients with closely held business stakes, mutual-fund holdings, charitable donations and retirement accounts to help maneuver around higher rates..."
http://www.bloomberg.com/news/2013-11-07/higher-tax-rates-give-top-u-s-earners-year-end-headaches.html
.
.
Higher government revenues + lower income from taxation = slower economy
As the Federal Reserve is financing about half the federal deficit and the real estate finance market, we may see higher inflationary symptoms as Europe lowered interest rates to forestall "low inflation".
What we should be doing is taking a short term economic hit to not need funny money.
We're not doing so, which is what most empires in decline chose to do throughout history.
We appear to be on the road to debasement of our currency, as emerging market economies print even faster to keep up with developing economies who are spending far more than income.
Pushing on a string we are.
Some top earners are only now realizing they may owe much more by April 15 because they’ve been paying quarterly estimated taxes based on their liability for 2012...
...For wealthy taxpayers, the rate on long-term capital gains and qualified dividends now can be as much as 25 percent, including the new surtax and limits on deductions..., that’s a 67 percent increase from 2012.
The rate on other investment income such as royalties, interest and rents can exceed 43 percent.
...two new taxes to help finance the 2010 health-care law -- a 3.8 percent surtax on investment income and 0.9 percent added levy on wages -- apply to income of more than $250,000 a year for married couples and $200,000 for individuals.
Lawmakers also reinstated phaseouts of personal exemptions and itemized deductions for adjusted gross income exceeding $250,000 for individuals and $300,000 for married couples.
...With less than two months left in the tax year, advisers and accountants are focusing on clients with closely held business stakes, mutual-fund holdings, charitable donations and retirement accounts to help maneuver around higher rates..."
http://www.bloomberg.com/news/2013-11-07/higher-tax-rates-give-top-u-s-earners-year-end-headaches.html
.
.
Higher government revenues + lower income from taxation = slower economy
As the Federal Reserve is financing about half the federal deficit and the real estate finance market, we may see higher inflationary symptoms as Europe lowered interest rates to forestall "low inflation".
What we should be doing is taking a short term economic hit to not need funny money.
We're not doing so, which is what most empires in decline chose to do throughout history.
We appear to be on the road to debasement of our currency, as emerging market economies print even faster to keep up with developing economies who are spending far more than income.
Pushing on a string we are.
Wednesday, November 6, 2013
"America's fiscal crisis is not that our debt ceiling isn't quite high enough — it's that we have too much debt."
 |
| http://ricochet.com/main-feed/Great-News!-The-Fiscal-Crisis-Is-Over |
Jon Gabriel
.
.
The dot com surplus actually really isn't, as Social Security revenues etc... were included in the accounting.
James Grant on historical US defaults, and of US defaults present and to come from currency debasement
"The U.S. government defaulted after the Revolutionary War, and it defaulted at intervals thereafter.
Moreover, on the authority of the chairman of the Federal Reserve Board, the government means to keep right on shirking, dodging or trimming, if not legally defaulting.
...The Federal Reserve can materialize the scrip on a computer screen.
Things were very different when America owed the kind of dollars that couldn’t just be whistled into existence. By 1790, the new republic was in arrears on $11,710,000 in foreign debt. These were obligations payable in gold and silver. Alexander Hamilton, the first secretary of the Treasury, duly paid them. In doing so, he cured a default.
Hamilton’s dollar was defined as a little less than 1/20 of an ounce of gold. So were those of his successors, all the way up to the administration of Franklin D. Roosevelt. But in the whirlwind of the “first hundred days” of the New Deal, the dollar came in for redefinition. The country needed a cheaper and more abundant currency, FDR said. By and by, the dollar’s value was reduced to 1/35 of an ounce of gold.
By any fair definition, this was another default. Creditors both domestic and foreign had lent dollars weighing just what the Founders had said they should weigh. They expected to be repaid in identical money.
...The “American default,” as this piece of domestic stimulus was known in foreign parts , provoked condemnation in the City of London. “One of the most egregious defaults in history,” judged the London Financial News. “...The plea that recent developments have created abnormal circumstances is wholly irrelevant. It was precisely against such circumstances that the gold clause was designed to safeguard bondholders.”
The lighter Roosevelt dollar did service until 1971, when President Richard M. Nixon lightened it again. In fact, Nixon allowed it to float. No longer was the value of the greenback defined in law as a particular weight of gold or silver. It became what it looked like: a piece of paper.
Yet the U.S. government continued to find trusting creditors...
...Sooner or later, the Obama Treasury will resume writing checks.
The question is what those checks will buy.
“Less and less,” is the Federal Reserve’s announced goal. Under Chairman Ben Bernanke (with the full support of the presumptive chairman-to-be, Janet Yellen)...
In other words, the value of money has become an instrument of public policy, not an honest weight or measure.
...The post-1971 dollar derives its value from the stamp of the government that issues it.
...Lend us your dollars for 10 years, the Treasury proposes. ...And at the end of those 10 years, we will hand you back your principal, which will almost certainly buy less than the money you lent.
This is the unsustainable conceit of the world’s superpower-cum-super debtor.
By deed, if not audible word, we Americans say: “The greenback is the world’s great monetary brand. You have no choice but to use it. Like it or lump it.” But the historical record of paper currencies is clear: Governments always over-issue it. The people finally do lump it.
What to do? Let us face facts: We have defaulted in the past. Let us confront the implied message of the Federal Reserve’s pro-inflation policy: We will default in the future, though no lawyer will call it “default.”..."
James Grant
Moreover, on the authority of the chairman of the Federal Reserve Board, the government means to keep right on shirking, dodging or trimming, if not legally defaulting.
...The Federal Reserve can materialize the scrip on a computer screen.
Things were very different when America owed the kind of dollars that couldn’t just be whistled into existence. By 1790, the new republic was in arrears on $11,710,000 in foreign debt. These were obligations payable in gold and silver. Alexander Hamilton, the first secretary of the Treasury, duly paid them. In doing so, he cured a default.
Hamilton’s dollar was defined as a little less than 1/20 of an ounce of gold. So were those of his successors, all the way up to the administration of Franklin D. Roosevelt. But in the whirlwind of the “first hundred days” of the New Deal, the dollar came in for redefinition. The country needed a cheaper and more abundant currency, FDR said. By and by, the dollar’s value was reduced to 1/35 of an ounce of gold.
By any fair definition, this was another default. Creditors both domestic and foreign had lent dollars weighing just what the Founders had said they should weigh. They expected to be repaid in identical money.
...The “American default,” as this piece of domestic stimulus was known in foreign parts , provoked condemnation in the City of London. “One of the most egregious defaults in history,” judged the London Financial News. “...The plea that recent developments have created abnormal circumstances is wholly irrelevant. It was precisely against such circumstances that the gold clause was designed to safeguard bondholders.”
The lighter Roosevelt dollar did service until 1971, when President Richard M. Nixon lightened it again. In fact, Nixon allowed it to float. No longer was the value of the greenback defined in law as a particular weight of gold or silver. It became what it looked like: a piece of paper.
Yet the U.S. government continued to find trusting creditors...
...Sooner or later, the Obama Treasury will resume writing checks.
The question is what those checks will buy.
“Less and less,” is the Federal Reserve’s announced goal. Under Chairman Ben Bernanke (with the full support of the presumptive chairman-to-be, Janet Yellen)...
In other words, the value of money has become an instrument of public policy, not an honest weight or measure.
...The post-1971 dollar derives its value from the stamp of the government that issues it.
...Lend us your dollars for 10 years, the Treasury proposes. ...And at the end of those 10 years, we will hand you back your principal, which will almost certainly buy less than the money you lent.
This is the unsustainable conceit of the world’s superpower-cum-super debtor.
By deed, if not audible word, we Americans say: “The greenback is the world’s great monetary brand. You have no choice but to use it. Like it or lump it.” But the historical record of paper currencies is clear: Governments always over-issue it. The people finally do lump it.
What to do? Let us face facts: We have defaulted in the past. Let us confront the implied message of the Federal Reserve’s pro-inflation policy: We will default in the future, though no lawyer will call it “default.”..."
James Grant
Peter Schiff on our debt issues
"The argument that America needs to pay its bills is just hollow rhetoric.
Paying off one's Visa bill with a new and bigger MasterCard bill can't be considered a legitimate payment of debt. At best it is a transfer. But in the government's case, it doesn't even qualify as that.
...the purchasing power of the food stamps had to come from somewhere.
The government can't create something from nothing. Taxation transfers purchasing power from people living in the present to other people living in the present. In contrast, borrowing transfers purchasing power from people living in the future to people living in the present. The good news for politicians is that future people don't vote in current elections (and current voters don't seem to appreciate the cost to their future selves of current policy).
...in the less than five years, the federal government has added, on average, about $1.3 trillion per year in new debt, a pace that is four times higher than the growth. If the deficit were subtracted from GDP, America would be shown to be stuck in a severe recession that Washington can't acknowledge. But such a reality is more consistent with the dismal job prospects and stagnant incomes experienced by most Americans.
The belief that deficits add to the economy, and that debt can be dealt with in an imaginary future (that never seems to arrive) is the foundation upon which the [government] can argue that borrowing is the equivalent of paying.
...What is alarming is that the media and the public have swallowed it so willingly. As they call for limitless increases in borrowing, [many elected officials] have offered no plan to reduce the current debt...
...We are in such a deep debt hole that there is no solution that does not involve serious economic pain.
...If they cut the deficit, this phony economy may likely implode and cause widespread distress.
...The more we borrow and spend today, the more we will suffer tomorrow when the bills come due.
...cutting government spending now helps the economy by allowing the economic adjustment to happen sooner rather than later.
...Unfortunately our debts don't leave us much in the way of choices.
We can choose to pay now or try to pay later.
But the longer we wait the steeper the bill."
Peter Schiff
Paying off one's Visa bill with a new and bigger MasterCard bill can't be considered a legitimate payment of debt. At best it is a transfer. But in the government's case, it doesn't even qualify as that.
...the purchasing power of the food stamps had to come from somewhere.
The government can't create something from nothing. Taxation transfers purchasing power from people living in the present to other people living in the present. In contrast, borrowing transfers purchasing power from people living in the future to people living in the present. The good news for politicians is that future people don't vote in current elections (and current voters don't seem to appreciate the cost to their future selves of current policy).
...in the less than five years, the federal government has added, on average, about $1.3 trillion per year in new debt, a pace that is four times higher than the growth. If the deficit were subtracted from GDP, America would be shown to be stuck in a severe recession that Washington can't acknowledge. But such a reality is more consistent with the dismal job prospects and stagnant incomes experienced by most Americans.
The belief that deficits add to the economy, and that debt can be dealt with in an imaginary future (that never seems to arrive) is the foundation upon which the [government] can argue that borrowing is the equivalent of paying.
...What is alarming is that the media and the public have swallowed it so willingly. As they call for limitless increases in borrowing, [many elected officials] have offered no plan to reduce the current debt...
...We are in such a deep debt hole that there is no solution that does not involve serious economic pain.
...If they cut the deficit, this phony economy may likely implode and cause widespread distress.
...The more we borrow and spend today, the more we will suffer tomorrow when the bills come due.
...cutting government spending now helps the economy by allowing the economic adjustment to happen sooner rather than later.
...Unfortunately our debts don't leave us much in the way of choices.
We can choose to pay now or try to pay later.
But the longer we wait the steeper the bill."
Peter Schiff
"If ever there was a chart of the gross misallocation of capital caused by [Federal Reserve Money Printing], this has got to be it..."
 |
| http://www.zerohedge.com/news/2013-10-21/qes-gross-misallocation-capital |
"Money put into the system would, in normal times multiply aggressively in use
(e.g. Fed to bank, bank to business, business to consumer, consumer to restaurateur, restaurateur to farmer, farmer back to bank etc etc.)
...However, as [Federal Reserve Money Printing (QE) since 2008/9 has] put artificial support under [financial, real estate and commodity markets], you get misallocation of capital and [diminishing] velocity of money.
The last time both were as low as this was 1965 (Nearly half a century ago)
One might even argue that as a consequence QE actually stifles economic growth [and] employment creation...
The trouble with that assessment (if correct) is that Ben does not believe that premise and neither does Janet.
(Quite the contrary) If the premise is potentially true that QE is actually a negative for the economy/savers etc. then more QE will not only not solve the problem, but exacerbate it.
It therefore becomes a negative feedback loop that we cannot get out of until the Fed has the nerve to stop QE no matter what the economic backdrop.
Under Janet Yellen that scenario is highly unlikely."
A Money Riddle; Vault Cash and Savings Deposits
 |
| http://research.stlouisfed.org/fred2/series/TLVAULT |
If there’s about $62.325 Billion in Vault Cash, and 100 million savings account holders wanted $1,000 each at the same time from more than $7 trillion in savings deposits, where would the $100 billion come from?
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| http://research.stlouisfed.org/fred2/series/WSAVNS |
If there's really not more than $7 trillion "saved" in our nation's banking system, where's the money?
If there was about $50 billion in Vault Cash in 2010 along with about $4.5 trillion in savings, and Vault Cash only went up about $13 billion since while savings rose about $2.5 trillion...?
"The more high-sounding the legislation, the more destructive its consequences."
HR 3293– the recently introduced Debt Limit Reform Act.
...HR 3293′s real purpose is to authorize the government to simply stop counting a massive portion of the US national debt ...one of the biggest chunks of the debt is money owed to ‘intragovernmental agencies’. ...nearly $5 trillion of the $17 trillion debt (almost 30%) is owed to intragovernmental agencies like Social Security and Medicare.
So now they basically want to stop counting this debt.
...Overnight, they’ll make $5 trillion disappear from the debt.
...the overwhelming evidence [suggests] the [US and other western countries will make every effort to lie, cheat, and steal whatever they can just to keep the party going a little while longer.
http://www.sovereignman.com/trends/congress-to-eliminate-the-debt-by-not-counting-it-anymore-12951/
.
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From the act;
"Government-Held Debt Not Taken Into Account for Purposes of the Public Debt Limit- Section 3101 of title 31, United States Code, as amended by subsection (a) is amended by adding at the end the following new subsection:
‘(e) Obligations held by the United States Government (including any obligation which is classified as an intragovernmental holding by the Secretary of the Treasury or which is held by any agency or instrumentality of the United States) shall not be taken into account for purposes of applying the limitation imposed under subsection (b).’."
.
.
Meaning the intent is to stop counting what is actually owed.
...HR 3293′s real purpose is to authorize the government to simply stop counting a massive portion of the US national debt ...one of the biggest chunks of the debt is money owed to ‘intragovernmental agencies’. ...nearly $5 trillion of the $17 trillion debt (almost 30%) is owed to intragovernmental agencies like Social Security and Medicare.
So now they basically want to stop counting this debt.
...Overnight, they’ll make $5 trillion disappear from the debt.
...the overwhelming evidence [suggests] the [US and other western countries will make every effort to lie, cheat, and steal whatever they can just to keep the party going a little while longer.
http://www.sovereignman.com/trends/congress-to-eliminate-the-debt-by-not-counting-it-anymore-12951/
.
.
From the act;
"Government-Held Debt Not Taken Into Account for Purposes of the Public Debt Limit- Section 3101 of title 31, United States Code, as amended by subsection (a) is amended by adding at the end the following new subsection:
‘(e) Obligations held by the United States Government (including any obligation which is classified as an intragovernmental holding by the Secretary of the Treasury or which is held by any agency or instrumentality of the United States) shall not be taken into account for purposes of applying the limitation imposed under subsection (b).’."
.
.
Meaning the intent is to stop counting what is actually owed.
"Maybe what’s practiced in the USA isn’t capitalism at all." but “Growthism.”
"[Growthism] seems to be a toxic admixture of capitalism for the poor, who are ruthlessly whittled down, in brutal Darwinian contests; and socialism for the rich, for whom there appears to be no limit to bailouts, subsidies, and privileges. It’s a lethal cocktail of cronyism for the powerful; and endless struggle for the powerless.
...It’s not just a system or a set of institutions. It’s a mindset; an ideology; a set of cherished beliefs. And one that’s hardened into dogma. A dogma which is palpably failing; but can’t be dislodged... a cult, whose priests and acolytes threaten mysterious, terrible, divine revenge whenever their authority is questioned.
Growthism says: growth must be achieved at all costs...
Growthism is willing to sacrifice everything for more growth. Even the very rights which enlightened societies once held to be inalienable. Are you concerned about the rise in extrajudicial mass spying, drone strikes, private security guards, military contractors, or even just the analytics that provide detailed information on what you say, do, and search to both the government and private companies? Too bad! Those are our growth industries, and woe to whatever or whoever stands in their way. Who cares about freedom of speech and assembly or the right to privacy when what we really need is good, growth-creating jobs? Jobs like becoming butlers and maids (or coaches, consultants, and “service-providers”) to the super-rich, who can purchase the “right” not to be frisked, stopped, or surveiled. Heaven forbid people protest. Why, that might hurt growth!
Growthism, then, is antithetical to democracy. Basic political and human rights, from the perspective of a growthist, are niggling sources of inefficiency that must be erased, rubbed out, sanded down. They are sources of social friction and tension that make people less productive workers and that encourage them to do things like wonder, question, agitate, challenge, defy, rebel, and think. Dammit! We don’t want a citizenry! We want a workforce.
...That is the great mistake growthism makes. But growth is not an end. It is a means. A means to, at best, expanding eudaimonia; the capacity to live meaningfully well. And a means, at least, to expanding human freedom.
And because it is a means, not an end, growth is necessary—but not sufficient.
...And nowhere is that more evident that in the USA; where the economy is “growing” but the majority of people under 40 are worse off than their forebears.
...Growthism is a kind of cult. Like all cults, it asks us to deny reality; to sacrifice ourselves; to sever our ties with all that we love; and to indulge in magical thinking. Its high priests soothe us with incantations that have been flat wrong for decades. Its acolytes recite the prayers that have failed to bring rain for years. And still, they tell us: keep the faith. One day, salvation will be yours.
Growthism’s great crime—and yes, it is a crime; for it is costing you and I, right here, right now, lives we should be living, instead of the days we find ourselves limited to—is that it prevents societies from developing a sophisticated conception of what prosperity is. And hence, how to attain it. It is failing because it is stifling us from reaching past the tired, rusting idea that prosperity is merely stuff and trinkets, ...and that it might, instead, be health, friendship, purpose, wisdom, resilience, happiness, a searing sense that all one’s days have mattered.
...Capitalism’s devolved into growthism. And growthism’s to this age what alchemy was to another.
...the truest wealth of life is having lived a life that matters.
...Maybe it’s time for each of us to take a deep breath, tell growthism to shove it, and chart our own new course."
Umair Haque
...It’s not just a system or a set of institutions. It’s a mindset; an ideology; a set of cherished beliefs. And one that’s hardened into dogma. A dogma which is palpably failing; but can’t be dislodged... a cult, whose priests and acolytes threaten mysterious, terrible, divine revenge whenever their authority is questioned.
Growthism says: growth must be achieved at all costs...
Growthism is willing to sacrifice everything for more growth. Even the very rights which enlightened societies once held to be inalienable. Are you concerned about the rise in extrajudicial mass spying, drone strikes, private security guards, military contractors, or even just the analytics that provide detailed information on what you say, do, and search to both the government and private companies? Too bad! Those are our growth industries, and woe to whatever or whoever stands in their way. Who cares about freedom of speech and assembly or the right to privacy when what we really need is good, growth-creating jobs? Jobs like becoming butlers and maids (or coaches, consultants, and “service-providers”) to the super-rich, who can purchase the “right” not to be frisked, stopped, or surveiled. Heaven forbid people protest. Why, that might hurt growth!
Growthism, then, is antithetical to democracy. Basic political and human rights, from the perspective of a growthist, are niggling sources of inefficiency that must be erased, rubbed out, sanded down. They are sources of social friction and tension that make people less productive workers and that encourage them to do things like wonder, question, agitate, challenge, defy, rebel, and think. Dammit! We don’t want a citizenry! We want a workforce.
...That is the great mistake growthism makes. But growth is not an end. It is a means. A means to, at best, expanding eudaimonia; the capacity to live meaningfully well. And a means, at least, to expanding human freedom.
And because it is a means, not an end, growth is necessary—but not sufficient.
...And nowhere is that more evident that in the USA; where the economy is “growing” but the majority of people under 40 are worse off than their forebears.
...Growthism is a kind of cult. Like all cults, it asks us to deny reality; to sacrifice ourselves; to sever our ties with all that we love; and to indulge in magical thinking. Its high priests soothe us with incantations that have been flat wrong for decades. Its acolytes recite the prayers that have failed to bring rain for years. And still, they tell us: keep the faith. One day, salvation will be yours.
Growthism’s great crime—and yes, it is a crime; for it is costing you and I, right here, right now, lives we should be living, instead of the days we find ourselves limited to—is that it prevents societies from developing a sophisticated conception of what prosperity is. And hence, how to attain it. It is failing because it is stifling us from reaching past the tired, rusting idea that prosperity is merely stuff and trinkets, ...and that it might, instead, be health, friendship, purpose, wisdom, resilience, happiness, a searing sense that all one’s days have mattered.
...Capitalism’s devolved into growthism. And growthism’s to this age what alchemy was to another.
...the truest wealth of life is having lived a life that matters.
...Maybe it’s time for each of us to take a deep breath, tell growthism to shove it, and chart our own new course."
Umair Haque
"Creating tons of new money and credit out of thin air is not without cost."
"Central bankers contributed to the economic crisis the world now faces. They kept interest rates too low for too long. They fixated on controlling inflation, even as they stood by and watched investment banks party in an orgy of credit. Central bankers were completely incompetent and failed to see the Great Financial Crisis coming. They couldn't spot housing bubbles, and even when the crisis had started and banks were failing, they insisted that the banks they supervised were well regulated and healthy. They failed at their job and should have been fired. Yet governments now need central banks to erode the mountain of debt by printing money and creating inflation.
...if central bankers couldn't manage conventional monetary policy well in the good times, what makes us think that they will be able to manage unconventional monetary policies in the bad times?
...Economists know that there are no free lunches. Creating tons of new money and credit out of thin air is not without cost. Massively increasing the size of a central bank's balance sheet is risky and stores up extremely difficult problems for the future.
...the experiment is unlikely to end well.
...Central banks think they can swell the size of their balance sheet, print money to finance government deficits, and keep rates at zero with no consequences. Bernanke and other bankers think they have the foresight to reverse their unconventional policies at the right time. They've been wrong in the past, and they will get the timing wrong in the future. They will keep interest rates too low for too long and cause inflation and bubbles... What they are doing will destroy savers who rely on interest payments and fixed coupons from their bonds. They will also harm lenders who have lent money and will never be repaid in devalued dollars, if they are repaid at all.
We are already seeing the unintended consequences of this Great Monetary Experiment. ...Investors are reaching for riskier and riskier investments to get some small return. ...Older people who are relying on pension funds to pay for their retirement are getting screwed...
When investors convince themselves central bankers have their backs, they feel encouraged to bid up prices for everything, accepting more risk with less return. Excesses and bubbles are not a mere side effect. As crazy as it seems, reckless investor behavior is, in fact, the planned objective. William McChesney Martin, one of the great heads of the Federal Reserve, said the job of a central banker was to take away the punch bowl before the party gets started. Now, central bankers are spiking the punch bowl with triple sec and absinthe and egging on the revelers to jump in the pool..."
http://www.zerohedge.com/news/2013-10-27/fire-and-brimstone-john-mauldin-edition
...if central bankers couldn't manage conventional monetary policy well in the good times, what makes us think that they will be able to manage unconventional monetary policies in the bad times?
...Economists know that there are no free lunches. Creating tons of new money and credit out of thin air is not without cost. Massively increasing the size of a central bank's balance sheet is risky and stores up extremely difficult problems for the future.
...the experiment is unlikely to end well.
...Central banks think they can swell the size of their balance sheet, print money to finance government deficits, and keep rates at zero with no consequences. Bernanke and other bankers think they have the foresight to reverse their unconventional policies at the right time. They've been wrong in the past, and they will get the timing wrong in the future. They will keep interest rates too low for too long and cause inflation and bubbles... What they are doing will destroy savers who rely on interest payments and fixed coupons from their bonds. They will also harm lenders who have lent money and will never be repaid in devalued dollars, if they are repaid at all.
We are already seeing the unintended consequences of this Great Monetary Experiment. ...Investors are reaching for riskier and riskier investments to get some small return. ...Older people who are relying on pension funds to pay for their retirement are getting screwed...
When investors convince themselves central bankers have their backs, they feel encouraged to bid up prices for everything, accepting more risk with less return. Excesses and bubbles are not a mere side effect. As crazy as it seems, reckless investor behavior is, in fact, the planned objective. William McChesney Martin, one of the great heads of the Federal Reserve, said the job of a central banker was to take away the punch bowl before the party gets started. Now, central bankers are spiking the punch bowl with triple sec and absinthe and egging on the revelers to jump in the pool..."
http://www.zerohedge.com/news/2013-10-27/fire-and-brimstone-john-mauldin-edition
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