Oct.1 2008

SOUND BITES FOR THE TIMES


GOLD 1.
Everybody is rushing to buy gold. We think it is a refuge in bad times. Gold always had value. Paper currencies come and go. We should realize, however, that there is no free market for gold. The price of gold is the most manipulated item in government intervention of the market. When there is no free market for gold, there is no free market for anything else. Free markets have never existed in civilization for that matter. Free market fundamentalism is merely a fantasy. Governments always interfere with the free market if they are able. I lived in times when a government could not interfere with a free market and commerce flourished as a black market.

GOLD 2.
The US Treasury now owns 261 million ounces of gold. As of August 30, 2008, the US national debt was $9.65 trillion. The price of gold required to pay back the national debt with gold held by the US would have to be US$36,983 per ounce. The rise in the price of gold necessary to keep up with the rise in US national debt at current rate is US$8.15 per ounce per day. All these numbers were determined before our national debt doubled in recent weeks.

GOLD 3.
To restore the gold standard, would require money backed by gold reserves. The price of gold would have to increase constantly because the physical production of new gold is far below the rate of economic expansion. We could not produce enough gold to back currencies needed for the expansion of world economies

GOLD CONFISCATION.
In 1933, Franklin Delano Roosevelt dealt with a monetary and banking crisis by confiscating all privately owned gold; paying for the gold at $20.67 per ounce; immediately devaluing the dollar by 40 percent; and setting the price of gold at $35.00 per ounce. At a single stroke, Roosevelt increased the government's gold assets, stabilized the monetary system and increased wholesale prices by more than 33 percent. However, he also inflicted losses of 40 percent on gold owners and stripped them of the gold that they saved to insure their financial futures. Could another liberal president repeat such move? After all, only the rich have gold and is it time to take it away from them?

IF YOU WANT TO BE REMOVED FROM THIS MAILING LIST SIMPLY REPLY AND SAY SO.

FOR A COLLECTION OF PAST NEWSLETTERS YOU MAY WANT TO VISIT (AT YOUR OWN RISK) http://tibbyweston.blogspot.com/ It is entitled: Have You Had Enough?

Oct.3 2008

THE AFFIRMATIVE ACTION END GAME.



A friend of mine is very angry. He called me upset and here is what he had to say:


“Most people don’t know that Fannie Mae and Freddie Mac were established by Democrats, for Democrats and it was operated by Democrats. It was affirmative action in its highest and ugliest form. It was also the forerunner of how government would operate if Obama were elected with a Democrat congressional majority.

We will move under an Obama Administration from food stamp backed mortgages to a society where direct transfer of money from whites to blacks will be done in the open. Black liberation policy will be the policy of the government. Blacks will receive reparations for the suffering of their ancestors. No refunds to whites, however, for the billions spent on welfare, prisons, the war on poverty and drugs.

The black poor will receive direct income tax refunds although they never paid any taxes.

Political correctness will be national policy and those who disagree will be brutally oppressed with all the powers of the government. No more talk radio.

Confiscation of all gold and silver coins and guns will be accomplished at the point of bayonets held by Black Muslim brigades of the new military. History will be further rewritten and MLK would be quoted: “I have a dream that one day this will be a nation where you will be rich because the color of your skin. “ Schools will turn out well rounded little communists who would spy on their elders and report them to the police if they do not follow the party line.

What do you have to say to this?”


I just laughed. He asked me what is so funny. So I told him that it would be ironic to watch Obama, a descendant of Arab slave traders and white slave owners, propose sanctimoniously and expedite ruthlessly the confiscation of wealth from those who earned it, to those who are entitled to it because of the color of their skin.


He was offended. How could I be laughing when the country is in such a desperate trouble?


So I told him.


I am tired of warning for years of what is to come. I am tired to see my call for action fall on deaf ears. Mostly I am tired of "déjà vu all over again.” I tried to do the same thing more than 68 years ago and my warnings fell on deaf ears. Those I warned all died a horrible death after unbelievable suffering. They in effect committed suicide, by inaction. It is very hard to be on the suicide watch again.

IF YOU WANT TO BE REMOVED FROM THIS MAILING LIST SIMPLY REPLY AND SAY SO.

FOR A COLLECTION OF PAST NEWSLETTERS YOU MAY WANT TO VISIT (AT YOUR OWN RISK) http://tibbyweston.blogspot.com/ It is entitled: Have You Had Enough?

Oct.4 2008

A LITTLE HEAVY LIFTING

I just heard all the moaning and groaning about the latest unemployment figures. The sky is falling, according to the biased media and their pompous spokesmen. Unemployment rates are at 6.1%. I became a bit curious. Although mathematics is not one of my best talents, I decided to compare the unemployment rates during the 96 months of the Clinton presidency with those of the 93 months of the Bush presidency.

Luckily I know how to use the calculation capacity of Microsoft Excell and soon I was able to determine what the average unemployment rate was from January 1993 to December of 1999, the end of the “glorious” Clinton era. Would you believe that during those years of the phony technology boom and subsequent collapse the average unemployment rate was 5.5%?

With dreadful anticipation I then put in the unemployment rates during the 93 months of the “disastrous” Bush administration to see what the phony housing boom and subsequent collapse created. I was astonished to learn that the average unemployment during the Bush presidency was 5.15%.

I am not a mathematical genius, but the numbers don’t lie. Unemployment was higher during the Clinton years than the Bush years. Now if I could get this message to Sarah it would be neat. IMHO Sending it to John is worthless. He is after all a Gentleman Senator who treats other Senators with due respects while they stab him in the back and spit him in the face. He still thinks this is a fair fight with rules that both sides observe and obey. He still does not understand that this is a Chicago style gangster campaign with the worst yet to come. I hope someday he will get angry and strike back.

Oct.5 2008

HERE IS NO WHITE GUILT.



I keep hearing that many are for Obama because of white guilt. It did not take me long to realize that what they are talking about is WHITE LIBERAL GUILT, because most of the conservative whites I know oppose racism out of a sense of justice. Most of the liberal folks I know think differently. They realize something is wrong in race relations and they feel responsible and were just thinking about doing something about to make themselves feel better and consider themselves virtuous. Obama provided them with a perfect opportunity to do something about their feeling of guilt and make them virtuous at the same time.


Most of this nation is and was always mostly white and conservative. The Republican Party used to be the same way. It was not out of sense of guilt that the Republicans nominated a black Supreme Court justice and two Secretaries of State. The Democrats have never elevated any black to a similar position. It would have reduced the virtuousness of their obsession with guilt. It was always better to keep blacks on the plantation and feel guilty about it until now.


A group of people, leftist, socialist, Marxist, neo-communist , who want to change our society has taken over the Democrat party. The same kind has been able to accomplish their goal in many other countries. Their MO is quite simple, but thorough. They take over the media. They brainwash the young through a corrupted educational system and by destroying the morality system through a depraved entertainment culture. They divide the nation by advocating class and race hatred. As a result we have become Balkanized.

They promoted the influx of illegal immigrants and removed any obstacle from them to be eligible for immediate welfare, retirement and medical benefits in an attempt to weaken the authority of the justice system and power structure. In order to increase the number of voters who will vote for these changes they made it illegal to question the eligibility of anyone to vote and to prevent massive voter fraud.

They have converted the legal system into political warfare method to accomplish their objectives.

The Obama nomination with a single stroke accomplishes all their objectives. Opposition now can be silenced by accusations of racism and selfishness. Here is a non-threatening black who speaks white during the election campaign, but has been raised, nurtured, trained in Marxist revolutionary tactics all his life. He learned and instructed others in how to blackmail society for the benefit of the black proletariat; how to use our system of fairness to exploit windfall benefits for his cronies by milking the affirmative action concept.

Never before in history has perceived guilt been used to take over a nation. If you let it happen, you’ll become a footnote in history. You’ll be compared to the 6 million Jews who went meekly into gas chambers, because they could not believe that it could happen in the civilized 20th Century. Well it is happening to you in the civilized 21st Century.

Oct.8 2008

WALKING AROUND MONEY

If you never herd the expression let me expand your horizons. In politics the term has always been used to describe a bribe given by a party hack to a voter. Originally it started with to cash given to people who "walk around" and help get out the vote for a candidate or party. It is vote buying corruption euphemized as "get-out-the-vote money" or "walking-around money."

It is quite a complex and large operation. Money is doled out to "grassroots" groups many of which are temporarily created just to extort cash from candidates. Still more dollars, usually untraceable hard cash, are passed around to small armies of workers -- the people waving signs on street corners or leafleting churches. Nothing illegal in this operation. But what happens to the money once it is given to neighborhood African-American pastors is another story. So is the dispersion of hundreds of thousands of dollars in small bills ostensibly paid to workers but which have other destinations.

I'm sure you all are familiar with allegations of voter and registration fraud associated with ACORN throughout the nation. You may have also noted that the Obama campaign announced that they are concentrating their campaign expenditures on a getting the vote out campaigns rather than advertising and in that connection they gave large sums of money to ACORN.

Let us look at what is happening in Ohio. Ohio now has a law that allows early voting, and that the vote may be cast on the same day the voter registers. Ohio law already allowed for voters to vote early by absentee ballots without having to give any reasons why, so the whole reason Democrats pushed for this law was simply to allow people to vote the same day they register.

Why is this important? Well, once a vote is cast, it can't be taken back. The whole reason there is a deadline to register in the first place to allow time for registrations to be checked for accuracy. So now it's easier for convicted felons, fake people, and dead people to register and have their votes counted. ACORN not only enacts as an enabler to exploit this new loophole in the law, but also is actually expediting voting malpractice.

Thousands of homeless people in Ohio have been paid cash “walking around money” to get on busses to go register and vote. They are instructed by the bus drivers to vote for Obama, and as they come back to the bus, they get the other half of their money. The bus drivers are ACORN volunteers. Incidentally, much ACORN walking around money is spent at the nearest liquor store. The best part is that you can do this all day as the bus drives you from precinct to precinct.

No wonder Obama and his Democrat friends support ACORN financially! They are literally buying votes.
WHERE IS THE OUTRAGE?

Oct.9 2008

THEY SOW THE WIND AND REAP THE WHIRLWIND.

The Bible uses these words to describe the concept of unintended consequences. Most Americans and the media are astonished by the speed by which this economic crisis mushroomed to become a world wide calamity. Let me reprint for you my earlier news letter in which I predicted what was to come.
The Democrats, George Soros and the leftist media spent years undermining our economy by never reporting anything that was good, but always concentrating on bad news and lying about economic conditions. The goal was simple. Destroy the Bush “illegitimate” presidency. They did not read their Bible. Sowing the wind brought the whirlwind.

“The lack of education in financial matters causes far more serious consequences than the lack of general education that was forced upon our people by cynical politicians working hand in hand with an inept educational system. If 30% of our population is effectively illiterate they can still get a job at a living wage, but illiteracy in elementary financial matters created the present credit crunch and will force the federal government to not-so-reluctantly enlarge its powers to save millions of homeowners from being evicted from their homes they were tricked into buying by a cabal of builders and money lenders in connivance with politicians.
These sentences are too long to describe the recent fake real estate boom that is now coming to haunt us. Unfortunately the worst is yet to come.
We had a fake technological boom in the 90s resulting in massive losses to investors and the public.
Twenty years ago we had a credit crunch that wiped out the real estate industry, the S&L industry and caused a loss of over $1,600 Billion. It took us over 10 years to recover from that one. The Government and politicians created the credit crunch of the 1980s. The result and goal was to socialize the losses and privatize the profits. Billions were lost by the public and enormous profits were made by insiders and their paid for politicians while they piously blamed a handful of S&L owners for the financial catastrophe politicians had created.
A previous credit crunch created by the federal Government resulted in the Great Depression. It took over 10 years and a World War to recover from that one.

This brings us to the present crisis. Politicians are now faced with a more complex problem. They and their insiders cannot profit from stealing foreclosed homes from millions of misguided borrowers, because those people may vote them out of office. Politicians must find a way to save their buddies who ripped off the public with pie-in-the sky loans, balloon mortgages, ARMs, sub prime lending and other creative financial instruments designed to dupe the financially ignorant.

In California anyone with any common sense should have known that sooner or later that houses had to stop being sold for ever larger amounts. The whole price structure became ridiculous. Eventually it has become difficult to pay millions for houses worth only thousands.
Echoes of the tulip mania and collapse. The term is still used metaphorically to refer to any large economic bubble. The term originally came from the period in the 17th century of the Netherlands during which demand for tulip bulbs reached such a peak that enormous prices were charged for a single bulb.

I predict that our nanny government will now step in and save the poor borrowers by refinancing those Mickey Mouse loans with new government backed FHA loans that will allow 60-100 year amortization schedules so that the minimum payments they were tricked into making could be continued forever. A neat trick! Everybody happy! The homebuilders, the money manipulators, the hedge funds, Wall Street and of course the illiterati. The wolf at the door has been tricked. We moved the door. Unfortunately there will be unintended consequences. The World will not just stand by and watch idly how we destroy the value of the dollar. They’ll stop protecting it and flee to hide behind their own doors to fend off the wolf."

Oct.9 2008

THE ELEPHANT IN THE ROOM 2.
NARCOTICS

I started writing this a few weeks ago, but the subject was so large that I had difficulty putting it in a small, comprehensive message. Narco-economics is the accepted name for this and it has started over 150 years ago with the Opium Wars in China. The British smuggled opium into China in such large quantities that finally the Chinese had to fight two wars in an attempt to stop the poisoning of their nation.
The United States and most of the Western world is inundated with the current form of opium destroying our will to resists it and demoralizing law enforcement and polluting politics.
AFGHANISTAN
Afghanistan has become one of the world's major narco-states and, as everyone knows, with narco-economics goes narco-politics. The trade of raw opium in Afghanistan has reached US $2.4 billion, and the trade of narco-drugs has reached up to $4 billion. Where are the drugs going? They are distributed throughout he world and are for sale in your neighborhood.
The Taliban are completely dependent on the narco-economy for their financing. They levy a 40% tax on opium cultivation and trafficking. They have harvested the opium into weapons. The opiate trade and terrorism activity currently overlap to such an extent that law-enforcement and military actions fall under counter-narcotics and counter-terrorism simultaneously.
The economic implications of opium eradication are huge for Afghanistan, but if the country can be secured, then violent terrorist/insurgency activities funded by illicit narcotics must be stopped because drug traffickers provide money, vehicles and subsistence to Taliban units in return for protection.
The current consensus is that a decades-long project is required to turn farmers away from opium. The war in Afghanistan cannot be pursued or won without solving this problem.
MEXICO
Mexico is fast sinking into the narco-terror that gripped Colombia in the 1980s and the early 1990s. Mexico's cartels have raised the scale of the bloodletting by introducing such weapons as grenades, AK-47 assault rifles and bazookas, as well as ghastly methods like mass beheadings. Heavily armed cartel enforcers routinely cross the border to escort massive shipments and it is government policy to wink at the problem.
Several local Mexican police chiefs, who, according to U.S. officials, have recently shown up at U.S. border checkpoints requesting political asylum in the U.S.
Mexico "is at war," and the stakes are the fundamental principles of justice that supposedly govern Mexican society.
The flow of drugs to feed demands to the eager U.S. market has not diminished in spite of the “War on Drugs”, a corrupted, ineffective and feeble effort conducted by a political system influenced by the flow of dirty cash to politicians from the cartels.
The drug war was a dismal failure primarily in its dealings with the poor. The large number of arrests and the overcrowding of jails did nothing to stop people from doing or selling drugs, because criminals did very little time, and there was no effort made to rehabilitate those convicted of drug related crimes. If the government had actually sought to reduce demand, as it said it would, perhaps it would have achieved more success with factually correct education. The war on drugs would have been much cheaper, and might have done something to combat the problem of heavy drug addiction amongst the poor instead of putting a glut of poor drug users and dealers behind bars.
GUATEMALA AND THE CARIBBEAN NATIONS.
U.S. turns blind eye to Guatemala's narco-military regime and ignores narcotics trafficking originating in the Caribbean area.

Ignoring the impact of drugs on our nation and ignoring the flow of money to drug cartels throughout the world sap our national will. Have you heard any of the candidates discuss it, other than to point out that Obama was a drug user and even dealer throughout his early years?

Oct.10 2008

SOS! SOS! HELP! HELP!

“I may not know the way out, but I know lots of ways not to go.”

This has been my motto for many years on the cancer forums that I participate in and in this spirit I am writing this first installment of my thoughts on the financial crisis.

In the last few days I received several calls from readers of my newsletter asking for advice how to survive these troubled times. They know I have the credentials of a professional survivor, since I have survived numerous disasters in my life time, including run away inflation, economic panic, political oppression, and unimaginable persecution as described in my memoirs. Based on the many former newsletters some believe I may have some kind of a bird’s eye view of the situation.

If you want my non-professional opinion I am willing to share some of my thoughts. Those of you who heard me predict a stock market crash to DJ 7200-7500 when the market was over 11,000 I must amend that prediction. I did not realize at the time that the sinister forces that started this avalanche for political reasons failed to understand unintended consequences of their action. Now my outlook is considerably worse.

First one item of good news. The election of the McCain/Palin ticket could create an immediate upsurge of confidence in the markets throughout the world and slow down the decline we are just commencing.

For more than a year I have been attempting to sell “survivor ranches” with little success. Somehow I could not get the message across to people busily investing in pieces of paper

issued for the benefit of others that the time is rapidly approaching when the issue of survival may be of utmost priority.

Here is what I see today:

The concept of cheap credit, which was the lifeblood of our economy, is gone and will not return for a long time. Many businesses based on credit sales will disappear and so will the jobs horizontally and vertically connected to them.

This includes the housing market, which triggered the crisis. Falling prices will drive homeowners to abandon their valueless homes and the dumping of foreclosed homes on the market will create a tailspin, a proverbial whirlpool sucking in real estate values. Real estate and sales tax losses by local governments will cripple services.

Credit card losses will compel banks to refuse credit cards for all but the most affluent customers.

Automobile and large appliance industries will crater leading to major unemployment and civil unrest.

Problems of the financial system will be so large that no government action could remedy them. Just compare the $700 billion rescue attempt with the $ 2.5 trillion in ARM mortgages due the next year and the $20.4 trillion in private-sector consumer and corporate debt, plus $2.7 trillion in municipal securities outstanding and you have some idea of the problems we face.

Realize that the $250,000 limit on government insured deposits means nothing since there are $7 trillion on deposit in banks of which the FDIC, which has only $45 billion in its insurance fund, insures $5.7 trillion.

A bank panic run on too many banks could easily crash the whole system! What if the government just prints more money to cover the insured debts? Hyperinflation, which I experienced. It was in another world, in another country. It was a nightmare. Just imagine that eating in a restaurant where the menu was written on a black board and prices were going up while I was having lunch

The greed and euphoria of Wall Street has been replaced by fear mushrooming into panic.

As I wrote a few weeks ago, credit is based on the word credo. When belief and trust is replaced by suspicion and despair, the worst is ahead of us.

My advice: Prepare for the unimaginable worst and hope you are wrong.

Survival tips and positive moves next.

Jan 16 2009

THE END OF THE GOLDEN RULE

The ethic of reciprocity is a fundamental moral value. It is an ethical code that states one has a right to receive just treatment, and has a responsibility to ensure justice for others. Reciprocity is the most essential basis for the modern concept of human rights and it is a fundamental concept of all religions.

A key element of the golden rule is that a person attempting to live by this rule treats all people, not just members of his or her in-group, with consideration. Of all the world’s religions, only Islam restricts the golden rule to Muslims only.

Obviously, even a casual observer of our world realizes that this moral value no longer exists in the 21st Century. It has been replaced by a more sinister and simplistic version of the concept: He, who has the gold, makes the rules.

The last presidential elections clearly demonstrated that money can buy elections and there is an invisible line separating corruption from influencing elected officials, judges and enforcers of the law as evidenced by the global illicit drug trade.

A more sinister and dangerous world has emerged because of the power of money. Countries, that consider us their enemy, are now wealthy beyond their dreams and find themselves in a position of power that can have a devastating impact on our survival.

Consider this sober fact: OPEC has accumulated over $1.5 trillion dollars in net profits last year. Secret sovereign wealth funds, those vast pools of government-controlled cash in oil-rich countries, held close to $4 trillion before the collapse of the credit market. Currently they still hold almost #3 trillion in available funds.

Insider political leaders worldwide are very concerned over the growing power of sovereign wealth funds. The fear is that they could buy up critical assets and demand decision-making powers running businesses.

Before the market collapse of 2008 the entire worth of the Fortune 500 companies was less than $18 trillion. Just imagine how much of that could be acquired by OPEC, or the sovereign wealth funds, if the stock market further declines. Such declines can be manipulated by the influx of large cash funds. It is quite apparent that forces attempting to create a setback of our economy to help elect Obama manipulated the economic collapse in the fall of 2008.

If you need to consider an example of what could happen, just remember Hitler and his National Socialist Empire building attempt. If Hitler had a similar wealth of funds during the Great Depression, he could have bought control of significant US industries by buying US stocks at a fraction of their value. World War 2 would have never started if German investors had controlled the steel industry or automobile industry.

Can you imagine a similar scenario where China using its enormous US dollar surplus would acquire GM, Ford, or some of our airplane industry?

And here comes the irony of it all! A scenario developing where a reversal of our current shrinking economy would bring higher oil prices and thus enable our enemies to use our own gold to make the rules in the 21st Century. To put it simply: If we succeed it may lead to our demise at the hand of rich enemies. If we continue to fail, we may destroy our enemies, because they cant’ take a recession or depression as well as we could. We now have a new golden rule. We won’t do anything to them that we don’t do to ourselves.
“Sirva vigad a Magyar.” Hungarians cry even while they are laughing. Even ex-Hungarians. That should explain this article.
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Jan. 17 2009

THE UNLIKELY TWINS

Part 1.

by Tibby Weston



Do you remember the movie in which Arnold Schwarzenegger and Danny Devito were unlikely twin brothers? If you accepted that premise than it should not be too hard to accept the idea that we are facing the unlikely twins of Depression and Inflation. You may remember the “stagflation” of the Carter years, but it does not compare with the coming “Deplation”.

The Great Depression was caused by the refusal of the Federal Reserve to provide more liquidity to the banks causing a sharp drop in the money supply. So the dollar was king because banks could not lend money and the economy stalled. Mr. Bernanke learned this lesson well. The Federal Reserve has dumped money on the banks in unprecedented amounts hoping that new borrowing will jump-start the economy. Banks are lending money to qualified borrowers, but the old “liars loans” are gone and banks are back looking at the basic 3 Cs of prudent lending: Collateral, Credit, Character. Offsetting this healthy lending are the companies and individuals going into bankruptcy creating an overall negative credit formation, which is natural when consumer and investor confidence is diminishing in a recession.

I learned decades ago that the success of the American economy was based on the bank’s ability to turn every dollar deposited in a savings account into $10 in loans to borrowers. My friendly banker in effect was creating new money out of thin air at the rate of 10:1. In prosperous years this ratio is based on the anticipation of successful repayment of the loans. In difficult times the bank no longer dares to use the 10:1 ratio. Today most banks restrict the money creation to 3:1 in fear of the ability of any borrower to be able to perform in a recession and in anticipation of the new socialist policies of the incoming administration.

By reducing lending to the 3:1 ratio, the banks prudently are protecting their stockholders and the intent of the Federal Reserve is thus stymied.

The fear by the banks, the public and investors is justified. The “bailout” hysteria will not only prolong the recession but also inevitably turn it into a depression. Money will be used to save obsolete industries, unions, and political cronies as socialist governments have been doing throughout Europe.

For those of you really interested in economic theory, which explains what to expect, I recommend that you read the story of Joseph Shumpeter’s description of the process of “Creative Destruction”, which is the essential fact about capitalism. Creative destruction occurs when something new kills something older. An example of this is the personal computer. Here is a personal example of the impact of Creative Destruction.

I was fortunate to be briefed on the capacity of the IBM 360 mainframe computer in the 1970s while attending a seminar at the IBM campus in San Jose. I was so impressed by the potential benefits mass usage of computers would create, that I decided to build a major office building where each tenant would be connected to a central mainframe computer operated by the building. I believed that giving access to the computer would revolutionize business.
I was right, but while I planned to provide it through access to mainframe big computers, three unknown fellows named Gates, Jobs and Grove had a better idea. They created the small personal computer and thus destroyed many mainframe computer companies. Would the government step in with a bailout program to prolong the life of an obsolete industry, or save my highrise office building? Luckily we were double crossed by our Arab partners and the building was never built.

I believe that if the auto industry were not bailed out, a new superior vehicle concept would be developed by a Schumperian innovator, in a replica of what happened in the computer industry. Such an innovator shows that a product can be can be more efficient and profitable. While it may create an entire new prosperous segment of the economy, it would destroy those people and organizations whose technologies or MO are obsolete and unprofitable.

A socialist government trying to protect the inefficient and the outmoded will spend unlimited funds to protect their political base. They will create make believe job programs, enlarge government payrolls and thus dependency and remove the incentive of the innovator by punishing success though taxation.

We are now entering an economic period where the slogan:” There is no free lunch” no longer applies. It is going to be free lunch handed out by a socialist government and paid for by our children and generations to come unless a cataclysmic collapse of the world's financial system levels the playing field.

##

Jan 21 2009

Ripples of Bernie Madoff

Even the simplest acts have consequences that spread across society the way waves spread across a pond when you drop a stone in it. If you drop a stone of Bernie Madoff’s size the waves go far until they hit the shore then continue in reverse. I never met Bernie Madoff but had an opportunity to meet his predecessor in Houston. He was George Traylor, the president of LET INVESTMENT CCORPORATION and he ran a successful Ponzi scam until it collapsed and many people lost their savings, including my late mother in law. George Traylor died in prison and we received about 10c on the dollar and considered ourselves lucky.
Traylor had a legitimate concept well known in banking circles for many decades. Banks paid a higher interest rate on “jumbo” deposits of $100,000.Mr. Traylor collected money from people who did not have $100,000 and combined them into large deposits to obtain a higher interest rate. . It all started as a legitimate idea, just as Ponzi’s postage stamp concept.
Sometime down the line Mr. Traylor decided that he could invest the money at a higher rate than the bank jumbo rates and started speculating with the investors money. The rest is history. Bad investments, personal needs for money, etc. and suddenly he was paying interest out of new investor’s money.
The reason I am bringing this to your attention because Bernie Madoff had a minimum $4,000, 000 entry limit. Many people did not have that much and they became prey to numerous George Traylors throughout the country. These people packaged smaller deposits into the required $4,000,000 and invested it with Bernie Madoff. These waves are slowly being heard of because the investors are smaller but the pain is larger.
In addition to these packagers another type worked with uncle Bernie. These were smart-alecky Wall Street types who bragged that they could beat normal market returns by their investment genius. All they did was to invest with Bernie but sometimes withheld that information from their customers. The investors did not care because they were getting high returns and the geniuses made a fortune in fees and by keeping some of the return for themselves. Speaking of waves - yacht sales have collapsed in the New York area.
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Jan 22 2009
THE END GAME HAS BEGUN


A friend of mine is very angry. He called me upset and here is what he had to say:


“Most people don’t know that Fannie Mae and Freddie Mac were established by Democrats, for Democrats and it was operated by Democrats. It was affirmative action in its highest and ugliest form. It was also the forerunner of how government will now operate under President Obama with a Democrat congressional majority.

We will move under an Obama Administration from food stamp backed mortgages to a society where direct transfer of money from whites to blacks will be done in the open. Black liberation policy will be the policy of the government. Blacks will receive reparations for the suffering of their ancestors. No refunds to whites, however, for the billions spent on welfare, prisons, the war on poverty and drugs.

The black poor will receive direct income tax refunds although they never paid any taxes.

Political correctness will be national policy and those who disagree will be brutally oppressed with all the powers of the government. No more talk radio.

Confiscation of all gold and silver coins and guns will be accomplished at the point of bayonets held by Black Muslim brigades of the new military. History will be further rewritten and MLK would be quoted: “I have a dream that one day this will be a nation where you will be rich because the color of your skin. “ Schools will turn out well rounded little communists who would spy on their elders and report them to the police if they do not follow the party line.

What do you have to say to this?”


I just laughed. He asked me what is so funny. So I told him that it would be ironic to watch Obama, a descendant of Arab slave traders and white slave owners, propose sanctimoniously and expedite ruthlessly the confiscation of wealth from those who earned it, to those who are entitled to it because of the color of their skin.


He was offended. How could I be laughing when the country is in such a desperate trouble?


So I told him.


I am tired of warning for years of what is to come. I am tired to see my call for action fall on deaf ears. Mostly I am tired of déjà vu all over again.” I tried to do the same thing more than 68 years ago and my warnings fell on deaf ears. Those I warned all died a horrible death after unbelievable suffering. They in effect committed suicide, by inaction. It is very hard to be on the suicide watch again.

Jan 24 2009

BACK TO BANKING 101.


I was deeply involved in trying to solve the S&L crisis in the 1980s and acquired unique knowledge how the banking system works and I may be able to comprehend some of the complex issues involved. We are in imminent danger and time is of the essence. The word has to be spread to prevent a calamity that could be more disastrous than the Great Depression of the 1930s.

Here are some of the issues we are facing and the dangers that illogical political decisions may create. Over the past few decades, the United States has changed from a nation of producers to one of consumers. Politicians should be encouraging the nation to return to productivity, but they are instead advocating consumerism. We just experienced an economic collapse created by a cheap credit bubble and politicians are out there encouraging the same practices.

Fortunately, or unfortunately for politicians, the American people are smart and they refuse to borrow. The illusion that capital gains created by equity in a home or securities could be a substitute for savings has dawned on many Americans who saw their retirement nest egg disappear. Most normal and logical people have reduced expenditures and are attempting to save as much as they can. By shutting down expenditures they consequentially are shutting down the economy because more than 75% of gross domestic product (GDP) is generated by consumer spending and not by production.

In the past whenever a recession impaired consumer spending, the government pumped hundreds of billion dollars into the economy. This led to liquidity driven bubbles like the technology bubble and the housing bubble. Wall Street greed utilized these bubbles to gain obscene profits becoming robber baron capitalists without regard to the national interest.

When bubbles collapse capitalism pays for it with short term, healthy pain and the economy revives. Politicians, however, will not allow the corrective mechanism of capitalism to operate. They are trying to take the pain out of the cycle, leaving only the pleasure of the bubble. This is impossible and leads to remedies far worse than the disease. They seem to hear constituents clamoring for another bubble.

How did the government try to alleviate the pain? Not the pain of Main Street, but the pain of Wall Street. They lent billions of taxpayer dollars to Wall Street and the mortgage industry, to the very people who made obscene private profits from the irresponsible lending and borrowing. Regretfully it was President Bush who abandoned free market and capitalist principles and started us on the way to socialism. Can we expect better from an Obama administration?

Where did the government get the money to lend to finance the bubbles? The US has imported a trillion dollars a year of capital to finance the housing bubble and the credit bubble. Now the Treasury has to sell more than $2 trillion in bonds to save the banks from collapse. An indication of the reduced trust in the US economy is the sudden rise in long term bond rates in the last week to attract foreign investors. Investors from around the world always bought Treasury bonds as a safe haven. If the Treasuries lose their safe heaven status, the entire financial structure of the US could collapse not only by demand for Treasuries disappearing, but by holders of massive amounts of our debt obligations liquidating their holdings. (Ask yourself another question: What would they do at the first sign of a collapsing dollar due to inflation?)

It is a widely held assumption that the banking industry is insolvent. The basic reason is the accounting ability of a bank to carry assets on the books at the purchase price and not at the current value of the asset. In fact they are lying about the solvency of the bank. This is the solution to the banking crisis – lie about the true state of the bank’s balance sheet. In the S&L crisis of the 1980s the opposite of this mechanism was used to destroy the industry by forcing the Texas S&Ls to use mark-to market accounting.

Obviously if a bank is insolvent and if the Obama Administration nationalizes major banks, the balance sheet of the Treasury will not be better than the banks they acquired and this may further destroy the credit of the United States.

The snapshot of the moment is not encouraging: Declining consumption, declining trust in the US Treasury, increasing socialist policies of the government advocating consumerism vs. restarting productivity and possible nationalization of banks.

The only “good” sign is that Paul Volcker may have the ear of the President. Volcker solved the collapse of 1981 by lying about the solvency of the banks and giving them cheap funding to create a positive cash return. Banks no longer had to wait for the little old lady bringing in her savings. Uncle Sam provided the money cheaper. If he prevails and the banks are not nationalized, the odds of our economic survival will be better.
##

Jan 29 2009

PRIVATE MORTGAGES - A SAFE INVESTMENT FOR TODAY.

Almost 50 years ago I pioneered estate planning in Houston, when the concept was almost unheard of and neither lawyers nor accountants knew much about the subject. It was so difficult to make a living doing estate and tax planning that I had to quit after a few years and got into a more lucrative field: real estate. Through the years I kept up with new developments in estate planning and today I still find incompetence and lack of imagination in the field. Most financial planners are pushing products, or charge fees with not enough regard to the consequences of their recommendations. The current collapse of many financial plans should bring back some more unbiased planning.

Many of you are looking for a safe heaven for your funds realizing that we are faced with a dual danger of deflation followed by inflation. Some of you decided that the return of your money is far more important than the return on your money. While looking at gold, platinum, zero yielding treasury bonds perhaps you are overlooking an investment potential much closer, verily under your nose.

This proposal applies only to limited number of situations and reading further will be academic for most of you except those who have funds they are trying to protect against the vagaries of deflation and inflation. Let me give you four hypothetical situations:

If you have elderly parents living in an expensive home with a mortgage balance. If you pay off the loan and replace it with a mortgage at 6% interest, with interest accruing you would accomplish many objectives.

Your parents would not have to make any more mortgage payments.
You would earn 6% on your investment accruing and taxable according to your method of accounting.
At the time of your parent’s death, you would receive the house if the mortgage and the accrued interest were not paid.

If the house is paid for and no mortgage balance exists, you may lend them 50% of the value of the house at 6% interest, with the interest accruing with the following results:
They would receive the cash to pay for living expenses, or investment.
You would earn 6% on your investment accruing and taxable according to your method of accounting.
At the time of your parent’s death, you would receive the house if the mortgage and the accrued interest were not paid some other heirs.
Instead of making a lump sum payment you may pay them a monthly income for the rest of their lives based on the annuity value of 50% value of the house. Each payment would be added to the mortgage gradually increasing the balance owed on the house. The advantages are same as in B. above.
It does not have to be your parent’s house. It can be any house whose owners are interested in this concept, which is in many aspects identical to the Reverse Mortgage concept. The only change would be that in the event of the mortgagee’s death, some of the heirs might step in and pay off the mortgage and the accrued interest.

Plan A. can be modified if needed by adding the income feature from Plan C. especially to enable your parents to pay real estate taxes.


I believe this a safe and timely method to protect your funds. The mortgagee will never walk out and have the house foreclosed. By limiting your investment to 50%-60% of the value of the house you should be safe even in a depreciating housing market. If it involves your parents, your percentages could be adjusted to a reasonably safe level.

For those who have questions do not hesitate to ask them.
©T.W.Weston



HECM REVERSE MORTGAGES

Reverse mortgages have been available for more than two decades for older homeowners who have accrued a significant amount of equity in their homes. Now, the government is backing a program to help older homeowners purchase a new home with the increasingly popular financing program.

A reverse mortgage historically has enabled senior homeowners to convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgages are available to individuals 62 or older who own their home. Funds obtained from the reverse mortgage are tax-free.

In this new version a homeowner may purchase a new home and immediately receive a Reverse Mortgage. For example, if a 70-year-old homebuyer wanted to purchase a $300,000 home, he or she could put approximately $123,000 down and finance the balance of $177,000, plus closing costs, with a reverse mortgage. The buyer would make no monthly payments for as long as he or she maintained the home as a principal residence.

Interest and MIP (Mortgage Insurance Premium) accrue on the initial loan amount and become due when the borrower, or surviving spouse, dies, moves or sells the home. The current annual percentage (APR) for the monthly-adjusted HECM 200 is 3.62 percent (including the government's 0.5 percent annual mortgage insurance).

Eligible properties include:

* 1- to 4-unit single-family homes
* Manufactured homes, built after June 15, 1976, that meet HUD's permanent foundation guidelines
* Condominiums

One of the choices for seniors is to sell their present home and use part of the proceeds to buy a new home with a Reverse Mortgage that requires no monthly payments.
The only challenge seniors now face in this slow market is finding a willing buyer to purchase their present home so they can "move down" via a reverse mortgage. After all, you have to sell your primary residence before you can buy another one.


2/1/2009

MEMORIES OF A TRIP TO HUNGARY.

In 1993 I was in Hungary and observed the aftermath of Hungary throwing out the communists. The country was in chaos. Former communist leaders were using their political connections to buy government assets at low prices. In the new free enterprise world they were getting rich by the privatization of formerly nationalized assets. They could not be criticized because they were using the new freedom to become rich. Their argument was that if the purpose of economic freedom is to become rich, how could anyone criticize them for doing so? It seems politicians always make out regardless of the political system.
The rest of the country was still in chaos, but I learned a very important lesson from the people of Hungary. This was a lesson worth to remember for the future. I never suspected that I would have to repeat this in my lifetime, but 2009 is the time and the US is the place for this lesson to be learned.

HE WHO STRAIGHTENS OUT CHAOS IS STUPID. HE WHO TAKES ADVANTAGE OF CHAOS IS SMART.

No doubt that we are heading into more chaos, and with a diletant administration blinded by political dogma, it is the consensus of most economists and logical people that chaos is almost unstoppable. Regardless how bad it gets, regardless how traumatic our life will become, we should follow the most important rules I have learned in my years of acquiring survival skills. Although I have been writing and saying these for years, you may not have heard it enough times.

SURVIVAL RULE #1.
SURVIVAL IS NOT FOR THE FITTEST. IT IS FOR THE ONES WHO CAN ADAPT TO CIRCUMSTANCES, AS WATER ADAPTS TO THE GLASS CONTAINER IT IS POURED INTO.

SURVIVAL RULE #2.
SURVIVAL IS A JOINT EFFORT. ENLIST FAMILY, FRIENDS, NEIGHBORS AND SHARE THEIR SKILLS, INSTINCTS AND WILLPOWER.

SURVIVAL RULE #3.
SWIMMING AGAINST THE STREAM WILL EXHAUST YOU – FLOAT UNTIL YOU SEE WHAT YOU WANT TO REACH – THAT IS THE TIME TO STROKE HARD.

SURVIVAL RULE #4.
IT IS NOT THE PREVAILING WIND THAT DETERMINES WHERE YOUR SHIP IS GOING BUT THE WAY YOU SET YOUR SAILS.

SURVIVAL RULE #5.
ALWAYS GET A SECOND OPINION. HE WHO HAS ALL THE ANSWERS DID NOT HAVE ALL THE QUESTIONS.

The above rules were first published by me more then 20 years ago in a little booklet subtitled: “Short sentences based on long experience.” Since then I added 20 more years’ of experience.

2/4/09

A SLEEPLESS NIGHT.

A friend of mine complained she could not sleep all night. She woke up 6 times-she claimed. How could she wake up 6 times if she did not sleep? I cannot make the same claim but I had a bad night too. I just had bad dreams. It must have been the news and the columnists and talk radio. I vaguely remember some of those dreams.

Obama made a deal with the Taliban. They can have Afghanistan back if they fight Al Qaeda for us. The Taliban agrees and promises to continue the export of opium to the US market. Allah Akhbar. It’s a deal.

Obama made a deal with Iran. We sign a mutual non-aggression and defense agreement. Iran promises to leave Israel alone and not to use a nuclear weapon and we will protect them against any attack. Allah Akhbar. It’s a deal.

Obama made a deal with Putin. We dismantle our missile defense in Europe since Iran promised not to use a nuclear weapon and Putin agrees not to take over any formerly Soviet occupied country. Charashow tovarich! It’s a deal.

Obama made a deal with the Saudis. Muslim public schools will be allowed to operate in the US and sharia law will be used in neighborhoods where a majority of the people is Muslim. The Saudis promised not to raise the price of oil more than 5% a year. Allah Akhbar. It’s a deal.

Obama made a deal with Al Gore. Gore will have exclusive rights to sell carbon credits in case of global warming and carbon debits in case of global cooling. Gore agrees to issue 24 hour warning in case the ocean levels rise high enough to inundate Washington DC. It’s a deal.

Obama made a deal with Nancy Pelosi. At his impeachment trial he won’t blame Pelosi for failing to secure the US against terror attacks, border wars, hunger riots, hyperinflation, but promises to implicate Biden so that Pelosi can become president. Pelosi promises to pardon Obama and allow him to keep his loot, but not the White House chinaware. It’s a deal.

It wasn’t the beer. I think it was the salad dressing. It did not quite taste right.
..

2/5/09
SURVIVAL CONDITIONING
By Tibby Weston

1. Psycho-Cybernetics and survival.

Forty years ago a book by a Dr. Maxwell Maltz made lasting impression on the American public. Many well known people (Tony Robbins, Zig Ziglar) made a lifelong career using the ideas of psycho-cybernetics and a few weeks ago I heard about a new Survivor’s Club, where people share their experiences as survivors. The airline crash in the Hudson River created renewed public interest du jour in the subject of survival, but I expect the interest will die down by the next American Idol event.

For those of you who are interested in survival not as a slogan for a few days, but as a preparation for the chaos and calamity we may be facing, here is a very important lesson that may save your life and the life of your loved ones.

Remember the images of people near the World Trade Center buildings on 9/11 with their faces covered with soot and gasping for breath? Many of them had developed severe lung problems from breathing toxic fumes and inhaling dust particles. These people were not prepared, but you will be after reading this article.

Psycho-cybernetics is a simple but very effective concept. In simple terms it suggests that if you imagine something that could be happening and you imagine how you would react, your subconscious will remember your imagined reaction and when the time comes it will automatically react in the way you have imagined. It is a life instinct that is built into every human being. It may be called Creative Mechanism or Automatic Survival Mechanism, but you won’t have to look for an answer while in panic or under stress or shock. You subconscious will make you act the way you imagined.

Say you get on an airplane and get in your seat. On your way to your seat you count how many rows you are from the nearest exit and imagine how you would have to act to get to the exit in an emergency. That’s all there is to it. If the emergency really arises your subconscious will direct you and take you to the exit. You may not even remember how you got there and how you found your way, because it was not your conscious decision but you Automatic Survival Mechanism that did it.

Should an explosion or terror attack create heavily polluted air you would survive if you had imagined that in such event you would use a handkerchief or bandana, or a torn shirtsleeve to create a facemask that you had moistened by some means. I always carry a handkerchief. It’s a small inexpensive precaution.

If and when times get scary, carry a bandana and a safety pin. Wash and dry the bandana to remove any starch or dust. Put the dry bandana in a zip lock baggie and carry it with you. A small hand wash size bottle of water will moisten the bandana and could save your lungs.

A wet bandana, or handkerchief will cover the nose, mouth and neck, providing good protection from dust and debris and filtering out most toxic fumes...very simple and cheap insurance. It's worked for cowboys caught on the open range in dust storms, and it still works today. Cowboys used “bandana pins”.

So don’t live your life in oblivion. Observe the world around you and prepare to react to it. Next time I will discuss mental awareness levels in a dangerous world.

BTW Just by having read this you have imagined how you would react during a similar terror attack. You subconscious is now aware of what to do.

2/8/09

I belong to a Breakfast Club which just had its 5,246th meeting last week. For the past 35 years we made predictions in January about the conditions of our world on December 31 of the current year. We ask 27 questions and we have an annual winner with the highest percentage of correct answers and we also have a consensus of the group.
In good, predictable years both the winning percentage and the consensus are quite high. In difficult years the results reflect the uncertainty of the times. The 2008 winners had a 52% accuracy which compared to 26% in 1988 is quite good.
2009 may prove to be as difficult to predict as 1988, which was during the collapse of the S&L, real estate and oil industries.
I am attaching our current year’s questionnaire. Much of it localized and pertains to Houston and Texas only. Answers are due back before February 15. If you want to think forward and become our guest predictor, please return the completed questionnaire either by E-mail or by fax to 979-249-5469. Next January you may be considered a visionary and prophet of our times.





2/13/09

URVIVAL CONDITIONING
By Tibby Weston

3. Medications during chaos.

A serious interruption of commerce would deprive millions of people of life saving medications. Under the Medicare system and most insurance plans, prescription drugs are only provided for 30 days and massive mortality could be expected in the elderly population and among the millions of ill and disabled if pharmacies cease to function.

Most drugs have an expiration date suggested by the manufacturer, but continuous testing by the FDA has proved that drugs remain effective far beyond such expiration dates.
There are virtually no reports of toxicity from degradation of outdated drugs. How much of their potency they retain varies with the drug and the storage conditions, especially humidity, but many drugs stored under reasonable conditions retain 90% of their potency for at least 5 years after the expiration date on the label, and sometimes much longer.

All this suggests that it would be a wise and prudent investment to purchase and store critical drugs. In order to do so you would have to obtain a prescription from you doctor for a one-year supply of the drugs. You would then have to negotiate a discounted purchase price with a pharmacy. Most likely you could get better results with independent pharmacies then with large chains, because such chains operate by manuals and rules set by the home office allowing little room for judgment calls by local employees. Shopping big discount houses, on line pharmacies may get you good prices. Just make sure that the drugs you receive are newly manufactured as close to the beginning of the two-year expiration date as possible.
Storing the drugs will determine the stability and effectiveness of the drugs. They should be kept in cool, dry place. Probably the worst place in the world to store drugs is in your bathroom medicine cabinet in a wet, hot environment. It’s the worst area to maintain stability.

Storing drugs for personal use, or as an investment, requires research as to what drugs are most necessary or suitable for storage. If you plan to use the drugs by the First In First Out method then you must make certain that your pharmacy gives you unopened, original bottles whenever you fill a new prescription. Opened bottles have lower stability.

You must decide if you want to use the FIFO method of storing each new prescription and using a previously stored drug, or using the LIFO method to use new prescriptions and not the stored drugs. Special rules apply to some drugs such as insulin that must be refrigerated to remain effective.

Certain antibiotics (Cipro) have major functions in the event of biological attacks and Potassium Iodide pills are lifesavers in the event of nuclear fallout.

You should have a comprehensive first aid kit and nonprescription drugs such as aspirin and non-aspirin pain reliever, anti-diarrhea medication, antacid, syrup of ipecac, laxative, and vitamins should also be a part of a first aid kit.

I do not have enough space to give you detailed instructions in the event of a national emergency. There numerous sources and one of them is FEMA at http://www.fema.gov/library/. You may want to read some of their publications.

Are You Ready? A Guide to Citizen Preparedness [H-34]Emergency Preparedness Checklist [L-154] Provides a checklist of suggested disaster preparedness steps and activities.

Your Family Disaster Supplies Kit [L-189]Provides a checklist of emergency supplies that should be kept in the home and contained in a Disaster Supplies Kit.

Your Family Disaster Plan [L-191]Provides guidelines and instructions to help families develop a disaster plan.

Emergency Food and Water Supplies [L-120] Explains how to choose food for an emergency kit, emergency cooking, water purification, where to locate emergency water, and how to store emergency food and water supplies in the home.

May you never have to use the spare tire on your car, but not having one is foolish.

###

2/25/09

HARD TO FIND NEWS

ISRAEL
Efforts to agree on a long-term Gaza ceasefire are hung up on Israeli demands for the return of Israeli soldier Gilad Shalit. Hamas is demanding that 1,500 imprisoned Palestinian terrorists be released in exchange for Shalit, including many jailed for killing Israelis. The Israelis believe that letting that many known terrorists loose will result in dozens of dead Israelis, and are trying to convince Hamas to accept a few hundred, less lethal, terrorists in exchange for Shalit (who has been held for two years now). Hamas and Israel are deadlocked on this issue, as well as Hamas demands for free access to the outside world (and no interference with their importation of longer range rockets from Iran.) Israel has fired its peace negotiator (for the Egyptian moderated talks with Hamas) and replaced with him with an intelligence veteran from Shin Bet.

Then there's the argument over Gaza reconstruction.

Nearly a billion dollars has been raised to repair the damage in Gaza from the recent war. But the rebuilding effort has been delayed until Israel, Hamas and Fatah can work out a peace deal. There's also the problem of keeping the money away from Hamas, which is refusing to back down on its demand that Israel be destroyed and Jews driven from the region. The situation is further complicated by the fact that most of the targets were Hamas owned and operated buildings. Hamas and Fatah have been unable to work out a deal whereby Fatah could lead the reconstruction effort, and slip Hamas a portion of the donated reconstruction money. Apparently the two groups are hung up on over how to divide the loot. SNAFU all over again.

To complicate matters further, as I warned repeatedly in the past, the Obama administration has taken a series of steps that show that it plans to push the traditional US policy of pressuring Israel to make unreciprocated concessions to its Arab neighbors to an entirely new level. Whereas the Bush administration rejected the legitimacy of the Iranian-supported Hamas terror group, the Obama administration gave three signs this week that it is willing to recognize a Hamas-led Palestinian regime. First, its surrogate, Senator John Kerry, who chairs the Senate Foreign Relations Committee, visited Hamas-controlled Gaza and so effectively accepted Hamas protection. While there, he accepted a letter from Hamas to President Barack Obama and duly delivered it to the US consulate in Jerusalem.

Second, Secretary of State Hillary Clinton announced that she would participate in next month's Egyptian-sponsored conference, which aims to raise money to rebuild Hamas-controlled Gaza in the aftermath of its unprovoked missile war against Israel. This is the first time that the US has willingly participated in raising money for Gaza since Hamas seized power in June 2007.

Finally, Fatah leader Mahmoud Abbas has decided to participate in negotiations aimed at reestablishing the Hamas-Fatah unity government. Abbas claims that the US now supports such a government that would again render Fatah Hamas's junior partner. US recognition of such a government would constitute US recognition of Hamas as a legitimate actor.

Then there was Kerry's visit to Syria. Not only did Kerry indirectly praise Syria for its support for Hamas by extolling its willingness to support a Palestinian government in which Hamas plays a leading role, he called for the abandonment of the Bush administration's decision to withdraw the US ambassador from Damascus after the Syrians oversaw the assassination of former Lebanese prime minister Rafik Hariri in February 2005.

OBAMA'S WILLINGNESS to treat with Hamas and Syria is part and parcel of his apparent belief that the principal reason that the Arab and Islamic worlds are hostile towards the US is because the US supports Israel. The notion that Obama blames Israel for the Arab and Islamic hatred of the US gained credence this week when it was reported that Obama intends to appoint former US ambassador to Saudi Arabia Chas Freeman to serve as the director of the highly influential National Intelligence Council.

Freeman is known for his virulent animus towards Israel. In numerous public statements he has placed all the blame for Arab and Islamic hostility towards the US on Israel and argued that the US's conflicts with the Arabs will disappear the minute the US abandons Israel.

SNAFU all over again.

PS Would you like to live in Israel? So stop complaining how bad things are here.

2/25/09

INTELLIGENCE BRIEFINGS INVOLVING THE RUSSKIES

MOSCOW
Russian industrial production plummeted 20 percent from December to January, and the government has cut its budget another 15 percent. This includes 15 percent cuts in military spending. Procurement of new army equipment is expected to take a disproportionate share of the cuts. The already government cut its 2009 spending plans by 15 percent last December.
Last year, Russia sold a record $8.35 billion in weapons. The bad news is that sales were expected to be over $10 billion for 2008. But problems with quality control and Chinese pirating of Russian technology have caused difficulties with the two largest customers; India and China. India is buying more from the West, and Indian producers. China is simply copying Russian weapons and producing them locally. Nevertheless, Russian arms manufacturers have a backlog of over $20 billion in orders. About half this is aircraft, mostly Su-27/30 type fighters. In the last decade, foreign air forces have bought far more Russian jet fighters than the Russian air force. But many countries see the Russia stuff as a cheap alternative to the more potent, but more expensive, Western weapons.

IRAN
Iran is pressuring Russia to quit screwing around and deliver the long range (over 200 kilometers) S-300 anti-aircraft missile systems that Iran ordered and paid for several years ago. International pressure has caused Russia to delay delivery. Now Iran fears that Russia is negotiating a deal where the U.S. will withdraw its anti-missile systems from Eastern Europe, in return for Russia never sending S-300 missile systems to Iran.
Iran actually wants a wide variety of weapons (ships, tanks, artillery, aircraft) from Russia. But Iran is under UN arms sanctions, and Russian would take a major diplomatic hit if they made the sale. Then again, the current Russian economic problems (oil and other raw materials are a major export, and prices and shipments are way down because of the global recession) may force Russia to take the money and ship the weapons anyway.

CHINA
Off the Pacific coast, a Russian coast guard patrol boat pumped over 500 30mm shells into a Chinese coastal freighter that was trying to escape police custody in a nearby port. Eight of 16 sailors on the freighter died in rough seas before the coast guard could pick them up. Russia first reported the Chinese freighter as just sinking in rough weather. When the real story came out a week later, China was furious. But Russian border forces have always (as in for centuries) been quick on the trigger. Late in the Cold War, two jet airliners were shot down after they strayed into Russian air space. It's something of a tradition.

RUSSIA - REVOLT OF THE GENERALS

The Army officer corps has stalemated the massive Defense Ministry reforms. This has delayed the forced retirement of thousands of senior officers. The officer corps wants to retain the 19th century "mobilization army" system. This requires conscription of most of the male population, and maintaining those men in reserve units (which are commanded by thousands of well paid senior officers). Russian leader Vladimir Putin sees this system as unworkable. Too many young men evade the draft and the country cannot afford to equip up to a hundred reserve divisions. Moreover, Russian nuclear weapons protect the country from invasion, and what the country needs is a smaller armed forces manned by professionals. But the officer corps is having none of it, and are digging in their heels. The generals are in revolt.

TEHERAN
With some fanfare, Iran has announced the start of tests on its Russian-built Bushehr nuclear power plant -- and that the facility could be operational before the end of the year.
Iranian officials invited international correspondents to cover a visit on February 25 to the 1,000-megawatt reactor by Sergei Kiriyenko, the head of Russia's state nuclear company, Rosatom, and his Iranian counterpart Gholamreza Aqazadeh.
Kiriyenko told reporters that construction of the long-delayed Bushehr plant -- Iran's first nuclear power station -- is now complete. He said the Bushehr project is now undergoing a combination of complex procedures that he described as "the pre-commissioning stage."
"This is an important stage," Kiriyenko said. "In fact, we are beginning a series of operations connected with the launch of the station. One of the elements will take place tomorrow, which is the loading of imitation fuel into the reactor in order to check the efficiency of all systems."
Iranian official Mohsen Shirazi said the fuel-rod imitators were created by injecting "virtual" fuel -- lead without any enriched uranium material -- into Bushehr's fuel rods.
If the tests are successful, Shirazi said it will clear the way for the use of nuclear fuel rods containing enriched uranium that was supplied last year by Russia under a contract estimated to be worth about $1 billion.

3/4/09

PERSONAL SECURITY

This is a very brief summary of defensive living, similar to defensive driving. With the terrorist threat increasing we should think about the unthinkable and imagine scenarios that we may be faced with, so that when it does happen, you react in a rehearsed manner and do not panic.

The Supreme Court has held in a landmark decision in 1989 : nothing requires the State to protect the life, liberty and property of its citizens against invasion by private actors. There is no-one to protect us. We must take the responsibility for personal safety. So here are some basic rules for survival:

BE AWARE!

There are various levels of awareness starting with a complete lack of awareness, living in oblivion all the way to a sudden realization that you are under attack. While walking from the store to your car, are you totally oblivious of your surroundings? Did you check the back seat of your car before entering it? Do you look for persons lurking around the ATM machine while you get your money or are you happily chatting away on your cell phone?

The US military teaches soldiers to categorize the levels of awareness by a color code.

WHITE is the typical non defensive driver existing in an ignorant stupor talking on the phone, shaving, eating, doing make-up, etc. This is living in oblivion. Going about your business as if you were the center of the universe, when in fact you may be in an ignorant daze. Most car accident happen in this condition.

YELLOW alert but relaxed. Know where the exits are, noticing people and their behavior. Being alert to your surroundings.

ORANGE feeling an unspecified threat caused by an unexpected sound, movement, or behavior. Say you hear the sound of breaking glass, someone running, the sound of shouting. At this level your body’s fight or flee instincts start to operate affecting your pulse, breathing and heart rate. If you carry a concealed weapon, you would immediately make sure of your access to it, look for concealment opportunities, cover or exits.

RED You recognize the source of the danger directed at you, search for escape routes or weapons that you could use.

BLACK You are under deadly attack with no escape. If armed you must use your weapon. This is a non negotiable situation with your life in immediate danger.

(Incidentally the above colors can be used as code words when communicating with others to secretly advise them in a dangerous environment i.e. by phone.)

Many people live in a constant WHITE condition some people call ignorant bliss. They are also known as "victims."

Living a YELLOW existence does not make you paranoid. Just as dogs and other animals can sense your state of mind, so can criminals. Just being observant and alert will make you the Alpha leader in life situations. In this condition you can escape trouble by avoiding it. In this condition a stalking criminal who is watching you realizes that you are aware of your surroundings and he will get a sense that you are not an easy victim. Believe me you can live your entire life in this condition without any psychological harm. I have done it for more than 60 years. For decades I would only sit in restaurant facing the entry door to see who may be entering. True, some people think I am not completely sane, but my survival instincts were honed under dangerous conditions.

Unfortunately the BODY ALARM REACTIONS (BAR) you experience under ORANGE condition are NOT within your control because they are physical consequences inherited from our ancestors. By understanding them, however, you may function with them and use them to your advantage. These reactions vary from person to person. Some of us are blessed to be able to stay calm but others suffer impaired thinking, paralysis, loss of hearing or vision, and a distortion of time. The body’s natural urge to survive makes the adrenal glands create a surge in blood pressure, pulse and breathing. These are natural symptoms and are not preventable.

As I described in SURVIVAL TACTICS #3, if you can imagine future situations and imagine your reaction to them, it will be much easier to deal with such situation when they occur because you had already rehearsed your actions and you follow a known script, rather then have to improvise while impacted by BAR. It is also important to imagine you actions rather than your reactions. I also highly recommend that if you are eligible, you should obtain a Concealed Weapons Permit. Remember what Leo Durocher said: Nice ballplayers don’t win ball games.

3/8/09
#7 Financial survival - the role of tradable valuables

B. WHERE TO HIDE GOLD AND VALUABLES

After World War 2 one of my sad activities was to look for hidden gold and valuables left by the thousands who were killed in the war, or in gas chambers. I speak from experience when I describe the best hiding places and the best valuables. The main reason Jews have been so involved in the diamond trade is because diamonds are easy to hide and transport in emergencies and when fleeing terror. The value of diamonds, however, requires for a normal society to survive in which the value of diamonds remains recognized.

Gold has been the best and easiest to utilize in both normal and chaotic times. Gold gives you security, privacy and portability. Gold coins and bars should make up a major portion of your survival portfolio. Although it is heavy, yet you can carry more than $100,000 in one hand.

I used to carry gold coins in my leather belt. You may be surprised how many you can carry and it holds up your pants as a bonus. In today’s world there are other issues that you should consider. A president who hates the rich will certainly try to confiscate your gold, so lets assume you were cautious and bought your coins for cash, from a coin dealer who does not know you. By not using checks, credit cards, billing records, etc. you may have achieved the first critical criteria – privacy. The next issue is where to keep your gold and/or silver?

Bank safety deposit box.

Advantage: It is safe as long it is in your nearby bank within easy access.
Disadvantages: You can only get to it during banking hours.
You cannot get to it if the regulators have shut down your bank.
The contents of your box are not insured against robbery.
In case of gold confiscation you will not be able to open your box without permission.

2.Bury it.
One of the favored burial places in Europe was the basement, most often under the threshold of a door.
If you have to bury it outdoors make sure your activities are not observed. You may want to find a reason for an excavation. Repairing plumbing or a septic line, creating a garden, etc. are all good excuses for your activities. Once buried the gold will not be subject to loss by burglaries, theft, fire, but here are a few practical recommendations.
Use an airtight and waterproof container, especially if you have coins of numismatic value, or silver. A metal clad thermos type water bottle would resist even the invasion of the most determined insects. A PVC pipe sealed at the ends and imbedded in some sack cement looks just like a remnant of a bad construction job.
The location where you bury it should be not too easy to find by accident, or by a thief, but it should not be impossible to find after the emergency is over, or by your heirs following your instructions in your will.
Disadvantages: Metal detectors are usually functional to 4 ft a depth and if the government comes looking they will be using ground-penetrating radar.

3. Hide it in your home.

A home safe is a good idea if it is attached to the building and concealed. Other hiding places are endangered by fire and by accidental discovery or deliberate theft. You can install floor safes without the use of a contractor. The best places are under a refrigerator or furniture. Safes and hiding methods are inexpensive.

The best solution is to use more than one method. Every method has its advantages and disadvantages and risks. You are the best judge as to which method suits your circumstances and abilities best.

4.What if you die?

Obviously you may not want to, or need to use your gold and it would be left to your heirs. If it is in the safety deposit box, have one of your heirs as a cosigner on the box, so that they can open it expeditiously. Make sure they have the key to the box.

You should also disclose your hiding places to one of your trusted heirs. Do not leave a paper “treasure map”. More important that you do not disclose your holding of gold to anyone, because you have no control how far that information could spread and the consequences of the information reaching the wrong persons.

If you have followed previous survival tactics, you may be prepared to deal with attempts to loot your assets, but do not invite trouble by spreading the word about your investment decisions.

3/8/09

60 MINUTES

I just watched a 60 Minute production reassuring the public that the FDIC is on the job; so don’t worry about your deposits. I knew that the FDIC was almost broke and will not have the funds to cover the coming collapse of banks, except for raiding the Treasury for more money printed on our way to hyperinflation. Less than one minute was used to discuss the elephant in the room: only small bank fail, big banks do not. Only small bank’s stockholders get wiped out, not the cronies running and owning the big banks.
If you have not noticed, let me bring a few items to your attention.
You remember the big rush to bail out AIG? $85 billion, 123 Billion, $180 Billion– and it is growing. Guess where the money went? You must guess because the beneficiaries are secret. Neither AIG and nor the their cronies in the government are willing to disclose who got the money, because the resulting scandal would send many of the best known names in banking to prison for fraud and stealing from the taxpayers to line their own pockets. Lets just start with what AIG has been doing by illegally using credit default swaps to help big banks avoid regulatory capital requirements. Insiders disclosed that most of the money given to AIG went to Goldman Sachs and Morgan Stanley. Can you associate top government officials involved in the bailout with those companies? And how was that money used? To buy worthless paper for their face value with taxpayers money.
Last week the vice chairman of the Federal Reserve refused to tell a congressional committee who got the bailout money. Congress is powerless in face of such impertinence and obvious cover up because they were involved in the conspiracy to allow redemption of all the fraudulent bonds at full value. TARP money was given to these banks not to make loans but to acquire other banks in distress. Goldman Sachs operatives working within the Treasury Dept. have encouraged regulators to increase capital requirements on banks thus reducing their ability to make loans. As result the economy is dying without access to borrowing. The goal is to save AIG, because it insures 70,000 individuals, more than 100,000 businesses and it has 74 million customers. If AIG fails insurance and bonds for tens of thousands of customers would be terminated and many businesses would have to cease to operate. If you watch the farce and the fraud you may wonder how long can this conspiracy on the top continue before it self-destructs? The elite of Wall Street is still enjoying the full brotherhood with its counterpart in the Treasury and the Federal Reserve. Their objective is not to generate credit for the economy, but to prevent the monstrous credit derivative system from a meltdown. The second objective is to prevent the bankrupt banking system from being examined by honest accountants using an honest accounting system. The third objective is to raid the Treasury until its final collapse. These people should be arrested, prosecuted and imprisoned for destroying the assets of millions of Americans and moving public funds into the pockets of the Wall Street elite in cahoots with their Congressional cronies.

HERE IS A SCARY SCENARIO. DO NOT READ BEFORE GOING TO SLEEP. IT WILL GIVE YOU NIGHTMARES

http://market-ticker.org/categories/8-Editorial

3/15/09
WHEN WILL OUR FEAR TURN INTO ANGER?

By Tibby Weston

On the 22nd day of February my first great grandson was born. I checked the national debt and the population estimate for the USA and found that he owed $35,000 on the day of his birth. This does not include interest accumulations that he would be responsible for. By the time he reaches adult age the debt he owed at his birth will have reached more than $100,000, Assuming no further disastrous obligations are created by a reckless government, which they started doing just within a week of his birth. This makes calculating the baby’s financial burden almost impossible. First I felt fear for the baby and suddenly realized that so many of us already live in fear these days. Then gradually my fear turned to anger at the huge financial burden Hunter Weston will bear.

I am fully aware of the grandiose plan to turn this debt into easily repayable inflated dollars by inflating us out of our misery. I lived through such inflation and it is devastating, dehumanizing and fraught with dangers of riots, civil war and mass murder. It destroys people.

I was angry with myself because I knew at the time of Hunter’s birth that cynical, mean spirited, corrupt politicians, I helped vote into office, were destroying his future. I watched how we spent ourselves into despair with borrowed money and how inept and corrupt political leaders want to delude us to think they can us to spend us into prosperity by doing the same until the economy collapses and the Government of the United Sates and its Treasury goes into bankruptcy.

When I came to the US and became an American By Choice I saved money and produced to prosper and to make my country prosper. I watched with dread how the United States gradually changed from a country of savers and producers to a country of reckless borrowers and irresponsible consumers. A fundamental change that led to our current national collapse.

I watched haplessly how a man raised on the principles of failed communism bought the presidency with utopian promises and corrupt funds, much of which came from enemies of this country who hate capitalism and our fundamental values. How he was able to defy our laws and traditions and how his behind the scene conspirators engineered the collapse of the economy perfectly timed to help him to be elected to the presidency.

I warned that they sowed the wind, and as an unintended consequence they might reap the whirlwind, but I was wrong. It was the whirlwind they really sought; to destroy the moral, historical, economic and political foundation of this country and build a socialist state in its stead. Socialism becomes shared misery paid for by those who accumulated any form of wealth through hard work and entrepreneurship. The object was always the destruction of the capitalist system. That is the reason nothing is being done to halt the slide into collapse, because only following the collapse of the free capitalist system will people accept the inept helping hand of a socialist government.

While in Moscow distraught, starving pensioners of the collapsed Soviet Socialist system are rioting for food and medical care, our leaders cynically coerce us into the same predicament by utilizing the chaos they have created and keep fomenting. How are they doing it? Just look at their proclaimed goals.

They reward the corrupt, the lazy and the mob of entitlement seekers.

They increase taxes during a ruinous recession.

They increase the cost of everything by paying off corrupt union bosses.

They tax energy production to escalate the cost of it.

They attack freedom of non-conforming speech.

They tax capital during the collapse of the equity market.

They punish corporations by creating new taxes to be passed on to consumers.

They destroy the best health system in world by making it government operated.

They appease our enemies and desert our allies.

They nationalize industry and banking and displace it with communistic central planning.

They clean the air by wrecking our industrial base, factories, mining, and productivity.

The incite race and class hatred.

They try to replace the secret ballot with intimidated voting to force a viable WalMart to unionize and turn it into a debilitated GM.

They follow the instruction manuals contrived by Karl Marx and the abhorrent communist nomenclature.

Instead of teaching people to fish, they hand them fish so they will have to depend on a socialist government forever.

Even a first grader understands that involuntarily sharing a grade A by reducing it to C, so that another student who is lazy and undeserving could get a C instead of an F, will accomplish only one result: nobody will work hard to get an A. When you forcibly take away wealth in order to make the poor wealthy, you destroy the will of people to excel. And that is exactly what socialists aim for and what the Obama agenda implies.

And this is just in the first few weeks, with a lot worse to come.

I have reached the point that I am ready to replace my fear for my great grandson with hatred for those who threaten him. I am now hoping for some leadership to help me direct my anger constructively instead of letting it cause me nightmares recalling the old far-away times I once endured and thought would never come here.

###

3/15/09

OUND “BITES”.
THEY DO BITE!


Chinese Premier Wen Jiabao's demand in Beijing on Friday that the US protect the vast value of US debt held by China and honor its financial commitments was almost immediately followed by a decline in the value of US Treasuries. Yet the fact that Wen can openly express such concern may be better than him keeping silent and dumping the dollar, which may follow if the decline continues.


Tensions remain high between the United States and China over a much-publicized confrontation on the South China Sea. The incident is, though, a signal that Beijing will no longer be bullied in its own backyard. The U.S. Navy ship that got into a scrape with five Chinese vessels last weekend in the South China Sea was looking for threats such as submarines — presumably Chinese — in waters that China claims as its own, US defense officials acknowledged Tuesday.


As North Korea prepares to launch its satellite-bearing missile in early April, military hawks in the United States are chomping at the bit to show off their counter-missile capabilities in the form of heat-seeking Tomahawks. But a US misfire would be incredibly embarrassing, never mind the consequences of inflaming regional tensions. U.S. Aegis destroyers are on alert as N. Korea threatens war if missile intercepted


The worst legacy of the Wall Street morass may be a broken confidence in capitalism and a ruined public's sense of betrayal on seeing bank executives escape with their fortunes. Insurance giant American International Group will award hundreds of millions of dollars in employee bonuses despite a confrontation Wednesday between the chief executive and Treasury Secretary Timothy F. Geithner who is so ineffective that he can’t even stop multi-million-dollar bonuses to failed executives of a bankrupt company that is only in existence due to serial multi-billion-dollar cash injections from the taxpayers.


Secretary of Defense Robert Gates’s recent downplaying of Iran’s nuclear progress doesn’t jibe with Israeli assessments and implies a sharpening of Jerusalem’s dilemma. While Tehran’s malevolence toward Israel, and designs on the region, are voiced daily, Israel may find itself in a quandary of facing a mounting, intolerable danger while an inexperienced Obama administration is still hoping to unclench Iran’s fist. Time is running out.


Senators John Kerry and Richard Lugar have proposed giving Pakistan a one-time $5 billion grant plus a 10 year aid package worth $15 billion. But Pakistan’s history of appropriately spending US aid money is appalling. More than $3.8 billion of an estimated $5 billion of military aid given to Pakistan up until December 2007 is unaccounted for, and it has been reported that millions of dollars in US aid has gone to the Taliban.
The great whispered-about possible crisis that financiers and governments around the world shudder over is what to do about the more than quadrillion (thousand trillion)-dollar notional value of the world's derivatives (what Warren Buffett called the financial WMD.).By comparison, the U.S. gross domestic product is $14 trillion; the U.S. money supply is $15 trillion. The GDP of the entire world is $50 trillion; the real estate of the entire world is $75 trillion; the world's stock and bond markets are worth about $100 trillion. The notional $1.14 quadrillion (as reported by the Bank for International Settlements, which is in Switzerland) only becomes real (and frightfully dangerous) if either counterparty to a derivative goes bankrupt and if the defaulter is a major institution. Then it would start a cascade of cross-defaults that might well infect and bring down the world financial system. This is why AIG got bailed out!

3/19/09

UNBELIEVABLE GALL AND INYOUR FACE FRAUD!

I watched the “bonus hearings” and realized that the whole issue has been created so that the public does not notice what is really happening.

The “bonus “ issue was created to inflame the public against people making a lot of money while they are in financial distress. This was a well designed and executed attack on the capitalist system, Compare the 0.001% bonuses with the following signs of impending financial collapse.
A.
The Federal Reserve had to buy Treasury Bonds because there were no buyers for it. In simple terms isn’t enough money in the world to finance the Treasury deficit, so the Fed is going to create the money by just printing more of it. This day will be remembered as the beginning of the end of the dollar.
B.
China is refusing to buy long-term Treasury obligations. It announced it would only consider short-term bonds, because it does not trust the ability of the dollar to survive and believes that the dollar will be destroyed by hyperinflation. China will dispose of its Treasury bonds to reduce its holdings to 50% of their foreign exchange holdings. The total exposure of China's central bank to dollar-denominated assets of all kinds is about 70%, or $1.7 trillion China believes that as the dollar collapses, the other 50% of its foreign exchange holdings will correspondingly increase in value to offset the losses due to the collapse of the dollar.
C.
Inflation has already started. Can you name anything that is getting cheaper other than troubled real estate? Deflation? The price of securities does not depend as yet on the value of the dollar, but the underlying strength of the economy.
D.
The US is engaged in the implementation of extremely risky and inflationary, dollar-debasing policies, making a loss of global confidence in the dollar a virtual certainty. Even if the massive spending does restore economic growth, the US economy is likely to remain very weak for some time. That will make it extremely difficult for the US Federal Reserve to tighten monetary policy to fight off the inevitable inflation that will result from today's shortsighted policies.

1.If the Fed attempts to tighten, the US economy will likely be plunged into a second-round recession or depression, with obviously awful effects upon the dollar.

3. But if the Fed fails to tighten sufficiently and quickly, runaway inflation will ravage the currency anyway.

“If the stone falls on the pitcher, the pitcher breaks. If the pitcher falls on the stone, the pitcher breaks.”



Get out of the dollar into assets they don't make anymore and cannot destroy by inflation.

3/24/09

ANOTHER DAY ON THE TITANIC


The Russians know who a Marxist is. After all they suffered through more than 50 years of Marxist tyranny and they are still unable to overcome the damages caused by it. So I was not too surprised to find an article in Moscow’s infamous daily paper, The Pravda, which called the present US government a “spend happy neo-Marxist government”.
(See http://english.pravda.ru/opinion/columnists/107223-america_next_catastrophe-0). Most Americans have no idea what the word Marxist means.
When they heard the word “change” they did not realize that it is one of the fundamental principles of Marxism is to change from culturally inherited values, even if it results in a rebellion against the established system thereby causing a change in the social order. Social order is the foundation of important social systems including the economic system, legal system, political system, cultural system, and others. Family, religion, law, economy and class are all social order. So is any form of authority.
The objective of this government is to “change” the US. Not to improve, enhance, repair, restore, uplift, ennoble, regenerate and strengthen. No, the plan is to transform, convert, recast, mutate, alter and revolutionize. Former Marxists in Moscow understand this and recognize it. No wonder they call the Obama regime neo-Marxist. The word neo simply means that this revolution against the established order is not starting by the people and is directed against the government as in the olden days. This is a revolution starting on the top of government and is directed against the people. Except the people do not understand it. Yet. They still don’t know about the icebergs waiting for us.



We own a red bud tree that just recently bloomed. I noticed that the number of bees that usually arrive to feed on this early production of nectar has substantially diminished. I saw just a few and realized that I read about this problem. Allegedly cell phones are killing the bees. It seems cell phone transmissions disorient the bees and they can’t find their way back to their hives and die. I read that much of the bee population of the world had been destroyed. I hope it is not true. Considering that most of the food we eat depends on pollination by bees, I came to realize that nuclear, biological, chemical weapons are not the real danger we face, but worldwide hunger. So I leaned back in my chair and asked the Titanic waiter to bring me another Schiner Bock. I need to hurry because we won’t have it if the bees stop working. Be warned. Have a cold one.


I just stopped at a small farmers market that is only open twice weekly. A small farmer who produces a variety of produce of great quality operates it. I asked him how much land he owns and to my surprise he said he only works on 3.5 acres and that keeps him busy enough. For years I’ve been advocating people to own a SURVIVAL RANCH, but I never realized how little land it takes to produce so much food that you can supply a farmers market. I am myself running a vegetable garden and hope to produce a surplus on my 100 sq.ft. farming facility. The radishes are already coming up. Farming is hard work. Waiter, I need another Shiner.


Disclaimer. I am not employed by Shiner and most of you unlucky people have no access to it anyway, so I am not selling it either. It is world biggest microbrewery in business for 100 years. When you move to Texas this would be an added amenity. Beside jobs. And low cost housing.

3/26/09

THURSDAY ON THE TITANIC

Thank you for letting me know that you enjoyed my earlier remarks from the deck of the Titanic. I find it quite comfortable to sit back and relax and watch with amusement the events that I used to watch with alarm, disgust, frustration and anger. To my chagrin I found out that my years of exhortations, warnings, predictions and pleadings resulted in little result. The deadly avalanche has started and my voice can do little to stop it, or make you get out of its way to save yourself and your loved ones.
At my age I do not have the wealth, or health, to march ahead of a revolutionary column, and to inspire, or conspire a mass movement. I have the textbook of how to start mass movements and I quoted from it liberally to describe and predict the coming age of Obama. I lived through two totalitarian socialist disasters. One was a National Socialist; the other was an International Socialist dictatorship. I recognized the moves, the machinations, the lies, and the strategies employed by dictators of the past. It is sad to realize the truth of the old wisdom that people do not learn from history. This is the most important lesson of history. A generation that ignores history has no past - and no future.
It is also much easier to talk about the present from the upper deck of the Titanic where you have a bird’s eye view because the trees do not block your view of the forest.
For today’s trip, here is my often-repeated view of the coming hyperinflation and how it is related to our current recession.
You may not recall that I described the critical decision by the Federal Reserve years ago, when they came to the crossroad. Do you remember what Yogi Berra said: ‘When you come to a cross road, take it. ‘ Mr. Bernanke certainly took his advice. He realized that we had two problems: Recession and Inflation. In order to control either he had only one weapon: the money supply. By increasing it he could fight recession, but risk inflation. In the long run inflation damages the economy more than a recession, but a recession has a more immediate political impact. Put it in simple words, a monthly devaluation of your salary is less noticeable than the sudden stoppage of your income.
So he reduced interest rates to a bare minimum and thus created a scenario where the government could borrow cheap money and use it to fight the recession. The trillions borrowed, on the credit card of our children and grandchildren, for bailouts, stimulus packages, massive credit obligations and utopian socialist programs will instantly result in hyperinflation, when the sources of cheap money suddenly dry up and the world refuses to be the victim of our reckless spending splurge. Interest rates will suddenly rise and our debt will be unsustainable. It is not going to be slow and gradual, but rapid and instant resulting in anarchy, chaos and upheaval.
Inflation is already here although still hidden by the force of the recession. Should the recession improve, interest rates rise and the spending resume, will be at the edge of the abyss. As I said last time this was a monster Catch 22 scenario, but most people are too young to understand what that means. So I say it differently to make it clear: This is a typical case of a “reménytelenség”.
BTW Its too early for the Scheiner.
***
WHEN BEING JAMMED IS GOOD
The DoD has spent billions of dollars on electronic jammers used to prevent roadside bombs from detonating via wireless devices such as cell phones, door bells and even electronic toys. These jammers work, but also jam military radios, wireless communications with UAVs and military robots, and even navy and air force aircraft. Fortunately, these jammers have less than a mile range, but as jammer vehicles move along they create an electronic bubble that jams most civilian cell phones. Although this is annoying to Iraqis, they do not object because roadside bombs kill many more Iraqis than US military personnel.
***
I HAD A DREAM
I am not so sure if it was a dream, or I read a prediction somewhere that Obama will be impeached for his failure to protect the United States. At his impeachment trial he was defended by his followers as being just naive and not a coward, or a traitor. So far his instant incompetence could be ascribed to being an amateur with zero past experience. Our enemies sense blood in the water. The next phase will be the reaction to the moves of an amateur by professionals. Obama's reaction will determine if he is a coward, or a traitor. The size of the damage suffered by the US will determine if he will be impeached as one or the other.
***
4/5/09
SOUND BITES
THAT BITE

Gordon Brown pronounced the beginning of the “New World Order,” first announced by George Bush I 15 years ago. One world government. One multi-national police force. No more tax havens. Nowhere to run, or to hide. World currency. Shared misery. Socialist heaven on earth. Financed by the country that doesn’t have any money: the U.S.A.



On Friday, March 20, in an act of domestic “leadership”, US First Lady Michelle Obama has broken ground on the White House lawn for a vegetable garden. In 1941 First Lady Rachele the wife of Italian dictator Benito Mussolini, broke the lawn at the Villa Torlonia in Rome to start a vegetable garden to show her “leadership” to the Italian people, who were beginning to feel the pinch of war, with increasing scarcities of all kinds of foods.



The official website of the Russian Security Council said that the Arctic troops would be set up to maintain the military security under various conditions of the military and political situation. Russia intends to create Arctic troops to maintain security of the Russian part of the Arctic Ocean under the conditions of the current political situation in the world. The region is said to become Russia’s leading strategic base by 2016.


Arrogant leftist Justice Dept. prosecutors G W Bush could not fire have succeeded in framing senator Stevens of Alaska and changed the balance of power in the U S Senate. Politically motivated indictments timed just before elections have become a political power tool from Austin to Washington. Strangely the victims always seem to be Republicans. Who said justice is blind?



The headline “90 Percent of Illegal Guns In Mexico Come From The U.S." turned out to be false. The actual number was 17 percent. The real unreported story is that there were so many sources of illegal weapons in Mexico, with the U.S. being one of the more difficult places to get weapons from. It's much easier to get a load of weapons in via ship, in a container labeled as something else. Port officials in Mexico are easier to bribe, than U.S. or Mexican border guards.


As the administration announced plans to give $900 Million in aid to rebuild Hamas' Gaza Strip while our own Defense Department's Security Development Plan for the Federally Administered Tribal Areas of Pakistan "faces a shortfall of approximately $167.5 million, about 73 percent of its funding goal for fiscal year 2009." These funds are directed at curtailing and/or cutting off terrorists from narcotics funding and undermining their stranglehold on and, to the degree that it exists, popular support of the local populations there. Would we rebuild Japan with Tojo still in place, or Germany under a surviving Hitler? And would we send them nearly $1 billion while our own economy is incessantly being described as "the worst crisis since the Great Depression"? Is this what “Yes, we can.” means?

4/7/09

For more than a week I have been advising some of my friends about the latest currency manipulations George Soros was caught in Hungary. Unfortunately I could not find any articles in the US media I could refer to and I thought my insider Hungarian sources may not be enough for my sophisticated readers. Now that Soros had been fined the cat is out of the bag. Here is one of the stories reported:

Record fine for Soros Fund over Hungarian transactions


Hungary’s financial supervisory watchdog announced Friday it had slapped a 1.6-million-euro fine on an investment fund founded by US billionaire George Soros, for manipulating the market.

The PSzAF said it had fined Soros Fund Management LLC for transactions on the Budapest stock exchange on October 9 that led to a "significant loss in value" of Hungarian OTP bank stocks, which fell in days from 4,000 forint (13.2 euros, 17.86 dollars) to 2,500 forint.

The PSzAF "is imposing a 489-million-forint fine on Soros Fund Management LLC… for violating the rules regarding the illegal manipulation of financial markets," the supervisory authority said in a statement on its Internet site.

The Soros Fund has 30 days to pay this record fine.

The PSzAF said the fund started putting OTP shares up for sale at 4:27 pm on October 9, just minutes before closing.

"The timing, the number and the effects of these transactions on the market point without any doubt to an illegal market manipulation," it added.

OTP, Hungary’s biggest bank, was already hit hard by the financial crisis, like many other banks, but then saw its share value crumble in a few days after October 9.

In a statement Friday, Hungarian-born Soros responded he had been informed of the fine but insisted that he was not involved in the transactions.

"I no longer control the Soros Fund Management’s operations, I retired last year and now only oversee the transactions to do with my private account," he said in the statement, published by Hungarian news agency MTI.

"Soros Fund Management is cooperating with the Hungarian authorities and has also launched an internal investigation" into the illegal transactions, he noted.

He added he was "deeply sorry the Soros Fund Management had carried out such a transaction."

You may have noticed the date of this activity. By coincidence there was also an attack on the US money markets in October. If Soros was involved in the deliberate attack and destruction of the US market, he made another fortune knowing that his friend Obama is not going to fine him as the Hungarians did. As a matter of fact the financial crisis thus created elected Obama to the presidency.

4/24/09

IT IS STORY TIME

I have two stories for you boys and girls. See if you can find the similarity in these stories. A business college graduate started a farmers market in Houston and kept losing money. Finally he consulted one of his fellow graduate economists for advice how to start making money. This economist Ph.D. asked him some basic questions: “Tell me how do you do business?” The business graduate told him that he bought farm products out in the country and then hauled the goods to Houston where he sold them at his farmers market. “For example I buy apples in Lufkin for $2 a bushel then I put it on my pickup truck and haul them to Houston where I sell them for about $1.50 to $1.75 a bushel.” The economist looked puzzled. “Let me understand this. You buy apples for $2.00 a bushel and load it on your pickup truck and sell it for $1.50 to $1.75 a bushel. Is this correct? If so, then I know the answer to your problem. You need a bigger truck.”

The second story is about a presidential candidate who becomes president. As a candidate he scolded the people: “You live beyond your means by abusing credit and incurring debt thus enabling the anything-goes culture of Wall Street . I will cut both taxes and spending, implementing a responsible budget that lowers the federal deficit by reducing wasteful spending. This what every responsible American should do. I am asking you to believe. Not just in my ability to bring about real change in Washington. I’m asking you to believe in your ability to also change.”
As a president he now scolds the people:” You are not spending your money, but saving it, which is bad for the economy. I granted nearly unlimited emergency powers to the Wall Street insiders to clean up their own mess since having first wrecked the financial world, they are best qualified to clean it up. I will make sure that you will again have access to credit to borrow money to buy stuff and the spending will spur production and employment, and thus the economy will grow. We give money to the banks, automakers and others so that they can again give you easy credit and the economy will move again. We will buy any debt that becomes bad and therefore there will be no risk to those who lend money. We will need to raise taxes and increase spending but it will not hurt the value of the dollar, or create a debt for your children and grandchildren. I promised you change and I am delivering it.”

4/23/09

TIME TO GET OUT OF WALL STREET?

The difference between short term and long-term predictions is that short-term predictions can be checked within the memory span of most people. Long-term predictions are seldom remembered and professional predictors making them always make another prediction mitigating the first one. For more than 30 years I have been making one-year predictions as part of my Breakfast Clubs annual Fearless Predictions and on many occasions I managed to be the most accurate, with predictions of 70% accuracy involving 25 questions of future economic and political events.

I am now predicting a major market crash following the release of the banking stress test results scheduled for May 4, 2009. Some experts called the recent rally on Wall Street a “sucker rally," but I believe it was a reaction to the multitude of government programs announced to stimulate the revival of the economy. Buying toxic assets of banks, encouraging the opening of credit markets and consumer spending, stopping the foreclosure avalanche are the goals. None of them have been accomplished and there has not been a turnaround in the economy. On the contrary, the public is not buying into the repeat of the consumer buying bubble created by loose credit.

The American public is engaged with its government in a curious tug-of-war. The people of the United States have just been badly hurt by the excess of consumer buying and easy credit and are logically reversing habits and are attempting to save money and live within their means. The Government, on the other hand, is encouraging and even forcibly advocating another foolish consumer spending spree, because 70% of the economy of this country is now based on consumer spending and not on production of goods. In the meantime we have classic deflation where fewer and fewer people are seeking to buy products. But we also have an underlying inflation due to the deterioration of the dollar.

Do you remember the movie in which Arnold Schwarzenegger and Danny Devito were unlikely twin brothers? If you accepted that premise than it should not be too hard to accept the idea that we are facing the unlikely twins of Depression and Inflation. If the government succeeds in this tug-of-war, deflation will end instantly and the economy will recover in a flash with dire consequences.

Beyond its apparent goals of revising the economy there is also a hidden, ulterior motive. Washington understands that at the moment the people realize that the dollar is losing its value due to the unconscionable flooding of the world markets with newly created dollars and borrowing in dollars, a buying frenzy will occur. People will try to get rid of their dollars and the resulting buying pressure will bring on hyperinflation desired by Washington. It will be easy to pay off trillions in debts when you start printing billion dollar denomination bank notes. I’ve been there and I still have the billion banknotes to prove to you how this scam works. Zimbabwe is today’s perfect example of that scenario.

How does this tug-of-war scenario fit with the May 4th deadline of stress results and the stock market? The financial institutions of Wall Street have lost investor confidence due to the deceptive schemes and artificially created financial instruments with inflated value. The manipulation of the books, accounting and credit standards, cooking of numbers and the inscrutable deals to protect their survival with the help of their friends at the Treasury and the Fed with tax payer dollars are all confidence destroyers as are huge bonuses paid to executives who oversaw the ruins of their companies.

In the sardonic words of my friend Peary Perry: “Give me $20 billion in bailout money and I will show you an instant profit of $1.6 billion.” Banks are reporting sudden profits to hedge against the stress test reports. These profits are also fictional, created by deciding what they report as “temporary” loss and what single, non-recurring event they report as a permanent profit source. The fundamental issue is whether the toxic fictitious derivate paper created is worth its face value, or is it just a figment of interlocking betting transactions of a quadrillion dollars that can only survive if every bettor remains solvent to pay off their end of the bet. One of the bottomless bettors is AIG and indirectly the US Treasury that keeps filling the bottomless pit at and through AIG.

On May 4th two eventualities can occur. Either the result of the stress test on 19 major banks will be rosy with just a few losers in which case the crisis of confidence will reach new levels and the market will be doomed to crash, because no credence will be given to the honesty of the report. Or If the report honestly describes the insolvency of major US banks then the result may be a run on the banks and a market crash. If the results are not released, or significantly redacted, then the public will assume that the banks are insolvent and that the information is deliberately suppressed.

For the government and Wall Street to overcome the above scenario will also require them to engage in a major propaganda effort. Even if it succeeds by hiding the insolvency of the banks, or by nationalizing some of them, the fundamental difficulty of trying to solve the problems of the past by repeating them will not stop the further decline of the economy and hyperinflation destroying the dollar. So my short term prediction: Market crash below March levels. I am not a financial advisor, or expert so my findings should not be used as financial advice. On the other hand if you make a lot of money shorting the market, come and see me and I sell you a survival ranch because there is one big item of good news lurking between the lines above. If you can buy a survival ranch with owner financing, the chances are you will be paying the loan back with cheaper dollars when inflation suddenly arises. Sapienti sat.
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4/24/09

To: DHS National Operation Center
From: (redacted)
Re: Suspicious activity by right wing militant group.

Pursuant to your request to report information concerning suspicious activity, here are the results of our investigation of suspicious activity that occurred on April 15, 2009 starting at 4:30 PM at Beason’s Park in Columbus, Texas. The selection of the site by itself proves highly suspicious. At this location Sam Houston had 1500 troops in position, facing the Mexican Army in 1836 and declared, "On the Colorado I make my stand." His armed militia then burned down the ferry crossing to prevent the Mexican Army from crossing the Colorado. These historical events selected for their symbolism of “taking a stand” and burning down a facility by a militia, tend to make the selection of this site highly suspicious.
Our operators were successful in penetrating the hundreds of right wing militants and attached is proof. Standing in the foreground is one of the conspirators who called for leadership and marching orders in communications sent to a large group of followers. We have attached a transcript of the speeches made by leaders of the militants. They called for change and giving voice back to the people, both concepts being an indication of militancy since these slogans had exclusive usage rights belonging to the present administration.
Please note on the attached proof the presence of a child and a disabled man in a wheel chair. We are pursuing efforts to charge the parents of the child with the Child Protective Service with child abuse and investigate the medical condition claimed by the disabled to determine if he should be getting medical service. He seems to be too old for usage of medical funds better used for younger claimants, as proposed by the new National Health Insurance administration.
I recommend that the speakers and the participants should be continuously monitored and I request that you assign 300 National Service members to the Columbus area for this purpose and pay their salary out of the $5.7 billion approved for this purpose. It will serve a dual purpose. It will increase employment and it will intimidate prospective militants.

4/27/09

FAKE STRESS TESTS?

Forgetfulness is a curse and blessing of old age. It would be far worse if we could not forget, than if we could not remember. You can always remember something that you have forgotten, but you cannot force yourself to forget something that you don't want to remember.

I found in my files an old issue of the Wall Street Journal MONEY & INVESTING section dated October 11, 2000, and at first glance I could not remember why I would have kept it all these years. What was in this paper that I considered so important nine years ago that I did not throw it away?

Lo and behold, it was an article about the ‘mark to market rules’ being considered. “Value Judgment: New Rules May Roil Banks.” Could I have been worried in 2000 about he consequences of what we have experienced in 2008? In those days I was deeply involved in understanding the problems of banks and S&Ls, having spent several years in an attempt to save the S&L industry. To my sorrow I found out that politics are behind all the bad decisions and blatant prevarication is the norm. Unfortunately, nothing has changed in the last nine years.

The results of the stress tests of US banks are due shortly, unless they turn into a non-release of non-information of non-tests but a cheap PR stunt by an incompetent, amateur administration. When I take a stress test the treadmill is set at certain speeds and at a certain elevation. The bank stress test has been fixed. The speed and elevation have been changed to come up with pleasing results. The tests have been blatantly rigged to portray our 19 largest banks as being far healthier than they really are.

Unless the stress tests openly recognize the grave situation faced by US banks, they will accelerate, instead of diffuse the problems. Rather than instill confidence, they risk creating growth of skepticism. Traditional stress testing of banks assumes historic worst-case scenarios, i.e., depression-era conditions. In order to understand where we stand and be able to better cope with conditions of the economy, stress testing should expanded to include mortgage lenders, insurance companies, other financial institutions and the Federal Reserve itself.

It will be interesting to compare the balance sheets of the banks with the balance sheet of the Federal Reserve Bank itself. When the banks got rid of their toxic assets, those assets did not disappear into thin air. They are now part of the Federal Reserve Banks assets, or shall we say liabilities, as they became collateral for loans made by the Fed.

For comparison look at the Consolidated Statement of all Federal Reserve Banks as of April of 2007. Total assets were $883 billion and 89%of it were “AAA” quality assets. The current report released a few days ago show that the “AAA” quality assets dropped to $526 billion, or only 24 % of the total assets of the Fed.

Even scarier is the fact that the total capital of all Fed Banks is only $45.7 billion against a total of $2.19 trillion in assets. This means the Fed is leveraging at 48-to-1 as compared to 27-to-1 just two tears ago.

Would a bank examiner shut down the Fed?

When my doctor finds the stress test results disturbing he will not only tell me, but will recommend remedial action, which may not be pleasant, or comfortable. The Obama administration is playing a dangerous game by acting responsible, while attempting to hide the truth because it may not be pleasant, or comfortable. You can’t cure the disease unless you are willing and able to diagnose it and take remedial action. Otherwise the condition becomes terminal.
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4/28/09

PANDEMIC – WAIT FOR THE REAL ONE.

The 40,000 Americans who die each year from the flu are less than 1% of the infected. The Mexicans who have died in the last few weeks from the swine flu are about 6% of the flue sufferers. This could be attributed to many factors: better medical service in the US; availability of vaccines, or the underreporting of people afflicted by the flu in Mexico.

In my warnings about survival strategies I always mention pandemics caused by medical causes and bio-terror attacks. The Department of Health and Human Services has issued an alarming assessment of the availability of emergency medical services in such events by admitting that they would break down and the government would be helpless in assisting the public. In addition both the Pentagon and the CIA has continuously warned about the potential of such pandemics. It is such old news that the media no longer consider it newsworthy.
According to the Washington Post they’re an estimated 20,000 laboratories in the world capable of creating deadly viruses and pathogens. Internet instructions are available suggesting that an investment of as little as $2,000 in medical supplies could create deadly, fast spreading diseases.

I read recently that former Health and Human Services Secretary Tommy Thompson has admitted the prospect of a bio-terror assault was keeping him awake at night, due to America's extraordinary vulnerability. The issue commands no consideration, much less priority, from the Obama Administration which has yet to find leadership for the HHS and the Congress which has eliminated funds from the stimulus bills dedicated to providing a vaccine supply for a flu pandemic.

It is obvious that you cannot depend on bureaucrats and politicians to protect you, unless you are a member of Congress, their staff and top federal employees, who have access to critical vaccines.

Homeland Security advises you to protect yourself by washing your hands frequently and staying away from people who are ill. They could not add, due to secular policies of the Administration; “and pray!”

In my ELEMENTS OF SURVIVAL sent to you earlier, I recommend the acquisition and storing of important medications that would not be available in the event of chaos created by a pandemic.

Staying away from people who are ill, or in panic, is difficult unless you have a SURVIVAL RANCH where you could live for a limited, or prolonged period without contact with infected persons, or people fleeing from them

Investing in land, providing a safe haven in the event of emergencies, getting out of dollars before they become worthless and the resulting peace of mind is still an option. Perhaps not for too long.

***

In the classic suppressed book of all times, THE CAMP OF THE SAINTS, people fleeing the miserable life of a third world country invade Europe with horrendous consequences. It is the story of the final, tragic end of European civilization which falls, like all great civilizations, by its own hand. If the swine flu accelerates in Mexico, we can expect masses of Mexicans fleeing across our open borders. I watched on TV this morning as sick Mexicans arriving across the border are sent to local hospitals in the US. If you want to know what could happen, read the CAMP OF THE SAINTS.

http://en.wikipedia.org/wiki/The_Camp_of_the_Saints  ¶ 8:47 PM