The Establishment Is In Full Blown Panic Over Rand Paul

The status quo doesn't care from which direction the mud is thrown on the phony left-right paradigm, so long as it sticks

 

Paul Joseph Watson - Prison Planet.com - Thursday, May 20, 2010

 

The establishment is in full blown panic over the runaway success of Kentucky primary winner Rand Paul and has set about attacking the son of Congressman Ron Paul from every conceivable angle in an attempt to undermine his support base and ensure his defeat by a Democratic opponent in November.

 

http://www.prisonplanet.com/the-establishment-is-in-full-blown-panic-over-rand-paul.html

Flood of Cash to Congress Is Unabated as Banks Seek Influence

(In case you stil have any trust left in representive democracy):

    May 17 (Bloomberg) -- As the U.S. Senate prepares to vote as early as
this week on legislation rewriting the rules for Wall Street, the financial
industry is holding fundraisers for lawmakers at a rate of almost one every
business day this month. Some members of Congress have criticized Wall
Street one month only to ask the industry for money the next. U.S.
Representative John Adler, a New Jersey Democrat, demanded accountability
from Wall Street in an April 29 statement. This week, he's holding what
is billed as a "financial services dinner" in Washington with a minimum
contribution of $1000.

   At least 20 House and Senate lawmakers have scheduled fundraisers in May
targeting the industry or hosted by lobbyists for banks such as Goldman
Sachs Group Inc. and Citigroup Inc., according to Democratic and Republican
party committee schedules sent to prospective donors. The events allow
lobbyists to mingle with lawmakers as the Senate debates sweeping new
regulations for the industry. "How hard are you going to be on somebody
who's handing you money?" said Bill Allison, an editor at the Sunlight
Foundation, a Washington-based watchdog group. The list of fundraisers
includes those for Senate Republicans and for House Democrats and
Republicans. The schedule for Senate Democrats couldn't be obtained.

   Lobbyists for New York-based Goldman Sachs and Citigroup are among those
hosting a $1,000-a-plate breakfast on May 20 for Senator Mike Crapo of
Idaho, a Republican member of the Senate Banking Committee. The group
sponsoring the Washington event, Capitol Tax Partners LLP, lobbies on tax
issues, not banking legislation, said one partner, Lindsay Hooper. One of
the hosts of a $1,000-per-person Washington fundraiser on May 18 for
another Senate Banking Committee member, Bob Corker of Tennessee, will be
Tim Locke, a lobbyist whose clients include Charlotte, North Carolina-based
Bank of America Corp.

Eurointelligence Daily Briefing - 20 May 2010

Criminally incompetent

• Merkel did not inform anyone of her decision to ban short-selling promping a furious reaction from European capitals, and the European Commission;
• Lagarde says decision is wrong, and France will not follow Germany;
• all recent efforts to display European unity have been eradicated in a single stroke;
• European stock markets plunge by 3%;
• euro falls, then recovers, but traders expect further bad news will weigh on the currency;
• FT says decision was intended to buy the Bundestag’s support for the EU’s rescue package;
• Schauble goes says markets are out of control; markets say Germany out of control.
• German politicians are outraged at negative reactions to their plans for a souped-up stability pact;
• Greece, meanwhile, is facing another day of general strike, as Fitch concludes that the country is effectively insolvent, whether or not it adhere to the austerity plan. 

_____________________________________________________________________

This is the Daily Briefing from www.eurointelligence.com.   

NIA: adjusted for real inflation, hourly earnings in the U.S. is now about half of what it was in the early 1970s

Inflation Causing Decline in U.S. Standard of Living

 

The Bureau of Labor Statistics (BLS) today released their Consumer Price Index (CPI) report for the month of April, which showed year-over-year price inflation of 2.24%. This was down from March's year-over-year increase of 2.31%. As discussed in NIA's new documentary 'Meltup', which has now surpassed 309,000 views in less than one week, the BLS uses geometric weighting and hedonics to understate inflation, in an attempt to keep Social Security payment increases as low as possible. NIA estimates the real rate of price inflation to be approximately 3%-4% higher than what's reported by the CPI. Americans receiving Social Security should be receiving payments that are approximately double what they receive today.

 

As shown on our new charts page, average hourly earnings in the U.S. is now at a record nominal high of $18.98; but adjusted for real inflation, hourly earnings in the U.S. is now about half of what it was in the early 1970s. During the 1970s, it was possible for American college students to pay their own tuition by working part time, without student loans or any help from their parents. (Besides paying their own tuition, many students in the 1970s could also afford their own car and apartment.) Today, college students need to get deeply into debt and have their parents help pay their tuition; students can barely afford to pay for food and beer on their own.

 

If the CPI is to be believed, Americans today have about the same standard of living that they had 40 years ago. However, all Americans can feel their standard of living decline. The CPI today no longer accounts for the cost to maintain the same standard of living, it accounts for only the cost to stay alive.

 

The reason for April's slight decline in year-over-year CPI growth compared to March is declining oil prices due to a temporarily strong U.S. dollar. There is now a record amount of investors who are short the Euro, which has given the U.S. dollar the artificial appearance of being a "safe haven". Due to the rallying U.S. dollar, the Federal Reserve believes it has a license to print and keep interest rates near zero. NIA believes this short-term rally in the U.S. dollar will set the stage for a huge crash in the U.S. dollar sometime in late 2010.

 

NIA is very pleased that Rand Paul has just received the Republican nomination for U.S. Senate in Kentucky. One of NIA's predictions for 2010 was that he would not only win the Republican nomination, but win the Senate seat. Rand Paul is now half way there and we must strongly support him in the general election this November. We must also continue to support Peter Schiff for the Republican nomination in Connecticut. The Senate primary in Connecticut will take place on August 10th and we believe Peter Schiff is the only candidate who fully understands the devastating effects of inflation and the need to rein in government spending.

 

Former Federal Reserve Chairman Paul Volcker is now admitting that time is "growing short" for the U.S. to address its budget deficit and yesterday said “there are serious questions, most immediately about the sustainability of our commitment to growing entitlement programs.” Unfortunately, we believe the Obama administration will ignore Volcker's warnings and point to this phony U.S. dollar rally as an excuse to continue on with unconstrained government spending. By the time hyperinflation becomes apparent to all, it will be too late to prevent our dollar's purchasing power from being completely wiped out. Hopefully enough Americans will become educated about the need to become their own central bank by buying gold and silver, so that after hyperinflation occurs, we have enough resources to rebuild our country.

 

Please continue to spread the word about NIA by telling your friends and family to subscribe for free at: http://inflation.us

The Too, Too Bizarre Quadrillion Dollar Derivative Death Star

A great article as always by The Mogambo Guru, just in from The Daily Reckoning :

I was sitting alone in The Mogambo Bunkeroo (TMB) thinking to myself that it seems unnaturally quiet around here lately, probably as a result of everyone holding their breath in anxious dread and anticipation since the Federal Reserve is not creating money with their habitual insane abandon, and Total Fed Credit was actually down $1.2 billion last week, which, given the total Fed Credit is a staggering $2.310 trillion, is a rounding error.


TheInternationalForecaster.com has a different take on this unusual quietude, and refers to “the deafening silence in the media and newsletters concerning the Quadrillion Dollar Derivative Death Star”, which references the disgusting, convoluted spider’s web of weird derivatives, and derivatives on derivatives, all based on lies and leveraged fraud, as far as I can tell.


If you want a way to understand leverage, remember there is only $927.6 billion in actual US coins and paper money in existence. Thanks to the insanity of derivatives like massive fractional-reserve banking (where the fraction of deposits that are held in reserve against about $12 trillion in US bank loans and leases, and another $12 trillion in deposits, steadily ran less than the mere pittance of $40 billion for over a decade, thanks to that bastard Alan Greenspan at the Federal Reserve at the time. And bank reserves are still only $65 billion under Bernanke!), this little bit of cash money was morphed into $17 trillion or so in the stock market, plus another $14 trillion or so in the bond market, plus a housing stock valued at $17 trillion or so, plus a couple of hundred trillion dollars in bizarre derivatives here and there.


In short, this piddly $927.6 billion in actual cash has been multiplied thousands of times over, so that people could go into debt to pay for all these things and so, so many more. And all of this in a $14 trillion GDP!
So you can see that derivatives dwarf everything else. The true size of the total of derivatives outstanding is understandably hard to compute, and that is why it was interesting that the Bank for International Settlements (BIS) calculates that there are about $620 trillion of derivatives floating around the world, and some estimates from others have gone as high as the incomprehensible $200 quadrillion, all of which seems Too, Too Bizarre (TTB) for words since global GDP – the sum total of all the goods and services produced by the Whole Freaking World (WFW) in an entire year – is only around $60 trillion!


But the BIS’s estimate of $620 trillion in derivatives means that there are over $10 in derivatives for every $1 of global economic activity, which is like one guy at the roulette table betting $1 while 5 guys around him are each betting each other $2 on whether the guy wins or loses!


I say this without fully understanding anything, which is OK with me since I am kind of stupid and would probably get it all wrong, anyway, but I feel very confident in my universal condemnation and disgust with the whole mess, mostly since I never heard of anybody saying, “I got rich from derivatives!” and, in fact, the opposite is manifestly true.


But this financial insanity is just a small, small part of the Sheer Economic Insanity (SEI) of the Federal Reserve creating So Freaking Much Money (SFMM), and as to the implications, I join with The International Forecaster in saying that “if people truly understood the implications, they would be buying gold and silver by the truckload, along with their related shares, which together comprise your only salvation at this point.”
I know what you are thinking. You are thinking to yourself, “Well, maybe they are both just saying that becauseThe International Forecaster is as stupid and crazy as that Mogambo lowlife idiot!”


Well, I doubt that, especially since I never heard my wife yell at them for being idiots, or heard her say how the only real idiot around here is her for putting up with them all these years, or go into one of those episodes where she ends up crying out, “Oh, death, where is thy sting?” about something they did, or didn’t do, but should have or shouldn’t have, depending.


Well, questions of my mental capacity aside, to buttress our joint opinion about gold, they note that inflation in prices is showing up in imports, as “The import price index reached 0.9% in April compared to 0.5% in March”, which is bad enough inflation in prices to give you the shakes, but, worse, “Over the year, the import price index registered 11.1% in April.” Yow!
And if the horror of 11.1% inflation in prices, or the looming horror of disastrous hyperinflation in prices thanks to the central banks of the world creating So Freaking Much Money (SFMM) is not enough to scare you into getting into your car to drive like a maniac in a screaming frenzy to buy more gold, zooming down the street and even onto the sidewalk when you have to (Honk! Honk! “Outta my way, morons!”), then remember that the Treasury says they only have 260 million ounces of gold (and this is assuming that all the gold is still there, which I don’t believe for a second), which, at the ludicrously low price of $1,230 an ounce, is worth only $319 billion!
Thus, all the gold in Fort Knox is worth, at these low prices, less than a fifth of one year’s deficit-spending in the Obama budget! Wow!


You can “do the math” because I probably can’t, or, if I could, I wouldn’t because it is pointless, since even an idiot like me can see that the price of gold is Too, Too Low (TTL)! And by a Long, Long Shot (LLS), too!
And speaking as an idiot, I am happy that even an idiot can see it, which is probably what makes me tingle all over and say, “Whee! This investing stuff is easy!”


The Mogambo Guru
for The Daily Reckoning
Comprehending the Enormity of Derivatives originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."