FedUpUSA

Archive for September, 2011

Who isn’t paying attention here?

Andreas Vosskuhle, head of the constitutional court, said politicians do not have the legal authority to sign away the birthright of the German people without their explicit consent.

“The sovereignty of the German state is inviolate and anchored in perpetuity by basic law. It may not be abandoned by the legislature (even with its powers to amend the constitution),” he said.

“There is little leeway left for giving up core powers to the EU. If one wants to go beyond this limit – which might be politically legitimate and desirable – then Germany must give itself a new constitution. A referendum would be necessary. This cannot be done without the people,” he told newspaper Frankfurter Allgemeine.

Oh I see.  So the expansion of the EFSF, including the “re-purposing” to turn it into a giant SIV which can then lever itself up to €2 trillion or more, isn’t legal from a German perspective without a formal vote of the people?

Yet Thursday, the markets believe, will mark the day this happens.  The Euro is soaring this morning and the futures have been on a relentless march since midnight when Europeans woke up “over there” and started trading among themselves.

The problem with leverage is that it magnifies losses as well as gains.  There is never a free lunch in finance just as there is not in thermodynamics – you can trade one thing for another, but never is there a move that is free of risk, and just as in thermodynamics loss is also an inescapable part of the equation.

I have to be cynical on this one.  Should the EFSF actually “pass” the immediate result is likely to be a credit downgrade for both France and Germany, and this assumes that implementation can be put forward.  I don’t see it.

The problem is that thus far we’re not seeing what has to happen to actually fix the problem be proposed: Reduction of debt to sustainable levels and a removal of systemic leverage.

The reason this isn’t being proposed (here or there) should be obvious: Doing so means an end to the “vote us some more free shit and then write a new and larger rubber check to cover both it and the previous rubber check that Joe’s trying to present over there so it doesn’t bounce!”

This is a losing formula for economic stability just as taking another hit off the crack pipe to “solve” your withdrawal from the previous night’s binge doesn’t work either.  Oh sure, it stops the shakes – for a while.  But every hit you take weakens your heart and deepens your addiction.  Eventually you run out of either money (for most of us) or margin in your cardiovascular system (if you’re a rock star) and turn to crime or fall over dead.

The politicians of the world are acting like the addict who has run out of money and rocks – they’re sniffing the carpet looking for the one little piece they dropped last night during the height of their binge, desperate for another hit.  Our economy has $53 trillion in debt outstanding against $15 trillion in GDP; at a blended 5% interest rate that’s more than $2.5 trillion in interest payments, or one dollar in six that does no useful “work” in the economy but merely shifts around who gets the benefits.

Many people decry “wealth disparity” but in point of fact this sort of slavery is self-inflicted and no amount of legislation to “redistribute” fixes it.  The solution is simple: No more shifting of risk to the taxpayer and sheltering people from their own stupidity.

The only solution that actually works is to default that which cannot be paid and allow those who wrote these bad loans to eat them.  This will bankrupt many of those “rich” who knowingly lent money to people who can’t pay – whether they be governments, businesses or people.  It will cause a gross contraction in GDP on a temporary basis.

If you have a serious desire to see “wealth disparity” addressed this is how you do it.  Those who are paper rich will get trashed in such a correction, but it’s not only the appropriate means to address the problem it’s the only sustainable way you can address it.  The Deutsche Banks and JP Morgans have to be told to stuff it where the sun doesn’t shine, be forced to perform honest accounting of their asset values and when shown to be insolvent, be closed with their bondholders and shareholders absorbing the loss.  Let the directors and executives of these corporations stand before the shareholders and pensioners who own their bonds and shares (indirectly in most cases) and stand trial in a very public court of the “angry mob” for their sin of excessive abuse of leverage.  The threat of having to face those who got shafted might cause them to seek trial in an ordinary criminal court instead, as at least in prison they can find some modicum of security.

At the same time we must stop the capital drain that our unbalanced and idiotic trade policies have put in place, we must neuter the so-called “Fed 2% inflation mandate” and enforce the written law of stable prices, and we must resolve our energy problem here at home as this is responsible for about half of the trade deficit issue.

I don’t believe for a minute that Greece is going to successfully avoid default.  Rather, they’re going to do what we’re doing – they will play along, lie and cheat right up until the rug gets pulled out from under them.  And why not – it’s worked thus far, and addicts only fix their addictions when they either die or hit rock bottom – from where there is nowhere to go by upward toward recovery.

In a scary and painfully frank interview a freaked out BBC interviewer is visibly shaken when market trader Alessio Rastani predicts that the “Market is Toast.”  Apparently there is nothing Euro governments can do.
Update:
If you are on Facebook Alessio is commenting further.  This may be one of the most important debates on Net at the moment.  http://www.facebook.com/alessiorastani & Twitter @alessiorastani

h/t to the Forum

The Federal Reserve wants to know what you are saying about it.  In fact, the Federal Reserve has announced plans to identify “key bloggers” and to monitor “billions of conversations” about the Fed on Facebook, Twitter, forums and blogs.  This is yet another sign that the alternative media is having a dramatic impact.  As first reported on Zero Hedge, the Federal Reserve Bank of New York has issued a “Request for Proposal” to suppliers who may be interested in participating in the development of a “Sentiment Analysis And Social Media Monitoring Solution”.  In other words, the Federal Reserve wants to develop a highly sophisticated system that will gather everything that you and I say about the Federal Reserve on the Internet and that will analyze what our feelings about the Fed are.  Obviously, any “positive” feelings about the Fed would not be a problem.  What they really want to do is to gather information on everyone that views the Federal Reserve negatively.  It is unclear how they plan to use this information once they have it, but considering how many alternative media sources have been shut down lately, this is obviously a very troubling sign.

You can read this “Request for Proposal” right here.  Posted below are some of the key quotes from the document (in bold) with some of my own commentary in between the quotes….

“The intent is to establish a fair and equitable partnership with a market leader who will who gather data from various social media outlets and news sources and provide applicable reporting to FRBNY. This Request for Proposal (“RFP”) was created in an effort to support FRBNY’s Social Media Listening Platforms initiative.”

A system like this is not cheap.  Apparently the Federal Reserve Bank of New York believes that gathering all of this information is very important.  In recent years, criticism of the Federal Reserve has become very intense, and most of this criticism has been coming from the Internet.  It has gotten to the point where the Federal Reserve Bank of New York has decided that it had better listen to what is being said and find out who is saying it.

“Social media listening platforms are solutions that gather data from various social media outlets and news sources.  They monitor billions of conversations and generate text analytics based on predefined criteria.  They can also determine the sentiment of a speaker or writer with respect to some topic or document.”

The Federal Reserve Bank of New York intends to listen in on “billions of conversations” and to actually determine the “sentiment” of those that are participating in those conversations.

Of course it will be those conversations that are “negative” about the Federal Reserve that will be setting off the alarm bells.

“Identify and reach out to key bloggers and influencers”

Uh oh.  So they plan to “identify” key bloggers and influencers?

What exactly do they plan to do once they “identify” them?

“The solution must be able to gather data from the primary social media platforms –Facebook, Twitter, Blogs, Forums and YouTube.”

Hopefully you understand this already, but nothing posted on the Internet is ever anonymous.  Everything on the Internet is gathered by a vast host of organizations and is used for a wide variety of purposes.  Data mining has become a billion dollar industry, and it is only going to keep growing.

You may think that you are “anonymous” when you criticize organizations like the Fed, but the truth is that if you are loud enough they will see it and they will make a record of it.

“The solution must provide real-time monitoring of relevant conversations.  It should provide sentiment analysis (positive, negative or neutral) around key conversational topics.”

Why do they need to perform “sentiment analysis”?

If someone is identified as being overly “negative” about the Fed, what will they do about it?

“The solution should provide an alerting mechanism that automatically sends out reports or notifications based a predefined trigger.”

This sounds very much like the kind of “keyword” intelligence gathering systems that are currently in use by major governments around the globe.

Very, very creepy stuff.

Are you disturbed yet?

For those of us that write about the Federal Reserve a lot, this is very sobering news.

I wonder what the Fed will think about the following articles that I have posted on this site….

*Unelected, Unaccountable, Unrepentant: The Federal Reserve Is Using Your Money To Bail Out
European Commercial Banks Once Again

*Celebrating Independence Yet Enslaved To Debt

*19 Reasons Why The Federal Reserve Is At The Heart Of Our Economic Problems

*Is Ben Bernanke A Liar, A Lunatic Or Is He Just Completely And Totally Incompetent?

*10 Things That Would Be Different If The Federal Reserve Had Never Been Created

What is their “Social Media Monitoring Solution” going to think about those articles?

Unfortunately, this is all part of a very disturbing trend.

Recently, a very creepy website known as “Attack Watch” was launched to gather information on those saying “negative” things about Barack Obama.

Suddenly, everyone seems obsessed with what you and I are saying.

This just shows how the power of the alternative media is growing.

Not only that, but it seems as though the government also wants to gather as much information on all of us as possible.

For example, a new rule is being proposed by the Department of Health and Human Services that would force health insurance companies to submit detailed health care information about all of their customers to the federal government.

Every single day our privacy is being stripped away a little bit more.

But now it is often not just enough for them to know what we are doing and saying.  Instead, the “authorities” are increasingly stepping in to silence important voices.

One of the most recent examples of this was when Activistpost was taken down by Google.  We are still awaiting word on why this was done.

Sadly, the silencing of Activistpost is far from an isolated incident.

Hordes of YouTube accounts have been shut down for their political viewpoints.

Quite a few very prominent alternative media websites have been censored or attacked because of what they stand for.

So why is this happening?  Well, it turns out that the power of the alternative media is growing.  According to a new survey by the Pew Research Center for The People & The Press, 43 percent of Americans say that they get their news on national and international issues from the Internet.  Back in 1999, that figure was sitting at just 6 percent.

The American people are sick and tired of getting “canned news”, and they are increasingly turning to the Internet in a search for the truth.

As I have written about previously, the mainstream media in this country is overwhelmingly dominated by just 6 very powerful corporations….

Today, ownership of the news media has been concentrated in the hands of just six incredibly powerful media corporations.  These corporate behemoths control most of what we watch, hear and read every single day.  They own television networks, cable channels, movie studios, newspapers, magazines, publishing houses, music labels and even many of our favorite websites. Sadly, most Americans don’t even stop to think about who is feeding them the endless hours of news and entertainment that they constantly ingest.  Most Americans don’t really seem to care about who owns the media.  But they should.  The truth is that each of us is deeply influenced by the messages that are constantly being pounded into our heads by the mainstream media.  The average American watches 153 hours of television a month.  In fact, most Americans begin to feel physically uncomfortable if they go too long without watching or listening to something.  Sadly, most Americans have become absolutely addicted to news and entertainment and the ownership of all that news and entertainment that we crave is being concentrated in fewer and fewer hands each year.

The “news” that we get from various mainstream sources seems to always be so similar.  It is as if nearly all mainstream news organizations are reading from the same script.  The American people know that they are not getting the whole truth and they have been increasingly looking to alternative sources.

The monopoly over the news that the mainstream media once possessed has been broken.  The alternative media is now creating some huge problems for organizations that were once very closely protected by the mainstream media.

The American people are starting to wake up and they are starting to get very upset about a lot of the corruption that has been going on in our society.

But it turns out that the “authorities” don’t like it too much when Americans try to actually exercise free speech in America today.  For example, you can see recent video of female protesters in New York City being penned in by police and then brutally maced right here.

Are you sickened by that?

You should be.

What the “authorities” want is for us to shut up, sit in our homes and act as if nothing wrong is happening.

Meanwhile, they seem determined to watch us more closely than ever.

So are you going to be afraid to talk negatively about the Federal Reserve now that you know that they are going to be watching what you say on the Internet?

The Economic Collapse

Ok, the latest little scheme coming out of Euroland is that they’re going to use the European Stability Fund to capitalize a SPV, which will then buy up sovereign bonds, package and then (presumably) repo those to the ECB and then of course buy more bonds.

I will simply remind everyone that this is not materially different than what ENRON did, and we know exactly how that ended and why.

The Big Change:  Massive financial volatility and the occupation of Wall Street – when the middle class breaks protests will hit the financial streets.  Poverty in the suburbs and rising food costs.

When the basic costs of living move up there is bound to be shocks deep in the economy.  As we mull over the humbling Census data, it is clear that many Americans are struggling in this modern day economy that protects the banks at the cost of the majority.  Let us call a spade a spade.  We are in the epicenter of the biggest financial disaster in history spurred on by the investment banks and their purchased colleagues in Washington D.C.  How do we know this?  Because no real reform has been enacted on Wall Street and we enter a decade of lost wages.  The middle class is disappearing because bankers have used corporate welfare to shield themselves from the brutal corrections of the markets while the rest of Americans need to get by on an average of $25,000 per capita.  Oscillating votes from Democrats to Republicans has done absolutely nothing.  Many are now taking to the streets and protestors are now marching to Wall Street taking action.  If you look at those who are protesting many are young, in their twenties and thirties, protesting what the media has failed to cover for years.  If we look at the last decade we realize that our current financial system has captured our political system and things are starting to get volatile, just like the stock markets.

The rising costs of daily goods

You don’t need a degree in economics to know the cost of living is getting more expensive.  Take a look at the performance of various asset classes for the last year:

Look at all the items related to food in the green:

-Live cattle is up 21 percent over the last year.

-Rough rice is up 33 percent over the last year

-Lean hogs are up 13.3 percent over the last year

-Soybeans are up 12 percent

-Crude oil is up 5 percent

-Sugar is up 2.7 percent

At the same time, the majority of Americans see a shrinking paycheck or no paycheck with the large number of unemployed.  When trends like this persist, economies begin to get unstable.  The Federal Reserve continues to devalue the U.S. dollar through its actions and specifically looks to aid the big banks at the expense of the public.

Poverty in the suburbs

One of the oddest symptoms of this crisis is suburb poverty.  When we think of poverty we usually think of run down sections of Detroit or other inner cities.  Yet poverty in the suburbs is growing with the middle class shrinking:

Read the rest at My Budget 360

Uh….

Due to operational difficulties the London Gold Exchange is permanently closed for business.

Thanks to all of our members.

 

London Gold Exchange
International Digital Currency Trader

26/09/2011

Um, what might those “operational difficulties” be, if I may be so intrepid as to ask?  (I am assuming their site was not hacked, of course.)