The AGI and Goldman Corruption
"Consider the folly of the AIG 'bailout.' The government has been shoveling money through AIG's front door, only to see it immediately leave out the back door en route to Goldman Sachs to cover an unknown amount of credit default losses."
- fascinating quote from Porter Stansbury
The point is well taken: Goldman is loaded down with toxic paper, insured by AIG. As the payment streams from that paper have dried up, the insurer (AIG) has had to assume those obligations. In other words, as the insurer, AIG was obligated to make the payments that those who defaulted on their mortgages, or whatever, were supposed to make. But, of course, it couldn't: it had issued far more default insurance (a.k.a., "credit default swaps") than it had any hope of being able to actually back up. Hence when the paper turned bad, AIG swiftly headed toward bankruptcy. And the impending failure of AIG, as Goldman's counterparty, implied that Goldman was destined to go belly up shortly thereafter. But, of course, Goldman is hugely politically connected (e.g., Paulsen, the Treasury Secretary, is the former CEO of Goldman), so they simply pressured the government to bail out AIG, which, in turn, meant they themselves would be bailed out.
Goldman Sachs’s Tax Rate Drops to 1%, or $14 Million
Dec. 16 (Bloomberg) -- Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007.
The company’s effective income tax rate dropped to 1 percent from 34.1 percent, New York-based Goldman Sachs said today in a statement. The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits.
Goldman Sachs, which today reported its first quarterly loss since going public in 1999, lowered its rate with more tax credits as a percentage of earnings and because of “changes in geographic earnings mix,” the company said.
The rate decline looks “a little extreme,” said Robert Willens, president and chief executive officer of tax and accounting advisory firm Robert Willens LLC.
“I was definitely taken aback,” Willens said. “Clearly they have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions.”
U.S. Representative Lloyd Doggett, a Texas Democrat who serves on the tax-writing House Ways and Means Committee, said steps by Goldman Sachs and other banks shifting income to countries with lower taxes is cause for concern.
“This problem is larger than Goldman Sachs,” Doggett said. “With the right hand out begging for bailout money, the left is hiding it offshore.”
"When" not "If"
History demonstrates that fiat money systems have been tried countless times over the past two or three thousand years, and in EVERY case they collapse into a hyperinflation, followed by a deflationary depression. These depressions usually destabilize societies leading to chaos and war. Because fiat currencies have such a “perfectly futile historical record,” the only means by which Central Banks can delay this inevitable conclusion is through “control” of the perceived value of precious metal.
For this reason – ALONE – accurate and verifiable data regarding vaulted Central Bank stocks of gold bullion are often said to be more closely guarded than nuclear technology.
Once one understands that vaulted Central Bank gold stocks are “filling the gap” between global bullion demand and global bullion supply, one quickly realizes that “the burn rate” is of paramount importance.
The implication of what happens when this gap can no longer be filled is EXACTLY what history has demonstrated time-and-time-again; a collapse into hyperinflation, followed by a deflationary depression.
When this gap can no longer be filled, paper gold and fiat burns.
Failure to disclose will not alter the outcome. It’s a question of “when,” not “if.”
Whether Or Not We Like It
“We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent.”
– James Paul Warburg, whose family co-founded the Federal Reserve - while speaking before the United States Senate, February 17, 1950
When we stop to consider that the Federal Reserve is no more “federal” than Federal Express and they have no “reserves” – owing to the fact that they create money ‘out of thin air’ – the name “Federal Reserve” itself is a misnomer and purposely given this moniker as a deceptive means; to make its creation more palatable to lawmakers since the framers of the U.S. Constitution [and the spirit of the document itself] were dead-set against the institution of Central Banking.
It would appear that the Constitution’s framers deep distrust of Central Banking was well founded too – since the stated goal of its chief advocates is to usurp both the Declaration of Independence and the Constitution itself, in pursuit of World Government.
The means by which Central Banking exerts control over the populace is through their monopoly power in the issuance of irredeemable fiat currency [debt] for interest [usury].
The history of irredeemable fiat currencies clearly illustrates that the compounding of accumulated debt always denigrates into bondage and ultimately to the conquest of complete debt-slavery.
What me Worry about the Deficit
Investors trying to beat the market and learning to invest need to consider the impact of the large budget deficits now being considered by the U.S. government. The incoming administration and the new congress intend to spend a lot of taxpayer money to stimulate the economy and fund their programs. This will drive up the already high U.S. deficit now over $10 trillion, or more than $33,000 for each man, women and child in the U.S. So will the contemplated deficit spending do the job or just increase the debt of everyone?
According to the latest numbers from the government, the deficit for 2009 is expected to be $438 billion. This is before the recent programs such as the TARP, any bailout for the auto companies, another stimulus package and other programs on the new administration’s wish list. This deficit number assumes normal growth in the economy with rising tax collections. This is unrealistic as unemployment is rising rapidly and companies are seeing profits fall quickly with sales declining. At a minimum, the deficit will reach $1 trillion and more likely achieve the $2 trillion mark. In one year, we will see the total deficit of the U.S. rise by 10 to 20 percent. That is another $3,300 to $6,600 for each man, women and child in the U.S. The deficit of the U.S. is climbing faster than the income of the people. At some point, this large deficit will haunt our children. Not the legacy we want to leave to them.
GMAC loosens credit to make vehicles easier to buy
GMAC said Tuesday that as a result of the government aid it will resume offering automotive financing to customers with credit scores as low as 621, eliminating restrictions put in place two months ago as a result of the tight credit markets that mandated a minimum score of 700.
Marc Cannon, a spokesman for AutoNation Inc., a Fort Lauderdale, Fla.-based auto retailer that encompasses 264 dealerships including 73 GM franchises, noted that consumers can faithfully pay their bills for years, but if they miss one or two payments along the way, their credit score can drop into the 600s.
"They're not lowering standards, they're bringing more people into the game," Cannon said of GMAC. "These people are still customers and they're still good people you want to help get into the right vehicle."
Scott Talbott, a financial services lobbyist in Washington, estimated that 49 million more Americans would have eligible credit scores under the loosened restrictions.
But he said it will still be tough to attract car buyers who are worried about their jobs.
Happy New Year! Gold left 2008 with a bang, silver exited with a roar. On Monday January 5, we will begin watching the price of Gold in earnest. January holds great potential, but be fore warned...February could be ugly.