Obama pieces together economic plan
Obama released a report from his economic team that claimed a $775 billion economic stimulus package he is proposing would create well more than the 3 million jobs contained in his first draft.
"These numbers are a stark reminder that we simply cannot continue on our current path," Obama said Saturday in his weekly radio and YouTube broadcast address.
"If nothing is done, economists from across the spectrum tell us that this recession could linger for years and the unemployment rate could reach double digits -- and they warn that our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world," he said.
On the other hand, what if "something" is [being]done and the recession does linger for years and the unemployment rate does reach double digits...or worse? The government is doing exactly the opposite of what it SHOULD BE doing. It is doing what it is "expected" to be doing because the masses have been hypnotized to believe that this is what the government SHOULD BE doing. Did that make any sense?
Our "financial system" is/has been a grand deception. "Spending Your Way To Prosperity" has proven to be a book better left unread. I'll gladly pay you Tuesday, for a hamburger today is not the path to Millionaire Acres.
Have you ever noticed these big homes with two and three car garages, and the cars/trucks/SUVs that are always parked in the driveway? And they're always parked in the driveway because the garage is too full of "stuff' to park the cars in there? These are the folks that have spent their way to prosperity. Look at all the stuff they have, "THEY MUST BE RICH!"
Not likely. With no savings account, and a low credit score, they are hardly rich. You're rich when your money works for you, and you no longer have to work for your money. Living paycheck to paycheck, paying the minimums on your credit cards, and just the interest on that jumbo mortgage doesn't make you rich. No, it doesn't...
Servitude - slavery or bondage of any kind: political or intellectual servitude. Bound to the banker, one could hardly call themselves rich. Americans have become sharecroppers of debt for the banking class. And what a crop of debt we Americans have raised. The debt overwhelms the financial landscape. It is time to harvest that debt, and clean up the landscape by increasing per capita savings, and eliminating unfunded spending. Sowing new seeds of debt with government encouragement is not what America and her immense sharecropper class needs today. Americans are not interested in growing new debt. They struggle with the debt they've grown already, unwilling, finally, to grow more. Americans want and need to be encouraged and rewarded for saving. Encouraging Americans to spend money they don't have by offering them ever cheaper debt financing is not going to solve or fix our broken financial system. It will only strengthen their chains of bondage to their bankers and drag the nation further into financial disrepair.
Terrorism isn't the biggest threat to our "freedom", our debt and the banks are the biggest threats to our freedom. The sovereignty of the nation is at far greater risk from within than it is from the outside. Fighting the twin boogie men of Communism and Terrorism over the past 50 years has taken up several lanes of this financial highway to hell that has lead to today's crossroads. The Military Industrial Complex has no foundation without the Federal Reserve printing money and debasing the Dollar for the past 96 years. Government spending is the grandest part of this grand deception we call our financial system. The Federal Reserve funded it all with their printing presses. WWII got America out of the Great Depression, NOT The New Deal. The new deal did more to perpetuate the Depression than end it. Obama's New New Deal will only exacerbate the current problem, prolong it, and leave what history will surely refer to as The Greater Depression in it's wake. We can only hope it doesn't lead to WWIII.
Bad banks and business need to be allowed to fail so that new ones can take their place. The effort to prop up home prices needs to cease immediately. The price of homes need to be allowed to fall to a level that is affordable because of price, not because the financing to purchase it is "cheap". America needs to recapitalize and begin renewing it's manufacturing base immediately. America desperately needs new roads and bridges, sure, but you can't export roads and bridges. America needs to shut down, disband, and forever disallow the Federal Reserve Bank Of The United States. The bank is unconstitutional and is the #1 reason the nation faces today's financial crisis. America was a richer nation 100 years ago than it is today. America is a gas bag of debt whose flatulence has wilted the world with an abundance of flotsam we call the US Dollar. What America really needs, is a BIG FLUSH. Unfortunately, by continuing to feed the gas bag, it's going to take a double flush to push this turd all the way down the drain.
How the Government Tallies That Grim Jobless Rate
Yesterday morning, the Labor Department released its grim December jobs report -- 524,000 jobs were lost that month, bringing the 2008 total to 2.6 million and pushing the nation's unemployment rate to 7.2 percent, the biggest since 1993.
But how exactly does the government figure unemployment?
Like many big reports, the Labor Department's monthly jobs report is based on data that is extrapolated from a randomly selected sample of all U.S. households, a much smaller group than the total number it seeks to determine.
For the monthly jobs report, the Labor Department contacts 60,000 households to determine the unemployment picture for the entire workforce, which consists of about 154 million Americans.
Each month, 15,000 of the sample's households are switched out, so the 1,500 U.S. Census workers who take the labor data aren't talking to the same people each month.
Nice recipe. I suspect, however, that the actual unemployment figures for America are far worse than we've been told. All government statistics come from educated guesses based on estimates using tainted variables. The truth is that the government doesn't really know how many folks are "unemployed" any given week. But they do know that if they knew the truth and published it, a panic would result.
Questions loom over use of Treasury bailout money
WASHINGTON (AP) -- President-elect Barack Obama's economic team is broadening the mission of the $700 billion bailout for the financial sector, aiming to unfreeze credit for homeowners, consumers, small businesses and local governments.
The overhaul is aimed at the $350 billion remaining in the Troubled Asset Relief Program and comes amid mounting criticism from lawmakers and watchdogs that the Bush administration has administered the money in an inconsistent way and has not made banks accountable for the money.
The head of a congressional panel overseeing the $700 billion bailout program said Friday that lawmakers need to "take a very hard look" at how banks have used the money and she welcomed Obama's attempts to better define the program's mission.
Though the Obama team is not offering any specifics, the mere fact that it is setting goals for the money won support from the head of a congressional panel that is charged with overseeing how the money is being spent.
"These are powerfully important initiatives," said Harvard law professor Elizabeth Warren. "I'm very pleased that the incoming administration is focused on these issues."
She offered no specific advice on how to free up more credit. "It's going to take a variety of tools," she said. "They may have to move through multiple approaches."
The Congressional Oversight Panel she heads released a report Friday featuring questions about how banks are spending taxpayer money, how the money will combat the rising tide of home foreclosures and Treasury's overall strategy for the rescue.
But Treasury's Dec. 30 response "did not provide complete answers to several of the questions and failed to address a number of the questions at all," said the panel's second report.
The new document cited an Associated Press investigation that found none of the banks was willing to disclose what they were doing with hundreds of billions of dollars distributed through direct injections of federal money.
"For Treasury to advance funds to these institutions without requiring more transparency further erodes the very confidence Treasury seeks to restore," it said.
Instead of attempting to "broaden the mission of TARP" the new administration should be looking at ways to eliminate the remainder of the TARP Funds before they are given away as another round of charity to banking directors. By an overwhelming margin Americans opposed the TARP Fund, yet legislators passed it anyways. After $350BILLION of the $700BILLION has been spent on bank dividends and bank director bonuses, the financial calamity it's passing was to prevent came anyways. Spending the other $350BILLION will only make it worse, NOT better.
Treasury Bills, Can You Hear The POP!?
This leads us to US treasury bills. It is the final bubble that has already popped and the air is quickly escaping. It is of great significance to the US economy as the US bond market far exceeds US equity markets. Other than gold, treasury bills and corporate bonds are the only asset classes to gain in 2008. It is an understandable outcome, given the general perception that T-Bills are a safe haven in times of uncertainty. But now the time has come for caution.
Yields have dropped to levels not seen since the all-time-lows in the 1940s. A 30-year bill yields a return of under 3%, 10-year just over 2% and short-term yields have periodically even dropped into the negatives. Yes, investors were paying for the privilege of owning US denominated debt. It boggles the mind who would accept such ludicrous returns when the money supply growth is quite literally, off-the-charts. The inevitable day of reckoning, when foreign investors fail to show up to a bill auction, is coming unless prices fall and yields tick up.
Treasury Bills have had an impressive run into the later months of 2008 but their heydays are quickly drawing to a close. We will see a continued movement out of T-Bills as investors refuse the low yields and move into asset classes offering greater opportunities. The recent resilience of T-Bills, in the face of a sharp dollar decline, can only be attributed to the Federal Reserve’s intervention to prevent the collapse of US debt. The Federal Reserve has as great a chance, of keeping prices at these levels, as are you or I do seeing pigs fly. Market forces always win and they will force down values and increase yields.
As investors come to their senses and refuse near zero yields, they will begin to move into other investment classes. We believe gold will be one of the largest benefactors as the desire to hold something of inherent value intensifies. All investors holding T-Bills as a trade, rather holding to maturity, should be out of their positions.
5 New Forces to Drive Gold Higher
Gold naysayers habitually point to the relatively weak performance of gold relative to the broader market over the last 5 years. Given the market today, that argument is increasingly wrong, and the naysayers are soon to either admit their mistake, or pretend that they were never naysayers at all. That’s because during the last 3 months, five major new forces have emerged to compound the previous strong drivers of the gold price up to now.
These new forces are as follows:
1. China has stopped buying U.S. debt.
2. Future discoveries of gold deposits will diminish dramatically.
3. Existing by-product gold production will fall sharply
4. Gold is becoming mainstream
5. Gold is the best performing asset class of the decade
Now that the global financial meltdown has got up a head of steam, investors are hard pressed to find any investment that has performed well over the last ten years as consistently as gold.
As this intelligence permeates the none-too-quick popular investment imagination, and, combined with the other 4 factors, gold is going to be where the world’s next crop of millionaires is minted.