Skip to content

A Thousand Pictures = One Word – Gang of Six: Cuts or Wish List? – Grassley: DOJ Cover Up

July 22, 2011

A Thousand Pictures Is Worth One Word

  • The Alex Jones Channel Alex Jones Show podcast Prison Planet TV Infowars.com Twitter Alex Jones' Facebook Infowars store

Jeff Clark
BIG GOLD
July 22, 2011

In spite of constant headlines about debts and deficits, most Americans don’t really believe the U.S. dollar will collapse. From knowledgeable investors who study the markets to those seemingly too busy to worry about such things, most dismiss the idea of the dollar actually going to zero.

History has a message for us: No fiat currency has lasted forever. Eventually, they all fail.

BMG BullionBars recently published a poster featuring pictures of numerous currencies that have gone bust. Some got there quickly, while others took a century or more. Regardless of how long it took, though, the seductive temptations allowed under a fiat monetary system eventually caught up with these governments, and their currencies went poof!

You might suspect this happened only to third world countries. You’d be wrong. There was no discrimination as to the size or perceived stability of a nation’s economy; if the leaders abused their currency, the country paid the price.

As you scroll through the currencies below, you’ll see some long-ago casualties. What’s shocking, though, is how many have occurred in our lifetime. You might count how many currencies have failed since you’ve been born.

So what’s the one word for the “thousand pictures” below? Worthless.

Yugoslavia – 10 billion dinar, 1993

Zaire – 5 million zaires, 1992

Venezuela – 10,000 bolívares, 2002

Ukraine – 10,000 karbovantsiv, 1995

Turkey – 5 million lira, 1997

Russia – 10,000 rubles, 1992

Romania – 50,000 lei, 2001

Central Bank of China – 10,000 CGU, 1947

Peru – 100,000 intis, 1989

Nicaragua – 10 million córdobas, 1990

Hungary – 10 million pengo, 1945

Greece – 25,000 drachmas, 1943

Germany – 1 billion mark, 1923

Georgia – 1 million laris, 1994

France – 5 livres, 1793

Chile – 10,000 pesos, 1975

Brazil – 500 cruzeiros reais, 1993

Bosnia – 100 million dinar, 1993

Bolivia – 5 million pesos bolivianos, 1985

Belarus – 100,000 rubles, 1996

Argentina – 10,000 pesos argentinos, 1985

Angola – 500,000 kwanzas reajustados, 1995

Zimbabwe – 100 trillion dollars, 2006

So, will a similar fate befall the U.S. dollar? The common denominator that led to the downfall of each currency above was the two big Ds: Debts and Deficits.

With that in mind, consider the following:

Morgan Stanley reported in 2009 that there’s “no historical precedent” for an economy that exceeds a 250% debt-to-GDP ratio without experiencing some sort of financial crisis or high inflation. Our total debt now exceeds GDP by roughly 400%.

Investment legend Marc Faber reports that once a country’s payments on debt exceed 30% of tax revenue, the currency is “done for.” On our current path, analyst Michael Murphy projects we’ll hit that figure by October.

Peter Bernholz, the leading expert on hyperinflation, states unequivocally that “hyperinflation is caused by government budget deficits.” This year’s U.S. budget deficit will end up being $1.5 trillion, an amount never before seen in history.

Since the Federal Reserve’s creation in 1913, the dollar has lost 95% of its purchasing power. Our government leaders clearly don’t know how – or don’t wish – to keep the currency strong.

Whether the dollar goes to zero or merely becomes a second-class currency in the global arena, the possibility of the greenback being added to the above list grows every day. And this will lead to serious and painful consequences in our standard of living. While money is only one of many problems we’ll have to deal with, you can protect your assets with the one currency that can’t be debased, devalued, or destroyed by irresponsible leaders.

Don’t be the investor who dismisses this message from history. Use gold (and silver) as your savings vehicle. Any excuse you have now will be meaningless and irrelevant when we enter that fateful period. Make sure you own enough precious metals to make a difference in your portfolio.

Because when it comes to money, worthless is not a fun word.

——————————————————————————-

Gang of Six Plan: Spending Cuts or Wish List?

| Print |  E-mail
Written by Jack Kenny
Thursday, 21 July 2011 17:31
The bi-partisan “Gang of Six” plan, billed as a $3.7 trillion deficit-reduction package, might better be described as a bi-partisan wish list. Rather than call for reductions in or elimination of any programs or departments of a federal government now $14.3 trillion in debt, the plan contains a long list of savings over the next ten years to be “found” by various committees of Congress. The plan begins by proposing enactment of a “a $500 billion down payment that would secure immediate debt relief…” Since our government is currently running in deficit at the rate $1.3 trillion a year, this amounts to borrowing another half a trillion dollars for a “down payment” on the debt we’ve already accumulated.The committees would be seeking “real deficit savings in entitlement programs,” including the following list:

  • Armed Services would find $80 billion.
  • Health, Education, Labor, and Pensions would find $70 billion.
  • Homeland Security and Government Affairs would find $65 billion.
  • Agriculture would find $11 billion while protecting the Supplemental Nutrition Assistance Program.
  • Commerce would find $11 billion.
  • Energy would find $6 billion and may propose additional policies to generate savings that would be applied to the infrastructure deficit or to reduce the deficit.
  • Judiciary would find an unspecified amount through medical malpractice reform.

The plan would save an unspecified amount by tying the Social Security Cost of Living Adjustment to the chained Consumer Price Index, which includes a shift in consumer purchases to lower price goods when calculating increases in the CPI. It would exempt Supplemental Security Income for the poor and disabled from the shift for five years, then phase it in over the next five. According to the Congressional Budget Office, the shift would slow the growth in the annual adjustment by 0.25 percent a year. On the other hand, Congress would consider Social Security reform “if and only if the comprehensive deficit reduction bill has already received 60 votes.”

At the same time the plan would “permanently reform or replace” the Medicare Sustainable Growth Rate at an increase of  $298 billion, while offsetting that cost with unspecified “health savings.” The Finance Committee would “find an additional $202 billion/$85 billion in health savings and would maintain the essential health care services the poor and needy rely on.” The Budget Committee, meanwhile, would find a savings of $26 billion in entitlement programs by seeking out “fraud, abuse and other wasteful spending government-wide.”

On the revenue side, the plan would require the Finance Committee to come up with tax reform that would “deliver real deficit savings by broadening the tax base, lowering tax rates and generating economic growth …” The plan would simplify the tax code by establishing three tax brackets with rated of 8-12, percent, 14-22 percent and 23-29 percent.  At the same time, it would reduce tax deductions for health, charitable giving and home ownership and “retain support for low-income workers and families.”  The Alternative Minimum Tax, expected to bring in $1.7 trillion over the next decade would be repealed, but over all revenue -or at least estimates of it—will have to increase during the same period: “Tax reform must be estimated to provide $1 trillion in additional revenue” and must generate “an additional $133 billion by 2021, without raising the gas tax, to ensure improved solvency for the Highway Trust Fund.” How Congress will “generate” an additional $13.3 billion a year for the Highway Trust Fund without increasing the federal tax rate at the pumps is not clear. Higher gas prices or increased travel by motorists could increase the flow of dollars to the federal treasury. Or perhaps the revenue will be “generated” by borrowing from other trust funds.

The issue of “additional revenue” has been a sticking point in the ongoing negotiations, particularly in the Republican House, where 235 members signed a pledge in 2010 not to vote for any tax increase. House Majority Leader Eric Cantor said on Tuesday the Gang of Six plan includes “some constructive ideas for dealing with the debt,” but he did not endorse it. The House approved its own “cut, cap and balance” plan on Tuesday, which some opponents of the plan criticized for not offering enough in the way of spending cuts and entitlement reforms, while others said it went too far.

“Regardless of what other parts of this bill say,” charged Representative Jerrold Nadler of New York, “there is no way to meet these goals without destroying Medicare, Medicaid, Social Security, veterans’ programs, and military preparedness.”

The Gang of Six is made up of three Senators from each party, with Democrats Dick Durbin of Illinois, Mark Warner of Virginia and Mike Crapo of Idaho, joined by Republicans Kay Bailey Hutchinson of Texas and Saxby Chambliss of Georgia. The sixth member, Republican Tom Coburn of Oklahoma, had bowed out in May when he believed the spending cuts in the plan were not enough.  He rejoined the group on Tuesday, having been drawn back, The Hill  reported, by the decision to add $116 billion in healthcare-entitlement savings to the deficit reduction plan. Coburn had put out a $9-trillion debt-reduction plan of his own on Monday, but conceded it could not get passed.

While it appears unlikely that legislation required to implement the long list of anticipated and hoped for savings and added revenue will be written and enacted by the August 2 deadline for a vote on raising the debt ceiling, the plan in its present from could form the basis of an agreement if an interim debt authorization is passed. At some point the committee recommendations are to be consolidated into one bill, with the exception of the Social Security reform, which will be voted on separately. If the Social Security reform receives 60 votes in the Senate it will be added to the deficit reduction measure, which will then be sent to the House. If not, the entire plan cannot pass, according to the procedural rules to be adopted.

Whatever legislation comes out of the Gang of Six plan, it will apparently be voted on in a hurry. The Majority and Minority leader could agree to “limit debate and the number of and the number of amendments, or impose other substantive restrictions by agreement, so that Leaders can manage the bill with a process that satisfies 60 Senators and the process cannot be held up by a small group on either side.”

Even if plan were to result in the anticipated $3.7 trillion in deficit reduction over the next ten years, that would be less than the $3.9 trillion that will be added to the debt in just three years at the current rate of deficit spending. And that is assuming the congressional committees will “find” all the anticipated savings in all the departments, bureaus and agencies run by people skilled and experienced in defending every dollar that comes their way.

In short, the Gang of Six plan offers a promise of savings, to be discovered and defined later, in exchange for a raising of the debt ceiling now.

—————————————————————————-

Grassley Sees DOJ Cover Up in ‘Fast and Furious’ Investigation

  • The Alex Jones Channel Alex Jones Show podcast Prison Planet TV Infowars.com Twitter Alex Jones' Facebook Infowars store

Fred Lucas
CNS News
July 22, 2011

A senior Senate Republican has accused the Justice Department of a “cover-up” by limiting information to Congress about a botched gun running program along the southwest border.

“I think they’re trying to cover up now by not giving us all the information that we want,” Sen. Charles Grassley (R-Iowa), the ranking member of the Senate Judiciary Committee, told CNSNews.com.

“In regard to criminality, this is quite obvious there is criminal activity when our own government suggests our own laws ought to be broken,” he said. “Isn’t it just as criminal if we do that, as [it would be] if Chuck Grassley did it as a private citizen?”

Grassley is investigating a gun running operation led by the Phoenix division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and also involving the Drug Enforcement Administration and FBI.

Full article here

———————————————————————————-

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: