Fw: Medical News - IMVA - Weathering the Storm - Part Two - March 22, 2006

[Guest guest]

-

Mark Sircus Ac., OMD

medicalnewscommentaries

Wednesday, March 22, 2006 10:33 AM

Medical News - IMVA - Weathering the Storm - Part Two - March 22, 2006

 

 

Weathering the Storm - Part Two

 

Internal Economic Forces in the United States

(And the Ending of M3 Money Supply Reporting.)

International Medical Veritas Association

 

 

 

 

 

Now, you may think that I have become insane. That is partially true

because I am convinced that the US Fed's monetary policies will

lead to exponentially widening wealth inequity and impoverish

the majority of US households, which will then lead to social strife,

protectionism, war, and the breakdown of the capitalistic system.

 

Dr. Mark Faber

 

Called the Crash of 1987, the crash of 1990,

and the Asia -Pacific crisis of 1998.

 

 

 

Dr. Faber is not alone in thinking badly about bankers. President

Andrew Jackson said of them, " You are a den of vipers and thieves. I intend to

rout you out, and by the Eternal God, I will rout you out. " On May 23, 1933,

Congressman Louis T. McFadden, brought formal charges against the Board of

Governors of the Federal Reserve Bank system, The Comptroller of the Currency

and the Secretary of United States Treasury for numerous criminal acts including

treason.

" Mr. Chairman, we have in this Country one of the most corrupt

institutions the world has ever known. I refer to the Federal Reserve Board and

the Federal Reserve Banks, hereinafter called the Fed. The Fed has cheated the

Government of these United States and the people of the United States out of

enough money to pay the Nation's debt. "

" This evil institution has impoverished and ruined the people of these

United States, has bankrupted itself, and has practically bankrupted our

Government. It has done this through the defects of the law under which it

operates, through the maladministration of that law by the Fed and through the

corrupt practices of the moneyed vultures who control it. "

" Some people think that the Federal Reserve Banks are United States

Government institutions. They are private monopolies which prey upon the people

of these United States for the benefit of themselves and their foreign

customers; foreign and domestic speculators and swindlers; and rich and

predatory money lender. In that dark crew of financial pirates there are those

who would cut a man's throat to get a dollar out of his pocket; there are those

who send money into states to buy votes to control our legislatures. "

" These twelve private credit monopolies were deceitfully and disloyally

foisted upon this Country by the bankers who came here from Europe and repaid us

our hospitality by undermining our American institutions. "

The money power preys upon the nation in times of peace, and

conspiracies against it in times of adversity. It is more despotic than

monarchy, more insolent than autocracy, more selfish than bureaucracy.

Abraham Lincoln

After Lincoln's death, Otto Von Bismark made the following statement,

" The death of Lincoln was a disaster for Christendom. There was no man in the

United States great enough to wear his boots. I fear that foreign bankers with

their craftiness and torturous tricks will entirely control the exuberant riches

of America, and use it systematically to corrupt modern civilization. They will

not hesitate to plunge the whole of Christendom into wars and chaos in order

that the Earth should become their inheritance. "

As Managing Director, Chief Economist, and Director of Global

Economic Analysis of Morgan Stanley, Stephen Roach is a man to listen to.

" America's income-short, consumer-led recovery is the aberration - not the norm

- in this Brave New World. It is all about ever-declining personal saving rates,

ever-widening current account deficits, mounting debt burdens, and increasingly

wealth [asset] dependent consumers. It personifies what I believe is one of the

most precarious macro models that has ever existed for a major economic power.

In my view, income-short growth models are not sustainable - the only question

pertains to the circumstances of their demise. The endgame is not in doubt, in

my view. The American consumer will ultimately cave. It is the only means by

which the US will ever " fix " its twin saving and current account problems. It is

the timing and circumstances of that fix that we endlessly debate. Excess

consumption is on a collision course with sub par labor income growth. Courtesy

of an unrelenting global labor arbitrage, the " big squeeze " is getting tighter

and tighter on the world's only real consumer. "

Altogether the circumstances seem to me as dangerous and

intractable as any I can remember, and I can remember quite a lot.

What really concerns me is that there seems to be so little

willingness or capacity to do much about it.

Paul Volcker

Fed

Chairman from 1979 to 1987.

" Despite the complete absence of coverage from the five U.S.

corporate media conglomerates, these foreign news stories suggest one of the

Federal Reserve's nightmares may begin to unfold in the spring of 2006, when it

appears that international buyers will have a choice of buying a barrel of oil

for $60 dollars on the NYMEX and IPE - or purchase a barrel of oil for ?45 - ?50

euros via the Iranian Bourse, " writes William Clark in his startling essay

Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse.[ii]

The Federal Reserve's greatest nightmare is that OPEC will switch its

international transactions from a dollar standard to a euro standard.

The USA would no longer be able to run its huge current account trade

deficits or continue to wage open-ended global war on terrorism or evil.

This would actually be a good thing for it is easily argued that the

good old USA is enforcing its own form of terrorism, not only on the world but

on its own people. Never has a government so full heartedly embraced the

poisoning of its own citizens (through many means) and never has a government

stolen so much money. When Americans wake up to the fact that their Social

Security has been pilfered and their retirements threatened, only then will they

know the true nature of their own government and what it has been doing for

decades to the rest of the world.

When government steals the fruits

of your labor, you are a slave.

Devvy Kidd

The funds in the Social Security system contain nothing but

" electronic chits " that measure government obligations to itself, according to

Doglas Holzt-Eakin of the Congresional Budget Office. Carolyn Lochhead, in

September of 2004, in the Chronicle Washington Bureau wrote, " Traditional budget

measures used by politicians and the press give what Walker and many others call

a highly misleading view of the U.S. debt. These focus on publicly held debt

already incurred, now at $4.5 trillion, or 10-year budget forecasts like the one

released last week by the Congressional Budget Office showing a record $422

billion deficit this year and a $2.3 trillion 10- year deficit. But these

figures, worrisome enough, are deceptive because they ignore future liabilities

such as Social Security and Medicare payments to the Baby Boomers. An array of

government and private analysts put the actual U.S. " fiscal gap, " which means

all future receipts minus all future obligations, at $40 trillion (Government

Accountability Office) to $72 trillion (Social Security Board of Trustees).

These are not sums, but present-value figures, heavily discounted to show in

today's dollars what it would cost to pay off the debt immediately. The

International Monetary Fund estimates the gap at $47 trillion, the Brookings

Institution at $60 trillion. " To give you idea how big the problem is, " said

Laurence Kotlikoff, economics chairman at Boston University, who has written

extensively on the subject, to close a $51 trillion fiscal gap, " you'd have to

have an immediate and permanent 78 percent hike in the federal income tax. "

In July of 2005, Kurt Richebacher notes, " The Federal Reserve's

Flow-of funds statistics for the first quarter are just out. Evidently, credit

creation has been completely taken over by the printing press. In the quarter,

overall credit skyrocketed by $2,976.1 billion, close to $3 trillion, at an

annualized rate. Nonfinancial credit was up $2,411.5 billion. This compares with

an increase of $1.943.2 billion in the fourth quarter of 2004 and $836.2 billion

in 2000. Over those four years, credit growth in the nonfinancial sector has

literally tripled. To us, this looks more like monetary lunacy than monetary

policy. "

The elites understand that the strength of the dollar

does not rest on economic or financial fundamentals.

The reality is that the strength of the dollar rests on

it being the international reserve currency and

that is what is threatened by oil sold in Euros.

" If the US does not take policy steps to reduce its need for external

financing before it exhausts the world's central banks willingness to keep

adding to their dollar reserves - and if the rest of the world does not take

steps to reduce its dependence on an unsustainable expansion in US domestic

demand to support its own growth - the risk of a hard landing for the US an

global economy will grow, " writes Nouriel Roubini, Professor of Economics and

International Business at New York University.

United States Balance Sheet

We are borrowing about $1.9 billion a day from strangers

(nearly half from China and her neighbors) to fund not

only massive tax cuts, but our massive military as well.

" Despite desires by U.S. elites to enforce the monopoly petrodollar

recycling system, the geopolitical risks of a U.S. aerial attack on Iran's

nuclear facilities - while simultaneously attempting to prevent the Iranian oil

Bourse from initiating a euro-based system for oil trades - would surely create

a crisis between Washington and Beijing. Given the Bush administration's

complete lack of interest or skill regarding " soft power " diplomacy, it seems

unlikely they could use the U.N. Security Counsel to thwart the opening of the

Iranian bourse in 2006, " continues William Clark.

The Federal Reserve money supply

report is about to fall into the abyss.

On March 23, 2006, the Board of Governors of the Federal Reserve

System will cease publication of the M3 monetary aggregate. The Board will also

cease publishing the following components: large-denomination time deposits,

repurchase agreements (RPs), and Eurodollars. Notice the inclusion of the

Eurodollar. For those not familiar with this term, it is not the same as the

Euro even though some erroneously call the Euro a Eurodollar. The Eurodollar is

an American dollar held by a foreign institution outside the U.S., usually a

bank in Europe. Every dollar in foreign hands is an IOU against the USA.

M3 is the broadest measure of how much money is circulating in the

U.S. at any one time. Unlike M2, M3 is the big stuff, the super-size deposits.

The M3 money supply measure is one of the most basic economic stats published by

the Fed. Basic college macro economics college courses always cover this along

with the definitions of M1 and M2. This statistic has been published since 1959

and is widely followed by economists and investors all over the word giving an

idea at what speed the (electronic) printing press is running.

Looking back into history economic data was only kept

a secret in failing economies, e.g. the Soviet Union.

Toni Straka

At the end of the day the freely floating dollar is a tradable

commodity just like any other currency or commodity. When demand for it drops

then its value will fall and it will buy less in the way of other goods and

services. The only resolution to that problem will be that the US either has to

consume less or else it will print more of its currency to compensate. Should it

adopt the second course then inflation takes off.

The Federal Reserve obviously will not stop collecting the data, after

all,

who would plan monetary policy for a nation without all the available data

they could get. So why stop publishing it unless it was really bad news?

M3 is one way to monitor inflation in both currency and credit

markets. Measured in billions of dollars, M3 has more than doubled since 1995,

and it has increased approximately $250 billion this year alone or about 9%

annualized. Or put another away, the policies of the Federal Reserve will create

almost $1 trillion (you read that correctly) this year alone to the broad money

supply. It's not a great leap to guess that someone does not want others to know

what they are doing as they virtually print money in escalating amounts to keep

the entire system afloat. Counterfeiting is illegal except when the Federal

Reserve does it

M3 has been growing at an annual rate of 7.5 percent or double

the most recent rate of GDP growth (subject to a revision.)

Since Bush took office money supply M3 has risen 39.2%.

" Since the establishment of the Federal Reserve, in 1913, the U.S.

dollar has lost over 95% of its purchasing power. Hence, it is not surprising

that the Federal Reserve's reckless inflation has led to the common man's

expectation for the dollar to lose value over time. As the Federal Reserve

intensifies the rate at which it creates money out of thin air, the common man's

behavior (in the sphere of personal finance) tends to change for the worse, "

writes Eric Englund, a surety bond underwriter in Bellevue, WA..

Why? How? The government sells bonds to the central bank to pay for

things it does not have the political will to raise taxes to pay for, but the

bonds are purchased with money the central bank creates out of nothing. More

money in circulation makes your money worth-less. The government gets as much

money as it needs and the people pay for it with " Inflation " . Almost all money

($1 debt = $1 money somewhere) from new debt once used (for war for example)

migrates very quickly to the investment sector. Since it has to be " spent " on

something it goes to inflate the " value " of existing assets. Thus the hugely

rising tide of debt has raised many " boats, " creating huge bubbles in financial

and real estate areas. For many it has offered a nice ride but what is going to

happen when the day of reckoning arrives and the balloons burst? Immortality is

not something we can expect from the present system though it is what most of us

secretly hope for.

The Federal Reserve is obviously getting ready to push the

accelerator past the floor with massive increases in M3. With no published

figures it will make it easier to disguise the new (counterfeit) money's journey

from the printing press to the bond markets. Someone has got to buy these bonds

and if the Chinese, Japanese and other foreign banks won't the Federal Reserve

will. They just print the money and hand it over to the government in exchange

for T-Bills. Ever wonder how Bush got away with a trillion dollar tax-cut or how

a bankrupt government and country continues on and on?

If total debt expands quickly under relatively

constant interest rates while the brakes are held

on inflation, the economy will continue to " grow " .

Lowell Manning

The Federal Reserve gave the following for the reason to eliminate M3

reporting: Our searching of the economic literature revealed that very few

economists used that aggregate. " " M3 does not appear to convey any additional

information about economic activity that is not already embodied in the M2

aggregate. Further, the role of M3 in the policy process has diminished greatly

over time. Consequently, the costs of collecting the data and publishing M3 now

appear to outweigh the benefits. "

Some financial analysts disagree violently with the above statements

from the Federal Reserve. " They know what's coming -- massive amounts of dollar

creation to fund the worsening trade and federal government budget deficits, "

says James Turk in the Free Market Gold & Money Report. " There is only one

reason for the Fed to conceal important monetary component information, " The

King Report says. It's " to cover up the truth about what the Fed, central banks,

and the really big money are doing. " McHugh surmised this in October, " Because

of the M3 numbers we would see there was too much money being created. M3 was

being pumped at three times the rate of growth " of the Gross Domestic Product.

The Federal Reserve stopping its decades old reporting on M3 would be

similar to a public company stops reporting their balance sheets - how do you

know what their stock is worth when you don't know how much they earn? Or, like

when Saudi Arabia stops reporting accurate oil reserves - how do you know how

much is left?

There are two definitions for inflation. The one the layman is most

familiar with is an increase in prices. Another definition is an increase in the

money supply in excess of the real increase in the size of the economy (which

tends to raise prices, either of assets such as real estate or of consumer

goods). Hyperinflation is just when inflation spirals out of control, like in

Germany in the 1920s, when housewives pushed shopping carts full of paper money

to the bakery to buy a loaf of bread. Today we have a new situation with both

deflation and inflation threatening simultaneously.

The bankers at the Fed seem to think that if they can keep the public

from knowing about alarming developments in the money supply, they will be able

to keep the party going at least long enough for the big players to buy up gold

or other real assets, leaving ordinary consumers, and probably countries that

rely on the US consumer market (e.g. China), to deal with the wreckage.

History has shown that Americans prefer to pay for their wars through

cranking up the printing press/inflation rather then bearing the burden through

taxes and decreased consumption. And since the United States seems committed to

be in a state of perpetual warfare from now until bankruptcy we can bet our last

dollars that they will be worth less and less until the dollar collapses

completely. Not a pretty picture but when there is more debt and more dollars

floating around then stars in the universe we can pretty much envision the end

of the current money system sooner or later.

General Motors Corp. late last week revised its reported loss for

2005 to $10.6 billion, or $18.69 a share, a steeper loss

than the $8.6 billion, or $15.13 a share, it reported in January.

When we consider that in 1960 the entire federal budget was only

sixty billion dollars the numbers found above and in this entire essay are more

than frightening. Clark sees the 21st century being very much different from the

previous century, with one possible exception. " The first half of the 20th

century was filled with unprecedented levels of violence and warfare on a global

scale (15 million killed in WW I, 55 million in WW II). The first two decades of

the 21st century present challenges that could also result in the unleashing of

another period of catastrophic human suffering and destruction. The Chinese

government may fear the same fate awaits their oil investments in Iran if the

U.S. were able to attack and topple the Tehran government. Despite U.S. desires

to enforce petrodollar hegemony, the geopolitical risks of an attack on Iran's

nuclear facilities would surely create a serious crisis between Washington and

Beijing. "

If the Democrats are the firewall between

a proto-fascist regime leading us backward

into neo-feudalism, then God help us.

Steve Bhaerman

What we are witnessing is a battle for oil currency supremacy. If

Iran's oil bourse becomes a successful alternative for international oil trades,

it would challenge the hegemony currently enjoyed by the financial centers in

both London (IPE) and New York (NYMEX). The chances of this going to happened

unchallenged is slim so the chances are high again for a world at war. Certainly

China and Russia will not be happy with Americans bombing strategic targets in

their backyards. It should not be overlooked how deep the oil ties are between

China and Iran or how easily Iran can block oil tankers from leaving the Persian

Gulf. A world at war will touch everyone today like no other. There are over six

billion of us to be affected. No doubt to those neoconservative fanatics who are

dedicated to massive population reductions around the world this is not a

problem.

No nation could preserve its freedom

in the midst of continual warfare.

James

Madison, 1795

Americans have the most to lose in the world; their fall will be the

hardest. We tend to think that everything is happening a new or that the worst

is not going to happen when it has happened many times throughout history. Over

two hundred years ago men like President James Madison was looking at these

issues and seeing how fragile democracy and individual freedoms were. A

nightmare is just waiting to happen on earth. We are all going to pay for the

lunacy and total arrogance of those who lead and those who control those who

lead.

My guess is that the US administration is evil enough

to nuke Iran rather than face up to that inevitable

loss of living standards and political annihilation.

Lowell Manning

War is already aflame in Iraq and Afghanistan so for some it's a

short step in expanding that against Iran. There are some crimes that can never

be admitted so war is the easier choice. Actually, as current events in the

United States demonstrate, war is psychologically more acceptable and easier to

digest than honest self evaluation of our government and society. At heart most

of us have a basic cowardice to work in earnest toward fundamental change inside

of ourselves thus we become vulnerable to the vultures who fear not to dominate

the world and everyone in it.

Once upon a time, I loved my country.

Now I am very afraid of it.

John Kaminski

Mark Sircus Ac., OMD

Director International Medical Veritas Association

http://www.imva.info

+55-83-3252-2195

www.skype.com ID: marksircus

--------

International Medical Veritas Association

Copyright 2006 All rights reserved.

IMPORTANT