Category Archives: Debt

Winter is Coming (Part Two), Jim Quinn

Part Two of Jim Quinn’s series on the arrival of the Fourth Turning. From Quinn at theburningplatform.com:

“Don’t think you can escape the Fourth Turning the way you might today distance yourself from news, national politics, or even taxes you don’t feel like paying. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted. The Fourth Turning necessitates the death and rebirth of the social order. It is the ultimate rite of passage for an entire people, requiring a luminal state of sheer chaos whose nature and duration no one can predict in advance.” – Strauss & Howe – The Fourth Turning

In Part One of this article I laid out the reasons for Gray Champions arising to meet challenges during crisis periods in history. We are ten years into this Crisis and I have been pondering where we go from here. The plot line of the Game of Thrones has opened my eyes to the fact there isn’t just one Gray Champion during a Fourth Turning. During the Civil War, Jefferson Davis and Robert E. Lee were Transcendental prophet generation representatives of the Confederacy. Abraham Lincoln and William Tecumseh Sherman were Gray Champions of the Union.

These were men who would do anything to further their cause, from ordering thousands of men to their deaths on Cemetery Ridge, to burning down cities, to suspending the writ of Habeas Corpus, and seceding from the Union. They were destined to brandish their terrible swift swords in achieving total indisputable victory. But, we know only one side could win.

During the World War II/Great Depression crisis FDR is known as the Gray Champion who took drastic measures on the economic front with his New Deal and sent 16 million young men into battle on a scale never seen in history. Douglass MacArthur commanded many of those men in battles to the death across the Pacific. What is less discussed is the fact Winston Churchill and Joseph Stalin were also members of the Missionary prophet generation and were the Gray Champions of their nations.

To continue reading: Winter is Coming (Part Two)

Advertisements

Crimes of a Monster: Your Tax Dollars at Work, by John W. Whitehead

What an appropriate article for the day our taxes are due. From John W. Whitehead at rutherford.org:

Let us not mince words.

We are living in an age of war profiteers.

We are living in an age of scoundrels, liars, brutes and thugs. Many of them work for the U.S. government.

We are living in an age of monsters.

Ask Donald Trump. He knows all about monsters.

Any government that leaves “mothers and fathers, infants and children, thrashing in pain and gasping for air” is evil and despicable, said President Trump, justifying his blatantly unconstitutional decision (in the absence of congressional approval or a declaration of war) to launch airstrikes against Syria based on dubious allegations that it had carried out chemical weapons attacks on its own people. “They are crimes of a monster.”

If the Syrian government is a monster for killing innocent civilians, including women and children, the U.S. government must be a monster, too.

In Afghanistan, ten civilians were killed—including three children, one an infant in his mother’s arms—when U.S. warplanes targeted a truck in broad daylight on an open road with women and children riding in the exposed truck bed.

In Syria, at least 80 civilians, including 30 children, were killed when U.S.-led air strikes bombed a school and a packed marketplace.

Then there was a Doctors without Borders hospital in Kunduz that had 12 of its medical staff and 10 of its patients, including three children, killed when a U.S. AC-130 gunship fired on it repeatedly. Some of the patients were burned alive in their hospital beds.

Yes, on this point, President Trump is exactly right: these are, indeed, the crimes of a monster.

Unfortunately, this monster—this hundred-headed gorgon that is the U.S. government and its long line of political puppets (Donald Trump and before him Obama, Bush, Clinton, etc.), who dance to the tune of the military industrial complex—is being funded by you and me.

It is our tax dollars at work here, after all.

Unfortunately, we have no real say in how the government runs, or how our taxpayer funds are used.

We have no real say, but we’re being forced to pay through the nose, anyhow, for endless wars that do more to fund the military industrial complex than protect us, pork barrel projects that produce little to nothing, and a police state that serves only to imprison us within its walls.

To continue reading: Crimes of a Monster: Your Tax Dollars at Work

More Absolutely Crazy Pension News, by John Rubino

One government employee in Oregon receives a pension of $76,111…per month! From John Rubino at dollarcollapse.com:

“War” and “pensions” are conceptually about as different as it’s possible to be. But – in a measure of how far into Crazy Town we’ve wandered – they’re both taking the world in the same direction.

If a Middle East (or Asian!) war doesn’t spike oil prices and push the global economy into recession, then pensions will probably produce the same end result. Here’s an excerpt from a much longer New York Times article that should be read in its entirety for a sense of what public finance has become:

A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

A public university president in Oregon gives new meaning to the idea of a pensioner.

Joseph Robertson, an eye surgeon who retired as head of the Oregon Health & Science University last fall, receives the state’s largest government pension.

It is $76,111.

Per month.

That is considerably more than the average Oregon family earns in a year.

Oregon — like many other states and cities, including New Jersey, Kentucky and Connecticut — is caught in a fiscal squeeze of its own making. Its economy is growing, but the cost of its state-run pension system is growing faster. More government workers are retiring, including more than 2,000, like Dr. Robertson, who get pensions exceeding $100,000 a year.

The state is not the most profligate pension payer in America, but its spiraling costs are notable in part because Oregon enjoys a reputation for fiscal discipline. Its experience shows how faulty financial decisions by states can eventually swamp local communities.

Oregon’s costs are inflated by the way in which it calculates pension benefits for public employees. Some of the pensions include income that employees earned on the side. Other retirees benefit from long-ago stock market rallies that inflated the current value of their payouts.

For example, the pension for Mike Bellotti, the University of Oregon’s head football coach from 1995 to 2008, includes not just his salary but also money from licensing deals and endorsements that the Ducks’ athletic program generated. Mr. Bellotti’s pension is more than $46,000 a month.

The bill is borne by taxpayers. Oregon’s Public Employees Retirement System has told cities, counties, school districts and other local entities to contribute more to keep the system afloat. They can neither negotiate nor raise local taxes fast enough to keep up. As a result, pensions are crowding out other spending. Essential services are slashed.

To continue reading: More Absolutely Crazy Pension News

Harvey, the first domino in Illinois: Data shows 400 other pension funds could trigger garnishment – Wirepoints Special Report by Ted Dabrowski and John Klingner

A little town in Illinois can’t make payments to its police pension fund and the state is garnishing the town’s tax revenues. It’s the shape of things to come; call it pension musical chairs and the game has begun in Illinois. From Ted Dabrowski and John Klingner at wirepoints.com:

Harvey, the first domino in Illinois: Data shows 400 other pension funds could trigger garnishment

You’d be mistaken to think Harvey, Illinois has a unique pension crisis. It may be the first, and its problems may be the most severe, but the reality is the mess is everywhere, from East St. Louis to Rockford and from Quincy to Danville. A review of Illinois Department of Insurance pension data shows that Harvey could be just the start of a flood of garnishments across the state (click here to see the list).

Harvey made the news last year when an Illinois court ordered the municipality to hike its property taxes (already at an effective rate of 5.7 percent – six times more than the average in Indiana) to properly fund the Harvey firefighter pension fund, which is just 22 percent funded.

Now, the state has stepped in on behalf of Harvey’s police pension fund. The state comptroller has begun garnishing the city’s tax revenues to make up what the municipality failed to contribute. In response, the city has announced that 40 public safety employees will be laid off.

Under state law, pensions that don’t receive required funding may demand the Illinois Comptroller intercept their municipality’s tax revenues. More than 400 police and fire pension funds, or 63 percent of Illinois’ 651 total downstate public safety funds, received less funding than what was required from their cities in 2016 – the most recent year for which statewide datais available.

Two-thirds of Illinois’ 355 police pension funds failed to receive their full required contribution in 2016. And 60 percent of Illinois’ 296 firefighter pension funds suffered the same fate.

If those same numbers continue to hold true, all those cities face the risk of having their revenues intercepted by the comptroller.

To continue reading: Harvey, the first domino in Illinois: Data shows 400 other pension funds could trigger garnishment – Wirepoints Special Report

 

The End of the Debt-As-Currency Era, by Jeff Thomas

The end of that era can’t come too soon. From Jeff Thomas at internationalman.com:

Gold is the currency of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves.

—Norm Franz, Money and Wealth in the New Millennium

We are nearing the end of the debt-as-currency era.

This is quite a broad statement and, of course, since debt is the foremost currency of our day, it would be quite understandable if the reader were to regard such a prognostication to be utter nonsense.

Indeed, many would say that, without debt, the world couldn’t function. Debt has always existed and always will. However, in eras past, debt often played a much smaller role, and those eras were marked by greater progress and productivity.

We’re now living in the era of the greatest level of debt mankind has ever created. In fact, we’ve come to regard it as “normal.” Most governments are far beyond broke. And they won’t be saved by confiscation or taxation, as their people and corporations are just as heavily in debt. For this reason, a collapse is inevitable. And, since the severity of a collapse is invariably directly proportional to the severity of the debt, when it arrives, it will be a collapse that eclipses all previous collapses.

The present uncontrolled level of debt is made possible through the ability of central governments to create more currency at will. And this is only possible through the existence of a currency that is fiat in nature—that has no inherent value.

Aristotle was right on the mark when he stated that for something to be appropriate as money, it must have intrinsic value—independent of any other object and contained in the money itself.

The great majority of what passes for money today is digital, although, for daily use, paper currency is still widely used. But it must be said that paper currency is also fiat, having a far lower intrinsic value than the denomination printed on it.

To continue reading: The End of the Debt-As-Currency Era

China’s History of Financial Warfare and The 4 Options They Can Use To Win, by Adem Tumerkan

Wars can be fought on many fronts, including the financial front. Does China have a financial war strategy? From Adem Tumerkan at palisade-research.com:

Last Friday I published an article highlighting the emerging Trade War between China and the United States. As I wrote then, you have the opportunity to position yourself correctly and benefit from their fighting.

But first, I think it’s necessary to take a deeper look at China and understand their strategy. I don’t think many realize what they’ve been up to for the last 20 years while preparing for any potential trade wars.

Also, I list the four things China could do in retaliation of a trade war. All four options would be devastating to the U.S. and global markets.

Let’s look at some history. . .

It started in the late 1990’s.

China realized that modern warfare wouldn’t follow the same path as traditional wars –  swarming troops and tanks and planes into other countries and shooting at one another in attempt to occupy their land.

There’s this little known book that was published two decades ago and explains all the pieces in China’s strategy. . .

The book is called Unrestricted Warfare by Qio Liang and Wang Xiangsui. Both men were Colonels in the air Force for the Chinese military.

In the book, they write about the collapse of Asian economies in 1997 – what’s known as the ‘Asian Contagion Crisis’ – when U.S. hedge funds “attacked” the currencies of Southeast Asia.

This to them was an example of the new generation of warfare. . .

What we call Financial Weapons of Mass Destruction (F.W.M.D).

We’ve seen the U.S. engage in Financial Warfare by using sanctions on countries that don’t play ball with us. An example of this type of warfare are the economic sanctions imposed against Iraq, Iran, Russia, and North Korea.

Cutting them off from world trade, the SWIFT interbank money transfer systems, and curbing their debt markets are some of the weapons used in financial warfare.

After witnessing the Asian Contagion Crisis, China’s military was one of the first to adopt a financial war strategy – years before the U.S. did.

 

To continue reading: China’s History of Financial Warfare and The 4 Options They Can Use To Win

More Shifty Accounting: US Public Sector Spending May Exceed 60% of GDP, by Peter Diekmeyer

If the government accounted for its liabilities the same way most corporations have to, annual deficits, the national debt, and government spending as a percentage of GDP would be much higher. From Peter Diekmeyer at wolfstreet.com:

US federal government spending is expected to bloat to over $4.7 trillion during fiscal 2020, according to Congressional Budget Office data released this week. However, aggressive accounting may be hiding a far worse situation.

Total spending by the Trump Administration this fiscal year may be more than double what the non-partisan CBO admits. Worse, overall US federal, state and local government spending may exceed 60% of GDP.

So calculates a Chicago-based accounting watchdog. “Government budgeting works on a cash basis,” explains Sheila Weinberg, founder and CEO of Truth in Accounting. “That enables them to leave many of their expenses and liabilities off the books.” Weinberg, a CPA who has testified before Congress and the Federal Accounting Standards Advisory Board, has been calling out shifty government reporting for nearly two decades.

“Truthful accounting is key for citizens, legislators and the press to understand public finances,” says Weinberg. “Without the right information, it’s hard—if not impossible—to make effective decisions about public policy.”

The scale of the laxness that Weinberg has uncovered is staggering. TIA data suggest that total US government debt currently tops $104 trillion when unfunded liabilities are included, nearly five times as high as the official figures suggest.

Weinberg isn’t alone. In Canada, Al Rosen, a forensic accountant and co-author of Easy Prey Investors , has long claimed that private sector investors are being “systematically swindled out of large amounts of retirement savings” due to inadequate reporting standards.

However, according to Laurence Kotlikoff, it’s governments that are setting the pace. Kotlikoff, an economics professor at Boston University, calculates that based on fiscal gap accounting, the US government owes $200 trillion more than it admits.

To continue reading: More Shifty Accounting: US Public Sector Spending May Exceed 60% of GDP