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December 25, 2005

US debts spinning out of control

"The US economy is the world's greatest credit addict. It is mainlining debt at the rate of an irrecoverable addict and the rest of the world is feeding its habit. US financial assets held by foreign investors have climbed $US 212 Billion over the third quarter of 2005. Annualised, that's 848 Billion." More...

The US government has only one way to keep it's debt spending going, and that is to flood the world with money of biblical proportions.

Posted by Ray Hewitt at 10:07 AM | Comments (0)

December 15, 2005

Washing budget cuts a lie

(1) it takes out all the (really "off-budget") excess money coming into the Social Security retirement fund, that is supposed to be saved for future retirees' checks, (2) considers it as "income" for Congress and uses it all to pay Congress's own bills, and then (3) subtracts that "income" from Congress's own losses and reports only the total to the public as "the" budget. More

Posted by Ray Hewitt at 10:50 PM | Comments (0)

December 13, 2005

US money printing to continue

The graphs in this article tell the story with big picture frames. More

Posted by Ray Hewitt at 10:01 PM | Comments (0)

December 10, 2005

The flu fraud

Let's connect the dots between these three links. People getting bird flu have gotten it directly from chickens; it has not become contagious between humans. Meanwhile the feds are gaming a health scare for which they are going to save us from those deadly birds. They've spent a couple billion on Tamiflu which is useless against bird flu.

Death toll from bird flu hits 70
White House prepares for flu epidemic
Tamiflu vaccine useless against avian flu

Posted by Ray Hewitt at 03:52 PM | Comments (0)

Merck studies on Vioxx were a fraud

It is an axiom in pharmacutical medicine that poison is in the dose. All medicines have negative side effects. Their art is to foist poisons on unsuspecting consumers without them making a connection to being systematically poisoned. The subject of this article is Merck. But don't think it is an isolated case. Merck withheld negative evidence

The industry has reached a stage when their patents run out, they have to keep finding ways to repackage the old medicines to get new patents. To do that, the new medicines are getting more toxic. Even with antibiotics which kill the friendly bacteria in your G.I. tract, microbes have been developing stronger resistance, certain evidence of evolution at work.

The industry would like you to think that disease just happens. Don't fall for it. Disease is your body's reaction to bad diet or bad medicine. Avoid medicine unless it is a life threatening emergency. Avoid processed foods ladened with chemicals and stripped of their nutrients. We can't be perfect at it, but the better we practice proper nutrition, the better we can ward off disease. Right food is your best cure and disease preventative. Always has been; always will be. One of my favorite websites on this subject is Mercola.com

Posted by Ray Hewitt at 11:32 AM | Comments (0)

Money , the political narcotic

I recall a quote years ago from a California politician. He called money "the mother's milk of politics." It also serves to think of money as a political narcotic. Politicians will alway spend more then they take in direct tax revenue; the more they get, the more they spend. The states are limited to debt financing, but the federal government has created the legal means to create money to pay its debts. It's like writing checks without savings to reconcile the checks. If you or I did it, it would be called counterfeiting. This is the ONLY source of monetary inflation. It amounts to an indirect source of tax revenue which saves the political class from the discomfort of legislating direct tax increases.

The effects on modern business cycles are well understood by a school of economists called Austrians. For good reason, they are shunned by the political establishment.

After the depression of the 30s, all the monetary imbalances were wrung out, paving the way for the long boom that followed WWII. There were recessions that followed, but they were kept relatively minor by infusions of extra money. During the early stages of an inflationary cycle, it doesn't take much extra money (the narcotic) to keep the boom going, but the long term effect is to mask cumulative monetary imbalances.

The hallmark of these cumulative imbalances is an increase in debt accompanied by a decrease in savings; inflationary cycles reduce the incentive to save and increase the incentive to borrow. Consumers haven't caught on the cause of the scam, but over time they eventually realize that it is better to borrow at cheap interest rates and spend in the present then to save to save at low interest rates and face the loss of purchasing power in the future.

There are real limits to how far this can go on and it is anybody's guess to when mass bankruptcies reach a critical stage. Just as borrowing increases the money supply, bankruptcies decrease the money supply. The feds don't have this problem because they can create money out of thin air. Still, they fear the antithesis of inflation, deflation, because they know it is a sign they have lost their ability to keep ahead of bankruptcies. To use the narcotic metaphor, it requires ever increasing amounts of monetary stimulus to ward off the eventual bust. This inflationary cycle is about 70 years old and there are signs it is nearing the end.

To give you some idea of what the statistics are showing, I've extracted some numbers from Richebächer. "When Greenspan took over, total indebtedness of the United States was USD 10,000 billion. Today, total indebtedness is 37 trillion dollars and something. I mean indebtedness has more than tripled in the United States and the question is: where did all this money go?

"When you look at the credit expansion in America from the late 70-ies and over these past decades, America has had a credit expansion of 1.4 dollars credit for 1 dollar additional GDP. The relationship was 1.4 to 1. Recently, the relationship is 4 to 1. For every dollar added to GDP, there are now 4 dollars added to indebtedness. This is the worst performance in terms of credit expansion in history and of course in comparison to any other country."

This is not just an American phenomenon, it is a world phenomenon. Every nation subscribes to the same fraudulent economic practices. Monetary flood

To repeat, nobody can predict when the unwinding of the world economy will start to make front page news, but if you are with me, it would be wise to decrease your debt exposure while there is time. At best, if you hold on to your job, increasing prices and the increasing cost of debt is going to keep squeezing you.

Posted by Ray Hewitt at 10:05 AM | Comments (0)

December 04, 2005

Federal Reserve discontinuance of M3 statistic forebodes an inflationary future

M3 discontinued

To those who don't follow arcane monetary statistics, M3 is a tally of all the money in circulation. When the Fed writes out IOUs to creditors, it creates new currency in circulation which translates to M3. Why are they doing this? If you are getting that feeling that they are hiding something, you would be right.

"Something of fundamental global monetary importance is now beginning to happen inside the US monetary system. The Federal Reserve is trying to disappear behind a curtain – for very good monetary reasons. The US "broad money" measure (M3) has increased from $US 6.5 TRILLION to $US 10 TRILLION over the past FIVE years! That is an increase - and an inflation - of 53.8 percent in the US "stock of money" over those five years. And THAT, in turn, is the "monetary illusion" inside which Americans have been living. They have seen the "value" of their house climb as they saw their country's trade and current account deficits explode and the debt owed to the rest of the world climb ever higher as many of these "new" Dollars flowed out." Source

Posted by Ray Hewitt at 09:59 AM | Comments (0)