I think it's important to understand the dynamic of inclusiveness, especially in national elections. If you surveyed most every American, they would claim to believe in the United States Constitution. Therefore, our charge must involve our own education of why those brave souls, whom I'm sure were not all in lockstep with one another, to fashion the Constitution the way they did.
If we are to build the base of any political party, we have to be well versed enough to debate the uninformed and misguided. This involves much more than debate amongst ourselves but also the outreach to those that may be misinformed as to the individual responsibility needed to live in a free society.
Quite often an opposing point of view will center on the issue of fairness, and this can be very tricky. Fairness first and foremost must be defined clearly and not confused to mean the same as justice. It is fair for everyone to have the same opportunity to apply for a job, but to say that every job has to be filled with an equal number of men and women is not fair if a more qualified member of either sex does not get hired as a result. That is not justice and to use fairness as a substitue is incorrect. This fairness issue is a major stumbling block we will encounter in many a debate, and it is critical we frame it's use properly to educate the misinformed.
There also is a clear delineation between federal and states rights that have to be explained properly, as this is the underlying tenant in supporting the argument for a limited federal government. The misuse of power in the federal government can be a unifier with many independents that have seen abuse on both sides of the political spectrum when the federal government leans to far one way or the other and impose their ideological extremes on a centrist nation.
We have to avoid being cast as extremists. When we make our case as standing for the principles that the oppressed individuals at the inception of our country did, we can rightfully claim to represent all citizens that feel their rights are being infringed upon. This allows us to welcome anyone who believes the choices of a free thinking people are the individual right given to them under our Constitution, as long as those choices don't infringe on the rights of other free thinking people.
It doesn't matter if you call yourself a Democrat or a Republican, we are all free citizens of the United States of America. Is is important to remember that our founding fathers believed strongly in a secular government, as most of them had personally witnessed abuses carried out in the name of any one religion, and provided for the States Rights to be a check on a tyrannical federal government. However, they also realized how the virtues espoused by Christianity were the most pure form of governance for a truly free people to live in harmony.
A noted Dietist in 1790, just about a month before he died, Benjamin Franklin wrote the following in a letter to Ezra Stiles, president of Yale University, who had asked him his views on religion:
“ As to Jesus of Nazareth, my Opinion of whom you particularly desire, I think the System of Morals and his Religion, as he left them to us, the best the world ever saw or is likely to see; but I apprehend it has received various corrupt changes, and I have, with most of the present Dissenters in England, some Doubts as to his divinity; tho' it is a question I do not dogmatize upon, having never studied it, and I think it needless to busy myself with it now, when I expect soon an Opportunity of knowing the Truth with less Trouble."
No my friends, America was not founded as a Christian Nation or any other form of religious nation, but America most certainly was formed with the belief that the values Christianity espoused were essential for it's citizen's to remain free from tyranny.
4/30/09
4/19/09
Sovereignty
The United States of America unlike other countries was founded on the principles of life, liberty and the pursuit of happiness for it's citizens as a sovereign, democratic republic.
The key to this sovereignty was the insistence of the individuals right of self determination through a responsive, limited government. Our founding fathers had known all to well the oppression inflicted by an all to powerful government.
But today, in a world of economic chaos we have to ask ourselves...our we sacrificing our country's sovereignty because of a global economy?
The following article portrays a very different America from the one in which our founding fathers envisioned and warned against, as well as detailing how the powers that be have worked so deeply behind the scenes to maintain the illusion that we still are a sovereign nation while at the same time stripping it's citizens of their liberty and right to self governance.
Ellen Brown
Global Research
April 19, 2009
Do we really want the Bank for International Settlements (BIS) issuing our global currency? In an April 7 article in the London Daily Telegraph titled “The G20 Moves the World a Step Closer to a Global Currency,” Ambrose Evans-Pritchard wrote:
“A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order. “We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity,’ it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.
“In effect, the G20 leaders have activated the IMF’s power to create money and begin global ‘quantitative easing’. In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it.”
BIS, founded in Basel, Switzerland, in 1930, it has been scandal-ridden from its beginnings. According to Charles Higham in his book Trading with the Enemy, by the late 1930s the BIS had assumed an openly pro-Nazi bias.
Indeed they will. The article is subtitled, “The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity.” Which naturally raises the question, who or what will serve as this global central bank, cloaked with the power to issue the global currency and police monetary policy for all humanity? When the world’s central bankers met in Washington last September, they discussed what body might be in a position to serve in that awesome and fearful role. A former governor of the Bank of England stated:
“The answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS)…. The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”[1]
And if that vision doesn’t alarm conspiracy theorists, it should. The BIS has been called “the most exclusive, secretive, and powerful supranational club in the world.” Founded in Basel, Switzerland, in 1930, it has been scandal-ridden from its beginnings. According to Charles Higham in his book Trading with the Enemy, by the late 1930s the BIS had assumed an openly pro-Nazi bias. This was corroborated years later in a BBC Timewatch film titled “Banking with Hitler,” broadcast in 1998.[2]
In 1944, the American government backed a resolution at the Bretton-Woods Conference calling for the liquidation of the BIS, following Czech accusations that it was laundering gold stolen by the Nazis from occupied Europe; but the central bankers succeeded in quietly snuffing out the American resolution.[3]
In Tragedy and Hope: A History of the World in Our Time (1966), Dr. Carroll Quigley revealed the key role played in global finance by the BIS behind the scenes. Dr. Quigley was Professor of History at Georgetown University, where he was President Bill Clinton’s mentor. He was also an insider, groomed by the powerful clique he called “the international bankers.” His credibility is heightened by the fact that he actually espoused their goals. He wrote:
“I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. … In general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known.” Quigley wrote of this international banking network:
“The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”
The key to their success, said Quigley, was that the international bankers would control and manipulate the money system of a nation while letting it appear to be controlled by the government. The statement echoed an often-quoted one made by the German patriarch of what would become the most powerful banking dynasty in the world. Mayer Amschel Bauer Rothschild famously said in 1791:
“Allow me to issue and control a nation’s currency, and I care not who makes its laws.”
Mayer’s five sons were sent to the major capitals of Europe – London, Paris, Vienna, Berlin and Naples – with the mission of establishing a banking system that would be outside government control. The economic and political systems of nations would be controlled not by citizens but by bankers, for the benefit of bankers. Eventually, a privately-owned “central bank” was established in nearly every country; and this central banking system has now gained control over the economies of the world. Central banks have the authority to print money in their respective countries, and it is from these banks that governments must borrow money to pay their debts and fund their operations. The result is a global economy in which not only industry but government itself runs on “credit” (or debt) created by a banking monopoly headed by a network of private central banks; and at the top of this network is the BIS, the “central bank of central banks” in Basel.
Behind the Curtain...
For many years the BIS kept a very low profile, operating behind the scenes in an abandoned hotel. It was here that decisions were reached to devalue or defend currencies, fix the price of gold, regulate offshore banking, and raise or lower short-term interest rates. In 1977, however, the BIS gave up its anonymity in exchange for more efficient headquarters. The new building has been described as “an eighteen story-high circular skyscraper that rises above the medieval city like some misplaced nuclear reactor.” It quickly became known as the “Tower of Basel.” Today the BIS has governmental immunity, pays no taxes, and has its own private police force.[4]
It is, as Mayer Rothschild envisioned, above the law. The BIS is now composed of 55 member nations, but the club that meets regularly in Basel is a much smaller group; and even within it, there is a hierarchy. In a 1983 article in Harper’s Magazine called “Ruling the World of Money,” Edward Jay Epstein wrote that where the real business gets done is in “a sort of inner club made up of the half dozen or so powerful central bankers who find themselves more or less in the same monetary boat” – those from Germany, the United States, Switzerland, Italy, Japan and England. Epstein said:
“The prime value, which also seems to demarcate the inner club from the rest of the BIS members, is the firm belief that central banks should act independently of their home governments… . A second and closely related belief of the inner club is that politicians should not be trusted to decide the fate of the international monetary system.”
In 1974, the Basel Committee on Banking Supervision was created by the central bank. Governors of the Group of Ten nations (now expanded to twenty). The BIS provides the twelve-member Secretariat for the Committee. The Committee, in turn, sets the rules for banking globally, including capital requirements and reserve controls. In a 2003 article titled “The Bank for International Settlements Calls for Global Currency,” Joan Veon wrote:
“The BIS is where all of the world’s central banks meet to analyze the global economy and determine what course of action they will take next to put more money in their pockets, since they control the amount of money in circulation and how much interest they are going to charge governments and banks for borrowing from them…
“When you understand that the BIS pulls the strings of the world’s monetary system, you then understand that they have the ability to create a financial boom or bust in a country. If that country is not doing what the money lenders want, then all they have to do is sell its currency.”[5]
The Controversial Basel Accords...
The power of the BIS to make or break economies was demonstrated in 1988, when it issued a Basel Accord raising bank capital requirements from 6% to 8%. By then, Japan had emerged as the world’s largest creditor; but Japan’s banks were less well capitalized than other major international banks. Raising the capital requirement forced them to cut back on lending, creating a recession in Japan like that suffered in the U.S. today. Property prices fell and loans went into default as the security for them shriveled up. A downward spiral followed, ending with the total bankruptcy of the banks, which had to be nationalized – although that word was not used, in order to avoid criticism.[6]
Among other collateral damage produced by the Basel Accords was a spate of suicides among Indian farmers unable to get loans. The BIS capital adequacy standards required loans to private borrowers to be “risk-weighted,” with the degree of risk determined by private rating agencies; and farmers and small business owners could not afford the agencies’ fees. Banks therefore assigned 100 percent risk to the loans, and then resisted extending credit to these “high-risk” borrowers because more capital was required to cover the loans. When the conscience of the nation was aroused by the Indian suicides, the government, lamenting the neglect of farmers by commercial banks, established a policy of ending the “financial exclusion” of the weak; but this step had little real effect on lending practices, due largely to the strictures imposed by the BIS from abroad.[7]
Similar complaints have come from Korea. An article in the December 12, 2008 Korea Times titled “BIS Calls Trigger Vicious Cycle” described how Korean entrepreneurs with good collateral cannot get operational loans from Korean banks, at a time when the economic downturn requires increased investment and easier credit:
“‘The Bank of Korea has provided more than 35 trillion won to banks since September when the global financial crisis went full throttle,’ said a Seoul analyst, who declined to be named. ‘But the effect is not seen at all with the banks keeping the liquidity in their safes. They simply don’t lend and one of the biggest reasons is to keep the BIS ratio high enough to survive,’ he said…
“Chang Ha-joon, an economics professor at Cambridge University, concurs with the analyst. ‘What banks do for their own interests, or to improve the BIS ratio, is against the interests of the whole society. This is a bad idea,’ Chang said in a recent telephone interview with Korea Times.”
In a May 2002 article in The Asia Times titled “Global Economy: The BIS vs. National Banks,” economist Henry C K Liu observed that the Basel Accords have forced national banking systems “to march to the same tune, designed to serve the needs of highly sophisticated global financial markets, regardless of the developmental needs of their national economies.” He wrote:
“National banking systems are suddenly thrown into the rigid arms of the Basel Capital Accord sponsored by the Bank of International Settlement (BIS), or to face the penalty of usurious risk premium in securing international interbank loans…
National policies suddenly are subjected to profit incentives of private financial institutions, all members of a hierarchical system controlled and directed from the money center banks in New York. The result is to force national banking systems to privatize …
“BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies…
The IMF and the international banks regulated by the BIS are a team: the international banks lend recklessly to borrowers in emerging economies to create a foreign currency debt crisis, the IMF arrives as a carrier of monetary virus in the name of sound monetary policy, then the international banks come as vulture investors in the name of financial rescue to acquire national banks deemed capital inadequate and insolvent by the BIS.”
Ironically, noted Liu, developing countries with their own natural resources did not actually need the foreign investment that had trapped them in debt to outsiders:
“Applying the State Theory of Money [which assumes that a sovereign nation has the power to issue its own money], any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation.”
When governments fell into the trap of accepting loans in foreign currencies, however, they became “debtor nations” subject to IMF and BIS regulation. They were forced to divert their production to exports, just to earn the foreign currency necessary to pay the interest on their loans. National banks deemed “capital inadequate” had to deal with strictures comparable to the “conditionalities” imposed by the IMF on debtor nations: “escalating capital requirement, loan writeoffs and liquidation, and restructuring through selloffs, layoffs, downsizing, cost-cutting and freeze on capital spending.” Liu wrote:
“Reversing the logic that a sound banking system should lead to full employment and developmental growth, BIS regulations demand high unemployment and developmental degradation in national economies as the fair price for a sound global private banking system.”
The Last Domino to Fall...
While banks in developing nations were being penalized for falling short of the BIS capital requirements, large international banks managed to escape the rules, although they actually carried enormous risk because of their derivative exposure. The mega-banks succeeded in avoiding the Basel rules by separating the “risk” of default out from the loans and selling it off to investors, using a form of derivative known as “credit default swaps.”
However, it was not in the game plan that U.S. banks should escape the BIS net. When they managed to sidestep the first Basel Accord, a second set of rules was imposed known as Basel II. The new rules were established in 2004, but they were not levied on U.S. banks until November 2007, the month after the Dow passed 14,000 to reach its all-time high. The economy was all downhill from there. Basel II had the same effect on U.S. banks that Basel I had on Japanese banks: they have been struggling ever since to survive.[8]
Basel II requires banks to adjust the value of their marketable securities to the “market price” of the security, a rule called “mark to market.”[9]
The rule has theoretical merit, but the problem is timing: it was imposed ex post facto, after the banks already had the hard-to-market assets on their books. Lenders that had been considered sufficiently well capitalized to make new loans suddenly found they were insolvent. At least, they would have been insolvent if they had tried to sell their assets, an assumption required by the new rule. Financial analyst John Berlau complained:
“The crisis is often called a ‘market failure,’ and the term ‘mark-to-market’ seems to reinforce that. But the mark-to-market rules are profoundly anti-market and hinder the free-market function of price discovery… . In this case, the accounting rules fail to allow the market players to hold on to an asset if they don’t like what the market is currently fetching, an important market action that affects price discovery in areas from agriculture to antiques.”[10]
Imposing the mark-to-market rule on U.S. banks caused an instant credit freeze, which proceeded to take down the economies not only of the U.S. but of countries worldwide. In early April 2009, the mark-to-market rule was finally softened by the U.S. Financial Accounting Standards Board (FASB); but critics said the modification did not go far enough, and it was done in response to pressure from politicians and bankers, not out of any fundamental change of heart or policies by the BIS.
And that is where the conspiracy theorists come in. Why did the BIS not retract or at least modify Basel II after seeing the devastation it had caused? Why did it sit idly by as the global economy came crashing down? Was the goal to create so much economic havoc that the world would rush with relief into the waiting arms of the BIS with its privately-created global currency?
The plot thickens …
NOTES
1. Andrew Marshall, “The Financial New World Order: Towards a Global Currency and World Government,” Global Research (April 6, 2009).
2. Alfred Mendez, “The Network,” The World Central Bank: The Bank for International Settlements, http://copy_bilderberg.tripod.com/bis.htm.
3. “BIS – Bank of International Settlement: The Mother of All Central Banks,” hubpages.com (2009).
4. Ibid.
5. Joan Veon, “The Bank for International Settlements Calls for Global Currency,” News with Views (August 26, 2003).
6. Peter Myers, “The 1988 Basle Accord – Destroyer of Japan’s Finance System,” http://www.mailstar.net/basle.html (updated September 9, 2008).
7. Nirmal Chandra, “Is Inclusive Growth Feasible in Neoliberal India?”, networkideas.org (September 2008).
8. Bruce Wiseman, “The Financial Crisis: A look Behind the Wizard’s Curtain,” Canada Free Press (March 19, 2009).
9. See Ellen Brown, “Credit Where Credit Is Due,” webofdebt.com/articles/creditcrunch.php (January 11, 2009).
10. John Berlau, “The International Mark-to-market Contagion,” OpenMarket.org (October 10, 2008).
Research related links
CNBC Analyst: Global Bank, Global Currency Within 15 Years
EU Leaders Call for Global Currency
The Financial New World Order: Towards a Global Currency and World Government
The G20 moves the world a step closer to a global currency
“This is the biggest currency crisis the world has ever seen”
Banker Giveaway Goes Global
China Voices Support For New Global Currency To Replace Dollar
Globalists Exploit Financial Meltdown In Move Towards One World Currency
UN & IMF Back Agenda For Global Financial Dictatorship
China Urges New International Reserve Currency
Russia proposes creation of global super-reserve currency
European Central Bank Member: “Tri-Polar” Currency Will Emerge
The key to this sovereignty was the insistence of the individuals right of self determination through a responsive, limited government. Our founding fathers had known all to well the oppression inflicted by an all to powerful government.
But today, in a world of economic chaos we have to ask ourselves...our we sacrificing our country's sovereignty because of a global economy?
The following article portrays a very different America from the one in which our founding fathers envisioned and warned against, as well as detailing how the powers that be have worked so deeply behind the scenes to maintain the illusion that we still are a sovereign nation while at the same time stripping it's citizens of their liberty and right to self governance.
Ellen Brown
Global Research
April 19, 2009
Do we really want the Bank for International Settlements (BIS) issuing our global currency? In an April 7 article in the London Daily Telegraph titled “The G20 Moves the World a Step Closer to a Global Currency,” Ambrose Evans-Pritchard wrote:
“A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order. “We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity,’ it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.
“In effect, the G20 leaders have activated the IMF’s power to create money and begin global ‘quantitative easing’. In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it.”
BIS, founded in Basel, Switzerland, in 1930, it has been scandal-ridden from its beginnings. According to Charles Higham in his book Trading with the Enemy, by the late 1930s the BIS had assumed an openly pro-Nazi bias.
Indeed they will. The article is subtitled, “The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity.” Which naturally raises the question, who or what will serve as this global central bank, cloaked with the power to issue the global currency and police monetary policy for all humanity? When the world’s central bankers met in Washington last September, they discussed what body might be in a position to serve in that awesome and fearful role. A former governor of the Bank of England stated:
“The answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS)…. The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”[1]
And if that vision doesn’t alarm conspiracy theorists, it should. The BIS has been called “the most exclusive, secretive, and powerful supranational club in the world.” Founded in Basel, Switzerland, in 1930, it has been scandal-ridden from its beginnings. According to Charles Higham in his book Trading with the Enemy, by the late 1930s the BIS had assumed an openly pro-Nazi bias. This was corroborated years later in a BBC Timewatch film titled “Banking with Hitler,” broadcast in 1998.[2]
In 1944, the American government backed a resolution at the Bretton-Woods Conference calling for the liquidation of the BIS, following Czech accusations that it was laundering gold stolen by the Nazis from occupied Europe; but the central bankers succeeded in quietly snuffing out the American resolution.[3]
In Tragedy and Hope: A History of the World in Our Time (1966), Dr. Carroll Quigley revealed the key role played in global finance by the BIS behind the scenes. Dr. Quigley was Professor of History at Georgetown University, where he was President Bill Clinton’s mentor. He was also an insider, groomed by the powerful clique he called “the international bankers.” His credibility is heightened by the fact that he actually espoused their goals. He wrote:
“I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. … In general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known.” Quigley wrote of this international banking network:
“The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”
The key to their success, said Quigley, was that the international bankers would control and manipulate the money system of a nation while letting it appear to be controlled by the government. The statement echoed an often-quoted one made by the German patriarch of what would become the most powerful banking dynasty in the world. Mayer Amschel Bauer Rothschild famously said in 1791:
“Allow me to issue and control a nation’s currency, and I care not who makes its laws.”
Mayer’s five sons were sent to the major capitals of Europe – London, Paris, Vienna, Berlin and Naples – with the mission of establishing a banking system that would be outside government control. The economic and political systems of nations would be controlled not by citizens but by bankers, for the benefit of bankers. Eventually, a privately-owned “central bank” was established in nearly every country; and this central banking system has now gained control over the economies of the world. Central banks have the authority to print money in their respective countries, and it is from these banks that governments must borrow money to pay their debts and fund their operations. The result is a global economy in which not only industry but government itself runs on “credit” (or debt) created by a banking monopoly headed by a network of private central banks; and at the top of this network is the BIS, the “central bank of central banks” in Basel.
Behind the Curtain...
For many years the BIS kept a very low profile, operating behind the scenes in an abandoned hotel. It was here that decisions were reached to devalue or defend currencies, fix the price of gold, regulate offshore banking, and raise or lower short-term interest rates. In 1977, however, the BIS gave up its anonymity in exchange for more efficient headquarters. The new building has been described as “an eighteen story-high circular skyscraper that rises above the medieval city like some misplaced nuclear reactor.” It quickly became known as the “Tower of Basel.” Today the BIS has governmental immunity, pays no taxes, and has its own private police force.[4]
It is, as Mayer Rothschild envisioned, above the law. The BIS is now composed of 55 member nations, but the club that meets regularly in Basel is a much smaller group; and even within it, there is a hierarchy. In a 1983 article in Harper’s Magazine called “Ruling the World of Money,” Edward Jay Epstein wrote that where the real business gets done is in “a sort of inner club made up of the half dozen or so powerful central bankers who find themselves more or less in the same monetary boat” – those from Germany, the United States, Switzerland, Italy, Japan and England. Epstein said:
“The prime value, which also seems to demarcate the inner club from the rest of the BIS members, is the firm belief that central banks should act independently of their home governments… . A second and closely related belief of the inner club is that politicians should not be trusted to decide the fate of the international monetary system.”
In 1974, the Basel Committee on Banking Supervision was created by the central bank. Governors of the Group of Ten nations (now expanded to twenty). The BIS provides the twelve-member Secretariat for the Committee. The Committee, in turn, sets the rules for banking globally, including capital requirements and reserve controls. In a 2003 article titled “The Bank for International Settlements Calls for Global Currency,” Joan Veon wrote:
“The BIS is where all of the world’s central banks meet to analyze the global economy and determine what course of action they will take next to put more money in their pockets, since they control the amount of money in circulation and how much interest they are going to charge governments and banks for borrowing from them…
“When you understand that the BIS pulls the strings of the world’s monetary system, you then understand that they have the ability to create a financial boom or bust in a country. If that country is not doing what the money lenders want, then all they have to do is sell its currency.”[5]
The Controversial Basel Accords...
The power of the BIS to make or break economies was demonstrated in 1988, when it issued a Basel Accord raising bank capital requirements from 6% to 8%. By then, Japan had emerged as the world’s largest creditor; but Japan’s banks were less well capitalized than other major international banks. Raising the capital requirement forced them to cut back on lending, creating a recession in Japan like that suffered in the U.S. today. Property prices fell and loans went into default as the security for them shriveled up. A downward spiral followed, ending with the total bankruptcy of the banks, which had to be nationalized – although that word was not used, in order to avoid criticism.[6]
Among other collateral damage produced by the Basel Accords was a spate of suicides among Indian farmers unable to get loans. The BIS capital adequacy standards required loans to private borrowers to be “risk-weighted,” with the degree of risk determined by private rating agencies; and farmers and small business owners could not afford the agencies’ fees. Banks therefore assigned 100 percent risk to the loans, and then resisted extending credit to these “high-risk” borrowers because more capital was required to cover the loans. When the conscience of the nation was aroused by the Indian suicides, the government, lamenting the neglect of farmers by commercial banks, established a policy of ending the “financial exclusion” of the weak; but this step had little real effect on lending practices, due largely to the strictures imposed by the BIS from abroad.[7]
Similar complaints have come from Korea. An article in the December 12, 2008 Korea Times titled “BIS Calls Trigger Vicious Cycle” described how Korean entrepreneurs with good collateral cannot get operational loans from Korean banks, at a time when the economic downturn requires increased investment and easier credit:
“‘The Bank of Korea has provided more than 35 trillion won to banks since September when the global financial crisis went full throttle,’ said a Seoul analyst, who declined to be named. ‘But the effect is not seen at all with the banks keeping the liquidity in their safes. They simply don’t lend and one of the biggest reasons is to keep the BIS ratio high enough to survive,’ he said…
“Chang Ha-joon, an economics professor at Cambridge University, concurs with the analyst. ‘What banks do for their own interests, or to improve the BIS ratio, is against the interests of the whole society. This is a bad idea,’ Chang said in a recent telephone interview with Korea Times.”
In a May 2002 article in The Asia Times titled “Global Economy: The BIS vs. National Banks,” economist Henry C K Liu observed that the Basel Accords have forced national banking systems “to march to the same tune, designed to serve the needs of highly sophisticated global financial markets, regardless of the developmental needs of their national economies.” He wrote:
“National banking systems are suddenly thrown into the rigid arms of the Basel Capital Accord sponsored by the Bank of International Settlement (BIS), or to face the penalty of usurious risk premium in securing international interbank loans…
National policies suddenly are subjected to profit incentives of private financial institutions, all members of a hierarchical system controlled and directed from the money center banks in New York. The result is to force national banking systems to privatize …
“BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies…
The IMF and the international banks regulated by the BIS are a team: the international banks lend recklessly to borrowers in emerging economies to create a foreign currency debt crisis, the IMF arrives as a carrier of monetary virus in the name of sound monetary policy, then the international banks come as vulture investors in the name of financial rescue to acquire national banks deemed capital inadequate and insolvent by the BIS.”
Ironically, noted Liu, developing countries with their own natural resources did not actually need the foreign investment that had trapped them in debt to outsiders:
“Applying the State Theory of Money [which assumes that a sovereign nation has the power to issue its own money], any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation.”
When governments fell into the trap of accepting loans in foreign currencies, however, they became “debtor nations” subject to IMF and BIS regulation. They were forced to divert their production to exports, just to earn the foreign currency necessary to pay the interest on their loans. National banks deemed “capital inadequate” had to deal with strictures comparable to the “conditionalities” imposed by the IMF on debtor nations: “escalating capital requirement, loan writeoffs and liquidation, and restructuring through selloffs, layoffs, downsizing, cost-cutting and freeze on capital spending.” Liu wrote:
“Reversing the logic that a sound banking system should lead to full employment and developmental growth, BIS regulations demand high unemployment and developmental degradation in national economies as the fair price for a sound global private banking system.”
The Last Domino to Fall...
While banks in developing nations were being penalized for falling short of the BIS capital requirements, large international banks managed to escape the rules, although they actually carried enormous risk because of their derivative exposure. The mega-banks succeeded in avoiding the Basel rules by separating the “risk” of default out from the loans and selling it off to investors, using a form of derivative known as “credit default swaps.”
However, it was not in the game plan that U.S. banks should escape the BIS net. When they managed to sidestep the first Basel Accord, a second set of rules was imposed known as Basel II. The new rules were established in 2004, but they were not levied on U.S. banks until November 2007, the month after the Dow passed 14,000 to reach its all-time high. The economy was all downhill from there. Basel II had the same effect on U.S. banks that Basel I had on Japanese banks: they have been struggling ever since to survive.[8]
Basel II requires banks to adjust the value of their marketable securities to the “market price” of the security, a rule called “mark to market.”[9]
The rule has theoretical merit, but the problem is timing: it was imposed ex post facto, after the banks already had the hard-to-market assets on their books. Lenders that had been considered sufficiently well capitalized to make new loans suddenly found they were insolvent. At least, they would have been insolvent if they had tried to sell their assets, an assumption required by the new rule. Financial analyst John Berlau complained:
“The crisis is often called a ‘market failure,’ and the term ‘mark-to-market’ seems to reinforce that. But the mark-to-market rules are profoundly anti-market and hinder the free-market function of price discovery… . In this case, the accounting rules fail to allow the market players to hold on to an asset if they don’t like what the market is currently fetching, an important market action that affects price discovery in areas from agriculture to antiques.”[10]
Imposing the mark-to-market rule on U.S. banks caused an instant credit freeze, which proceeded to take down the economies not only of the U.S. but of countries worldwide. In early April 2009, the mark-to-market rule was finally softened by the U.S. Financial Accounting Standards Board (FASB); but critics said the modification did not go far enough, and it was done in response to pressure from politicians and bankers, not out of any fundamental change of heart or policies by the BIS.
And that is where the conspiracy theorists come in. Why did the BIS not retract or at least modify Basel II after seeing the devastation it had caused? Why did it sit idly by as the global economy came crashing down? Was the goal to create so much economic havoc that the world would rush with relief into the waiting arms of the BIS with its privately-created global currency?
The plot thickens …
NOTES
1. Andrew Marshall, “The Financial New World Order: Towards a Global Currency and World Government,” Global Research (April 6, 2009).
2. Alfred Mendez, “The Network,” The World Central Bank: The Bank for International Settlements, http://copy_bilderberg.tripod.com/bis.htm.
3. “BIS – Bank of International Settlement: The Mother of All Central Banks,” hubpages.com (2009).
4. Ibid.
5. Joan Veon, “The Bank for International Settlements Calls for Global Currency,” News with Views (August 26, 2003).
6. Peter Myers, “The 1988 Basle Accord – Destroyer of Japan’s Finance System,” http://www.mailstar.net/basle.html (updated September 9, 2008).
7. Nirmal Chandra, “Is Inclusive Growth Feasible in Neoliberal India?”, networkideas.org (September 2008).
8. Bruce Wiseman, “The Financial Crisis: A look Behind the Wizard’s Curtain,” Canada Free Press (March 19, 2009).
9. See Ellen Brown, “Credit Where Credit Is Due,” webofdebt.com/articles/creditcrunch.php (January 11, 2009).
10. John Berlau, “The International Mark-to-market Contagion,” OpenMarket.org (October 10, 2008).
Research related links
CNBC Analyst: Global Bank, Global Currency Within 15 Years
EU Leaders Call for Global Currency
The Financial New World Order: Towards a Global Currency and World Government
The G20 moves the world a step closer to a global currency
“This is the biggest currency crisis the world has ever seen”
Banker Giveaway Goes Global
China Voices Support For New Global Currency To Replace Dollar
Globalists Exploit Financial Meltdown In Move Towards One World Currency
UN & IMF Back Agenda For Global Financial Dictatorship
China Urges New International Reserve Currency
Russia proposes creation of global super-reserve currency
European Central Bank Member: “Tri-Polar” Currency Will Emerge
4/17/09
So You Want To Be A Protester?
Well the Tax Day Tea Party has come and gone, so now what?
I had some reservations in calling the rally on April 15 a Tea Party. I understand the symbolism of many to re-enact the dumping of tea, but I'm concerned with their real understanding of the reason and commitment made by those brave souls in 1773. The adoption of this moniker only seems to provide the media elite an avenue to question the motives of this new movement.
Those brave Bostonians knew exactly what they were doing when they boarded those three ships and began breaking open the heavy chests filled with tea from the East India Trading Company. They were committing an act of insurrection, not political theater.
A close look into the history of the time revealed that in Colonial America, there were a lot of tea drinkers, and many of them bought smuggled tea. The reason was simple: it was cheaper. There was already an import duty on British tea which made it more expensive than the Dutch tea many merchants (including John Hancock) smuggled in to the colonies.
In April of 1773, England tried to rectify this by passing the Tea Act. The legislation granted a monopoly of the North American market to the East India Trading Company in order to try and keep the company from economic collapse. At the same time, they imposed a new tax on tea that would be paid in London as a surcharge. Therefore the Americans would actually see lower prices on tea, because the tea they purchased would already come pre-taxed.
Historian Benson Bobrick says, "it remains a noble feature of the whole confrontation that immediate economic interest did not determine [the colonists'] response."
So Americans didn't take the bribe of lower tea in exchange for accepting a revenue tax. Of course Boston, already filled with thousands of British troops sent to suppress the insurrection, is not what we face in America today. There is one similarity however, today when our President proposes and Congress passes a stimulus bill with a tax cut for 95% of Americans (bribe), in exchange for a massive increase in government spending that will make the revenue tax imposed by England seem like child's play.
When the ships landed at Griffin's Wharf in Boston Harbor, armed townspeople stood guard over the vessels to prevent the tea from being unloaded. Patriot leaders pleaded with the captains of the ships to sail away, but they refused to do so until their cargo was removed. Only when word was received that the tea was to be off-loaded and imported the very next morning did the patriots act.
The beginning of the Boston Tea Party took place at Fanueil Hall. The large meeting house was packed to the brim on the night of December 16th. When he was informed that the governor had rejected pleas for help from the colonists, Samuel Adams, a staunch supporter of the Patriot cause (and something of a rabble-rouser) cried out, "This meeting can do nothing more to save the country!"
That was the signal that triggered the Boston Tea Party. Two hundred men disguised themselves as best they could (it's interesting to point out that at the time, no one dared publicly admit they had taken part in the Tea Party) and set out to dump the tea, while thousands of residents watched from the streets.
It took them three hours. They did not burn down the ships, or vandalize them. They didn't steal any tea. They only destroyed it, and then marched off the boats and down the street with a fifer leading the way.
I mentioned earlier that His Majesty's troops were already in Boston that night. They did nothing to stop the Tea Party. Warships anchored less than a mile away did not fire upon the crowd, nor did they send a detachment of soldiers to try to break up the silent riot. Instead, the Crown's men exercised a great deal of restraint (no doubt thinking back to that March night just a few years earlier when troops opened fire on a crowd of belligerent Bostonians, killing five of them in what became known as the Boston Massacre). Still, Admiral John Montague couldn't help but open a window as the patriots passed by on the street below. "Boys, you have had a fine, pleasant evening for your Indian caper, haven't you? But mind, you have got to pay the fiddler yet."
They paid, all right. The reaction from Parliament and the Crown was swift and severe. Parliament quickly passed the Coercive Acts, better known in the colonies as the Intolerable Acts. The response to the insurrectionist Tea Party was to try to break the will of the colonists. They shut down the port of Boston, revoked the charter of Massachusetts, removed any civilian governing authority and replaced it with Royal rule, and re-established the practice of quartering troops in civilian homes. Additionally, more than 5,000 more troops arrived to crack down on the rebellious Bostonians. Boston at the time was a city between 15,000 and 20,000, which meant that there was nearly one of the Crown's soldiers for every adult male in the city. General Gage, the new military governor of Massachusetts, soon set out to confiscate gunpowder and arms stored in towns throughout the colony. Long before Lexington and Concord, Regular troops marched on the towns of Somerville (where they successfully removed the powder) and Salem (where they were forced to turn back by a crowd of civilians). Patriots responded by seizing the armed garrison at Portsmouth, Maine (then a part of Massachusetts) without firing a shot.
In short, the Boston Tea Party was an act of defiance and insurrection that set in motion a chain of events that led to armed rebellion against England and the King. I wonder, do we really mean to compare ourselves to the men and women who, even at that early date, were ready to sacrifice their all for the cause of liberty?
It seems that what we're actually seeing now is a relatively low-key and sedate protest in relation to the audacious and incredible increase in government power. Frankly, the patriots who took part in the Boston Tea Party would probably call us cowards for not responding in a more full-throated manner.
Don't get me wrong, I'm not objecting to the protests. Far from it in fact. But if this protest is to be anything more than street theater, there must be a non-stop clamoring that is deafening down on Washington..."we understand this power grab and we refuse to accept it."
As of today, I won't compare the protests on April 15 to the Boston Tea Party, because there is no comparison. To claim otherwise is to both cheapen the actual protest by 200 Bostonians and their thousands of supporters, and to inflate the magnitude of our current actions.
I wonder, what are we expecting to achieve from these protests? Are we content to merely register our disapproval, or are we seeking to change what Congress and our president have done? If it is the former, I'm sure the politicians will note our objection, and wait for us to quiet down. If it is the latter, I fear our current protests are too scatter-shot to do any real good.
What is the target of our protest? Are we protesting the President and Congress for an act already passed, or are we petitioning our state and local governments to refuse to accept the stimulus money?
What do we do if these protests do not result in the change in policies we are asking for? What happens next?
Make no mistake, once a movement like this has begun, it will, sooner or later, have to answer these difficult questions or risk failure. Now is the seed-time of liberty, and the steps we take and the words we use will either be recalled triumphantly by our grandchildren, or seen as a sad charade conducted by children who could not muster the strength and conviction of their ancestors.
In 1775, just a few weeks before blood was spilled at Lexington Green, Dr. Joseph Warren addressed a crowd of Bostonians who had gathered to commemorate the anniversary of the Boston Massacre.
"Our country is in danger, but not to be despaired of. Our enemies are numerous and powerful; but we have many friends, determining to be free, and heaven and earth will aid the resolution. On you depend the fortunes of America. You are to decide the important question, on which rest the happiness and liberty of millions yet unborn. Act worthy of yourselves. The faltering tongue of hoary age calls on you to support your country. The lisping infant raises its suppliant hands, imploring defence against the monster slavery. Your fathers look from their celestial seats with smiling approbation on their sons, who boldly stand forth in the cause of virtue; but sternly frown upon the inhuman miscreant, who, to secure the loaves and fishes to himself, would breed a serpent to destroy his children."
So I hope you understand why I oppose the name Tea Party being associated with the present day rallies. We can however through understanding the adversity and courage of those brave Sons of Liberty, and appreciate what it might take to fend off the years of servitude this massive amount of debt will create.
Think carefully, are you really up to this challenge you've embarked on?
I had some reservations in calling the rally on April 15 a Tea Party. I understand the symbolism of many to re-enact the dumping of tea, but I'm concerned with their real understanding of the reason and commitment made by those brave souls in 1773. The adoption of this moniker only seems to provide the media elite an avenue to question the motives of this new movement.
Those brave Bostonians knew exactly what they were doing when they boarded those three ships and began breaking open the heavy chests filled with tea from the East India Trading Company. They were committing an act of insurrection, not political theater.
A close look into the history of the time revealed that in Colonial America, there were a lot of tea drinkers, and many of them bought smuggled tea. The reason was simple: it was cheaper. There was already an import duty on British tea which made it more expensive than the Dutch tea many merchants (including John Hancock) smuggled in to the colonies.
In April of 1773, England tried to rectify this by passing the Tea Act. The legislation granted a monopoly of the North American market to the East India Trading Company in order to try and keep the company from economic collapse. At the same time, they imposed a new tax on tea that would be paid in London as a surcharge. Therefore the Americans would actually see lower prices on tea, because the tea they purchased would already come pre-taxed.
Historian Benson Bobrick says, "it remains a noble feature of the whole confrontation that immediate economic interest did not determine [the colonists'] response."
So Americans didn't take the bribe of lower tea in exchange for accepting a revenue tax. Of course Boston, already filled with thousands of British troops sent to suppress the insurrection, is not what we face in America today. There is one similarity however, today when our President proposes and Congress passes a stimulus bill with a tax cut for 95% of Americans (bribe), in exchange for a massive increase in government spending that will make the revenue tax imposed by England seem like child's play.
When the ships landed at Griffin's Wharf in Boston Harbor, armed townspeople stood guard over the vessels to prevent the tea from being unloaded. Patriot leaders pleaded with the captains of the ships to sail away, but they refused to do so until their cargo was removed. Only when word was received that the tea was to be off-loaded and imported the very next morning did the patriots act.
The beginning of the Boston Tea Party took place at Fanueil Hall. The large meeting house was packed to the brim on the night of December 16th. When he was informed that the governor had rejected pleas for help from the colonists, Samuel Adams, a staunch supporter of the Patriot cause (and something of a rabble-rouser) cried out, "This meeting can do nothing more to save the country!"
That was the signal that triggered the Boston Tea Party. Two hundred men disguised themselves as best they could (it's interesting to point out that at the time, no one dared publicly admit they had taken part in the Tea Party) and set out to dump the tea, while thousands of residents watched from the streets.
It took them three hours. They did not burn down the ships, or vandalize them. They didn't steal any tea. They only destroyed it, and then marched off the boats and down the street with a fifer leading the way.
I mentioned earlier that His Majesty's troops were already in Boston that night. They did nothing to stop the Tea Party. Warships anchored less than a mile away did not fire upon the crowd, nor did they send a detachment of soldiers to try to break up the silent riot. Instead, the Crown's men exercised a great deal of restraint (no doubt thinking back to that March night just a few years earlier when troops opened fire on a crowd of belligerent Bostonians, killing five of them in what became known as the Boston Massacre). Still, Admiral John Montague couldn't help but open a window as the patriots passed by on the street below. "Boys, you have had a fine, pleasant evening for your Indian caper, haven't you? But mind, you have got to pay the fiddler yet."
They paid, all right. The reaction from Parliament and the Crown was swift and severe. Parliament quickly passed the Coercive Acts, better known in the colonies as the Intolerable Acts. The response to the insurrectionist Tea Party was to try to break the will of the colonists. They shut down the port of Boston, revoked the charter of Massachusetts, removed any civilian governing authority and replaced it with Royal rule, and re-established the practice of quartering troops in civilian homes. Additionally, more than 5,000 more troops arrived to crack down on the rebellious Bostonians. Boston at the time was a city between 15,000 and 20,000, which meant that there was nearly one of the Crown's soldiers for every adult male in the city. General Gage, the new military governor of Massachusetts, soon set out to confiscate gunpowder and arms stored in towns throughout the colony. Long before Lexington and Concord, Regular troops marched on the towns of Somerville (where they successfully removed the powder) and Salem (where they were forced to turn back by a crowd of civilians). Patriots responded by seizing the armed garrison at Portsmouth, Maine (then a part of Massachusetts) without firing a shot.
In short, the Boston Tea Party was an act of defiance and insurrection that set in motion a chain of events that led to armed rebellion against England and the King. I wonder, do we really mean to compare ourselves to the men and women who, even at that early date, were ready to sacrifice their all for the cause of liberty?
It seems that what we're actually seeing now is a relatively low-key and sedate protest in relation to the audacious and incredible increase in government power. Frankly, the patriots who took part in the Boston Tea Party would probably call us cowards for not responding in a more full-throated manner.
Don't get me wrong, I'm not objecting to the protests. Far from it in fact. But if this protest is to be anything more than street theater, there must be a non-stop clamoring that is deafening down on Washington..."we understand this power grab and we refuse to accept it."
As of today, I won't compare the protests on April 15 to the Boston Tea Party, because there is no comparison. To claim otherwise is to both cheapen the actual protest by 200 Bostonians and their thousands of supporters, and to inflate the magnitude of our current actions.
I wonder, what are we expecting to achieve from these protests? Are we content to merely register our disapproval, or are we seeking to change what Congress and our president have done? If it is the former, I'm sure the politicians will note our objection, and wait for us to quiet down. If it is the latter, I fear our current protests are too scatter-shot to do any real good.
What is the target of our protest? Are we protesting the President and Congress for an act already passed, or are we petitioning our state and local governments to refuse to accept the stimulus money?
What do we do if these protests do not result in the change in policies we are asking for? What happens next?
Make no mistake, once a movement like this has begun, it will, sooner or later, have to answer these difficult questions or risk failure. Now is the seed-time of liberty, and the steps we take and the words we use will either be recalled triumphantly by our grandchildren, or seen as a sad charade conducted by children who could not muster the strength and conviction of their ancestors.
In 1775, just a few weeks before blood was spilled at Lexington Green, Dr. Joseph Warren addressed a crowd of Bostonians who had gathered to commemorate the anniversary of the Boston Massacre.
"Our country is in danger, but not to be despaired of. Our enemies are numerous and powerful; but we have many friends, determining to be free, and heaven and earth will aid the resolution. On you depend the fortunes of America. You are to decide the important question, on which rest the happiness and liberty of millions yet unborn. Act worthy of yourselves. The faltering tongue of hoary age calls on you to support your country. The lisping infant raises its suppliant hands, imploring defence against the monster slavery. Your fathers look from their celestial seats with smiling approbation on their sons, who boldly stand forth in the cause of virtue; but sternly frown upon the inhuman miscreant, who, to secure the loaves and fishes to himself, would breed a serpent to destroy his children."
So I hope you understand why I oppose the name Tea Party being associated with the present day rallies. We can however through understanding the adversity and courage of those brave Sons of Liberty, and appreciate what it might take to fend off the years of servitude this massive amount of debt will create.
Think carefully, are you really up to this challenge you've embarked on?
4/11/09
The Battle Cry
There is a war going on and it could not be more evident than in public and private employment. Public employment jobs average some 44% more in salary and benefits than private sector jobs.
Why? Because when the private sector has an economic downturn they pull back, lower prices, reduce spending and possibly layoff workers. When the public sector experiences an economic downturn, they request a bailout, increase taxes, vote themselves a pay raise and go on they merry way under the guise of righting every injustice heaped on the have nots by the greedy capitalists.
The point that is missed with our elected officials, local, state or federal, is that the money they spread around so liberally is not theirs. The government is not a for-profit organization. When Americans want the government to help them financially, the government doesn't just have a underground room filled with money that they can pull out a million here and a million there. If they help the poor or sick, that money comes not from some underground room but comes out of every taxpayers pocket. And don't even get me started on the financial bailouts! The government doesn't have any money that wasn't ours in the first place and this point seems to be missed by many an uniformed citizen.
Don't ask me why. Maybe it's because the common virtues that guided our country for over two centuries isn't hammered in our hard little heads anymore. Most of our society is becoming addicted to entitlements and we the voter are to blame. Those of us that understand the laws of thrift, working hard and suffering the consequences of our mistakes, still have to shoulder much of the blame, just as the welfare cheat does. That is because the productive people will hire CPA's to work the system and often just shut up and pay the extra freight because they can afford it.
The government counts on this and therefore placates the well to do with loopholes to avoid many of the absurdities this repressive income tax code imposes. All the while Joe Blow is left out in the cold. Still the ever increasing intrusion of government to Joe's right of the pursuit of happiness is also placated. Not with loopholes, but entitlement programs so as to keep him shut up as well. All the while the government is allowed to rape and pillage the economy to further secure their jobs and increase their wages that include medical and retirement programs that no private citizen can ever obtain.
It's like a dog chasing it's tail. When government is unwilling to curtail spending, the very taxes they impose make it more difficult for the private sector to succeed so they can pay for the increased tax burden.
Apart from the soundness of our present governments tax approach, what really spells the loss of liberty by this massive government intervention into our lives is what's going on with these corporate bailouts. Where in the constitution does it say that because the government pours money into a company, they have the right to fire it's CEO or board of directors? Well it doesn't, no matter how miffed you are as a taxpayer that money is going to bailout companies that are failing. The government also gives money and benefits to the individual through medicaid as well, but that doesn't mean the have the right to tell you if you are qualified to take a certain job does it? Of course not, or at least we hope not yet.
Now I'm not saying that unethical behavior in the private sector is OK in the name of capitalism, because it most certainly isn't. However, that is a problem with society not capitalism, and there are laws in our country to penalize these transgressions. Where the size of government and it's desire to protect itself circumvents so many of these laws is due to the outrageous effects the lobbys have over our elected officials. This influence perpetuates the self-serving drivel from Washington to extol the haves as greedy capitalists preying on the everyday citizen.
You see big government, big business and big labor, all sleep in the same bed. Washington holds the purse strings to billions of tax dollars, and big business and big labor have the wherewithal to hire lobbyists to influence how those government dollars are spent. This is why the federal tax code needs to be totally revamped.
The very nature of taxing income is absurd on a couple of fronts but most notably because it has created as series of loopholes for the very powerful business and labor lobbys. It also is regressive through it's progressive nature to heap ever greater burdens on the productive, to be redistributed amongst the less productive. This approach deters business to expand and incentivizes them to seek alternative venues for production. This of course further exacerbates the problem with the union battle cry to keep jobs in America and wages high. Talk about playing both sides against the middle, if these lawmakers did this in the private sector they be called the Mafia.
Remember the dog chasing it's own tail? Well that is our current tax system and it has to be reformed to restore liberty and opportunity every American deserves.
How? By adopting the Fair Tax.
What is the Fair Tax?
The Fair Tax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.
The Fair Tax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.
The Fair Tax taxes us only on what we choose to spend on new goods or services, not on what we earn. The Fair Tax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
The Fair Tax:
Enables workers to keep their entire paychecks
Enables retirees to keep their entire pensions
Refunds in advance the tax on purchases of basic necessities
Allows American products to compete fairly
Brings transparency and accountability to tax policy
Ensures Social Security and Medicare funding
Closes all loopholes and brings fairness to taxation
Abolishes the IRS
The Fair Tax Five
The gloves are off as critics try to pick apart the Fair Tax. Trouble is, it's just a replay of the same five Fair Tax myths:
"The 23% rate is misleading. It's actually 30%"
Well, actually...
"It's not enforceable and evasion will be rampant"
Well, actually...
"It will not be revenue neutral at 23%"
Well, actually...
"The Fair Tax is not politically viable"
Well, actually...
"The Fair Tax is regressive and shifts the tax burden onto lower and middle income people"
Well, actually...
If you really want to get control of government spending and have real transparency in the ways government uses those revenues, I strongly urge you to read the definitive work on this subject by Neal Boortz and John Linder, in the book that is in paperback now and may even be in your local library called, "FAIR TAX, The Truth Answering The Critics."
Why? Because when the private sector has an economic downturn they pull back, lower prices, reduce spending and possibly layoff workers. When the public sector experiences an economic downturn, they request a bailout, increase taxes, vote themselves a pay raise and go on they merry way under the guise of righting every injustice heaped on the have nots by the greedy capitalists.
The point that is missed with our elected officials, local, state or federal, is that the money they spread around so liberally is not theirs. The government is not a for-profit organization. When Americans want the government to help them financially, the government doesn't just have a underground room filled with money that they can pull out a million here and a million there. If they help the poor or sick, that money comes not from some underground room but comes out of every taxpayers pocket. And don't even get me started on the financial bailouts! The government doesn't have any money that wasn't ours in the first place and this point seems to be missed by many an uniformed citizen.
Don't ask me why. Maybe it's because the common virtues that guided our country for over two centuries isn't hammered in our hard little heads anymore. Most of our society is becoming addicted to entitlements and we the voter are to blame. Those of us that understand the laws of thrift, working hard and suffering the consequences of our mistakes, still have to shoulder much of the blame, just as the welfare cheat does. That is because the productive people will hire CPA's to work the system and often just shut up and pay the extra freight because they can afford it.
The government counts on this and therefore placates the well to do with loopholes to avoid many of the absurdities this repressive income tax code imposes. All the while Joe Blow is left out in the cold. Still the ever increasing intrusion of government to Joe's right of the pursuit of happiness is also placated. Not with loopholes, but entitlement programs so as to keep him shut up as well. All the while the government is allowed to rape and pillage the economy to further secure their jobs and increase their wages that include medical and retirement programs that no private citizen can ever obtain.
It's like a dog chasing it's tail. When government is unwilling to curtail spending, the very taxes they impose make it more difficult for the private sector to succeed so they can pay for the increased tax burden.
Apart from the soundness of our present governments tax approach, what really spells the loss of liberty by this massive government intervention into our lives is what's going on with these corporate bailouts. Where in the constitution does it say that because the government pours money into a company, they have the right to fire it's CEO or board of directors? Well it doesn't, no matter how miffed you are as a taxpayer that money is going to bailout companies that are failing. The government also gives money and benefits to the individual through medicaid as well, but that doesn't mean the have the right to tell you if you are qualified to take a certain job does it? Of course not, or at least we hope not yet.
Now I'm not saying that unethical behavior in the private sector is OK in the name of capitalism, because it most certainly isn't. However, that is a problem with society not capitalism, and there are laws in our country to penalize these transgressions. Where the size of government and it's desire to protect itself circumvents so many of these laws is due to the outrageous effects the lobbys have over our elected officials. This influence perpetuates the self-serving drivel from Washington to extol the haves as greedy capitalists preying on the everyday citizen.
You see big government, big business and big labor, all sleep in the same bed. Washington holds the purse strings to billions of tax dollars, and big business and big labor have the wherewithal to hire lobbyists to influence how those government dollars are spent. This is why the federal tax code needs to be totally revamped.
The very nature of taxing income is absurd on a couple of fronts but most notably because it has created as series of loopholes for the very powerful business and labor lobbys. It also is regressive through it's progressive nature to heap ever greater burdens on the productive, to be redistributed amongst the less productive. This approach deters business to expand and incentivizes them to seek alternative venues for production. This of course further exacerbates the problem with the union battle cry to keep jobs in America and wages high. Talk about playing both sides against the middle, if these lawmakers did this in the private sector they be called the Mafia.
Remember the dog chasing it's own tail? Well that is our current tax system and it has to be reformed to restore liberty and opportunity every American deserves.
How? By adopting the Fair Tax.
What is the Fair Tax?
The Fair Tax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.
The Fair Tax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.
The Fair Tax taxes us only on what we choose to spend on new goods or services, not on what we earn. The Fair Tax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
The Fair Tax:
Enables workers to keep their entire paychecks
Enables retirees to keep their entire pensions
Refunds in advance the tax on purchases of basic necessities
Allows American products to compete fairly
Brings transparency and accountability to tax policy
Ensures Social Security and Medicare funding
Closes all loopholes and brings fairness to taxation
Abolishes the IRS
The Fair Tax Five
The gloves are off as critics try to pick apart the Fair Tax. Trouble is, it's just a replay of the same five Fair Tax myths:
"The 23% rate is misleading. It's actually 30%"
Well, actually...
"It's not enforceable and evasion will be rampant"
Well, actually...
"It will not be revenue neutral at 23%"
Well, actually...
"The Fair Tax is not politically viable"
Well, actually...
"The Fair Tax is regressive and shifts the tax burden onto lower and middle income people"
Well, actually...
If you really want to get control of government spending and have real transparency in the ways government uses those revenues, I strongly urge you to read the definitive work on this subject by Neal Boortz and John Linder, in the book that is in paperback now and may even be in your local library called, "FAIR TAX, The Truth Answering The Critics."
4/8/09
Second Chances
We are all familiar with the old cliche "Don't throw stones if you live in a glass house." Of course if this were applied literally, no one would or should have a leg to stand on when complaining about someone not doing what they said they would.
Still, in a political environment with an ever increasing pontificating about who are the real scoundrels, at least an examination of individuals tenure in their present occupation should be examined carefully to see if they actually operate in a truthful and genuine manner.
Our new administration has beat the drum of change we can believe in. They have professed a new transparency in the motes operande of government to make sure the common man is given ample time to review decisions made by it's officials in order to enlighten and offer intelligent debate to the courses of action proposed for our country.
The action of our congress to ram an eleventh hour stimulus bill down our throats without one single congressman having read it, doesn't inspire much confidence however and the best face we can put on this change we can believe in mantra is that the administration hasn't quite worked all the bugs out in this transparency thing yet.
Of course we could possibly draw some more harsh opinions of our new administration when nominee after nominee are having trouble passing muster to even be considered, let alone actually going through the approval process in congress.
When you consider Bill Richardson, Tom Daschale, Kathleen Sebelius and Turbo Tax Geithner, having their troubles with the IRS and in essence getting a pass, when many an ordinary citizen would face jail time or at least be put through the arduous audit process that presumes them guilty until they can prove themselves innocent, points to a real disconnect with the rhetoric of transparency.
If these previous appointments were not bad enough, I urge to to read this little article regarding the Obama's latest nomination to the number 2 post at HUD here.
It's one thing for an individual that has transgressions in his past unrelated to government service being scrutinized for an appointment, or for that matter elected office, but when an individual has a history of shenanigans while in government service, there is little reason to believe that a government hack who moves from one office to another would be any less a hack in his new post.
I'm all for second chances, but when an individual has a history of deception as a government official already, I'd rather have an individual that has paid his debt to society for is transgressions no matter what they were, than an individual that knows how to work the system in order to maintain his position.
Soaring rhetoric of transparency does not make it so and we should demand full disclosure by our press and institutions delegated with the authority to reveal all the facts.
Still, in a political environment with an ever increasing pontificating about who are the real scoundrels, at least an examination of individuals tenure in their present occupation should be examined carefully to see if they actually operate in a truthful and genuine manner.
Our new administration has beat the drum of change we can believe in. They have professed a new transparency in the motes operande of government to make sure the common man is given ample time to review decisions made by it's officials in order to enlighten and offer intelligent debate to the courses of action proposed for our country.
The action of our congress to ram an eleventh hour stimulus bill down our throats without one single congressman having read it, doesn't inspire much confidence however and the best face we can put on this change we can believe in mantra is that the administration hasn't quite worked all the bugs out in this transparency thing yet.
Of course we could possibly draw some more harsh opinions of our new administration when nominee after nominee are having trouble passing muster to even be considered, let alone actually going through the approval process in congress.
When you consider Bill Richardson, Tom Daschale, Kathleen Sebelius and Turbo Tax Geithner, having their troubles with the IRS and in essence getting a pass, when many an ordinary citizen would face jail time or at least be put through the arduous audit process that presumes them guilty until they can prove themselves innocent, points to a real disconnect with the rhetoric of transparency.
If these previous appointments were not bad enough, I urge to to read this little article regarding the Obama's latest nomination to the number 2 post at HUD here.
It's one thing for an individual that has transgressions in his past unrelated to government service being scrutinized for an appointment, or for that matter elected office, but when an individual has a history of shenanigans while in government service, there is little reason to believe that a government hack who moves from one office to another would be any less a hack in his new post.
I'm all for second chances, but when an individual has a history of deception as a government official already, I'd rather have an individual that has paid his debt to society for is transgressions no matter what they were, than an individual that knows how to work the system in order to maintain his position.
Soaring rhetoric of transparency does not make it so and we should demand full disclosure by our press and institutions delegated with the authority to reveal all the facts.
4/3/09
It's About Time
Well it looks like the straw that broke the camel's back was my previous post on "Valuations."
OK, OK, I understand politicians don't read my blog, but what has transpired with the FASB (Federal Accounting Standards Board) relaxing the disastrous Mark To Market accounting regulations, give me reason to hope there is some sanity left amongst some of our congressman and government regulators.
Bloomberg Business, has a fine article detailing these revisions and how they will help our banking system and in turn spur the economic activity needed for every individual and business to prosper.
For those of you not so familiar with accounting practices, I've included a short little video explaining what Mark To Market really does here and how it's misapplication creates havoc with balance sheets.
Next we can only hope that congress also sees the error in the repeal of the Glass-Stegall Act. Commercial banks have no business in the rough and tumble volatile markets that investment banks work in as it jeopardizes the certainty needed in the credit markets to keep our economy liquid.
Commercial banks can maintain stability and generate more than enough income from the spread between what interest is paid to their depositors and the interest charged on the loans they make. With a return to sound underwriting fundamentals, which basically means verifying income and the debt to asset ratio of it's loan applicants, banks will once again become the sound financial institutions every citizen has the right to expect.
OK, OK, I understand politicians don't read my blog, but what has transpired with the FASB (Federal Accounting Standards Board) relaxing the disastrous Mark To Market accounting regulations, give me reason to hope there is some sanity left amongst some of our congressman and government regulators.
Bloomberg Business, has a fine article detailing these revisions and how they will help our banking system and in turn spur the economic activity needed for every individual and business to prosper.
For those of you not so familiar with accounting practices, I've included a short little video explaining what Mark To Market really does here and how it's misapplication creates havoc with balance sheets.
Next we can only hope that congress also sees the error in the repeal of the Glass-Stegall Act. Commercial banks have no business in the rough and tumble volatile markets that investment banks work in as it jeopardizes the certainty needed in the credit markets to keep our economy liquid.
Commercial banks can maintain stability and generate more than enough income from the spread between what interest is paid to their depositors and the interest charged on the loans they make. With a return to sound underwriting fundamentals, which basically means verifying income and the debt to asset ratio of it's loan applicants, banks will once again become the sound financial institutions every citizen has the right to expect.
4/1/09
Valuations
When we consider the state of the economy and more specifically the debacle in the banking system, we must understand a couple of recent legislative changes in the accounting regulations that has greatly contributed to this problem.
They are the repeal of the Glass-Stegall Act in the late 90's and the Sarbanes-Oxley Bill introduced in the aftermath of the Enron disaster.
These two acts by congress have gone a long way to exacerbate the failure in our banking system and economy. Once again this demonstrates the ineptness by and large of elected officials whose primary motives to pass legislation are driven more by pandering to their constituents, than acting as true statesman to represent what's in the best interests for the nation as a whole.
The Glass-Stegall Act was passed in the early 30's in response to commercial banks in essence investing in the stock market and the tremendous exposure that practice had on the solvency in the banking industry. This legislation was passed to protect not only the solvency of the commercial banks and protection for it's customer's deposits but also to draw a definitive line between the commercial and investment banks and how they conduct business.
Much of the disaster that has happened in today's banking industry has been a direct result of the repeal of the Glass-Stegall Act. It's repeal has once again allowed commercial banks to become involved in investment activity that the Glass-Stegall Act specifically forbid.
To compound this ill advised repeal, our elected officials had another knee-jerk reaction to the scandal and implosion of Enron. The Sarbanes-Oxley bill instituted another albatross of accounting mumbo-jumbo that made the formation of public companies almost non-existent in our country while at the same time placing a tremendous cost on existing businesses on adhering to an ever more complex and costly set of accounting standards.
One of the most reprehensible tenants of the Sarbanes-Oxley legislation was the accounting method for business to evaluate existing inventories on the balance sheets through an accounting practice called Mark to Market. This strict accounting principle forces a business to value their inventory based on what the market will fetch on the open market as of today only.
This method of evaluating inventories and assets in this way only goes to over-inflate their value in a strong market and over-devalue them in a weak market. The repeal of Mark to Market, or at least a revision that could possibly use a 3 year rolling average of inventories and assets, would portray a more stable valuation for said inventories and help business and the government maintain a more accurate picture of the companies true worth.
For example, under the present accounting rules put forth by Mark to Market, assets on bank balance sheets that comprise questionably secure mortgages are valued at zero. These assets that are valued in this way create severe liquidity problems for banks that are actually in a better cash position today than they were a year ago. This accounting procedure forces banks to show book losses that portray their balance sheets in a shambles when in fact that is not the case.
If in fact these questionable loans were in fact worth zero, I'd take as many of these mortgages as possible for that price and so would you. First of all, every one of these mortgages represents land the home is built on which most certainly is not worth zero, as well as having a structure on it that is comprised of bricks and mortar, that again is certainly worth more than zero.
The repeal of Mark to Market would instantly improve the book valuations on bank balance sheets and jump start the banks ability to making credit available to creditworthy individuals and businesses.
They are the repeal of the Glass-Stegall Act in the late 90's and the Sarbanes-Oxley Bill introduced in the aftermath of the Enron disaster.
These two acts by congress have gone a long way to exacerbate the failure in our banking system and economy. Once again this demonstrates the ineptness by and large of elected officials whose primary motives to pass legislation are driven more by pandering to their constituents, than acting as true statesman to represent what's in the best interests for the nation as a whole.
The Glass-Stegall Act was passed in the early 30's in response to commercial banks in essence investing in the stock market and the tremendous exposure that practice had on the solvency in the banking industry. This legislation was passed to protect not only the solvency of the commercial banks and protection for it's customer's deposits but also to draw a definitive line between the commercial and investment banks and how they conduct business.
Much of the disaster that has happened in today's banking industry has been a direct result of the repeal of the Glass-Stegall Act. It's repeal has once again allowed commercial banks to become involved in investment activity that the Glass-Stegall Act specifically forbid.
To compound this ill advised repeal, our elected officials had another knee-jerk reaction to the scandal and implosion of Enron. The Sarbanes-Oxley bill instituted another albatross of accounting mumbo-jumbo that made the formation of public companies almost non-existent in our country while at the same time placing a tremendous cost on existing businesses on adhering to an ever more complex and costly set of accounting standards.
One of the most reprehensible tenants of the Sarbanes-Oxley legislation was the accounting method for business to evaluate existing inventories on the balance sheets through an accounting practice called Mark to Market. This strict accounting principle forces a business to value their inventory based on what the market will fetch on the open market as of today only.
This method of evaluating inventories and assets in this way only goes to over-inflate their value in a strong market and over-devalue them in a weak market. The repeal of Mark to Market, or at least a revision that could possibly use a 3 year rolling average of inventories and assets, would portray a more stable valuation for said inventories and help business and the government maintain a more accurate picture of the companies true worth.
For example, under the present accounting rules put forth by Mark to Market, assets on bank balance sheets that comprise questionably secure mortgages are valued at zero. These assets that are valued in this way create severe liquidity problems for banks that are actually in a better cash position today than they were a year ago. This accounting procedure forces banks to show book losses that portray their balance sheets in a shambles when in fact that is not the case.
If in fact these questionable loans were in fact worth zero, I'd take as many of these mortgages as possible for that price and so would you. First of all, every one of these mortgages represents land the home is built on which most certainly is not worth zero, as well as having a structure on it that is comprised of bricks and mortar, that again is certainly worth more than zero.
The repeal of Mark to Market would instantly improve the book valuations on bank balance sheets and jump start the banks ability to making credit available to creditworthy individuals and businesses.
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