Interesting article to read

http://www.wnd.com/2013/04/the-it-cant-happen-here-syndrome/

NIA blog post - 11/9/11

ECB Preparing Italy Bailout, Massive Inflation Coming

Italy’s 10 year bond yields rose above 7% on Wednesday and economists from around the world are now proclaiming that these interest rates are unsustainable with Italy’s national debt now 120% of its GDP. NIA believes the ECB is currently working on their largest bailout in history where they will commit to purchasing over €1 trillion of Italian bonds and bonds of other eurozone countries that are at risk of becoming insolvent. Despite the signals currently being given by the ECB, they will not allow Italy to fail because it will cause a Great Depression throughout the European Union, which will lead to the destruction of the eurozone.

Economists today fail to realize that 10 year bond yields of 7% are normal for not just Italy, but the rest of the eurozone and the United States. If it wasn’t for the ECB holding their benchmark interest rate at artificially low levels for over a decade, Italy and other eurozone countries wouldn’t have the high levels of debt they do today and they would be able to withstand yields of 7% or higher. The ECB is entirely at fault for the European Debt Crisis and they are about to follow in the footsteps of the Federal Reserve by abandoning their objective of maintaining price stability and keeping inflation low.

German 10 year bond yields declined again today to 1.72% and the spread between Germany and Italy is at a new record of 553 basis points. Germany is benefiting from safe haven buying from investors selling Italian bonds and buying German bonds, but investors will soon realize that German bonds are no better than Italian bonds and the world will dump all Euro denominated bonds.

Bond investors currently expect very little inflation in the eurozone, as seen by Germany’s low bond yields. The sole reason for the large spread between German and Italian bonds is Italy’s greater risk of default. However, a default by Italy would lead to the failure of Germany’s largest banks. Germany knows this but they don’t want to raise inflation expectations by making the world think that the ECB will be monetizing Italy’s debt. Therefore, Germany is now telling Italy to request aid from the European Financial Stability Facility (EFSF) if needed.

Unfortunately, the EFSF doesn’t have the financial resources to rescue a country the size of Italy. Last week, the EFSF had to cancel a €3 billion auction of 10 year bonds due to a lack of investor interest. On Monday, the EFSF finally had the bond sale, but was met with subdued interest that barely covered the €3 billion in bonds being offered. So far the EFSF has only raised a total of €13 billion through bond sales, but has received €440 billion in guarantees from eurozone countries. If Italy becomes a recipient of EFSF funding, the EFSF will lose one of their largest contributors.

The EFSF is looking to leverage up its €440 billion in funding to over €1 trillion. The European Debt Crisis was caused by too much leverage and debt. It is complete insanity to believe that the EFSF is going to solve the debt crisis when it too is getting deeply into debt and planning to use huge leverage to increase their funds available for bailouts.

There was recently a report that a proposal was made at the G20 summit last week in Cannes for Germany and other leading countries in the eurozone to pool together their foreign currency reserves including their gold reserves to back the EFSF, which would allow it to easily leverage up their funds and raise more money through bond sales. As soon as this report surfaced, Germany immediately announced to the world that they will not be using their gold reserves to boost the EFSF and that their gold reserves are “untouchable”.

Germany’s unwillingness to use their gold reserves clearly shows that gold is the real safe haven where individuals should store their savings if they want to keep their purchasing power. Investors buying German 10 year bonds with a yield of only 1.72% should ask themselves why Germany is willing to fund the EFSF with Euros but not their gold. Maybe investors will come to their senses and change their mind about buying any Euro denominated bonds.

For the past decade there has been a bond bubble in both Europe and the U.S. where we have seen bond yields at artificially low levels for an unprecedented amount of time. This has caused modern economists to believe that low bond yields are the new normal. When central banks interfere in the free market by manipulating interest rates to artificially low levels, it creates asset bubbles that eventually burst. When asset bubbles burst, the free market takes over and attempts to correct the damage by raising interest rates to extremely high levels, which encourages consumers to reduce their consumption and increase their savings.

NIA believes that over the next five years, 10 year bond yields will reach double digit territory throughout the eurozone and the U.S. The free market wants countries like Greece and Italy to default on their debts and restructure them, which is why their bond yields are rising so high. Although Greece and Italy have the highest debt levels in the eurozone as a percentage of GDP, the whole entire eurozone borrowed too much and has too much debt. Germany and France both know that the failure of Italy will spread to them when German and French banks with Italian debt begin to fail. The EFSF will soon be exposed as a failure itself when it is unable to attract the funding necessary to rescue eurozone countries in need of bailouts. Unless the ECB decides to bailout eurozone countries through the EFSF by buying their bonds, the ECB will be forced to directly monetize debts across the entire eurozone.

Even though the destruction of the eurozone seems imminent, NIA believes it will take time to play out. Most likely, in about two or three months from now the media will begin focusing its attention on the U.S. crisis. When the spotlight is off Italy, their bond yields will temporarily dip back down, but U.S. bond yields will skyrocket. The U.S. national debt is very close to breaking 100% of GDP, which will likely be a catalyst for investors to begin dumping their U.S. dollar denominated assets. The U.S. has unfunded liabilities many times the size of Italy’s unfunded liabilities. Including unfunded liabilities, while Italy’s total debts are approximately 300% of their GDP, the U.S. has total debts equaling about 600% of its GDP.

Austerity cuts are becoming very common in the eurozone and although citizens still protest them, it has become politically acceptable for politicians in Italy and other eurozone countries to support them. Italy’s cash budget deficit as a percentage of GDP is currently only 3.9% and their national debt has been barely growing. The U.S. cash budget deficit as a percentage of GDP is currently 8.7%, more than double Italy, and the U.S. national debt has been growing at a record rate. Americans are used to stimulus over austerity. Members of Congress are too afraid to make necessary spending cuts. The U.S. has a budget deficit from entitlement programs and interest payments on the debt alone.

The supercommittee created by Congress to recommend $1.5 trillion in deficit reductions by November 23rd, so far hasn’t agreed to make reductions to any entitlement programs. The Democrats and Republicans have so far only reached consensus on changing the way the government calculates inflation for Social Security cost of living adjustment (COLA) increases. They want to calculate inflation by using a new chain weighted CPI, which will understate inflation even more than the current CPI they use.

Based on how the current CPI has been miscalculating inflation for decades, Social Security recipients today should be receiving approximately triple their current payments. All Americans should be outraged that the government is planning to once again reduce the deficit through deception, when they should be eliminating wasteful government agencies like the Department of Energy, the Department of Education, and the Department of Homeland Security, while bringing our troops home from the middle east and immediately cutting overseas military spending in half so that we have the resources to better protect ourselves at home.

The extremely high levels of debt in both Europe and the U.S. need to be liquidated as soon as possible. If Italy can’t sustain itself with 7% interest rates, which is only average on a historical basis, think about how large the crisis will be in the U.S. when interest rates here reach 15% as price inflation spirals out of control. Less than three months ago Italy’s interest rates were below 5%. Fundamentally, Italy’s economy is the same as it was three months ago, but perceptions in the marketplace change quickly. Today, U.S. treasuries are still perceived to be a safe haven, but this will change 180 degrees in no time.

Just like how the U.S. government understates inflation when calculating COLA adjustments, they also understate inflation when calculating GDP growth. The U.S. recently reported 3Q GDP growth of 1.62% on a year-over-year basis, which used a price deflator of only 2.52%. If they used the real rate of price inflation, they would have reported negative GDP growth. The Federal Reserve just lowered forecasts for U.S. GDP growth in 2012 to between 2.5% and 2.9%, down from a forecast in June of between 3.3% and 3.7%. In order to ensure that we even meet the Fed’s new projections, the Fed will soon be launching QE3. NIA predicts that the Fed will use fears of contagion from the European Debt Crisis as their excuse for launching QE3 in the near-future. Combined with massive inflation from Europe as the ECB monetizes debt to save banks with exposure to Italian bonds, gold will soon skyrocket to new all time highs with silver likely beginning to once again outperform gold.

 

http://inflation.us/

NIA New Email - 11/30/11

The Federal Reserve along with the European Central Bank, Bank of Canada, Bank of Japan, Bank of England, and the Swiss National Bank are all lowering their U.S. dollar swap rates by 50 basis points! This is going to create massive worldwide monetary inflation and flood the world with U.S. dollars!

The Fed claims that these coordinated actions will enhance their capacity to provide liquidity support to the global financial system in order to "ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity."

It was also announced this morning that arrangements have been made to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant. Although the Fed said, "there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar" at this time, the stage is now set to create massive worldwide monetary inflation in other fiat currencies as well. The whole entire global fiat currency system could soon come to an end. The only solution to the upcoming hyperinflationary crisis will be a global digital gold backed currency.

NIA believes China will soon announce that they have dramatically increased their gold holdings to backup their rapidly growing foreign currency reserves, which have now reached $3.2 trillion. China's central bank just announced this morning that they are lowering their reserve requirement ratio by 50 basis points to 21% from 21.5%!

NIA considers precious metal stocks to be extremely undervalued at this time and we believe they are set to outperform gains in gold and silver in the months ahead. We believe silver stocks have the most upside potential and that silver exploration stocks, although the most risky, could be the biggest silver gainers.

Italian economy...

http://www.dailyfinance.com/2011/11/10/as-italian-drama-persists-fears-of-credit-crunch-spread-to-smal/

I think this is more than just a "hiccup" as stated in the article.

NIA New Email - 11/9/11

ECB Preparing Italy Bailout, Massive Inflation Coming

Italy's 10 year bond yields rose above 7% on Wednesday and economists from around the world are now proclaiming that these interest rates are unsustainable with Italy's national debt now 120% of its GDP. NIA believes the ECB is currently working on their largest bailout in history where they will commit to purchasing over €1 trillion of Italian bonds and bonds of other eurozone countries that are at risk of becoming insolvent. Despite the signals currently being given by the ECB, they will not allow Italy to fail because it will cause a Great Depression throughout the European Union, which will lead to the destruction of the eurozone.

Economists today fail to realize that 10 year bond yields of 7% are normal for not just Italy, but the rest of the eurozone and the United States. If it wasn't for the ECB holding their benchmark interest rate at artificially low levels for over a decade, Italy and other eurozone countries wouldn't have the high levels of debt they do today and they would be able to withstand yields of 7% or higher. The ECB is entirely at fault for the European Debt Crisis and they are about to follow in the footsteps of the Federal Reserve by abandoning their objective of maintaining price stability and keeping inflation low.

German 10 year bond yields declined again today to 1.72% and the spread between Germany and Italy is at a new record of 553 basis points. Germany is benefiting from safe haven buying from investors selling Italian bonds and buying German bonds, but investors will soon realize that German bonds are no better than Italian bonds and the world will dump all Euro denominated bonds.

Bond investors currently expect very little inflation in the eurozone, as seen by Germany's low bond yields. The sole reason for the large spread between German and Italian bonds is Italy's greater risk of default. However, a default by Italy would lead to the failure of Germany's largest banks. Germany knows this but they don't want to raise inflation expectations by making the world think that the ECB will be monetizing Italy's debt. Therefore, Germany is now telling Italy to request aid from the European Financial Stability Facility (EFSF) if needed.

Unfortunately, the EFSF doesn't have the financial resources to rescue a country the size of Italy. Last week, the EFSF had to cancel a €3 billion auction of 10 year bonds due to a lack of investor interest. On Monday, the EFSF finally had the bond sale, but was met with subdued interest that barely covered the €3 billion in bonds being offered. So far the EFSF has only raised a total of €13 billion through bond sales, but has received €440 billion in guarantees from eurozone countries. If Italy becomes a recipient of EFSF funding, the EFSF will lose one of their largest contributors.

The EFSF is looking to leverage up its €440 billion in funding to over €1 trillion. The European Debt Crisis was caused by too much leverage and debt. It is complete insanity to believe that the EFSF is going to solve the debt crisis when it too is getting deeply into debt and planning to use huge leverage to increase their funds available for bailouts.

There was recently a report that a proposal was made at the G20 summit last week in Cannes for Germany and other leading countries in the eurozone to pool together their foreign currency reserves including their gold reserves to back the EFSF, which would allow it to easily leverage up their funds and raise more money through bond sales. As soon as this report surfaced, Germany immediately announced to the world that they will not be using their gold reserves to boost the EFSF and that their gold reserves are "untouchable".

Germany's unwillingness to use their gold reserves clearly shows that gold is the real safe haven where individuals should store their savings if they want to keep their purchasing power. Investors buying German 10 year bonds with a yield of only 1.72% should ask themselves why Germany is willing to fund the EFSF with Euros but not their gold. Maybe investors will come to their senses and change their mind about buying any Euro denominated bonds.

For the past decade there has been a bond bubble in both Europe and the U.S. where we have seen bond yields at artificially low levels for an unprecedented amount of time. This has caused modern economists to believe that low bond yields are the new normal. When central banks interfere in the free market by manipulating interest rates to artificially low levels, it creates asset bubbles that eventually burst. When asset bubbles burst, the free market takes over and attempts to correct the damage by raising interest rates to extremely high levels, which encourages consumers to reduce their consumption and increase their savings.

NIA believes that over the next five years, 10 year bond yields will reach double digit territory throughout the eurozone and the U.S. The free market wants countries like Greece and Italy to default on their debts and restructure them, which is why their bond yields are rising so high. Although Greece and Italy have the highest debt levels in the eurozone as a percentage of GDP, the whole entire eurozone borrowed too much and has too much debt. Germany and France both know that the failure of Italy will spread to them when German and French banks with Italian debt begin to fail. The EFSF will soon be exposed as a failure itself when it is unable to attract the funding necessary to rescue eurozone countries in need of bailouts. Unless the ECB decides to bailout eurozone countries through the EFSF by buying their bonds, the ECB will be forced to directly monetize debts across the entire eurozone.

Even though the destruction of the eurozone seems imminent, NIA believes it will take time to play out. Most likely, in about two or three months from now the media will begin focusing its attention on the U.S. crisis. When the spotlight is off Italy, their bond yields will temporarily dip back down, but U.S. bond yields will skyrocket. The U.S. national debt is very close to breaking 100% of GDP, which will likely be a catalyst for investors to begin dumping their U.S. dollar denominated assets. The U.S. has unfunded liabilities many times the size of Italy's unfunded liabilities. Including unfunded liabilities, while Italy's total debts are approximately 300% of their GDP, the U.S. has total debts equaling about 600% of its GDP.

Austerity cuts are becoming very common in the eurozone and although citizens still protest them, it has become politically acceptable for politicians in Italy and other eurozone countries to support them. Italy's cash budget deficit as a percentage of GDP is currently only 3.9% and their national debt has been barely growing. The U.S. cash budget deficit as a percentage of GDP is currently 8.7%, more than double Italy, and the U.S. national debt has been growing at a record rate. Americans are used to stimulus over austerity. Members of Congress are too afraid to make necessary spending cuts. The U.S. has a budget deficit from entitlement programs and interest payments on the debt alone.

The supercommittee created by Congress to recommend $1.5 trillion in deficit reductions by November 23rd, so far hasn't agreed to make reductions to any entitlement programs. The Democrats and Republicans have so far only reached consensus on changing the way the government calculates inflation for Social Security cost of living adjustment (COLA) increases. They want to calculate inflation by using a new chain weighted CPI, which will understate inflation even more than the current CPI they use.

Based on how the current CPI has been miscalculating inflation for decades, Social Security recipients today should be receiving approximately triple their current payments. All Americans should be outraged that the government is planning to once again reduce the deficit through deception, when they should be eliminating wasteful government agencies like the Department of Energy, the Department of Education, and the Department of Homeland Security, while bringing our troops home from the middle east and immediately cutting overseas military spending in half so that we have the resources to better protect ourselves at home.

The extremely high levels of debt in both Europe and the U.S. need to be liquidated as soon as possible. If Italy can't sustain itself with 7% interest rates, which is only average on a historical basis, think about how large the crisis will be in the U.S. when interest rates here reach 15% as price inflation spirals out of control. Less than three months ago Italy's interest rates were below 5%. Fundamentally, Italy's economy is the same as it was three months ago, but perceptions in the marketplace change quickly. Today, U.S. treasuries are still perceived to be a safe haven, but this will change 180 degrees in no time.

Just like how the U.S. government understates inflation when calculating COLA adjustments, they also understate inflation when calculating GDP growth. The U.S. recently reported 3Q GDP growth of 1.62% on a year-over-year basis, which used a price deflator of only 2.52%. If they used the real rate of price inflation, they would have reported negative GDP growth. The Federal Reserve just lowered forecasts for U.S. GDP growth in 2012 to between 2.5% and 2.9%, down from a forecast in June of between 3.3% and 3.7%. In order to ensure that we even meet the Fed's new projections, the Fed will soon be launching QE3. NIA predicts that the Fed will use fears of contagion from the European Debt Crisis as their excuse for launching QE3 in the near-future. Combined with massive inflation from Europe as the ECB monetizes debt to save banks with exposure to Italian bonds, gold will soon skyrocket to new all time highs with silver likely beginning to once again outperform gold.

If you would like your friends and family members to be among the first to see NIA's 'Occupy Wall Street the Documentary' coming soon, please tell them to become a member of NIA for free immediately at: http://inflation.us

NIA New Email - 11/07/11

European Debt Crisis Facts and Truth

The mainstream media as of late has been focusing its total attention on the sovereign debt crisis in Europe and seemingly has forgotten that we have a much larger debt crisis in the U.S. that hasn't gone away and is only getting worse. Many global economists have been saying in recent weeks that if the European Central Bank (ECB) only went the way of the Federal Reserve, eurozone nations wouldn't be in the desperate situation they are in today. NIA believes that the ECB has already been acting just like the Fed, just not to the same extent.

Mario Draghi just took over as the new President of the ECB and as his first act in office, Draghi lowered the ECB's benchmark interest rate by 0.25% to 1.25%. The ECB's interest rate of 1.25%, while not quite as low as the Fed Funds Rate of 0% to 0.25%, is still very inflationary. The ECB's primary stated objective has always been maintaining price stability and containing inflation. However, with all of the rioting and civil unrest that took place in Greece in response to major austerity cuts, public officials in countries like Spain have been putting pressure on the ECB to abandon their objective to maintain price stability and instead focus on helping fuel growth.

In May of 2010, eurozone countries along with the International Monetary Fund (IMF) agreed to rescue Greece from default by giving them a €110 billion loan. Of the €110 billion loan, eurozone countries agreed to contribute €80 billion of the funds, including Germany providing €29.3 billion and France providing €22 billion. The IMF agreed to contribute the remaining €30 billion.

Unfortunately for Greece, their bond yields have been skyrocketing and they have been finding it difficult to raise money on their own. Greece is now in need of additional rescue funds. In July of 2011, after Greece's two year bond yield rose as high as 40.46%, European leaders negotiated in Brussels a deal to provide Greece with a new bailout of €109 billion in rescue loans. After this deal was announced, Greece's two year bond yield declined to 25.66% in just two days.

In August, Greece's two year bond yield started to surge once again, surpassing July's high of 40.46%. In mid-September, Moody's downgraded the credit ratings for the eight largest Greek banks, sending the two year bond yield to a new high in September of 84.52%. In early October 2011, Greece raised their 2011 budget deficit estimate as a percentage of GDP to 8.5%, well short of the 7.6% target that Greece promised to meet as a condition of the bailout package agreed to in July.

In late-October, European leaders abandoned their proposal from July and announced a new shocking bailout plan for Greece. Not only did they agree to give Greece new rescue funding of €130 billion, but in an additional part of the agreement, banks holding Greek bonds have agreed to accept a 50% haircut on the money they are owed by Greece. Greece Prime Minister George Papandreou, instead of accepting the deal on his own, announced that he was going to hold a referendum so that Greek citizens can vote on the deal.

Papandreou's proposed referendum infuriated leaders of Germany and France, who expressed their frustrations with Papandreou and threatened to pull the plug on the bailout deal. Greek bond investors once again panicked, sending the two year yield all the way up to a new high of 107.26%. Papandreou later announced that he was canceling the referendum, but still faced calls from the opposition to resign. Papandreou survived a confidence vote this weekend but is planning to soon step down to allow the creation of a new national unity government.

NIA believes that the best decision for Greece and its citizens would be to turn down the new bailout deal and declare bankruptcy. Greece would be best off leaving the eurozone and creating their own fiat currency. The bailouts are doing nothing to help the citizens of Greece, they are only helping the German and French banks that recklessly purchased Greek bonds at artificially low interest rates. If Greece declares bankruptcy, the country won't self-destruct. All of their infrastructure will still exist, but their debts will be eliminated and Greek citizens will enjoy a higher standard of living.

The only good news to come out of the European debt crisis so far is that the banks are willing to accept a 50% haircut on their Greek bonds. If the U.S. is going to survive its debt crisis without creating hyperinflation, it will need to convince its creditors to take an even larger haircut on U.S. treasuries. Unfortunately for Americans, the U.S. will never admit that it can't pay back its debts. The U.S. debt crisis is even worse than Greece, but the U.S. has a printing press that it will use to pay back China, Japan, and our other creditors, which will steal the remaining purchasing power of American citizens who don't have their savings in gold and silver.

The uncertainties and fears surrounding Greece are now spreading to Italy, which saw its 10 year bond yield skyrocket in recent days to a new Euro-era high today of 6.66%. Greece's liquidity problems began last year after their 10 year bond yield rose above 6%. Many people believe that Italy is becoming the next Greece and is now at risk of defaulting on its debt.

Even though Italy's debt to GDP ratio is 120%, the second highest out of eurozone countries behind Greece, Italy's budget deficit as a percentage of GDP is among the lowest in the eurozone at only 3.9%. It is insane for Italy's 10 year bond yield to be 6.66% with the U.S. 10 year bond at only 2.04%. The U.S. has no chance of ever balancing its budget and will likely see its deficit explode to new highs in the years ahead. Italy, on the other hand, could realistically balance its budget if it implements reform measures to cut spending.

NIA believes that Italy's 10 year bond yield is near a short-term peak because everybody has become negative on Italy all at once. It will likely decline back below 6% in the near future as Italy implements more austerity cuts. America's strategy to grow its way out of its own debt crisis will only create massive price inflation without any real economic growth. Before long, U.S. bond yields will surge faster than anybody has ever seen in history. In a few months, the media will forget about Italy and focus their attention on the U.S.

Although a 10 year bond yield for Italy above 6% may be a new high for the Euro-era, Italy's 10 year bond yield averaged well above 6% for many decades before the eurozone was created. Italy made a major mistake by joining the eurozone. Before joining the eurozone, Italy was able to survive even when their 10 year yield reached a high of 13.75% in 1995. After joining the eurozone, Italy was able to borrow money at interest rates that were manipulated to artificially low levels by the ECB. If Italy's bond yields were still being set by the free market this past decade, they would have no where near the level of debt they do today.

Many investors selling Italian bonds are now buying German bonds, because Germany has a low debt to GDP ratio and one of the world's largest manufacturing bases. German 10 year bond yields are now 1.78%, a record 488 basis points below Italy. This huge spread will not last and NIA believes investors are making a mistake by buying German debt over Italian debt. There is no chance of Italy being allowed to default on its debt. If Italy ever gets to the very edge of insolvency, Germany and France will allow the ECB to monetize Italy's debt. If Italy went bankrupt, many of the largest banks in Germany and France would fail. The ECB will not allow this to happen.

As bad as things are in Europe today, with the media making it seem like Euro Armageddon is fast approaching, you would expect the Euro to currently be collapsing on a daily basis. The Euro, which ended last year at $1.34, has risen so far in 2011 to $1.38. This shows that even with all of the inflation being created by the ECB, it is nothing compared to the inflation being created by the Fed. The U.S. is lucky for the European debt crisis because it is taking attention away from our problems and allowing the Fed to secretly prepare QE3 while our bond yields are still near record lows.

If you would like your friends and family members to be among the first to see NIA's 'Occupy Wall Street the Documentary' coming soon, please tell them to become a member of NIA for free immediately at: http://inflation.us

NIA New Email - 10/20/11

NIA Exposes Occupy Wall Street Truth

The Occupy Wall Street movement is gaining tons of momentum and is likely to continue picking up steam in the weeks and months ahead. Americans are angry but they aren't exactly sure what they are angry about and they don't know for sure who they should be angry with. It is easy for them to point their fingers at Wall Street, but Wall Street is in no way responsible for the financial crisis our country has today.

NIA believes that Occupy Wall Street protesters need to be educated to the facts and truth about the U.S. economy and what is truly causing our economic problems. NIA is getting ready to release 'Occupy Wall Street the Documentary', which NIA has produced so that Occupy Wall Street protesters can understand exactly what changes need to be made in America if our country is going to survive the Hyperinflationary Great Depression that will soon hit America and steal all remaining purchasing power that the U.S. dollar still has left.

NIA first saw signs of the protests taking place today back in November of 2009 when we were in Beverly Hills filming our documentary 'The Dollar Bubble'. We were alerted by NIA members to a major protest that was breaking out at the University of California. We went to see it and witnessed a very violent protest of students upset about a 32% increase in college tuition for the next semester.

The UCLA protest showed us just how angry Americans can become about inflation. Because we were forecasting massive food inflation to start breaking out in 2010, we made the prediction that we would see large "End the Fed" protests beginning in 2010. We did see massive food inflation in late 2010, accelerating greatly throughout 2011. However, we overestimated the ability for average Americans to quickly point the finger at the Federal Reserve. We also didn't expect many citizens of foreign countries, especially Arab nations, to begin protesting before Americans did.

About one year after the violent UCLA tuition inflation protest that we witnessed, a larger even more violent tuition inflation protest broke out in London. When Prince Charles' security detail made the mistake of driving him and the Duchess of Cornwall past the area where the protest was taking place, in a vehicle that cost more than what each protester will earn in the next ten years combined, about 50 of the protesters broke through the motorcycle police protecting the Prince chanting "Off with their heads!", beating on the side of their Rolls-Royce with sticks and bottles. Luckily, the car was armored and only suffered minor damages, keeping Prince Charles and the Duchess safe. A Jaguar behind it containing police officers was destroyed to the extent that the officers ended up using car doors from the Jaguar as shields, which still couldn't prevent six of them from being seriously injured.

The food inflation protests that NIA had been expecting for over a year, started to break out in late January of this year in Algeria, with citizens chanting "Bring Us Sugar!" Eight citizens were killed during the protests in Algeria. This quickly spread to a massive outbreak of civil unrest in neighboring Tunisia, where thousands protested food inflation and high unemployment. The Tunisian revolution led to the ousting of longtime President Zine El Abidine Ben Ali, but came at the expense of 79 protesters being killed.

This rapidly spread to the riots in Egypt. Before the Egyptian protests even began, six Egyptian citizens committed suicide in front of government buildings by dousing themselves with fuel and lighting themselves on fire. All together, 846 protesters were killed across different parts of Egypt and over 6,000 more were injured. The Egyptian protesters were eventually successful at getting Egyptian President Hosni Mubarak to resign from office.

NIA saw the resignation of Mubarak as a farce from the beginning. We couldn't understand how thousands of angry Egyptians who were calling for Mubarak's head would within seconds of his resignation announcement erupt into cheers like Egypt had just won the World Cup. The resignation of one man would not eliminate the corruption in Egypt's government and fix their inflation and jobs crisis. Most of Mubarak's cronies are still in power. Mubarak agreed to just take one for the team. For the protesters to declare victory and go home after one man announced his resignation shows that most of the protesters were sheep who were just copying their friends without having a real grasp on the issues affecting the economy in Egypt. What if Mubarak came back on television and said "I was just kidding" or "I just changed my mind and decided not to resign", would the protesters have come back?

After Egypt, the protests spread to Jordan and Yemen. Once again, food inflation was the main root cause of the protests, something that the mainstream media in the U.S. largely ignored when reporting on the protests. The American mainstream media was not allowed to discuss inflation when corresponding about the global inflation protests, because it didn't want the world to connect the dots and realize that Federal Reserve Chairman Ben Bernanke is more responsible for the global food inflation crisis and protests than the leader of any foreign country.

Because of the U.S. dollar's status as the world's reserve currency, the majority of the world's most important agricultural and energy commodities are traded in U.S. dollars. When Bernanke prints trillions of dollars out of thin air in an attempt to reinflate the Real Estate bubble and lower unemployment in the U.S., it has a direct affect on what foreigners pay for all goods and services around the world. With China printing massive amounts of Yuan to keep it pegged to the U.S. dollar and the Bank of Japan intervening to keep the Yen from appreciating too rapidly against the U.S. dollar, countries like Australia are now quick to blame any short-term dip in manufacturing, agriculture production, or energy commodity exports on their currency being too strong against not just the U.S. dollar but the Yen, Yuan, and most other fiat currencies.

In just the last two weeks, the Australian dollar has risen 9.5% against the Yen, 8.5% against the U.S. dollar, and 8.6% against the Yuan. It should be no surprise to NIA members that attempts to copy "Occupy Wall Street" in Australia have been dismal. After 1,000 protesters initially showed up in Sydney on Saturday for their own "Occupy Wall Street" protest that was supposed to continue "indefinitely", less than 50 protesters remained on Monday as most people returned to work. Australia doesn't have an inflation or unemployment crisis because their central bank did the right thing and raised interest rates to 4.75% at a time when everybody else was lowering them. This is why since the inception of NIA we have always suggested Australia as our top choice for Americans to move to if they want to get out of harms way before hyperinflation hits the U.S. We hope that the Reserve Bank of Australia will continue to do the right thing and ignore calls from all around the world for them to lower rates.

The mainstream media is currently once again focused on the financial crisis in Europe, which is temporarily distracting from the debt crisis that really matters in the U.S. On Halloween, the official U.S. national debt for the first time ever will surpass U.S. GDP. At any time now without any warning or any new catalyst, we could see a huge onslaught of dollar dumping that causes the economic equivalent of 9/11.

There is no hope of preventing hyperinflation in America when President Obama is unwilling to consider any measure that would cut government spending in a meaningful way. In August when the Budget Control Act of 2011 was enacted by Congress, the mainstream media was widely reporting that the "supercommittee" formed by the act would be in charge of finding $1.5 trillion in spending cuts by Thanksgiving. In reality, this "supercommittee" that Obama was so heavily relying on to pay for his proposals in his "jobs bill", is not responsible for finding $1.5 trillion in spending cuts but only a $1.5 trillion reduction in the budget deficit over 10 years.

Obama promises to veto any proposals that make large spending cuts, especially to entitlement programs. Many Democrats are calling for a new 5% "surcharge" on Americans earning over $1 million per year. Within a few years, an annual income of $1 million will only have the purchasing power of what a $100,000 salary has today. This proposed new tax would discourage small business owners from expanding and hiring new employees. It would destroy any remaining hope that is left for a real economic recovery and encourage most American entrepreneurs to leave the country permanently.

The U.S. Bureau of Labor Statistics (BLS) yesterday released their consumer price index (CPI) data for the month of September. The BLS reported year-over-year CPI growth of 3.87%, the highest rate of U.S. price inflation in three years. The official government reported year-over-year U.S. price inflation rate of 3.87% for September was up from 3.77% in August, 3.63% in July, 3.56% in June, 3.57% in May, 3.16% in April, 2.68% in March, 2.11% in February, 1.63% in January, 1.5% in December, and 1.1% in November. Year-over-year increases in the CPI have risen by 252% over the last ten months.

Even year-over-year core-CPI growth rose for the 11th straight month to 1.97% in September, an increase of 223% from year-over-year growth of 0.61% in November. NIA estimates the real rate of U.S. price inflation to currently be 8.5% on a year-over-year basis. It was just announced that American retirees receiving Social Security will receive a 3.6% COLA increase, the first increase since 2009. Social Security is the main reason the U.S. government reports artificially low CPI numbers. By giving retired Americans only a 3.6% Social Security payment increase when real price inflation is now 8.5%, Congress gets to spend the difference in the ways they see fit.

With inflation spiraling out of control, the government knows that they soon won't be able to afford even the artificially low COLA increases they are making today. Congress is now exploring ways to keep future COLA increases as low as possible. Many clueless Keynesian economists in Washington are now arguing that the inflation measure the government uses to calculate COLA increases, the CPI-W, is overestimating true increases in the cost of living. These economists claim that Americans can shift between items and if veal prices are rising too much, they can eat chicken or if lobster prices are rising too much, they can eat shrimp. They propose that the government switches to a version of CPI that accounts for these changes, called "chain weighted" CPI.

All Americans know that their cost to maintain the same standard of living has increased by a lot more than 3.6% over the past year. The CPI-W being used today already artificially understates inflation so much that current Social Security recipients deserve to be receiving triple their current payments. If "chain weighted" CPI was being used today, American seniors would only receive a 3% COLA increase next year.

If the U.S. government did the right thing and invested all FICA tax receipts into gold, it would be able to give Social Security recipients an increase next year of around 8.5% like they should be entitled to. American seniors are being hurt most by inflation because health care has consistently had the highest rate of inflation out of all goods and services. A COLA increase of 3.6% is nothing when NIA estimates the real rate of health care inflation to currently be 15% or 76.5% higher than the overall real rate of price inflation. To artificially lower COLA increases even more would mean utter devastation to the U.S. economy as seniors would need to reenter the workforce and Americans with jobs would need to stop spending money on goods and services in order to help their parents. This would mean even less jobs for the youth in America and less support for them from their parents.

If you would like your friends and family members to be the first to see 'Occupy Wall Street the Documentary' coming soon, simply tell them to become a member of NIA for free today at: http://inflation.us

NIA New Email - 9/9/11

The Truth About Obama's Jobs Bill

 

The Truth About Obama's Jobs Bill

On Thursday evening, President Obama gave a speech to a joint session of Congress discussing the jobs situation here in America. The purpose of Obama's speech was to convince the American public and their elected representatives in Washington to support Obama's new $447 billion 'American Jobs Act', which has a cost that is 49% larger than the $300 billion act most people were expecting. NIA believes this bill will do nothing to reduce unemployment in America and that it is nothing but another stimulus bill in disguise that will add to our budget deficits.

Obama's bill proposes a $4,000 per employee tax credit for businesses that hire somebody who was previously unemployed for 6 months or more, at a cost of $8 billion. At the same time, Obama wants to extend emergency unemployment compensation (EUC), which allows Americans who have exhausted standard unemployment benefits that last for 26 weeks to continue receiving them for between 20 and 53 additional weeks. EUC benefits are set to expire at the end of 2011 and continuing them through the end of 2012 will cost U.S. taxpayers $49 billion.

It is totally absurd for Obama to give employers money to attempt to hire people he is simultaneously paying to stay out of work. What makes this even more outrageous is that employers have an incentive not to hire recently laid off workers, when only those unemployed for 6 months or more will bring them a $4,000 check. If this bill is passed it will make the unemployment situation in America far worse than it already is.

NIA has heard from members who own farms and have positions on their farms available, but can't find anybody interested in working for them and filling the available positions. Every time they hire somebody to work on their farm, the worker purposely does a poor job and tries to get fired. Their sole purpose of getting a job is to convince their local unemployment agency that they are trying to find employment so that they can keep receiving unemployment benefits, when in reality they are trying to take advantage of the system.

Obama is right that any future recovery will be driven by our businesses and our workers, but if Washington wants to make a positive difference the only step it should take to improve our people's lives, is get out of their lives. It is impossible for any piece of legislation including Obama's 'American Jobs Act', to improve the employment situation here in America. Obama needs to remove any government programs already in place that interfere with the free market. NIA believes that if the U.S. eliminated all unemployment benefits and also got rid of the minimum wage, it would cause the unemployment rate to return to healthy levels.

U.S. employees earning up to $106,800 annually currently pay a 4.2% payroll tax that is scheduled to revert back to 6.2% in 2012. Obama not only doesn't want employee payroll taxes to raise back up to the historical level of 6.2%, which went into effect in 1990, but he wants to further reduce them to 3.1% for 2012. The annual cost of this employee payroll tax reduction is estimated to be $175 billion. In an attempt to help small businesses, Obama also wants to cut employer side payroll taxes in half from 6.2% to 3.1% on the first $5 million of payroll, while eliminating employer side payroll taxes for new hires. The annual cost of this employer side payroll tax reduction is estimated to be $65 billion.

NIA believes all payroll taxes should be eliminated. Americans who make payroll tax payments today are paying for other Americans to receive entitlement programs that they will never receive. Social Security and Medicare are already on the verge of insolvency. By the end of this decade, NIA believes Americans receiving Social Security checks will be receiving checks that don't have any purchasing power and aren't worth cashing. Americans would be much better off if they were able to use the money they currently spend on payroll taxes to accumulate physical silver instead. Only Americans with enough savings in physical gold and silver will be able to retire in the future.

Obama's bill also provides $35 billion in state and local government aid, $50 billion in infrastructure repairs, $10 billion for a national infrastructure bank, $30 billion for school modernization and repairs, and $15 billion in housing expenditures. Unfortunately, the jobs Obama's bill will create for construction workers, teachers, veterans, and the long-term unemployed, are only temporary jobs that will vanish after the bill expires, and the money printed to pay these workers will steal from the purchasing power of American workers who already have jobs today. There is no doubt about it that America's infrastructure is decaying and we need to build new roads and bridges, but this is something that we can't afford to do until we return to an economy that is based on production instead of consumption.

We need to return to a trade surplus and begin paying off our debt before we can afford to make investments into infrastructure. China can afford to build newer airports and faster railroads because they have a $254 billion trade surplus and $3.2 trillion in foreign exchange reserves that they are better off spending on infrastructure improvements than keeping parked in U.S. dollars that will soon be worthless.

Obama says that everything in his bill will be paid for, but NIA wonders how? The government is claiming this isn't another stimulus bill and Obama didn't mention the word stimulus once during his speech. The truth is, NIA believes all of the measures in this bill will have to be paid for by borrowing and printing money, which will increase our budget deficit, expand the money supply, and lead to massive price inflation.

The jolt that Obama is trying to give to the economy he admits has stalled, is the same economy he tried to jolt with the American Recovery and Reinvestment Act of 2009, which put the U.S. $787 billion deeper into debt. NIA said at the time this stimulus bill was passed that when it failed to produce the results the government said it would, instead of admitting that stimulating the economy failed and reversing course, they will say the stimulus didn't work because it wasn't big enough and attempt to pass further stimulus bills by making new false promises.

Obama is lying to the public just like Congress recently did in regards to its bill to raise the debt ceiling. Congress deceived Americans into believing that in return for raising the debt ceiling so that the government can continue operating as it is today, "spending cuts" would be made to lower future budget deficits. These so called "spending cuts" turned out to be minor reductions to very large spending increases, with even these minor reductions not beginning until early 2013. Government spending is set to rise every single year until the dollar doesn't have any purchasing power left.

Obama said in his speech last night that, "while corporate profits have come roaring back, smaller companies haven't." The reason this is true is only the largest banks and the companies they do business with have direct access to the Federal Reserve's cheap and easy money. If the Fed didn't bail out all of the banks on Wall Street that made risky leveraged up bets with other people's money for the sole purpose of paying their employees huge bonuses, smaller banks would have acquired their assets in bankruptcy court for pennies on the dollar and be prospering today. Instead, small banks that made sound decisions were punished for doing the right thing. The Fed has made it even more difficult than ever for them to compete with the large banks that should be out of business.

If the Fed and Treasury didn't bail out Wall Street, the world wouldn't have come to an end like former-Treasury Secretary Henry Paulson conned everybody into believing. The truth is, we would be better off today because the bad assets would have been liquidated. The bad assets that caused the financial crisis of late-2008/early-2009 still exist today. The main difference between back then and now is, the size of the Fed's balance sheet has doubled to $2.862 trillion due to the toxic assets they purchased, and the world is now flooded with excess liquidity of U.S. dollars.

It is impossible for the U.S. not to feel the consequences of the money we squandered fighting wasteful wars in Iraq and Afghanistan, and maintaining military bases all around the world. It is impossible for the U.S. not to feel the devastating effects of interest rates that have been left artificially low for way too long. When you have an artificial boom, that boom will eventually go bust and the more that is done to prop a phony economy up that is built on U.S. consumers spending money they don't have, the harder the economy will fall in terms of high unemployment, high inflation, and a total lack of purchasing power that will cause a permanent decline in the U.S. standard of living.

The fact that Obama felt the need to demand that Congress pass his bill 17 times in 1 speech, shows that nothing positive will come out of this bill for the average American citizen. The only people who will benefit from this bill are bankers on Wall Street who are in line to earn huge fees on the infrastructure deals that get funded by the new national infrastructure bank. While the official U.S. Bureau of Labor Statistics (BLS) unemployment rate in August was 9.1%, down from its peak in October of 2009 of 10.1%, the real rate of unemployment including both short and long-term discouraged workers is now 22.8%, up from 22% in October of 2009 and a new high since the Great Depression in 1933. By further impeding the free market, Obama's bill will further misallocate what little resources Americans still have left before hyperinflation arrives.

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us

National Inflation Association | 96 Linwood Plaza #172 | Fort Lee, NJ 07024

Jobs plan

How can you pay for something when you cut the taxes that actually pay for it?  And how is this not going to raise the deficit?  Apparently he doesnt do his own taxes or anything to do with math.  Sorry if you are an Obama lover but politicians are politicians and even if you love him or hate him you have to admit he's still a politician and is just saying what we want to hear so he can get elected again.  It's what they all do...

What they really need to do is to get rid of some of the regs they have for businesses so that they can actually make a little money by hiring Americans instead of going overseas, not all of them just some of them.  I like how he said that dismantling the government couldnt be done.  Government is too big, let the states decide how they want to run their own states.  Our founding fathers did not want big government.  They just came from the biggest government, England, and did not want to have a king.  Guess we are trying to go back to that though.

 

FACT CHECK: Obama's jobs plan paid for? Seems not

By CALVIN WOODWARD - Associated Press,TOM RAUM - Associated Press | AP

WASHINGTON (AP) — President Barack Obama's promise Thursday that everything in his jobs plan will be paid for rests on highly iffy propositions.

It will only be paid for if a committee he can't control does his bidding, if Congress puts that into law and if leaders in the future — the ones who will feel the fiscal pinch of his proposals — don't roll it back.

Underscoring the gravity of the nation's high employment rate, Obama chose a joint session of Congress, normally reserved for a State of the Union speech, to lay out his proposals. But if the moment was extraordinary, the plan he presented was conventional Washington rhetoric in one respect: It employs sleight-of-hand accounting.

A look at some of Obama's claims and how they compare with the facts:

OBAMA: "Everything in this bill will be paid for. Everything."

THE FACTS: Obama did not spell out exactly how he would pay for the measures contained in his nearly $450 billion American Jobs Act but said he would send his proposed specifics in a week to the new congressional supercommittee charged with finding budget savings. White House aides suggested that new deficit spending in the near-term to try to promote job creation would be paid for in the future — the "out years," in legislative jargon — but they did not specify what would be cut or what revenues they would use.

Essentially, the jobs plan is an IOU from a president and lawmakers who may not even be in office down the road when the bills come due. Today's Congress cannot bind a later one for future spending. A future Congress could simply reverse it.

Currently, roughly all federal taxes and other revenues are consumed in spending on various federal benefit programs, including Social Security, Medicare, Medicaid, veterans' benefits, food stamps, farm subsidies and other social-assistance programs and payments on the national debt. Pretty much everything else is done on credit with borrowed money.
So there is no guarantee that programs that clearly will increase annual deficits in the near term will be paid for in the long term.
___

OBAMA: "Everything in here is the kind of proposal that's been supported by both Democrats and Republicans, including many who sit here tonight."

THE FACTS: Obama's proposed cut in the Social Security payroll tax does seem likely to garner significant GOP support. But Obama proposes paying for the plan in part with tax increases that have already generated stiff Republican opposition.

For instance, Obama makes a pitch anew to end Bush-era tax cuts for the wealthiest Americans, which he has defined as couples earning over $250,000 a year or individuals earning over $200,000 a year. Republicans have adamantly blocked what they view as new taxes. As recently as last month, House Republicans refused to go along with any deal to raise the government's borrowing authority that included new revenues, or taxes.

___

OBAMA: "It will not add to the deficit."

THE FACTS: It's hard to see how the program would not raise the deficit over the next year or two because most of the envisioned spending cuts and tax increases are designed to come later rather than now, when they could jeopardize the fragile recovery. Deficits are calculated for individual years. The accumulation of years of deficit spending has produced a national debt headed toward $15 trillion. Perhaps Obama meant to say that, in the long run, his hoped-for programs would not further increase the national debt, not annual deficits.
___

OBAMA: "The American Jobs Act answers the urgent need to create jobs right away."

THE FACTS: Not all of the president's major proposals are likely to yield quick job growth if adopted. One is to set up a national infrastructure bank to raise private capital for roads, rail, bridges, airports and waterways. Even supporters of such a bank doubt it could have much impact on jobs in the next two years because it takes time to set up. The idea is likely to run into opposition from some Republicans who say such a bank would give the federal government too much power. They'd rather divide money among existing state infrastructure banks.
___

Associated Press writer Joan Lowy contributed to this report.

NIA New Email - 9/7/11

 

Obama Preparing for Martial Law During Hyperinflation

In August of 2009, the city of Paterson, New Jersey, proposed the implementation of martial law by imposing an adult curfew at night in an attempt to curb violence. This unprecedented proposed ordinance would have made it illegal for adults to leave their homes and be out in the public in Paterson between the hours of 12AM and 7AM, with a penalty of up to a $2,000 fine and 90 days in jail. This ordinance would have been completely unconstitutional, especially being that it was a non-emergency situation.

NIA actually determined that violence in the city was down that year and trending downward over the previous few years. We thought for sure that there was more to the story than what was being reported by the mainstream media, so we traveled to Paterson City Hall and attempted to interview then-Mayor Joey Torres on camera. The mayor turned down the interview and refused to answer our questions even off camera.

As we left the mayor's office, we met a city employee who overheard our conversation and introduced us to then-City Council President Jeffery Jones, who agreed to an interview and invited us into his office. Jones explained to us that he is the City Council President and the first time he ever heard of this proposal was from the Associated Press, after Torres already announced it on the steps of the police department saying, "we're trying to think outside the box" in regards to solving crime issues. Jones expressed disbelief that the mayor would want to lock down an entire city including the people who aren't committing crimes. He was also surprised that the AP already had a list of the 30 shootings that occurred in the city during the previous year, when this was undisclosed information that even he didn't have at the time.

Jones was flabbergasted that this ordinance was even being considered since it completely lacked logic. He said that in the past before any other ordinances were publicly announced by the mayor, there would always be a comprehensive discussion about it between local government officials. Not only was there no discussion about it, but Torres hastily added it to the City Council's agenda for a vote at their very next meeting. Jones was perplexed not just by the total lack of discussion and rush to get it passed, but by the total lack of details in the ordinance regarding the roles of departments, agencies, and the police department's capacity to do the work. Using common sense, Jones said that if the police department had the capacity to enforce the ordinance, we wouldn't even be discussing it.

NIA agreed with Jones that if the police department couldn't prevent the 30 shootings from taking place in the city, there is no way on earth that it will have the ability to enforce an ordinance keeping 146,199 residents in their homes at night. Torres must have known that and must have also known that proposing this ordinance would be career suicide. Therefore, we see no logical explanation as to why Torres would propose this during a time when crime in the city was declining and he was up for reelection the very next year. Even a preschool child with no political experience would focus on taking credit for the reduction in crime, instead of giving the impression that the city has no protection or safety for its residents by proclaiming they must all be locked down.

Paterson is one of the largest recipients of federal funding per capita in the U.S. It makes total sense to NIA if the Federal Government was forcing Torres to propose this ordinance. The government most likely wanted to gauge the public's reaction and see what type of outrage there would be in response to this proposal. The government wanted to see just how many residents would be willing to so easily give up their freedom and liberty in the name of safety by supporting the ordinance. The government wanted to know how difficult it would be to get the ordinance passed and if it was passed, they wanted to see what it would take to enforce it. A real life trial of martial law in one of the largest cities in the New York metropolitan area would allow the military to be better equipped to handle all types of situations when martial law takes place on a nationwide basis during hyperinflation.

The reason why we believe the ordinance was so vague with no details about enforcement is simple, the police department was never intended to enforce the ordinance. In the event that the ordinance was passed, there would immediately be thousands of brand new criminals breaking the law in Paterson and Torres would have a need to ask the Federal Government to bring in the U.S. military to detain the thousands of criminals who were disobeying the law. The Federal Government would in effect be creating a phony conflict in a city with a high crime rate so that they can justify using the U.S. military at home.

Last year, President Obama signed an Executive Order "Establishment of the Council of Governors", which Obama claims is an order to strengthen further the "partnership" between the Federal Government and State governments to "protect" our Nation and its people and property. It orders that a council be created of 10 State Governors appointed by the President who will meet to exchange information with the Secretary of Defense, Secretary of Homeland Security, and many other government officials related to the military. Their meetings will concern matters involving the National Guard of the various States, homeland defense, civil support, synchronization and integration of State and Federal military activities in the United States; and other matters of mutual interest pertaining to National Guard, homeland defense, and civil support activities.

From our experience, we know that the words "partnership" and "protect" are being used in this order to deceive the public into believing the Executive Order serves some kind of a noble purpose, which to us shows malicious intent behind the creation of the order. "Civil support" in this Executive Order can't possibly mean anything other than martial law when civil unrest takes place inside of a city. This Executive Order is an attempt to invalidate the Posse Comitatus Act of 1878 and make it legal for the military to enforce civilian laws inside of a city like Paterson. You would think that an Executive Order this outrageous and disturbing would have all Americans up in arms, but the mainstream media completely ignored this latest attempt by Obama to transfer power from state and local governments to the Federal Government, and didn't have one single report about it.

Interestingly, Obama was just in Paterson this past Sunday touring parts of the city damaged by Hurricane Irene with New Jersey Governor Chris Christie and newly elected Paterson Mayor Jeffery Jones. (Jones in late-September 2009 rejected the adult curfew ordinance of former-Paterson Mayor Joey Torres and in 2010 ran against him for mayor, defeating him despite being outspent 17 to 1.) Hurricane Irene caused the worst flooding crisis in city history. Mandatory evacuations were ordered for parts of the city, forcing thousands of people out of their homes and hundreds of businesses to close. All across Paterson, store shelves were empty with no food, water, batteries, or flashlights available to purchase anywhere. With most of the main streets and bridges into the city flooded, trucks weren't able to enter the city to replenish stores with supplies.

As bad as the flooding from Hurricane Irene was for Paterson residents, it is nothing compared to the devastation and destruction that will be caused by a different kind of flooding from Obama and Federal Reserve Chairman Ben Bernanke. Obama and Bernanke have been flooding the world with trillions of U.S. dollars with the false belief that because Treasury yields have been falling to record lows, Obama can run trillion dollar budget deficits with Bernanke leaving the Federal Funds Rate near zero forever. Their actions are setting up the next major U.S. financial crisis, which will be massive price inflation that eventually results in hyperinflation and leads to government price controls. The empty store shelves in Paterson from Hurricane Irene are finally being replenished now that flood waters are subsiding. Unfortunately, the empty store shelves that will arise from hyperinflation and government price controls, will be permanent.

The 77-foot high Great Falls and river that was responsible for most of the flooding in Paterson, was previously used for centuries to power dozens of surrounding mills that produced textiles, firearms, and railroad locomotive products. Paterson eventually became one of the world's largest producing cities of silk, with 50% of U.S. silk production coming from Paterson, and was later named the "Silk City". Immigrants from all around the world who moved to the U.S., came to Paterson from Ellis Island to get their first job in America at one of Paterson's many factories.

Today, there are no more silk mills left in Paterson and unemployment in the city is nearly double the national average. With 30% of Paterson residents living below poverty, Paterson is one of the U.S. cities that will be hurt most by the massive monetary inflation of the Federal Reserve. The majority of people in Paterson are relying on government entitlement programs just to survive and don't have the financial resources to accumulate physical gold and silver.

While in Paterson, Obama pledged Federal Government funding to residents who were devastated by the hurricane. The White House has estimated that the U.S. government's cost for Hurricane Irene relief will be around $1.5 billion, but the Federal Emergency Management Agency (FEMA) only has $800 million in funds left. FEMA will soon be asking Congress for billions of dollars that our government doesn't have and the Federal Reserve will be forced to print. By printing the FEMA funds to be provided to people in Paterson, the food stamps, unemployment checks, welfare checks, and other government entitlements that Paterson residents depend on to survive, will all lose their purchasing power, making residents more dependent on government than ever. This is Obama's strategy to get reelected, promise people more government handouts that instead of helping them, cause the U.S. dollar to lose its purchasing power and make the people as dependent on government as possible.

NIA believes the main reason Obama went to Paterson was to see exactly how residents responded to mandatory evacuations and empty store shelves. He knows that Paterson is a microcosm of what the whole entire U.S. will soon look like during hyperinflation. That is why the Federal Government was so eager to run martial law tests and trials in Paterson. They know that the city is practically on the verge already of having rioting, looting, and civil unrest, before hyperinflation arrives. By providing Paterson with more federal funds, we are sure a secret deal will be worked out that will allow the Federal Government to push through their plans for a martial law trial in Paterson without any resistance from local government officials

NIA believes that the Federal Government has no business providing funds to victims of hurricanes and other natural disasters. There is absolutely nothing in the U.S. Constitution that authorizes it. Most Americans are afraid to speak out against helping victims of natural disasters, but FEMA is a bureaucratic waste that needs to be eliminated in favor of free market solutions. During Hurricane Katrina, thousands of Americans volunteered to help out in disaster relief, but instead of being put straight to work they were told to sit around for hours, which turned into days, and many of them decided to just go home. FEMA spent an outrageous $416,000 per person to provide temporary housing for several hundred Hurricane Katrina evacuees in Alabama. FEMA even paid $800 million to manufacture 11,000 mobile homes to be used as shelter for Hurricane Katrina victims, but they were never used and were left to waste away in Arkansas.

The most shocking FEMA debacle is when they decided to give out thousands of debit cards with $2,000 on them to Hurricane Katrina victims. Many people ended up using these debit cards at strip clubs. A jail escapee convicted of murder was even able to say he was a Hurricane Katrina victim and get a free $2,000 FEMA debit card, which he used to buy beer and drugs, before paying a limo driver to transport him far out of the area. A Red Cross volunteer was convicted and jailed for stealing $250,000 worth of these debit cards and we are sure that others got away with stealing millions of dollars worth of them.

If Americans didn't have the mindset that FEMA will always be there to rescue them, more Americans would have full insurance coverage on their homes. One Paterson resident who we saw on the nightly news crying about his home being flooded and how he didn't have money for flood insurance, had an iPhone in his hand. The average annual flood insurance policy costs less than the average annual mobile phone bill. If the cost of insurance to cover flood damages is extraordinarily high in certain areas because the locations are prone to flood, then Americans shouldn't be living there. Americans who are smart enough not to build a home on the edge of a cliff or next to a river, shouldn't be forced to pay for incompetent Americans who did. It is the existence of FEMA that encourages Americans to build in risky locations without thinking of the consequences.

Ever since Christie was elected Governor of New Jersey, he has surpassed the expectations we had for him, taking dramatic steps to cut wasteful spending in the state. Unfortunately, he appears to have changed his beliefs due to a Category 1 hurricane. He now doesn't even think it is necessary for the Federal Government to cut enough spending in parts of the budget to cover its spending on hurricane relief. The fact is, if Christie wants to help residents of New Jersey, he should have reserves set aside to do so on his own. If anybody in government is responsible for helping New Jersey residents hurt by Hurricane Irene, it is Christie himself. Instead of state and local elected representatives putting funds aside for a rainy day, it seems as though their entire purpose is to beg the Federal Government for relief.

NIA expects Sarah Palin to announce her candidacy for the Republican Nomination for President of the United States this month. It was a prediction that NIA originally made in its top 10 predictions for 2011 back in January. We give her credit for helping build $14 billion in state reserves while she was Governor of Alaska, before quitting the job that she was nominated for. If a natural disaster strikes Alaska, they will be able to take care of themselves. Unfortunately, these Alaskans would in effect be punished for their good decisions by being forced to pay for the reckless decisions of other states. Many other states would also have large reserves for a rainy day if it wasn't for the Federal Government creating a moral hazard by providing funding to state and local governments for disaster relief.

If Alaska was smart they would secede from the union and become their own country. Alaska currently has no state income tax or sales tax, and if Alaskans no longer had to pay federal income tax to support the reckless wasteful spending of U.S. politicians, millions of people from across the U.S. and all around the world would want to move to Alaska. As the U.S. dollar continues to rapidly lose its purchasing power, the likelihood of Alaska and other states moving towards secession will greatly increase. In 2006, an organization collected the required signatures to place on Alaska's fall ballot an initiative to have Alaska secede from the union, but the State Supreme Court ruled any attempt at secession to be illegal and unconstitutional.

NIA believes that U.S. states have the legal right to secede from the union. U.S. courts have proven time and time again that they will incorrectly interpret the U.S. Constitution in order to protect the government's destructive illegal actions while selectively ignoring provisions that protect American's rights. The U.S. is addicted to waging illegal wars against countries like Iraq, Afghanistan, Libya, and soon to be Syria. The U.S. is also addicted to money printing, in large part to pay for its illegal wars. These dangerous addictions are unconstitutional, because the U.S. Constitution said wars must be approved by Congress and only gold and silver shall be used as legal tender. The act of secession is a very powerful tool that should only be used during times in which the Federal Government's actions threaten the freedom and liberty of the citizens they swore to protect. Secession is legal and constitutional because without it there is nothing to keep the Federal Government in check and force them to rein in out of control deficit spending that threatens our very existence as a sovereign nation.

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us

NIA New Email - 08/20/11

National Inflation Association

 

Facts and Truth About U.S. Inflation, Debt, and Political Crisis

The U.S. Bureau of Labor Statistics (BLS) yesterday released their consumer price index (CPI) data for the month of July. The BLS reported an increase in year-over-year CPI growth to 3.63%, the highest rate of U.S. price inflation since October of 2008. July's official government reported year-over-year U.S. price inflation rate of 3.63% was up from 3.56% in June, 3.57% in May, 3.16% in April, 2.68% in March, 2.11% in February, 1.63% in January, 1.5% in December, and 1.1% in November.

The official rate of U.S. price inflation has increased by 230% over the last eight months. NIA conservatively projects the official rate of U.S. price inflation to surpass 4% by year-end and 5% in early 2012. NIA estimates the real rate of U.S. price inflation, without geometric weighting and hedonics, to currently be approaching 8%. NIA projects the real rate of U.S. price inflation to reach double-digit territory by mid-2012, if not much sooner.

Gold prices today reached a new all time high of $1,877 per ounce. Gold is the best gauge of inflation, not the CPI. On June 15th when the BLS reported May CPI data, gold was trading for only $1,520 per ounce. Even though the BLS reported a year-over-year CPI increase for the month of May of 3.16%, the mainstream media reported that inflation was slowing down and not a problem because gas prices were declining. Although seasonal adjusted gas prices in the month of May were down 2%, NIA reported to you that non-adjusted gas prices actually rose 3.6%. NIA then warned you that the BLS's seasonal adjustments will reverse beginning in the month of July and start boosting reported gas prices.

NIA was right, seasonal adjusted gas prices in the month of July increased 4.7%. The mainstream media intentionally misled Americans about price inflation during the month of June, but the world is now recognizing the truth about how U.S. price inflation is spiraling out of control with the price of gold having risen 23% since mid-June. The investment community is also finally realizing what NIA has been saying for years, inflation does not create real economic growth.

The Dow Jones declined today by 172.93 points to 10,817.65 and the Dow Jones/Gold ratio fell to 5.84. The Dow Jones/Gold ratio is declining at a faster rate than even we expected. NIA was one of the only organizations in the world to accurately predict that the Dow Jones/Gold ratio would decline to 6.5 in 2011. NIA continues to believe that the Dow Jones/Gold ratio will decline to 1 this decade, which will mean another 83% loss for Dow Jones stocks in terms of real money.

The lower the stock market declines in the near-term, the greater the chances are that the Federal Reserve will soon unleash QE3 in disguise under a new name. Despite gold reaching a new all time high, the core-CPI, which the Federal Reserve likes to use to gauge inflation because it excludes food and energy prices, is currently up 1.77% on a year-over-year basis, compared to an annual gain of 0.61% in October of last year. Even though core-CPI growth appears to still be low, year-over-year core-CPI growth has increased by 290% since October of last year, a larger gain on a percentage basis than the official CPI. Ever since the Federal Reserve announced QE2 in November of last year, core-CPI has increased for nine straight months.

By the time the 2012 Presidential election comes around, inflation will be the top concern on the minds of all Americans. Inflation will be an even bigger concern than unemployment, because nobody will want to have a job that pays them a salary in U.S. dollars. The only Presidential candidate who has the knowledge and courage necessary to preserve what little purchasing power the U.S. dollar still has left is Ron Paul. NIA supports Ron Paul to become the Republican nominee in the 2012 U.S. Presidential election. To become the Republican nominee, Ron Paul will need to win the Republican presidential primaries. Unlike the general election to be held on November 6th, 2012, the Republican primaries are a series of primary elections and caucuses that are spread out over five months beginning in February.

Iowa is always the first state to vote and will have their caucuses on February 6th, followed by New Hampshire on February 14th, Nevada on February 18th, and South Carolina on February 28th. The results of the first few primaries/caucuses usually influence how people will vote in the following primaries/caucuses. It is important for a candidate to build momentum early on. If a candidate doesn't have a strong showing in early primary states, they frequently drop out of the race before all of the primaries/caucuses are completed.

The way the primaries are structured gives voters in early primary states, especially voters in Iowa, a lot of power compared to voters in states like New York who very often don't vote until the nominee has already been determined. About six months before every Iowa Republican primary is the Ames Straw Poll, an unofficial Presidential straw poll that takes place in Ames, Iowa, of who Iowa voters are planning to support in their caucuses. The 2011 Ames Straw Poll just took place on August 13th with Michele Bachmann finishing first place with 4,823 votes and Ron Paul coming in second with 4,671 votes, only 152 votes behind Bachmann.

To attend the Ames Straw Poll and have the opportunity to vote in the poll, attendees were required to purchase a ticket priced at $30. Bachmann gave her supporters 6,000 free tickets at a cost to her campaign of $180,000. Only 80% of the people she gave free tickets to actually voted for her and that's assuming none of the people who bought tickets voted for her. Bachmann didn't just pay for the entrance of 6,000 people who she thought supported her, but she paid a small fortune to have Grammy Award winning country singer Randy Travis perform in a special air-conditioned tent. Bachmann even paid to transport forty bus loads of Randy Travis fans to the event, who were required to register at the Bachmann table and vote before seeing the entertainment.

With Bachmann spending a total of nearly $1 million on this event, she should have won the straw poll in a blow out. Click on the link below to see a shocking video we just posted to the NIA blog of the never ending line of Bachmann "supporters" registering at her table so that they could vote without paying the $30 fee. NIA believes that many of these people pretended to support her in order to get free tickets, but actually voted for Ron Paul: http://inflation.us/blog/2011/08/crazy-video-of-bachmann-ames-straw-poll-line/

The morning after Bachmann's phony victory, she appeared on five different nationwide talk shows. Ron Paul wasn't allowed to appear on any, with both 'Meet the Press' and 'Fox News Sunday' canceling interviews they had scheduled with him. Meet the Press spent the morning talking about Bachmann's win and Tim Pawlenty dropping out of the race after finishing third with less than half of the votes of Bachmann and Ron Paul. They barely mentioned Ron Paul even when he finished in a statistical dead heat with Bachmann.

Even more frustrating and disturbing, the Wall Street Journal published a long article Sunday morning about the race and it focused almost entirely on Bachmann's straw poll win and Rick Perry's entry into the race. The article only had one sentence about Ron Paul that read, “Libertarian Ron Paul, who has no chance to win the nomination, finished a close second.” On Monday morning, Ron Paul was scheduled to appear on NBC’s 'Today' show, but that interview was canceled as well with an NBC official saying it was due to "logistics and timing reasons with the news in Indiana and Somalia."

The mainstream media believes that if they repeat "Ron Paul has no chance of winning" enough times, it will be a self-fulfilling prophecy. The same applies to the media constantly referring to Mitt Romney as the front-runner. The media supports Romney because they like how he is a part of the Republican establishment and if elected would stick with the status quo in Washington.

Four years ago when Ron Paul was relatively unknown, Romney was the winner of the 2007 Ames Straw Poll. Rudy Giuliani and John McCain, who were both also seeking the 2008 Republican presidential nomination, chose not to participate in the 2007 Ames Straw Poll. Romney at the time in his own words called Giuliani and McCain cowards. Romney said, "I think if they thought they could have won, they would have been here," and "If you can't compete in the heartland, if you can't compete in Iowa in August, how are you going to compete in January when the caucuses are held, and how are you going to compete in November of '08?"

NIA believes that if Romney thought that he could have won the 2011 Ames Straw Poll, he would have been there. Romney knows that he lost all of his grassroots supporters when he spoke out in favor of the Federal Reserve's destructive monetary policies and said Fed Chairman Ben Bernanke was doing a good job. Romney showed his true colors when he said that the Federal Reserve is a non-issue and that he won't be discussing it during his campaign. He has now proven himself to be a hypocrite who was scared of looking bad by losing to Ron Paul in the straw poll and losing his "front-runner" status that was handed to him by the mainstream media. If Romney was afraid to compete in Iowa this month, NIA sees no chance of him winning in Iowa this February and no chance of him winning the Republican nomination.

With Iowa voters having a lot of power being in the first primary state, Iowa residents have spent more time researching the candidates than residents of most other states. Because Iowa voters are educated on the issues, especially issues affecting the economy, the media knew Ron Paul would have a strong showing in the Ames Straw Poll and for weeks leading up to it ran countless stories designed to downplay the poll and make it seem irrelevant. One Fox News reporter even went as far as saying that winning the straw poll is a negative and makes it nearly impossible to win the nomination. None of these things were said before the poll in 2007 because the media knew their darling Romney would win.

All educated Americans who understand the facts and truth about the U.S. economy and inflation are in strong support of Ron Paul because of his 24 year record in Congress of voting against increases in government spending and taxes, and voting for measures to strengthen our currency and reduce monetary inflation. Ron Paul stands for everything that NIA believes in such as liberty, freedom, and sound money. He has done more to protect the U.S. Constitution than any other person in Washington. Our founding fathers had the foresight 224 years ago to see the economic problems we have today. Even back then, rulers of nations had a history of coin clipping, replacing the silver in coins with base metals, and implementing other measures that stole from the purchasing power of ordinary citizens. Our founding fathers never would have imagined just how easy it has become to create inflation, where now the Federal Reserve with the click of a mouse can credit trillions of dollars to any banking institution worldwide.

For years, the media has dismissed Ron Paul's fight against the Federal Reserve and its destruction of the U.S. dollar. The media calls Ron Paul's ideas radical, but NIA believes Ron Paul is the most sane person in Washington. NIA believes balancing the budget, auditing the Federal Reserve, returning to a gold standard, and bringing our troops home from the Middle East, are all sane ideas that must be implemented if we want to have any hope of avoiding hyperinflation.

Rick Perry, the governor of Texas who just entered the race for the Republican presidential nomination, was recently asked about the Federal Reserve and in response he called Bernanke's acts of printing money "treasonous". NIA was the first to call Bernanke's actions treasonous. Back on December 9th of last year, NIA released an article entitled "WikiLeaks, Bernanke, and Hyperinflation" in which NIA said that it was "deeply disturbed by how U.S. politicians and the mainstream media have been calling for WikiLeaks founder Julian Assange to be charged with treason." Although in no way does NIA support Assange or his actions, we expressed in our article how we don't believe it is a treasonous act to help spread the truth about our country's foreign policy and other sensitive topics when the information he posted was given to him and in no way did he hack any government systems to obtain it.

NIA went on to state in its December 9th article, "If there is one American who deserves to be charged with treason, it is Federal Reserve Chairman Ben Bernanke." It is not humanly possible to betray ones country in a way that is more egregious than Bernanke's despicable acts. NIA is currently in the process of producing a sequel to its critically acclaimed documentary 'Meltup', which has received over 1.1 million views with 96% of its viewers "liking" the movie and only 4% "disliking" it, a record for YouTube documentaries at least 50 minutes in length with over 1 million views. NIA's sequel to 'Meltup' will expose the latest updated facts and truth about the U.S. economy, Federal Reserve, and inflation. It will set a whole new standard as the most in-depth, informative, educational, and entertaining economic documentary ever produced. Most importantly, it will expose why Bernanke's actions are indeed treasonous.

As far as Rick Perry is concerned, he is really no different than Romney. Perry like Romney is a governor who was elected to office due to his strong ties to the Republican establishment. Both Perry and Romney according to many media pundits look very Presidential. You will never hear Perry or Romney speak a word about bringing our troops home, repealing legislation that invades Americans' privacy rights without making us any safer here at home, and eliminating entire departments of government including the Department of Education, Department of Energy, Department of Commerce, Department of Health and Human Services, and Department of Homeland Security. These unnecessary bureaucracies have done nothing but add to our budget deficits, without a single success story to justify their existence.

Perry is not a true fiscal conservative. He and his wife complained that the Texas governor's mansion was too small and is now spending $11 million of President Obama's stimulus money to renovate and expand its size. With the construction now taking place at the governor's mansion and Perry unable to live there, Texas taxpayers have so far spent $700,000 to rent him an even bigger Texas mansion and to cover expenses at the mansion including Neiman Marcus window coverings and a subscription to Food & Wine Magazine.

What is unbelievable to us is that Perry for the most part has been a career politician, yet he has somehow managed to become a multi-millionaire while spending nearly all of his time in public office earning a relatively modest salary. Of course, if Perry was elected President, nothing much will change from the Obama administration and within a few years, he might become a multi-billionaire because a billionaire will be the new millionaire. Make no mistake about it, Perry may be trying to differentiate himself from Romney by speaking out against the Fed, but as President of the United States of America, NIA guarantees that Perry wouldn't do a damn thing to limit the Fed's powers and stop it from wiping out both the savings of senior citizens and the purchasing power of their Social Security checks. Perry is already in the pocket of the big banks and we just posted an 11 second video on the NIA blog that proves it: http://inflation.us/blog/2011/08/shocking-video-bank-of-america-executive-offers-to-help-out-rick-perry/

Tomorrow, Saturday, August 20th, is Ron Paul's birthday. To celebrate his birthday and help build momentum for his Presidential campaign, Ron Paul supporters have organized a huge "moneybomb" that starts at midnight tonight. If you would like to give Ron Paul the best possible birthday President and help increase the chances of our nation's survival, please make a donation beginning at midnight tonight by going to: http://www.ronpaul2012.com/

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us