- Begin Excerpt
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- Jerome R. Corsi of WorldNetDaily.com tells it straight:
"As the Obama administration prepares to finance a 2010 budget deficit
expected to top $1.5 trillion, the American public is largely unaware that
the true negative net worth of the federal government reached $70.7 trillion
last year. That's more than $70,000,000,000,000. The figure is five times
last year's U.S. GDP and exceeds the world GDP by about $10 trillion. 'The
future of this course is hyperinflation,' said John Williams, editor of
the electronic newsletter Shadow Government Statistics. Williams argues
the total U.S. obligations, including Social Security and Medicare benefits
to be paid in the future, have effectively placed the U.S. government in
bankruptcy. He comes to that conclusion even without taking into consideration
any future and continuing social welfare obligations embedded in the Obama
administration's planned massive overhaul of health care insurance."
Keep in mind, however, that they will give us war before it reaches that
point. That is their only way to escape direct blame for insolvency--have
the debt wiped away with nuclear war.
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- CHINA SPENDING THEIR DOLLARS AWAY
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- Nations holding large blocks of dollar denominated debt
instruments all realize they can't dump those dollars on the markets without
undermining the rest of their reserves. So, as Megan Carpenter points out,
China is moving from US Treasuries to direct foreign investment. "L.A.
Times writer Don Lee found that China was investing the money [US dollars]
in private companies throughout the world. China poured $43.3 billion into
foreign direct investments in 2009 and, according to U.S. Treasury figures,
it actually shed $45.1 billion in U.S. Treasuries in the last half of 2009.
Not that China's private investments were primarily American: Experts estimate
that, while China bought stock in everything from a theater in Branson,
Mo., to Coca-Cola, its total direct investments in the U.S. in 2009 ranged
between $3.9 and 6.4 billion. That amounts to a total of about 3 percent
of all the foreign direct investment in the United States in 2009."
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- TAXPAYERS TAKE A HIT FROM TARP
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- Reuters reports that the US Treasury is not making good
decisions on behalf of the taxpayers. "A small Midwestern bank has
negotiated with the U.S. Treasury for taxpayers to essentially buy the
bank's shares at an above-market-value price, in an unusual transaction
reflecting how the government's bank investments are entering a new phase.
Midwest Banc Holdings Inc (MBHI.O) agreed to swap $84.8 million of preferred
shares it sold to the U.S. government in 2008 for securities that will
convert into about $15.5 million of common shares -- roughly an 80 percent
loss to taxpayers. To some analysts, the transaction is an outrageous giveaway
to an ailing bank, and its investors.
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- "'There's a lot of funny stuff going on here,' said
James Ellman, president at hedge fund Seacliff Capital in San Francisco...
The biggest banks repaid the money they owed the U.S. Treasury last year
and earlier this year and with a few exceptions, they did so easily [having
had access to free money from the Fed to make riskless interest income].
But more than 600 smaller [non-insider] banks are still left in the program,
and owe roughly $130 billion to taxpayers. In the latest stage of TARP
negotiations, many banks will struggle to repay that money. The government
will be forced to negotiate separate deals with banks that could result
in losses for taxpayers."
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- WHY JOBS AREN'T RESPONDING
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- Here's an insightful analysis by John Browne of Europac.net.
"Despite his rhetoric to the contrary, the Obama Administration is
actually leading the US in the opposite direction. By raising taxes on
business owners, monopolizing credit, and increasing business regulations
at a frightening pace, current policy is turning the employment landscape
into a rather sterile promontory.
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- "Meanwhile, the media has selectively focused on
the recently passed jobs bill, which includes meager tax-credits for new
job hires. If this bill has any effect, it will be to encourage cash-strapped
entrepreneurs to make hiring decisions that are unjustified by current
business activity. In reality, employment's future is being decided in
the credit markets. Here, the Fed's zero interest rate policy is redirecting
investment capital towards government. When banks can borrow from the Fed
at zero percent and buy long-dated U.S. Treasuries yielding 3 to 4 percent,
there is little incentive to take the risks inherent in business lending.
Business credit is, therefore, tighter than even a severe recession would
ordinarily dictate. This lack of credit is starving the private sectors'
ability to create jobs. Furthermore, the current 'progressive' activism
on display in Washington is breeding great uncertainty in the board room,
making businesses even more cautious in an exceptionally difficult planning
environment."
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- End Excerpt
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- World Affairs Brief
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- Commentary and Insights on a Troubled World.
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- Copyright Joel Skousen. Partial quotations with attribution
permitted.
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- Cite source as Joel Skousen's World Affairs Brief http://www.worldaffairsbrief.com
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