YAHOO: Preparing for the Worst

by Robert Kiyosak

Posted on Monday, August 24, 2009, 12:00AM

“Is the crisis over?” is a question I am often asked. “Is the economy coming back?”
My reply is, “I don’t think so. I would prepare for the worst.”

Like most people, I wish for a better future for all of us. Life is better when people are working, happy, and spending money.

The stock market has been going up since March 9, 2009. Talk of “green shoots” fill the air. Yet, in spite of the more positive news, I continue to recommend that people prepare for the worst. The following are some of my reasons:

1. I believe the stock market is being manipulated. I suspect the government, banks, and Wall Street are doing everything they can to keep the market from crashing. Our leaders know that nothing makes the world feel better than a raging bull market.

Do I have any proof that the market is being manipulated? No. I just smell a rat, or a pack of rats. I believe greed, self-interest, arrogance, and fear control the financial markets. I suspect those in charge will do anything to keep us all from panicking… and I don’t blame them. A global panic would be ugly and dangerous.

2. In my view, this global crisis has been caused by the Federal Reserve Bank, the U.S. Treasury, Wall Street, and the central banks of the world. They caused the problem, profited excessively in doing so, and now profit by being asked to fix the problem.

Every time I hear a politician mention the word stimulus, my mind flashes back to high school biology class, when I touched battery wires to a dead frog to make it twitch. Today, you and I are the dead frogs. Pretty soon the dead frog will be fried frog.

In the 1980s, our government’s hot money stimulus was measured only in the millions of dollars. By the 1990s, the government had to ramp the stimulus voltage into the billions in order to get the frog to twitch. Today the frog has jumper cables with trillions in high-voltage hot money pouring through the lines.

While most us feel better when we have more high-voltage money in our hands, none of us feel good about higher taxes, increasing national debt, and rising inflation for the long term. Another old saying goes, “Sometimes the cure is worse than the disease.” I say the government stimulus cure is killing us frogs.

3. Old frogs don’t hop. Another reason I am cautious about the future is that the Western world has a growing number of old frogs. Between 1970 and 2000, the economy responded to bailouts and stimulus packages because the baby boomers of the world were entering their greatest earning years — their purchasing power increased, and demand for homes, cars, refrigerators, computers, and TVs boosted the economy.

The stimulus plans seemed to work. But when a person turns 60, their spending habits change dramatically. They stop consuming and start conserving like a bear preparing for winter. The economy of the Western world is heading into winter. Hot wires and hot money will not get old frogs to hop. Old frogs will simply join the bears and stick that money in the bank as they prepare for the long, hard winter known as old age. The businesses that will do well in a winter economy are drug companies, hospitals, wheelchair manufacturers, and mortuaries.

4. The dying frog economy will lead us to the biggest Ponzi schemes of all: Social Security and Medicare. If we think this subprime financial crisis is big, it’s my opinion that this crisis will be dwarfed by the crisis brewing in Social Security and Medicare…Medicare being the biggest crisis of all. As old frogs head for the big lily pad in the sky, they will demand young frogs spend even more in tax dollars just to keep old frogs from croaking.

5. The 401(k)Ponzi scheme. A Ponzi scheme, like the scheme Madoff ran, depends upon young money to pay off old money. In other words, a Ponzi scheme needs tadpoles to finance old frogs. The same is true for the 401(k) and other retirement plans to work. If young money does not come into the stock market, the old money cannot retire. One reason so many people my age are worried, not only about Social Security and Medicare, is because they’re concerned about getting their money out of the stock market before the other old frogs decide to drain the swamp.

The facts are that the 401(k) plan has a trigger that requires old frogs to begin withdrawing their money at a certain age. In other words, as baby boomers grow older, more and more will be required, by law, to begin withdrawing their money from the market. You do not have to be a rocket scientist to know that it is hard for a market to keep going up when more and more people are getting out.

The reason the 401(k) has this law related to mandatory withdrawals is because the Federal government wants to collect the taxes that they deferred when the worker’s money went into the plan. In other words, the taxman wants their pound of flesh. Since they allowed the worker to invest without paying taxes, the government wants their tax dollars when the employee retires. That is why the laws require older workers to sell their shares ¬– and pay their pound of flesh.

Demographics show that we are entering a battle between young and old. I call it the “Age War.” The young want to hang onto their money to grow their families, businesses, and wealth. The old want the tax and investment dollars of the young to sustain their old age.

This war is not coming…it is upon us now. This is one of many reasons why I remain cautious and say, “The worst is yet to come.”

Real concentration camps USA: Our immigrant-detention system is spiraling out of control

By David Neiwert~Crooks and Liars

See Video Here (At Puppetgov)

Jackie Mahendra points out an Associated Press story describing some of the most recent information about how we’re detaining illegal immigrants — and it’s profoundly disturbing:

The U.S. detention system for immigrants has mushroomed in the past decade, creating a costly building boom in an effort to sweep up criminals and ensure that illegal immigrants are quickly deported.

However, an Associated Press computer analysis of the entire detention population on a Sunday night in January found that most did not have a criminal record and many were not about to leave the country soon — voluntarily or through deportation.

A U.S. Immigration and Customs Enforcement database, obtained through the Freedom of Information Act, showed a U.S. detainee population of exactly 32,000 on the evening of Jan. 25.

Of those, 18,690 immigrants did not have a criminal conviction, including for illegal entry or low-level crimes such as trespassing. More than 400 of those with no criminal record had been incarcerated for at least a year. A dozen had been held for three years or more; one man from China had been locked up for more than five years.

Almost 10,000 had been in custody longer than 31 days, the average detention stay.

For an up-close look at what’s going on at these detention centers, check out Breakthrough Media’s incredibly informative site, Homeland Guantanamos, which describes the detention system we’ve created in response to right-wing agitation about illegal immigration. You know, the same right-wingers who are now stewing over non-existent FEMA concentration camps.

The video below also explores the subject in some depth, focusing on the situation in Illinois.

Goldman Sachs – THE WORLD’S BIGGEST PONZI SCHEME

Taken from a comment by “Calltoaccount”, which was taken from Institutional Risk Analytics, blogged by http://www.cjr.org

Res Ipsa Loquitor: Here’s the real story that’s been conveniently swept under the rug.

From Reuters: QUESTION: Did Goldman do any due diligence on AIG before buying credit default swaps (CDS) from it?

ANSWER: “We do extensive due diligence on all our counterparties.” –  posted 4/2/09 by Karl Denninger

(Credit Barry Ritholtz and Institutional Risk Analytics, the original source)

WHOAH!

In fact, our investigation suggests that by the time AIG had entered the CDS fray in a serious way more than five years ago, the firm was already doomed. No longer able to prop up its earnings using reinsurance because of growing scrutiny from state insurance regulators and federal law enforcement agencies, AIG’s foray into CDS was really the grand finale. AIG was a Ponzi scheme plain and simple, yet the Obama Administration still thinks of AIG as a real company that simply took excessive risks. No, to us what the fraud Bernard Madoff is to individual investors, AIG is to the global financial community.

As with the phony reinsurance contracts that AIG and other insurers wrote for decades, when AIG wrote hundreds of billions of dollars in CDS contracts, neither AIG nor the counterparties believed that the CDS would ever be paid. Indeed, one source with personal knowledge of the matter suggests that there may be emails and actual side letters between AIG and its counterparties that could prove conclusively that AIG never intended to pay out on any of its CDS contracts.

Read that folks.

Then read it again.

Then read it AGAIN.

More excerpts:

There are two basic problems with side letters. First, they are a criminal act, a fraud that usually carries the full weight of an “A” felony in many jurisdictions. Second, once the side letter is discovered by a persistent auditor or regulator examining the buyer of protection, the transaction becomes worthless. You paid $6 million to AIG to shift risk via the reinsurance, but the side letter makes clear that the transaction is a fraud and you lose any benefit that the apparent risk shifting might have provided.

And finally, the last nail in the coffin:

The key point is that neither the public, the Fed nor the Treasury seem to understand is that the CDS contracts written by AIG with these various non-insurers around the world were shams – with no correlation between “fees” paid and the risk assumed. These were not valid contracts as Fed Chairman Ben Bernanke, Treasury Secretary Geithner and Economic policy guru Larry Summers claim, but rather acts of criminal fraud meant to manipulate the capital positions and earnings of financial companies around the world.

Indeed, our sources as well as press reports suggest that the CDS contracts written by AIG may have included side letters, often in the form of emails rather than formal letters, that essentially violated the ISDA agreements and show that the true, economic reality of these contracts was fraud plain and simple. Unfortunately, by not moving to seize AIG immediately last year when the scandal broke, the Fed and Treasury may have given the AIG managers time to destroy much of the evidence of criminal wrongdoing.

Only when we understand how AIG came to be involved in CDS and the fact that this seemingly illegal activity was simply an extension of the reinsurance/side letter shell game scam that AIG, Gen Re and others conducted for many years before will we understand what needs to be done with AIG, namely liquidation. Seen in this context, the payments made to AIG by the Fed and Treasury, which were then passed-through to dealers such as Goldman Sachs (NYSE:GS), can only be viewed as an illegal taking that must be reversed once the US Trustee for the Federal Bankruptcy Court for the Southern District of New York is in control of AIG’s operations.

Thank you Timmy, thank you Ben Bernanke, thank you Henry Paulson, thank you George Bush and thank you President Obama.

If this is true every one of you needs to go to prison.

After those of you still in your positions are impeached.

Again, for the simple who need it in one sentence:

AIG was a Ponzi scheme plain and simple, yet the Obama Administration still thinks of AIG as a real company that simply took excessive risks. No, to us what the fraud Bernard Madoff is to individual investors, AIG is to the global financial community.

Distilled to one sentence: The bailout of AIG is equivalent to the US Taxpayer bailing out Madoff’s admitted (and now convicted) Ponzi Scheme.

PS: This isn’t MY analysis, this is the analysis of Institutional Risk Analytics. If you don’t understand who they are, you should – they’re one of the most-respected groups out there when it comes to banking system analysis. If they’re willing to print something this damning….

Posted by Calltoaccount on Sat 18 Jul 2009 at 09:40 AM

Remind all your elected servants that ….

they are bound by the Government Code of Ethics….

Code of Ethics for Government Service

House Document 103, 86th Congress, 1st Session – Passed by the Congress of the United States on July 11, 1958.

ANY PERSON IN GOVERNMENT SERVICE SHOULD:

I. Put loyalty to the highest moral principles above loyalty to persons, party, or Government department.

II. Uphold the Constitution, laws, and legal regulations of the United States and of all governments therein and never be a party to their evasion.

III. Give a full day’s labor for a full day’s pay; giving to the performance of his duties his earnest effort and best thought.

IV. Seek to find and employ more efficient and economical ways of getting tasks accomplished.

V. Never discriminate unfairly by the dispensing of special favors or privileges to anyone, whether for remuneration or not; and never accept, for himself or his family, favors or benefits under circumstances which might be construed by reasonable persons as influencing the performance of his governmental duties.

VI. Make no private promises of any kind binding upon the duties of office, since the Government employee has no private word which can be binding on public duty.

VII. Engage in no business with the Government, either directly or indirectly, which is inconsistent with the conscientious performance of his governmental duties.

VIII. Never use any information coming to him confidentially in the performance of governmental duties as a means for making private profit.

IX. Expose corruption wherever discovered.

X. Uphold these principles, ever conscious that public office is a public trust.

More on ethics including instructions for display of the above, at the Defense Systems Information Agency (DISA) site at the Department of Defense.

How the spooks took over the news

This is an edited extract from “Flat Earth News: an award-winning reporter exposes falsehood, distortion and propaganda in the global media”, published by Chatto & Windus. In his controversial new book, Nick Davies argues that shadowy intelligence agencies are pumping out black propaganda to manipulate public opinion – and that the media simply swallow it wholesale

Onthe morning of 9 February 2004, The New York Times carried an exclusive and alarming story. The paper’s Baghdad correspondent, Dexter Filkins, reported that US officials had obtained a 17-page letter, believed to have been written by the notorious terrorist Abu Musab al Zarqawi to the “inner circle” of al-Qa’ida’s leadership, urging them to accept that the best way to beat US forces in Iraq was effectively to start a civil war.

The letter argued that al-Qa’ida, which is a Sunni network, should attack the Shia population of Iraq: “It is the only way to prolong the duration of the fight between the infidels and us. If we succeed in dragging them into a sectarian war, this will awaken the sleepy Sunnis.”

Later that day, at a regular US press briefing in Baghdad, US General Mark Kimmitt dealt with a string of questions about The New York Times report: “We believe the report and the document is credible, and we take the report seriously… It is clearly a plan on the part of outsiders to come in to this country and spark civil war, create sectarian violence, try to expose fissures in this society.” The story went on to news agency wires and, within 24 hours, it was running around the world.

There is very good reason to believe that that letter was a fake – and a significant one because there is equally good reason to believe that it was one product among many from a new machinery of propaganda which has been created by the United States and its allies since the terrorist attacks of September 2001.

For the first time in human history, there is a concerted strategy to manipulate global perception. And the mass media are operating as its compliant assistants, failing both to resist it and to expose it.

Full Article

BART Police shoot and kill innocent man, then LIE about it in court…VIDEO (WARNING GRAPHIC)

Welcome to America… The land of the innocent until shot dead in the back. If this is not a police state I don’t know what is. Police are arresting two men, and the one (highly trained) police officer has his gun aimed at the man, then he pulls the trigger and the man lets out “I have a daughter…” then dies on the platform. The multiple witnesses stand in awe. They have just witness a cold blooded murder and NOTHING IS HAPPENING!!! WTF!!! Are we all going to have to get shot for you to care? What if that was your son or daughter, I bet you would care then…  Change is here, and its here to stay.

Link to Video @ PUPPETGOV.COM

A MUST SEE VIDEO!!! Tea Party Hijacked by BOTH sides of media

The video begins with a CNN reporter speaking to a gentlemen who is clearly upset with the Federal Governments overreaching into pockets. The CNN reporter acts totally clueless and gets schooled by a protester. Halfway through the video a terrifying sight is seen. There is a lone Obama supporter being followed around by a reporter, a cameraman and a PRIVATE SECURITY GUARD!!! The Obama supporter is planted into the crowd and protected by a private firm. Meanwhile, anti-Obama protesters are being hauled away in police wagons with 0 due process. This is more than something to be worried about.