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Wednesday, February 29, 2012

Are We Drifting Into Another War?!?

Here is the view from London via the Financial Times.  It is worth reading.

And here is the view from Australia.  It is worth thinking about.

Conversation overheard on the VHF Guard (emergency) frequency 121.5 MHz while flying from Europe to Dubai ..
Iranian Air Defence Site:   'Unknown aircraft you are in Iranian airspace. Identify yourself.'  
   'This is a British aircraft. I am in Iraqi airspace.'  
Air Defence Site:
   'You are in Iranian airspace. If you do not depart our airspace we will launch interceptor aircraft!'  
   'This is a Royal Air Force GR4 Tornado fighter. Send 'em up, I'll wait!'  
Air Defence Site:
   ( .... total silence)  
I love the RAF

Tuesday, February 28, 2012

More Really Bad News!!

The point has been made repeatedly here that small businesses create over 70% of all new jobs.  This is not a theory or an opinion, it is a fact.  Here is another fact that is deeply troubling.  In the past, small businesses have accounted for over 50% of our Gross National Product (the pie we all have to share).  That has now fallen to just about 44%,  That most likely means there are fewer and fewer small businesses to create new jobs.

We have to get money into the economy (without just printing it) or our new job "machine" will disappear.  And that would really be bad news!!

Monday, February 27, 2012

Another Problem Facing Us!

We've pointed out here, repeatedly, that our infrastructure is falling apart and we desperately need to fix it.  Further, every day we delay increases the cost.  So far, I have talked about the Interstate Highway system, bridges, dikes, and pipelines.  Now here is a whole new problem with a huge price tag.


Infrastructure: Buried No Longer

Buried No Longer
Download the report(PDF, 2MB)
The massive investment needed for buried drinking water infrastructure in the United States totals more than $1 trillion between now and 2035. The need will double from roughly $13 billion a year today to almost $30 billion (in 2010 dollars) annually by the 2040s, and the cost will be met primarily through higher water bills and local fees, according to a new AWWA report.
"Buried No Longer: Confronting America's Water Infrastructure Challenge" is a call to action for utilities, consumers and policy makers and recognizes that the need to replace pipe in the ground "puts a growing stress on communities that will continue to increase for decades to come."
Oh Boy!!  How Come Nobody Told Us About This Before??

There are a number of books and articles appearing these days outlining the incompetence of the FBI and CIA, especially when it concerns internal threats.  Now comes "Sovereign Citizens"  Why haven't we heard about this, apparently, very serious internal threat?  What is going on here?  And. by the way, how many carrier battle groups do we need to protect us from "sovereign citizens"?
Read this article from last Friday's Los Angeles Times and ask somebody those same questions.

'Sovereign citizen' movement now on FBI's radar

The Homeland Security Department has ranked the movement as a major threat. Its members reject the law, and some kill police.

By Brian Bennett, Washington Bureau
4:52 PM PST, February 23, 2012
Reporting from Washington

With the FBI pounding on his door, and his wife and two children barely awake, Shawn Rice allegedly strapped on a bulletproof vest, grabbed a semiautomatic pistol and stepped out his back door on Dec. 22.

But dozens of FBI agents and local police had surrounded the ranch house in Seligman, Ariz., about 80 miles west of Flagstaff, and the only nearby cover was knee-high sagebrush. Rice ducked back inside, and warned the FBI to keep away.

After a tense 10-hour standoff, Rice, 49, was arrested. He now sits in a Las Vegas jail awaiting trial on federal money-laundering charges.

But it wasn't Rice's alleged offense alone that prompted the FBI's interest.

According to court papers, Rice was involved in the "sovereign citizen" movement, a group that has attracted little national media attention but which the FBI classifies as an "extremist antigovernment group." So-called sovereign citizens argue that they are not subject to local, state or federal laws, and some refuse to recognize the authority of courts or police.

Since 2000, members of the movement have killed six police officers, and clashes with law enforcement are on the rise, according to the FBI. The deadliest incident came in 2010, when a shootout with a member left four people dead, including two police officers, during what began as a routine traffic stop in West Memphis, Ark.

Since then, in a notable shift in policy, federal officials have stepped up their attention on sovereign citizens.

"We are focusing our efforts because of the threat of violence," said Stuart R. McArthur, a deputy assistant director in the FBI's Counterterrorism Division.

In two recent unpublished studies, the Homeland Security Department and the National Counterterrorism Center ranked the sovereign citizen movement as a major threat, along with Islamic extremists and white supremacists. The FBI assigned a supervisor to coordinate investigations of the movement last year.

"This is a movement that has absolutely exploded," said Mark Potok, a senior fellow at the Southern Poverty Law Center, a nonprofit organization based in Montgomery, Ala., that tracks domestic terrorists and hate groups. More than 100,000 Americans have aligned themselves with the sovereign citizens, the center said.

Adherents cite a patchwork of beliefs, including that the U.S. is essentially under martial law, that some U.S. constitutional amendments are invalid, and that dollars have been illegitimate since the U.S. Treasury went off the gold standard during the Great Depression.

Most important, some followers believe they are entitled to use armed force to resist arrest and fight police.

The FBI also is investigating followers for alleged mail fraud and harassment of federal officials through nuisance lawsuits and property liens. Such cases are clogging courts in every state, said Casey Carty, who heads the FBI's sovereign citizen unit.

Until recently, federal officials had steered clear of any extensive focus on right-wing extremist groups. In 2009, some members of Congress complained after a Homeland Security Department report warned that such groups might seek to recruit disaffected military veterans returning from Iraq and Afghanistan, as well as others. The report highlighted several groups, including the sovereign citizen movement.

Bowing to the criticism, Homeland Security officials gutted the office that had focused on right-wing extremism. They also canceled planned presentations and shelved a reference guide that the office had produced to inform local police about the movement.

"The topic had become too politically charged," said Daryl Johnson, who headed the team that wrote the 2009 report.

That changed after the West Memphis shootout with Jerry Kane Jr., a sovereign citizen proponent who had traveled the country offering $100-a-head seminars that taught spurious ways to avoid paying taxes, among other movement tactics.

Kane and his 16-year-old son, Joseph, were killed in the shootout. Also killed was Police Sgt. Brandon Paudert, son of the local police chief, Bob Paudert.

Paudert had never heard of the sovereign citizen movement until that day. Now retired, he has spoken to more than 75 law enforcement groups around the country warning of its danger.

Paudert remains angry that Kane wasn't identified as potentially armed and dangerous in the FBI-run database that local police normally access for warrants and other data when they stop a vehicle. He wants the FBI to change the database to flag known sovereign citizen adherents.

"If we had that, [my son] would have immediately called for backup," Paudert said. "He would be alive today."

Sunday, February 26, 2012

Something To Think About Seriously!!

Michael has a list of 55 things that should alarm you.  Some of them are a stretch, but some are spot on.

For example, the economy cannot recover until you and I start spending money so small businesses can get profitable and hire new employees.  Michael has a lot of examples that say this is not happening and they are worth paying attention to, but the really worrisome one is #41.  Remember, it is impossible for individuals to borrow their way out of debt*.  And then remember that too much debt is what got us into the awful problem in the first place. 

*Governments can just print more money and it is called inflation.  Businesses can invest in new businesses and it is called profits.  But consumers cannot do these things.

So here we go..............................................

55 Interesting Facts About The U.S. Economy In 2012

How is the U.S. economy doing in 2012?  Unfortunately, it is not doing nearly as well as the mainstream media would have you believe.  Yes, things have stabilized for the moment but this bubble of false hope will not last for long.  The long-term trends that are ripping our economy and our financial system to shreds continue unabated.  When you step back and look at the broader picture, it is hard to deny that we are in really bad shape and that things are rapidly getting worse.  Later on in this article you will find a list of interesting facts that show the true state of the U.S. economy.  Hopefully many of you will find this list to be a useful tool that you can share with your family and friends.  Each day the foundations of our economy crumble a little bit more, and we need to wake up as many Americans as we can to what is really going on while there is still time.  We have accumulated way too much debt, we consume far more wealth than we produce, millions of our jobs are being shipped overseas, our big cities are decaying, family budgets are being squeezed more than ever, poverty is rampant and we have raised several generations of Americans that expect the government to fix all of their problems.  The U.S. economy is at a crossroads, and the decisions that the American people make in 2012 are going to be incredibly important.
The statistics listed below are presented without much commentary.  They pretty much speak for themselves.
After reading this list, it will be hard for anyone to argue that we are on the right track.
The following are 55 interesting facts about the U.S. economy in 2012....
#1 As you read this, there are more than 6 million mortgages in the United States that are overdue.
#2 In January, U.S. home prices were the lowest that they have been in more than a decade.
#3 In Florida right now, some drivers are paying nearly 6 dollars for a gallon of gas.
#4 On average, you could buy about 10 gallons of gas for an hour of work back in the mid-90s.  Today, the average hour of work will get you less than 6 gallons of gas.
#5 Sadly, 43 percent of all American families spend more than they earn each year.
#6 According to Gallup, the unemployment rate was at 8.3% in mid-January but rose to 9.0% in mid-February.
#7 The percentage of working age Americans that have jobs is not increasing.  The employment to population ratio has stayed very steady (hovering between 58% and 59%) since the beginning of 2010.
#8 If you gathered together all of the workers that are "officially" unemployed in the United States into one nation, they would constitute the 68th largest country in the entire world.
#9 When Barack Obama first took office, the number of "long-term unemployed workers" in the United States was approximately 2.6 million.  Today, that number is sitting at 5.6 million.
#10 The average duration of unemployment in the United States is hovering close to an all-time record high.
#11 According to Reuters, approximately 23.7 million American workers are either unemployed or underemployed right now.
#12 There are about 88 million working age Americans that are not employed and that are not looking for employment.  That is an all-time record high.
#13 According to CareerBuilder, only 23 percent of American companies plan to hire more employees in 2012.
#14 Back in the year 2000, about 20 percent of all jobs in America were manufacturing jobs.  Today, about 5 percent of all jobs in America are manufacturing jobs.
#15 The United States has lost an average of approximately 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.
#16 Amazingly, more than 56,000 manufacturing facilities in the United States have been shut down since 2001.
#17 According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.
#18 During the Obama administration, worker health insurance costs have risen by 23 percent.
#19 An all-time record 49.9 million Americans do not have any health insurance at all at this point, and the percentage of Americans covered by employer-based health plans has fallen for 11 years in a row.
#20 According to the New York Times, approximately 100 million Americans are either living in poverty or in "the fretful zone just above it".
#21 In the United States today, corporate profits are at an all-time high.  The percentage of Americans that are living in "extreme poverty" is also at an all-time high according to the U.S. Census Bureau.
#22 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#23 The poorest 50 percent of all Americans now collectively own just 2.5% of all the wealth in the United States.
#24 The number of children living in poverty in the state of California has increased by 30 percent since 2007.
#25 According to the National Center for Children in Poverty, 36.4% of all children that live in Philadelphia are living in poverty, 40.1% of all children that live in Atlanta are living in poverty, 52.6% of all children that live in Cleveland are living in poverty and 53.6% of all children that live in Detroit are living in poverty.
#26 Since Barack Obama entered the White House, the number of Americans on food stamps has increased from 32 million to 46 million.
#27 As the economy has slowed down, so has the number of marriages.  According to a Pew Research Center analysis, only 51 percent of all Americans that are at least 18 years old are currently married.  Back in 1960, 72 percent of all U.S. adults were married.
#28 In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger.  Today, the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.
#29 If you can believe it, 37 percent of all U.S. households that are led by someone under the age of 35 have a net worth of zero or less than zero.
#30 After adjusting for inflation, U.S. college students are borrowing about twice as much money as they did a decade ago.
#31 According to the Student Loan Debt Clock, total student loan debt in the United States will surpass the 1 trillion dollar mark at some point in 2012.  If you went out right now and starting spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
#32 Today, 46% of all Americans carry a credit card balance from month to month.
#33 Incredibly, one out of every seven Americans has at least 10 credit cards.
#34 The average interest rate on a credit card that is carrying a balance is now up to 13.10 percent.
#35 Of the U.S. households that do have credit card debt, the average amount of credit card debt is an astounding $15,799.
#36 Overall, Americans are carrying a grand total of $798 billion in credit card debt.  If you were alive when Jesus was born and you spent a million dollars every single day since then, you still would not have spent $798 billion by now.
#37 It may be hard to believe, but the truth is that consumer debt in America has increased by a whopping 1700% since 1971.
#38 At this point, about 70 percent of all auto purchases in the United States involve an auto loan.
#39 In the United States today, 45 percent of all auto loans are made to subprime borrowers.
#40 Mortgage debt as a percentage of GDP has more than tripled since 1955.
#41 According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.
#42 To get the same purchasing power that you got out of $20.00 back in 1970 you would have to have more than $116 today.
#43 When Barack Obama first took office, an ounce of gold was going for about $850.  Today an ounce of gold costs more than $1700 an ounce.
#44 The number of Americans that are not paying federal incomes taxes is at an all-time high.
#45 A staggering 48.5% of all Americans live in a household that receives some form of government benefits.  Back in 1983, that number was below 30 percent.
#46 The amount of money that the federal government gives directly to Americans has increased by 32 percent since Barack Obama entered the White House.
#47 During 2012, the U.S. government must roll over nearly 3 trillion dollars of old debt.
#48 The U.S. debt to GDP ratio has now reached 101 percent.
#49 At the moment, the U.S. national debt is sitting at a grand total of $15,419,800,222,325.15.
#50 The U.S. national debt is now more than 22 times larger than it was when Jimmy Carter became president.
#51 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.
#52 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.
#53 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.
#54 Right now, the U.S. national debt is increasing by about 150 million dollars every single hour.
#55 Spending by the federal government accounted for about 2 percent of GDP back in 1800.  It accounted for 23.8 percent in 2011, and according to former U.S. Comptroller General David M. Walker, it will account for 36.8 percent of GDP by 2040.
Bad news, eh?
But it isn't just our economy that is decaying.
We are witnessing a tremendous amount of social decay as well.  As I wrote about the other day, America is rapidly decomposing right in front of our eyes.
When the water level of a river drops far enough, it will reveal rocks that have been hidden from view for a very long time.  Well, a similar thing is happening in America right now.  For decades, our debt-fueled prosperity has masked a lot of the social decay that has been going on.
But now that our prosperity is evaporating, a lot of frightening stuff is being revealed.
Unfortunately, another major financial crisis is rapidly approaching and economic conditions in the United States are going to get a lot worse.
So what is our country going to look like when that happens?
That is a very good question.

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Saturday, February 25, 2012


Wednesday night, during the Republican debates, Ron Paul said "There is no evidence that Iran has a nuclear bomb"!  And NONE of the other people on the platform denied it, told him he was wrong, etc.  And that is just after the other three said they were going to bomb the crap out of Iran if they were elected President!!

Whoa!!  Here we go again, mythical weapons of mass destruction.  A president declaring war without a vote from congress.  Thousands of young Americans killed.  Billions of dollars wasted.  The list goes on.

That night took a long time to go to sleep!!

And the next morning, the Los Angeles Times said the same thing.

"U.S. does not believe Iran is trying to build nuclear bomb

The latest U.S. intelligence report indicates Iran is pursuing research that could enable it to build a nuclear weapon, but that it has not sought to do so.

By Ken Dilanian, Los Angeles Times
6:11 PM PST, February 23, 2012
Reporting from Washington
As U.S. and Israeli officials talk publicly about the prospect of a military strike against Iran's nuclear program, one fact is often overlooked: U.S. intelligence agencies don't believe Iran is actively trying to build an atomic bomb.

A highly classified U.S. intelligence assessment circulated to policymakers early last year largely affirms that view, originally made in 2007. Both reports, known as national intelligence estimates, conclude that Tehran halted efforts to develop and build a nuclear warhead in 2003."

You can read the rest at  And today, the New York Times told the same story.

Remember that in the 1940's, President Eisenhower warned about the dangers posed by the "Congressional/Military/Defense Industry complex (except his aides forced him to leave out Congressional).

And here we are sixty years later getting ready to let these assholes kill our kids and bankrupt the country because they have bought, signed and sealed Congress.

Every day, I am reminded that, "The only thing we learn from history is that we never learn anything from history".  How incredibly sad is that?????

Friday, February 24, 2012

This Is How Obama Creates Jobs By Supporting Small Businesses!!!!!

Kansas City Southern Railway Company (KCSR) has taken out a $54.6 million Federal Railroad Administration-administered Railroad Rehabilitation and Improvement Financing (RRIF) Program loan to purchase 30 new General Electric diesel-electric locomotives.

I’m so sick of seeing this day after day. Washington is shelling out taxpayer money to support this successful company so they can buy locomotives from GE.
Obama, Immelt
GE pays next to no taxes in the US, they haven’t for years. But when it comes to government money, they are on the top of the list for handouts. There is only one reason that GE keeps sucking on the country’s teat, the CEO is best buds with Obama. Not only are they pals, but GE’s top honcho, Jeff Immelt, is advising the President on what to do.

There are many segment of our economy and society that need a helping hand from the government. I would put the interests of GE (and KSU) at the very bottom of the list. They are doing fine, they don’t need these handouts. This is not an industrial policy. It’s crony capitalism of the very worst kind.
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Monday, February 20, 2012

Some More Reasons Public Pensions Need Overhaul!

The ten biggest San Diego city pensions, 2011

( Raoul Ranoa, Los Angeles Times / February 19, 2012 )

Sunday, February 19, 2012

What Is Making Me Crazy Explained!

The thing making me crazy is the demonstrated, absolute inability of this government to learn anything from its own failures, or anyoneelse's for that matter. This incredible stupidity about the personal tax nonsense going on now is a perfect example.  First, all the tax cut does is steal from the Social Security Account.  Second, it does nothing to stimulate the economy because all the evidence from previous efforts show that a third of all people receiving it will use the money to pay down their debt.  Another third will simply save it.  Third, you have to have a job to get it so roughly 15 million Americans will get nothing and cannot stimulate the economy.

I have now found the perfect explanation for this insanity.  Friedrich Hegel (1770-1831) observed that "the only thing we learn from history is that we learn nothing from history".

That about sums it up precisely.

Monday, February 13, 2012

Want A Peek At The Future??

Read this piece from the New York Times, and every time the word "Greece" appears, substitute the "United States".  Don't think it could happen here?   I wish I shared your confindence!

February 13, 2012

The Way Greeks Live Now

In a little brick-walled taverna in Athens, over a lunch of Cretan salad and stuffed grape leaves, a Greek journalist named Aris Hadjigeorgiou was holding forth one day in late November about the calamitous state of his city and country as only a veteran metropolitan reporter could. He explicated the insidious ways in which the upper echelons of Greek media were intertwined with the political structure, which prevented reporting of financial mismanagement and also clouded any hope for resolving the crisis. And he noted little things, like the leaflets on car windshields advertising moving companies: literal signs of the way the economic crisis was affecting Athens, as people angled for escape routes, either abroad or to the countryside. And how the mayor’s office was at that moment considering a quaint but cockeyed approach for the season’s Christmas lighting scheme: stringing lights around the city’s hundreds of shuttered storefronts.

At some point, I asked Hadjigeorgiou how the crisis was affecting him personally. Life was getting difficult, he acknowledged. Then, prodded a bit more, he mentioned that he had not been paid by his newspaper, the major left-leaning daily, in four months. Nor had any of his colleagues at the paper. Yet despite the lack of paychecks, few if any employees had left the paper (which has since filed for bankruptcy), for the good reason that there was nowhere else to go. 

Which pretty much sums up Greece. Everyone talks incessantly about the economy — about Merkel and Sarkozy and the E.U., about the tightly knit elite that has run Greece for so long and about their neighbors’ troubles and their own — but somehow everyday life rumbles on, in a collective trance, shot through with gallows humor.
By many indicators, Greece is devolving into something unprecedented in modern Western experience. A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under 25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. Greek bankers told me that people had taken about one-third of their money out of their accounts; many, it seems, were keeping what savings they had under their beds or buried in their backyards. One banker, part of whose job these days is persuading people to keep their money in the bank, said to me, “Who would trust a Greek bank?” 

The situation at the macro level is, if anything, even more transformational. The Chinese have largely taken over Piraeus, Greece’s main port, with an eye to make it a conduit for shipping goods into Europe. Qatar is looking to invest $5 billion in various projects in Greece, including tourism infrastructure. Other, relatively flush Europeans are trying to make “Greece the Florida of Europe,” Theodore Pelagidis, a Greek economist at the University of Piraeus, told me, referring in particular to plans to turn islands into expensive retirement homes for wealthy people from other parts of the continent. Whether or not the country pays its debts, he went on, other nations and foreign companies “now understand the Greek government is powerless, so in the future they will take over viable assets and run parts of the country by themselves.”
For months, Greece has sat at the epicenter of an economic crisis that is threatening the foundations of Europe and that has the potential to bring new waves of economic upset to America. The latest austerity plan meant to satisfy Greece’s creditors and allow for new infusions of financial aid may have averted involuntary default — and a global economic downturn — but will nonetheless make life for ordinary Greeks even more difficult. The plan reduces the minimum wage by more than 20 percent, mandates thousands of layoffs and reduces some pensions, probably ensuring that strikes and demonstrations will continue to be a feature of the Greek landscape. 

Yet spending time in Greece presents a complicated picture of what is going on. There is certainly anger and belt-tightening and dark clouds of depression. It’s not uncommon to see decently dressed Greeks discreetly rummaging through garbage bins for food. A new book about how the country survived the Nazi occupation — “Starvation Recipes” — has become a surprise hit. But there are also success stories that fly fully in the face of the turmoil. Most surprising, there is a pervasive sense of relief over the crisis that is upon them, as if a long, strange dream is at last over. 

My first impression of Petros Vafiadis was of a bear. He’s a big, jowly man, and he sat hunkered by the grille of his living-room fireplace. People in his town in northern Greece — Giannitsa — told me that the rising price of heating oil forced residents to rely on their fireplaces, and for the first time in memory, you regularly smell wood smoke in the chilly air.

Vafiadis is 56 and has spent his life in construction. For the last 10 years, he has been a site supervisor for a company called Archi-Tek, overseeing the building of big, mostly government-sponsored projects like schools and museums. At its height, the company had 50 people on staff and employed about 900 contract workers. Today it has two employees: engineers who are basically putting finishing touches on completed projects. All work in the Thessaly region, where the company is based, has dried up. Vafiadis was laid off in September, two years short of retirement. He took a drag on his cigarette and said, in a mud-thick smoker’s voice, “There’s no brightening in the future.” He was referring to both the Greek situation and his own. “I think things will only get worse.” 

His wife, Ekaterina, set a homemade cheese-and-leek pie on the table, then took a seat. The room had peach-colored walls and a white-tiled floor; one wall was covered with religious icons; a glass swan sat like a sentinel on top of the Sony flat-screen TV. “There are families worse off than us,” Ekaterina reminded her husband. “There are lots of families where nobody is working.” She still had her job — as a cook at a kindergarten cafeteria — though her salary was cut from $1,730 a month to $1,260. The couple’s income has dropped from $43,000 a year to about half that, and it will drop another $530 a month once Vafiadis’s 12 months of unemployment benefits run out. 

They have no savings, they told me, because when they bought their home in 2000, they used their life savings as a down payment. Plus they have two sons in their early 20s, both of whom they put through college. One son, Traianos, who studied electrical engineering, sat with us as we talked, and when the subject of fallback financial reserves came up, there was a sudden flurry of back-and-forth banter in Greek, tinged with tension and dark laughter. Eventually Traianos explained to me that his father’s sister died some years ago and left her savings to her two nephews: Traianos and his brother. “So now our children can start giving to us, for a change,” Petros Vafiadis said with a laugh. To which his son replied, with an edgy chuckle, “If things get harder, then we’ll give.”

The austerity measures imposed by the government as it tries to appease distant bankers and governments have caused hardships for ordinary people (to save money, residents of Giannitsa have taken to driving across the border into Bulgaria for everything from dentist visits to gas), but when I met with him some months before the February austerity agreement, Vafiadis said: “Still I think this is the only way out of the crisis. The government has to impose cuts in salaries and pensions.”

Anastasia Tsangarli, a family friend who showed up to take part in our discussion, agreed that cuts were necessary, saying, “The Greek way of life is to spend and then overspend.” She and her husband are also from Giannitsa but lived for a long time in Jersey City, where she worked in a factory making fake fur coats. When the factory closed, they moved back, only to find life far more difficult than it used to be. Her husband, an electrician, is out of work. She does some baby-sitting. “We are afraid of the future, so we don’t spend anything without having a good reason,” she said. But the couple have an escape plan. They became American citizens while living in the United States. Her husband is 60. When he is 62, they can return so he can claim Social Security benefits. 

As the economy implodes, young people are leaving Giannitsa. Traianos Vafiadis, who is 24, told me that of the group of six friends he has had since childhood, he is the only one with a job, and the others have all emigrated or are looking for work abroad. I heard over and over from young Greeks that they are painfully aware of repeating the cycle that most recently occurred in the late 1940s, when a great diaspora of young Greeks left the country for work. The crucial difference is that now well-educated young people — future doctors, teachers and engineers — are leaving, suggesting that what is taking place is the hollowing-out not only of an economy but also of a whole social system. 

The loss of young people worsens another problem facing this country: the birthrate is among the lowest in the world — and was even before the crisis manifested itself — making it unable to maintain population levels. This fact is much on the minds of ordinary Greeks. “And now it’s even worse,” Petros Vafiadis said. “Young couples aren’t having children because of the crisis.” He paused, then added, with a comic’s timing, “Maybe I’ll get a second wife and work on this demographic problem.” His wife gave out a high-pitched cackle, then shot back: “If he’s serious, someone should save the women of Greece.” As the laughter died down, I asked Petros the question that seemed most pressing. What was his plan? What, given the sorry state of affairs, was he going to do? 

Things went quiet. The bearish man executed an elaborate movement of his upper body that, when it was over, I decided you would have to call a shrug. It was painful to watch. Earlier, when I talked to his son alone, he summarized his father’s situation: he was in his late 50s, spoke only Greek and knew only the kind of work he had done — work that won’t be coming back anytime soon. The shoulder twist was the only possible answer. 

“Watch it! Watch out!” Paul Evmorfidis was driving up to a toll plaza on the main road from Athens to Thebes. He slowed down as he came to the toll arm blocking the road, but he was not paying the toll and, to my alarm, was not stopping. “I’m showing you something,” he said. He reached out his window, shoved the toll arm up out of the way and drove off as an alarm shrieked behind us. “This is what we do here — everybody who lives around here.” As the Greek government adds new taxes and surcharges onto its citizens, they respond with protest or evasion. After the government announced that there would be an additional 2010 income tax — in effect, retaxing that year’s income — people refused to pay, whereupon the government tacked a new property tax onto electricity bills, which you could elude only at the cost of having the power cut. Likewise, the toll plaza was installed to raise money. The toll was about $3. “The problem is if you live around here, you have to go down this road maybe five times a day,” Evmorfidis said. “Crazy! What kind of planning is that? So we protest.” 

Evmorfidis could pay the toll painlessly. He and his brother are owners of a company called Coco-Mat, which specializes in all-natural bedding and furniture (“Sleep on nature,” the ads say). Coco-Mat supplies hotels around Europe with high-end mattresses, filled with layers of natural rubber, coco fiber and seaweed, and has 70 stores in 11 countries. Since last year, the company’s affiliate in China has been opening shops at the rate of one per month. A Coco-Mat outlet inside the ABC Furniture building in Lower Manhattan opened in 2010, and the brothers plan to open 10 stores in the United States in the next two years. Global sales for 2011 were $70 million, 15 percent higher than the year before. Coco-Mat stores exude an airy, casual-chic vibe that seems the diametrical opposite of “economic crisis.” There is generally a kitchen area and a long sleek picnic table. If it’s around lunchtime, there might be a big bowl of Greek salad on the table. Customers are offered a glass of freshly squeezed orange juice or an espresso. 

Coco-Mat is a Greek company, one that defies the crisis in the country both in its efforts (of the 30 Coco-Mat stores in Greece, five opened in the past year, in the very teeth of the crisis) and in its formula for success. If Petros Vafiadis and his family represent a common situation in Greece today — people who toiled diligently in the old system, only to find that its collapse necessitates their own — Paul Evmorfidis is atypical but also revealing of another path, one not generally taken but apparently not entirely overgrown. As we drove through a landscape of silvery-green olive trees set against gray-white hills, I wanted to know how this very successful Greek businessman thought Greece had fallen to such a state. 

“This is a country with 300 days of sunshine per year,” he began, proceeding into a rambling, fast-paced discourse, the central point of which was that in buying into the euro, Greece tried foolishly to mimic other countries and in so doing shifted away from its natural advantages and way of life. “Working in offices is good in countries where there is lots of rain,” he said. “Greeks don’t need to be in offices. Athens has doubled in size in a couple of decades — it’s now half the population of the country! Two-hour traffic jams, man! After we joined the euro, the mentality totally changed. Suddenly it was like if you still live in the small village where you were born, you must be retarded. So Greeks left their islands and their villages and moved to the city, and they became maniacs. They started expecting loans and handouts.” 

The modern Greek mentality, according to Evmorfidis, is a hyped-up version of the debt-ridden American consumerism of recent memory. “Greek people would take out a loan to buy a luxury car so they could say, ‘I have money,’ ” he said. “Crazy! I would run into someone I used to know, and suddenly he’s talking to me about the stock exchange. I say: ‘Come on, man! What do you know about the stock exchange? Let’s talk about apples and olives!’ ”

Evmorfidis is a high-energy man (a few weeks later he and his son executed a winter crossing of the Alps on bicycles), and as the speedometer hit 90 miles an hour, my foot was involuntarily pushing the nonexistent brake on the passenger’s side. “But you know what?” he added. “This crisis is exactly what we need. Merkel and Sarkozy are good for our health. I hope they don’t give us a penny!” 

The standard short answer to how Greece got into its financial mess is that it borrowed too much and spent unwisely. Beneath this, people like to look for a cultural root. Most popular (outside Greece) is the north-south explanation, which holds that Northern Europeans are efficient and hardworking, and Southerners, while they may have better food and better sex lives, like to relax too much to run an efficient economy. But numbers don’t necessarily bear this out. Even the guy selling you souvlaki in Athens can quote statistics from the Organization for Economic Cooperation and Development showing that the average Greek worked 2,116 hours in 2008, while the average German worked 1,426 hours. Traveling around the Greek countryside provides lots of anecdotal support to the notion that people do in fact work, and work hard. 

Still, there’s some value in looking at geography. Greece is part of Europe — you might say the heart of Europe (the euro symbol itself was designed after the Greek letter epsilon: a nod to the classical roots of modern Europe) — but in another sense, Greece is a remnant of the Ottoman Empire, that realm famous for top-down rule, bribery and looking the other way. Everyone I talked to seemed to feel that this interconnected triad of features is indeed elemental and thus part of the reason for the crisis. People on the left and people on the right agree that its bureaucracy is a menace. Fakelaki (literally “little envelopes”) are a legendary feature of society. If you’re starting a business, there are lots of signatures you need, and handing over the cash-stuffed envelopes has traditionally been part of the process.

Then, too, the intense international focus on the country’s problems may be obscuring the fact that since it became part of the eurozone, Greece has actually made significant steps toward integrating with Europe. Mike Evmorfidis, Paul Evmorfidis’s brother and co-owner of Coco-Mat, made this point to me. “When we started 20 years ago, it took six months to get through the bureaucracy,” he said. “And fakelaki were a part of that. But that has changed. Among the younger generation now, I would say that it does not exist at all, the business of the little envelopes. Young Greeks are really a part of Europe.” 

The Evmorfidis brothers’ story gives some perspective on the changes in Greece in the past 50 years or so. They were born in a small town near Sparta. In the 1950s, their father left home as part of the migration of Greeks who went abroad seeking work. He found a job in Stuttgart, Germany, working on the American military base, and was able to visit his family only once a year. Paul, who is 53, acted as surrogate father to his younger brother. Both did well in school, and both went on to do graduate studies in a way that reflected the country’s dawning awareness of its place within Europe. Paul studied business in Athens and earned a master’s degree in Germany, and Mike earned a Ph.D. in law at the Sorbonne in Paris. 

Then, in 1989, while Paul was working in a jewelry shop in Plaka — Athens’s tourist zone — a Dutch businessman asked if he knew of a Greek company that made mattresses. The Dutchman owned a bed shop and wanted to find a cheaper source. Paul took him to a Greek mattress company but saw at once that its quality was low. Whereupon he had an idea: do it right and ride what was then a growing wave of interest in all-natural products. The company emphasizes its use of Greek materials: wool from Thrace, cotton from Larissa, wood from Mount Athos, seaweed from Sparta. 

Sparta, land of legendary warriors famed for their austerity and discipline, figures heavily in Paul Evmorfidis’s thinking. When I asked if there was one element of Coco-Mat’s strategy that he would like to see other Greek companies emulate, he said: “Spartan thinking, man! We’ve got to get lean and smart. All of these state subsidies that Greeks got, they make you fat and lazy.” I tried to point out the apparent contradiction of a company that sells ultracomfy beds insisting that Spartan thinking is its underlying philosophy, but he seemed not to notice. His brother echoed him in saying that a basic part of their strategy involved a determination to avoid bank loans: “We have grown step by step. We didn’t want to invest more than we had gained. Our gains were not transformed into yachts or villas but were put back into the business.”
As for the future of the country, the Evmorfidis brothers profess a strange-sounding hopefulness, and their recent store openings in Greece would seem to indicate that it’s not just talk. “I’m naturally optimistic,” Mike said. “This is a cycle; things will come back. Plus it’s smart business to expand now. There are always opportunities in crisis.” 

Those opportunities come at a cost to someone. Before the crisis, he said, the owner of a space in central Athens that they had their eyes on wanted $20,000 a month in rent; when they opened a store there in December, it was for a monthly rent of $7,000. Likewise, where Coco-Mat used to pay $1,700 per cubic meter of Greek oak, the price has dropped to $640. Coco-Mat’s furniture has also gone down in price inside Greece, Mike said, though not by as much. He told me that last year the company’s domestic sales were down 15 percent, a figure that he was quite upbeat about (“Not catastrophical!”) given the overall state of the economy. And when you consider that a Coco-Mat bed costs anywhere from $3,300 to $16,600, the fact that Greeks are still buying them gives some corrective to the image of an entire country in a state of free fall. 

Then again, you could also look at this as evidence of a lingering state of denial. Or the sales of deluxe beds could be a sign of a two-tiered society that the economist Theodore Pelagidis sees developing in his country. “You are going to see a part of the population, the middle class, comprising say 30 to 50 percent, involved in some kind of resurgence,” he told me. “But another part of the population will be living on 300 or 400 euros ($400 to $500) a month. This part of Greek society won’t be living a Western European lifestyle. It will be more like Bulgaria.” Mike Evmorfidis admitted that where Coco-Mat’s Greek customers used to be a cross section of the economic spectrum, now it’s mostly the rich who buy his beds. 

To the north of the Gulf of Corinth, Mount Helicon slopes down into a broad valley that, in classical times, was the location of a sanctuary devoted to the worship of the nine muses. I stepped out of a car into the cold wind sweeping up the valley and began hiking through an area crosshatched with vineyards. With me was a 27-year-old man named Stelios Zacharias, who talked about soil and slope and summer sun and the varietal finickiness of grapes. 

When Zacharias and his brothers were children, their father, Athanasios, grew grapes here and sold the juice to neighbors, but he talked of starting a proper winery. Stelios studied business, and his older brother, Nicos, studied winemaking. Today they and their father run Muses Estate, which produced 200,000 bottles last year: merlot, cabernet sauvignon, chardonnay, as well as a Greek variety called mouhtaro.
We sampled each of these once we reached the winery, while a burning log snapped on the hearth and Ioanna Zacharias, Stelios’s mother, laid out platters of food. The Zacharias family’s business straddles the line between corporate-cosmopolitan and Greek-traditional. Stelios has pursued a strategy that involves combating the bad reputation of Greek wine not by producing something chic but by stressing value: the wines are soundly made and no bottle costs more than $30 retail. The strategy is working, and with curious timing. Over the very years in which the economic crisis has arisen and engulfed the country, the little winery has taken off. The wines are distributed in four countries, including the United States, and deals are in place with eight more. Stelios Zacharias told me sales have doubled in each of the last five years — and 80 percent of sales are still within their economically crippled home country. 

At the same time, the business remains steadfast to its village — the place where Stelios and his brother grew up, went to school and played soccer in the field down the street from the winery. In the fall, cousins and villagers participate in the grape harvest. A neighbor, who raises chickens, strolls across the road every couple of days with a dozen eggs, which he trades for a bottle of the house white. Stelios took me to the local olive-oil cooperative, something that many Greek villages still maintain, where his parents bring olives from their own trees. It was a simple husk of a building housing a noisy press. The processing is free; the co-op keeps 2 percent of the oil, which it sells in order to stay in business. The little gleaming green, black and brown olives filled up a large metal tray waiting to be mashed. A stout man with a vast gray mustache turned the spigot and gave me a taste of the end result. 

Zacharias says the troubles have rallied like-minded Greek businesspeople. “The crisis gives us the opportunity to clean the market of everyone who was trying to make something out of nothing. Then we can focus on what works: creating a real product, using real methods.” 

A lot of people seem to be coming around to Zacharias’s way of thinking. According to the Greek farmers’ union, between 2008 and 2010 — even before the crisis reached its height — 38,000 people lost or gave up their jobs, as their dream of euro-capitalism died, and returned to the land, often to their home villages on the islands. Former accountants and Web designers are growing potatoes on Naxos, collecting resin from mastic trees on Chios and tending wheat fields on Crete. On the cloud-rimmed top of Mount Othrys, in the region of Magnesia, Ioannis Tsokaras, who a year ago quit the civil-service job in Athens from which he had endured one too many pay cuts, showed me what he is now, at 58, staking his hopes on: little yellow-green clumps of an herb called sideritis, or “mountain tea.” He was intent on turning what had been a sideline — cultivating wild herbs on land his family owned — into a living. His storage space, perched halfway down the mountain, was crammed with large, aromatic, light-as-air boxes of his product, awaiting shipment to markets in Athens. “This is a real business now,” he declared. 

Such individual stories are signs of hope in a country that is searching for a viable future. Yet no matter how many families find their way back to the land, what ultimately happens to Greece depends more on what happens in the wider world.

One of the grandest piles of ancient stones in a country full of glorious ruins lies on the island of Crete. It is called Knossos, and it was to Greece what Greece is to Europe: the cradle of its civilization. At the core of its prehistory is the legend of King Minos, who ruled over the Greek islands. Minos maintained his hegemony over Greece by requiring that Athens, the second power in the Aegean world, send him tribute in the form of young men and women, whom Minos fed to the beast he kept in his labyrinth: the Minotaur.
Improbably enough, a Greek economist named Yanis Varoufakis has been drawing attention in many of the hot spots of global finance lately, offering the Minotaur myth as a metaphor for understanding recent macroeconomic events. As Varoufakis writes in his recent book, “The Global Minotaur,” the world in which we have been living until recently functioned thanks to the voracious consumption of a different kind of beast. After World War II, the U.S. built up the infrastructure of its European allies as well as its former enemies, all of whom became trading partners. The U.S., with its great industrial and financial might, became the world’s surplus nation: its profits flowed out to its allies in the form of aid and investments. By the early 1970s, however, other countries had robust economies, and the U.S. was a debtor nation. “At that moment, certain very bright men within the American financial hierarchy made a stunning realization,” Varoufakis told me. The realization was that it didn’t matter if the U.S. was the biggest surplus or biggest debtor nation. What mattered was controlling the world’s primary currency, which would allow the United States to continue to recycle the global economic surplus. The idea was not unlike the thinking behind a casino — whichever gamblers are winning or losing, the house, which sets the terms and takes its cut, always wins.
So a new system came into being, in which a huge part of the world’s capital flows went to service debt originating in the United States. American debt, and the need to feed it, would be the modern Minotaur. The Wall Street financial houses became the handmaidens of the Minotaur. “The massive flow of capital into Wall Street gave it the impetus for financialization,” Varoufakis said, referring to the creation of derivatives and other risky financial vehicles. “And so Wall Street created a great deal of private money, with which it flooded the world and created huge bubbles, in the U.S. housing market and elsewhere.”
When that system came crashing down in 2008, Varoufakis says, “it was then only a matter of time that the euro would come into crisis.” Europe’s powerhouse economies — essentially, the northern countries — no longer had a place to sell their goods. 

And where, in this grand picture, does Greece fit? Part of the logic of the eurozone involved the strong economies’ providing loans to the weaker ones, in order to build up their infrastructure so they could then buy products from the stronger countries — a kind of replay of what the U.S. did vis-à-vis Europe with the Marshall Plan. But while Greece took the loans, it didn’t invest wisely, and its own debt kept mounting.
As the weakest link in the eurozone, Greece gives us the clearest picture of what the larger economic downturn portends. And for all the hopefulness of some of the Greeks I met in my travels, others take a dimmer view of their future. Near Thessaloniki — Greece’s second-largest city — I visited a family home. Husband, wife and son were present. The woman is one of the top bankers in Greece. She spoke on condition that I not use her name or the name of her bank. When I asked for her views on the future, she said: “Last week, in the town of Larissa, I was sitting at an outdoor cafe, and a clean, well-dressed Greek man of about 60 passed by and politely asked if he could have the biscuit that came with my coffee. What you say about successful companies is good to hear. But the reality is that man who asked for my biscuit. You can’t see the crisis results fully yet because people have been living off their savings. Soon the savings will end. I believe that by the end of 2012, you will see a different Greece, a different country, with real poverty.” 

According to Yanis Varoufakis, the future — for Greece and for much of the rest of the Western world, never mind recent upticks in the U.S. economy — is one of even more upheaval. “The Minotaur died, and that is what held everything together,” he said. “Until a new system is invented, we are in for turmoil.” As anecdotal evidence of the situation in Greece, he told me that all of his top Ph.D. students at the University of Athens were seeking jobs abroad. Then he added that he, too, would soon be leaving, possibly for a position in the United States. 

Like many Greeks I talked to, Stelios Zacharias, the winemaker, insisted that as hard as it is, the crisis takes on a different character when put in local perspective. “For one thing, there isn’t a housing crisis,” he said. Economists echo this point: you don’t see homelessness in Athens the way you do in other hard-hit cities. That is because even as they were pursuing careers in Athens as stockbrokers or investment bankers, people maintained their ties to their villages. Astoundingly, about 80 percent of Greeks own a home. It may be on family land on a distant island, but it is still a home. Zacharias, for example, lives on land that his grandfather bought decades ago with coupons from a newspaper promotion. Many of those who have lost jobs in the city therefore have rural homes to retreat to, though whether there is income once they get there is another matter. 

Family and community ties are certainly helping to hold Greece together thus far. When I asked the journalist Aris Hadjigeorgiou, two months after our meeting in the taverna, if he was getting a paycheck yet, he said the newspaper had completely stopped publication. “As a journalist, I don’t know if I’ll make it,” he said. But, he said, he was scraping by with the help of others. And he negotiated a lower rent with his landlady.
So maybe Paul Evmorfidis’s argument has some validity: Greece’s traditional infrastructure may not be the ultimate answer to its problems, given the global scale of things, but it may make difficult times less painful. The destination of my car trip with Evmorfidis was Volos, a vigorous port city in Thessaly and conduit for trade with Asia, where he had been asked to speak about the crisis to a group of business leaders. After the talk, as we walked out of the building, he was in the middle of telling me that what will save Greece is its still-vibrant sense of community when we saw a middle-aged woman coming down the steps. It was late, and we hadn’t eaten dinner. He asked the woman if she knew where we could get something to eat. “Come to my home, and I’ll cook for you,” she said. And so we did.

Russell Shorto is a contributing writer and the director of the John Adams Institute in Amsterdam.
Editor: Vera Titunik
This Truly Is Important!

Michael explains somethings about the Federal Reserve Bank that I did not know.  There will be a lot of things in this article that you didn't know.  And you will begin to understand Ron Paul's rant about the Fed.

But pay particular attention to the total of the SECRET loans the Fed has made to private banks, mostly on Wall Street (#4).  It comes to $16 TRILLION!!  Then remember that the entire U.S. debt is $16 TRILLION!!!!

10 Things That Every American Should Know About The Federal Reserve

What would happen if the Federal Reserve was shut down permanently?  That is a question that CNBC asked recently, but unfortunately most Americans don't really think about the Fed much. Most Americans are content with believing that the Federal Reserve is just another stuffy government agency that sets our interest rates and that is watching out for the best interests of the American people.  But that is not the case at all.  The truth is that the Federal Reserve is a private banking cartel that has been designed to systematically destroy the value of our currency, drain the wealth of the American public and enslave the federal government to perpetually expanding debt.  During this election year, the economy is the number one issue that voters are concerned about.  But instead of endlessly blaming both political parties, the truth is that most of the blame should be placed at the feet of the Federal Reserve.  The Federal Reserve has more power over the performance of the U.S. economy than anyone else does.  The Federal Reserve controls the money supply, the Federal Reserve sets the interest rates and the Federal Reserve hands out bailouts to the big banks that absolutely dwarf anything that Congress ever did.  If the American people are ever going to learn what is really going on with our economy, then it is absolutely imperative that they get educated about the Federal Reserve.
The following are 10 things that every American should know about the Federal Reserve....

#1 The Federal Reserve System Is A Privately Owned Banking Cartel
The Federal Reserve is not a government agency.
The truth is that it is a privately owned central bank.  It is owned by the banks that are members of the Federal Reserve system.  We do not know how much of the system each bank owns, because that has never been disclosed to the American people.
The Federal Reserve openly admits that it is privately owned.  When it was defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve stated unequivocally in court that it was "not an agency" of the federal government and therefore not subject to the Freedom of Information Act.
In fact, if you want to find out that the Federal Reserve system is owned by the member banks, all you have to do is go to the Federal Reserve website....
The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
Foreign governments and foreign banks do own significant ownership interests in the member banks that own the Federal Reserve system.  So it would be accurate to say that the Federal Reserve is partially foreign-owned.
But until the exact ownership shares of the Federal Reserve are revealed, we will never know to what extent the Fed is foreign-owned.

#2 The Federal Reserve System Is A Perpetual Debt Machine
As long as the Federal Reserve System exists, U.S. government debt will continue to go up and up and up.
This runs contrary to the conventional wisdom that Democrats and Republicans would have us believe, but unfortunately it is true.
The way our system works, whenever more money is created more debt is created as well.
For example, whenever the U.S. government wants to spend more money than it takes in (which happens constantly), it has to go ask the Federal Reserve for it.  The federal government gives U.S. Treasury bonds to the Federal Reserve, and the Federal Reserve gives the U.S. government "Federal Reserve Notes" in return.  Usually this is just done electronically.
So where does the Federal Reserve get the Federal Reserve Notes?
It just creates them out of thin air.
Wouldn't you like to be able to create money out of thin air?
Instead of issuing money directly, the U.S. government lets the Federal Reserve create it out of thin air and then the U.S. government borrows it.
Talk about stupid.
When this new debt is created, the amount of interest that the U.S. government will eventually pay on that debt is not also created.
So where will that money come from?
Well, eventually the U.S. government will have to go back to the Federal Reserve to get even more money to finance the ever expanding debt that it has gotten itself trapped into.
It is a debt spiral that is designed to go on perpetually.
You see, the reality is that the money supply is designed to constantly expand under the Federal Reserve system.  That is why we have all become accustomed to thinking of inflation as "normal".
So what does the Federal Reserve do with the U.S. Treasury bonds that it gets from the U.S. government?
Well, it sells them off to others.  There are lots of people out there that have made a ton of money by holding U.S. government debt.
In fiscal 2011, the U.S. government paid out 454 billion dollars just in interest on the national debt.
That is 454 billion dollars that was taken out of our pockets and put into the pockets of wealthy individuals and foreign governments around the globe.
The truth is that our current debt-based monetary system was designed by greedy bankers that wanted to make enormous profits by using the Federal Reserve as a tool to create money out of thin air and lend it to the U.S. government at interest.
And that plan is working quite well.
Most Americans today don't understand how any of this works, but many prominent Americans in the past did understand it.
For example, Thomas Edison was once quoted in the New York Times as saying the following....
That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt.
Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.
But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good.
We should have listened to men like Edison and Ford.
But we didn't.
And so we pay the price.
On July 1, 1914 (a few months after the Fed was created) the U.S. national debt was 2.9 billion dollars.
Today, it is more than more than 5000 times larger.
Yes, the perpetual debt machine is working quite well, and most Americans do not even realize what is happening.

#3 The Federal Reserve Has Destroyed More Than 96% Of The Value Of The U.S. Dollar
Did you know that the U.S. dollar has lost 96.2 percent of its value since 1900?  Of course almost all of that decline has happened since the Federal Reserve was created in 1913.
Because the money supply is designed to expand constantly, it is guaranteed that all of our dollars will constantly lose value.
Inflation is a "hidden tax" that continually robs us all of our wealth.  The Federal Reserve always says that it is "committed" to controlling inflation, but that never seems to work out so well.
And current Federal Reserve Chairman Ben Bernanke says that it is actually a good thing to have a little bit of inflation.  He plans to try to keep the inflation rate at about 2 percent in the coming years.
So what is so bad about 2 percent?  That doesn't sound so bad, does it?
Well, just consider the following excerpt from a recent Forbes article....
The Federal Reserve Open Market Committee (FOMC) has made it official:  After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years.  The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.
#4 The Federal Reserve Can Bail Out Whoever It Wants To With No Accountability
The American people got so upset about the bailouts that Congress gave to the Wall Street banks and to the big automakers, but did you know that the biggest bailouts of all were given out by the Federal Reserve?
Thanks to a very limited audit of the Federal Reserve that Congress approved a while back, we learned that the Fed made trillions of dollars in secret bailout loans to the big Wall Street banks during the last financial crisis.  They even secretly loaned out hundreds of billions of dollars to foreign banks.
According to the results of the limited Fed audit mentioned above, a total of $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010.
The following is a list of loan recipients that was taken directly from page 131 of the audit report....
Citigroup - $2.513 trillion
Morgan Stanley - $2.041 trillion
Merrill Lynch - $1.949 trillion
Bank of America - $1.344 trillion
Barclays PLC - $868 billion
Bear Sterns - $853 billion
Goldman Sachs - $814 billion
Royal Bank of Scotland - $541 billion
JP Morgan Chase - $391 billion
Deutsche Bank - $354 billion
UBS - $287 billion
Credit Suisse - $262 billion
Lehman Brothers - $183 billion
Bank of Scotland - $181 billion
BNP Paribas - $175 billion
Wells Fargo - $159 billion
Dexia - $159 billion
Wachovia - $142 billion
Dresdner Bank - $135 billion
Societe Generale - $124 billion
"All Other Borrowers" - $2.639 trillion
So why haven't we heard more about this?
This is scandalous.
In addition, it turns out that the Fed paid enormous sums of money to the big Wall Street banks to help "administer" these nearly interest-free loans....
Not only did the Federal Reserve give 16.1 trillion dollars in nearly interest-free loans to the "too big to fail" banks, the Fed also paid them over 600 million dollars to help run the emergency lending program.  According to the GAO, the Federal Reserve shelled out an astounding $659.4 million in "fees" to the very financial institutions which caused the financial crisis in the first place.
Does reading that make you angry?
It should.

#5 The Federal Reserve Is Paying Banks Not To Lend Money
Did you know that the Federal Reserve is actually paying banks not to make loans?
It is true.
Section 128 of the Emergency Economic Stabilization Act of 2008 allows the Federal Reserve to pay interest on "excess reserves" that U.S. banks park at the Fed.
So the banks can just send their cash to the Fed and watch the money come rolling in risk-free.
So are many banks taking advantage of this?
You tell me.  Just check out the chart below.  The amount of "excess reserves" parked at the Fed has gone from nearly nothing to about 1.5 trillion dollars since 2008....

But shouldn't the banks be lending the money to us so that we can start businesses and buy homes?
You would think that is how it is supposed to work.
Unfortunately, the Federal Reserve is not working for us.
The Federal Reserve is working for the big banks.
Sadly, most Americans have no idea what is going on.
Another example of this is the government debt carry trade.
Here is how it works.  The Federal Reserve lends gigantic piles of nearly interest-free cash to the big Wall Street banks, and in turn those banks use the money to buy up huge amounts of government debt.  Since the return on government debt is higher, the banks are able to make large profits very easily and with very little risk.
This scam was also explained in a recent article in the Guardian....
Consider this: we pretend that banks are private businesses that should be allowed to run their own affairs. But they are the biggest scroungers of public money of our time. Banks are lent vast sums of money by central banks at near-zero interest. They lend that money to us or back to the government at higher rates and rake in the difference by the billion. They don't even have to make clever investments to make huge profits.
That is a pretty good little scam they have got going, wouldn't you say?

#6 The Federal Reserve Creates Artificial Economic Bubbles That Are Extremely Damaging
By allowing a centralized authority such as the Federal Reserve to dictate interest rates, it creates an environment where financial bubbles can be created very easily.
Over the past several decades, we have seen bubble after bubble.  Most of these have been the result of the Federal Reserve keeping interest rates artificially low.  If the free market had been setting interest rates all this time, things would have never gotten so far out of hand.
For example, the housing crash would have never been so horrific if the Federal Reserve had not created such ideal conditions for a housing bubble in the first place.  But we allow the Fed to continue to make the same mistakes.
Right now, the Federal Reserve continues to set interest rates much, much lower than they should be.  This is causing a tremendous misallocation of economic resources, and there will be massive consequences for that down the line.

#7 The Federal Reserve System Is Dominated By The Big Wall Street Banks
Even since it was created, the Federal Reserve system has been dominated by the big Wall Street banks.
The following is from a previous article that I did about the Fed....
The New York representative is the only permanent member of the Federal Open Market Committee, while other regional banks rotate in 2 and 3 year intervals.  The former head of the New York Fed, Timothy Geithner, is now U.S. Treasury Secretary.  The truth is that the Federal Reserve Bank of New York has always been the most important of the regional Fed banks by far, and in turn the Federal Reserve Bank of New York has always been dominated by Wall Street and the major New York banks.
#8 It Is Not An Accident That We Saw The Personal Income Tax And The Federal Reserve System Both Come Into Existence In 1913
On February 3rd, 1913 the 16th Amendment to the U.S. Constitution was ratified.  Later that year, the United States Revenue Act of 1913 imposed a personal income tax on the American people and we have had one ever since.
Without a personal income tax, it is hard to have a central bank.  It takes a lot of money to finance all of the government debt that a central banking system creates.
It is no accident that the 16th Amendment was ratified in 1913 and the Federal Reserve system was also created in 1913.
They have a symbiotic relationship and they are designed to work together.
We could fill Congress with people that are committed to ending this oppressive system, but so far we have chosen not to do that.
So our children and our grandchildren will face a lifetime of debt slavery because of us.
I am sure they will be thankful for that.

#9 The Current Federal Reserve Chairman, Ben Bernanke, Has A Nightmarish Track Record Of Incompetence
The mainstream media portrays Federal Reserve Chairman Ben Bernanke as a brilliant economist, but is that really the case?
Let's go to the videotape.
The following is an extended excerpt from an article that I published previously....
In 2005, Bernanke said that we shouldn't worry because housing prices had never declined on a nationwide basis before and he said that he believed that the U.S. would continue to experience close to "full employment"....
"We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though."
In 2005, Bernanke also said that he believed that derivatives were perfectly safe and posed no danger to financial markets....
"With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly."
In 2006, Bernanke said that housing prices would probably keep rising....
"Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise."
In 2007, Bernanke insisted that there was not a problem with subprime mortgages....
"At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency."
In 2008, Bernanke said that a recession was not coming....
"The Federal Reserve is not currently forecasting a recession."
A few months before Fannie Mae and Freddie Mac collapsed, Bernanke insisted that they were totally secure....
"The GSEs are adequately capitalized. They are in no danger of failing."
For many more examples that demonstrate the absolutely nightmarish track record of Federal Reserve Chairman Ben Bernanke, please see the following articles....
*"Say What? 30 Ben Bernanke Quotes That Are So Stupid That You Won’t Know Whether To Laugh Or Cry"
*"Is Ben Bernanke A Liar, A Lunatic Or Is He Just Completely And Totally Incompetent?"
But after being wrong over and over and over, Barack Obama still nominated Ben Bernanke for another term as Chairman of the Fed.
#10 The Federal Reserve Has Become Way Too Powerful
The Federal Reserve is the most undemocratic institution in America.
The Federal Reserve has become so powerful that it is now known as "the fourth branch of government", but there are less checks and balances on the Fed than there are on the other three branches.
The Federal Reserve runs the U.S. economy but it is not accountable to the American people.  We can't vote those that run the Fed out of office if we do not like what they do.
Yes, the president appoints those that run the Fed, but he also knows that if he does not tread lightly he won't get the money from the big Wall Street banks that he needs for his next election.
Thankfully, there are a few members of Congress that are complaining about how much power the Fed has.  For example, Ron Paul once told MSNBC that he believes that the Federal Reserve is now actually more powerful than Congress.....
"The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress."
As members of Congress such as Ron Paul have started to shed some light on the activities of the Federal Reserve, that has caused many in the mainstream media to come to the defense of the Fed.
For example, a recent CNBC article entitled "If The Federal Reserve Is Abolished, What Then?" makes it sound like there is absolutely no other rational alternative to having the Federal Reserve run our economy.
But this is not what our founders intended.
The founders did not intend for a private banking cartel to issue our money and set our interest rates for us.
According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress has been given the responsibility to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures".
So why is the Federal Reserve doing it?
But the CNBC article mentioned above makes it sound like the sky would fall if control of the currency was handed back over to the American people.
At one point, the article asks the following question....
"How would the U.S. economy then function? Something has to take its place, right?"
No, the truth is that we don't need anyone to "manage" our economy.
The U.S. Treasury could be in charge of issuing our currency and the free market could set our interest rates.
We don't need to have a centrally-planned economy.
We aren't China.
And it goes against everything that our founders believed to be running up so much government debt.
For example, Thomas Jefferson once declared that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing....
I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.
Oh, how things would have been different if we had only listened to Thomas Jefferson.
Please share this article with as many people as you can.  These are things that every American should know about the Federal Reserve, and we need to educate the American people about the Fed while there is still time.

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