Will it hit the fan?

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Out of the Ashes of GM

Most of us have some expertise in one thing or another and the older we get we tend to have a deeper appreciation for those who excel in the areas we know nothing about. When it comes to banking and finance my adeptness is limited to academia's managerial accounting and ECO 102. other than that I do keep close tabs on my bank account. I could brag about my expertise in zoonotic diseases or anything related to the food manufacturing industry but that's not why I came here today. Ellen Brown whom I've come to know over this medium (the Internet) has written a number of books including titles that give her credence in the financial world. She certainly has a handle on the Federal Reserve which is neither federal nor reserve. The article below is not simply a story about GM and the auto industry; it's about banking, taxes, and money. Your money!
Please take a few minutes to read the suggestions presented here and if this does not enlighten you then may I suggest you start at ECO 101. (Note: Here's a note from Ellen..."Take Back the Power to Create Money from the Private Banking Industry" is now no. 11 out of 3,649 entries on the President's brainstorming website. It's not too late to vote!* It's here --http://opengov.ideascale.com/akira/dtd/3648-4049 ) - Norman E. Hooben (*ps: I voted)

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Out of the Ashes of GM: The Phoenix of Renewable Energy

By Ellen Brown

Pontiac Firebird

It may be prophetic that among the brands GM chose to kill was the Pontiac Firebird, a classic hot car of the 1960s sporting the fabled Phoenix on its hood. In mythology, the Phoenix was a colorful bird that incinerated itself in its nest, then rose from the ashes as its own offspring. GM too, says Michael Moore, could be reborn as something else. In a June 1 eulogy of sorts, he wrote:

“So here we are at the deathbed of General Motors. The company’s body not yet cold, and I find myself filled with—dare I say it—joy. It is not the joy of revenge against a corporation that ruined my hometown … Nor do I, obviously, claim any joy in knowing that 21,000 more GM workers will be told that they, too, are without a job. But you and I and the rest of America now own a car company!”

What would we want with a car company? Moore suggests that the bankrupt mega-builder of obsolete gas guzzlers can be transformed into a mega-builder of things we need more—mass transit vehicles, including bullet trains, light rail mass transit lines, energy efficient clean buses, hybrid or all-electric cars, and alternative energy devices such as batteries, windmills, and solar panels. The factories that built the cars that helped destroy the environment can become the tools for cleaning it up. This would, of course, take some investment; but Moore suggests that to pay for it all, the government could impose a two-dollar tax on every gallon of gasoline.

It sounds good right up to the gas tax, a regressive tax that would hit hardest in the wallets of the poor and would raise alarm bells for politicians, the oil lobby, and voters. Isn’t there some way to fund the plan without driving up the tax burden or the national debt? In fact, there is.

TO PUT OUR NEW CAR COMPANY TO GOOD USE, WE JUST NEED TO OWN A BANK

The federal government could create its own credit with its own government-owned lending facility, on the model of the Reconstruction Finance Corporation used by President Roosevelt to fund the New Deal. But instead of merely recycling borrowed money as Roosevelt did, the new facility could actually create credit on its books. Its capital base could be leveraged into many times that sum in loans, in the same way that private banks routinely create money (or “credit”) today. Assuming a reserve requirement of 10%, if the $300 billion or so that remains of the TARP money were deposited in the new bank, this money could be leveraged into $3 trillion in loans. If the money were counted as capital, at an 8% capital requirement it could become $3.75 trillion in loans, or 12.5 times the original sum.

Indeed, it is the sovereign right of governments to create the national money supply, but few governments exercise that right today. The only money the U.S. government now issues are coins, which compose only about one ten-thousandth of the U.S. M3 money supply. The rest is created by private banking institutions when they make loans. This includes the privately-owned Federal Reserve, which creates Federal Reserve Notes (dollar bills) and lends them to the government and to commercial banks. Federal Reserve Notes compose only 3% of the money supply. All of the rest consists merely of credit created on the books of private banks.

Many authorities have attested that banks simply create the money they lend as accounting entries on their books. The Federal Reserve Bank of Dallas states on its website:

“Banks actually create money when they lend it. Here’s how it works: Most of a bank’s loans are made to its own customers and are deposited in their checking accounts. Because the loan becomes a new deposit, just like a paycheck does, the bank … holds a small percentage of that new amount in reserve and again lends the remainder to someone else, repeating the money-creation process many times.”

This was confirmed recently by President Obama himself. In a speech at Georgetown University on April 14, he said:

“[A]lthough there are a lot of Americans who understandably think that government money would be better spent going directly to families and businesses instead of banks—‘where’s our bailout?’ they ask—the truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth.”

The money generated by banks through the multiplier effect comes at a heavy cost in interest. One advantage of a government-owned bank is that it could fund public projects interest-free or nearly interest-free, cutting production costs dramatically. Interest comprises as much as 77% of the cost of goods and services, such as public housing, that require large amounts of capital. The cost of interest is lower for labor-based services such as garbage collection, for which it makes up only about 12% of the cost. Averaging them all together, the overall cost of interest has been estimated to be about half the cost of everything we buy. If money for infrastructure development were issued interest-free, projects currently considered unsustainable because of the burden of interest could become not only self-sustaining but actually profitable for the government.

In The Modern Universal Paradigm (2007), Rodney Shakespeare gives the example of the Humber Bridge, which was built in the UK at a cost of £98 million. Every year since the bridge opened in 1981, it has turned an operating profit; that is, its running costs (basically repair, maintenance, and staff salaries) have been exceeded by the fees it receives from travelers crossing the river Humber. But by the time the bridge opened in 1981, interest on its construction loans had driven its cost up to £151 million; and by 1992, only 10 years later, the debt had shot up to a breath-taking £439 million. The UK government was forced to intervene with sizeable grants and writeoffs to save the local residents from bearing the brunt of these costs. If the bridge had been financed with interest-free, government-issued credit, these costs could have been avoided and the bridge could have funded itself.

In March of this year, Congressman Chris Van Hollen introduced a bill to establish a Green Bank aimed at catalyzing clean energy and energy efficient projects. The proposed bank would be an independent, tax-exempt, wholly owned corporation of the United States, with the exclusive mission of providing a comprehensive range of financial support to qualified clean-energy and energy-efficiency projects in the U.S. If this Green Bank were operated on the fractional reserve system, its initial capital base could be leveraged many times as loans. The loans could then be paid off with the income generated by the projects, preventing inflation and allowing additional loans to be made. Unlike the bank bailouts that have eaten up so much of the government’s revenues, green projects create real goods and services and real profits; and the projects could be particularly profitable if they were created without the burden of interest.

HISTORICAL PRECEDENTS

Funding public projects with government-issued credit is not a new idea. It has a long and successful history, including these notable examples:

• In the early eighteenth century, the colony of Pennsylvania issued money that was both lent and spent by the local government into the economy, producing an unprecedented period of prosperity. This was done without producing price inflation and without taxing the people.

• When Abraham Lincoln needed money to fund the American Civil War, rather than paying 25 to 36 percent interest charges, he avoided going into debt by printing Greenback dollars that were “legal tender” in themselves. The ploy not only allowed the North to win the Civil War but helped fund a period of unusual national expansion and development.

• The island state of Guernsey, located in the Channel Islands, used government-issued money to fund roads, bridges, and other needed infrastructure throughout most of the 19th and 20th centuries, without price inflation and without incurring government debt.

• The Bank of North Dakota, founded in 1919, is a wholly state-owned bank that creates credit on its books just as private banks do. This credit is used to serve local needs, and the interest on loans is returned to the government. Not coincidentally, North Dakota has a $1.2 billion budget surplus at a time when 47 of 50 states are insolvent, an impressive achievement for a state of isolated farmers battling challenging weather.

• During the First World War, when private banks were demanding 6 percent interest, Australia’s publicly-owned Commonwealth Bank financed the Australian government’s war effort at an interest rate of a fraction of 1 percent, saving Australians some $12 million in bank charges. After the First World War, the bank’s governor used the bank’s credit power to relieve the depression conditions in other countries by financing production and home-building, and lending funds to local governments for the construction of roads, tramways, harbors, gasworks, and electric power plants. The bank’s profits were paid back to the national government.

• A successful infrastructure program funded with interest-free “national credit” was also instituted in New Zealand after it elected its first Labor government in the 1930s. Credit issued by its nationalized central bank allowed New Zealand to thrive at a time when the rest of the world was struggling with poverty and lack of productivity. According to a book titled State Housing in New Zealand, published by the Ministry of Works in 1949:

“To finance its comprehensive proposals, the Government adopted the somewhat unusual course of using Reserve Bank credit, thus recognizing that the most important factor in housing costs is the price of money—interest is the heaviest portion in the composition of rent. … This action showed … it was possible for the State to use the country’s credit in creating new assets for the country.”

THE INFLATION OBJECTION

The objection invariably raised to proposals for government self-funding is that the result would be dangerously inflationary. Addressing that issue in the Winter 2004 edition of the New Zealand Guardian Political Review, Stan Fitchett explored whether the New Zealand government’s 1930s approach would create price inflation today. He confirmed with bank officials that 97 percent of the New Zealand money supply is now created by commercial banks when they make loans. The year he was writing, the money supply increased by 18,527 million New Zealand dollars, or 16.8 percent; and 97 percent of this increase came from commercial bank lending. Fitchett confirmed with banking experts that if the Reserve Bank had created 100 million New Zealand dollars to build new houses in New Zealand, the sum would have had no noticeable impact on inflation, since it was only one-half of one percent of what was already being added to the money supply annually by private commercial banks. Similar ratios apply in the United States and other countries.

If it is dangerously inflationary for public banks to create money, then it is dangerously inflationary for private banks to do it; but we don’t hear economists and politicians clamoring for the private credit machine to be shut down. To the contrary, a flood of money is being poured into that choking and sputtering machine in a desperate attempt to get its pistons firing again. A more efficient solution to the credit crunch would be for the government to abandon its old Tin Lizzie-model credit machine and create a shiny new public Firebird model; and the first thing the new credit engine might be tested on are green energy projects of the sort proposed by Mr. Moore. Out of the ashes of a failed GM could arise not only a new, clean way of traveling but a new way of funding government and the services we expect from it.

Author's Bio: Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from "the money trust." Her eleven books include Forbidden Medicine, Nature's Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com.

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Yes We Can From The Candy Man...enjoy it now before they tax it!

A sign of the times...

CIC Does not trust his subordinates....because he hates them!

There was no saber rattling at this year’s U.S. Naval Academy graduating ceremonies held at Annapolis, Maryland.

Never before in the history of Annapolis has the Commander in Chief required that naval officers in his presence be disarmed. The reason for no swords this year is that Obama hates the military and along with that hatred, the distrust for anyone that wears the uniform. Of course the media would make some lame excuse for Obama that it was an overreaction by the U.S. Secret Service. That of course is nonsense! The so called Secret Service has never reacted in like fashion with former CIC’s. One must never forget that no matter how much he sweet talks you with his Alinsky rhetoric, Obama is a narcissist, Marxist, racist who intends to destroy the United States of America. This is self-evident and if anyone believes anything less, I pity your ignorance!

Related Stories...

The U.S. Naval Academy: a weapons-free zone!

What The !#$%!!!! U.S. Naval Academy Graduates Ordered To Remove Swords For President Obama’s Speech

Ceremonial Swords Banned at US Naval Academy Graduation

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Torture... No Warnings! But Torture Non-The-Less!

To all you Obama loving Socialist, Marxist, Democrats who want to release the Abu Graib photographs and videos that would fall into the same category as college hazings of not too long ago here's the real scoop on torture... brought to you by the very people Obama has bended knee to! Islam!

WHAT IS TORTURE: ISLAM VS WEST

added by aqsaparvez

GM (Government Motors) To Offer Inexpensive Transportation

SOME ASSEMBLY IS REQUIRED

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If Looks Can Kill

From Right Truth (click on link for full story "Getting To Know You...and it ain't pretty")

Why do US women go abroad and immediately wrap their heads with a scarf or worse? Even Mrs. George W. Bush did the same thing, much to my dismay. Did Obama leave Michelle home from his Middle East trip because he did not want any pictures of her wearing the headscarf??? She skipped the Middle East and headed directly to Paris.

The Obamas were rude, refused an offer to dine with French President Sarkozy and his wife. Marcus Wilder sent me this image, (I do not know the original source so I have not given credit) saying "a picture is worth a thousand words." No kidding. If looks could kill....

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Do Not Pray For This Man's Success ...would you pray for Satan? - "Is it my imagination, or have we lost our minds?"

From the first time I heard about the bogeyman as a child to the first time I got shot at in Vietnam, NOTHING in my entire lifetime, has put more fear into me than this man Obama. - Norman E. Hooben - July 2008

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"Could it all be a bad dream, or a nightmare? Is it my imagination, or have we lost our minds? It's surreal; it's just not believable. A grand absurdity; a great deception; a delusion of momentous proportions, based on preposterous notions and on ideas whose time should never have come; simplicity grossly distorted and complicated; insanity passed off as logic; grandiose schemes built on falsehoods with the morality of Ponzi and Madoff; evil described as virtue; ignorance pawned off as wisdom; destruction and impoverishment in the name of humanitarianism; violence, the tool of change; preventive wars used as the road to peace; tolerance delivered by government guns; reactionary views in the guise of progress; an empire replacing the republic; slavery sold as liberty; excellence and virtue traded for mediocrity; socialism to save capitalism; a government out of control, unrestrained by the Constitution, the rule of law, or morality; bickering over petty politics as we collapse into chaos; the philosophy that destroys us is not even defined." - Congressman Ron Paul of Texas

I will stand with the United States Constitution should the political winds shift in an ugly direction. – Norman E. Hooben

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Advertise Here

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Is this an attempt to associate Obama with Satan? Yes we can!

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65th Anniversary of the landing at Obama Beach

Source: Amy Proctor

Gordon Brown's Fruedian Slip: Renaming Omaha Beach "Obama Beach"

Saturday, June 6, 2009 at 12:36PM

British Prime Minister Gordon Brown, embroiled in scandal at home and preoccupied with a certain celebrity President abroad, referred to Omaha Beach as Obama Beach in a ceremony commemorating the 65th anniversary of D-Day:

GORDON BROWN: “And so next to Obama beach, we join President Obama in paying particular tribute to the spectacular bravery of American soldiers who gave their lives in Omaha Beach…”

Read more here...

California Dreaming... aah, shouldn't that be, "California Dying"

Source: PoliGazette

Churchill, deTocqueville, Prejean, and the Suicide of California

By: Jason Arvak

Winston Churchill is reputed to have said that the best cure for democracy is five minutes with the average voter.

Boy was he right, at least if that voter is Californian.

In a remarkable act of fiscal suicide, California’s voters have used the state’s unusual direct democracy provisions to essentially close off all options for dealing with their looming fiscal crisis. The state government is disallowed from raising taxes, cutting spending, or using reserve funds. And President Obama has joined with the public employee unions to say double-no on spending cuts.

Observing a young American experiment in democracy, Alexis de Tocqueville observed that the greatest danger to democracy would arise when the mass of people realized they could vote themselves the benefit of the public treasury while refusing to pay for it. That seems to be exactly what is happening in California. With a strong majority of Democrats in the state legislature and bureaucracy, California has long been a profligate spender. Large and well-organized blocs of interest groups have succeeded in enacting one of the largest systems of entitlements outside of northern Europe. But a backlash cohort led by isolated fiscal conservatives succeeded in the 1980s in imposing requirements for a two-thirds majority in the legislature to authorize any tax increases.

Do the math: It requires only a majority to authorize spending increases, but a two-thirds majority to pay the bills. That is a recipe for disaster. Layer on the apparent stupidity of the median California voter (the pejorative descriptor “stupidity” being justified by the apparent fact that they cannot do the math), and we no have that recipe in the mixing bowl with the oven pre-heating.

For the last several weeks, liberals have been shouting that the stupidest thing to come out of California was Carrie Prejean. It seems a few of them need to look in a mirror for a better example. And some of the conservatives who have been singing the praises of Prejean’s genius need to somehow show themselves superior to beauty-queen-level logic when paying the state’s bills.

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Muslim Crashes Memorial for Pvt. William Long in Arkansas

Source: GOE

Burka Wearing Muzzie Freak Crashes Memorial for Pvt. William Long in Arkansas

Published: 06/07/2009 Posted On: June 7, 2009 at 8:45 AM By: Kathy

Video at: http://www.theodoresworld.net/ Arkansas organized a rally in rememberance of the first terrorist attack since 9/11. Pvt. William Long was killed and Pvt. Quinton I. Ezeagwula was wounded by Carlos Leon (aka Abdulhakim Mujahid Muhammad). Channel 11 was the only TV crew out there with a camera, and the AR Dem Gazette sent a reporter and a photographer. The event had several speakers who did a wonderful job. Video footage of them will be uploaded soon. However, the most shocking part of the event was when a muslim fanatic crashed the event. The fanatic drove by and yelled at us, then parked in the parking lot and stood out with a homemade sign yelling anti-American and later anti-Semetic comments. Had this been a ceremony for Tiller, this would have been the top story for both local and national media. Pvt. William Long, 23, of Conway, Arkansas Wild Thing's comment......... With all the pro Muslim BS from Obama there will be a lot more of this happening now. Obama has given Muslims the green light to do what they want. He even has his promise to protect the American Muslim that he and AG Eric Holder did. sheesh! ....Thank you Mark for sending this to me. Mark 3rd Mar.Div. 1st Battalion 9th Marine Regiment 1/9 Marines aka The Walking Dead VN 66-67

Newsweek Editor: Obama “Is Sort of God” ... Can it get any worse than this?

Thou Shalt Not Have Any Strange Gods Before Me

“And the Lord spoke all these words: I am the Lord thy God, who brought thee out of Egypt, out of the house of bondage. Thou shalt not have strange gods before me.
"Thou shalt not make to thyself a graven thing, nor the likeness of any thing that is in heaven above, or in the earth beneath, nor of those things that are in the waters under the sea.
"Thou shalt not adore them, nor serve them: I am the Lord thy God, mighty, jealous, visiting iniquity of the fathers upon the children, unto the third and fourth generation of them that hate me: and shewing mercy unto thousands to them that love me, and keep my commandments." (Exodus 20: 1-6)

Note to Obama: You got it all wrong. America is still a Christian Nation, it's the media, you, and your Cabinet who has gone to hell.


Strange gods do exist as evidenced by the following:
Source: Poli Gazette

Newsweek Editor:

Obama "Is Sort of God"

June 6th, 2009 By: Michael van der Galien

It’s utterly unbelievable, but it seems that Robert Fisk isn’t the biggest Obama worshipper in the (media) world. Here is what Newsweek editor Evan Thomas recently had to say about the 44th president of the United States:

Newsweek editor Evan Thomas brought adulation over President Obama’s Cairo speech to a whole new level on Friday, declaring on MSNBC: “I mean in a way Obama’s standing above the country, above – above the world, he’s sort of God.”

Sort of? What do you mean “sort of”? Just say what you mean: He’s God. “There is no God but Obama, and Robert Fisk and Evan Thomas are his prophets. Something like that.

As if that’s not enough: ... Read more here: http://www.poligazette.com/2009/06/06/newsweek-editor-obama-is-sort-of-god/

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Another "Oops"... Geithner must be having a contest with Biden

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The commentary accompanying the video was cross-posted from: The Conservative Xpress

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VIDEO: Oops! Geithner: Open To China "Global Currency" Plan; Then Retracts

Tim Geithner had another "Biden" moment today. When asked about China's proposal for a "global" currency, Geithner initially seemed open to the idea.

As usual when Geithner speaks, the dollar instantly plummeted.

Soon after, the moderator of his interview quickly asks a "leading question" prompting Geithner to "clarify" his position.

The dollar thankfully recovered.

Wonderboy. Whiz kid. When can we get rid of this guy?

Ben Smith reports on the gaffe:

Geithner, at the Council on Foreign Relations, said the U.S. is "open" to a headline-grabbing proposal by the governor of the China's central bank, which was widely reported as being a call for a new global currency to replace the dollar, but which Geithner described as more modest and "evolutionary."

"I haven’t read the governor’s proposal. He’s a very thoughtful, very careful distinguished central banker. I generally find him sensible on every issue," Geithner said, saying that however his interpretation of the proposal was to increase the use of International Monetary Fund's special drawing rights -- shares in the body held by its members -- not creating a new currency in the literal sense.

"We’re actually quite open to that suggestion – you should see it as rather evolutionary rather building on the current architecture rather than moving us to global monetary union," he said.

"The only thing concrete I saw was expanding the use of the [special drawing rights]," Geithner said. "Anything he’s thinking about deserves some consideration."

The continued use of the dollar as a reserve currency, he added, "depends..on how effective we are in the United States...at getting our fiscal system back to the point where people judge it as sustainable over time."

President Obama flatly rejected the notion of a new global currency at last night's press conference.

UPDATE: Evidently sensing a gaffe, moderator Roger Altman told Geithner that it would be "useful" to return to the question, and asked if he foresaw a change in the dollar's centrality.

"I do not," Geithner said, adding several forceful promises, including, "We will do what's necessary to say we're sustaining confidence in our financial markets."

But Geithner wasn't the only top Obama adviser who refused to rule out a transition to a global currency. White House economic adviser Austan Goolsbee said much the same thing yesterday afternoon in an interview with CNN's Wolf Blitzer. Although he characterized such a change as "unlikely," Goolsbee twice declined to rule out such a global currency despite being pressed by Blitzer. "I haven't seen the details of the proposal," Goolsbee said. The entire exchange follows:

BLITZER: The Chinese suggesting today, this dollar, U.S. dollar, should be replaced as international currency, because they are beginning to have concerns that you are printing, the U.S. government is simply printing too many of these dollars and will lose its value as an international currency.
What's your reaction?

GOOLSBEE: It strikes me as probably unlikely.

Different people have in the past argued for world currencies or new -- new currencies before. I believe the U.S. at this point is the safest place to invest in the world. And it's likely to remain that the dollar is a critical currency in the years ahead.

BLITZER: So, you -- you don't like some new international currency that some Chinese are proposing?

GOOLSBEE: Well, look...

BLITZER: I assume that's right, right?

GOOLSBEE: I haven't seen the details of what they are proposing.

I mean, the dollar is the dollar. If people don't want to buy it, they don't buy it. But I think you have seen sort of a flight to the dollar in -- in times of trouble.

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