ALL THE TRUTH FIT TO PRINT

Blindly We Go - Down The Path Of Socialism
by JR Dieckmann

When Samuel Joseph Wurzelbacher, commonly known as “Joe the plumber,” asked Barack Obama about his tax plan for small businesses, the Democrat candidate spilled the beans without even realizing what he had just said: “spread the wealth around.” These four words should be a political death sentence for any candidate running for office in America, a country built on capitalism and the rejection of European socialism.

As a result of his question, Wurzelbacher has been smeared, investigated, scrutinized, and disparaged by the Obama campaign and the left. Joe says this is dangerous when we can’t even ask a question of our elected officials. I too have a question for Obama: Where is all that $600 million in campaign money coming from? Obama won’t disclose it, and I suspect for good reason. There is just no way that that amount of money can all be from legal donations. Not even half.

Obama says his economic plan would increase taxes on any person or any small business making over $250,000/year. He also stated that 98% of small business would not be effected by the tax increase because they don’t make $250,000 in a year. And Obama says that John McCain is “out of touch?” It appears that Barack Obama knows very little about private businesses in America.

Full Article

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Barack Obama: BORN IN THE COAST PROVINCIAL GENERAL HOSPITAL AT MOMBASA, KENYA
Right Truth also see report on Anti-Mullah

Reports quote information that certified copies of a Kenyan Birth Certificate for Obama were sent from Kenya, and have been received by three separate individuals. And that these documents are certified, with an embossed seal, and display the name of the hospital where Obama was born, as well as witness signatures. It has been asserted by a number of sources, including Andy Martin, that Barack Hussein Obama was born in Mombasa, Kenya and not in Hawaii. If this report is confirmed, Obama will not be eligible for president.

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Glenn Beck joins Fox News
NY Times
Fox News has announced that conservative radio and television host Glenn Beck is joining the network, leaving behind CNN's Headline News. Beck will host a show at 5 p.m. on Fox beginning in the spring (Full release after the jump). Glenn Beck has signed a multi-year agreement to join FOX News, announced Roger Ailes, Chairman and Chief Executive Officer of FOX News. Glenn’s TV show will be moving to Fox News Channel, beginning early next year. In the mean time, Glenn’s show on CNN Headline News has come to an end. Glenn will begin making appearances on Fox News soon.

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Biden Tells Supporters: "Gird Your Loins," Obama viewed as Weak by World
ABC News
"Mark my words," the Democratic vice presidential nominee warned at the second of his two Seattle fundraisers Sunday. "It will not be six months before the world tests Barack Obama like they did John Kennedy. The world is looking... Watch, we're gonna have an international crisis, a generated crisis, to test the mettle of this guy... And he's gonna need help. And the kind of help he's gonna need is, he's gonna need you... we're gonna need you to use your influence, your influence within the community, to stand with him. Because it's not gonna be apparent initially, it's not gonna be apparent that we're right. There are gonna be a lot of you who want to go, 'Whoa, wait a minute, yo, whoa, whoa, I don't know about that decision'..." Editor's Note: See the comments under the story, you won't believe it. Remember, this is ABC's website.

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Obama’s Secret Campaign Cash: Has $63 Million Flowed from Foreign Sources?
Newsmax.com
As Barack Obama reaped a stunning $150 million in campaign donations in September, bringing his total to more than $600 million, new questions have arisen about the source of his amazing funding. By Obama’s own admission, more than half of his contributions have come from small donors giving $200 or less. But unlike John McCain’s campaign, Obama won’t release the names of these donors. A Newsmax canvass of disclosed Obama campaign donors shows worrisome anomalies, including outright violations of federal election laws.

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Interview with joe the Plumber by Neil Cavuto - Good video
The Lonely Conservative
Joe Wurzelbacher, the plumber who asked Barack Obama why he would raise his taxes, was interviewed earlier today by Neil Cavuto. Needless to say, Obama was not able to change the mind of the plumber who worked hard and saved his money in order to live his American dream. In case you haven’t heard, Obama replied that he needs to share the wealth. In twenty eight seconds we learned more about Barack Obama than the media’s told us in eighteen months. See the video interview on Fox News.

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Fox Toledo News airs Berg v. Obama story
ObamaCrimes.com
Philip J. Berg, a former University of Toledo law student, is suing Sen. Barack Obama, asking questions about the Democratic presidential nominee's citizenship. Berg doesn't believe he was born in the United States and if the Illinois senator is elected, it would cause a crisis within the U.S. Constitution. Obama's campaign contends he was born in Hawaii. FOX Toledo's Kristi Leigh investigates. New video. Obama still refuses to allow public disclosure of his birth cirtificate and school records. What do those records show that Obama is so determined to hide from the public? Is Obama a natural born citizen of the United States, or an illegal alien out to destroy American traditions?

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Honolulu lawsuit filed to open Obama's secret birth records
PR-inside.com
Honolulu lawsuit filed to open Obama's secret birth records Obama steadfastly refuses to allow access to official sources Andy Martin in Hawaii takes legal action to seek the truth and ferret out the facts about Barack Obama's family history. 'One of Obama's most controversial and contentious issues that he has allowed to fester for years is the question of his birth certificate,' says Martin. "Obama has posted at least two versions, maybe more, of a 'certificate' on the Internet. 'I want to see a certified copy issued by the State of Hawaii, not one issued by the State of Obama.

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Lawsuit in Washington State Questions Barack Obama's Citizenship, Eligibility to be President
America's Right
According to an article run yesterday by The Daily Herald in Everett, WA, a civil action was filed Tuesday in Washington State Superior Court against Sam Reed, Secretary of State for the State of Washington, demanding that Illinois Sen. Barack Obama be removed from the ballot in Washington unless he can provide verification of his status as a United States citizen. Steven Marquis, the Fall City, WA resident who filed the suit, asks that the Secretary of State's office verify, by looking at "original or certified verifiable official documents," that Obama is a natural-born citizen of the United States and eligible to serve as president, and that the office do so by Election Day.

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USSA - United Socialist States of America
USAwakeup.org
The complete rundown on Barack Hussein Obama in a flash video presentation. Really makes you wonder how someone with this background ever made it to the national political stage, let alone a candidate for president. This flash presentation says it all. We live in very dangerous times, and Obama is at the center of that danger. Please share this video with everyone you can and hope enough voters will be informed in time to stop this Marxism from taking over our country.

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Bush Plan to Buy Bank Stocks Should Face Constitutional Challenge
CNSNews
Former House Majority Leader Dick Armey (R-Texas) said that the Bush administration’s plan to buy $250 billion in stock in U.S. banks should be challenged in federal court as unconstitutional. “I think that it is subject to a serious constitutional challenge,” Armey said in a conference call with reporters on Tuesday. “It is very important that this challenge be made. We had challenges of this nature against Roosevelt. I think it is extremely healthy that we challenge this, and it should be challenged.”

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Wright 101
Obama funded extremist Afrocentrists who shared Rev. Wright’s anti-Americanism
By Stanley Kurtz
It looks like Jeremiah Wright was just the tip of the iceberg. Not only did Barack Obama savor Wright’s sermons, Obama gave legitimacy — and a whole lot of money — to education programs built around the same extremist anti-American ideology preached by Reverend Wright. And guess what? Bill Ayers is still palling around with the same bitterly anti-American Afrocentric ideologues that he and Obama were promoting a decade ago.

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Congressman's $121,000 Payoff to Alleged Mistress
Tim Mahoney Elected to Remove 'Ethical Cloud' of His Disgraced Predecessor, Mark Foley
ABC News
West Palm Beach Congressman Tim Mahoney (D-FL), whose predecessor resigned in the wake of a sex scandal, agreed to a $121,000 payment to a former mistress who worked on his staff and was threatening to sue him, according to current and former members of his staff who have been briefed on the settlement, which involved Mahoney and his campaign committee. Mahoney, who is married, also promised the woman, Patricia Allen, a $50,000 a year job for two years at the agency that handles his campaign advertising, the staffers said.

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New 8th Grade English Textbooks Now Contain 15 Page Section on Obama!
Gateway Pundit
This is getting really freaky. Dear Leader gets 15 page spread in 2008 children's textbooks. This isn't teaching, it's indoctrination! The hard Left is already pumping out massive Obama indoctrination material in 8th grade textbooks. No Hillary, No McCain, No Palin, No Bush... Just Obama!

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Russia Makes an Extraordinary Show of Missile Force
By Sergei Blagov
At the height of the Cold War, Nikita Khrushchev claimed that Soviet factories were turning out intercontinental strategic missiles "like sausages from an automatic machine, rocket after rocket.” Five decades later, amid uneasy relations between Russia and the West, Moscow has given an unprecedented demonstration of its strategic missile prowess. The weekend show of force was extraordinary even by Cold War standards.

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Obama's 95% Illusion
It depends on what the meaning of 'tax cut' is.
WSJ
One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today. It's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut."

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The coming liberal thugocracy
Michael Barone
"I need you to go out and talk to your friends and talk to your neighbors," Barack Obama told a crowd in Elko, Nev. "I want you to talk to them whether they are independent or whether they are Republican. I want you to argue with them and get in their face." Actually, Obama supporters are doing a lot more than getting into people's faces. They seem determined to shut people up. That's what Obama supporters, alerted by campaign e-mails, did when conservative Stanley Kurtz appeared on Milt Rosenberg's WGN radio program in Chicago.

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America's Second Wake-Up Call!
By INVESTOR'S BUSINESS DAILY
History is important to study... if you can trust the national media to not withhold key information they don't want you to see or twist daily news to fit their agenda. In the last 40 years, there have been nine major surveys of editors and reporters who work for national media. The most they ever voted Republican in a national election was 14%; the more common range has been 4% to 7%. This is one reason why no matter who wins a political debate, the media almost en masse repeatedly tell you their man won. And most voters who don't pay close attention will believe them. It's called coordinated propaganda.

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The End Of American Capitalism?
Washington Post
The worst financial crisis since the Great Depression is claiming another casualty: American-style capitalism. Since the 1930s, U.S. banks were the flagships of American economic might, and emulation by other nations of the fiercely free-market financial system in the United States was expected and encouraged. But the market turmoil that is draining the nation's wealth and has upended Wall Street now threatens to put the banks at the heart of the U.S. financial system at least partly in the hands of the government.

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$53 Trillion Shortfall: ‘No One Will Bail Out America'
CNSNews.com
The United States faces a $53 trillion shortfall in the funds needed to cover promised entitlements, including Medicare and Social Security benefits, and neither Congress nor the presidential candidates are doing anything about it, former Comptroller General David Walker warned this week. “We need leadership, not lag-ship,” Walker said. “No one is going to bail out America.”

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You're under arrest for saying 'Hussein Obama!'
by Bobby Eberle
We have seen many changes in this great nation which have been brought about by left wing activists. Now, we can't even say what we want to say in public because not only will the thought police be on patrol, but, using a recent event in Florida as an example, saying "Hussein Obama" in public might just get you a visit from the FBI. Just ask Florida's Lee County Sheriff Mike Scott who is under fire -- and investigation -- for referring to Obama at a campaign rally by his -- gasp -- full name. What is going on with America?

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As I Suspected From Day One

Qadhafi admits to the money here:http://normanhooben.blogspot.com/2008/06/muslim-by-any-other-name-is-still.html Obama's Secret Campaign Cash! Obama's Secret Campaign Cash Has $63 Million From Foreign Sources

Sunday, October 19, 2008 6:28 PM By: Kenneth R. Timmerman

As Barack Obama reaped a stunning $150 million in campaign donations in September, bringing his total to more than $600 million, new questions have arisen about the source of his amazing funding. By Obama’s own admission, more than half of his contributions have come from small donors giving $200 or less. But unlike John McCain’s campaign, Obama won’t release the names of these donors. A Newsmax canvass of disclosed Obama campaign donors shows worrisome anomalies, including outright violations of federal election laws. For example, Obama has numerous donors who have contributed well over the $4,600 federal election limit. Many of these donors have never been contacted by the Obama campaign to refund the excess amounts to them. And more than 37,000 Obama donations appear to be conversions of foreign currency. According to a Newsmax analysis of the Obama campaign data before the latest figures were released, potential foreign currency donations could range anywhere from $12.8 million to a stunning $63 million in all. With the addition of $150 million raised in September, this amount could be much more. When asked by Newsmax about excess contributions, Obama spokesman Ben LaBolt said that contributions already identified as excess had been returned and that those the campaign was just learning about -- either through news accounts or from the Federal Election Commission -- “will be returned.” “Every campaign faces the challenge of screening and reviewing its contributions,” LaBolt said. “And we have been aggressive about taking every available step to make sure our contributions are appropriate, updating our systems when necessary.” But many of the donors Newsmax canvassed said they had “never” been contacted by the Obama campaign or seen any refunds, even though their contributions went over the limit months ago. In all, Newsmax found more than 2,000 donors who had contributed in excess of the $4,600 limit for individuals per election cycle. Such donations, if not returned within 60 days, are a clear violation of federal campaign finance laws. Lisa Handley, a stay-at-home mom from Portland, Ore., recalled giving $4,600 to the Obama campaign by credit card, contributions she made because “I love Obama,” she said. According to FEC records, however, she gave an additional $2,300 to the campaign, putting her over the limit. The Obama campaign reported that it had “redesignated” the excess money, which could mean that it had contributed it to a separate party committee or a joint fundraising committee, which have higher limits. But if that happened, it’s news to Handley. “No one ever contacted me to return any of the money or told me they were redesignating some of the money,” she said. Ronald J. Sharpe Jr., a retired teacher from Rockledge, Fla., appears in the Obama campaign reports as having given a whopping $13,800. The campaign reported that it returned $4,600 to him, making his net contribution of $9,200 still way over the legal limit. But there’s one problem with the Obama data: Sharpe doesn’t remember giving that much money to the Obama campaign in the first place, nor does he recall anyone from the campaign ever contacting him to return money. “At the end, I was making monthly payments,” he told Newsmax. The Obama campaign records do not show any such payments. Many donors refused to answer questions about the political campaign contributions appearing in their name when they learned that the caller was from a news organization. John Atkinson, an insurance agent in Burr Ridge, Ill., refused to discuss his contributions, which totaled $8,724.26, before numerous refunds. Atkinson and others gave in odd amounts: $188.67, $1,542.06, $876.09, $388.67, $282.20, $195.66, $118.15, and one rounded contribution of $2,300. Sandra Daneshinia, a self-employed caregiver from Los Angeles, made 36 separate contributions, totaling $7,051.12, according to FEC records. Thirteen of them were eventually refunded. In a bizarre coincidence, those 13 refunded contributions -- for varying amounts such as $223.88 and $201.44 -- added up exactly to $2,300, the amount an individual may give per federal election. Also giving in odd amounts was Robert Porter, an accountant for the town of Oviedo, Fla. Porter gave a surprising $4,786.02 to the Obama campaign. In all, Newsmax found an astonishing 37,265 unique donors to the Obama campaign whose contributions were not rounded up to dollar amounts. That amounts to more than 10 percent of the total number of unique donors whose names have been disclosed by the Obama campaign to the public. Of those, 44,410 contributions came in unrounded amounts of less than $100. FEC regulations only require that campaigns disclose the names of donors who have given a total of $200 or more, so that means that all these contributors were repeat donors. Another 15,269 contributions gave in unrounded amounts between $101 and $999, while 704 of the unrounded contributions were in amounts of more than $1,000. Campaign finance experts find the frequent appearance of unrounded contributions suspicious, since contributors almost invariably give in whole dollar amounts. One expert in campaign finance irregularities offers a possible explanation. “Of course this is odd. They are obviously converting from local currency to U.S. dollars,” said Ken Boehm, the chairman of the National Legal and Policy Center. “The overwhelming number of large dollar contributors -- and even small donors -- are in even dollar amounts,” he told Newsmax. “Anyone who doubts that can go to FEC.gov and look through the campaign contribution data bases. You will not find many uneven numbers.” Boehm said he had rarely seen unrounded contributions in his 30 years as a lawyer doing campaign finance work. “There’s always the odd cat who wants to round up his checkbook, but they are very rare,” he said. Richard E. Hug, a veteran Republican fundraiser in Maryland who who raised hundreds of thousands of dollars for George W. Bush in 2000 and 2004, and spearheaded the successful 2002 gubernatorial race for Bob Ehrlich that brought in a record $10 million, told Newsmax that unrounded contributions were extremely unusual. “I’ve never seen this in all my years of raising money for political candidates,” he said. “The first thing it suggests is foreign currency transactions -- contributions from foreign donors, which is clearly illegal.” Top Republican fundraiser Steve Gordon, who has raised $65 million for GOP candidates over the past 30 years, told Newsmax that such contributions in uneven amounts would be “pretty unusual.” “You might have a rounding process if there was some kind of joint event, but since all appears to be on the Internet, it’s pretty unusual. At the very least, it would need to be explored.” LaBolt attributed the uneven amounts to the online “Obama store,” which sells T-shirts and other campaign items. “Contributions made to the Obama store often produce totals that are not exact dollar amounts,” he said. But the campaign has never produced any accounting for proceeds from its online store, which virtually shut down several weeks ago after Newsmax and news organizations revealed that Palestinians from the Gaza Strip and other foreigners had made large purchases there. The Republican National Committee has filed a complaint against the Obama campaign for “accepting prohibited contributions from foreign nationals and excessive contributions from individuals,” which incorporated reporting from Newsmax and other news organizations. “Their responses to FEC inquiries have often been inadequate and late,” RNC general counsel Sean Cairncross told Newsmax. The Obama camp claims to have 2.5 million donors in all. But until now, they have kept secret the names of the overwhelming majority of these money-givers. According to a Newsmax analysis, the Obama campaign finance records contain just 370,448 unique names. Even accounting for common names such as Robert Taylor or Michael Brown, which can signify multiple donors, Obama’s publicly known donor base is less than 20 percent of the total number of donors the campaign claims to have attracted. But the identity of the other 2 million donors is being kept secret. As of the end of August, those secret donors have given an incredible $222.7 million to Obama, according to the FEC -- money whose origin remains unknown to anyone other than Obama’s finance team, who won’t take calls from the press. While no exact figures are available, if the same percentage of potential foreign contributions found in the itemized contribution data is applied to the total $426.9 million the Obama camp says it has taken in from individuals, this could mean that Obama is financing his presidential campaign with anywhere from $13 million to a whopping $63 million from overseas credit cards or foreign currency purchases. The sum of all un-rounded contributions in the itemized FEC filings for the Obama campaigns comes to $6,437,066.07. That is the actual amount of money that appears to have been charged to foreign credit cards that the Obama campaign has disclosed. If the same ratio applies to the un-itemized contributions, which are again as large, then the Obama campaign may have taken as much as $13 million from foreign donors. However, the donors who made those un-rounded contributions gave a total of $31,484,584.27, meaning that as much as $63 million may have come from questionable sources. Both presidential campaigns are required to submit detailed fundraising reports for September on Monday. © 2008 Newsmax. All rights reserved.

"Hope won't fill your gas tank when all you have is change."

Ready for change?

"Hope won't fill your gas tank when all you have is change."

Not Everybody Can Work At Wal-Mart - A quick overview of the candidate's tax plan.

"Whatcha think?"

Do Facts Matter?

Cross posted from: http://townhall.com/columnists/ThomasSowell/2008/10/03/do_facts_matter?page=full&comments=true

Do Facts Matter?

by Thomas Sowell

Abraham Lincoln said, "You can fool all the people some of the time and some of the people all the time, but you can't fool all the people all the time." Unfortunately, the future of this country, as well as the fate of the Western world, depends on how many people can be fooled on election day, just a few weeks from now. Right now, the polls indicate that a whole lot of the people are being fooled a whole lot of the time. The current financial bailout crisis has propelled Barack Obama back into a substantial lead over John McCain-- which is astonishing in view of which man and which party has had the most to do with bringing on this crisis. It raises the question: Do facts matter? Or is Obama's rhetoric and the media's spin enough to make facts irrelevant? Fact Number One: It was liberal Democrats, led by Senator Christopher Dodd and Congressman Barney Frank, who for years-- including the present year-- denied that Fannie Mae and Freddie Mac were taking big risks that could lead to a financial crisis. It was Senator Dodd, Congressman Frank and other liberal Democrats who for years refused requests from the Bush administration to set up an agency to regulate Fannie Mae and Freddie Mac. It was liberal Democrats, again led by Dodd and Frank, who for years pushed for Fannie Mae and Freddie Mac to go even further in promoting subprime mortgage loans, which are at the heart of today's financial crisis. Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush's Secretary of the Treasury, five years ago. Yet, today, what are we hearing? That it was the Bush administration "right-wing ideology" of "de-regulation" that set the stage for the financial crisis. Do facts matter? We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn't. Is that the free market? Or do facts not matter? Then there is the question of being against the "greed" of CEOs and for "the people." Franklin Raines made $90 million while he was head of Fannie Mae and mismanaging that institution into crisis. Who in Congress defended Franklin Raines? Liberal Democrats, including Maxine Waters and the Congressional Black Caucus, at least one of whom referred to the "lynching" of Raines, as if it was racist to hold him to the same standard as white CEOs. Even after he was deposed as head of Fannie Mae, Franklin Raines was consulted this year by the Obama campaign for his advice on housing! The Washington Post criticized the McCain campaign for calling Raines an adviser to Obama, even though that fact was reported in the Washington Post itself on July 16th. The technicality and the spin here is that Raines is not officially listed as an adviser. But someone who advises is an adviser, whether or not his name appears on a letterhead. The tie between Barack Obama and Franklin Raines is not all one-way. Obama has been the second-largest recipient of Fannie Mae's financial contributions, right after Senator Christopher Dodd. But ties between Obama and Raines? Not if you read the mainstream media. Facts don't matter much politically if they are not reported. The media alone are not alone in keeping the facts from the public. Republicans, for reasons unknown, don't seem to know what it is to counter-attack. They deserve to lose. But the country does not deserve to be put in the hands of a glib and cocky know-it-all, who has accomplished absolutely nothing beyond the advancement of his own career with rhetoric, and who has for years allied himself with a succession of people who have openly expressed their hatred of America.

Total Collapse - To all ye ole nay sayers. Do you hear me now? "...before next summer 2009, the US government will default ..."

"...the period that will then begin should be conducive to the setting up of a « new Dollar » to remedy the problem of default and of induced massive capital drain from the US."

Do I hear AMERO? Wake up you fools! This is the planned and blantantly orchestrated collaspe of our monetary system by Bill Clinton, Jimmy Carter, and all the New World Order...TRAITORS! The United Nations is laughing all the way to the bank! "We gotcha!" , they're saying.

GEAB N°28 is available! Global systemic crisis Alert - Summer 2009:

The US government defaults on its debt

- Public announcement GEAB N°28 (October 16, 2008) -

In this 28th edition of the GEAB, LEAP/E2020 has decided to launch a new global systemic crisis alert. Indeed our researchers anticipate that, before next summer 2009, the US government will default and be prevented to pay back its creditors (holders of US Treasury Bonds, of Fanny May and Freddy Mac shares, etc.). Of course such a bankruptcy will provoke some very negative outcome for all USD-denominated asset holders. According to our team, the period that will then begin should be conducive to the setting up of a « new Dollar » to remedy the problem of default and of induced massive capital drain from the US. The process will result from the following five factors studied in detail further in this GEAB:

• The recent upward trend of the US Dollar is a direct and temporary consequence of the collapse of stock markets

• Thanks to its recent « political baptism », the Euro becomes a credible « safe haven » value and therefore provides a « crisis » alternative to the US dollar

• The US public debt is now swelling uncontrollably

• The ongoing collapse of US real economy prevents from finding an alternative solution to the country's defaulting

• « Strong inflation or hyper-inflation in the US in 2009? », that is the only question.

Studying the case of Iceland can give an idea of the upcoming stages of the crisis. That is what our team has been doing ever since the beginning of 2006. This country indeed provides a good illustration of what the US and the UK should be expecting. It can be considered – and that is what most Icelandic people do today – that the collapse of Iceland's financial system came from the fact that it was disproportionate to the size of the country's economy.

Inflation in Iceland - 2003-2008 - Source Central Bank of Iceland

Financially speaking, Iceland thought of itself as UK (1), in the same way as, financially speaking, UK thought of itself as the US and the US thought of themselves as the entire world. It is therefore quite useful to study the case of Iceland (2) in order to understand the course of events that London and Washington will follow in the next 12 months (3).

What we see today is a double historical phenomenon:

. on the one hand, since September 2008 (as anticipated in the February 2008 edition of the GEAB - N°22), the whole planet has become aware that a global systemic crisis is unfolding, characterised by the collapse of the US financial system and its contagion to the rest of the world.

. on the other hand, a growing number of global players are beginning to act on their own, in reaction to the ineffectiveness of the measures advocated or implemented by the US though they are the centre of this global financial system. What happened with this first Euroland (or Eurozone summit which took place on Sunday, October 12, 2008, and whose decisions, by their scope (close to 1,700-billion EUR) and their nature (4), resulted in a regain of confidence on financial markets from all over the world, is typical of the « post-September 2008 world ».

Map of deposit insurances in the EU - Source AFP - 10/09/2008

Indeed there is such a thing as a « post-September 2008 world ». According to our team, it is now clear that this past month will remain in the history books of the whole planet as the month when the global systemic crisis started; even if what is really at play is its decanting phase, the last of a series of four phases of the crisis described by LEAP/E2020 as early as June 2006 (5). As always when it comes to large human groups, the perception of change among the general public only occurs when change is already far on its way.

As a matter of fact, September 2008 is the month when the « financial detonator » of the global systemic crisis exploded. According to LEAP/E2020 indeed, this second semester 2008 is the time when « the world dives into the heart of the impact phase of the global systemic crisis » (6); which means for our researchers that, at the end of this semester, the world enters the « decanting phase » of the crisis, i.e. a phase when the outcome of the shock settles down. This phase is the longest (from 3 to 10 years, according to the country) and the one affecting the largest number of people and countries. It is also the phase when the components of new global equilibriums will start to appear, two of them being already described by LEAP/E2020 in this 28th edition of the GEAB in the graphic illustrations below (7).

Therefore, as we repeated it on and on since 2006, this crisis is far more important, in terms of impact and outcome, than the 1929 crisis. Historically, we are the very first players, witnesses and/or victims of a crisis affecting the whole planet, in a situation of unprecedented interdependence of countries (resulting from twenty years of globalisation) and people (the level of urbanization - and related dependence for all the basic needs – water, food, energy… - is also unprecedented). However, the 1929 experience and all its dreadful outcome, is still vivid enough in our collective memories to hope, if citizens are vigilant and leaders clear-sighted, that we will be spared from a « remake » leading to major conflagration(s).

Europe, Russia, China, Japan,... are certainly the collective players who can make sure that the unfolding implosion of today’s world power, i.e. the United States, does not drive the planet into a disaster. Indeed, except for Gorbachev’s USSR, empires have a tendency to strive in vain to reverse the course of History when they realize their might is escaping them. It then belongs to partner-powers to channel the process peacefully, as well as it belongs to the citizens and rulers of the concerned country to be clear-sighted and face the difficult times they are about to cross.

Total borrowings of US Depository Institutions from the US Federal Reserve (01/08/1986 – 10/09/2008) - Source Federal Reserve Bank of St Louis

The « emergency repair » of international financial channels, achieved by the countries of the Eurozone at the beginning of this month of October 2008 (8), should not hide three fundamental facts:

• The “repair” was necessary to curb the panic that threatened to squander the entire global financial system in just a few weeks, but what it heals temporarily is merely a symptom. It has just bought a bit of time, two to three months maximum, as the global recession and the collapse of the US economy (the table above shows the staggering increase of US banks’ borrowings from the Fed) will speed up and create new tensions in the economic, social and political fields, that must be anticipated and coped with as soon as next month (as soon as the “financial packages” have been implemented)

• The huge financial means allocated worldwide for « emergency rescues » of the global financial system, though they were necessary to put back in order the system of credit, are lost for the real economy when it is on the verge of facing a global recession

• The « emergency repair » results in further marginalization, and therefore weakening, for the United States, because it sets up processes that are contrary to those advocated by Washington for the allocation of the Hank Paulson’s and Ben Bernanke’s 700-billion USD TARP: bank recapitalisation by governments (a decision Hank Paulson has now come to follow) and interbank loan guarantees (in fact Euroland governments substitute to credit insurers, a mostly American industry at the centre of global finance since decades). These trends turn more and more decision-making relays and financial flows away from the United-States when because of the explosion of their public (9) and private debt they need them more than ever; not to mention pensions going up in smoke (10).

The last aspect shows how, in the coming months, solutions to the crisis and to its various sequences (financial, economic, social and political) will increasingly diverge: what is good for the rest of the world will not be good for the United States (11), and now, Euroland in the first place, the rest of the world seems determined to make its own choices.

The sudden shock that will result from the US defaulting in summer 2009 is partly due to this decoupling of decision-making processes of the world’s largest economies with regard to the US. It is predictable and can be dampened if global players start to anticipate it. As a matter of fact, it is one of the topics developed in this 28th edition of the GEAB: LEAP/E2020 hopes that the September shock has “educated” the world’s political, economic and financial policy-makers and made them understand that it is easier to act by anticipation than in a panic. It would be a pity if Euroland, Asia and oil-producing countries, as well as US citizens of course, discover one morning of summer 2009 that, after a long-week-end or bank-holiday in the US, their US T-Bonds and Dollars are only worth 10 percent of their value because a « new Dollar » has just been imposed (12).

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Notes:

(1) Iceland adopted 10 years ago all the principles of economic deregulation and « financieration » advocated and implemented in the US and UK. Reykjavik thus became some sort of a financial « Mini-Me » of London and Washington, in reference to the very Americano-British movie character Austin Powers. The three countries undertook to play the financial game of « the frog that wished to be as big as the ox », in reference to a fable by Jean de la Fontaine with a very unhappy end for the frog.

(2) Icelandic stocks collapsed 76 percent after a few days suspension designed to « avoid » a panic! Source: MarketWatch, 10/14/2008

(3) On this subject, let's spend a few lines on the amount of the “financial package” announced by London, i.e. 640-billion EUR including 64-billion EUR to recapitalize banks and a further 320-billion EUR pay back those same banks’ debt (source: Financial Times, 10/09/2008). With an economy in freefall to the image of the real-estate market, with a soaring inflation, with capital-based pensions going up in smoke and a currency at the lowest,… apart from increasing the public debt and weakening even more the Sterling pound, it is difficult to imagine how the plan can « rescue » British banks. Contrary to Eurozone banks, the British financial system, exactly like its US counterpart, is at the centre of the crisis, not a collateral victim. Gordon Brown may well compare himself to Churchill and Roosevelt together (Source: Telegraph, 10/14/2008), in his ignorance of History, he seems to forget that neither Churchill nor Roosevelt had already spent 10 years in their country's governments when each of them had to cope with their « big crisis » (that goes for the US and the Bush administration – Paulson and Bernanke included - who all come from the problem and are certainly not part of the solution). Not to mention the fact that Churchill and Roosevelt organised summits such as Yalta or Tehran leaving the French and the Germans waiting at the door, while today it is him who waits at the door of the Euroland summit.

(4) Source: L'Express, 10/13/2008

(5) Source: GEAB N°5, May 15, 2006

(6) Source: GEAB N°26, June 15, 2008

(7) LEAP/E2020 made a synthesis of its anticipations on the decanting phase of the crisis by means of a world map of the impact of the crisis based on the identification of 6 large groups of countries; and of an anticipatory schedule of the 4 financial, economic, social and political sequences over 2008-2013 for each of these regions.

(8) It is indeed the Eurozone which curbed the spiral of global panic. For weeks, the US and British initiatives followed one another without any effect. The eruption of a new collective player, the « Euroland summit », and the wide-ranging decisions it made, are a new and soothing phenomenon. It is for this very reason that Washington and London have systematically prevented such a summit from taking place ever since the Euro was launched, 6 years ago. A complete set of diplomatic gesticulation was required (preliminary meeting, pre-summit group photo,…) to make the British Prime Minister believe he was not set aside the process, when in fact there is no reason why he should take part in a Euroland Summit. In this edition of the GEAB, LEAP/E202020 comes back on the phenomenon and the long-term systemic consequences of this 1st Euroland Summit.

(9) The US financial rescue plan has already increased by 17,000 USD the debt owned by each US citizen. Source: CommodityOnline, 10/06/2008

(10) It is indeed 2,000-billion USD of capital-based pensions which evaporated in the past few weeks in the US. Source: USAToday, 10/08/2008

(11) At least in the short-term. Indeed our team is convinced that it is not bad at all for the American people in the medium- and long-term if the system currently prevailing in Washington and New-York is fundamentally reappraised. This system has thrust the country into dramatic problems among which dozens of millions of US citizens now struggle, as illustrated in this article by the New York Times dated 10/11/2008.

(12) Even if it will be a minor-scale measure compared to the prospect of a US bankruptcy, those who think that it is time to invest again on financial markets may find useful to learn that the New York Stock Exchange has recently reviewed all its circuit-breaker thresholds as a result of ratings collapse. Source : NYSE/Euronext, 09/30/2008

Jeudi 16 Octobre 2008

In the same category:

Global systemic crisis – End of 2008: Pension funds go off the rails - 06/10/2008

The decisive six months to avoid a global recession: Five strategic advices for central banks, governments and other regulatory authorities - 30/09/2008

LEAP/2020: Global systemic crisis September 2008 - Special announcement - 24/09/2008

SEQUENCE 6 - 'Very Great Depression' in the US, social unrest and army's growing influence on public affairs (2nd quarter 2007 – 4th quarter 2009) - 24/08/2008

Traffic Info LEAP/E2020 - May 2008 - 12/05/2008

Special offer! Each new subscriber gets Special Edition 'GEAB/SUBPRIME CRISIS: Causes, development, consequences and strategic advice'... because an in-depth understanding is required to secure oneself - 12/08/2007

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