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U.S. Treasury Secretary Admits U.S. Default is Imminent

January 24, 2011 Comments off

By James West

Timothy Geithner, U.S. Treasury Secretary, admitted in a letter to congress dated January 6th, that the United States Treasury would be forced to default on its credit obligations without clearance from congress to raise the amount of money tha the treasury is allowed to borrow.

After citing a list of “extraordinary measures” congress has had to resort to int he past to avoid entering a state of defualt, Geithner stated, “Once these steps have been taken, no remaining legal and prudent measures would be available to create additional headroom under the debt limit, and the United States would begin to default on its obligations. The extraordinary measures include, “suspending sales of State and Local Government Series (SLGS) Treasury securities; suspending reinvestment of the Government Securities Investment Fund (G-Fund); suspending reinvestment of the Exchange Stabilization Fund (ESF); and determining that a “debt issuance suspension period” exists, permitting redemption of existing, and suspension of new, investments of the Civil Service Retirement and Disability Fund (CSRDF).

That the United States has already defaulted on its obligations is beyond dispute, at this point, as its the rate at which its debt service obligations is growing exceeds the rate at which the United States GDP could possibly grow, meaning that, without drastic cuts to governmenbt spending, the debt can only continue to grow.

Before our very eyes, the so-called leadership of the world’s largest economy is intentionally bankrupting the country and devaluing its currency in what can only be a precursor to rampant inflation. Since the integrity necessary to manage this problem does not exist within the United States political system, the rest of the world has no choice but to stand by and watch the value of their United States Treasury Bills diminish incrementally on a daily basis. Selling them will only exacerbate the problem, but the question must be asked, how long until the remedy is preferred over the miserable condition?

Geithner goes on to say, in a remarkable baring of the national soul,

However, if Congress were to fail to act, the specific consequences would be as follows:

The Treasury would be forced to default on legal obligations of the United States, causing catastrophic damage to the economy, potentially much more harmful than the effects of the financial crisis of 2008 and 2009. Read more…

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Fed chief expects high unemployment, economic growth in 2011

January 24, 2011 Comments off

Vicki Needham

Unemployment will remain high, the nation’s economy could expand by 4 percent and interest rates may need go up, Federal Reserve Bank of Philadelphia President Charles Plosser said Monday.

“If economic growth in the United States continues to gain traction and the prospects begin to look ever better, it might be time for us to begin thinking about how do we begin to gradually take our foot off the accelerator,” Plosser told reporters after a speech at the Central Bank of Chile in Santiago, according to news reports.

Plosser said he may favor a rate increase if economic growth necessitates a change.

“It might. I’m not going to rule that out,” he said.

The central bank has said that it plans to keep short-term interest rates low for an “extended period.”

During Monday’s speech, Plosser also predicted that the U.S. could grow between 3 percent and 4 percent this year.

The Fed’s plan to purchase $600 billion in government debt will probably continue through June while the nation’s 15 million unemployed look for work, although Plosser didn’t rule out pulling the stimulus funds back earlier.

“It could end earlier if economic conditions call for it, but right now I’m not sure that that’s the most likely outcome,” he told reporters. “It obviously creates challenges for some countries because of appreciating currencies. But I think that will pass. Those are short-run issues.”

Plosser has expressed concern about whether the Fed’s quantitative easing, also known as QE2, will spur economic growth while lowering the jobless rate that has remained above 9 percent for 20 months.

“Monetary policy is not going to be able to speed up the adjustments in labor markets or prevent asset bubbles, and attempts to do so may create more instability, not less,” he said.

“Expecting too much of monetary policy will undermine its ability to achieve the one thing that it is well-designed to do — ensuring long-term price stability.”

QE2 has brought harsh criticism from some lawmakers on Capitol Hill who argue that the plan could devalue the dollar and cause inflation.

China’s coming fall

January 24, 2011 Comments off

Like the Soviet Union before it, much of China’s supposed boom is illusory — and just as likely to come crashing down

In 1975, while I was in Siberia on a two-month trip through the U.S.S.R., the illusion of the Soviet Union’s rise became self-evident. In the major cities, the downtowns seemed modern, comparable to what you might see in a North American city. But a 20-minute walk from the centre of downtown revealed another world — people filling water buckets at communal pumps at street corners. The U.S.S.R. could put a man in space and dazzle the world with scores of other accomplishments yet it could not satisfy the basic needs of its citizens. That economic system, though it would largely fool the West until its final collapse 15 years later, was bankrupt, and obviously so to anyone who saw the contradictions in Soviet society.

The Chinese economy today parallels that of the latter-day Soviet Union — immense accomplishments co-existing with immense failures. In some ways, China’s stability today is more precarious than was the Soviet Union’s before its fall. China’s poor are poorer than the Soviet Union’s poor, and they are much more numerous — about one billion in a country of 1.3 billion. Moreover, in the Soviet Union there was no sizeable middle class — just about everyone was poor and shared in the same hardships, avoiding resentments that might otherwise have arisen.

In China, the resentments are palpable. Many of the 300 million people who have risen out of poverty flaunt their new wealth, often egregiously so. This is especially so with the new class of rich, all but non-existent just a few years ago, which now includes some 500,000 millionaires and 200 billionaires. Worse, the gap between rich and poor has been increasing. Ominously, the bottom billion views as illegitimate the wealth of the top 300 million. Read more…

Categories: China Tags: , , , , ,

Australian ‘inland sea’ flood threatens towns

January 24, 2011 Comments off

MELBOURNE — Australia’s flood crisis deepened Saturday with a giant “inland sea” threatening more communities in the southeast, as officials continued the grim search for bodies in worst-hit Queensland.

Sandbagging was underway in some villages in Victoria, where weeks of floods have affected as much as one-third of the state, with swollen rivers overflowing in 75 towns and flooding some 1,770 properties.

“We know that this is the most significant flooding in the north west of Victoria since records began… about 130 years ago,” a spokeswoman for the State Emergency Service told AFP.

“We are still on alert for towns in the north of the state.”

Floodwaters which national broadcaster ABC described as a moving “inland sea” covering an area 90 kilometres (56 miles) long and 40 kilometres wide, were threatening towns around Swan Hill, some 300 kilometres northwest of Melbourne.

“In the actual Swan Hill township itself, we are very confident that the levee system around the town is built to a very high grade and will protect the township,” Mayor Greg Cruickshank told ABC radio.

But rural and outlying areas “will have significant amount of inundation through them,” he said.

While thousands of people around the state have been urged to evacuate, emergency services warned that those people who choose to remain on their properties in the rural areas could be stranded by the floods.

“A number of these communities will be isolated for days as this huge amount of floodwater comes through,” SES spokesman Kevin Monk said. Read more…

Einstein Gives Humans 4 years After Bee extinctions

January 24, 2011 1 comment

Reuters (Nov 25, 2008) – LONDON – Where in the United States, fruit farmers pay to have bees trucked thousands of miles to pollinate their crops and in parts of China, humans with feather dusters have taken on the task, in Britain most bees go nature’s way… “We are extremely aware of the enormous threat there is to honey bees and the huge reduction in population,” said Adrian Barlow, chief executive of trade group English Apples and Pears. “It is something we are very concerned about.”
www.reuters.com

Albert Einstein said if the honey bees were suddenly gone mankind would have about 4 years left to live. Well, the honey bees are going extinct now and at the present rate in another year or so there will be no more honey bees left on earth. One year from now plus another 4 years gives us the year… Read more…

Powdermill researchers to study ‘alarming’ decline of bees

January 24, 2011 Comments off

By Rick Wills

As four previously abundant bumblebee species near extinction in the United States, it is becoming clear how little is known about native bees — which experts say often are more efficient at pollinating some crops than honeybees.

The Powdermill Nature Reserve in Westmoreland County, part of the Carnegie Museum of Natural History, plans to take a hard look at native bees.

“There are 20,000 species of bees in the world, and we know almost nothing about native pollinators,” said John Wenzel, director of the Center for Biodiversity and Ecosystem Management, the second of five Powdermill centers that opened recently. “We have only scratched the surface.”

A Penn State study released last month confirmed agriculturally important bumblebees are not just disappearing here but worldwide. Researchers called the findings “alarming.”

“The disappearance of these species happened very quickly, and no one really knows why,” Wenzell said.

The study found that native pollinators, like wild bees and wasps, are infected by the same viral diseases as honeybees and that these viruses are transmitted via pollen. Read more…

Obama Signs New Executive Order; Congress Officially Irrelevant

January 24, 2011 Comments off

Are you ready kids?  (Whenever I say this to the RedLemur, he knows it’s gonna be bad…)

Barry Soetoro, current resident of the White House, has signed an Executive Order directing federal agencies to review regulations and produce a plan for changes to the current regulations based on the best science available.

Bye-bye Congress.

(All emphasis from this point on is the editor’s and is meant to highlight portions that require reading!!!)

The White House Office of the Press Secretary

For Immediate Release
January 18, 2011

Improving Regulation and Regulatory Review – Executive Order

By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to improve regulation and regulatory review, it is hereby ordered as follows:

Section 1.  General Principles of Regulation.  (a)  Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation.  It must be based on the best available science. It must allow for public participation and an open exchange of ideas.  It must promote predictability and reduce uncertainty.  It must identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends.  It must take into account benefits and costs, both quantitative and qualitative.  It must ensure that regulations are accessible, consistent, written in plain language, and easy to understand.  It must measure, and seek to improve, the actual results of regulatory requirements.

(b)  This order is supplemental to and reaffirms the principles, structures, and definitions governing contemporary regulatory review that were established in Executive Order 12866 of September 30, 1993.  As stated in that Executive Order and to the extent permitted by law, each agency must, among other things:  (1) propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, Read more…

Categories: GOVERNMENT Tags: ,