Ron Paul on Fox Business

Peter Schiff's Predictions 2002 to 2009

Ron Paul - "Focus On Violent Crime/Wasting Time Protecting People From Themselves"3/30/2009

Peter Schiff on the Jerry Doyle Show

Ron Paul on Keynesian Economics, Great Depression, & the Current Crisis

Peter Schiff The Dollar is Gonna Drop Like a Stone

35,000 protest before G20 meeting

Campaign For Liberty St. Louis Conference - Ron Paul

Daniel Hannan Supports Ron Paul, Comments On Republican Party 3/27/2009

Max Keiser - The Truth About Markets - 28 March 2009

Judge Napolitano interviews Peter Schiff 3/25/09

Max Keiser on new reserve currency - March 27

Audit the Federal Reserve (HR 1207)

Ron Paul’s bill to audit the Federal Reserve continues to gain momentum. H.R. 1207 now has 46 co-sponsors (as of 3/27/2009)!

If you too would like to see Ben Bernanke squirm and finally discover what the Fed has been up to behind the scenes, call and write your representative and ask that they support the “Federal Reserve Transparency Act H.R. 1207″.

Capitol Switchboard: (202) 224-3121 or 1-877-851-6437

Here’s a sample letter you can use:

Dear Representative,

Please co-sponsor and/or support H.R.1207, an effort to audit the Federal Reserve.

Recently, it has come to light that there is little to no accountability to the people on the part of the Federal Reserve. While the citizens of this country are required by law to give an accounting of every penny they come in contact with, the Federal Reserve has never been held to the same standard. During this time of extreme economic crisis, the people deserve an accounting of where our money is going.

Currently there are 46 co-sponsors for this legislation, and it is enjoying bi-partisan support. Your efforts in supporting this important legislation would go a long way in proving to your constituents that you not only hold the Federal Reserve to the same standard as you do your constituents, but it would also show that you believe in transparency. Anything less than support for this resolution suggests that you are in favor of secrecy and a lack of accountability to the people who pay the bills. We pay the tab; we have a right to know where our money is going.

Unlike recent bills that you voted in favor of that had hundreds of pages and just a few hours to read, this bill can be read in under 5 minutes. I encourage you to take the time to read it, and then move to support it.

Thank you in advance for your attention on this important legislation. I have every expectation that you will do right by your constituents and support this measure.

Sincerely,

Max Keiser "These guys are financial terrorists, they should be decapitated." - 27 March 2009

Wall Street Unspun with Peter Schiff - 3/25/09

Inside Story - China questions the dollar's value - 26 Mar 09

Ron Paul on regulation - March 26, 2009

Ron Paul on Fox Business 03-25-09

Peter Schiff CNN - March 27, 2009

Support HR1207 The Federal Reserve Transparency Act of 2009

Guns and Butter - March 25, 2009

Guns and Butter

"The World at Crossroads" with Franck Biancheri, Research Coordinator of LEAP/E2020's GlobalEurope Anticipation Bulletin. We discuss Franck Biancheri's open letter to the G20, "Last Chance Before Global Geopolitical Dislocation", which advocates for three strategic recommendations: 1) the creation of a new international reserve currency, 2) the control of banks on a global scale, and 3) an independent assessment of the three national financial systems at the heart of the current financial crisis - the United States, United Kingdom and Switzerland. If radical action is not taken within six months, it is anticipated that the opportunity to shorten the crisis to a 3 to 5 year duration will no longer be possible, and the world (particularly the U.S.) will be in for a very harsh geopolitical dislocation lasting for a decade or more.

Listen Here:

Guns and Butter - March 25, 2009 at 1:00pm

Click to listen (or download)

Peter Schiff 3/25/09 - Schiff Report Video Blog

Spread the word!

Hello Visitors,

I encourage you all to spread the word about this website to raise awareness about the cause of the economic turmoil and how we can be best equipped for what more of it is to come.

You can refer people to the homepage through:

www.FinancialBreakdown.net

Thanks!,

Andre G

Ron Paul 3/24/09 "We Didn't Have Capitalism/Easy Money Deceived The People"

Cato Institute Calls Out Bush/Obama's Keynesian Fallacy! 3/24/2009

Ending the Monetary Fiasco and Returning to Sound Money

Chinese Holdings of US Asstes

Gordon Brown, the devalued prime minister of a devalued country

Peter Schiff on The Lew Rockwell Show

Peter Schiff on MSNBC

Rep. Michael Capuano (D-MA) grills panel

Congresswoman Waters Questions Geithner & Bernanke

Congressman Manzullo: Not One Of You Can Give Me A Yes Or No Answer!

Ron Paul HR1207 The Federal Reserve Transparency Act of 2009 update 03-24-09

Congressman Sherman Explains The 3 Acts Of Kabuki Theater We're Witnessing

Ron Paul: Do You Operate With The Idea That Capitalism Has Failed?

Congresswoman Bachmann Questions Geithner & Bernanke About A Global Currency

Max Keiser and Stacy: Dollar in threat of no longer being the world reserve currency soon!

Ron Paul on Glenn Beck Radio 03-23-09 - MIAC Report, U.N., G20, Geithner, The FED

Jim Rogers the Dollar is Doomed 23 Mar 2009

Bankruptcy is Economic Stimulus by Ron Paul

Bankruptcy is Economic Stimulus

by Ron Paul

The distraction on Capitol Hill this week has to do with the jackpot bonuses that executives at AIG recently received. The argument is over a relative drop in the bucket. The total amount of bonuses given out was $165 million. The government has put $170 billion into AIG so far. Many now are demanding we get this money back. We ought to be spending our time and effort doing something more worthwhile, like figuring out how the Federal Reserve is handling the trillions of dollars they are creating and pumping into the economy, and how that is affecting the purchasing power of dollars in your pocket.

The big mistake was appropriating the TARP funds in the first place. A Johnny-come-lately bill of attainder won’t stop the spending epidemic. This whole situation is a perfect demonstration of why “doing nothing” and letting failing companies fail would have been much better than sinking valuable money and resources into them.

When a company makes a profit, it is a signal that it is taking resources and increasing their value while controlling costs. When a company operates at a loss, it is a signal that it is decreasing the value of its resources or letting out-of-control costs outstrip any value it has created. A company operating at a loss is therefore an engine of wealth destruction. Bankruptcies are a net positive for the economy because more productive competitors are rewarded by opportunities to buy up remaining assets at bargain prices to strengthen their operations. In an economy that allows this kind of growth and change, any jobs lost by bankruptcy are soon replaced by new ones as the most efficiently managed businesses gain access to more assets and expand.

Bankruptcy was the stimulus that we needed in the case of AIG. More bankruptcies would clean out malinvested resources and enable economic growth again.

AIG, by losing money and maneuvering their operations to the brink of bankruptcy, was telling us that they were inefficient. So what did we do? We forced the taxpayer to assume the losses, and now we are supposed to be shocked that it is not working out. Had AIG gone bankrupt, it would have been impossible to hand out these bonuses. The taxpayer would have been fleeced for $170 billion less last year. Had they gone bankrupt, the world would not have come to an end, it would just continue on with one less engine of wealth destruction.

We should have learned from Japan. The 1990s is referred to as Japan’s “lost decade” because of the zombie banks kept on life support by the Japanese government. Any productivity was redirected through these engines of wealth destruction, resulting in long term stagnation. We should and can avoid this outcome if we come to our senses.

A recession should be a time of strengthening and regrouping for an economy. But as long as the government insists on maintaining the status quo by propping up failed institutions, we will continue to dig a bigger hole for ourselves.

Peter Schiff The Crisis Just Begun

The Mother of All Bells by Peter Schiff

March 20, 2009

The Mother of All Bells


There is an old adage on Wall Street that no one rings a bell at major market tops or bottoms. That may be true in normal times, but as many have noticed, we are now completely through the looking glass. In this parallel reality, Ben Bernanke has just rung the loudest bell ever heard in the foreign exchange and government debt markets. Investors who ignore the clanging do so at their own peril. The bell’s reverberations will be felt by everyday Americans, whose lives are about to change in ways few can imagine. While nearly every facet of America’s economy has been devastated over the past six months, our national currency has thus far skipped through the carnage with nary a scratch. Ironically, the U.S dollar has been the beneficiary of the global economic crises which the United States set in motion. As a result, our economy has thus far been spared the full force of the storm.

This week the Federal Reserve finally made clear what should have been obvious for some time – the only weapon that the Fed is willing to use to fight the economic downturn is a continuing torrent of pure, undiluted, inflation. The announcement should be seen as a game changer that redirects the fury of the financial storm directly onto our shores.

In its statement, the Fed announced its intention to purchase an additional $1 trillion worth of U.S. treasury and agency debt. The purchases, of course, will be made with money created out of thin air through the Fed’s printing presses. Few can doubt that they will persist with these operations until the economy returns to its former health. Whether or not this can ever be accomplished with a printing press alone has never been seriously considered. Bernanke himself admits that we are in uncharted waters, with no map or compass, just simply a hope that more dollars are the answer.

Rather than solving our problems, more inflation will only add to the crisis. Falling asset prices, the credit crunch, declining consumer spending, bankruptcies, foreclosures, and layoffs are all part of the necessary rebalancing of our economy. These wrenching movements, however painful, are the market’s attempts to resolve the serious problems at the root of our bubble economy. Attempts to literally paper-over these problems will lead to disaster.

Now that the Fed has recklessly shown its hand, the mad dash to get out of Treasuries and dollars should not be far off. The more the Fed prints to buy bonds the less the dollar is worth. Holders of our debt (read China and Japan) understand this dynamic. We must expect that they will not only refuse to buy new bonds, but they will look to unload those bonds they already own.

Under normal circumstances, if creditors grew concerned that inflation was eating into their returns, the Fed would raise interest rates to entice them to buy. However, the Fed will avoid this course of action as it fears higher rates are too heavy a burden for our debt laden economy to bear. To maintain artificially low rates, the Fed will be forced to purchase trillions more debt then it expects as it becomes the only buyer in a seller’s market.

Just last week, Chinese premier Wen Jiabao voiced concern about his country’s massive investments in U.S. government debt. In the most unequivocal statement yet by the Chinese leadership on this issue, Wen made it plain that he was concerned with depreciation, not default. With his fears now officially confirmed by the Fed statement, we must wonder when the Chinese will finally change course.

There is a growing consensus that if China no longer wants to buy our bonds, we can simply print the money and buy them ourselves. This naïve view fails to consider the consequences implicit in such a change. When the Treasury sells bonds to China, no new dollars are printed. Instead, China prints yuan which it then uses to buy treasurers. This effectively allows America to export its inflation to China. However, now that we will be printing the money ourselves, the full inflationary impact will fall directly on us.

With such a policy in place, America has now become a banana republic. It won’t be too long before our living standards reflect our new status. Got Gold?

For a more in depth analysis of our financial problems and the inherent dangers they pose for the U.S. economy and U.S. dollar denominated investments, read Peter Schiff’s book "Crash Proof: How to Profit from the Coming Economic Collapse".

Ron Paul on CNN

Peter Schiff Report March 19, 2009

Peter Schiff by George Stroumboulopoulos

Peter Schiff 3/19/09 - CNBC The Call

Wall Street Unspun with Peter Schiff - 3/18/09

Audit the Federal Reserve (HR 1207)

Ron Paul’s bill to audit the Federal Reserve continues to gain momentum. H.R. 1207 now has 33 co-sponsors (as of 3/19/2009)!

If you too would like to see Ben Bernanke squirm and finally discover what the Fed has been up to behind the scenes, call and write your representative and ask that they support the “Federal Reserve Transparency Act H.R. 1207″.

Capitol Switchboard: (202) 224-3121

Here’s a sample letter you can use:

Dear Representative,

Please co-sponsor and/or support H.R.1207, an effort to audit the Federal Reserve.

Recently, it has come to light that there is little to no accountability to the people on the part of the Federal Reserve. While the citizens of this country are required by law to give an accounting of every penny they come in contact with, the Federal Reserve has never been held to the same standard. During this time of extreme economic crisis, the people deserve an accounting of where our money is going.

Currently there are 11 co-sponsors for this legislation, and it is enjoying bi-partisan support. Your efforts in supporting this important legislation would go a long way in proving to your constituents that you not only hold the Federal Reserve to the same standard as you do your constituents, but it would also show that you believe in transparency. Anything less than support for this resolution suggests that you are in favor of secrecy and a lack of accountability to the people who pay the bills. We pay the tab; we have a right to know where our money is going.

Unlike recent bills that you voted in favor of that had hundreds of pages and just a few hours to read, this bill can be read in under 5 minutes. I encourage you to take the time to read it, and then move to support it.

Thank you in advance for your attention on this important legislation. I have every expectation that you will do right by your constituents and support this measure.

Sincerely,

Auditing the Fed is only the first step towards exposing this antiquated insider-run creature to the powerful forces of free-market competition. Once there are viable alternatives to the monopolistic fiat dollar, the Federal Reserve will have to become honest and transparent if it wants to remain in business.

Ron Paul introduced bill H.R. 1207 on February 26, 2009 with the following speech to Congress:

Madame Speaker,

I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.

Serious discussion of proposals to oversee the Federal Reserve is long overdue. I have been a longtime proponent of more effective oversight and auditing of the Fed, but I was far from the first Congressman to advocate these types of proposals. Esteemed former members of the Banking Committee such as Chairmen Wright Patman and Henry B. Gonzales were outspoken critics of the Fed and its lack of transparency.

Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed’s susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests.

The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed’s negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.

More importantly, the Fed’s funding facilities and its agreements with the Treasury should be reviewed. The Treasury’s supplementary financing accounts that fund Fed facilities allow the Treasury to funnel money to Wall Street without GAO or Congressional oversight. Additional funding facilities, such as the Primary Dealer Credit Facility and the Term Securities Lending Facility, allow the Fed to keep financial asset prices artificially inflated and subsidize poorly performing financial firms.

The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve. I urge my colleagues to support this bill.

This is the bill itself, H.R. 1207:

111th Congress - 1st Session

H.R. 1207

A BILL

To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.

1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.
This Act may be cited as the “Federal Reserve Transparency Act of 2009″.

SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

(a) IN GENERAL. - Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after “shall audit an agency” and inserting a period.

(b) AUDIT. - Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:

“(e) AUDIT AND REPORT OF THE FEDERAL RESERVE SYSTEM. -

“(1) IN GENERAL. - The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.

“(2) REPORT -

“(A) REQUIRED. - A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each sub-committee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

“(B) CONTENTS. - The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.”.

Sponsor

Rep. Ronald Paul [R-TX]

33 Cosponsors [as of 2009-03-19]

Rep Abercrombie, Neil [HI-1] - 2/26/2009
Rep Alexander, Rodney [LA-5] - 3/10/2009
Rep Bachmann, Michele [MN-6] - 2/26/2009
Rep Bartlett, Roscoe G. [MD-6] - 2/26/2009
Rep Blackburn, Marsha [TN-7] - 3/16/2009
Rep Broun, Paul C. [GA-10] - 2/26/2009
Rep Buchanan, Vern [FL-13] - 3/17/2009
Rep Burton, Dan [IN-5] - 2/26/2009
Rep Castle, Michael N. [DE] - 3/17/2009
Rep Chaffetz, Jason [UT-3] - 3/6/2009
Rep DeFazio, Peter A. [OR-4] - 3/9/2009
Rep Duncan, John J., Jr. [TN-2] - 3/6/2009
Rep Fleming, John [LA-4] - 3/18/2009
Rep Foxx, Virginia [NC-5] - 3/10/2009
Rep Garrett, Scott [NJ-5] - 3/5/2009
Rep Grayson, Alan [FL-8] - 3/11/2009
Rep Heller, Dean [NV-2] - 3/6/2009
Rep Jones, Walter B., Jr. [NC-3] - 2/26/2009
Rep Kagen, Steve [WI-8] - 2/26/2009
Rep Kingston, Jack [GA-1] - 3/6/2009
Rep Marchant, Kenny [TX-24] - 3/11/2009
Rep McClintock, Tom [CA-4] - 3/6/2009
Rep Petri, Thomas E. [WI-6] - 3/10/2009
Rep Poe, Ted [TX-2] - 2/26/2009
Rep Posey, Bill [FL-15] - 2/26/2009
Rep Price, Tom [GA-6] - 3/10/2009
Rep Rehberg, Denny [MT] - 2/26/2009
Rep Rohrabacher, Dana [CA-46] - 3/6/2009
Rep Stearns, Cliff [FL-6] - 3/6/2009
Rep Taylor, Gene [MS-4] - 3/6/2009
Rep Wamp, Zach [TN-3] - 3/16/2009
Rep Woolsey, Lynn C. [CA-6] - 2/26/2009
Rep Young, Don [AK] - 3/6/2009

Ron Paul: Quit bankrupting this country & MONITOR THE FEDERAL RESERVE

Scenes from the recession

The state of our global economy: foreclosures, evictions, bankruptcies, layoffs, abandoned projects, and the people and industries caught in the middle. It can be difficult to capture financial pressures in photographs, but here a few recent glimpses into some of the places and lives affected by what some are calling the "Great Recession".

Click here to view the photos

Freedom Watch w Judge Napolitano, Ron Paul, Peter Schiff, Alex Jones, and more

The Schiff Report - March 18th - Peter Schiff Video Blog

The Depression Has Ended!

September 1929
"There is no cause to worry. The high tide of prosperity will continue." — Andrew W. Mellon, Secretary of the Treasury.

October 14, 1929
"Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board." — New York Times

December 5, 1929
"The Government's business is in sound condition." — Andrew W. Mellon, Secretary of the Treasury

December 28, 1929
"Maintenance of a general high level of business in the United States during December was reviewed today by Robert P. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression." — Associated Press dispatch.

January 13, 1930
"Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today." - News item.

January 21, 1930
"Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction." - News dispatch from Washington.

January 24, 1930
"Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast." - New York Herald Tribune.

March 8, 1930
"President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days." - Washington Dispatch.

May 1, 1930
"While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States - that is, prosperity." - President Hoover

June 29, 1930
"The worst is over without a doubt." - James J. Davis, Secretary of Labor.

August 29, 1930
"American labor may now look to the future with confidence." - James J. Davis, Secretary of Labor.

September 12, 1930
"We have hit bottom and are on the upswing." - James J. Davis, Secretary of Labor.

October 16, 1930
"Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment." - Charles M. Schwab.

October 20, 1930
"President Hoover today designated Robert W. Lamont, Secretary of Commerce, as chairman of the President's special committee on unemployment." - Washington dispatch.

October 21, 1930
"President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter." - Washington Dispatch

November 1930
"I see no reason why 1931 should not be an extremely good year." - Alfred P. Sloan, Jr., General Motors Co.

January 20, 1931
"The country is not in good condition." - Calvin Coolidge.

June 9, 1931
"The depression has ended." - Dr. Julius Klein, Assistant Secretary of Commerce.

Ron Paul on Bloomberg "I see no Purpose for the Federal Reserve..." 03-17-09

Peter Schiff Vlog Report 17 March 2009

Marc Faber US Treasurys a "Disaster Waiting to Happen"

Marc Faber : Asians can move away from the US Dollar

Jim Rogers Expect Civil Unrests in the US and all around the World

Economic Crisis: A Look Ahead

US Monetary Base Chart

Peter Schiff Vlog Report 16 March 2009

Ron Paul on the future of the monetary system

Peter Schiff 3/13/09 - Why the Meltdown Should Have Surprised No One - MUST WATCH

Jim Rogers: destruction of USD and US economy

Greatest Depression Has Arrived Gerald Celente on Jeff Rense Radio March 13, 2009

Max Keiser [1021] The Truth About Markets - 14 March 2009

Credit Card Cancer by Peter Schiff - March 13th, 2009

March 13, 2009

Credit Card Cancer


This week, with his pronouncement that “credit is the lifeblood of a healthy economy,” President Obama reiterated what has been one of his most common themes in diagnosing our economic problem. The president has relied on this bedrock belief to propose policies that place the restoration of credit as the highest priority. However, despite his seemingly earnest intentions, the president and his economic advisors have misdiagnosed the ailment. Savings, not credit, is the lifeblood of a healthy economy. When not used properly credit can be like a cancer that sickens an otherwise healthy economy.

What everyone seems to have forgotten at this point is that credit does not come from thin air. Even in a system in which bank reserves are leveraged many times, someone has to put savings in a bank for the bank to turn around and make a loan. As a result, the bedrock is the savings, which allows for the credit to flow. Credit extended without adequate savings inevitably leads an economy into disaster.

The primary mechanism that has injected credit where it does not belong is the massive credit card industry that has developed in the United States over the last generation. The ease with which these cards may be obtained and the degree to which Americans now rely on them for routine purchases has created a culture of credit that simply has no precedent in a healthy economy. Until this culture has been reformed, America’s fight to restore economic vitality will be a lost cause.

However, this week a much discussed opinion piece in the Wall Street Journal by top banking analyst Meredith Whitney, indicated that many Americans besides the president are still looking toward credit as the means of economic salvation. In her piece, Ms. Whitney writes,

“…Undeniably, consumers look at their unused credit balances as a "what if" reserve. "What if" my kid needs braces? "What if" my dog gets sick? "What if" I lose one of my jobs? This unused credit portion has grown to be relied on as a source of liquidity and a liquidity management tool for many U.S. consumers. If credit is taken away from what otherwise is an able borrower, that borrower's financial position weakens considerably. With two-thirds of the U.S. economy dependent upon consumer spending, we should tread carefully and act collectively.”

In order to keep the economy functioning, Ms. Whitney asks the credit card providers and the federal government to keep credit lines open, so that millions of Americans can keep on spending. However, while such actions would certainly keep our phony economy propped up a while longer, it would further weaken the very foundation upon which a real economy will eventually have to be rebuilt.

Without a doubt, Americans, and all other people for that matter, benefit from having access to “rainy day money.” But Americans should be saving for a rainy day, not adopting the attitude that if it rains I’ll whip out my credit card. If Americans need to pay for a suddenly ill dog, to straighten their kid’s teeth, or to pull them through a period of unemployment, they should save some of their present earnings.

But saving money requires a reduction in spending, and that is something that modern economists, within and without the Administration, cannot abide. A drop in spending will create a sharper contraction in our economy – which is now comprised of 70% consumer spending. But this is no reason to discourage the process. The option to go into debt in the event of an emergency is no substitute for building personal savings for such events. Not only does such a strategy jeopardize the solvency of individuals or families when they are at their most vulnerable, but it deprives society of badly needed savings.

Currently, with so many financially strapped Americans looking to draw on their credit lines, the fallacy of this ‘savings substitute’ is easily revealed. With lenders’ capital depleted, and falling home prices, and rising unemployment putting borrowers at greater risk of default, credit is naturally harder to come by. Had only a small percentage of borrowers needed to access their credit card “rainy day funds” there would have been no credit crisis. But with a deluge drenching so many at once, there was simply not enough credit umbrellas to go around. Had Americans actually been saving money instead, everyone would have his own umbrella and would not now be looking to borrow someone else’s.

Most importantly, as savers bank their earnings into “rainy day funds,” in addition to earning interest, those savings are available to businesses to make capital investments, produce goods and services, and provide employment. Without access to those savings, such investments cannot be made, and society is worse off as a result.

Lastly, savings can always be relied upon whereas credit is ephemeral. Remarks this week from the Chinese premier Wen Jiabao should serve notice to all Americans that the day will soon come when the Chinese stop lending us their umbrellas. When that happens, the average American will be soaked to the bone.

For a more in depth analysis of our financial problems and the inherent dangers they pose for the U.S. economy and U.S. dollar denominated investments, read Peter Schiff’s book "Crash Proof: How to Profit from the Coming Economic Collapse".

Premier of China worried about US Treasuries - Glenn Beck - 3.13.2009

Ron Paul March 12, 2009

Peter Schiff 3/12/09 - Schiff Report Video Blog`

Peter Schiff on FBN Stop Using that Plastic Card 12 mar 2009

Kucinich: Banks Are Loaning Our Money To Foreign Countries Instead Of Americans!

Wall Street Unspun with Peter Schiff - 3/11/09

Ron Paul Peter Schiff John Stossel Lew Rockwell Judge Napolitano Strategy Room Fox 3/11/2009

Jim Rogers Hyperinflation will consume us ...America is counting its last Breaths ...

Nearly 700 apply for Ohio custodian job

PERRY TWP., Ohio —

Plant closed. Laid off.

Lack of work.

How hungry are people for work in today’s sinking economy?

Nearly 700 people have applied for a single job as a school custodian.

Perry Local Schools have an open position — full time with benefits — at Edison Junior High School after its afternoon janitor retired. It pays $15 to $16 an hour.

The job opened last Saturday, and district officials say the stack of applications continues to expand daily. So much so, the deadline to apply for the position was moved to 3:30 p.m. Monday to give potential hires more time.

Many of those who have applied say they lost their previous job due to budget cutbacks by their former employer.

“A lot of people have their stories when they come in. It’s heart-wrenching,” said Superintendent John Richard.

Hope?

Dane Steed, 51, forged blades at Heinemann Saw Co. in Canton for nearly four years until last month.

He and several co-workers were let go because of a lack of work available. He put his name in the mix for the custodian post.

“Times are bad,” the Plain Township man said.

Steed said he has previous custodial experience at a school district and hopes he can retire at Edison.

“I don’t want to be doing this again,” Steed said.

Donna Croston, 49, of Plain Township, spent nine years on the assembly line at the Hoover Co. in North Canton before it closed last winter.

Prior to Hoover, she lost another factory job because the plant shut down.

Continue Reading

"Gold will go to astronomic numbers" GATA on Russia Today

Ron Paul on Alex Jones Radio 03-10-09

Peter Schiff Vlog Report 10 March 2009

Ron Paul 3/9/2009 Imagine

Jim Rogers Farmers Will Drive Lamborghinis Mar-09-09

Peter Schiff Vlog Report 09 March 2009

Peter Schiff on Kudlow Mar. 9 2009

[1020] The Truth About Markets - 07 March 2009

JP Morgan in BIG trouble! Bill Murphy 3/6/2009

D.L. Hughley talks with Ron Paul about the current Economic Crisis and his Presidential Run

Peter Schiff 3/6/09 - Schiff Report Video Blog

Pledge for Peter Schiff to run for Senate in 2010!

The Oracle with Max Keiser

CNBC gives financial advice

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

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Important Things With Demetri Martin

Political Humor
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Peter Schiff Video Blog - March 5, 2009

3/5/09 Peter Schiff On The The Kudlow Report : Get out of the US before it is too late

Wall Street Unspun with Peter Schiff - 3/4/09

Peter Schiff: US Dollar is a Subprime Currency Mar-4-09

Jim Rogers: Unrest, Protest coming in US - Mar. 4 2009

FREEDOM WATCH: RON PAUL, JUDGE NAPOLITANO, PETER SCHIFF, LEW ROCKWELL MARCH 4, 2009

Jim Rogers on the Obama Disaster Mar. 4 2009

FDIC chief warns fund could dry up

Federal Deposit Insurance Corp. Chairwoman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency.

"Without these assessments, the deposit insurance fund could become insolvent this year," Bair wrote in a March 2 letter to the industry.

U.S. community banks plan to flood the FDIC with about 5,000 letters in protest of the fees, according to a trade group.

"A large number" of bank failures may occur through 2010 because of "rapidly deteriorating economic conditions," Bair said in the letter. "Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative."

The FDIC last week approved a one-time "emergency" fee and other assessment increases on the industry to rebuild a fund to repay customers for deposits of as much as $250,000 when a bank fails. The fees, opposed by the industry, may generate $27 billion this year after the fund fell to $18.9 billion in the fourth quarter from $34.6 billion in the previous period, the FDIC said.

The fund, which lost $33.5 billion in 2008, was drained by 25 bank failures last year. Sixteen banks have failed so far this year, further straining the fund.

Smaller banks are outraged over the one-time fee, which could wipe out 50 percent to 100 percent of a bank's 2009 earnings, Camden Fine, president of the Independent Community Bankers of America, said Tuesday in a telephone interview.

Jim Rogers on Glenn Beck - March 4th , 2009

Gerald Celente - Start Of Something Big - 3/3/09

Dr. Ron Paul - "Let's consider reinstating the constitution, before it's too late." 03-04-09

Ron Paul on Bloomberg - March 3rd, 2009

Ron Paul on Glenn Beck 03-03-09