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Interest is one of the few things that is more profoundly understood in Europe, more specifically, Germany. Throughout the 20th century interest has been analyzed by some unknown, but brilliant thinkers. Silvio Gesell comes to mind, Gottfried Feder and later Helmut Creutz and their current standard bearer Margrit Kennedy.

Feder wrote a book Breaking the Shackles of Interest, and later advised Hitler, who was to say time and again, that “the kernel of National Socialism is breaking the thralldom of interest.” Maybe that did some damage by association to the theme.

It is curious to realize, when studying Hitler, how close he came to the truth in his analysis (which was, no doubt, inspired by exactly the enemies he was purported to attack). It is mind boggling to realize how much the bankers were willing to give away and how they entrenched their supremacy by totally destroying him and his credibility.

Be that as it may, it is time to make fully clear what the scale of the interest problem is. We need to get rid of any misunderstanding, let alone underestimation of this most heinous tool in the hands of our Satanist masters.

Dealing with Interest

We’ll go through this point for point. Some points will in some way overlap others, but they are still worth mentioning because they widen our perspective. I’ll be quoting Margrit Kennedy a lot and I would strongly suggest going through her classic ‘Why we need monetary innovation’.

1. To begin with, I’ll put forward my standard example: a mortgage. Let’s say you want to buy a house and go the bank and get a loan. Say 200k. The simple truth is, after thirty years you will have payed back 600k. 200k for the principal and 400k (!!) in interest. Now this might be OK, or at least somewhat understandable, if you were borrowing this money from somebody else, who has been saving it. But as we know, this is not the case. The money is produced the moment the loan is granted by the bank. In a computer program. By pressing a few buttons.

So basically you pay 400k interest for pressing a button. Granted, the bank needs to manage the loan during the time it is being repaid. But the cost for this is still only a fraction of the income they get through the interest.

Now, we could stop here, because it is clear that the bank is ripping us off, also in legal terms, although they make the laws themselves, because there is no realistic service being delivered for the money.

But there is so much more, we must continue.

2. When the bank creates some money by giving you a loan, it takes the money out of circulation when you repay. Repaying debts means a diminishing money supply. The banks only provide the principal, in our previous example 200k. But after thirty years, 600k has been repaid and only 200k was created. So how can this be? How can 600k be repaid by 200k?

It can’t. Somebody else needs to get into debt to create sufficient liquidity to pay the 400k interest. And the borrower of the original loan must start competing for this liquidity with everybody else to obtain that, intrinsically scarce, cash.

This means that because of the combination of debt and interest, the money supply must grow forever. But we know that a growing money supply is the definition of inflation and that inflation is closely linked to rising prices. So inflation is inherent in the system. This sounds strange, because Central Banks raise interest rates to lower inflation, reasoning less credit will be issued because of rising prices for it. But the higher the interest rates go, the more money must be created to pay for this interest.

Just one of the perverse side effects of interest in the current wealth transfer system we call “finance.”

3. Due to interest, money circulates slower. This is a big problem, because the slower the money circulates, the more we need of it in circulation to meet our needs. And when you have interest bearing money as debt, that is quite a problem indeed. The reason for slower circulation is that it enhances the store of value function of money, with all its detrimental implications.

This phenomenon can be best seen when thinking about paying bills. If you know you can increase your money by postponing paying your bills, you will help the money circulate slower. People will be encouraged to hoard the money instead of spending it.

It is also more likely because of this reason rather than the growing cost of money which lessens inflation (or better, price rises) in the short term when raising interest rates. Because less money is circulating slower, demand falls.

4. Now, because of the fact that the principal is created but not the money to pay the interest, money is intrinsically scarce. Because of scarce money, capital is the scarce factor of production, whereas reason has it that labor should be the scarcer than capital. How else can we say we live in abundance?

I think it was Lietaer who pointed out the natural consequence of this state of affairs: competition. Economic actors in the current system compete with each other primarily for scarce working capital. Scarce money is a major driving force in the ever more competitive marketplace. Of course, the winners of this system have their lackeys (“economists”) explain that competition leads to efficiency. But common sense dictates that humans are more effective when they can cooperate. Surely there is a place for competition in the market, but it has gotten totally out of hand and it is getting worse.

Scarce money because of interest is one of the more profound reasons for this trend.

5. So what of it you think. I was raised to be conservative in these matters and one should simply not get into debt, so you won’t pay interest.

Wrong. Not only because if nobody went into debt, there would be no money, but because companies go into debt to finance their production. They pay interest (capital costs) over these loans. And like any cost this must be calculated into the prices they ask for their goods and services.

And what percentage of prices can be related to interest? It depends on the kind of business, particularly how capital intensive it is. Going from 12% for garbage collection to 77% for renting a house. All in all about 40% of prices can be traced back to costs for capital. These figures are by Kennedy and they have been corroborated by an independent study done by Erasmus University, Rotterdam, the Netherlands under the supervision of STRO, a leading monetary think tank in the Netherlands.

So, you lose 40% (!!!!) of your disposable income to interest through prices.

6. Interest is being payed by people borrowing money and received by people having loads of it. So it is per definition a wealth transfer from poor to rich.

It transpires, that about 80% of the poorest people pay more interest than they receive to the richest 10%. The next richest 10% pay as much as they receive. This means the vast majority is losing a substantial part of their money to interest. The richest own the banks or have a lot of money there.

We must keep in mind that this is totally for nothing, since most of the money is printed at the time it is loaned out.

How much money are we talking about? I have only figures for Germany, but reason suggests it is basically the same everywhere.

In Germany the poorest 80% pay 1 billion Euros in interest to the richest 10% PER DAY. Yes, that’s right, one billion euros per day. That is a grand total of 365 billion euro’s per year. That is one seventh of German GDP and extrapolating this to America, the poorest 80% must be paying at least a trillion a year.

It conclusively explains the old adage that the rich get richer and the poor get poorer.

This is the hidden tax that nobody is talking about.

This is the yoke that we carry.

This is the worst kind of slavery, because it is slavery without even realizing it.

This is interest and let it never be forgotten.

This is our mortal enemy and let us never take our eyes of it again, until it is thrown into the fire of hell, together with the usurers enslaving us with it.

The New Tax Man: Big Banks and Hedge Funds

Fred Schulte and Ben Protess

Huffington Post Investigative Fund

October 20, 2020

Nearly a dozen major banks and hedge funds, anticipating quick

profits from homeowners who fall behind on property taxes, are

quietly plowing hundreds of millions of dollars into businesses

that collect the debts, tack on escalating fees and threaten to

foreclose on the homes of those who fail to pay.

The Wall Street investors, which include Bank of America and

JPMorgan Chase & Co., have purchased from local governments

the right to collect delinquent taxes on several hundred thousand

properties, many in distressed housing markets, the Huffington

Post Investigative Fund has found.

Video by Lagan Sebert

In many cases, the banks and hedge funds created new companies

to do their bidding. They gave the companies obscure, even

whimsical names and used post office boxes as their addresses,

masking Wall Street’s dominant new role as a surrogate tax

collector.

In exchange for paying overdue real estate taxes, the investors gain legal powers from local governments to collect the debt and levy fees. At first, property owners may owe little more than a few hundred dollars, only to find their bills soaring into the thousands. In some jurisdictions, the new Wall Street tax collectors also chase debtors over other small bills, such as for water, sewer and sidewalk repair.

Some states allow the investors to tack on as much as 18 percent interest and a passel of legal fees and other charges. When property owners fail to make full payment, the investors can sue to foreclose – in some states within as little as six months.

In June, Bank of America snatched up liens on properties in Florida owned by low-income residents and nonprofit public interest groups, including a Salvation Army shelter, a preschool and a wildlife rescue group involved in the Gulf of Mexico oil spill cleanup, the Investigative Fund found in its examination. Bank of America also bought liens on properties of the wealthy, including a professional basketball star with the Los Angeles Lakers, Lamar Odom.

Some observers of the financial services industry said they were surprised to learn that banks, some of which received billions of dollars in taxpayer-funded bailouts in recent years, were rushing to profit from homeowners having trouble paying their tax bills.

“This is not how I’d like to be making my money,” said James Cox, a Duke University School of Law professor who specializes in corporate and securities law. “I would find it personally distasteful to foreclose or press a claim against individuals, many of whom have lost their jobs and are in tight economic straits.”

Five big banks involved in the industry, known as tax lien investing, collected a total of more than $106 billion in bailout money through the government’s Troubled Asset Relief Program, known as TARP.

Over the last year, Bank of America, which received $45 billion in these taxpayer funds in 2008 and 2009, has bought liens on properties in scores of municipalities in at least a dozen states. Bank of America repaid the government in 2009.

Still, noted Cox: “There’s no bailout for people struggling to pay their taxes.”

Years ago, the big banks left the buying of tax liens largely to local real estate specialists and small-time investors. These days, banks and hedge funds, stung by the failure of many speculative investments, see tax liens as a relatively safe option that can yield returns of around 7 percent.

Some banks also are packaging tax liens as securities – in a similar way to how unpaid home loans are securitized – and selling them to investors.

If mortgage holders fail to pay overdue taxes, an investor could waltz off with a home worth hundreds of thousands of dollars for the price of paying the owner’s tax bill. Most homeowners eventually pay their debt.

Put it all together and it is makes for a solid investment, said Lloyd McClendon, an owner of realauction.com in Plantation, Fla., one of several companies that conducts online auctions in Florida and other states.

“There’s an awful lot of new, big money in the sales this year,” said James Powell, a longtime Florida investor who remembers a time when local investors flocked to live auctions at courthouses. Typically, they would bid for liens by holding up paddles. Powell is still one of the few in the liens business who makes purchases using his own name.

But the smaller investors, noted Powell, have been overtaken by well-heeled banks and funds that now bid online, and in volume.

Banks and hedge funds usually buy the liens through online auctions that permit them to bid in bulk, and they can use any name they want.

The giant Bank of America, for instance, has bid in Florida tax lien sales using colorful names such as Bennu, LLC, named after a mythical bird said to be the soul of the ancient Egyptian sun god. It also has bid as Osprey, LLC, and Ecru, LLC, named after the French word for a pale brown color.

Fortress Investment Group, a hedge fund run by former Fannie Mae chief Daniel Mudd, has bought tax liens under 17 different corporate names. Some evoke tranquil, bucolic settings, such as Pleasant Valley Capital, LLC and Travis Farm Investments, LLC.

Representatives of several prominent banks and hedge funds contacted by the Investigative Fund, from JPMorgan to Bank of America and Fortress Investment Group, declined to comment for this article.

Some banks purchased liens directly; others financed investment groups that did so. For example, Wells Fargo lends to a liens buyer. Deutsche Bank invests through a subsidiary. And BankAtlantic, based in Fort Lauderdale, is a longtime tax certificate investor in several states, buying liens under the names of several subsidiaries.

Though several mortgage lenders, including JPMorgan, recently suspended foreclosures amid concerns that some may have been done improperly, the slowdown is not expected to apply to foreclosures stemming from unpaid taxes.

The Investigative Fund identified major tax lien purchasers, many for the first time, through a computer-assisted analysis of more than 300,000 liens, municipal, corporate and court filings and other documents obtained from local government officials in four states and the District of Columbia. The Investigative Fund then traced these purchasers to the major financial institutions that oversaw them, invested in them, or lent money to their operations.

Business ‘Needs Scrubbing’

Local governments, faced with tight budgets and the challenges of collecting debt from property owners, strongly endorse online auctions because tax collectors can easily and rapidly recoup millions of dollars. Miami-Dade County, for instance, took in more than $374 million in June 2009 from the sale of about 60,000 local property tax liens.

Tax collectors defend the practice by pointing out that property owners can avoid added fees or the risk of losing homes by paying their bills on time. The threat of losing property often compels tardy homeowners to pay off just before the deadline; without severe penalties many people would simply ignore their obligations to pay property taxes, collectors say.

Some two dozen states and the District of Columbia allow tax sales, which spare the governments from added expenses of hiring their own debt collector, or foreclosing and becoming a landlord. Local governments generally require minimal identification – for instance, a Social Security number. They allow bidders to choose whatever names they wish, and don’t check to see if bidders are using multiple identities.

The few investors willing to talk about the tax lien business with the Investigative Fund argue that they are playing a vital role in helping cash-strapped local governments plug holes in budgets and, in some cities, helping rehabilitate older buildings. That returns the properties to the tax rolls, and can help revive beleaguered neighborhoods, they say.

“Budget-challenged cities are using the proceeds from their [tax lien] sale as an important source of funding,” said Gabriel Boehmer, a spokesman for Wells Fargo Bank, which lends to companies that buy tax liens.

Critics aren’t so sure. “If your only goal is to maximize your rate of return, this is a nice industry,” said Frank Alexander, a law professor at Emory University with expertise on tax sales. “The question becomes: Do you mind being a vulture and preying on people?”

Alexander argues that when local governments privatize tax collection duties they “wash their hands of all responsibility” for ensuring property owners are treated fairly.

In Cleveland, officials are beginning to express concern about the consequences of trusting the new tax collectors. Cuyahoga County canceled this year’s tax sale amid alarm that previous ones had contributed to an upsurge in home foreclosures and further decay in already marginal neighborhoods. “With the economy the way it is now, we won’t have a tax sale for at least one year,” said Robin Thomas, Cuyahoga County’s chief deputy treasurer. Her aim: To buy homeowners in Cleveland “a little more time” to get caught up with their property taxes.

Despite national reform efforts that have focused on debt collection, from credit cards and payday lenders to checking account fees, the fairness of tax sales to homeowners remains largely a local, unregulated matter. A new consumer protection bureau created by Congress has no explicit authority to watch over local tax sales.

“There is no oversight at all,” said District of Columbia Attorney General Peter Nickles, who is suing a tax lien investment firm for charging homeowners what he alleges are exorbitant fees to get their homes out of hock.

In a separate matter, the U.S. Department of Justice’s antitrust division is investigating allegations of possible tax-sale bid rigging in two states. The ongoing probe began in Maryland, where three men pleaded guilty to criminal charges earlier this year. A federal grand jury in New Jersey has subpoenaed records from several major tax lien investors, including a JPMorgan subsidiary, and a Virginia company that serviced the Bank of America tax lien portfolio in Florida this year. No charges have been brought in the New Jersey investigation.

Said Nickles of the tax lien business: “This is one of the areas that really needs a good scrubbing.”

Small Debts Grow Fast

Tax sales routinely place home ownership in jeopardy over relatively small sums, sometimes just a few hundred dollars, the Investigative Fund data analysis of hundreds of thousands of liens records shows. For instance, more than two of every five liens sold earlier this year in 31 Florida counties and in Maricopa County, Arizona (Phoenix), were for unpaid taxes of less than $1,000; more than 90 percent were less than $5,000. Results were similar in Toledo, Ohio.

Some jurisdictions such as Baltimore toss in unpaid water bills and other municipal fees of $250 or more. In May, the Investigative Fund reported how an unemployed former mental health counselor with four children named Vicki Valentine lost her home even though the mortgage had been paid in full. She had owed $362 on an overdue water bill when investors took over and added thousands of dollars in legal fees she couldn’t afford. (In response, city officials are seeking statewide legislation that would prohibit the sale of tax liens of less than $750.)

To be sure, many debtors eventually pay the mounting bill rather than lose property of greater value. And some states such as Florida give homeowners up to two years to pay off the debt before investors can force the sale of their property. But in other states, those who fail to pay can quickly find themselves in a thicket of escalating debt and in a costly – and often losing – legal battle to keep a roof over their heads.

Barbara Carpenter, a 58-year-old disabled Ohio retiree, found herself in such a situation. The former worker for the American Red Cross struggled to save her Toledo home from a JPMorgan entity called Plymouth Park Tax Services, which in recent years has been among the nation’s top buyers of tax liens.

“It’s a great neighborhood and the house is in good condition,” said Carpenter, who paid $67,000 for the one-story home in 2004. But she fell behind in paying her taxes and a certificate for $1,500 in unpaid taxes was sold off to Plymouth Park, which is based in New Jersey.

Carpenter’s lawyer, Joseph Westmeyer, said Plymouth Park routinely charges an upfront fee of around $1,500 as soon as it buys the lien and 18 percent interest on the debt. If they don’t get paid, they foreclose.

“It’s not a good deal for poor customers,” said Westmeyer. Carpenter wound up selling the house in August for less than half what she had paid. Plymouth Park received about $12,000 in legal fees and other charges, including some additional taxes, Westmeyer said, quoting from court records.

Andrew Neuhauser, an attorney with Advocates for Basic Legal Equality in Toledo, said his group believes the Lucas County tax sale, which reached a peak of about $5.4 million in liens during 2006, has led to hundreds of foreclosures. That, in turn, has partly eroded the tax base and had a “devastating effect” on some neighborhoods, he said. “It’s a short-term gain for the county that in the long term does harm,” Neuhauser said.

Gail Michaud, a 71-year-old retired real estate broker who lives in a $60,000 home in Dania Beach, Fla., recently fell behind on the property taxes. In June, Broward County sold collection rights to her unpaid bill – only $782 – to Bennu, LLC, the Bank of America arm named after the mythical bird.

Michaud, who said she receives food stamps, resents having to pay interest charges to the nation’s mightiest bank – especially because when the bank was in trouble the government came to the rescue. “The taxpayers gave them their bailout money, and they are still doing the same thing they used to. They look their nose down at people and think they can do whatever they want,” she said.

Florida Boom

Florida, the nation’s largest tax sale market and one of the few states where large transfers of liens can be tracked, shows how the collapse of a once-buoyant real estate market can be a boon for tax lien investors, especially banks and hedge funds.

This year alone, counties have offered more than $1.9 billion in tax liens and found eager buyers for nearly all of them. Buyers from across the U.S., the Cayman Islands, Bermuda and Panama bid alongside the banks and hedge funds that cater to wealthy investors.

In this year’s sale in Orange County, which includes Orlando, bank-affiliated companies or hedge funds gobbled up nearly 90 percent of the 24,000 tax liens sold. In the Fort Lauderdale area, officials sold more than a quarter of the liens to entities financed by Bank of America.

Bank of America made most of its purchases in Florida through four limited liability companies. LLCs can limit exposure to lawsuits and can shield the owner’s identity. In Florida, Bank of America’s LLCs had the names Investments 2234, Bennu, and Ecru, and all used the same post office box in Atlanta as their business address, according to records on file in Florida counties.

In several Florida auctions, Bank of America’s interests were managed by MTAG Services, one of the largest tax lien servicers in the U.S. The Vienna, Va., company has been subpoenaed by a federal grand jury in New Jersey that is investigating alleged collusion in bidding at tax sales.

MTAG’s president, James Meeks, said his company is “cooperating fully” with the federal investigation. He added that “everybody who bought any substantial amount of liens in Jersey was subpoenaed.” Meeks said that his company, like others in the industry, favors creative names like Bennu for companies that bid on tax liens.

“There’s no rhyme or reason to the names,” Meeks said.

Tax officials in several counties said they had no idea the companies were affiliated with the Bank of America.

“I know nothing about these companies. I don’t have any background on them,” said Juanita B. Sikes, tax collector in Hernando County, Fla., north of Tampa, where the numbers of liens sold earlier this year was nearly double those from 2005. “It’s not on us to determine if they are a real person.”

Several hedge funds saw opportunity in the Sunshine state as well.

One was the Fortress Investment Group headed by Mudd, the former chief executive of Fannie Mae. While Mudd was at the helm, Fannie’s decision to take on more than $200 billion in risky loans crippled the mortgage giant and helped unravel the economy.

In only a few months, Fortress has purchased more than 30,000 tax liens in Florida counties using 17 different LLCs. Most registered for the tax sales using the 46th floor of an Avenue of the Americas skyscraper in midtown Manhattan – Fortress’ headquarters – as their address.

Fortress began competing for tax liens this year after joining forces with three former executives of JPMorgan’s tax liens subsidiary. The subsidiary, which bids under the names Xspand and Plymouth Park Tax Services, was among several companies subpoenaed in the grand jury investigation in New Jersey. Former New Jersey Gov. James Florio founded the company and has since sold his interest in it.

Neither JPMorgan nor Fortress would comment for this story. Repeated efforts to reach Mudd were not successful.

Anonymity Questioned

Although many local governments are pleased with the financial results of tax lien sales, D.C. officials question its fairness.

D.C. Attorney General Nickles criticizes Aeon Financial, LLC, a bank-financed investment group from Chicago that buys tax liens in some 10 states. Nickles asserts that Aeon has slammed homeowners, who sometimes owed just a few hundred dollars in back taxes, with $7,000 or more in legal fees.

In papers filed in a local D.C. court in late 2009, the attorney general’s office accused the company of “engaging in a pattern of charging and collecting impermissible or excessive legal fees.” In an interview, Nickles called that a “rip off.”

Aeon responded that the fees are reasonable, comply with the law and escalate because of improper management by the District’s tax collectors. Homeowners who consider the fees too high can challenge the charges in court.

Court papers show that after Aeon bought liens in the nation’s capital, property owners received notices from a Chicago law firm. The notices warn homeowners to “act now or you could lose your property/investment.” An accompanying letter on the law firm’s letterhead states that “THIS PROPERTY IS IN FORECLOSURE” and demands payment of legal fees.

In April 2009, Nickles formally notified Aeon’s lawyer, Malik J. Tuma, that he had launched a preliminary investigation of Aeon. The company’s notices to homeowners appear “at least, to be deceptive and, at worst, potentially fraudulent,” wrote Assistant Deputy Attorney General David Fisher.

In 2008, when Aeon Financial paid the District $4.6 million for the right to collect on 400 liens, it was the single biggest purchaser of tax liens. Even so, Nickles said he still has no idea who the company’s owners are. He is hoping the court case will flush out their names.

An Investigative Fund reporter visiting the address printed on the letters from the Chicago law firm found it to be a mail drop at a UPS Store.

Reached by phone, Tuma declined to comment on Aeon’s business practices, citing the ongoing litigation with the District. He would not identify Aeon’s principals and said the mailbox at the UPS Store was used “for the safety of our employees.”

Tuma added: “There’s nothing deceptive about it…I’m in D.C. Superior Court every Wednesday. It’s not hard to find me.”

Aeon, which has received funding from TCF Bank for tax liens purchases, has an office in Chicago’s Willis Tower, formerly known as the Sears Tower, once the world’s tallest building. Michael Wehenkel, who has identified himself as Aeon’s chief operating officer in presentations to D.C. officials, did not respond to numerous requests for comment by phone and e-mail.

A spokesman for TCF, a Midwestern bank, said: “We were doing business with [Aeon] and no longer are.”

Tax collectors in Florida don’t always know who they’re doing business with, either. Officials in Pinellas County want to know who exactly is behind a company called GL Funding Limited. Sales records show that GL Funding spent more than $10 million and dominated the tax sale in at least 10 Florida counties, most of them rural or smaller cities where interest rates tended to be much higher than in urban and resort areas.

GL Funding registered with several Florida tax collectors as a company with offices in the Cayman Islands. But other counties list a post office box in Philadelphia as its address. The person who registered GL Funding in Pinellas County’s tax sale provided Pinellas with a telephone number in Dallas, Tex. At that number, a man named Jess Weir declined to tell the Investigative Fund who is investing through the name GL Funding.

Said Sam McClelland, deputy tax collector in Pinellas County, Fla., where GL Funding acquired hundreds of liens earlier this year: “We’re still trying to sort this out.”

Lagan Sebert contributed to this article.

The New Tax Man: Big Banks and Hedge Funds

Ron Paul

October 20, 2010

Inflation fears are heating up this week as Fed Chairman Ben Bernanke gave a speech in Boston on Friday, causing further frantic flight into gold by those fearful of the coming “quantitative easing” the Fed is set to deliver in November. Others who view gold as a short term investment engaged in immediate profit-taking after Bernanke’s speech.

Gold is more correctly viewed as insurance against bad monetary policy decisions that erode the value of savings. Those bad decisions keep coming at an ever faster clip these days and we hear more and more talk of currency wars especially between the dollar, the Chinese yuan, the Japanese yen, the Australian dollar, and the Euro. As the economies of the world continue to stagnate or contract, monetary policy decisions become more relevant to people who once thought this topic arcane. We have several examples this week of major fumbles on the part of the US Central Bank:

· The Federal Reserve continues to insist that inflation is too low, even while the monetary base remains at record levels, and food and gas prices continue to climb.

· As the Fed continues to drive down the value of the dollar, the government accuses China of deliberately devaluing its currency, and the House has passed legislation aimed at punishing China for this alleged devaluation.

· Low returns on US bonds are driving investors into higher-performing foreign bonds. Some of these countries are responding by reinstituting capital controls to guard against hot money and the carry trade.

· The spat with China and reemergence of capital controls have led some to fear that we are in the first stages of an all-out currency war.

· The instability in the international monetary system, the decreasing value of the dollar, and the large amounts of new US debt could lead the IMF and countries such as China, Japan, Russia, India, and Brazil to abandon the dollar and adopt a new multinational currency.

While the big players in these currency games sort everything out, the people hurt the most are the savers, the workers, and those on fixed incomes as their money buys less and less. Make no mistake — the Fed and the Treasury Department are playing games with our money, especially in how they report statistics like unemployment and inflation. These games erode our standard of living and hide just how much damage their inflationary policies are doing.

Official core inflation for the US is only 1.14%, but that excludes such crucial day-to-day goods such as food and energy. Real inflation certainly is higher, maybe much higher. John Williams of Shadow Government Statistics calculates true inflation at a whopping 8.48%! But manipulated inflation statistics give the government cover when they again deny seniors a cost of living increase in their social security checks. They also serve to convince the public that further expansion of the money supply will boost the economy without causing any real pain, which has essentially been the core argument of Greenspan-Bernanke fed policy for the last 20 years.

Of course, the United States is not alone in its disastrous monetary policy decisions. These pressures are inherent in any fiat monetary system where money is created at will, for the benefit of the special interests. As all these currencies race to the bottom of the inflationary barrel, the only security to be had will be in honest money like gold as the system falls apart. My hope is that we can return to the wisdom of the Constitution and get back to sound, commodity-backed money before our dollar suffers a wholesale collapse.

Currency Wars: A Race to the Bottom of the Inflationary Barrel

White House officials have stopped President Barack Obama from visiting the Golden Temple in Amritsar, India, over concerns that coverage could strengthen a belief he is a secret Muslim.

The temple - called Harmandir Sahib - is the spiritual

centre of the Sikh religion and one of India's most popula

r tourist attractions.

It was scheduled to be the third stop on Mr Obama's visit to

the country next month, but it has now been cut from t

he itinerary because of the impact it could have in the U.S.

Holy: Sikh devotees gather at the Golden Temple in Amritsar

to celebrate the birth of Sikh Guru Ramdass. President Obama

will not visit the shrine

Holy: Sikh devotees gather at the Golden Temple in Amritsar

to celebrate the birth of Sikh Guru Ramdass. President Obama

will not visit the shrine

According to Sikh tradition, Mr Obama would have to cover his

head before entering the temple.

Mr Obama, a Christian, has been dogged by persistent rumours that he is a Muslim and Sikhs in the U.S. have been occasional targets of anti-Muslim discrimination and violence in America.

Dalmegh Singh, secretary of the committee which runs the temple, told the New York Times: 'To come to Golden Temple he needs to cover his head.

'That is our tradition.'

Days after the 9/11 attacks on the World Trade Center, a Sikh man was killed in Arizona by another man who mistook him for a Muslim.

Observant Sikhs do not cut their hair and Sikh men wear turbans that cover their heads in public.

Devotees: Visitors to the temple are expected to cover their heads and take off their shoes and White House aides were worried about the impact images of Mr Obama covering his head in the U.S.

Visit: The Golden Temple, in Amritsar, was scheduled to be Mr Obama's third stop while in India

Visitors to temples, known as gurudwaras, must cover their heads and remove their shoes. Sikh beliefs require men to tie a piece of cloth on their heads, rather than putting on a hat that can be taken off.

The religion, which was founded in Punjab in the 15th century, includes elements of Hinduism and Islam but is a totally distinct faith.

Queen Elizabeth visited the iconic temple in 1997 and took off her shoes to walk around the temple. Last year, Canada's prime minister Stephen Harper covered his head during his visit.

H.S. Phoolka, a prominent Sikh lawyer in New Delhi, said he was disappointed that the U.S. president was now not visiting the temple.

He told the New York Times: 'We have worked so hard to establish in America that Sikhs have a very different identity than Muslims.

'It is very unfortunate that even the White House is conveying the message that there is no difference between Muslims and Sikhs.'

Domestic concerns: The president has battled persistent rumours in the U.S. that he is a Muslim

Mr Obama's itinerary wil see him visit Mumbai and New Delhi.

The news comes as the president prepares to take his campaign message to The Daily Show.

White House spokesman Dan Pfeiffer says Mr Obama will record an appearance on the Jon Stewart show on October 27, days before the mid-term elections begin.

The president has been battling to boost Democrat Party fortunes ahead of the elections on November 2, with the Republicans expected to make big gains in both houses of Congress.

Michelle Obama has made frequent appearances with her husband in a bid to galvanise the Democrat campaign.

White House officials have stopped President Barack Obama from visiting the Golden Temple in Amritsar, India,

Michael Savage: China on the Verge of 'Burying' the U.S.

Tuesday, 19 Oct 2010 02:33 PM

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By: David A. Patten

Outspoken talk-radio host Michael Savage warns that China is steadily wiping out the

American industrial base and "burying" the United States by keeping the value of its

currency artificially low.

Savage, whose talk show is heard by over 9 million radio listeners each week, writes

about the attack underway against the U.S. middle class in his new book, "Trickle Up

Poverty: Stopping Obama's Attack on Our Borders, Economy, and Security."

The political clamor over China's trade and currency policies has been steadily building

in recent months, in part because of the sluggish economy and high U.S. unemployment.

Nationally syndicated radio talk host Michael Savage contends that President Barack Obama considers the middle class to be his enemy and he has targeted it in Marxist policies The bestselling author also discusses his latest book Trickle Up Poverty

"They're burying us," Savage tells Newsmax.TV in an exclusive interview. "They are controlling the world's economy by keeping their currency too low, so they can continue to export cheaply . . . And also it cripples those of us in other countries who want to export to China.

"And so unless we impose tariffs on their goods," he says, "we're going to lose every industry. We have lost our machining industry, lost our steel industry, we've virtually lost most of our auto industry."

The Beltway clamor over China's trade and currency policies has been steadily building in recent months, in part because of the sluggish economy and high U.S. unemployment.

In September, Congress passed legislation allowing tariffs to be levied against any country that manipulates its currency to gain a trade advantage. That move was widely condemned in China, which alleged the United States was dumping chickens and slapped a tariff on U.S. poultry imports.

Savage isn't alone in sounding the alarm. This month, billionaire Donald Trump objected to China's policies and stated "outside forces are destroying this country."

Savage warns America must act quickly or risk losing its remaining industrial base.

"Unless tariffs are put on their goods, the few industries that remain in this nation that are viable are liable to disappear very, very shortly," Savage warns. "And the only way to save America is to institute tariffs on specified industries, and to rebuild the manufacturing base of the United States of America."

Savage sees the trade imbalance with China as part of a larger assault on America's middle class. "For at least 150 years," he says, "it was the great middle class that made America unique."

The policies of President Barack Obama and Democrats in Congress are now hurting those middle-class citizens, he says.

"You know, Obama came across as a Robin Hood, who was going to rob from the rich to give to the poor," Savage tells Newsmax. "The exact opposite is true. He's not robbing from the rich to give to the poor. He's shrinking the middle class, to give to the rich and the poor."

The common theme in all of Obama's initiatives, including healthcare reform and new forms of regulation, Savage says, is that the middle class ultimately foots the bill.

"And that's why there's an uproar in the country," Savage says in the exclusive interview. "That's why the tea parties are surging. That's why the tea party candidates are showing so well in polls: Because the people who actually pay the taxes are revolting. And I hope to God they revolt at the ballot box."

Other highlights from the author's interview with Newsmax:

* Key staffers are leaving the administration just before the midterms because they know Obama has steered things "so far to the left" that conditions are likely to worsen. "It's like a sinking ship, and the crew is jumping off because they don't want to go down with the ship," he says.

* Sen. Harry Reid, D-Nev., is in trouble in his race against GOP challenger Sharron Angle, a tea-party favorite. Savage says the race mirrors the anti-incumbent animus sweeping the country.

* He would vote for Meg Whitman over Jerry Brown for California governor, calling Brown a "career politician and a radical leftist at that." But he's concerned Whitman isn't conservative enough. "Beyond her business experience, I don't see any social conservatism. But she's the best we're going to get."

* He would vote for anyone over incumbent Democratic Sen. Barbara Boxer of California. "At least [GOP candidate Carly] Fiorina has some business experience, so she knows what it's like to run a business, so we have to go in that direction," he says.

* Fiorina and Whitman aren't running stronger in the polls because they've shied away from tackling illegal immigration. "And if you study the polls on illegal immigration, you'll find that even Democrats strongly want something done," Savage says. "So I think both of these Republican candidates are not doing themselves a service, by listening too closely to the professional campaign advisers."

* He believes the tea parties have made a mistake by overlooking issues important to social conservatives. "I think the social issues are very important to many of the American people, such as: defend the defense of marriage act, is one of my points; end affirmative action; limit welfare benefits; voting reform," he says. "I don't see any of that in the tea party platform. I put that in there hoping that they'll remember the masses of conservative Americans still care about these social issues."

* He believes the Obama administration is peopled with hard-core leftists who consider America's middle class their enemy, saying their policies are "aimed straight at the heart of the middle class, who by the way are suffering the most. The rich aren't doing worse. The poor are still collecting their government checks. Who's getting hit? The middle class. And that's why I call it Trickle Up Poverty."

* He likes the recent Pledge to America document that Republicans unveiled, but he doesn't believe it goes far enough. "They mention reducing government but they don't say how, there are no specific targets," he says. He says his book, which offers a 37-point plan to right the nation, provides a detailed roadmap for cutting the deficit. Savage lists how to reduce government, and by how much each year, to get the budget back under control.

We The People must reclaim our Constitution

JT Coyoté

Infowars.com

October 25, 2010

Whether we care to admit it or not, it is well past

time for the people to break their attachment to the

left/right, Republican/Democrat, liberal/conservative,

false political paradigms. “The People must reclaim our

Constitution,” declared State Senator Charlie Duke in

his speech before the crowd at the Colorado State

Republican Convention in June of 1996. Charlie knew

all to well the face of the peoples enemy. He also

knew the only way to peacefully defeat the nation

usurping corporate bankers, was to apprise the peopl

e of the power of the Constitution.

Yes, the Constitution is the solution, with it’s 9th

Amendment protected Rights, secured by each individual

as Inalienable by birth. These Rights find into through

the 10th Amendment power of each State. Lawful

constitutional clout aimed directly at the globalits

Power

brokers, the haters of individual liberty.

Thomas Jefferson hit the nail on the head, with the following unambiguous words:

“I have sworn upon the altar of almighty God, eternal hostility against every form of tyranny over the mind of man.”

We must say NO to the Corporate Statists and their fraudulent parties. NO to their coerced tax legislation funded Wall Street banks, and their Goebbels-esque main stream media propaganda machine which promotes this agenda. These march together lockstep, connected at the hip, hell-bent on turning the United States into a sub-state, North American Union, third world multi-cultural fiefdom, ripe for culling. What’s left will be merged into the elite’s global tyranny envisaged by F.A. Hayek in his 1944 book The Road to Serfdom. Our only hope is if We the people of each state, pull together reclaiming the Constitutional United States to terminate our slide into neo-feudalism. It will mean arousing folks into frightful awareness and educating as many as we can. Again Jefferson foresaw our plight:

“Fear can only prevail when victims are ignorant of the facts.”

Unfortunately, we have been long-term hoodwinked by the global corporate bankers by their preferred method of political divide and conquer — corporate commandeering of the Party system. Formally created in the French Parliament in the 1700s, the party system cleaved government administration along philosophical lines, splitting policies and programs among the parties which eventually becomes that party’s particular niche. Because there is no separation of corporation and state, the lions share of funding for both political parties today is from corporate banking coffers.

In other words, they completely control the two major political parties. Together, we must unite in our Inalienable power to halt this incremental dismantling of the ideas of the Founders even the Constitution itself. As Reform Candidate Pat Buchanan stated in his stump speeches during the 2000 presidential campaign:

“The Democrats and the Republicans are the two wings of the same bird of prey, which is feasting upon the Constitution and the American people.”

George Washington saw the destructive liabilities of party factioning. Though he is characterized today as a federalist. In his July 6th, 1796 letter to Thomas Jefferson, Washington recollected:

“I was no party man myself, and the first wish of my heart was, if parties did exist,to reconcile them.”

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So here we are, dealing with the same imperial interests we thought were expelled from our shores in our War for Independence. Unfortunately the enemy just went underground to wage a covert war of intrigue, infiltration, and subterfuge instead. Signer of the Declaration of Independence, Benjamin Rush characterized it this way:

“The American war is over; but this is far from being the case with the American revolution. On the contrary, nothing but the first act

We The People must reclaim our Constitution

Michael Savage: China on the Verge of 'Burying' the U.S.

Conway Cover-Up: Media Ignores Admitted Obstruction Of Justice

Paul Joseph Watson & Kurt Nimmo

Infowars.com

October 27, 2010

Conway Cover Up: Media Ignores Admitted Obstruction Of

Justice conway

While hyperventilating over the Lauren Valle stomping

ncident, the corporate media has ignored a far bigger

scandal swirling around the Kentucky Senate race – the

fact that financial contributors to Jack Conway’s campaign

and Conway himself tipped off Conway’s brother to the fact

that he was being investigated for trafficking drugs in an

admitted obstruction of justice.

The Kentucky Courier-Journal, which has favored Conway

over Rand Paul in the course of the Senatorial race, hid the

bombshell story behind a relatively tame headline this past

weekend, presumably in a bid to protect Jack Conway from

the blowback of the astounding revelations contained in the

five page report written by R.G. Dunlop.

The nitty gritty of the issue runs like this – Matthew C. Conway, prosecutor and brother of Jack Conway, the Democratic candidate for U.S. Senator from Kentucky, was under investigation by the Louisville Metro Police for alleged drug use and drug trafficking.

Two narcotics detectives involved in the case perverted the course of justice by tipping off Conway to the fact that he was under investigation. At least three narcotics officers are now under internal investigation for “policy violations”.

After hearing detectives discussing the case in a restaurant, a Conway campaign supporter then also related the issue to Jack Conway, who in turn tipped off his brother.

“When investigators learned of the leaks and interrogated the two detectives and the prosecutor last March, all three initially gave false or misleading statements about what happened, those records show. The statements of Matthew C. Conway, the prosecutor, were made under oath,” reports the Courier-Journal.

In August of this year, Jefferson County Attorney Michael O’Connell made the decision not to prosecute Matthew Conway. O’Connell is a financial supporter of Jack Conway’s Senate campaign.

Commonwealth’s Attorney David Stengel also dismissed the drug trafficking allegations, without revealing why investigators targeted Conway in the first place. Like O’Connell, Stengel was a supporter and a financial contributor to Jack Conway’s Senate campaign.

“According to Fec.gov, Mr. David Stengel has donated $500 to Jack Conway’s campaign in the past, vested interest? Do we really want a former Jack Conway donor overlooking this? Really?” asks the Capitalist Banner blog.

“Alex Pappas of the Daily Caller reported that the Democrat’s campaign did not reply to an e-mail “seeking elaboration Saturday as to whether Conway, as attorney general, took any steps to involve himself in the investigation,” points out the American Spectator.

Louisville attorney Scott Roby is also a Conway supporter. Roby told Matthew Conway that the cops were investigating him for either drug use or trafficking, thus allowing him to avoid a police raid. LMPD Detective Scott Wilson had told Roby about the investigation. Conway and Wilson both attended St. Xavier High School at about the same time and are longtime acquaintances, according to the newspaper.

Scott Roby donated $1250 to the Conway campaign.

But it gets worse. It turns out that a Jack Conway supporter, businessman Charles Alexander, was the man who overheard cops talking about the Matthew Conway case in a downtown Louisville restaurant. The narcotics detectives described Matthew Conway as “dirty” (corrupt). Alexander called Jack Conway and informed him of the overheard conversation.

“According to Fec.gov, Charles Alexander is a $2400 donor to Jack Conway and a $4600 donor to Barack Obama, so there is little doubt Mr. Alexander was concerned about the troubling allegations,” notes CapitalistBanner.com.

Jack Conway and his supporters are involved in a cover-up and an attempt to obstruct justice, but this does not seem to be on the corporate media’s radar screen. Instead, we are harangued with absurd stories about Rand Paul, Aqua Buddha, and a fraternity prank invented by an anonymous woman.

Jack Conway is involved in a brazen attempt to cover-up a police investigation of his brother. Supporters of his political campaign facilitated obscuration of justice. Is this the sort of man the people of Kentucky want representing them in Washington?

In the name of objective journalism and fairness, the corporate media needs to cover this story immediately instead of inventing new ways to tear down the Rand Paul campaign.

Many disturbing issues remain unanswered regarding the involvement of Jack Conway and his supporters in the story.

Thomas McAdam summarizes some of the key questions.

1. What was the nature of the evidence known to the narcs that prompted the investigation of Matt Conway?

2. Was any political pressure used to pull the detectives away from investigating the brother of Kentucky’s Attorney General?

3. When and how did LMPD Chief Robert White involve himself in the investigation?

4. When Matt Conway resigned from the Jefferson County attorney’s office in 2008, what was the status of the criminal investigation into his alleged drug involvement, and what did Jefferson County Mike O’Connell know about it.

5. What did Commonwealth’s Attorney David Stengel know, and when did he know it?

6. Was the meeting at Jack Conway’s house, where he brought in high-powered criminal defense attorney Bart Adams, the only involvement by the Attorney General in this matter?

7. It seems incredible that O’Connell, Stengel, and White could be involved in an elaborate cover-up to protect a drug dealer. Shouldn’t the Conways come forward and shed some light on this affair, thereby dispelling any imputation of misconduct on the part of innocent law enforcement officials?

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8. How long has reporter Dunlap been working on this story, and did the timing of its publication have anything to due with the upcoming election?

—

Paul Joseph Watson is the editor and writer for Prison Planet.com. He is the author of Order Out Of Chaos. Watson is also a fill-in host for The Alex Jones Show. Watson has been interviewed by many publications and radio shows, including Vanity Fair and Coast to Coast AM, America’s most listened to late night talk show.

Conway Cover-Up: Media Ignores Admitted Obstruction Of Justice