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Mortgage Meltdown: The High Cost of Racism

May 14, 2008 · No Comments

There are lots of things we do as human beings that are counterproductive in the sense of preventing ourselves from getting what we want. One of them is racism. Whether you harbor some small or large negative feeling toward one race or another consider this:

Negative red lining: In order to carry off the largest economic scam in history, bankers and Wall Street had to find a population that was deprived of sufficient education to know about the world, to know how to conduct their affairs legally, and to be able to reason things so they could make an informed decision. 

It was obvious where they were going to find this demographic: (1) people who spoke no English and (2) black people, especially from the deep South. They were perfect targets and it all went “swimmingly” with everybody touting their new equity in their modest homes as though they were watching the ticker on the New York Stock Exchange.

People refinanced to take more money out of their house like an ATM machine, and they spent the money. But the value wasn’t really there, and neither is the income for original targets and then the secondary “refi” targets who got caught up in the whole frenzy. And now millions of lives are being uprooted, millions of jobs are being lost, and millions of people are stuck in retirement with insufficient income because of failed investments by their pension funds, their mutual funds et al..

You see, it is the poor in our country who are exposed, who are vulnerable. They are the ones that predators attack with tactics they could never get away with elsewhere. But the effects, if the predators succeed on a large scale, are felt by everyone. And they are felt deeply.

And the income isn’t there either for all the individuals, institutions, banks, government entities, corporations and other invetors who bought mortgage backed securities that were, for the most part, not worth the paper they were written on.

And the income isn’t there for people who earn a living wage but now find that it isn’t a living anymore because the value of the dollars they earn is also not worth the paper it is written on.

And so when these poor people protest that they were treated unfairly, the racist in us tends to turn a less sympathetic ear to them than to someone “like us.” That is where racism costs us.

By waiting for the shoe to drop on us instead of protecting those who could not protect themselves, by depriving people of the education they need to be able to avoid these predators, we have now created the worst possible outcome: nobody in the entire world trusts the United States policy on money and finance. And we lost our moral high ground to influence the policies of other nations. 

And the benefits that we have long expected from our dominance of world finance is fast vanishing as the dollars we issued have turned into vast sweeping IOU’s to countries we could not imagine would have such power over us — China, S. Korea etc.

That Obama has come this far is amazing, even astonishing. Especially in view of the secrets we harbor, the driftwood of hundreds of years of shameful history and rationalization of that history. Notwithstanding all we have learned there are many among us who do not understand that we are wasting precious time and human resources when we withhold empathy, when we withhold funding for education, when we flee from those who are different.

How much money has been lost in home equity due to white flight? It was whites that lost the equity!

How much time and productivity did the South lose because they refused to allow blacks to participate in their economy or in education — even right after the civil war when it was ONLY the blacks that knew how to run the farms and plantations. 

How much innovation did we lose by red lining employment opportunities in the North?

How many Einsteins have we completely missed amongst the black and Latin populations?

 

Racist Incidents Give Some Obama Campaigners Pause
By Kevin Merida
Washington Post Staff Writer
Tuesday, May 13, 2008; A01

 

Danielle Ross was alone in an empty room at the Obama campaign headquarters in Kokomo, Ind., a cellphone in one hand, a voter call list in the other. She was stretched out on the carpeted floor wearing laceless sky-blue Converses, stories from the trail on her mind. It was the day before Indiana’s primary, and she had just been chased by dogs while canvassing in a Kokomo suburb. But that was not the worst thing to occur since she postponed her sophomore year atMiddle Tennessee State University, in part to hopscotch America stumping for Barack Obama.

Here’s the worst: In Muncie, a factory town in the east-central part of Indiana, Ross and her cohorts were soliciting support for Obama at malls, on street corners and in a Wal-Mart parking lot, and they ran into “a horrible response,” as Ross put it, a level of anti-black sentiment that none of them had anticipated.

“The first person I encountered was like, ‘I’ll never vote for a black person,’ ” recalled Ross, who is white and just turned 20. “People just weren’t receptive.”

For all the hope and excitement Obama’s candidacy is generating, some of his field workers, phone-bank volunteers and campaign surrogates are encountering a raw racism and hostility that have gone largely unnoticed — and unreported — this election season. Doors have been slammed in their faces. They’ve been called racially derogatory names (including the white volunteers). And they’ve endured malicious rants and ugly stereotyping from people who can’t fathom that the senator from Illinois could become the first African American president.

The contrast between the large, adoring crowds Obama draws at public events and the gritty street-level work to win votes is stark. The candidate is largely insulated from the mean-spiritedness that some of his foot soldiers deal with away from the media spotlight.

Victoria Switzer, a retired social studies teacher, was on phone-bank duty one night during the Pennsylvania primary campaign. One night was all she could take: “It wasn’t pretty.” She made 60 calls to prospective voters in Susquehanna County, her home county, which is 98 percent white. The responses were dispiriting. One caller, Switzer remembers, said he couldn’t possibly vote for Obama and concluded: “Hang that darky from a tree!”

Documentary filmmaker Rory Kennedy, the daughter of the late Robert F. Kennedy, said she, too, came across “a lot of racism” when campaigning for Obama in Pennsylvania. One Pittsburgh union organizer told her he would not vote for Obama because he is black, and a white voter, she said, offered this frank reason for not backing Obama: “White people look out for white people, and black people look out for black people.”

Obama campaign officials say such incidents are isolated, that the experience of most volunteers and staffers has been overwhelmingly positive.

The campaign released this statement in response to questions about encounters with racism: “After campaigning for 15 months in nearly all 50 states, Barack Obama and our entire campaign have been nothing but impressed and encouraged by the core decency, kindness, and generosity of Americans from all walks of life. The last year has only reinforced Senator Obama’s view that this country is not as divided as our politics suggest.”

Campaign field work can be an exercise in confronting the fears, anxieties and prejudices of voters. Veterans of the civil rights movement know what this feels like, as do those who have been involved in battles over busing, immigration or abortion. But through the Obama campaign, some young people are having their first experience joining a cause and meeting cruel reaction.

On Election Day in Kokomo, a group of black high school students were holding up Obama signs along U.S. 31, a major thoroughfare. As drivers cruised by, a number of them rolled down their windows and yelled out a common racial slur for African Americans, according to Obama campaign staffers.

Frederick Murrell, a black Kokomo High School senior, was not there but heard what happened. He was more disappointed than surprised. During his own canvassing for Obama, Murrell said, he had “a lot of doors slammed” in his face. But taunting teenagers on a busy commercial strip in broad daylight? “I was very shocked at first,” Murrell said. “Then again, I wasn’t, because we have a lot of racism here.”

The bigotry has gone beyond words. In Vincennes, the Obama campaign office was vandalized at 2 a.m. on the eve of the primary, according to police. A large plate-glass window was smashed, an American flag stolen. Other windows were spray-painted with references to Obama’s controversial former pastor, the Rev. Jeremiah Wright, and other political messages: “Hamas votes BHO” and “We don’t cling to guns or religion. Goddamn Wright.”

Ray McCormick was notified of the incident at about 2:45 a.m. A farmer and conservationist, McCormick had erected a giant billboard on a major highway on behalf of Farmers for Obama. He also was housing the Obama campaign worker manning the office. When McCormick arrived at the office, about two hours before he was due out of bed to plant corn, he grabbed his camera and wanted to alert the media. “I thought, this is a big deal.” But he was told Obama campaign officials didn’t want to make a big deal of the incident. McCormick took photos anyway and distributed some.

“The pictures represent what we are breaking through and overcoming,” he said. As McCormick, who is white, sees it, Obama is succeeding despite these incidents. Later, there would be bomb threats to three Obama campaign offices in Indiana, including the one in Vincennes, according to campaign sources.

Obama has not spoken much about racism during this campaign. He has sought to emphasize connections among Americans rather than divisions. He shrugged off safety concerns that led to early Secret Service protection and has told black senior citizens who worry that racists will do him harm: Don’t fret. Earlier in the campaign, a 68-year-old woman in Carson City, Nev., voiced concern that the country was not ready to elect an African American president.

“Will there be some folks who probably won’t vote for me because I am black? Of course,” Obama said, “just like there may be somebody who won’t vote for Hillary because she’s a woman or wouldn’t vote for John Edwards because they don’t like his accent. But the question is, ‘Can we get a majority of the American people to give us a fair hearing?’ “

Obama has won 30 of 50 Democratic contests so far, the kind of nationwide electoral triumph no black candidate has ever realized. That he is on the brink of capturing the Democratic nomination, some say, is a testament to how far the country has progressed in overcoming racism and evidence of Obama’s skill at bridging divides.

Obama has won five of 12 primaries in which black voters made up less than 10 percent of the electorate, and caucuses in states such as Idaho and Wyoming that are overwhelmingly white. But exit polls show he has struggled to attract white voters who didn’t attend college and earn less than $50,000 a year. Today, he and Hillary Clinton square off in West Virginia, a state where she is favored and where the votes of working-class whites will again be closely watched.

For the most part, Obama campaign workers say, the 2008 election cycle has been exhilarating. On the ground, the Obama campaign is being driven by youngsters, many of whom are imbued with an optimism undeterred by racial intolerance. “We’ve grown up in a different world,” says Danielle Ross. Field offices are staffed by 20-somethings who hold positions — state director, regional field director, field organizer — that are typically off limits to newcomers to presidential politics.

Gillian Bergeron, 23, was in charge of a five-county regional operation in northeastern Pennsylvania. The oldest member of her team was 27. At Scranton’s annual Saint Patrick’s Day parade, some of the green Obama signs distributed by staffers were burned along the parade route. That was the first signal that this wasn’t exactly Obama country. There would be others.

In a letter to the editor published in a local paper, Tunkhannock Borough Mayor Norm Ball explained his support of Hillary Clinton this way: “Barack Hussein Obama and all of his talk will do nothing for our country. There is so much that people don’t know about his upbringing in the Muslim world. His stepfather was a radical Muslim and the ranting of his minister against the white America, you can’t convince me that some of that didn’t rub off on him.

“No, I want a president that will salute our flag, and put their hand on the Bible when they take the oath of office.”

Obama’s campaign workers have grown wearily accustomed to the lies about the candidate’s supposed radical Muslim ties and lack of patriotism. But they are sometimes astonished when public officials such as Ball or others representing the campaign of their opponent traffic in these falsehoods.

Karen Seifert, a volunteer from New York, was outside of the largest polling location in Lackawanna County, Pa., on primary day when she was pressed by a Clinton volunteer to explain her backing of Obama. “I trust him,” Seifert replied. According to Seifert, the woman pointed to Obama’s face on Seifert’s T-shirt and said: “He’s a half-breed and he’s a Muslim. How can you trust that?”

* * *

Pollsters have found it difficult to accurately measure racial attitudes, as some voters are unwilling to acknowledge the role that race plays in their thinking. But some are not. Susan Dzimian, a Clinton supporter who owns residential properties, said outside a polling location in Kokomo that race was a factor in how she viewed Obama. “I think if it was somebody other than him, I’d accept it,” she said of a black candidate. “If Colin Powell had run, I would be willing to accept him.”

The previous evening, Dondra Ewing was driving the neighborhoods of Kokomo, looking to turn around voters like Dzimian. Ewing, 47, is a chain-smoking middle school guidance counselor, a black single mother of two and one of the most fiercely vigilant Obama volunteers in Kokomo, which was once a Ku Klux Klan stronghold. On July 4, 1923, Kokomo hosted the largest Klan gathering in history — an estimated 200,000 followers flocked to a local park. But these are not the 1920s, and Ewing believes she can persuade anybody to back Obama. Her mother, after all, was the first African American elected at-large to the school board in a community that is 10 percent black.

Kokomo, population 46,000, is another hard-hit Midwestern industrial town stung by layoffs. Longtimers wistfully remember the glory years of Continental Steel and speak mournfully about the jobs shipped overseas. Kokomo Sanitary Pottery, which made bathroom sinks and toilets, shut down a couple of months ago and took with it 150 jobs.

Aaron Roe, 23, was mowing lawns at a local cemetery recently, lamenting his $8-an-hour job with no benefits. He had earned a community college degree as an industrial electrician, but learned there was no electrical work to be found for someone with his experience, which is to say none. Politics wasn’t on his mind; frustration was. If he were to vote, it would not be for Obama, he said. “I just got a funny feeling about him,” Roe said, a feeling he couldn’t specify, except to say race wasn’t a part of it. “Race ain’t nothing,” said Roe, who is white. “It’s how they’re going to help the country.”

The Aaron Roes are exactly who Dondra Ewing was after: people with funny feelings.

At the Bradford Run Apartments, she found Robert Cox, a retiree who spent 30 years working for an electronics manufacturer making computer chips. He was in his suspenders, grilling shish kebab, which he had never eaten. “Something new,” Cox said, recommended by his son who was visiting from Colorado.

Ewing was selling him hard on Obama. “There are more than two families that can run the United States of America,” she said, “and their names aren’t Bush and Clinton.”

“Yeah, I know, I know,” Cox said, remaining noncommittal.

He opened the grill and peeked at the kebabs. “It’s not his race, because I got real good friends and all that,” Cox continued. “If anything would keep him from getting elected, it would be his name. It might turn off some older people.”

Like him?

“No, older than me,” said Cox, 66.

Ewing kept talking, until finally Cox said, “Probably Obama,” when asked directly how he would vote.

As she walked away, Ewing said: “I think we got him.”

But truthfully, she wasn’t feeling so sure.

Staff writer Peter Slevin and polling analyst Jennifer Agiesta contributed to this report.

Categories: Bush · CDO · CORRUPTION · Clinton · Eviction · GTC | Honor · Investor · Mortgage · Obama · bubble · community banks · credit unions · currency · education · foreclosure · foreign relations · inflation · interest rates · politics · securities fraud
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Bankruptcy: Chapter 13, RISING PRICES and Foreclosure Defense

May 12, 2008 · No Comments

OBAMANOMICS VS NO ECONOMICS AT ALL

the government is charged with reporting on inflation when it has a vested interest in keep the reported inflation low both for political and financial reasons

The job of the Petitioner in bankruptcy to get a modification of the Chapter 13 plan is therefore double-whacked because of (1) a presumption against him which requires him to show a significant change in circumstances and (2) inaccurate government statistics which call you a liar when you say your basic expenses have shot up 25% just because of inflation.

Homeowners with ARM financing on their homes are triple whacked when the resets kick in. Those people in bankruptcy already should tell their lawyers to file an adversary proceeding based upon violations of TILA and RESPA. There are a number of steps you need to follow (see many posts and links on this blog) before you can file suit.

BKR attorneys are struggling with clients who are complaining that their payment plan is being negatively impacted by the surge in the cost of living. This surge has been understated by, for example, publication of the Consumer Price Index and other indices that are used to set increases in government and pension benefits like social security.

Thus the government is charged with reporting on inflation when it has a vested interest in keep the reported inflation low both for political and financial reasons. If they report it accurately, the government expenses will go up. Up until now, the fact that this was at the expense of the recipients of those benefits (which they paid into and are now being short-changed) has been felt, talked about but largely ignored. That too is coming up front and center. McCain’s statement “I’m not very good on economics” better change to “I just studied up on economics and it is very interesting, Here is what I learned.”

When inflation was comparatively low, even though understated. there wasn’t much conflict. Now, however, the basket of items used for the CPI is literaly out of touch with the real life experience of most Americans — something that Obama has started talking about and which McCain unfortunately doesn’t seem to know or care to know. 

The job of the Petitioner in bankruptcy to get a modification of the Chapter 13 plan is therefore double-whacked because of (1) a presumption against him which requires him to show a significant change in circumstances and (2) inaccurate government statistics which call you a liar when you say your basic expenses have shot up 25% just because of inflation. 

Homeowners with ARM financing on their homes are triple whacked when the resets kick in. Those people in bankruptcy already should tell their lawyers to file an adversary proceeding based upon violations of TILA and RESPA. There are a number of steps you need to follow (see many posts and links on this blog) before you can file suit.

MOST BANKRUPTCY LAWYERS ARE LARGELY UNFAMILIAR WITH TILA, RESPA AND OTHER CONSUMER PROTECTIONS AND THUS MISSING THE LARGEST POTENTIAL BENEFITS TO THEIR CLIENTS. If YOUR lawyer does not know this field then get help elsewhere. For example: www.repairyourloan.com, where you can get help on all the steps before filing suit and even get a referral to someone who can assist your attorney in filing the adversary proceeding. 

From another site where the attorneys appear to be knowledgeable but I know nothing about them —-

Rising prices give rise to chapter 13 plan modifications

What do rising gas and food prices have in common? They both eat up a substantial part of your monthly budget. And if you filed chapter 13 within the past few years, you submitted a plan of monthly payments based on a budget before gas and some food prices doubled. It may be time to modify that old plan. How so, follow this.

Your Schedule J lists your projected monthly expenses. Your monthly plan payment is calculated based as a factor of those expenses. It may be possible to file an amended Schedule J to account for today’s increased costs. As your expenses rise, your monthly disposable income decreases and your monthly plan payment may decrease as well. So, instead of paying money to your unsecured creditors, you might be able to free up some cash to use for your personal monthly expenses.

Your bankruptcy attorney can advise you whether you qualify for a lower payment. Dial that number before the cost of a phone call goes up

Categories: CDO · CORRUPTION · Eviction · GTC | Honor · McCain · Mortgage · Obama · bubble · credit unions · currency · education · foreclosure · inflation · interest rates · politics
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HILLARY STEPPED DOWN

May 7, 2008 · No Comments

You could see the grueling 15 months of endless campaign stops on the faces of the candidate, her husband and her daughter. It wasn’t working and they knew it. She had piled on the drive for momentum as late as an hour before the polls closed and the deal swung the other way. History slipping away. Her assumption of power thwarted. Her dream smashed by a democratic process that turned out to be every bit as unpredictable as it was intended to be.

She tried her best. She was inevitable, vetted, competent, well financed, and started out with hundreds of delegates and endorsements. She was brilliant, home-town, foreign policy astute, an historic candidate as the former first lady and the first lady to become president. She was tough. She was rough. She used every trick in the book and showed her mettle as she applied all her long years of political knowledge to the project at hand, confident of victory.

While her own quest is ended, she has nonetheless made history, paving the way for the next first lady president; and she played an important part of enduring American history by providing training and sparring with the first Afro-American man in the U.S. history to occupy the oval office.

It is on this day that America takes another leap forward in healing the greatest tragedy in our history with an “imperfect messenger” whose African father ironically and paradoxically arrived in this Country by his own free will, leaving a child behind who would become the most powerful person on Earth.

It’s a step down from lofty ambition but I doubt if we seen the last of Hillary. Her role model being Eleanor Roosevelt, her mentor being a successful former President himself, her current position as United States Senator, and her upcoming appearances on the campaign trail, without the stress of having her own trajectory on the line, all tell a tale of future accomplishments. When President Obama starts his first term, he’ll know he got there not just in spite of her, but because of her. 

 

Categories: Clinton · Edwards · Obama · politics
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Thomas Friedman Calls Out Clinton and McCain on Gas Tax Proposal

May 2, 2008 · 1 Comment

The McCain-Clinton gas holiday proposal is a perfect example of what energy expert Peter Schwartz of Global Business Network describes as the true American energy policy today: “Maximize demand, minimize supply and buy the rest from the people who hate us the most.”

Good for Barack Obama for resisting this shameful pandering.

 

April 30, 2008
OP-ED COLUMNIST

Dumb as We Wanna Be

It is great to see that we finally have some national unity on energy policy. Unfortunately, the unifying idea is so ridiculous, so unworthy of the people aspiring to lead our nation, it takes your breath away. Hillary Clinton has decided to line up with John McCain in pushing to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this summer’s travel season. This is not an energy policy. This is money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks. What a way to build our country.

When the summer is over, we will have increased our debt to China, increased our transfer of wealth to Saudi Arabia and increased our contribution to global warming for our kids to inherit.

No, no, no, we’ll just get the money by taxing Big Oil, says Mrs. Clinton. Even if you could do that, what a terrible way to spend precious tax dollars — burning it up on the way to the beach rather than on innovation?

The McCain-Clinton gas holiday proposal is a perfect example of what energy expert Peter Schwartz of Global Business Network describes as the true American energy policy today: “Maximize demand, minimize supply and buy the rest from the people who hate us the most.”

Good for Barack Obama for resisting this shameful pandering.

But here’s what’s scary: our problem is so much worse than you think. We have no energy strategy. If you are going to use tax policy to shape energy strategy then you want to raise taxes on the things you want to discourage — gasoline consumption and gas-guzzling cars — and you want to lower taxes on the things you want to encourage — new, renewable energy technologies. We are doing just the opposite.

Are you sitting down?

Few Americans know it, but for almost a year now, Congress has been bickering over whether and how to renew the investment tax credit to stimulate investment in solar energy and the production tax credit to encourage investment in wind energy. The bickering has been so poisonous that when Congress passed the 2007 energy bill last December, it failed to extend any stimulus for wind and solar energy production. Oil and gas kept all their credits, but those for wind and solar have been left to expire this December. I am not making this up. At a time when we should be throwing everything into clean power innovation, we are squabbling over pennies.

These credits are critical because they ensure that if oil prices slip back down again — which often happens — investments in wind and solar would still be profitable. That’s how you launch a new energy technology and help it achieve scale, so it can compete without subsidies.

The Democrats wanted the wind and solar credits to be paid for by taking away tax credits from the oil industry. President Bush said he would veto that. Neither side would back down, and Mr. Bush — showing not one iota of leadership — refused to get all the adults together in a room and work out a compromise. Stalemate. Meanwhile, Germany has a 20-year solar incentive program; Japan 12 years. Ours, at best, run two years.

“It’s a disaster,” says Michael Polsky, founder of Invenergy, one of the biggest wind-power developers in America. “Wind is a very capital-intensive industry, and financial institutions are not ready to take ‘Congressional risk.’ They say if you don’t get the [production tax credit] we will not lend you the money to buy more turbines and build projects.”

It is also alarming, says Rhone Resch, the president of the Solar Energy Industries Association, that the U.S. has reached a point “where the priorities of Congress could become so distorted by politics” that it would turn its back on the next great global industry — clean power — “but that’s exactly what is happening.” If the wind and solar credits expire, said Resch, the impact in just 2009 would be more than 100,000 jobs either lost or not created in these industries, and $20 billion worth of investments that won’t be made.

While all the presidential candidates were railing about lost manufacturing jobs in Ohio, no one noticed that America’s premier solar company, First Solar, from Toledo, Ohio, was opening its newest factory in the former East Germany — 540 high-paying engineering jobs — because Germany has created a booming solar market and America has not.

In 1997, said Resch, America was the leader in solar energy technology, with 40 percent of global solar production. “Last year, we were less than 8 percent, and even most of that was manufacturing for overseas markets.”

The McCain-Clinton proposal is a reminder to me that the biggest energy crisis we have in our country today is the energy to be serious — the energy to do big things in a sustained, focused and intelligent way. We are in the midst of a national political brownout.

Categories: CORRUPTION · Clinton · GTC | Honor · bubble · currency · education · energy · foreign relations · inflation · interest rates · oil · politics
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Mortgage Meltdown: Media Diverts from FACTS to Entertainment

May 1, 2008 · No Comments

Does anyone really care about what the media is hyping for their own ratings and their own revenue?

CAN ANYONE WAIT FOR RELIEF FROM THE 2 MILLION FORECLOSURES THAT WILL HURL US DOWN THE TUBES IF WE DON’T FIGURE A WAY OUT OF THE CREDIT CRISIS?

Exactly how important are the comments of an ex-pastor of a presidential candidate to someone who is losing their home, lost their job, can’t pay for gas, and can’t find a self and secure environment for their children to grow up, be educated, and prepared to meet the challenges of an increasingly complex world?

Is there ANYONE who want to be rejected for hiring because of comments made by their pastor, preacher, minister, or rabbi? Are you defined by the views of YOUR spiritual leader?

Does it make any difference how crazy the ex-pastor was or how closely President Obama was listening to sermons when he was there for prayer and spiritual renewal? 

Is there ANYONE in publishing who wants to start printing news that is important and not merely entertainment? 

May 1, 2008

Obama Defends Handling of Furor Over Ex-Pastor

WASHINGTON — Senator Barack Obama on Thursday defended his handling of the firestorm around his former pastor, saying he had not denounced the minister’s provocative comments sooner because he wanted to “give him the benefit of the doubt” as a man who had married the Obamas and baptized their two daughters.

The senator made the comments in an interview with Meredith Vieira on the NBC “Today” show. He was joined by his wife, Michelle, and Ms. Vieira said it was their first interview together in more than a year.

Mrs. Obama spoke passionately of her pride in her husband, and how he has handled the harsh glare of public scrutiny. “I love my husband, you don’t want anybody talking poorly about the people you love, and quite frankly, I think he’s handled this stuff” well, she said. “I’m so proud of how he has maintained his dignity, his cool, his honor.”

The husband-and-wife interview, during which the two held hands, laughed and seemed particularly close and mutually supportive, appeared to have been designed at least partly to soften Mr. Obama’s image at a time when it has been buffeted by controversy surrounding the former pastor, the Reverend Jeremiah Wright Jr. It might also help him in his so-far problematic courtship of working-class white voters.

When provocative snippets from Mr. Wright’s past sermons were aired weeks ago, Mr. Obama at first denounced the comments but supported the man. When Mr. Wright went further in recent days, saying that it seemed possible the United States government had introduced the AIDS virus to undercut minorities, and that Mr. Obama’s original denunciations of Mr. Wright were not sincere, the senator finally made a break, calling the former pastor’s comments “outrageous,” and “divisive and destructive.”

Meanwhile, Mr. Obama’s standing in polls has suffered.

Asked by Ms. Vieira if he should have spoken out sooner, Mr. Obama replied, “I think the sequence of events was the right one, because this was somebody who had married Michele and I, who had baptized our children.”

He went on: “When those first snippets came out, I thought it was important to give him the benefit of the doubt, because if I had wanted to be politically expedient, I would have distanced myself and denounced him right away.”

When Ms. Vieira pressed Mrs. Obama on whether Mr. Wright had betrayed her husband, she demurred, saying, “I think Barack has spoken so clearly and eloquently about this.” She added: “We’ve got to move forward.”

Mr. Obama, who faces his next key test against Senator Hillary Rodham Clinton in the Indiana primary on Tuesday, currently a toss-up according to polls, again acknowledged that he was partly responsible for the tightening of the race. North Carolina holds its primary on Tuesday as well, and polls give him a double-digit lead there.

Both Senators Clinton, of New York, and Obama, of Illinois, were campaigning on Thursday in Indiana.

Mr. Obama again described his earlier comments in San Francisco — that some small-town Americans were “bitter” over the economy and tended to “cling” to religion and guns — as “very poorly phrased.”

“I should have said ‘angry and frustrated’ instead of ‘bitter,’” he said, “I should have said people rely on their religious faith during these times of trouble as opposed to ‘cling to.’”

Asked about surveys that show fewer Americans identify with Mr. Obama’s values than before, the senator struck a philosophical tone.

“We always knew this was an improbable journey,” he said. “We always knew this was hard, and the reason is because we’re trying to do something new.”

The Obamas had a playful moment late in the interview, as she was strongly defending him and he tried to cut her off.

“I know you’re trying to cut me off when I’m, you know, talking nicely about you,” she said, laughing.

“I know,” he smiled, “it gets me embarrassed.”

As part of the senator’s media campaign, he is scheduled to spend a full hour on Sunday on NBC’s “Meet the Press.”

Categories: CDO · Eviction · GTC | Honor · Investor · Mortgage · bubble · currency · foreclosure · inflation · politics
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Clinton Gas Tax is Vapor

April 30, 2008 · No Comments

Gas prices are up for several reasons, the primary one being that the oil companies are squeezing every last penny of profit out before the inaugeration of the new, presumably Democratic President and a congress that is heavily weighted Democratic. 

  • THERE IS NO CLINTON PLAN OR PROPOSAL: Any Gas Tax “proposal” submitted by a Presidential candidate is straight pandering. Clinton is not President, there is no strong Democratic congress, and she has not neither the existing executive power nor any proposed bill on the floor of the Senate to reduce Gas Prices or Gas Taxes. She knows it will never happen and hopes that voters won’t figure that out.
  • Her suggestion that the plan would go into effect this summer is a blatant lie. 
  • Her suggestion that she would pay for it with a windfall profits tax on oil companies is also made to the voters of Indiana but not to the Senate where it could be considered. Of course it won’t pass as long as oil money continues to flow into the DC lobbyists and the Senators and Congressman they own. 
  • Obama’s answer is reality — no recourse without reforming Washington. Clinton’s view is that Indiana voters are more interested in sound bites than good sense. I hope she is wrong.
  • OBAMA SAYS IT IS NOT PRUDENT TO EVEN MENTION IT AND ALL ECONOMISTS AGREE WITH HIM:Even if Clinton’s Plan was eventually adopted, it would not take effect until over one year from now. It can’t take effect this summer because she isn’t President and she has proposed the tax holiday to the people but not to Congress where it could happen. 
  • What would happen is that one year from now, when Gas prices are $6 per gallon, and it costs $90 to fill your tank some ten times over the summer ($900!!), you might save $30 over the summer. AND that $30 would be taken out of the infrastructure money for repairing roads, bridges and tunnels, reducing employment. 

Categories: CORRUPTION · Clinton · Obama · bubble · currency · inflation
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Clinton Scheme Blows Up: Barbara Reynolds Set Up Wright Press Club Appearance

April 30, 2008 · 3 Comments

May 3, 2008: Two interesting things about this posting.

The first is that while I posted it many days ago it has been the number one posting on this site every day.

The second is that it obviously attracted the attention of the Clinton attack machine who have tried to get me to allow comments that suggest that this entire story, which has done so much obvious damage to Obama, was actually a plot by Obama.

I almost let it go up as a comment until I heard the exact same words spoken by Clinton surrogates on TV. I concluded it was a plant and I rejected it. I also concluded that Errol Louis might have stumbled onto something important and that the thought of having the Clintons back in the White House is not nearly as appealing to me as it was a few months ago.

ALSO SEE 

http://www.nydailynews.com/opinions/columnists/louis/index.html

New York Daily News columnist Errol Louiswrites:

The Rev. Jeremiah Wright couldn’t have done more damage to Barack Obama’s campaign if he had tried. And you have to wonder if that’s just what one friend of Wright wanted.
Shortly before he rose to deliver his rambling, angry, sarcastic remarks at the National Press Club Monday, Wright sat next to, and chatted with, Barbara Reynolds.

A former editorial board member at USA Today, she runs something called Reynolds News Services and teaches ministry at the Howard University School of Divinity. (She is an ordained minister).

It also turns out that Reynolds - introduced Monday as a member of the National Press Club “who organized” the event - is an enthusiastic Hillary Clinton supporter. …

I don’t know if Reynolds’ eagerness to help Wright stage a disastrous news conference with the national media was a way of trying to help Clinton - my queries to Reynolds by phone and e-mail weren’t returned yesterday - but it’s safe to say she didn’t see any conflict between promoting Wright and supporting Clinton.

Categories: CORRUPTION · Clinton · Edwards · Mortgage · Obama · healthcare · politics
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Mortgage Meltdown: Conservatives do not Conserve and Liberals do not Liberate

April 13, 2008 · 3 Comments

The bottom line is that regardless of who steps into the oval office next January, nothing will actually change unless the dynamics of political participation by U.S. Citizens changes. It isn’t enough to vote. It isn’t wise to trust any leader to do the right thing. And it isn’t wise to trust that once a policy or program has been approved it will be ever be executed. It is up to us to hold their feet to the fire and to remain interested despite the constraints and demands of our lives. That fire will burn us and not them if we don’t wake up to this essential obligation of citizenship.

 

Both the Conservative and Liberal seek “assistance” from government, which explains that despite the slogans and speeches, government has grown to mammoth proportions regardless of whether it was dominated by democrats (generically liberal) or republicans  (generically conservative). Both seek access to the Public Treasury for their agendas, which explains why spending increases regardless of who is in power. The conservatives seek to direct the money to the top while the liberals seek to direct the money to the bottom.

 

Our citizens end each month further in debt, with less value in assets, and declining income that even a second or third job won’t cure. This is explains why no fiscal stimulus package, and no bailout will “assist” anyone. The ONLY thing that will save our economy, our sovereignty and our economic and political power here and abroad is a fundamental shift in perception and action directed toward revitalizing our population. 

This starts with taking the stress out of where they are going to live (STOP THE FORECLOSURES AND EVICTIONS) and whether they will have something to eat (10% of our population is already on food stamps). It includes medical care (we pay more for medical care than any other country on the planet, yet we deliver less, die earlier and have a higher infant mortality rate) and education (having slid to third world status) that is meaningful for their participation in society and the world. And it means telling the truth to them without using nice-sounding names of programs that are based in self-interest and potentially evil intent. 

 

 

 

Perhaps more than anyone else the one person the current “Conservative” economic policy can be traced to is Andrew Mellon, who served under the three Republican Presidential administrations as Secretary of the Treasury. The roaring 20’s, having antecedents dating back to the Civil War, and fueled by unbridled greed inspired by Mellon and his group of “leaders” created the events leading up to the Great Depression . Mellon of course made a ton of money in various endeavors, just like the other “robber barons” of his age. He was ardently “conservative” in his economic and political philosophy, or so he thought. 

 

If you asked for a definition of a conservative from Mellon or anyone else who is of like mind it would all boil down to one central idea: that the purpose of government is to “assist” private enterprise in creating jobs and wealth for the country. In fact, conservatives conserve nothing and have no desire to conserve anything, except their own rising wealth and power. Looking after one’s own interests is hardly sufficient for condemnation. Catering to one group (corporate interests, and specifically the largest of them) does nothing to conserve the most precious resource any country posses: the people who are citizens and residents of that country. 

 

The inevitable consequence of the so-called conservative philosophy is to concentrate wealth and power into the hands of an ever smaller number of people who eventually will be so taken with themselves that they will commit acts of outright theft and fraud with the assistance of a government that either passes laws to make such acts legal or which does not enforce the laws that clearly describe those acts as illegal. This is clearly the outcome we have been dealing with repeatedly with the boom and bust cycles wherein the corporate titans wring every last piece of value from the treasury of the of the government, from the citizens of this country and from the governments and citizens of other countries. 

 

And yet “conservatism” masquerades as freedom from government interference when in truth without government, the greatest fouls committed in the economic marketplace could never have succeeded without the active assistance of government including direct subsidies for acts that were and are contrary to the interests of the country — like giving tax breaks to corporations that ship jobs overseas. Like most things in politics it is a lie masquerading as the truth through the mouths of “leaders” who speak with a stright face and a forked tongue. 

 

We have a habit in politics to name things in a way that will distract the public from the real intent of the perpetrators of any particular agenda. We’ll stick with conservatism and liberalism here since that is a current topic of political discourse in this presidential season. 

 

If you asked for a definition of a liberal a/k/a progressive from anyone on that side of the spectrum it would boil down to one central point: that everyone in the country, especially the poor and disenfranchised should receive the assistance of government in seeking a better life.

 

So both the Conservative and Liberal seek “assistance” from government, which explains that despite the slogans and speeches, government has grown to mammoth proportions regardless of whether it was dominated by democrats (generically liberal) or republicans  (generically conservative). Both seek access to the Public Treasury for their agendas, which explains why spending increases regardless of who is in power. 

 

Differences do emerge however. As to conservation of resources (especially our people) conservatives treat our resources as infinite and relatively unimportant, relying upon technology to make up the difference when we run out of something. They completely miss the point that when you run your people into the ground, you have the figurative equivalent of an army that is too exhausted to fight. The battle and the war will be lost if you press forward in that condition. 

 

This is at least an adequate description of the vast majority of the American public — they are exhausted, beleaguered, and demoralized. It is not hard to see how innovation, education, the dollar itself, and the financial markets are in a near state of collapse. Led by trickle down enthusiasts, we have depleted our human resources to the point where we have nowhere to go and the rest of the world knows it. 

 

Our citizens end each month further in debt, with less value in assets, less relevant knowledge that is valued in the marketplace, and declining income that even a second or third job won’t cure. This is explains why no fiscal stimulus package, and no bailout will “assist” anyone — except the usual culprits at the top. 

 

The ONLY thing that will save our economy, our sovereignty and our economic and political power here and abroad is a fundamental shift in perception and action directed toward revitalizing our population. 

 

The Liberal  also treats our resources (natural and human) as infinite but differs in that they identify such resources as important. A nice step, but useless without positively pursuing policies that (as an actual result) conserve and revitalize our people, our economy and our societal fabric. Like their conservative cousins they tend to rely on slogans and speeches rather than accountability and results.

 

The rather obvious conclusion is that we must seek a new political route. It appears as though the American public has been awakened to this need but has been so misinformed and denied access to the truth that they cannot identify by themselves which policies hold the most promise for relieving the ever-worsening conditions in this country and around the world. The voters have been bombarded by interesting but unimportant facts and theories and slogans and speeches. We are seduced into voting against our own interests by exchanging one “leader” for another without knowing that both subscribe to the same dogma and both are seeking to further their own self aggrandizement of power and wealth.

 

In that sense, while the words could have been different, Obama correctly identified the problem with certain voters. They have been abandoned, lied to, and defrauded by promises that were never intended to be kept. They are angry and bitter about their loss of jobs, wealth, and prospects. When voters get angry they seek change, but rarely get it. Obama’s “small town” remarks were extremely uncomfortable for a lot of people to hear, but they were true. 

 

Whether you are a supporter of Obama, Clinton or McCain, if you want change, you are going to have to work for it from the ground up. If you rely on the person onstage to cure your ills because they will “fight” for you, they are telling you they have no intent to win — but they would very much like to create the illusion that they are trying to do something for you. They are not and they won’t unless you insist on it. Obama at least, as been courageous enough to speak the truth and to pursue a nuance in politics that I don’t think we have seen since Kennedy or Lincoln. Most people, even the ones that support him, get it at a gut level but really do not understand the dynamics involved. There is no way to say that without sounding condescending. 

 

The bottom line is that regardless of who steps into the oval office next January, nothing will actually change unless the dynamics of political participation by U.S. Citizens changes. It isn’t enough to vote. It isn’t wise to trust any leader to do the right thing. And it isn’t wise to trust that once a policy or program has been approved it will be ever be executed. It is up to us to hold their feet to the fire and to remain interested despite the constraints and demands of our lives. That fire will burn us and not them if we don’t wake up to this essential obligation of citizenship.

Categories: CDO · Eviction · GTC | Honor · Investor · Mortgage · bubble · currency · foreclosure · inflation · politics
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Mortgage Meltdown and Credit Crisis: News and Comment 4-2-08

April 2, 2008 · No Comments

U.S. economy in ‘very difficult period,’ Bernanke says

By Greg Robb

Last update: 9:30 a.m. EDT April 2, 2008

WASHINGTON (MarketWatch) - The outlook for U.S. growth has worsened since January and the possibility of a recession can’t be ruled out, Federal Reserve Chairman Ben Bernanke said Wednesday. “It not appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke said in testimony prepared for the Joint Economic Committee of Congress. “Clearly, the U.S. economy is going through a very difficult period.” His testimony supports the view that the Fed is not done cutting interest rates. The central bank has lowered its target overnight lending rate to 2.25% from 5.25% last fall, the largest percentage decline on record. Bernanke suggested the central bank is slowing down the pace of its rate cuts. “Much necessary economic and financial adjustment has already taken place, and monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year,” he said. Inflation remains a concern, he noted, and some signs indicate that the public expects prices to continue rising. 

EDITOR’S NOTE: State Department Overview of Global economic transactions needed, along with a department of trained, serious, non-political economists who can report the actual effects and trends of global commerce on our foreign relations.

 

  1. According to the Secretary of State and the National Security Council, counterfeiting undermines currency and constitutes an ACT OF WAR if sanctioned or promoted by one government to the detriment of another. 
  2. By promoting the expansion of “money” supply through the latest “funny money schemes” of Wall Street, the United States has been the source of counterfeiting “cash equivalents” which are currently only part of the way through the process of undermining the financial strength, viability, social services and credibility of local and federal governments around the world. 
  3. These cash equivalents (derivatives) are the modern day equivalent of counterfeiting. 
  4. While it is not likely that a military response is on the horizon, it IS likely that economic and political responses will be coming from countries that include our friends and allies. 
  5. The effect on our foreign relations is immeasurable right now. 
  6. The effect on our own economy is understated intentionally by government reporting agencies: food prices in Arizona are up 19% (demonstrating that the true rate of inflation of geometrically higher than what the government is reporting). 
  7. Food and oil and other necessities are rising sharply in the U.S. because the dollar is sinking to new lows every month. Citizens must be made aware that the economic policies and choices we make, right down to individual purchases at the grocery store or other retail locations has a direct impact on the statement we are making in our foreign relations.
  8. Paulson’s “sweeping” proposals do nothing except sweep the problems under a rug too small to hold the debris. 
  9. What must be included in any plan for changes in how the government plays referee in in the marketplace (i.e., regulation), is a new division of the State department that assesses the impact of global economic commerce and recommends policy adjustments to heal and promote our relationships with sovereign nations. 

Swiss finance minister reportedly expects tax shortfall due to UBS

Switzerland’s finance minister Hans-Rudolf Merz expects the country to receive 1 billion Swiss francs, or $1 billion, less in taxes for 2007 as a result of the crisis at UBS AG (UBS: UBS Ag he told Swiss daily Tages-Anzeiger in an interview published Wednesday. See full story

By Polya Lesova MarketWatch 4/2/2008 9:06:00 AM Crude-oil futures rise modestly as traders look to data on U.S. petroleum inventories and eye strength in the dollar. See full story 

[EDITOR’S NOTE: Somehow people must be educated to understand the relationship between a weak dollar caused by excessive borrowing and flooding the marketplace with “funny money” and the price of gas at the pump. As the value of U.S. currency declines, more of it is required to purchase anything on the world market, including oil. If OPEC follows through on converting from dollars to Euros the effect will be magnified and the price of gas at the pump could easily exceed $10 per gallon same time next year. Wake up, America!]

Wider access to high-risk currency trading lures more investors

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By Gergana Koleva MarketWatch4/1/2008 7:33:00 PM

With over $3 trillion worth of foreign currencies changing hands every day, a growing number of retail investors who seek a boost to their portfolios and a hedge for the falling dollar are viewing the high liquidity of foreign exchange trading as a tonic for troubled times. See full story

National City mulling deal with KeyCorp: report

BOSTON (MarketWatch) — National City Corp. (NCC:

National City Corporation which has seen its stock battered due to its exposure to troubled loans and softening real estate markets, is contemplating a plan to sell itself to KeyCorp (KEY: KeyCorp (New) The Wall Street Journal reported Wednesday.

Fannie Mae revises standards for mortgages: report

Fannie Mae (FNM: Fannie Mae has told lenders it will require a credit score of at least 580 for most individual loans as part of the latest move to make its standards more stringent for mortgages it buys or guarantees, according to a report Wednesday in The Wall Street Journal. See full story 

[EDITOR’S NOTE: Talk about locking the barn door after all the horses are gone! What is needed besides changes in future regulation is a solution now, today, to the massive credit crisis which now extends to all new loans including auto loans. 

 

  • The solution does NOT lie in piecemeal, patchwork of rule changes by different agencies that will conflict with each other, congressional legislation that will conflict with other federal and state legislation, or bailouts of certain players because they are either more important or less “culpable” in the eyes of the beholder. 
  • What is needed is a fast consensus of ALL the players, agencies and leaders from across the spectrum from homeowners and borrowers, through lenders, appraisers, mortgage brokers, investment bankers, retail securities sales, and investors in derivatives to 
  • STOP foreclosures and evictions, 
  • KEEP homeowners in homes unless they can’t even afford to maintain them, 
  • RESTORE the balance sheet of investment bankers and investors, and 
  • HEAL the wounded dollar and staunch the bleeding --- by reducing payments on al forms of excessive debt (caused either by artificially --- i.e., manipulated --- higher housing prices during 2001-2006, or caused by the nearly $1 trillion drain on credit card revolving debt that was promoted in every conceivable way despite interest rates so high that any financial planner or economist could tell you that the average person would NEVER pay it all back]. 
  • IMMUNIZE EVERYONE from civil and criminal action to get their cooperation (yes, Amnesty. It is more important to save our economy and standing in the world than to see a few “examples” in jail, or millions of people out on the street. We need no homeless people not a surge in their number. We need stable, rising house prices, not a view with “no end in sight.”).
  • EDUCATE the American public that this crisis transcends ideology and politics. Whatever your feeling about “entitlements”, personal responsibility and suffering the consequences, we are all bearing the brunt of this crisis every time we go to buy food, gas or other necessities. We are all bearing the brunt of this every time we expect social services like education, fire, police or paramedical help — and they are diminished because the local treasury has been depleted by losses in CDOs/CMOs and by inflation. We are all putting the burden on our children, grandchildren and great-grandchildren for spending money we didn’t need to (like over paying for medical care and drugs compared to all other countries and going to wars to protect an interest in oil which should have been abandoned long ago as a fuel source)

Obama comes closest in his proposals. But even he has failed to grasp all the horns of the bull]

Manhattan apartment sales fall most in 18 years as buyers wait

Manhattan apartment sales plunged the most in 18 years last quarter as buyers faced the prospect of a recession and job cuts at Wall Street securities firms. See full story at Bloomberg.com

Paulson says Treasury `flexible’ on housing measures

Treasury Secretary Henry Paulson indicated the Bush administration is willing to consider congressional plans to stem foreclosures by expanding government guarantees for mortgages. “I think you will continue to see flexibility as we learn and go forward,” Paulson said in an interview with Bloomberg Television in Beijing. See full story at Bloomberg.com

Lehman in market abuse claim

Lehman Brothers (LEH: Lehman Brothers Holdings Inc  on Tuesday said it had sent information to the Securities and Exchange Commission about possible abusive short-selling in its shares in recent days. Erin Callan, Lehman chief financial officer, said the SEC was examining whether hedge funds acted in concert to drive down the bank’s share price in the days following the near collapse of Bear Stearns. Such behavior could constitute market manipulation, subject to civil and criminal sanctions. See full story at FT.com

Categories: CDO · CORRUPTION · Eviction · GTC | Honor · Investor · Mortgage · Obama · bubble · community banks · credit unions · currency · education · foreclosure · foreign relations · healthcare · inflation · interest rates · politics · securities fraud
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Euro Dominance And American Policy

March 14, 2008 · 2 Comments


Get with the Program: Challenge for the Obama Presidency. Fundamentals vs. Brute Force

American policy should be changed to reflect the paradigm shift — to determine ways in which we would be an acceptable member of the European Union and gradually shift to the Euro as the currency of choice. In order to accomplish this, U.S. leaders must guide the country back on track toward production, rather than perceived “productivity” and purchasing power rather than perceived “corporate earnings.” Rather than the old methods of brute force, Obama’s message of consensus will do more to stabilize our economy and foreign affairs than any of the proposals of his opponents or prospective opponents. Far from being in the clouds, Barack Obama, reflecting his experience at ground level on the streets of Chicago, understands the true dynamics of achievement, especially when it comes to peace and prosperity.

The European Union and the creation and adoption of the Euro as a competitive currency to the U.S. dollar was an inevitable bi-product of the Bretton Woods agreement and an American policy that pursued brute force and meddling in the affairs of other nations rather than the rather simple logic employed by such countries as Ireland, Brazil and Venezuela who have all achieved status by investing in their greatest resource — their own people. As nations join the European Union and the Euro gains increasing market share, the perceived safety of the judgment of a council of nations rather than dominance of a single nation is becoming apparent.

Things change. While the definition of “money” has not generically changed, the character of money has fundamentally shifted in every conceivable way. Agreement, acceptance and faith are elements of human interaction and society. They are also the cornerstone of “money,” by which we measure the value of things, store value and exchange goods. 

It is common theme that the perceived dominant world player has had its currency adopted by most of the commercial world and the governments of other sovereign nations. 

Prior to the dollar, it was the pound sterling. Over centuries the main currency of world commerce has shifted from the fiat money of one country to another depending upon world perception of the strength of their economy and their political and military strength to maintain their position. 

Everyone has their “fifteen minutes” and then it is up — but nobody gives up their position without a fight. Sometimes the fight is world war, extended regional wars or other military confrontations. Other times it is a diplomatic and commercial battle in the marketplace of ideas and the relative strength and weakness of competing treasuries. 

In the end, for better or worse, a new consensus arises and the currency of the dominant country shifts along with the enormous economic, political and social power and influence that commercial dominance endows the creator of the most favored currency.

In 1944, world leaders, prompted by “economists” and pure commercial interests came up with the forerunner of the new world order emerging today. It was the Bretton Woods conference. It was a formal meeting of sovereign nations and a negotiated agreement as opposed to “market forces” or competing unilateral sovereign agendas coming into balance. It was consensus of the kind that Barack Obama proposes and which even our enemies embraced as they have ever since scurried to enhance their holdings of U.S. dollars.

This event marked the beginning of a process that would pacify the U.S. and its ever-expanding ambitions, but ultimately end up with a shared unity that was NOT tied to whims of a single government. It was a relinquishment of sovereignty that could not and would not become undone. It would grow and evolve causing pervasive changes in business, banking and relations between countries.

The Bretton Woods Agreement did two things — set a gold standard, which was a temporary measure that only the the most forward thinkers understood, and set the currency for international (world) commerce as the U.S. dollar which was tied to Gold at $35.00 per ounce. 

Using gold is a standard that was hardly new. Yet the process of formal agreement was new and that process would emerge as the only lasting impact impact of the conference. 

Gold was valued because of its scarcity, its beauty and mythic reverence that was in the minds of believers from the dawn of commerce. It worked because of two factors — on the one hand a subjective set of factors including agreement, acceptance and faith and on the other, a scarcity that was somewhat controllable by additional mining. Periodically, gold strikes wreaked havoc with the price of gold but on the average it has been a relatively stable influence on commerce. 

The weakness of Gold was in its relative scarcity to population growth and related growth of commercial activity on the one hand and in the meteoric changes in the nature of money which has become increasingly symbolic tot he point where now most of it merely exists in electronic data files that nobody can touch, feel or roll around in their hand. There is no slight of hand coin trick to display for amusement because there is no coin.

Putting these factors together brings us to the inescapable conclusion that the supply of gold could not possibly keep up with the growth of human society. Indeed that was the precisely the issue when Nixon and Volcker, in 1971 decided to withdraw from the Bretton Woods agreement, and NOT promise to back every dollar with gold valued at $35 per ounce. 

While viewers of the popular show Bonanza were doubly disturbed that their favorite program was interrupted by the President on a lazy Sunday evening and that their currency was suddenly in free fall, the Nixon-Volcker decision was merely a statement of the obvious — the U.S. already was out of balance three to one (gold on hand versus dollars issued) and the situation was clearly permanent and getting worse. We had in fact passed the point of no return very soon after the Bretton Woods agreement was signed.

This decision eventually brought the U.S. back to dominance of the the perceived leader on world affairs. But lurking underneath was the positive knowledge of other world leaders and people who would become world leaders that an agreement was not only possible but inevitable. As long as the dollar was useful it would remain the currency of choice. Now the dollar’s usefulness is in doubt — the result of “creative schemes” from wall Street, overspending, failures to invest in itself and the inevitable downfall of the two engines of any economy — production of goods and services that people want, and the ability of people to pay for them. 

The European Union and the creation and adoption of the Euro as a competitive currency to the U.S. dollar was an inevitable bi-product of the Bretton Woods agreement and an American policy that pursued brute force and meddling in the affairs of other nations rather than the rather simple logic employed by such countries as Ireland, Brazil and Venezuela who have all achieved status by investing in their greatest resource — their own people. As nations join the European Union and the Euro gains increasing market share, the perceived safety of the judgment of a council of nations rather than dominance of a single nation is becoming apparent. It is proof positive that Obama’s perception of the world is right and that the other candidates are clueless as to the realities.

This represents a fundamental but entirely logical shift. It is a change from the acceptance of brute strength to consensus — a somewhat democratic consensus that captures the spirit of the American experiment if not its announced policies and secret agendas. 

It logically follows that the tide is changing with such force that it is unlikely that any one nation, no matter how strong, will gain world acceptance of its currency as the currency of choice for world commerce regardless of its military or political power. In the end it is people who determine agreement, acceptance and faith in the marketplace.  

When people start making distinctions of their own as to which “band” of dollar has greater value (recently issued or older) and discounting the dollar based upon their own individual perceptions the currency is in trouble. There are places where the signature of one U.S. Treasury secretary over another results in a discount of 10% or more. 

Thus it is the either the Euro that will eventually overtake the dollar or some other emerging union that will find acceptance. The dollar is in free fall and no amount of bailouts, regulation or creative solutions will suffice. The goal post has been moved. 

American policy should be changed to reflect the paradigm shift — to determine ways in which we would be an acceptable member of the European Union and gradually shift to the Euro has the currency of choice. In order to accomplish this, U.S. leaders must guide the country back on track toward production, rather than perceived “productivity” and purchasing power rather than perceived “corporate earnings.” There are plenty of examples around the world as to how to do this — they all amount to the same thing — education of every man, woman and child, in skills, culture, knowledge and analytical ability. The words are very simple and have already been written: “The pursuit of happiness.”


Categories: Bush · CDO · Eviction · GTC | Honor · Investor · Mortgage · Obama · bubble · community banks · credit unions · currency · education · foreclosure · foreign relations · inflation · interest rates · politics · securities fraud
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