Flash Editorials December 1, 2012

December 1, 2012

By Russell D. Longcore

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(Editor’s Note: WordPress, the host of this blog, deactivated the blog Friday night, indicating that I had violated their Terms of Service as related to Advertising Policy. This blog has been going continuously since 2009…over FOUR YEARS with a perfect record of compliance. WordPress did not send me an email…make a note on my blog…call me…and tell me that there was some piece of content they wanted removed. They just shut me down. We here at DumpDC may need to move from WordPress to a private web host. We still love WordPress, but feel their treatment of us was pretty heavy handed. The site came back online about 3:00 Eastern Monday, and WP still has not communicated with me to tell me what they want done. We await their pleasure…)

Welcome to Flash Editorials for December 1st, 2012. Christmas…Bah, Humbug!!

I am Russell D. Longcore, owner and editor of DumpDC. Flash Editorials is presented by w w w dot Dump D C dot com. DumpDC is the world leader in secessionist thought. We show the world that secession is the only hope for personal liberty and property rights on the planet.


Now, to the news.

The pickins are pretty slim these days after the Obama win, but we do soldier on.

The Nation I: Two tickets for the $588 million Powerball lottery were sold Wednesday night…one in Missouri and one in Arizona. There is a hidden code in your Powerball ticket. If you still have one handy, grab it and I’ll tell you how to read your losing Powerball ticket. The First number is the number of car payments you still have to make. The second number is the number of years you’ll have to keep working at that job you despise. Third number is the number of major life mistakes you’ve made that led to a near-impossible Lotto win being your only hope for a debt-free existence…or a comfy retirement. Fourth number is how many dollars you have in your checking account. Fifth number is how many times you stood in front of the bathroom mirror rehearsing the ways you were going to tell your co-workers and boss to kiss your ass. And the sixth number is the number of times you will re-check the ticket before accepting that you had not a chance in hell of winning. (I stole that off of Facebook.)

The Nation II: The only other story worth mentioning here in national news is the death of Zig Ziglar. Zig died Wednesday in Dallas from complications of pneumonia. He was 86. Ziglar was the undisputed Emperor of all motivational speakers. He filled auditoriums where ever he spoke. His career spanned five decades, and Zig was…and still is…greatly beloved by those like me who are personal development junkies. His most famous quote is, “You can get anything in life you want if you’ll just help enough other people get what THEY want.” Rest well, Mister Ziglar. You’ve earned it.

International I: A tectonic economic shift occurred in Phnom Penh, Cambodia during the week of November 16th to 20th, and America still does not know about it. The 20th ASEAN Summit of 2012 brought together thirteen nations that represent half of the world’s population. Our Dearly Beloved Leader Barry showed up at the conference with his bag 0’tricks, and was politely tolerated until he left, as is the Asian way. America has little to offer the world at this point, and Obama’s proposals for American participation in Asia were shunned entirely. The world is lining up with China, and the nations of the developing world are looking to China for economic leadership…and finding it. China is leading the BRICS nations in an effort to replace the US Dollar as world reserve currency. Remember that China is the world’s largest producer of gold and silver, and China does not disclose much of their mining output. China also is not selling gold outside its own borders. So their lead on the world in gold production is far greater than anyone but the Chinese know. China has been a net seller of US Treasuries over the past year, not adding any more bonds to their holdings, but quietly selling them. And curiously, Japan has been the biggest foreign buyer of US bonds lately. Just goes to show you. Japan’s economy imploded from too much debt about 20 years ago and has not fully recovered. And now they are adding on more American debt instruments? Isn’t this the nation that just had a giant earthquake and tsunami that destroyed much of their nuclear power generating infrastructure? Japan should be plowing all its Yen into its own nation, not helping prop up Washington. Japan would not be buying all this debt unless it perceived some benefit from it. Don’t you wonder what DC has promised the Japanese government? These things have a way of leaking out. Stay tuned.

Yesterday’s DumpDC posting was all about this. Scroll down and make sure you read the article entitled, “The Asian Pivot Already Happened.”

Business I: This week’s Reuters Online has a story about entrepreneurs and “Lean Startup.” That term defines a web businessman starting with little or no capital investment. Another term I’ve seen is “Ultralight Startup.” Google that term to learn more. But if you have never done an online business, what do you do? If you ever dreamed of owning a small business, the timing for starting one could not be better. Your choice of which business to start is more important than any other consideration. Let me show you our business at: www.PortableOnlineBusiness.com

Here is tonight’s commercial message. Anybody read the Tim Ferriss book, The Four Hour Workweek? The subtitle is ”Escape 9-5, Live Anywhere, and Join The New Rich.” Ever heard a sexier title…a more irresistible tease? Who wouldn’t want a four hour work week? But I have something that is a variation on that. Maybe I’m not as good as Tim, or perhaps I have different talents and abilities than he has. But my system works just GREAT!

Let me offer to you the joys of 7 Hour Wealth! At 7 Hour Wealth, our sub-title is “Live How You Want To Live, Live Where You Want To Live, And Make Money Doing It!”

We still LOVE the DEAL concept that Tim Ferriss teaches. DEAL is an acrostic for a process of creating time freedom, which is what we are all about:

D – Definition: You must define how you want your life to operate before you can have it.
E – Elimination: We teach you how to get rid of time gobbling activity in favor of time spent that is rich in results.
A – Automation: being to outsource the stuff you know best to others, thereby freeing up your time while still maintaining control of the process.
L – Liberation: this is about living the success you defined at the beginning. And this level of success allows for the ultimate luxury…mobility and the freedom to live by your own rules, not someone else’s rules.

Sound tempting?

Click on: Get 7 Hour Wealth Here!

Economy I: The number of actual initial unemployment claims filed under state programs, unadjusted, totaled 357,015 in the week ending November 17th. This is a whopping decrease of 46,541 over the previous week and is attributable to Holiday merchants hiring. Curiously, the Labor Department NEVER reports the number of claimants that reached the end of their benefits and fell out of the system. But the story is the number. Another 357,000 people just like you filed new jobless claims last week. Just last week. And corporations all across America will shed jobs in the final weeks of 2012 in an attempt to show greater profitability at the end of the 4th quarter. It happens every year.

And I’ll say it again. Think about all those jobs said to have been “created” by the Obama Administration, or promised by schmucks like Mitt Romney. First…government does not create jobs, either in the public sector or the private sector. Jobs are created by capital, not by taxation. Capital is investment; taxation is theft with the implied threat of death. All jobs are not created equal. If you create two jobs that pay $10 an hour in the low-paying service sector to replace the high-paying engineering job in manufacturing that paid $50 an hour, you can truthfully say you created more jobs than you lost. But the economic impact is not the same. This is the dirty little secret of the politician and job creation. And the only reason they can get away with this over and over is that the American people don’t know the difference and don’t know the numbers behind the headlines.

In Sports: Big rivalry in the NFL between the New Orleans Saints and the Atlanta Falcons got decided in Atlanta’s favor Thursday night with a 23-13 win. That leaves the Falcons with the best record in the NFL at 11-1, and the Saints effectively out of any hopes of getting to the playoffs. Playoffs? Playoffs? Jim Mora.

In Entertainment: The Rolling Stones are beginning their 50th Anniversary Tour with a show in London on Sunday night, then on to three more gigs in America…in the New York area. Can you imagine these old coots, all nearly 70 years old, still playing kick-ass rock and roll? Jagger was born in 1943…do the math. And what Vegas bookie would have even taken a bet on whether Keith Richards would even be alive in 2012? But here they are, doing four more concerts. And their concerts will be over two hours long, with nearly two dozen songs performed. But only four concerts…they’re old wankers. Ancient tossers.

Finally, in Entertainment: JRR Tolkien’s epic book The Hobbit has been lovingly turned into a three-movie series by Peter Jackson, the producer that brought us the Lord of the Rings trilogy. Hobbit One will be in theaters on December 14th. You must see this film.

That’s all for tonight. Thanks for watching. I am Russell D. Longcore. For all of us here at Dump D C: Good night and good luck.

Dump DC: Six Letters That WILL Change History.

Copyright 2012: Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.


The Asian Pivot Already Happened

November 30, 2012

The “Asian Pivot” in the title is a recently-invented phrase which describes world nations pivoting away from American allegiance and pivoting toward Asia and specifically China.

Spengler is a link to an outstanding article by “Spengler” at The Asian Times. You MUST read this. The American Main Stream Media will not report this, yet this meeting that happened November 16th – 20th, was the single most important market shift in the last 100 years.

Here are a few excerpts:

“It is symptomatic of the national condition of the United States that the worst humiliation ever suffered by it as a nation, and by a US president personally, passed almost without comment last week.

Does the United States have a competitive advantage? Apart from commercial aircraft, power-generating equipment, and agriculture, it has few areas of real industrial pre-eminence. Cheap natural gas helps low-value-added industries such as fertilizer, but the US is lagging in the industrial space.

…The US still dominated the nuclear power plant industry. With the sale of the Westinghouse nuclear power business to Toshiba, and Toshiba’s joint ventures with China to build (thorium) power plants locally, that advantage has evaporated.

The problem is that Americans have stopped investing in the sort of high-tech, high-value-added industries that produce the manufactures that Asia requires.”

CLICK HERE FOR THE ARTICLE: The Asian Pivot


FRONA and Jobs

October 16, 2012

How High is High?

By Russell D. Longcore

American politicians, constantly jonesin’ for a vote fix to satisfy their addiction for power, promise that what THEY propose will return “high-paying jobs” to America once more. Messrs. Romney and Obama are presently jockeying for position on this very topic. It’s one of the most cynical, dastardly lies they tell to credulous Americans and to each other.

The Free Republic of North America will be the only location on the planet where high-paying jobs will again exist. But it won’t be for the reason most people think. More on that later.

For a quick primer on what a job is, go to It’s Demand, Stupid! and read it.

If you visit DumpDC regularly, you know what a “connotation word” is. I have written about them many times. “High-paying jobs” is a connotation phrase. A connotation phrase is one that carries a subjective cultural or emotional association. An example of a connotation word is “God.” Your emotional or cultural interpretation of that word might be the little statue in the corner that you bow down to, burn candles to, and offer chicken blood on an altar. Another person’s mental picture might be the God painted on the ceiling of the Sistine Chapel. But I can manipulate you by the use of the word so that you either agree with me or disagree with me. My definition of the word or phrase is probably not the same as yours. A dishonest person used that to his advantage.

So it is with “high-paying jobs.” What does “high” mean? As compared to what? What is the yardstick with which we measure high-ness?

I contend that high-paying jobs are a relic of the American past, never to return to American shores. Let me walk you through my thought process on this issue.

The level of technological manufacturing has never been higher than it is today. A large percentage of that manufacturing is done outside the USA. American manufacturers are getting their products built overseas. But has quality gone to hell?

No. It’s better than ever. But market forces are at work globally…even in a market distorted by the Dollar.

In the free market, competitors will challenge your offering of goods or services in one of three ways:

1. Same product, better price
2. Better product, same price
3. Better product, better price

Where are LOTS of the highest technology products of the planet built? China. China has cornered the market on technological manufacturing. According to Forbes.com, tech workers earn about $1.50 per hour in a company like Foxconn, which manufactures the iPad, the iPod, the iPhone, Kindle, Playstation and Xbox 360. But its 2011 revenue was $102.74 BILLION. And the world snaps up its manufactured products as fast as lightning.

Here are some tidbits of information about your Chinese competition:

1. In China today there are over 320 million people that speak English. That means they are all at least bilingual. It is also a number greater than the entire population of the USA.
2. The US individual savings rate is zero. The Chinese individual savings rate is 34%, and a lot of those savings ARE IN GOLD.

You can tell me about currency manipulation, free trade agreements, tariffs, duties, and lots of other advantages or disadvantages allegedly held by one nation or another. But here is what I observe:
1. A bilingual Chinese worker will be trained to perform very high-tech world-class manufacturing skills…and then perform those skills for about 15% of the wage that American workers expect.
2. The American corporations that manufacture offshore are not subject to the burdensome American regulations (like OSHA and ADA) that they suffer on American soil, are they?
3. Offshore workers are not subject to unemployment insurance, Worker’s Compensation or Obamacare, are they?
4. American corporations can lawfully incorporate in other countries and leave their profits offshore so they are not subject to confiscatory Washington taxation, can’t they?

So just exactly HOW and WHY are American corporations going to bring “high-paying jobs” back to North America? What would be their motivation? All of the reasons they moved operations offshore still exist, and Washington is not going to roll back laws, taxation or regulation to bring those jobs home. Corporations exist to enrich the shareholders, not to perform some social function for “the greater good.”

Now let’s discuss what Washington has done to cheat the entire planet.

The world economy is a balloon inflated by the US Dollar. The tools Washington has used are (1) fiat currency, (2) fractional reserve banking, and (3) inflation caused by issuing trillions of dollars with no underlying value. Because the dollar lost 95% of its value since 1971, wages have been stagnant for over 40 years.

According to InflationData.com, you would need $568.84 in 2012 to have the same buying power that $100 had in 1971, the year in which Richard Nixon closed the gold convertability window for the US Dollar.

So, using the same calculator, a non-union carpenter that earned $10.00 per hour in 1971 would have to earn $56.88 per hour in 2012 just to have the same purchasing power that he had in 1971. Do you know any non-union carpenters that earn $56.88 per hour? Neither do I. And remember…that $56.88 does not reflect any raise in pay due to an increase in productivity. THAT IS JUST TO BREAK EVEN and maintain purchasing power. $56.88 times 2,080 hours (40 hours/wk. x 52 weeks) is $118,310.40. Once again…do you know any non-union carpenters who earn $118K per year? Me neither. I can hire all the carpenters I want today for $25 per hour here in Atlanta.

This calculation is the same for all of us. Inflationdata.com states that the average annual inflation rate since 1914 is 3.24%. That is 98 years, friends. I think it has become a trend by now. And, because of the Quantitative Easings I, II and III, the inflation rate is poised to skyrocket into insolvency. DC has no choice but to either continue printing fiat money and buy Treasury bonds, or allow interest rates to increase, which will drive DC into insolvency. There is no third choice for Washington.

Dear Readers, is there any solution for this problem? Yes there is.

SECESSION.

The Free Republic of North America will be able to DOMINATE the global manufacturing marketplace because of:
1. Its metals-backed money. Precious metals money NEVER has inflation. EVER. The free market determines the prices for goods and services based upon metal weights, not fiat currencies. Hard money chases out bad money. FRONA has no central bank, and therefore has no opportunity to steal from the citizens through monetary policy. And by protecting the value of the money by not regulating or monopolizing it, FRONA creates an irresistible draw to businesses. Imagine living in a place where you KNOW your money will have the same value year in and year out.
2. The business of the Free Republic of North America is business. FRONA’s charter commitment to individual liberty and property rights naturally favors transactions between individuals. And businesses are organic extensions of individuals. What is a corporation but individuals investing together seeking a return on their investment? When property rights and contracts are held sacred, and not subject to governmental abrogation, business can thrive.
3. Regulation. FRONA’s Founders were smart enough to write a simple Charter that gives FRONA very limited functions. All else is left up to the citizens of FRONA to figure out on their own in the free market. FRONA will not be weighed down with the American-style regulations that chased business from its own shores. The absence of regulations will be an irresistible magnet to global companies to locate within The Free Republic. And don’t forget that the cost of American regulations is built into every product. But not in FRONA.
4. Taxation. No corporate taxes? No property taxes? No duties or tariffs? No Social Security, Medicare, or income tax withholding? Entire accounting departments that exist in American companies will not exist in FRONA companies. No tax other than the national sales tax could mean lower priced goods and services, or more profit for the business owner. Or both.

High-paying jobs are jobs in which the labor cost of a product or service allows an individual to trade his time for money at a price that may use less of his time and provide more free time for that individual. High-paying jobs are a function of what any goods or services take to produce. High-paying jobs are those in which the workers have a superior level of training and/or experience, and they are able to negotiate more money paid to them per hour of labor. And all that is due to the free market, which decides the price of any goods or services by supply and demand.

In FRONA, people will no longer denominate every transaction in Dollars. They will conduct commerce in WEIGHT AND PURITY. When someone asks your hourly rate, you might reply that you work for one ounce of “999” (99.9% pure) silver per hour. In today’s US Dollar, that would translate to about $34.00 per hour.

So the high-ness of a so-called “high-paying job” will be relative to the monetary unit in which it is measured. Sure, there will be high-paying jobs in FRONA. But not measured in Dollars. And they will exist because FRONA has created THE ONLY free-market environment where they can exist.

If US politicians can get you jobs that pay $56.88 an hour, but that money has only the purchasing power of $10 in 1971, what have they actually done for you? They have stolen your money’s value. And the higher the inflation rate, the more dollars it will take to buy goods and services. So if you earn $500 an hour or $5,000 an hour, you’re a sucker and DC knows it. They count on it.

Secession is the only hope for mankind to enjoy individual liberty and property rights in North America.

DumpDC. Six Letters That Can Change History.

Copyright 2012 Russell D. Longcore. Permission to reprint in whole or in part is gladly given, provided full credit is given.


Flash Editorials May 5, 2012

May 5, 2012

By Russell D. Longcore

The Nation I: This week, Warren Buffet and Berkshire Hathaway are hosting their annual meeting in Omaha. Thousands will attend. You gotta give the old boy his snaps. He has become one of the world’s wealthiest men in the stock market and owning companies. But a big part of his amassed wealth came from doing business with the Federal Government. So is it any wonder that in his doting years, he says stupid things like “the wealthy should pay more income taxes?” His “Buffet Rule” legislation went down in flames last week in Congress. But think about this. No one is preventing any wealthy individual from writing an extra check to the US Treasury. So this is not about the wealthy paying more voluntarily. This is all about being forced to pay more at the threat of death or imprisonment. This is all so extraordinarily disingenuous. The Congress carries the water for business. The tax code for business owners is laden with tax benefits and tax credits that employees don’t get. Employees don’t have their capital at risk, and they don’t deserve business tax breaks. But we all deserve less taxation. So instead of stealing more from the wealthy, let’s see someone slash EVERYBODY’S tax rates. Even better would be a ten percent national sales tax and no income tax.

The Nation II: President Obama made a surprise trip to Afghanistan this week to keep the fictional account of the murder of Osama bin Laden alive, now one year old. This was a campaign speech wrapped in an even bigger lie. Obama didn’t cap Osama. Bin Laden died of kidney failure back in 2002. Too bad presidential lies are not felonies.

International I: In the wake of the nuclear meltdown in Japan, the Japanese government has closed all of its nuclear plants for the first time in 40 years. Now they expect brownouts and rolling blackouts. Out of the frying pan into the fire. Hey Japan!!! Ever heard of the Molten Salt Reactor, using thorium as fuel? Totally safe, no radioactive waste, 60-year-old technology? China has…

Business: At a Sotheby’s auction Wednesday, one of the original four versions of Edvard Munch’s painting The Scream (you know, white face, mouth gaping open, eyes wide…kind of looks like that mask from the horror films) sold for $119,922,500…a new record. The winning bidder had way more money than common sense.

In tonight’s commercial message. Here are the most important questions I could ask you: Are you living the dream? Do you spend as much time with the people you love as you want to? Are you living in the home of your dreams? Are you living in the spot in the world that you dream of? Do you drive the car of your dreams? Do you have a dream of helping others in some charity that remains unfulfilled? And let’s talk about where we spend a huge chunk of our time…at work. Are you working at the job of your dreams? Are you making the kind of money you always dreamed of earning? Were you able to answer “YES” to any of those questions? Most people I know are not living the dream…whatever that phrase means to THEM. I can’t tell you what YOUR dream is. But if you could not answer “YES”, how are you planning to make your dreams come true? There is a racing analogy that works well here: You must have the right vehicle but you must be the right driver. Think about it. If you have a NASCAR or Formula One car, and you’re the driver, you’ll probably get yourself killed in a race. And if you take the best NASCAR or Formula One driver and put him in a Volkswagen Beetle, he has no chance of winning. To win and make your dreams come true, you must be the right driver in the right vehicle. Here is another important question: How important ARE your dreams to you? Do you have a burning desire to make them come true…or do you just enjoy fantasizing about what it would be like to live the dream? Most of the people I spend time with are in the first category. They are working hard to make their dreams come true. Even if you have the right vehicle and you don’t think you’re the right driver, cheer up!! You can Learn to be a great driver…the driver of your dreams! If you’d like to learn more about making your dreams come true, and whether or not my energy business could be the right vehicle for you, send me an email at russlongcore@gmail.com. We can talk about it possibly designing a plan to make your dreams come true!

Economy I: The advance number of actual initial claims under state programs, unadjusted, totaled 330,475 in the week ending April 28, a decrease of 40,158 from the previous week. Yet, the Labor Department reported 365,000 new jobless claims last week. And here is a new piece of information I have never seen before, Today, the St. Louis Federal Reserve released a Bureau of Labor Statistics chart and report about Americans in the category “Not In The Labor Force.” Their report showed 88,419,000 Americans that have functionally dropped out of the labor force altogether. The chart only records up to 88 million people. Now…do you wonder how the government-released unemployment rate can be between 8-9% when 88 million adults are not employed in America? Folks, there are only about 315 million living people in America, and 25% of them are below age 18. Do the math. That means the REAL unemployment rate is about 25%. This statistic makes the Great Depression of the 1930 look pale by comparison.
Here is the chart.

Sports: Former NFL All-pro linebacker Junior Seau died of a self-inflicted gunshot wound this week. Seau is the eighth player from the 1994 Chargers championship team to die. We will all learn more about Seau’s life as the story unfolds, but there is something real bad about the head trauma that is happening in the league all the time. A lot of old players are ending up with dementia and other ailments from old football injuries. But this is the most violent sport in America. There weren’t too many Roman Gladiators that enjoyed a soft retirement either.

Entertainment: The movie The Avengers opens this weekend, and many are predicting that it will have the biggest box office first weekend in history, even bigger than the biggest Harry Potter opening weekend. Go see Nick Fury and his team of The Hulk, Ironman, Captain America, Thor, Black Widow and Hawkeye whip some bad guy butt. Written and directed by Joss Whedon of Buffy the Vampire Slayer and Firefly.At a theatre near you!

Dump DC: Six Letters That Can Change History.

Copyright 2012: Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.


Nuclear Power Secrets Revealed

April 17, 2012

Nuclear Power Is Expensive and Bad for the Environment. It’s Being Pushed Because It Is Good For Making Bombs

by Washington’s Blog

(Editor’s note: Once again, Washington completely screws up something it controls. We are learning that the Fukishima nuclear disaster has its origins in DC. What a surprise.

Imagine a seceded state, now a new nation. How does it become 100% energy independent without uranium/plutonium reactors or coal-fired plants? Thorium reactors, called Molten Salt Reactors (MSR). Completely safe with no radioactive waste, and a proven 50-year-old technology. When you read the article below, you should get pissed at Washington. I did. You might also find THIS ARTICLE infuriating. China is leading the world in MSR technology.)

If nuclear energy is expensive and bad for the environment, why is it being pushed so heavily? And why did the Fukushima reactors use plutonium – instead of just uranium? We need a little background to understand the answers.

Virtually all of the nuclear reactors in the U.S. are of the same archaic design as those at Fukushima. This design was not chosen for safety reasons. Rather, it was chosen because it worked in Navy submarines, and produces plutonium for use in nuclear weapons.

Indeed, safer designs – such as thorium reactors – were left on the shelf because they don’t produce weapons-grade plutonium.

Governments have been covering up nuclear meltdowns for 50 years in order to protect the nuclear plant production of weapons-grade nuclear material. They have also suppressed the findings of their own top scientists about the health risks of radiation. Indeed, “nuclear regulators” are really just promoters for the nuclear cycle.

As veteran investigative reporter Joseph Trento – who has received six Pulitzer nominations, worked for CNN’s Special Assignment Unit, the Wilmington News Journal, and prominent journalist Jack Anderson – notes in a new report, the U.S. circumvented national and international laws to secretly give Japan nuclear weapons:

The United States deliberately allowed Japan access to the United States’ most secret nuclear weapons facilities while it transferred tens of billions of dollars worth of American tax paid research that has allowed Japan to amass 70 tons of weapons grade plutonium since the 1980s, a National Security News Service investigation reveals. These activities repeatedly violated U.S. laws regarding controls of sensitive nuclear materials that could be diverted to weapons programs in Japan. The NSNS investigation found that the United States has known about a secret nuclear weapons program in Japan since the 1960s, according to CIA reports.

***

[Japan] has used its electrical utility companies as a cover to allow the country to amass enough nuclear weapons materials to build a nuclear arsenal larger than China, India and Pakistan combined. This deliberate proliferation by the United States fuels arguments by countries like Iran that the original nuclear powers engage in proliferation despite treaty and internal legal obligations.

***

That secret effort was hidden in a nuclear power program that by March 11, 2011– the day the earthquake and tsunami overwhelmed the Fukushima Daiichi Nuclear Plant – had amassed 70 metric tons of plutonium. Like its use of civilian nuclear power to hide a secret bomb program, Japan used peaceful space exploration as a cover for developing sophisticated nuclear weapons delivery systems.

Political leaders in Japan understood that the only way the Japanese people could be convinced to allow nuclear power into their lives was if a long line of governments and industry hid any military application. For that reason, a succession of Japanese governments colluded on a bomb program disguised as innocent energy and civil space programs.

***

Until the March 2011 tragedy, the Japanese nuclear industry had largely remained hidden from critical eyes. The less than thorough InternationA nuclear-armed Japan would relieve much of the drain on American military resources. The need to keep two divisions on the ground in Korea, as well as nuclear armed ships and aircraft in the Pacific as a hedge against China and the missile bases in the Soviet Far East detracted from the Pentagon’s chief mission – preparing for all-out war on the plains of Central Europe. The Reagan administration’s strategy was to push the Soviet war machine until it broke, taking the Soviet Union and its satellite regimes with it. The less than thorough International Atomic Energy Agency, the world’s proliferation safeguard agency, also turned a blind eye.

In a rare glimpse of a Japanese industry that has remained top secret for so many decades, our investigation raises serious concerns about Japanese and Western nuclear policies and the officials who shaped those policies during and after the Cold War. International corporations and officials sacrificed the safety and security of the public to carry out the deception. Under the guise of a peaceful nuclear power program, they made huge profits.

***

Both the Monju fast-breeder reactor in 1995 and the Tokai reprocessing plant in April 1997 suffered serious, accidental radiation leaks; both accidents were the subjects of attempted cover-ups. Most egregious was the fire and leak of radioactive sodium at the Monju FBR. Japan’s Power Reactor and Nuclear Fuel Development Corporation (PNC), the government corporation that operated Monju, lied repeatedly to the public about the accident. PNC attempted to suppress video footage that showed the cause of the accident: a ruptured pipe in a secondary cooling system that had spilled an estimated two to three tons of radioactive sodium – the largest such leak in the history of fast-breeder technology. One of the reasons PNC gave for releasing the misinformation was that Monju was too important to Japan’s energy program to jeopardize the reactor’s operation. In other words, the public’s safety was secondary to the breeder program.

Had it not been for a courageous act by a group of Fukui prefecture officials in the early morning of December 11, PNC’s attempted cover-up probably would have succeeded. Suspecting a cover-up, the officials entered the plant and secured the videotape. The action came as a direct result of a previous accident at Fukui’s Tsuruga Unit I reactor in the early 1980s. Fukui prefecture officials were not permitted to investigate that mishap. When the Monju accident took place, the officials were determined not to be turned away a second time. Following revelations that the agency itself had been involved in trying to withhold the video, a PNC executive committed suicide.

***

The Fukushima nuclear disaster was not Japan’s first close call with nuclear weapons grade plutonium. Japan came very close to contaminating the Chilean coast on March 20, 1995, when the Pacific Pintail, laden with enough waste plutonium to build hundreds of nuclear bombs, tried to head into the protection of Chilean waters during a storm [with] 40-foot waves crashing over her bow, the spray flying away horizontally in the storm. He was in the midst of an Antarctic gale off Cape Horn at the tip of South America – the deadliest ocean in the world….

BBC notes:

A veteran of the nuclear industry wrote this: “What the industry needs to regain the support of the British public is… something akin to a Truth and Reconciliation Commission.”

It needs to be admitted that governments and industry lied to the public about the links with the military programme” ….

Washington’s Blog is a frequent contributor to Global Research.


Flash Editorials March 10, 2012

March 10, 2012

By Russell D. Longcore

This has been a news-filled week!

To view this article as an entertaining animated video, click below.

The Nation I: Breitbart’s revenge: On Wednesday night on the Sean Hannity Show on Fox, the Obama video footage was shown. It shows Barry on the Harvard University campus, speaking to a crowd of students, asking the students to “open up your hearts and minds to Professor Derek A. Bell.” Who is that? Bell…now deceased…was the first tenured black professor at Harvard, and was a Professor of Law. He was the leading American proponent of the Critical Race Theory, which basically holds that white people have systematically oppressed blacks and Latinos over centuries. His writings moved radical thought and led to the recent aberration of criminal law into “hate speech” and “hate crimes.” That’s YOUR president, folks. Derek Bell’s philosophy was integral to Obama’s “hope and change” and “fundamental transformation of America.”

The Nation II: On Super Tuesday, Romney won six of nine contests. There was outrageous vote counting fraud, just like in every other caucus or primary. But our boy Ron Paul came in second in Virginia and North Dakota. One question that comes to my mind is: What is Ron Paul going to do with all the hearts and minds he has won during this pre-election circus? There are tens of thousands of civilians and soldiers that did not vote in the primaries and caucuses, yet have been brought over to what I call “retro-conservatism.” Watch for an article about this topic at DumpDC next week. I have a suggestion.

The Nation III: The Federal Reserve now owns more United States Treasury bonds (debt) than China. Think about what a mega-Ponzi scheme this is. The very entity that prints greenback dollars…creating money from paper and ink…prints up a few hundred billion and hands them to the US Treasury to buy debt, thereby propping up the government. It’s the highest form of counterfeiting ever witnessed in human history. The tragic part of this story is that the Fed cannot stop printing and buying. If other nations around the planet want to dump DC debt, the Fed will be forced to buy it so that the bond market does not crash. Get ready for hyperinflation, ladies and gentlemen. It’s coming to a wallet near you.

International I: What would a Nobel Peace Prize winner do in the Middle East? Especially if he were President of the USA and serious about avoiding a war with Iran? He would call a summit between himself, PM Bibi Netanyahu of Israel, Iman Khamanei and President Ahmedinajad of Iran in a neutral place like Basel, Switzerland. At that summit, he would broker a peace agreement. Part of that peace agreement would be to look Bibi in the eye and say, “On the day that you make any military moves against Iran in any manner, I will cancel ALL financial and military aid of every kind from the USA to Israel…forever. Pre-emptive air strikes are not defense…they are offense. If you still choose to make war against Iran, I will tear up all treaties with Israel and you are on your own.” That is what a Peace Prize winner who actually wanted to live up to the Prize would do.

International II: Quick quiz: Which nation has the third largest population of Jews on planet Earth? The US is #1. Israel is #2. Give up? It’s Iran. If Iran was such a threat to Israel, why do the Jews in Iran live in peace with no persecution? There has been a Jewish community in Iran since the 6th century…BC!! Oh…by the way. If Israel starts raining bombs down on Iran, it will likely be killing its own Jewish people who live there. Collateral damage??

International III: Both Germany and Switzerland have begun the process of bringing their gold reserves back to their own soil. Where do you think they have been keeping their gold? In the basement of the Federal Reserve Bank of New York. But who knows if the gold is actually still there? By the way…Switzerland has always had this legendary reputation for secrecy and security for money. Why the hell would they send their sovereign gold to America? This is going to get interesting!

International IV: The Financial Times ran a story this week stating that China has offered loans to the other BRIC nations…Brazil, Russia and India…denominated in the renminbi, China’s money. This is a HUGE move away from the world reserve currency, the US Dollar. The four BRIC nations represent the strongest economies on the planet, and almost 3 Billion people out of the 7 Billion on earth. Dear readers, when the dollar is not reserve anymore, look for massive hyperinflation. We will make Zimbabwe’s experience look like kindergarten.

International V: Vladimir Putin was elected President of Russia this week for a six-year term. Expect little to change, since Putin was effectively running the country while he was Prime Minister. But he will preside over the fall of the United States. Ironic, isn’t it? In 1989, the Soviet Union imploded from many of the same things infecting America right now…socialism being one of them. Planned economies and imperialism don’t work on either side of the Atlantic. 23 years later, it’s America’s turn to implode. Only this time…we’re going to show ‘em how to do it RIGHT. Remember…the Ruble wasn’t the world reserve currency when the USSR tanked.

Shameless Plug: Nearly everyone over 16 buys insurance. But is it a good idea to switch companies? Are any of the TV commercials by insurance companies telling the truth about switching? How often should you shop for new coverage and lower rates? Does loyalty to one particular company matter anymore? How do you find the best value in insurance? A new way to shop is online. But low price is not everything. Learn to think like an insurance adjuster, not like an insurance agent. To learn more and get FREE quotes online, go to: www.InsuranceQuoteHQ.com

Business: We read today that certain executives of MF Global, currently in bankruptcy, are actually going to get bonuses this year. The Court actually approved the bonuses, said to be in the millions. Remember that MF Global embezzled hundreds of millions from their own customers in wildly risky commodities investments. Men who should be in prison are getting bonuses. This is what is happening in high finance in 2012.

Economy I: The number of actual new unemployment claims under state programs, unadjusted, totaled 355,754 in the week ending March 3rd, a 31,000-claim increase over the week previous. The real unemployment rate, calculated by ShadowStats.com, a highly reliable DC Watchdog, is above 22% overall, and much higher in pockets of the country like Detroit. Looking for a job? North Dakota cannot find enough people to fill all the positions available. True unemployment in North Dakota is around 2%, which is statistically zero.

Economy II: Dr. Gary North’s articles can be found very regularly at LewRockwell.com. He has written a new book about money entitled “Banks, Bubbles and Busts.” If you click on that link, you can get a free copy. Do it. Do it NOW.

Sports: Peyton Manning seems to have become addicted to adoration. Why else would a superstar NFL quarterback who has had FOUR neck surgeries in the last TWO YEARS want to continue to play in the NFL? Manning has been paid perhaps a hundred millions dollars over his football career. Can you really imagine that his wife wants him to risk becoming a quadriplegic by playing again? Does anyone think that the opposing defensive squads would treat him softly so he doesn’t get another neck owwie? Apparently the owner of the Indianapolis Colts still has some common sense, and has placed Manning on waivers. Peyton…retire already. Don’t become pathetic…or become Christopher Reeve. You are magic in front of a TV camera. Take a color commentator’s job with a network for a couple million a year and relax. You’ll never buy a drink in another bar for the rest of your life.

Entertainment: The Hunger Games movie opens March 23rd at a theater near you. Based upon the books by Suzanne Collins, the movie is a loose update to the theme in the 1987 Schwartzenegger movie, ”Running Man.” In a post-collapse America, the nations goes buggy over the annual Hunger Games, in which only one contestant survives. The main character is a 16-year-old girl, Katniss Everdeen, who wins. (Spoiler Alert) I hear the film has a good anti-government message, so I’ll be seeing it first week it’s open.

DumpDC. Six Letters That Can Change History.

© Copyright 2012, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.


China, The American Colony

September 13, 2011

China: American Financial Colony or Mercantilist Predator?

by Lewis E.Lehrman

(Editor’s Note: Lewis E. Lehrman has written a stunning article about the financial relationship between the US (Washington) and China. He asserts that, despite China’s status as the Number One creditor for Washington, it is actually an captive financial colony to the USA, just like India was to Great Britain. The article also shows in detail how impossible it will be for all the nations of the planet (who are also US financial colonies) to extricate themselves from the death grip of the US dollar reserve currency without a world financial collapse as the trigger.

Our stance is unwavering. A state that secedes and forms a gold/silver monetary system entirely independent from the world reserve currency will be the sole magnet on the face of the planet for stability and predictability. Wealth will pour into that new nation like nothing in the history of the world.

This is a somewhat long article with graphics. In a departure from our normal way of posting, we provide you with the link and ask you to click below and read.)

China: American Financial Colony or Mercantilist Predator?


Conservative Neanderthals and Rubes

August 25, 2011

by Linda Brady Traynham

Is the winner the one who owes most?

(Editor’s Note: Linda gets a gold star for this one about China. I’ve written repeatedly that I believe that China will be the successor to the USA. But remember…the WORLD financial system is established on fiat money. Sure, China may jump to the top of the heap temporarily. But the whole system MUST crash. The serf state that secedes and then reinvents the gold/silver money system will be the freest place on earth.)

Conservative Neanderthals have their place, you know. If I had been a member of the tribal council (having won my seat by bashing a rival with a club), I guarantee you I would have argued passionately against planting that first field. “I’m a reasonable man,” I would have said, swinging my club casually, “and I admit that your crazy idea about herding animals so that we do not need to rely entirely on hunting seems to have worked out okay, although I still say if we are attacked suddenly we’re going to lose a lot of the animals and our people and it is bad for our moral character to rely on anything other than our skills and our prowess. However, THIS time you go too far. Settle down in one place? Where our enemies can find us easily? In the hopes that we can grow more maize on purpose better than it grows in the wild? What will the women do? ” (Shouts of “Tend the fields!”) “No, that will take them at least as much time as gathering so we will gain nothing. We will destroy our ancient ways and our sacred beliefs for no real gain. And…have you noticed that since meat is more plentiful the women are producing more babies? What will happen if we build this village thing and they turn their hindquarters to the wind more frequently and we see even more babies who will eat and breed?” Another detractor shouts “We only have the witch doctor’s word for it that the wind causes babies.” Many calls of, “In time we will have a great army!” “We can brew more beer and mead.”

I would have smiled lethally and sourly, and said, “In time we will have more mouths than we can feed, you and I will grow old and weak, and the young men will take our seats on the council without knowing the true ways. Mark my words, nothing good will come of this, and so I shall say every time I stand before you or my name is not Cato the Courageous but Cautious.” And I would have been right.

I like a good labor-saving device as much as anyone, not that I’m always certain my computer qualifies, but there are very few shades of gray in the world. Changing the old ways always brings new problems. Last week 42,000,000 people were on food stamps. This week the number is 46,000,000, 15% of the population. A full third of all the residents of Alabama, and DE-troit isn’t exactly thriving, nor is California. As an, ah, less than admiring reader pointed out yesterday, Texas went into deficit two years ago, although she had the decency to put the blame where it belongs: on DC demands that we provide “free” medical care for the indigent, the illegal, the lazy. (She attempted to claim that I had said that Perry created jobs! You know the Neanderthal better than that; governments and politicians do not “create” real jobs, only individuals do.)

The tab for all that extra “free” medical care was about $1.3 Bn, and up to $2Bn this year. OVER what we had already budgeted for bills that should never have been ours, that is. It took the USA over 60 years to create the disastrous conditions we face, one small, deliberate, incremental step at a time. MENA has gotten there in about two decades and my Neo-Con’s envisioned “army” isn’t willing to accept lavish bribes any more, they want Cairo, Tripoli, Constantinople, Riyadh, and Damascus and their own palaces and seats on the Revolutionary Councils. China has done a brilliant job of saddling the whirlwind they did not begin to understand and has shown a truly magnificent talent for making economic mistakes worse than their social and political ones. “Infrastructure” sounds so sexy and modern, doesn’t it? Bridges over gorges, bullet trains, 101-floor World Finance Centers, fancy condos few can pay for, and hosting the Olympics we can hide under “promoting tourism.”

Dr. Victor Shih, of Northwestern, was asked to estimate what China’s debt is. His response? “That depends on what you include. Large sectors of the Chinese economy are owned by the government. The debt of these state-owned enterprises is what’s called a “contingent liability” — ultimately it’s the responsibility of the government. If you count all of these liabilities, then you get to an extremely high number, something like 150 percent of the Chinese gross domestic product, or more. A more restricted definition is debt that’s owed by either the central or local governments. That is about 80 percent of China’s GDP.” That’s a lot of Yuan any way we look at it. The next question was, “If China’s central and local governments are responsible for the companies’ debts, is that the more prudent number to use?”

Dr. Shih’s answer was very professional: “It depends on the prevailing economic conditions. When the economy’s strong, then there’s no need to look at the wider contingent liabilities, because there’s plenty of money to go around. If the business environment begins to deteriorate, state-run enterprises could go bankrupt. In those cases, you do need to look at the broader liabilities. If growth slows down substantially, people may find that the Chinese government in fact owes a lot more than 100 percent of GDP.” Speaking as an ordinary person who understands budgets, I would say that any entity, be it human, political, or commercial plant that owes a full years’ income has serious problems, and if that doesn’t include the vital overhead of a roof overhead serious steps had best be taken.

Governments frequently whip up a war, the individual equivalent of taking to a life of crime, which politicians do as a matter of course. I don’t call wars “overseas contingency operations,” and I do not refer to obvious debts as “contingent liabilities.” Are US-Sino relations more cordial than we had supposed or is it the nature of political beasts to come up with such terms? Look for those to heat up now that Viet Nam purchased half a dozen submarines to go with their former Russian missile Frigates and even the Philippines picked up another “war ship.” When we get to who owes whom what, some day, perhaps blowing Taiwan out of the water with the thousand missiles placed on the coast of China will look like a more lucrative option than an island with aging factories and a population that hates them. As I mentioned somewhere today, everybody is lining up to scrimmage over the oil and fish in the Spratley Islands.

Consider this tidbit: “China’s banks have been engaging in risky ‘off balance sheet’ lending somewhat reminiscent of Enron’s shenanigans. Last week, Beijing released a national audit revealing that local governments owe an estimated $1.65 trillion in outstanding loans. This week, Moody’s has indicated that the problem is significantly worse, by as much as $540 billion. And that’s only local government debt. It doesn’t include the central government’s huge obligations, or those of banks that are essentially guaranteed by Beijing.”

Bill Bonner asked yesterday in his Daily Reckoning–in the context of very bad days in the stock market–if his readers liked seeing others in pain. Mr. Bonner is not known, as a rule, for asking stupid questions, but I consider that one, and said so. Of course I like really whopping big down days in the market! I like failed bond auctions. I like economic cataclysms for the elegantly simple reason that Mr. Market will have his way. Until the entire shoddy, irrational, iniquitous, dishonest, failed system of fiat money and Keynesian “economics” lies in shreds we cannot rebuild on free-market principles. I would prefer, being a gentle lady, that we could get to that point without what is going on in Greece and London, but I doubt it. Too many people have too much to lose. Those at the top will do whatever they think will preserve what they have, those at the bottom will do whatever is necessary to survive, and those of us in the middle will scramble madly to increase and protect our assets. I don’t fight Newtonian physics or Kepler’s laws. I pay attention to the world around me.

Another reader asked that I stick to facts and not tell stories, which I prefer to think of as educational and sometimes entertaining; I replied sweetly that my readers like my tales. If you don’t, just skip them although they are very instructive. Generally.. As I was working on this I looked up (being able to watch livestock in two directions being one of the pleasures that keeps me chained to these desks) and saw a wild stampede of cattle, horses–and goats. Now, it is feeding time, so that explained the big livestock which really, really likes the new feed and has a lot more energy these days…but why the goats? The light goes on. The goat girls are getting Chaffhaye Alfalfa (private company), too, adore the taste, and are crazy about filling their rumens quickly and feeling so much better. They know they can slip through cattle-proof fence like Afghans entering a guarded camp undetected and that the big animals won’t really hurt them. Faith headed out at a canter, followed by all of the does and babies, because it is well worth the effort of running a quarter of a mile to snitch someone else’s chopped alfalfa and molasses. The same “principle” works fine with government giveaways. Talk up how bad times are, print a bunch of new money and credit cards for Goldman Sachs to profit from overseeing, and sure you can have an additional 10% on food stamps in a month. As soon as the goats work out there is more feed and how easy it is to procure they head for the newest trough and don’t even have to fill out paperwork. I won’t say most people are as smart as goats, but they know opportunities for freebies when they are advertised.

To add to the gaiety, there will be a regime change in ’12, and the Chinese wrote the book on “losing face.” This gives the current oligarchs a strong incentive to paper over or cover up the problems…and the others a good reason to start screaming the Chinese equivalent of “It’s all Bush’s fault!” as quickly as possible. So they pull a Bernanke! Announcing that no big bank will be allowed to fail. I am certain this will lead to prudent banking practices..

Are the Chinese more impervious to inflation, debt, real estate bubbles, government interference, shams, scans, and dishonest businessmen than we? I cannot see any reason to suppose so. They look like real Rubes, to me.

Linda Brady Traynham is a writer and rancher in Texas.


After the Dollar: What Comes Next?

June 7, 2011

by Peter Schiff

(Editor’s Note: Mr. Schiff is correct in his analysis. I agree that yet another fiat currency from ANY country, chosen as the successor to the Dollar as world reserve, will just kick the can down the road. But China is positioning itself as the most likely successor, and is buying more gold than any other nation. So, in the absence of some other rival, the new world reserve currency will likely be the yuan, even if only by dint of no other viable rival.)

THE DOLLAR’S TERRIBLE FATE

My readers are familiar with my forecast that the US dollar is in terminal decline. America is tragically bankrupt, unable to pay its lenders without printing the dollars to do so, and enmeshed in an economic depression. The clock is ticking until the dollar faces a crisis of confidence like every other bubble before it. The key difference between this collapse and, say, the bursting of the housing bubble is that the US dollar is the backbone of the global economy. Its conflagration will leave a vacuum that needs to be filled.

Mainstream commentators often discuss three main contenders for the role: the euro, the yen, or China’s RMB (known colloquially as the “yuan”). These other currencies, however, each suffer from a critical flaw that makes them unready to carry the reserve currency role in time for the dollar’s collapse. When it comes to fiat alternatives, it appears the world would be going out of the frying pan and into the fire.

EURO: FRAYING AT THE EDGES

The euro is a ten-year-old experiment in uniting divergent political, economic, and cultural interests under one monolithic fiat currency held in the hands of one very powerful central bank.

If managed correctly, such a currency could serve to keep its member-governments honest – but that is not the world in which we live. Instead, the fiscally irresponsible members are discussing ditching the currency at the first sign of trouble. That is, they’d rather have their own national currencies to inflate in order to cover over their burdensome public debts. So, in order to keep the euro together, creditor states have been strong-armed into bailouts of the debtors – even though such measures violate the compact that created the common currency.

The question becomes: how long do Germans – still wrought with the memory of Weimar hyperinflation and the rise of the Third Reich – want to keep printing euros to pay the debts of the spendthrift Greeks? How many German politicians will ride to electoral victory on promises of unending bailouts and higher prices across Europe? This is the fundamental flaw of the euro.

And, of course, Greece isn’t the only problem. Ireland and Portugal are vying for second-worst debt crisis in Europe. Spain, representing over 12% of eurozone GDP, saw sovereign yields jump from 4.1% at the beginning of 2010 to 6.6% by the end of the year. Yields on most other eurozone countries have been rising as well – a clear indication that the eurozone is an increasingly risky bet.

While a euro secession by the PIGS could actually leave a stronger currency region at the end, it would be a traumatic event. That prospect is undermining confidence in the euro at just the time when the world is considering where to go next.

Perhaps a mature currency that didn’t falter so easily amidst the recent global financial crisis would be a good contender for the world’s reserve. The euro, by contrast, is both young and in serious trouble. If less than two-dozen nations are too immense a burden for the euro to shoulder, should we expect better results when it’s stretched across two hundred?

YUAN: CAPITALIST COUNTRY, COMMUNIST CURRENCY

The investment community is slowly coming around to my long-held excitement about the miraculous growth of China. This is no frenzy. In fact, if anything, I think many are still too skittish when it comes to this market. Yet, those that are jumping on the bandwagon are now proclaiming the Chinese yuan as the logical successor to the dying dollar. But while China is becoming an immense economic force, the yuan itself is hobbled by the country’s communist past.

Foremost, China enforces stern capital controls on the yuan. A reserve currency must be freely and easily exchangeable with other currencies. Even within China’s borders, one cannot exchange large amounts of yuan for dollars or any other currency.

China is slowly undertaking reforms to relieve these controls, but remember they were not put there arbitrarily. The controls allow China to suppress the value of the yuan, thereby maintaining artificially high exports, among other consequences. If China allowed the yuan to trade freely, it would lose the power it maintains over its money – and by extension, its people.

Let’s remember that all fiat currencies are routinely manipulated and inflated. The People’s Bank of China has reported M2 growth of over 140% in the past five years – almost entirely to maintain a stable exchange rate with a depreciating dollar. Given rampant inflation, combined with exchange restrictions and a serious lack of transparency, the yuan is simply not ready for primetime.

YEN: BLACK HOLE OF DEBT

The Japanese yen is the third amigo at the international fiat fiesta. While it doesn’t suffer the structural risks of the euro, the yen is subsisting in an environment of massive sovereign debt. Japan’s debt-to-GDP ratio is the highest of any developed country at 225%, meaning there is a perpetual impetus to print more yen to pay it back. The yen must endure this debt-noose, making it a poor alternative to the USD, which suffers the very same problem.

While I believe Japan is in a much better position because it generally maintains a net trade surplus and because most of their debt is held domestically, it’s still not a stable unit with which to conduct world trade.

Perhaps more importantly, with a world seeking yen reserves, the price of yen would increase drastically. This is politically unpalatable in Japan, where the export lobby is constantly trying to push the yen down to boost their sales overseas.

These two factors combine in such a way as to make the yen a plainly infeasible reserve currency. The appreciation in yen value would simultaneously make Japan’s debt problems worse and cause its export industry to suffer greatly, meaning that Japan probably doesn’t want this role any more than we want her to have it.

As an aside, if you type “yen as reserve currency” into Google, it will ask, “Did you mean: yuan as reserve currency?” I guess even the world’s smartest search engine doubts the yen could fill that role.

THE SIMPLEST ANSWER IS OFTEN THE BEST

As J.P. Morgan famously said to Congress in 1913, “gold is money and nothing else.” Morgan meant that gold was unmatched in its effectiveness as a store of value and medium of exchange.

Given that his namesake bank started accepting physical gold bullion this past February as counterparty collateral, why should the trend of a widespread return to gold be considered only a remote possibility? On the contrary, it should be expected – if for no other reason than every other currency is fundamentally dismal.

Markets are powerful things, and require a reliable medium of exchange. The call for sound money is not just philosophical; it is derived from the market itself. Throughout human history, merchants have always turned to pure gold and silver over every pretender. This is not the first experiment in a paper money system, nor is it the first widespread debasement of money. In fact, the lessons of history were impressed upon our well-read Founding Fathers to the point that they included the following clear language in the Constitution: “No state shall… make any Thing but gold and silver Coin a Tender in Payment of Debts.”

While it has always been possible that another fiat currency would rise up to take the dollar’s place, and thereby keep this irrational experiment in valueless money going awhile longer, the particular circumstances that abound today make it seem less and less likely to me. Instead, I’m seeing signs that the world is moving back to gold at a breakneck speed.

This is a return to normal and has many positive implications for the global economy. It’s certainly a trend we can all welcome, and profit from.

Peter Schiff is president of Euro Pacific Capital and author of “The Little Book of Bull Moves in Bear Markets” and “Crash Proof: How to Profit from the Coming Economic Collapse.” His latest book is “How an Economy Grows and Why It Crashes.”

Copyright © 2011 Euro Pacific Capital


12 Warning Signs of U.S. Hyperinflation

March 30, 2011

Courtesy The National Inflation Association

One of the most frequently asked questions we receive at the National Inflation Association (NIA) is what warning signs will there be when hyperinflation is imminent. In our opinion, the majority of the warning signs that hyperinflation is imminent are already here today, but most Americans are failing to properly recognize them. NIA believes that there is a serious risk of hyperinflation breaking out as soon as the second half of this calendar year and that hyperinflation is almost guaranteed to occur by the end of this decade.

In our estimation, the most likely time frame for a full-fledged outbreak of hyperinflation is between the years 2013 and 2015. Americans who wait until 2013 to prepare, will most likely see the majority of their purchasing power wiped out. It is essential that all Americans begin preparing for hyperinflation immediately.

Here are NIA’s top 12 warning signs that hyperinflation is about to occur:

(1) The Federal Reserve is Buying 70% of U.S. Treasuries. The Federal Reserve has been buying 70% of all new U.S. treasury debt. Up until this year, the U.S. has been successful at exporting most of its inflation to the rest of the world, which is hoarding huge amounts of U.S. dollar reserves due to the U.S. dollar’s status as the world’s reserve currency. In recent months, foreign central bank purchases of U.S. treasuries have declined from 50% down to 30%, and Federal Reserve purchases have increased from 10% up to 70%. This means U.S. government deficit spending is now directly leading to U.S. inflation that will destroy the standard of living for all Americans.

(2) The Private Sector Has Stopped Purchasing U.S. Treasuries. The U.S. private sector was previously a buyer of 30% of U.S. government bonds sold. Today, the U.S. private sector has stopped buying U.S. treasuries and is dumping government debt. The Pimco Total Return Fund was recently the single largest private sector owner of U.S. government bonds, but has just reduced its U.S. treasury holdings down to zero. Although during the financial panic of 2008, investors purchased government bonds as a safe haven, during all future panics we believe precious metals will be the new safe haven.

(3) China Moving Away from U.S. Dollar as Reserve Currency. The U.S. dollar became the world’s reserve currency because it was backed by gold and the U.S. had the world’s largest manufacturing base. Today, the U.S. dollar is no longer backed by gold and China has the world’s largest manufacturing base. There is no reason for the world to continue to transact products and commodities in U.S. dollars, when most of everything the world consumes is now produced in China. China has been taking steps to position the yuan to be the world’s new reserve currency.

The People’s Bank of China stated earlier this month, in a story that went largely unreported by the mainstream media, that it would respond to overseas demand for the yuan to be used as a reserve currency and allow the yuan to flow back into China more easily. China hopes to allow all exporters and importers to settle their cross border transactions in yuan by the end of 2011, as part of their plan to increase the yuan’s international role. NIA believes if China really wants to become the world’s next superpower and see to it that the U.S. simultaneously becomes the world’s next Zimbabwe, all China needs to do is use their $1.15 trillion in U.S. dollar reserves to accumulate gold and use that gold to back the yuan.

(4) Japan to Begin Dumping U.S. Treasuries. Japan is the second largest holder of U.S. treasury securities with $885.9 billion in U.S. dollar reserves. Although China has reduced their U.S. treasury holdings for three straight months, Japan has increased their U.S. treasury holdings seven months in a row. Japan is the country that has been the most consistent at buying our debt for the past year, but that is about the change. Japan is likely going to have to spend $300 billion over the next year to rebuild parts of their country that were destroyed by the recent earthquake, tsunami, and nuclear disaster, and NIA believes their U.S. dollar reserves will be the most likely source of this funding. This will come at the worst possible time for the U.S., which needs Japan to increase their purchases of U.S. treasuries in order to fund our record budget deficits.

(5) The Fed Funds Rate Remains Near Zero. The Federal Reserve has held the Fed Funds Rate at 0.00-0.25% since December 16th, 2008, a period of over 27 months. This is unprecedented and NIA believes the world is now flooded with excess liquidity of U.S. dollars.

When the nuclear reactors in Japan began overheating two weeks ago after their cooling systems failed due to a lack of electricity, TEPCO was forced to open relief valves to release radioactive steam into the air in order to avoid an explosion. The U.S. stock market is currently acting as a relief valve for all of the excess liquidity of U.S. dollars. The U.S. economy for all intents and purposes should currently be in a massive and extremely steep recession, but because of the Fed’s money printing, stock prices are rising because people don’t know what else to do with their dollars.

NIA believes gold, and especially silver, are much better hedges against inflation than U.S. equities, which is why for the past couple of years we have been predicting large declines in both the Dow/Gold and Gold/Silver ratios. These two ratios have been in free fall exactly like NIA projected.

The Dow/Gold ratio is the single most important chart all investors need to closely follow, but way too few actually do. The Dow Jones Industrial Average (DJIA) itself is meaningless because it averages together the dollar based movements of 30 U.S. stocks. With just the DJIA, it is impossible to determine whether stocks are rising due to improving fundamentals and real growing investor demand, or if prices are rising simply because the money supply is expanding.

The Dow/Gold ratio illustrates the cyclical nature of the battle between paper assets like stocks and real hard assets like gold. The Dow/Gold ratio trends upward when an economy sees real economic growth and begins to trend downward when the growth phase ends and everybody becomes concerned about preserving wealth. With interest rates at 0%, the U.S. economy is on life support and wealth preservation is the focus of most investors. NIA believes the Dow/Gold ratio will decline to 1 before the hyperinflationary crisis is over and until the Dow/Gold ratio does decline to 1, investors should keep buying precious metals.

(6) Year-Over-Year CPI Growth Has Increased 92% in Three Months. In November of 2010, the Bureau of Labor and Statistics (BLS)’s consumer price index (CPI) grew by 1.1% over November of 2009. In February of 2011, the BLS’s CPI grew by 2.11% over February of 2010, above the Fed’s informal inflation target of 1.5% to 2%. An increase in year-over-year CPI growth from 1.1% in November of last year to 2.11% in February of this year means that the CPI’s growth rate increased by approximately 92% over a period of just three months. Imagine if the year-over-year CPI growth rate continues to increase by 92% every three months. In 9 to 12 months from now we could be looking at a price inflation rate of over 15%. Even if the BLS manages to artificially hold the CPI down around 5% or 6%, NIA believes the real rate of price inflation will still rise into the double-digits within the next year.

(7) Mainstream Media Denying Fed’s Target Passed. You would think that year-over-year CPI growth rising from 1.1% to 2.11% over a period of three months for an increase of 92% would generate a lot of media attention, especially considering that it has now surpassed the Fed’s informal inflation target of 1.5% to 2%. Instead of acknowledging that inflation is beginning to spiral out of control and encouraging Americans to prepare for hyperinflation like NIA has been doing for years, the media decided to conveniently change the way it defines the Fed’s informal target.

The media is now claiming that the Fed’s informal inflation target of 1.5% to 2% is based off of year-over-year changes in the BLS’s core-CPI figures. Core-CPI, as most of you already know, is a meaningless number that excludes food and energy prices. Its sole purpose is to be used to mislead the public in situations like this. We guarantee that if core-CPI had just surpassed 2% and the normal CPI was still below 2%, the media would be focusing on the normal CPI number, claiming that it remains below the Fed’s target and therefore inflation is low and not a problem.

The fact of the matter is, food and energy are the two most important things Americans need to live and survive. If the BLS was going to exclude something from the CPI, you would think they would exclude goods that Americans don’t consume on a daily basis. The BLS claims food and energy prices are excluded because they are most volatile. However, by excluding food and energy, core-CPI numbers are primarily driven by rents. Considering that we just came out of the largest Real Estate bubble in world history, there is a glut of homes available to rent on the market. NIA has been saying for years that being a landlord will be the worst business to be in during hyperinflation, because it will be impossible for landlords to increase rents at the same rate as overall price inflation. Food and energy prices will always increase at a much faster rate than rents.

(8) Record U.S. Budget Deficit in February of $222.5 Billion. The U.S. government just reported a record budget deficit for the month of February of $222.5 billion. February’s budget deficit was more than the entire fiscal year of 2007. In fact, February’s deficit on an annualized basis was $2.67 trillion. NIA believes this is just a preview of future annual budget deficits, and we will see annual budget deficits surpass $2.67 trillion within the next several years.

(9) High Budget Deficit as Percentage of Expenditures. The projected U.S. budget deficit for fiscal year 2011 of $1.645 trillion is 43% of total projected government expenditures in 2011 of $3.819 trillion. That is almost exactly the same level of Brazil’s budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1993 and it is higher than Bolivia’s budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1985. The only way a country can survive with such a large deficit as a percentage of expenditures and not have hyperinflation, is if foreigners are lending enough money to pay for the bulk of their deficit spending. Hyperinflation broke out in Brazil and Bolivia when foreigners stopped lending and central banks began monetizing the bulk of their deficit spending, and that is exactly what is taking place today in the U.S.

(10) Obama Lies About Foreign Policy. President Obama campaigned as an anti-war President who would get our troops out of Iraq. NIA believes that many Libertarian voters actually voted for Obama in 2008 over John McCain because they felt Obama was more likely to end our wars that are adding greatly to our budget deficits and making the U.S. a lot less safe as a result. Obama may have reduced troop levels in Iraq, but he increased troops levels in Afghanistan, and is now sending troops into Libya for no reason.

The U.S. is now beginning to occupy Libya, when Libya didn’t do anything to the U.S. and they are no threat to the U.S. Obama has increased our overall overseas troop levels since becoming President and the U.S. is now spending $1 trillion annually on military expenses, which includes the costs to maintain over 700 military bases in 135 countries around the world. There is no way that we can continue on with our overseas military presence without seeing hyperinflation.

(11) Obama Changes Definition of Balanced Budget. In the White House’s budget projections for the next 10 years, they don’t project that the U.S. will ever come close to achieving a real balanced budget. In fact, after projecting declining budget deficits up until the year 2015 (NIA believes we are unlikely to see any major dip in our budget deficits due to rising interest payments on our national debt), the White House projects our budget deficits to begin increasing again up until the year 2021. Obama recently signed an executive order to create the “National Commission on Fiscal Responsibility and Reform”, with a mission to “propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015″. Obama is redefining a balanced budget to exclude interest payments on our national debt, because he knows interest payments are about to explode and it will be impossible to truly balance the budget.

(12) U.S. Faces Largest Ever Interest Payment Increases. With U.S. inflation beginning to spiral out of control, NIA believes it is 100% guaranteed that we will soon see a large spike in long-term bond yields. Not only that, but within the next couple of years, NIA believes the Federal Reserve will be forced to raise the Fed Funds Rate in a last-ditch effort to prevent hyperinflation. When both short and long-term interest rates start to rise, so will the interest payments on our national debt. With the public portion of our national debt now exceeding $10 trillion, we could see interest payments on our debt reach $500 billion within the next year or two, and over $1 trillion somewhere around mid-decade. When interest payments reach $1 trillion, they will likely be around 30% to 40% of government tax receipts, up from interest payments being only 9% of tax receipts today. No country has ever seen interest payments on their debt reach 40% of tax receipts without hyperinflation occurring in the years to come.

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us


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