11/17/10

Hyperinflation is Guaranteed if U.S. Stays on Current Path

From: National Inflation Association

The National Commission on Fiscal Responsibility and Reform released last week their ‘CoChairs’ Proposal’ on how the U.S. can achieve $100.2 billion in domestic savings and $100.1 billion in defense savings in fiscal year 2015, for total discretionary spending savings of $200.3 billion. Combined with other steps designed to boost tax revenues, the commission’s plan, if implemented, is expected to reduce the projected 2015 U.S. budget deficit by $400 billion to $372 billion. NIA believes it is very unlikely that our representatives in Washington will have the political backbone and courage to implement any of the commission’s proposed spending cuts. The truth is, the U.S. is on a path towards exploding budget deficits in the years ahead, that could cause an outbreak of hyperinflation by the end of calendar year 2015.

Many people are asking us when exactly we expect our food price projections to be reached. We can pretty much guarantee you that all of our food price projections will be seen this decade. There is a very good chance of our projections being reached by the end of calendar year 2015 and a slight chance that they will be reached as soon as the 2012 elections. NIA’s food price projections are very conservative. They are based on the current purchasing power of the U.S. dollar and do not factor in the likelihood of an outbreak of hyperinflation.

NIA believes that if the U.S. stays on its current path, we are guaranteed to see hyperinflation this decade. The only way it will be possible to prevent hyperinflation is if the U.S. government dramatically cuts spending across the board immediately and if the Federal Reserve raises interest rates from near zero percent (where they have been for nearly two years) to a level that is higher than the real rate of price inflation. Considering that the Federal Reserve still claims to fear deflation and just announced massive quantitative easing, we see very little chance of any major interest rate hikes taking place during the next six months.

Although the commission’s proposal includes many large spending cuts including freezing federal salaries for three years (saving $15.1 billion), cutting the federal workforce by 10% (saving $13.2 billion), and eliminating 250,000 non-defense service and staff augmentee contractors (saving $18.4 billion); even if their proposal was implemented it would be too little too late. The commission’s proposal calls for its cuts to be gradually implemented beginning in early 2012 and it includes absolutely no meaningful cuts to social security. The only proposed major changes to social security are raising the retirement age to 68 in year 2050 and 69 in year 2075. There is absolutely no chance of the U.S. dollar surviving past the year 2020 unless much more drastic spending cuts than the commission has proposed are implemented within the next twelve months.

The commission says that if we fail to implement their proposed spending cuts, we will likely see interest payments on our national debt reach $1 trillion by 2020. The reality is, NIA believes interest payments on our national debt are likely to reach $1 trillion in 2015. It is currently projected that our interest payments in 2015 will be $586 billion. However, this number is based on a projected 4.1% interest rate on our 91-day treasury bills and 5.3% interest rate on our 10-year treasury bills.

The yield on 10-year U.S. treasuries has risen in recent weeks by 41 basis points to 2.94%, up from 2.53% on November 4th. NIA believes it is likely the 10-year yield will rise back above 4% in the first half of 2011. By 2015, we expect the 10-year yield to be substantially higher then 5.3%. During the 1970’s, the last time we had an inflationary crisis like the one we are rapidly approaching, yields on the 10-year bond exploded. When each of the agricultural commodities in our food inflation report reached their real all time highs in the 1970’s, the average 10-year bond yield at the time of their highs was 7.47%. With the Federal Reserve likely to be forced to raise the Fed Funds Rate to around this same level, based on our projected public debt in 2015 of $14 trillion, our interest payments will likely rise to $1.046 trillion or 29% of projected tax receipts, and this is a very conservative estimate.

The Federal Reserve’s monetary base currently stands at $1.9851 trillion and is projected to rise to $2.5851 trillion by mid-2011 due to the Fed’s upcoming $600 billion in quantitative easing. The U.S. M2 money supply rose over the past week by $22.4 billion to $8.7862 trillion. This represents a $1.1648 trillion annualized increase, which would equal 13.25% monetary inflation over the next year. The M2 multiplier, or M2 divided by the monetary base, currently stands at 4.426, compared to a long-term average of 10. Based on a projected monetary base of $2.5851 trillion and a long-term average M2 multiplier of 10, the M2 money supply has a chance of rising as much as 194% to $25.851 trillion over the next few years.

In the short-term, if the M2 multiplier remains at 4.426, it is likely the M2 money supply could rise to $11.4416 trillion next year, up 30.22% from its current level. With the UBS Bloomberg CMCI Food Index currently up 30.5% from its low in August, it appears as though the market has already factored the upcoming 30.22% increase in the M2 money supply into agricultural commodity prices. Even if food manufacturing companies and retailers agree to accept 2/3 of these rising costs in the form of lower profit margins, Americans will still see about a 10% rise in retail food prices come early 2011.

The upcoming food inflation crisis and eventual hyperinflation will come as a direct result of our representatives in Washington trying to prevent a much needed recession by propping up Real Estate prices through bailouts, stimulus plans, tax rebates and other wasteful programs. The only thing that our elected representatives care about is remaining in power. They only see our current problems and not the problems that will arrive next as a result of their actions. Their goal is to make the average American as dependent on them as possible through massive price inflation, so that the average American is forced to rely on entitlement programs just to survive.

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.

11/17/10

TSA Gone Wild

Hat Tip: Brian B.

Shep Smith: ‘If You Touch My Junk, I’m Going To File A Lawsuit Against You’ (Hat Tip: Brian B.)

Angry Over Airport Full Body Scans? On the Horizon, Red Flag Tests (Hat Tip: Nancy Jacques)

Buying a Car a Little Harder Now (Hat Tip: Jean Stoner)

Government gropers at airports a ruse for body scanners coming to schools and malls (Hat Tip: Brian B.)

Big Sis Caught Lying To American People

Hat Tip: Nancy Jacques

TSA Opt-Out Day, Now with a Superfantastic New Twist! (Men, wear a kilt, no underwear) (Hat Tip: Jean Stoner)

George Soros also profiting off controversial new TSA scanners (Hat Tip: Jean Stoner)

11/17/10

The Exceptional Breed Called Americans

By: Wayne Leeper
A Land Called America

During the age of colonizing the New World, a number of Old World countries established colonies in the New World. It is the British colonists, now known as Americans, who have surpassed all others and have become a unique and exceptional people. The British colonists were indeed a special breed of people. Just to establish a foothold in a savage land required both bravery and faith. These people left the Old World for a variety of reasons, freedom not being the least of them. There was little they were able to bring with them in addition to some implements for clearing the land and agriculture. Many died on the three month voyage from the Old World and others soon after arriving. Just staying alive during the early years was a major task in and of itself.

From this beginning, they have risen to become the greatest nation in the history of the world. What was it that made them different from all the rest? The first British colony was Jamestown followed by Plymouth Rock a few years later. These first colonists brought with them two items which they considered to be indispensable: guns and Bibles. The guns were necessary for providing protection and physical food, while the Bibles provided them with food for their souls. These two items are still necessary for every true patriot. When Japanese Admiral Yamamoto was asked why Japan did not follow up the attack on Pearl Harbor with an attack on America itself, his answer was, “Because we knew the American citizens were all armed.”

One of the first ships to arrive in the new world was a ship named Mayflower, which carried 120 pilgrims. Upon arrival they realized there would be no governmental authority to provide the protection they enjoyed in England. They found it necessary to establish a governing document to which the colonists would voluntarily submit. The document they agreed to is known as the Mayflower compact.

“In the name of God, Amen. We whose names are under-writ­ten…Having undertaken, for the glory of God, and advancement of the Christian faith… a voyage to plant the first colony in the northern parts of Virginia, do by these presents solemnly and mu­tually, in the presence of God, and one of another, covenant and combine our selves together into a civil body politic, for our better ordering and preservation and furtherance of the ends aforesaid; and by virtue hereof to enact, constitute, and frame such just and equal laws, ordinances, acts, constitutions and offices, from time to time, as shall be thought most meet and convenient for the general good of the Colony, unto which we promise all due sub­mission and obedience.”

This idea of the citizens forming a government by and of themselves was a unique concept in the world of their day and one they would not easily give up. It was a few years later when another ship arrived named the Arbella. A sermon preached on board ship by a man named John Winthrop outlined their vision of the land they intended to establish. The part that has lasted and been quoted for over three hundred years says:

“For we must consider that we shall be as a city upon a hill. The eyes of all people are upon us. So that if we shall deal falsely with our God in this work we have undertaken…we shall be made a story and a by-word throughout the world. We shall open the mouths of enemies to speak evil of the ways of God… We shall shame the faces of many of God’s worthy servants, and cause their prayers to be turned into curses upon us til we be consumed out of the good land whether we are a-going.”

These concepts, unique to their time, but commonplace in their Bibles, provided the foundation upon which they would build this “land of freedom.”

The passages upon which they particularly relied had to do with Gods promises regarding nations which they found in the Bible. Passages such as:

“Blessed is the nation whose God is the Lord” (Psalms 33:12)

“Righteousness exalts a nation, but sin is a reproach to any people” (Proverbs 14:34)

“Blessed are the people who know the joyful sound! They walk, O Lord, in the light of your
countenance. In Your name they rejoice all day long, and in your righteousness they are exalted.”
(Psalm 89:15-16)

“Unless the Lord builds the house, they labor in vain who build it; unless the Lord guards the city, the watchman stays awake in vain.” (Psalm 127:1)

Upon these and other passages found in the Bible they built a nation. When, in 1772, King George III attempted to restrict, and in many cases take away their freedoms, they refused to remain silent. In 1774 God brought the men we call our Founding Fathers together for the First Continental Congress. They have been described as “enlightened geniuses touched by divine inspiration.” I cannot imagine a more succinct definition. Only God could have brought together such men, at such a time, in such a place, and with such a purpose. The purpose was God’s and the men were His instruments for accomplishing it. The purpose was to establish the United States of America. The idea of a union of all the colonies was first presented by Patrick Henry who said in an opening speech:

“British oppression has effaced the boundaries of the several colonies; the distinction between Virginians, Pennsylvanians, and New-Englanders is no more. I am not a Virginian, but an American.”

To this day that name, American, has been worn by every true patriot who has chosen to become a citizen of this nation, no matter what their nation of origin. Among the founding fathers of America we find names such as George Wash­ington, Thomas Jefferson, Benjamin Franklin, John Hancock, James Madi­son and John and Samuel Adams, among many others. The youngest del­egate was 26 years old. The oldest, Benjamin Franklin, was 70.

Regarding one of these men, Thomas Jefferson, John Kennedy made the comment at a White House assembly of some of the best minds in the United States:

“I think this is the most extraordinary collection of talent and of human knowledge that has ever been gathered together at the White House – with the possible exception of when Thomas Jefferson dined alone.”

Thomas Jefferson is considered the father of our Declaration of Independence and James Madison the father of our Constitution. These two documents stand unique among all documents ever devised for the governing of mankind. The opening three words of our Constitution, We the People, lifts it above all others. Abraham Lincoln described the government designed by our founders as a government “of the People, by the people, and for the people.”

Americans are a unique breed because the basis of our government is in itself unique. America is perhaps the only Constitutional Republic built upon the concepts found in the Bible. A Frenchman named Alex DeTocqueville is credited with saying in 1821, “America is great because America is good, and if America ever ceases to be good, it will cease to be great.” Many years later Ronald Reagan, the last of our great Presidents, echoed these same words when he said, “If we ever forget that we’re one nation under God, then we will be a nation gone under.”

We are the descendants of these first colonists. We are the beneficiaries of their labors and the inheritors of their dreams for this great land of freedom. America is not the name of a nation or a nationality, but an exceptional breed of patriots, white, black, red and brown, who choose to wear the name American, and American alone. It was George Washington who said, Americans will die on their feet, before they live on their knees.”

Today, America is facing the greatest crises since the Founding Fathers established this “Land of Freedom.” Are we the nation of our founder’s dreams? Do we walk in their footsteps? Is God still the foundation of our nation? Is America’s exceptionalism a thing of the past? I think most of us know the answers to these questions. Is America to recover and prosper in the ways our founders desired? That is the current question we must answer and our answer will determine the lives led by our children and grandchildren. The answer to the crises today is the same as it was in the days of our Founding Fathers. Our land must turn to the God of our founders, the God who guided them in the founding of this land and who has blessed and protected it for two hundred and thirty-four years. For He has promised:

“If my people who are called by My name will humble themselves and pray and seek My face and turn from their wicked ways, then I will hear from heaven, and will forgive their sins and heal their land.” II Chronicles 7:14