Daily Archives: November 14, 2011

11/14/11

“We are at war. And the enemy is the media.” — Pamela Geller

By: Andrea Shea King
The Radio Patriot

First, she acknowledged our troops. Then she acknowledged our friend, fellow Tea Party Express patriot and chairman of the Campaign to Defeat Obama — Lloyd Marcus.

Sit back and watch this. Geller nails it. We are surrounded by the enemy and we are at war. Make no mistake. You need to know who the enemy is. The enemy is the media and is the biggest weapon our enemies have in their arsenal.

11/14/11

Important NIA Economic Update

National Inflation Association

On Monday of last week we told you that too many people were becoming bearish on Italy all at once and that we thought the Italian 10 year bond yield was near a short-term peak. We said that after it reaches its short-term peak, we would probably see a large decline in the Italian 10 year bond yield back down to below 6% as Italy implements more austerity cuts.

On Wednesday the Italian 10 year bond yield reached a Eurozone-era high of 7.48% and finished the day at 7.25%. We highlighted on Wednesday how the spread between the German and Italian 10 year bond yield had reached a record 553 basis points. We said that there was no reason for such a huge spread between their yields because the bonds of both countries are denominated in the same currency and there is no chance of the ECB allowing Italy to fail.

During the last two trading days of last week, the Italian 10 year bond yield declined 103 basis points from its peak to finish Friday at 6.45%. At the same time, the German 10 year bond yield bounced from 1.72% on Wednesday to finish Friday at 1.89%.

The spread between the German and Italian 10 year bond yield is now back down to 456 basis points, a massive decline of 97 basis points in just two days. This is exactly what NIA expected to happen, but the spread between Germany and Italy has a lot more room to decline substantially lower in the weeks and months ahead.

The catalyst for the decline in the Italian 10 year bond yield is exactly what NIA predicted it would be, austerity cuts. The Italian Senate approved a major package of austerity cuts on Friday, which was passed by the lower house of Italy’s parliament on Saturday.

The austerity package is designed to achieve €59.8 billion in savings and balance Italy’s budget by 2014. It includes an increase in the VAT from 20% to 21%, a freeze on public-sector salaries until 2014, and a gradual increase in the retirement age from 60 in 2014 to 65 in 2026. It also calls for the sale of some state assets and the implementation of a new tax in the energy sector.

Whether or not the package will be successful at balancing Italy’s budget by 2014 is anyone’s guess. At least Italy has a budget that is theoretically possible to balance. The U.S. has a budget that is absolutely impossible to balance. There is not a single person in Washington today who is even forecasting the U.S. to ever balance its budget again.

The White House budget for fiscal year 2012 currently projects a U.S. budget deficit of $1.101 trillion. The deficit is projected to decline in 2013 to $768 billion and to a low in 2015 of $607 billion, before rising back up to $774 billion in 2021. These projections are using the most optimistic and rosy assumptions possible, and still we get no where near a balanced budget.

NIA believes the U.S. will see substantially higher budget deficits over the next decade than what is currently being projected. The White House is projecting real GDP growth in 2012 of 3.6% and for real GDP growth to average 4.17% in years 2013 through 2015.

The U.S. just reported year-over-year 3Q GDP growth of 1.62%, almost the same as year-over-year 2Q GDP growth of 1.63%. NIA believes the deflator used in the 3Q of 2.52%, down from a deflator used in the 2Q of 2.59%, way understates the current rate of price inflation. In our opinion, if you account for the real rate of price inflation, real GDP in the U.S. today is declining on a year-over-year basis.

The GDP growth assumptions being made in the White House budget will be impossible to reach for not just 2012, but for every year moving forward. Therefore, tax receipts will likely be substantially lower than what is being projected. If U.S. GDP stays flat between now and 2015, instead of having a $1.101 trillion deficit in 2012 that declines to $607 billion in 2015, we will have a $1.225 trillion deficit in 2012 that grows to $1.310 trillion in 2015.

The Fed just revised downward their 2012 GDP growth estimates to between 2.5% and 2.9%. To have any chance of even reaching these new lower projections, the Fed will need to launch QE3. Money printing never creates real economic growth, but will lead to much higher price inflation and bond yields. This will make it more expensive to run all areas of the government and increase our interest payments on the national debt.

The White House budget is currently projecting price inflation based on the CPI to only reach 2% in 2015 and to stay at 2.1% from 2016 through 2021. We already have price inflation of 3.87% based on year-over-year CPI growth and NIA estimates our real rate of price inflation to currently be 8.5%.

The White House budget is also currently projecting the U.S. 10 year bond yield to reach 5% in 2015 and to stay at 5.3% from 2017 through 2021. From 1981 to 2000, the U.S. 10 year bond yield averaged 8.36%. From 2001 to 2010, the U.S. 10 year bond yield averaged 4.18%, exactly one half the yield of the previous two decades.

Over the past decade with the 10 year bond yield averaging 4.18%, the U.S. national debt increased by $7.887 trillion for an average of $789 billion per year. During this time period, U.S. GDP grew by only $4.668 trillion for an average of just $467 billion per year.

Over the previous two decades with the 10 year bond yield averaging 8.36%, the U.S. national debt increased by $4.767 trillion for an average of $238 billion per year. During this time period, U.S. GDP grew by $7.096 trillion for an average of $355 billion per year.

When the U.S. had normal bond yields of 8.36%, the U.S. economy grew 49% faster than the national debt. During the past decade when the Fed began manipulating interest rates to artificially low levels in order to prevent a much needed recession, the U.S. national debt grew 69% faster than the economy.

With artificially low bond yields, the U.S. national debt grew 232% faster this past decade than during the previous two decades, while the economy only grew 32% faster. We went from having a national debt that was 33% of GDP 30 years ago to being 93% of GDP in 2010.

If the Fed got out of the way and allowed the free market to set interest rates, the 10 year bond yield would not only rise to 8.36% where it averaged from 1981 to 2000, but it would quickly reach the high from September of 1981 of 15.84%. With interest rates that high, unless the U.S. government were to cut discretionary spending down to zero, we will experience budget deficits between $3 trillion and $4 trillion annually. At that point, the Federal Reserve will be the only buyer left of U.S. treasuries and we will experience hyperinflation.

If the Fed keeps doing what they are doing, they will soon lose control of bond yields anyway as inflation spirals out of control and the world rushes to dump their U.S. dollar-denominated assets. Americans will be shocked by just how fast the world loses confidence in the U.S. dollar. A decade from now after the U.S. dollar is completely worthless, nobody will remember that Greece was once the top financial story on the news each night.

If you would like your friends and family members to be among the first to see NIA’s ‘Occupy Wall Street the Documentary’ coming soon, please tell them to become a member of NIA for free immediately at: http://inflation.us

11/14/11

WOMAN RAPED AT #OCCUPYPHILADELPHIA

Hat Tip: BB

Breitbart.tv:

A woman protester at the Occupy Philadelphia encampment at City Hall was raped in a tent, allegedly by a man who had traveled from out of state to join the protest, police said.

How many more rapes, how many more deaths, how many more acts of violence have to occur before President Obama and the Democratic Party withdraw their support and condemn these lawless protests?

11/14/11

Anti-Semitic Vandalism in Brooklyn Sparks Community Outrage

By: Fern Sidman

In the early morning hours of Friday November 11th, vandals set fire to several parked cars and scrawled anti-Semitic graffiti on nearby benches in the predominantly Jewish neighborhood of Midwood in Brooklyn in what the police said was a hate crime.

The arson took place along Ocean Parkway between Avenue I and Avenue J in what is commonly referred to as the Flatbush section, where three cars; a BMW, a Lexus and a Jaguar, were set ablaze. In addition, the epithet “KKK” was scrawled on the side of a red van, the police said, and swastikas and anti-Semitic slurs could be found on benches.

“The violence – I’m calling it violence when you blow up three cars – adds a sickening dimension to this type of anti-Semitism,” said Assemblyman Dov Hikind, who lives two blocks away and represents the 48th assembly district. He said he regularly walked past the benches with his 90-year-old mother to Sabbath services. “We walk down Ocean Parkway every single week,” Mr. Hikind said. “All I could think about was my mother sitting on a bench with a swastika. She survived Auschwitz.” Mr. Hikind said that this area of Brooklyn, including Midwood and Borough Park, contains one of the largest concentrations of Holocaust survivors outside of Israel.

The Police Department’s Hate Crimes Task Force is involved in the investigation and Mr. Hikind said the police promised to increase their presence in the neighborhood. “The fact that this most recent attack came on the heels of the 73rd anniversary of Kristallnacht may or may not be a coincidence,” Mayor Michael R. Bloomberg said in a statement in response the episode in Brooklyn. “Either way, this kind of hateful act has no place in the freest city in the freest country in the world.”

“Somebody had to have seen something,” remarked Hikind. “Even the tiniest detail that may seem irrelevant could prove to be a vital piece of information to the investigation. It is simply impossible that three cars were set on fire in the middle of a residential neighborhood and nobody saw anything. To the cowards who did this, who are responsible for this vicious and depraved anti-Semitic act, I say, ‘we will hunt you down and prosecute you to the fullest extent of the law for this hate crime.’”

Since Friday, the reward for credible information leading to the arrest and conviction of the person or persons responsible for this heinous crime has increased by $25,000. The monies were put together by both Mr. David Ben-Horeen, publisher of The Jewish Voice, as well as other leaders of the community, and $1000 by NYC council member David Greenfield. The reward now stands at $30,000.

As of Sunday afternoon police had made no arrests. The NYPD Hate Crimes Task Force is investigating. Brooklyn District Attorney Charles Hynes said dozens of empty beer bottles were found at the scene. He said they would be tested for fingerprints and DNA samples. Police in the 66th Precinct bolstered patrols in the neighborhood; especially at the scene of the attack.

Separately, the police said Friday that they had arrested a man accused of scrawling swastikas in five incidents last week in Jackson Heights, Queens. The man, Franco Rodriguez, 40, spray painted the symbols on the doors of several local libraries and a Catholic church, the police said.

On Sunday, November 13th, about 100 Midwood residents along with elected officials staged a peaceful protest march on Ocean Parkway past the four public benches from which the 16 swastikas had been removed after the pre-dawn attack Friday. Carrying an Israeli flag, the marchers were led by Mr. Hikind, State Senator Eric Adams, Rabbi Chaim Gruber, New York City Public Advocate Bill de Blasio, civil rights lawyer Norman Siegel and other community leaders. “There was a time when vandals used magic markers to express hate; now they’re using gasoline,” Adams said.

U.S. Sen. Charles Schumer condemned the vandalism during an unrelated event on Sunday. “It’s disgraceful and they should throw the book at the people who did it,” Schumer said. “Sometimes vandals think they’re pranks, sometimes they’re more malicious than that. Either way they cause great harm.”

Protesters noted the attack occurred one day after the 73rd anniversary of Kristallnacht in Nazi Germany on Nov. 9-10, 1938, when synagogues were set on fire and the windows of Jewish-owned shops were broken. Sunday’s march also included about 25 people from the Occupy Wall Street movement in Manhattan, which put out a statement condemning the vandalism. The mix of people who showed up for the march “shows that we stand together against hatred. And it makes residents here feel better,” Hikind said.

The NYPD has established special hotlines for tips. Anyone with information concerning Friday’s incident is urged to call 718-265-7327 or 718-265-7387. All calls will be kept confidential.