Federal Reserve Stands by Stimulus Policies, Blames U.S. Lawmakers For Sluggish Economy

 

 

Federal Reserve Board of Governors

 

Economic stimulus is here to stay and U.S. lawmakers are to blame for sluggish economic growth, the Federal Reserve said in a statement released on Wednesday.

“Fiscal policy is restraining economic growth,” the Fed said in reference to recent tax increases and budget cuts passed by Congress and the White House.

 

“The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate,” the statement added

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Companies line up to drill after survey shows Dakota oil, gas fields far bigger than believed

Energy companies are lining up for their shot to drill in the Dakotas and Montana after a new government report revealed that a massive geological formation stretching across the states contains twice the oil and three times the amount of natural gas than was originally believed.

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1st Chinese Automaker in US to Open Calif. Plants

 

Click the image to shrink it.

Wang Chuanfu, founder and chairman of Chinese automaker BYD Co 

LOS ANGELES (AP) — The first Chinese-owned vehicle manufacturer in the United States plans to build electric buses and batteries at plants in the Mojave Desert.

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White House had advance warning on Fisker’s struggles, documents show

Newly released documents show that the Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the loan after questions were raised about the company’s statements.

[Read more...]

American Airlines Back Online After Grounding All Flights Due to Computer Glitch

American Airlines flights across the country are getting back up in the air after being grounded until just before 5 p.m. EDT because of computer problems. A few other air travel problems the day after the bombings of the Boston Marathon were experienced as well.

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Bitcoin Celebrated As Way To Avoid Taxes

A symbol in the window of a pub in Berlin indicates the acceptance of bitcoins for payment. The libertarian politics of some bitcoin users, the specific characteristics of the currency and the lack of tax guidance from the U.S. government are leading some to decide to move their assets into bitcoins to avoid paying taxes. (Photo by Sean Gallup/Getty Images)

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Gold Tanks to Lowest Point in Two Years: Here’s What You Need to Know

The price of gold on Monday fell below $1,400 an ounce, its lowest point since March 2011:

Gold Continues to Plunge In Price: Whats Going On?

This is an official two-year low for gold.

“Gold has fallen sharply over recent trading sessions from over $1,600 10 days ago and there is talk in the markets that a number of institutions are cashing in following a reduction in gold price predictions from leading investment banks, including Goldman Sachs. Earlier, it fell to $1,398.80, its first foray below $1,400 since March, 2011,” the Associated Press notes.

So what’s the deal?

“Interesting that Gold crash came 4 days before hearings on Texas depository. It’s like Bernanke sent Perry a fish wrapped in a newspaper,” economist Jim Rickards tweeted.

“The action is gold/silver is another example of gov’t confiscation. MFGlobal, Cyprus, Gold/Silver. This is what a currency war looks like,” TV host Max Keiser also said in a tweet.

Is gold’s nearly 12-year bull run as a precious commodity coming to an end?

“Many reasons have been put forward to explain the sudden change of course, including speculation that Cyprus may sell a chunk of its reserves to finance its part of its financial rescue,” the AP explains.

“Though that may not materialize, it was enough to prompt some investors to think that a gold-selling strategy may be used elsewhere in the troubled eurozone.”

Many analysts, most especially the “gold bugs,” believe the Federal Reserve is directly responsible for the recent ascent (and now the descent) of gold:

Another reason put forward is that the Federal Reserve will outline a strategy to withdraw its monetary stimulus later this year despite recent mixed signals out of the U.S. economy, the world’s largest.

One of the reasons why the price of gold has been so well-bid in recent years is a direct result of the Fed’s policy — the new dollars created under so-called quantitative easing have found themselves recycled in financial markets and many of them have gone to the perceived haven of gold.

Gold prices tumbling would seem to contradict earlier calls from bearish analysts [via Financial Times]:

The collapse in prices has been foreshadowed by a string of bearish calls by analysts. In February Credit Suisse predicted the market had already peaked; Société Générale said the “end of the gold era” was nigh; and last week Goldman Sachs recommended investors short the metal.

However, to some, the drop in the price of gold isn’t a bad thing (or a conspiracy). Au contraire! According to Business Insider’s Joe Weisenthal, he of “Hey, the March jobs report was ‘GREAT’” fame, everyone should be “thrilled” about the decline in gold.

“Investing in gold is a rejection of government money and finance. Money flowing into gold-related assets represents a belief that rocks (however shiny they are) are a better place to invest than human endeavors (like stocks),” he notes, adding that the events following 9/11 “shook our faith in humanity” and drove people into the arms of gold.

“Since [stocks vs. gold bottomed in 2011], the fever has begun to break,” he writes. “Washington is fractious, but not like it was in 2011. Housing, which was central to America’s national malaise, has begun to turn around for real.”

“So ultimately, the decline of gold and the rise of stocks is a big trend that everyone should cheer.”

Gold Continues to Plunge In Price: Whats Going On?

And whether you find yourself agreeing with Weisenthal or Rickards, just know this: Gold isn’t finished just yet.

“[M]any investors remain committed to gold – most notably John Paulson, who made billions betting against the US housing market ahead of the financial crisis,” FT notes.

“They argue that the expansionary policies of central banks in the US, Japan and the UK will ultimately herald an era of much higher inflation that should lift gold prices significantly,” the report adds.

Follow Becket Adams (@BecketAdams) on Twitter

Featured image AP photo. This post has been updated.

Source:  http://www.theblaze.com/stories/2013/04/15/gold-tanks-to-lowest-point-in-two-years-heres-what-you-need-to-know/

Why Are The Banksters Telling Us To Sell Our Gold When They Are Hoarding Gold Like Crazy?

The big banks are breathlessly proclaiming that now is the time to sell your gold. They are warning that we have now entered a “bear market” for gold and that the price of gold will continue to decline for the rest of the year. So should we believe them? Well, their warnings might be more credible if the central banks of the world were not hoarding gold like crazy.

 

During 2012, central bank gold buying was at the highest level that we have seen in almost 50 years. Meanwhile, insider buying of gold stocks has now reached multi-year highs and the U.S. Mint cannot even keep up with the insatiable demand for silver eagle coins. So what in the world is actually going on here? Right now, the central banks of the world are indulging in a money printing binge that reminds many of what happened during the early days of the Weimar Republic. When you flood the financial system with paper money, that is eventually going to cause the prices for hard assets to go up dramatically.

Could it be possible that the banksters are trying to drive down the price of both gold and silver so that they can gobble it up cheaply? Do they want to be the ones sitting on all of the “real money” once the paper money bubble that we are living in finally bursts?

Over the past few weeks, nearly every major newspaper in the world has run at least one story telling people that it is time to sell their gold. For example, the following is from a recent Wall Street Journal article entitled “Goldman Sachs Turns Bearish on Gold“…

Another longtime gold bull is turning tail.

Investment bank Goldman Sachs Group Inc. said Wednesday that gold’s prospects for the year have eroded, recommending investors close out long positions and initiate bearish bets, or shorts. The shift in outlook was the latest among banks and investors who have soured on gold as its dozen-year run-up has been followed by a 12% decline in the last six months.

Goldman began the year predicting gold would decline in the second half of 2013, but said Wednesday the drop began earlier than expected and doesn’t appear likely to reverse. Like others, the firm said the usual catalysts that have been bullish for gold during its run are no longer working.

Major banks over in Europe are issuing similar warnings about the price of gold. The following is from a Marketwatch article entitled “Sell gold, buy oil, Societe Generale analysts say“…

Analysts at Societe Generale predict in a note Thursday that gold prices will fall below $1,400 by the year’s end and continue heading south next year.

They cite two main reasons:

1. Inflation has so far stayed low and now investors are beginning to see economic conditions that would justify an end to the Fed’s quantitative easing program.
2. The dollar has started trending higher, which should make gold prices move lower as the physical gold market is extremely oversupplied without continued large-scale investor buying.

And even Asian banks are telling people to sell their gold at this point. According to CNBC, Japanese banking giant Nomura is another major international bank that has turned “bearish” on gold…

Nomura forecast gold prices will fall in 2013, on Thursday, becoming the latest bank to turn bearish on the precious metal which has been a favorite hedge for investors who fear aggressive monetary stimulus will lead to rising inflation.

“For the first time since 2008, in our view, the investment environment for gold is deteriorating as economic recovery, rising interest rates and still benign Western inflation (for now) will likely leave some investors rethinking their cumulative $240 billion investment in gold over the past four years,” wrote Nomura analysts in a sector note on Thursday.

A lot of financial analysts are urging people to dump gold and to jump into stocks where they “can get a much better return”. They make it sound like it is only going to be downhill for gold from here. The following is from a recent CNBC article entitled “Gold’s ‘Death Cross’ Isn’t All Investors Are Worried About“…

Gold is flashing the “death cross” but the bearish chart pattern is not the only thing scaring investors.

The magnetic appeal of a rising stock market has pulled some investment funds away from the yellow metal. Since the beginning of the year, stocks are up nearly 7 percent and gold is down nearly 6 percent.

But if gold is such a bad investment, then why are the central banks of the world hoarding gold like crazy?

According to the World Gold Council, gold buying by global central banks in 2012 was at the highest level that we have seen since 1964

Worldwide gold demand in 2012 was another record high of $236.4 billion in the World Gold Council’s latest report. This was up 6% in value terms in the fourth quarter to $66.2 billion, the highest fourth quarter on record. Global gold demand in the fourth quarter of 2012 was up 4% to 1,195.9 tonnes.

Central bank buying for 2012 rose by 17% over 2011 to some 534.6 tonnes. As far as central bank gold buying, this was the highest level since 1964. Central bank purchases stood at 145 tonnes in the fourth quarter. That is up 9% from the fourth quarter of 2011, and the eighth consecutive quarter in which central banks were net purchasers of gold.

This all comes on the heels of decades when global central banks were net sellers of gold. Marcus Grubb, a Managing Director at the World Gold Council, says that we are witnessing a fundamental change in behavior by global central banks…

Central banks’ move from net sellers of gold, to net buyers that we have seen in recent years, has continued apace. The official sector purchases across the world are now at their highest level for almost half a century.

Meanwhile, insiders seem to think that gold stocks are actually quite undervalued right now. In fact, insider buying of gold stocks is now at a level that we have not seen in quite some time. The following is an excerpt from a recent Globe and Mail article entitled “Insider buying of gold stocks surges to multi-year highs“…

The TSX global gold index has lost about a third of its value over the past two years. The S&P/TSX Venture Exchange, stock full of gold mining juniors, hit a multi-year low this month.

Yet, executives and officers who work within those businesses are showing remarkable confidence that the sector is poised for better times.

In addition, the demand for physical silver in the United States seems to be greater than ever before. According to the U.S. Mint, demand for physical silver coins hit a new all-time record highduring the month of February.

And demand for silver coins has not abated since then. Just check out what has been happening in April so far

The US Mint has updated April sales statistics for the first time since last week, and to no surprise, the Mint again reported more massive sales, with another 833,000 silver eagles reported sold Monday! The April total through 6 business days is now 1.645 million ounces, bringing the 2013 total to a massive 15.868 million ounces. In response to the continued massive demand for silver eagles, the mint also has begun rationing sales of silver eagles to primary dealers resulting in supply delays! Just as was seen in January, tight physical supplies have seen premiums on ASE’s skyrocketing over the weekend and throughout the day, as ASE’s are rapidly becoming as scarce as 90%!

Something does not appear to add up here.

 

Michael Snyder contributed to this report

Report continues at Source:  http://www.infowars.com/why-are-the-banksters-telling-us-to-sell-our-gold-when-they-are-hoarding-gold-like-crazy/

 

Margaret Thatcher Was Frighteningly Accurate When She Made This Econ. Prediction

Lady Margaret Thatcher was well-known throughout the free world for her fierce conservatism and her opposition to the “Evil Empire,” two noble qualities that separated her from the rest of her U.K. colleagues.

But did you know that she also had some frighteningly accurate economic predictions?

[Read more...]

Confused by Digital Currency? This Three Minute Video Has Basics of What You Need to Know About ‘Bitcoins’

Bitcoin Exceeds $250 Exchange Rate and Video Details Digital Currency Basics

(Image: Shutterstock.com)

Bitcoin has been making headlines steadily since March after it reached a record high and its value has only continued to climb since.

The booming digital currency saw an exchange rate exceeding $250 per Bitcoin as of Wednesday on Mt.Gox, a Bitcoin exchange. In late March, it was at $94 and just two months ago it was only valued at $20. According to NPR, some connect the recent spike in value with the economic trouble in Cyprus and Spain, while others don’t see those issues solely driving the trend:

But Jon Matonis of the Bitcoin Foundation tells Der Spiegel that he doesn’t believe the connection is as direct as people think.

“Most transactions are still coming from affluent regions, like the United States and Northern Europe,” he says. “What we are seeing is not a Cyprus bubble.”

Even though the decentralized digital currency — first beginning as an idea in 1998 and reaching its working form by 2009 — is gaining popularity, many still have questions about how it works, how it’s “mined” and its risks. This slightly more than 3-minute video (via Gizmodo) posted a few days ago answers many of the basic questions surrounding Bitcoin:

What is most important about Bitcoin, the narrator in the video says, is how it can “change the way we look at, think about and, most importantly, spend our money.”

Although some see Bitcoins as an investment — this guy recently put a new, unused iPhone 5 for sale on Craigslist for three Bitcoins only (no other form of currency allowed) — others note the risky side of them. PC World also recently pulled together the “sad history of virtual currency” over the years that has never seemed to end well.

One of the risks, for example, is that services are subject to hackers. Just last week Mt.Gox was hit by a distributed denial of service attack and some of its effects continue into this week. In a press release, Mt. Gox said the attack was creating its greatest trading lag ever and noted that because of it some users could not log into accounts.

 

contributed to this report

Source:  http://www.theblaze.com/stories/2013/04/10/confused-by-digital-currency-this-three-minute-video-has-basics-of-what-you-need-to-know-about-bitcoins/

Microsoft Escalates Advertising Assault on Google

Microsoft escalates advertising assault on Google

Associated Press/Microsoft – This frame grab made available by Microsoft shows a scene from the latest in a series of scathing Microsoft ads against Google.  The ads that say as much about the dramatic shift …more

SAN FRANCISCO (AP) — Microsoft is skewering Google again with scathing ads that say as much about the dramatic shift in the technology industry’s competitive landscape as they do about the animosity between the two rivals.

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Ga. Official Wants to Start Charging For Those Free Gov’t-Subsidized Cell Phones

Getty Images.

A utility regulator in Georgia wants to charge low-income residents $5 a month to get government-funded telephone service, a step that he says will deter fraud.

Critics worry it will effectively gut the program.

The U.S. government now pays companies $9.25 a month per customer to offer phone service to low-income residents. Public Service Commissioner H. Doug Everett, a Republican, wants Lifeline users — many of whom now pay nothing for cell service — to pay a $5 monthly fee for their service, essentially a 54 percent tax on their subsidy.

Companies that don’t charge the fee would have to offer at least 500 minutes of calling time, potentially making it unprofitable to stay in the market.

The rules are designed to affect firms offering cellphones, not landlines. People getting subsidies for landline phones typically pay more than $5 out of pocket now since that service costs more than the government subsidy.

After taking an early vote in January, Everett said he expects the commission to refine the plan in the next few weeks.

“This to me is a luxury item, it’s not a necessity,” he said. “They have family, most of them. They have the church. I believe they can put a little skin in the game.”

Cellphone companies now offer phones and calling plans that cost less than the government subsidy, meaning the firms can earn a profit. Advocates for low-income residents say forcing low-income people to pay $5 will discourage them from using the program. Even though telephone companies would keep the fee, most don’t want it and have filed a lawsuit challenging the plan. Company officials say the cost of the collecting the payments exceeds what they would get in extra revenue.

“Those who qualify for Lifeline are already facing economic hardship,” said George Korn, who represents the Rainbow PUSH Coalition, which opposes the rule. “In most cases, they are surviving on a meager monthly income that leaves them little room for extras.”

Rainbow PUSH Coalition partners with a cellphone provider.

The dispute centers on the Lifeline program, which started in 1984 under President Ronald Reagan’s administration and expanded under presidents George H.W. Bush, Bill Clinton, George W. Bush, and Barack Obama.

Ga. Regulators Mull Charging Govt Cellphones Recipients

Originally, the program subsidized wire telephones in poor households. As household income dropped and more telephone carriers entered the program, spending increased sharply. The program, which cost roughly $582 million in 1998, cost about $2.2 billion in 2012.

Prior to recent changes, the Federal Communications Commission estimated that up to 15 percent of Lifeline subscribers may be ineligible for the assistance, costing the government as much as $360 million annually. Those findings prompted the FCC to issue new rules — for example, making clear that users can get just one phone per household. Federal officials are forcing a state-by-state check of customer rolls, searching for people who receive more than one phone and requiring users to re-certify that they remain eligible for the assistance.

By the end of the year, FCC officials expect to have a national database that will allow cellphone companies to check whether someone already is enrolled in the program before signing him or her up for service.

While considering changes to curtail spending, FCC officials rejected a proposal to charge customers. The commission said it worried that many poor people lacked access to bank accounts and would be discouraged from enrolling, and that there was little evidence the move would discourage fraud.

Everett said the federal rule-tightening does not go far enough.

“A lot of people are giving fictitious names and fictitious addresses, and no one was checking it,” he said.

Follow Becket Adams (@BecketAdams) on Twitter

The AP contributed to this report. Featured image Getty Images.

(Emphasis added)

Source:  http://www.theblaze.com/stories/2013/04/08/ga-official-wants-to-start-charging-those-getting-free-govt-cell-phones/

 

‘Leading From Behind’: Former White House Budget Wonks Savage Obama For Failing To Lead On Econ. Issues

David Stockman, former OMB for President Ronald Reagen. (Getty Images.)

Former Reagan budget director David Stockman and David Walker, former U.S. Comptroller General under Presidents Bill Clinton and George W. Bush, agreed Thursday that the U.S.’ greatest deficit is its leadership deficit.

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Could This Lawsuit Really Kill ‘Obamacare’?

Although it’s widely believed that “Obamacare” is here to stay, one lawsuit is threatening to undo President Obama’s landmark health care bill.

“A challenge filed by the Pacific Legal Foundation contends that the Affordable Care Act is unconstitutional because the bill originated in the Senate, not the House. Under the Origination Clause of the Constitution, all bills raising revenue must begin in the House,” the Washington Times notes.

[Read more...]

Gun store rescinds Mark Kelly’s rifle purchase, questions his ‘intent’

A Tucson gun store owner has decided to rescind the sale of a military-style rifle to Mark Kelly, the husband of former U.S. Rep. Gabrielle Giffords, after Kelly said he had intended the purchase to make a political point about how easy it is to obtain the kind of firearms he’s lobbying Congress to ban.
Kelly’s March 5 purchase of an AR-15-style rifle and a 45.-caliber handgun at Diamondback Police Supply sparked a frenzy of reaction from both sides of the debate after he posted to Facebook a photo of himself shopping.

[Read more...]

How Important Are Guns to the U.S. Economy? For Starters, the Firearms Industry Employs Twice As Many Americans As GM

This article is part of a series on Guns in America that explores the use of firearms in our country and the debate over gun control. This is an editorially independent series sponsored by Tactical Firearms Training Secrets.

Guns are big business in America – so big, in fact, that despite making vastly more firearms than any other nation, the U.S. also is the largest importer of handguns, rifles and shotguns.

[Read more...]

Here’s Why You Might Want to Stop Giving Out Your ZIP Code to Stores

You might have thought nothing of stores asking for your ZIP code when you’re making a purchase. After all, it’s just the general location of where you live, right?

According to privacy experts, giving out your ZIP code might reveal more about you than you intend to reveal.

In a recent interview with NBC’s Today show, Privacy Rights Clearinghouse Policy and Advocacy Director Paul Stephens advised customers against offering up their ZIP codes. He said when paired with information like the customer’s name on a credit card, these ZIP codes can help identify the person’s actual address and target them with marketing materials, like junk mail.

According to Privacy Rights Clearinghouse’s fact sheet on the topic, merchants cannot legally require of consumers:

  • Any personal information, including address and telephone number, on any form associated with the credit card transaction when the consumer uses a credit card to pay for goods or services;
  • Personal information that the merchant then records; or
  • Forms with pre-printed spaces for personal information.

There are exceptions to the above, like allowing collection of ZIP codes for gasoline “pay at the pump” transactions. This information though can only be used for fraud, theft and identity theft prevention.  (Emphasis added)

The fact sheet also references a case where the California Supreme Court ruled that merchants cannot ask customers for ZIP codes in credit card transactions because Williams Sonoma was using the information to locate specific addresses to send catalogs to customers who never provided an address for it in the first place.

contributed to  this report

Read more at Source: http://www.theblaze.com/stories/2013/03/20/heres-why-you-might-want-to-stop-giving-out-your-zip-code-to-stores/

Elizabeth Warren Wonders: Why Aren’t Employers Paying $22-an-Hour Minimum Wage Rates?

Democrat Senator Elizabeth Warren during a hearing of the Senate Committee on Health, Education, Labor and Pensions last week asked why the current federal minimum wage rate is only $7.25 and not $22 an hour.

“If we started in 1960, and we said that, as productivity goes up — that is, as workers are producing more — then the minimum wage is going to go up the same,” the Massachusetts senator said during the hearing.

[Read more...]

Cyprus Bailout Deposit Tax Rattles Markets

Cyprus bailout deposit tax rattles markets

Associated Press/Pavlos Vrionides – In this image taken Saturday, March 16, 2013, people queue to use an ATM machine outside of Bank of Cyprus branch in southern port city of Limassol, Saturday, March 16, 2013.

LONDON (AP) — Stocks around the world and the euro fell sharply Monday as investors fretted over a plan to tax depositors in Cypriot banks as a way to partly fund a bailout of the Mediterranean island nation.

[Read more...]

The Crazy Cyprus Tax Plan: What Does This Mean For the U.S. & the Rest of the World?

The Cyprus Bailout Could Have Major Ramifications For the Rest of the World

A man reads a newspaper at a cafe in the Cypriot capital Nicosia on March 17, 2013. (Photo by BARBARA LABORDE/AFP/Getty Images).

The world learned Saturday that the small Mediterranean country of Cyprus had agreed to a deal with European Union creditors that would impose a financial transaction tax as high as 9.9 percent on all depositors.

Depending on whether the Cypriot government finalizes the deal, which is still pending, this means that every depositor will have a portion of his money confiscated by the government when the banks reopen Tuesday morning.

“Accounts under 100,000 euros will have 6.75% of the funds seized. Accounts over 100,000 euros will have 9.9% seized,” Business Insider’s Henry Blodget explains.

After these funds are seized, the EU’s emergency lending facility and the International Monetary Fund, headed by Christine LaGarde, will drop €10 billion on keeping the banks in Cyprus running.

Unsurprisingly, after Cypriots learned of the surprise deal, many rushed to empty their bank accounts. However, according to various reports, ATMs have not been functioning properly and the government has made it impossible to transfer money outside of the country’s borders.

Obviously, the EU’s bailout conditions (and the fact that Cyprus seems willing to go along with them) are unprecedented.

You see, most bank bailout efforts in the past have put the burden on bondholders — not the actual depositors. Furthermore, it has usually been the goal to protect depositors to keep them withdrawing their funds en masse, creating a “run on the bank.”

But all that seems to have changed this weekend, which raises some obvious questions: Where does this go from here? What will this mean for the U.S. and the rest of the world? Will this actually help Cyprus’ banks or will it create a spreading panic and crash?

The Associated Press offers these thoughts:

Cyprus may be on holiday Monday, but the rest of the world will go back to work. [Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics in Washington ] says that the decision to tax tap depositors indicates that the European Central Bank is confident that the risk of a bank run elsewhere in the eurozone is low – and by excluding Greek branches of Cypriot banks, they have reduced the possibility even further.

Bond markets may react a little since bondholders were also tapped. Bank stocks will probably fall and they’ll see their borrowing costs rise since this deal signals that other eurozone countries may call on bondholders if their banks run into trouble.

But Heather Conley, director of Europe program for the Center for Strategic and International Studies, says it’s hard to know the far-reaching implications of this one-off deal. The “exceptions” created to solve Europe’s debt crisis are adding up, she said. And some investors may look at this late-night, three-day-weekend deal and see what she saw: a dress rehearsal for a country dropping out of the euro.

But Blodget raises some really interesting points:

Depositors in Cyprus banks will lose some of their deposits.

They will be furious about this.

And they will, rightly, feel that it is grossly unfair — because depositors in the bailed-out banks in Ireland, Greece, etc. didn’t lose their money. And they will feel like fools for not having taken their money out.

Indeed, as we noted in June 2012 when Spain — unlike Ireland and Greece — was awarded its no-austerity bailout, the “EU is like a family. And as anyone with siblings can tell you, when one kid gets special treatment, all the kids want special treatment.”

We have a feeling that Cypriots (as well as Russians and other non-residents who have stashed massive amounts of cash in Cyprus banks) are not going to be happy if the country goes forward with the proposed bailout deal.

The Cyprus Bailout Could Have Major Ramifications For the Rest of the World

German Chancellor Angela Merkel chats with Cyprus’s President Nicos Anastasiades on March 15, 2013 in Brussels. (Bertrand Langlois/AFP via Getty Images).

Blodget continues:

And … here’s the important part …

Other depositors at weak banks all over Europe, in places like Spain, Italy, and Greece, will rightly wonder whether this is the beginning of a new era of bank bailouts, an era in which bank depositors are going lose some of their money.

What do you think those other depositors in Spain, Italy, Greece, etc., are going to feel like doing when they realize that, if their banks ever need a bailout, they might have their deposits seized?

That’s right. They’re going to feel like yanking their money out of their banks.

And if some of them yank their money out of their banks, well — then the financial condition of those banks will go from weak to insolvent. And the banks will go rushing to their governments and the Eurozone for help.

And if, god forbid, the Eurozone decides to seize the deposits of more bank depositors …

Well, then, a good portion of Europe is going to suddenly experience a good old-fashioned bank run. That, to put it mildly, could be a disaster.

The destruction of its banking sector would be a disaster for the EU economy, and a disaster for the EU economy would translate into a disaster for anyone who does business with them: The U.S., China, Japan, etc.

Considering that the U.S. did roughly $265 billion in exports and $380 billion in imports with the European Union in 2012, a crippling EU banking crisis would most certainly send shockwaves through the U.S.

Furthermore, should Cyprus agree to the deal, it’s not just the economic ramifications of a possible EU-wide run on the bank that should have everyone yelling, “Stop!” It’s the fact that Cyprus and European Union creditors are telling the rest of the world that targeting depositors is an apparently legitimate strategy.

Could this happen in the U.S.? Would Congress ever enact a financial transaction tax on U.S. depositors? To answer that question, let’s take a look at the following thoughts from Zero Hedge.

First, here’s a summary of the consolidated U.S. depository system, which, “according to the Fed’s December 31, 2012 Flow of Funds report had a grand total of $15 trillion in assets, and a matched number of liabilities, of which 72%, or a total of $10.9 trillion was in the form of deposits (checkable, small and large time, and savings).”

This is what it looks like:

The Cyprus Bailout Could Have Major Ramifications For the Rest of the World

Courtesy Zero Hedge

“So, if the US was to go the Cyprus route, and begin impairing balance sheet liabilities to remark assets, there would be precious little space (with just $4.3 trillion in total other funding liabilities), before one would need to start eating into the deposit base,” Zero Hedge explains.

But would Congress ever go the Cypress route?

Obviously, we can’t really answer that question, but “it was ‘absolutely certain’ as recently as 48 hours ago that Cyprus too would see no depositor ‘bail in’ either,” the Hedge points out.

“What is known,” the report continues, “is that…the necessary debt-reduction needed in the US to reach a sustainable debt level, was over $8.2 trillion using debt numbers as of 2009 … Since then consolidated US debt has risen by over $5 trillion.”

The Cyprus Bailout Could Have Major Ramifications For the Rest of the World

Courtesy Zero Hedge

“Which means that if, indeed, the US proceeds with its own wealth tax, then deposits may well be one ‘wealth class’ that gets impaired,” it continues.

“Of course, since in the US other financial assets, namely the stock market, account for a far greater proportion of household net worth, it is quite possible that instead of impairing deposits at US banks, which already subsist solely due to the Fed’s $2 trillion in excess reserves, the government may instead choose to generously tax simple 30% of all of your stock holdings, and achieve the same ‘wealth transfer’ result,” the report adds

The Cyprus Bailout Could Have Major Ramifications For the Rest of the World

Courtesy Zero Hedge

Hopefully, it never comes to this. Hopefully, the EU and Cyprus rethink their “tax the depositors” strategy — which they may be doing.

“Cyprus’ president said Sunday that he is trying to amend an unpopular euro zone bailout plan that would tax deposits in the country’s banks to reduce its effect on small savers,” the AP notes.

“But in a nationally televised speech, President Nicos Anastasiades also urged lawmakers to approve the tax in a vote Monday, saying it is essential to save the country from bankruptcy,” the report adds. “Some 25 lawmakers in the 56-seat Cypriot parliament said they wouldn’t vote for the tax amid deep resentment over a move some called disastrous.”

The Cyprus Bailout Could Have Major Ramifications For the Rest of the World

Cyprus’s President Nicos Anastasiades. (Getty Images).

“I completely share the unpleasant sentiment that this difficult and onerous decision has caused,” Anastasiades said. “That’s why I continue to give battle so that the decisions of the eurozone are amended in the next hours to limit the effect on small depositors.”

 (Emphasis added)
Featured image Getty Images.

contributed to this report

Source:   http://www.theblaze.com/stories/2013/03/17/the-crazy-cyprus-tax-plan-what-does-this-mean-for-the-u-s-the-rest-of-the-world/

Elizabeth Warren: Bust Banks That Launder Drug Money

 

Warren’s attack comes at a touchy time for the Obama administration. | John Shinkle/POLITICO

 Elizabeth Warren on Thursday demanded answers from top banking regulators over the possibility of shuttering financial firms that flout federal anti-money laundering laws or violate international trade sanctions.

Al Gore Sued Over Current TV Sale to Al Jazeera (Exclusive)

A $5 million lawsuit claims Gore was “adamant” about not selling his network to oil-rich Qataris but had a “change of heart,” then stiffed the man who came up with the idea for the deal.

 

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GM Proposes to Pay CEO $11.1 million in 2013

 

 

 

 

CEO Dan Akerson didn’t get a raise last year, but received a $9 million pay package including a $1.7 million cash  salary Spencer Platt/Getty Images)

 

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What’s the White House Doing Now That Has an NBC News Journalist Shocked?: ‘This Just Looks Bad’

NBC News Chuck Todd Is Not Happy With OfAs Offer to Get Donors Access to the White House

President Obama’s 2012 campaign manager Jim Messina in January became the national chairman of Organizing for Action (OFA), a group closely affiliated” with “insider liberal organizations” funded by the likes of billionaire philanthropist George Soros, TheBlaze reported.

And considering the fact that Messina is the president’s former campaign manager, it shouldn’t come as a surprise that his group would have access — and the ability to offer access — to the White House.

Well, let’s back up for a second. It shouldn’t be that big of a surprise — but for some in traditional media, it’s a bit unnerving.

Citing a recent New York Times report that claims OFA is offering donors access to the President Obama, MSNBC’s Chuck Todd sounded both surprised and disappointed Monday morning.  (Emphasis added)

“Excuse us? This just looks bad,” Todd said, adding that the president is “ceding the moral high ground.”

He continued, noting .the president’s history of decrying the influence of money in politics

“This is how a bad system gets worse,” Todd added. “I wonder what candidate Obama would say about this.”

contributed to this report

Source:   http://www.theblaze.com/stories/2013/02/25/whats-the-white-house-doing-now-that-has-an-nbc-news-journalist-shocked-this-just-looks-bad/

‘Lying Worm’: Beck’s Reaction To Krugman’s ‘Death Panel’ Remarks

Heres How Glenn Beck Reacted to Paul Krugmans Death Panel RemarksScreen grab

John Maynard Keynes fanboy Paul Krugman caused a little stir earlier this year after he half-jokingly suggested that the best way to address the rising national debt would be through tax increases on the middle class and – wait for it – “death panels.”

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