David Walker, US Comptroller of the Currency Predicts Economic Disaster for the US

Here is a Reuters Story that can be found Here.

LONDON, March 14 (Reuters) - The United States is headed for a financial crisis unless it alters its course of racking up big budget deficits year after year, Comptroller General David Walker told a British audience on Tuesday.

"If we continue on our present course, a fiscal crisis is only a matter of time," Walker said in the course of an address to the London School of Economics in which he stressed the need for the United States to get its fiscal house in order.

The comptroller general acts as the nation's chief accountability officer and is the head of the U.S. Government Accountability Office, or GAO.

Walker said some combination of reforming so-called entitlement spending like that for health care and Social Security, curbing discretionary spending and possibly changes in tax policy likely will be needed to get deficits under control.

Even then, it will take a considerable period of time and strong political leadership to correct the current situation.

"I think it's going to take 20-plus years before we are ultimately on a prudent and sustainable path," Walker said, partly because so many American consumers take their example from the government.

"Too many Americans are following the lead of the federal government, they are spending more than they take in and are running up debt at record rates," Walker said.

The BBC's Stephen Sackur talks to America's Auditor -in-Chief, David Walker in a video interview that can be found Here.

Does this Controlled Demolition Look Familiar??

Clicking on the picture above or this link will take you to a video of the controlled demolition of the Landmark Tower in Fort Worth, Texas. The building at one time was the tallest skyscraper in that city. Does the controlled demolition of the Landmark Tower remind you of any other controlled demolitions that you might have witnessed?


WTC7 : The Smoking Gun

Our Worst Nightmare: The Puncture of the Current U.S. Housing Bubble

Complete article found Here.

Excerpts:

TORONTO (PreciousMetalsWarrants) -- The key to holding up the entire speculative U.S. financial system with its current excessive levels of debt - federal (current account and trade), state, municipal, corporate and household - is maintaining the U.S. housing bubble. Anything less would result in America’s worst nightmare and, in short order, the entire world.

The housing market is dominated by Fannie Mae and Freddie Mac who hold 75% of all outstanding home mortgages (and the Federal Home Loan Bank Board to a much lesser extent). One too many additional increases in the Fed rate may well turn out to be the U.S. economy's Achilles' heel and lead to a major crisis at these two institutions generating an out-of-control systemic breakdown situation and disastrous financial implosion...

Here's why. Fannie’s and Freddie's (FF) original functions were to provide liquidity to the housing market. After a mortgage lending institution (MLI) originated a mortgage – say, $100,000 – FF would purchase that mortgage from the MLI for a fee and hold the mortgage to maturity. The MLI now had $100,000 to make yet another mortgage loan and earn yet another fee. By the repeating of this process FF injected liquidity into the housing market making it possible for MLIs to increase the number of mortgage loans they could make each year and earn considerably more fees in the process...

...The above-mentioned obligations of FF total over $5 trillion. Another $1 trillion in obligations are held by the Federal Home Loan Bank Board and private issuers of MBS. These $6 trillion in risky obligations are distinct from, and in addition to, the more than $6 trillion in mortgages themselves. As such, a total in excess of $12 trillion is laden on to the homes and attached to to the incomes of America's homeowners. And then there is credit card debt, car lease debt, cell phone contract debt, bank loan debts, margin debt, etc!...

...FF assets have expanded so rapidly over the past few years due to the number of mortgages, the escalating value of mortgages (as a result of escalating real estate prices) and the refinancing of mortgages and they have so much debt in the form of mortgages, bonds, MBS’s and derivatives that should they encounter any problems servicing the debt it most likely will have a destabilizing effect on the U.S. economy.

Indeed, the Fed are so concerned about this happening they are flooding the economy with almost limitless liquidity. There must be a crisis of historic proportions coming, and the Federal Reserve Bank of the United States is making sure that there is enough liquidity in place to protect our nation's fragile financial system. The amazing thing is that the Fed's actions mean they know what is about to happen.

The complete article is a must-read for anyone interested in understanding how the morgage industry, lead by Fannie Mae and Freddie Mac, has contributed to the wobbly house o' cards built on ARMs, No interest morgages, and other speculative loans to marginal buyers that will walk away from their obligations in a heartbeat as interest rates continue to rise as the economy continues to tank. The article's only deficit is not addresing the aspects of speculation and overbuilding that are compounding the problem by flooding the market with excess capacity that will contribute dramatically to the coming crash. - Etienne

The White Rose

Complete Article Found Here:
http://www.lewrockwell.com/hornberger/hornberger79.html

Excerpt:

One day in 1942, copies of a leaflet entitled "The White Rose" suddenly appeared at the University of Munich. The leaflet contained an anonymous essay that said that the Nazi system had slowly imprisoned the German people and was now destroying them. The Nazi regime had turned evil. It was time, the essay said, for Germans to rise up and resist the tyranny of their own government. At the bottom of the essay, the following request appeared: "Please make as many copies of this leaflet as you can and distribute them."

The leaflet caused a tremendous stir among the student body. It was the first time that internal dissent against the Nazi regime had surfaced in Germany. The essay had been secretly written and distributed by Hans Scholl and his friends.

Another leaflet appeared soon afterward. And then another. And another. Ultimately, there were six leaflets published and distributed by Hans and Sophie Scholl and their friends – four under the title "The White Rose" and two under the title "Leaflets of the Resistance." Their publication took place periodically between 1942 and 1943 – interrupted for a few months when Hans and his friends were temporarily sent to the Eastern Front to fight against the Russians.

The members of The White Rose, of course, had to act cautiously. The Nazi regime maintained an iron grip over German society. Internal dissent was quickly and efficiently smashed by the Gestapo. Hans and Sophie Scholl and their friends knew what would happen to them if they were caught.

People began receiving copies of the leaflets in the mail. Students at the University of Hamburg began copying and distributing them. Copies began turning up in different parts of Germany and Austria.

Moreover, as Hanser points out, the members of The White Rose did not limit themselves to leaflets. Graffiti began appearing in large letters on streets and buildings all over Munich: "Down with Hitler! . . . Hitler the Mass Murderer!" and "freiheit!

. . . freiheit! . . . Freedom! . . . Freedom!"

US Government Weeks From Defaulting on Debt and Raiding Government Pension Funds

Find the Washington Post Story Here: http://www.washingtonpost.com/wp-dyn/content/article/2006/03/06/AR2006030600635_pf.html
Excerpts Here:

WASHINGTON -- Treasury Secretary John Snow notified Congress on Monday that the administration has now taken "all prudent and legal actions," including tapping certain government retirement funds, to keep from hitting the $8.2 trillion national debt limit.

In a letter to Congress, Snow urged lawmakers to pass a new debt ceiling immediately to avoid the nation's first-ever default on its obligations...

...Snow in his letter notified lawmakers that Treasury would begin tapping the Civil Service Retirement and Disability Fund, which Treasury officials said would provide a "few billion" dollars in extra borrowing ability.

Treasury officials also announced that on Friday they had used the $15 billion in the Exchange Stabilization Fund, a reserve that the Treasury secretary has that is normally used to smooth out volatile movements in the value of the dollar in currency markets.

Treasury has also been taking investments out of a $65.3 billion government pension fund known as the G-fund...

...The formal title for the G-fund is the Government Securities Investment Fund of the Federal Employees Retirement System....

Couple this with the fact that the Federal Reserve will quit publishing the M3 this month, the end of the Yen carry trade, potential war with Iran, etc. and expect a dollar in free fall. Got Gold? - Etienne

Georgetown Law StudentsTurn Backs To Gonzales

The Article Can be Found Here: http://www.rense.com/general69/georgetwn.htm

Excerpts Here:

Future American lawyers to be proud of.

Alberto Gonzales spoke before law students at Georgetown Law School today, justifying illegal, unauthorized surveilance of US citizens, but during the course of his speech the students in class did something pretty ballsy and brave. They got up from their seats and turned their backs to him.

To make matters worse for Gonzales, additional students came into the room, wearing black cowls and carrying a simple banner, written on a sheet.

Fortunately for him, it was a brief speech... followed by a panel discussion that basically ripped his argument in half.

And, as one of the people on the panel said,

"When you're a law student, they tell you that if you can't argue the law, argue the facts. They also tell you if you can't argue the facts, argue the law. If you can't argue either, apparently, the solution is to go on a public relations offensive and make it a political issue... to say over and over again "it's lawful", and to think that the American people will somehow come to believe this if we say it often enough.

In light of this, I'm proud of the very civil civil disobedience that was shown here today."

The Jesuits at Georgetown seem to be doing something right and these students should be aplauded for taking a moral stand against Bush's totalitarian dictatorship with its predilection for war, torture, domestic spying, and fake terrorism to name but a few of its crimes. Go Hoyas!
- Etienne