New Banking Trace Rules

It use to be that $10,000 was the reporting limit where banks are supposed to let the IRS know you received money.

Well, any money you send or receive, that number is now $3,000.

This Sovereign Debt Crisis is getting so bade and unemployment is really runny closer to 17%, that pretty soon if you find a quarter in a parking lot a surveillance camera will send a picture to the IRA and they will fine you $1,000 for cheating them out of their 15 cents. This is all about money now.

Post-Office New Rules – You cannot mail cash

Here are the regulations of the US Post Office now prohibits mailing:

“Money (coins, cash, currency, paper money and negotiable instruments equivalent to cash such as endorsed stocks, bonds and cash letters).”

We tried at three Post Offices and listing the content as “coins” led to a refusal to accept the package. Trying to explain the “Roman” coins were not negotiable, proved fruitless. No doubt professional coin dealers were NEVER intended to be shut down. Obviously, being in that business probably led to some moron calling and being told they were not negotiable under the rules.


Scranton PA Cuts Gov’t Employees to Minimum Wage

If anyone still thinks I have exaggerated the Sovereign Debt Crisis, you better wake up and smell the roses before the coffin slams shut. The mayor of the city of Scranton, Pa, has been faced with a devastating collapse in revenue creating a crippling cash flow problem. I have been warning the model for what has been taking place is the same as the collapse of the City of Mainz. They raised taxes, chased the rich out of town, and were left with those who did not pay taxes, and still had their hand sticking straight out.

Philadelphia will raise its property taxes and destroy what is left of its economy before the politicians there wake up and say – oh shit! Scranton has been one of Pennsylvania’s largest cities who chased worthwhile citizens out of town. Last week, it distributed paychecks to city workers that cut wages to the legal minimum. They are dead broke. Scranton’s 398 city workers were paid a reduced rate of $7.25 an hour. No doubt – they are overpaid now because they will do nothing at all.

The pay cut, which Mayor Chris Doherty has threatened since late June, was carried out even though a coalition of unions had been granted a court injunction that prohibited the mayor from slashing wage rates. The mayor simply said he had no choice and one has to ask – will the court come up with the money if the city can’t?

This of course has the local union critics contending it is never their fault for demanding so much, it is the taxpayer for not paying their “fair share” as they see it and the years of financial mismanagement by the city’s political leadership. Never do employee or unions ever have anything to do with anything. To beat the court order, use the Supreme Court Obamacare decision that say the taxing authority is unlimited. Pay the wages at the normal rate byt impose a surcharge tax of 85% on government workers. The court cannot overrule that thanks to the Obamacare decision and that will shut up the unions. – No charge for that political advice!

All governments are plainly operating on the assumption they can do as they like and pass the bill to the taxpayer and if he refuses to pay, seize their home, sell it and imprison them. This sort of perpetual structural deficit is self-evident in every level of government since World War II. The system is fundamentally unsound. There is never any planning, nor is there any realistic fiscal management.

The bond holders and lenders were no doubt spooked after the city council refused to make payments on debt issued by the city’s parking authority. A flurry of resignations followed, and the bond trustee has been replaced. But this is just the beginning. I have been warning – get the hell out of munibonds. Not ever one will default, but if the Feds go, as they will, you will get the short-end of the stick.

We are facing a massive round of tax increases and government at every level tries to keep the game going. There will NEVER be reform until the fat lady screams. We are beyond a mere song!

So be careful. We are trying to get the computer models full functioning by September. This is going to be a wild fall this year. Then we have 2013, and the rise in geopolitical tension begins in 2014. We then get the two year spike and the cliff for 2016 into 2020.

This is going to be one hell of a ride in both directions that will often appear to be even simultaneous. You just cannot forecast this kind of stuff by the seat of your pants. It will take a global computer monitoring everything worldwide 24hrs 7 days a week just to survive this one. Why do you think they have been trying to block the computer models with a sense of desperate frustration. They think if nobody forecasts anything, then it will not happen. Braindead!


Barclays – The Tip of the Iceberg

The British Scandal of how Barclays got caught rigging LIBOR is just the TIP of the real iceberg. The big banks are traders, not bankers. If you have to speculate to make the big bucks, you are a hedge fund – not a banker. The problem is that the banks get inside info because they get to look at the portfolios of clients. If anyone else did that, it would be called “insider trading” and they would destroy your firm if you were outside of New York City as they did with Drexel Burnham of Philsdelphia.

The Financial Industry is spiraling down a path that they better wise up or they will be destroyed. The mob will blame them for the entire era of politicians who have borrowed and left society in a position that they can never pay back the debts. Hitler’s support against the Jews began as getting the “Jewish” bankers. History repeats and if we do not stop this spiral, when the shit-hits-the-fan, as the say, you can count on the politicians pointing their fingers at the bankers and declaring – See, it ain’t us. It was them!

This always plays out the same way. Gretchen Morgenson’s piece in the NY Times, The British, at Least, Are Getting Tough, illustrates the stark difference between New York and the rest of the world. It is time to clean house before it burns down.


What the Hyperinflationists Do Not Understand

What the Hyperinflationists do not understand is that government is always about government. They assume government will simply honor its promises and print into oblivion. It just never works that way. You are ALWAYS the enemy. Senator Alan Simpson of Wyoming, the Co-Chair of Obama’s deficit commission, made a slip of the tongue and for once spoke the truth – the truth about how government sees the people. I get to witness this all the time Behind the Curtain. Just as the Roman Senators said give them circuses (sports) and bread, and they will leave us alone, nothing has changed in 2000 years.  Most men can tell you what team won what sport. Some can tell you the names of ever person on a team. Ask them who is their local representative in government, and they are dumbfounded.

In politics they get everyone worked up over abortion, gay rights, and illegal aliens, but never mention anything about how their promises are never kept. Indeed, they turn vicious whenever a citizen actually asks for what they are entitled to. Alan Simpson spoke the truth. He called senior citizens the Greediest Generation as he compared “Social Security” to a Milk Cow with 310 million teats.

Well, they promise that they “feel our pain”, tax our money, promise to give us back three times as much, and when they can turn on us for having the audacity to actually expect them to honor their word.

So sorry. The hyperinflation scenario assumes way too much besides lacking the historical empirical support for a single core economy that has ever been extinguished through hyperinflation. Government ALWAYS, and without exception, turns against its own people. Why do you think there is revolution? They will NEVER print into oblivion, they will berate us for daring to expect what they promised. They will NEVER honor what they say, will default, change the rules, and even send in the troops against us to retain power.

They will not honor their promises.  American seniors nearing retirement found the goal posts for full retirement were moved from age 65 to age 67. They are looking to move it again to 69 to 70 on the theory the life-expectancy has increased. The life-expectancy was 65 when the created social security. They always figured you would die before collecting very much. An that was from the beginning.

They will sooner bribe some think-tank to produce a bogus study that supports that you will now live 20 years longer than in 1932 and they will attribute that to themselves, and then justify moving retirement age well into the 70s and tell you early retirement will be 75.

They all know in Washington and Brussels, a fool and his money are quickly parted. Guess who plays the fool?

The said part, this is like watching a Shakespearean play. It’s the same plot for centuries.


Paradox of Government

The food stamp program, administered by the is Department of Agriculture, is proud to be distributing the greatest amount of free meals and food stamps ever in its history.
Meanwhile, the National Park Service, administered by the Department of the Interior, asks us to “Please Do Not Feed the Animals.”
Their stated reason for the policy is because the animals will grow dependent on handouts and will not learn to take care of themselves.

Is there a paradox in philosophy between the Departments of Agriculture & Interior?

Perhaps we reduce the cost of government by transforming the jobs there into low paying positions without pensions that will be provided to people unable to find real productive jobs. This will reduce the cost of government and lower the cost of just feeding the animals who have become dependent.