Monthly Archives: April 2011

Coping, caring, and building community

As the financial and economic ground continues to shift beneath our feet, it becomes ever more imperative that we reduce our dependence upon the institutions and structures that we have come to depend upon and take for granted. The financial tsunami of 2008 and the continuing aftershocks should be a wakeup call. The sock markets may be up (for now), but that should not be taken as comforting evidence that everything is “getting back to normal.” As billionaire financier George Soros said in his recent book, “This crisis …has brought the entire [financial] system to the brink of a breakdown, and it is being contained only with the greatest difficulty. This will have far reaching consequences. It is not business as usual but the end of an era.” (The New Paradigm for Financial Markets: The Crash of 2008 and What it Means. p. 81).

The total outstanding credit for all sectors in the U.S. economy was 160% GDP in 1929, 260% in 1932. By comparison, we entered the 2008 crash at 365%, and Soros believes this will rise to about 500% of GDP within the next few years.

What seems to be in prospects for the foreseeable future for the vast majority of people in the developed world, especially the United States, is diminished purchasing power. This the result of simultaneous trends of underemployment or unemployment, rising prices of basic necessities due to currency debasement (inflation), and systematic attacks on the middle-class by the political establishment.

How do we cope with all of that? It is, of course, as the proverb says, both a challenge and an opportunity. I have suggested before that society is on the verge of metamorphic change that offers the promise of a more peaceful and harmonious world in which basic needs are met and everyone has the opportunity to realize their fullest potential. But it will take the right kind of action to make that vision a reality. It will require that we take sharing and cooperation to new levels, and that we create new structures that can serve the common good. An essential part of that is building community.

On that score, I take inspiration from Richard Flyer and the Conscious Community Network. Richard recently posted a list of 37 ways to build community. No Act is Too Small! You can click on that link to learn more, but I have extracted the 37 ways here for your convenience. I’m sure Richard won’t mind.—t.h.g.

1. A smile and a wave will go a long way.

2. Each morning, ask where you can make a difference.

3. Find the good in others instead of their faults – start in your home and on your street.

4. Become aware of hidden needs on your street – isolated seniors;

youth needing mentors, single parents; etc.

5. Start a community garden.

6. Practice forgiveness.

7. Surprise a new neighbor by making a favorite dinner – and include the recipe.

8. Slow down and enjoy the present moment.

9. Don’t gossip.

10. Start a monthly tea group.

11. Play cards with friends and neighbors.

11. Start a babysitting cooperative.

12. Form a group of neighbors to walk their dogs together.

13. Seek to understand.

14. Start a carpool.

15. Have family dinners and read to your children.

16. If you grow tomatoes, plant extra for a lonely elder who lives nearby – better yet, ask him/her to teach you and others to can the extras.

17. Turn off the TV, Play Station, PSP, and talk with family, friends, and neighbors.

18. Bless your food with gratitude.

19. Know that love is not a feeling but a courageous choice.

20. Ask neighbors for help and reciprocate.

21. Talk to your children or parents about how their day went.

22. Say hello to strangers.

23. Create a neighborhood newsletter.

24. Organize a neighborhood clean-up.

25. Be a model and demonstrate the virtues you want to see in the world.

26. Be a peacemaker.

27. Talk to the mail carrier.

28. Shoot some ‘hoops with neighbor children.

29. Support local merchants.

30. Speak kindly and listen carefully

31. Hire young people for odd jobs.

32. Form a tool cooperative with neighbors and share ladders, rakes, snow blowers, etc.

33. Grow your own food.

34. Be real. Be humble. Be respectful.

35. Offer to watch your neighbor’s home or apartment while they are away

36. Be of service to all.

37. Go to http://www.consciouscommunity-reno.org/ to share your stories.

Adapted from http://bettertogether.org.

Should every state own a bank of its own?

A state owned bank can provide state economies with many advantages–if it is properly run. Here’s an article from Mother Jones about the Bank of North Dakota, the only state owned bank in the United States. It makes a pretty good case.–t.h.g.

How the Nation’s Only State-Owned Bank Became the Envy of Wall Street

The Great Unraveling—Entering Stage Two

There has been very little recognition of the Debt/Growth Imperative that is built into our global system of money, banking, and finance. As I have been preaching for many years, the creation of money as interest-bearing debt requires that indebtedness, in either the private sector or the public sector, must be continually increased at an accelerating rate in order for the system to continue to function. When the private sector is fully “loaned up,” government must step in as “the borrower of last resort.” That was clearly manifested in the latest bubble-bust cycle with the massive bank bailouts and the assumption by governments of enormous amounts of their “toxic debt.”

The aggregate debt burden is destined to ultimately become unbearable, and no amount of government or central bank intervention can save this flawed system (such is the nature of exponential growth). The fiscal crisis that is now confronting national governments around the world signals the imminent collapse. How that will play out is difficult to assess, but it behoove us to use our available resources to enhance the resilience of our communities and build new systems that can be relied on to provide the things we need in order to thrive and build a world that works for all.

One prominent commentator who “gets it” is Chris Martenson. His recent observations (below) are worth considering.—t.h.g.

The Breakdown Draws Near

Tuesday, April 19, 2011, 12:22 pm, by Chris Martenson

Things are certainly speeding up, and it is my conclusion that we are not more than a year away from the next major financial and economic disruption.

Alas, predictions are tricky, especially about the future (credit: Yogi Berra), but here’s why I am convinced that the next big break is drawing near.

In order for the financial system to operate, it needs continual debt expansion and servicing. Both are important. If either is missing, then catastrophe can strike at any time. And by ‘catastrophe’ I mean big institutions and countries transiting from a state of insolvency into outright bankruptcy. [emphasis added]

In a recent article, I noted that the IMF had added up the financing needs of the advanced economies and come to the startling conclusion that the combination of maturing and new debt issuances came to more than a quarter of their combined economies over the next year. A quarter!

I also noted that this was just the sovereign debt, and that state, personal, and corporate debt were additive to the overall amount of financing needed this next year. Adding another dab of color to the picture, the IMF has now added bank refinancing to the tableau, and it’s an unhealthy shade of red: Banks face $3.6 trillion “wall” of maturing debt: IMF

Read the rest of Martenson’s post here.

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Whose interests does a central bank serve?

There’s an old adage that says “the best way to rob a bank is to own one.” Well, take a look at what the owners of the Federal Reserve are doing with your money. And, this is, I’m sure, the mere tip of a very ugly iceberg.–t.h.g.

From Rolling Stone

The Real Housewives of Wall Street

Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?

By Matt Taibbi
April 12, 2011 9:55 AM ET

America has two national budgets, one official, one unofficial. The official budget is public record and hotly debated: Money comes in as taxes and goes out as jet fighters, DEA agents, wheat subsidies and Medicare, plus pensions and bennies for that great untamed socialist menace called a unionized public-sector workforce that Republicans are always complaining about. According to popular legend, we’re broke and in so much debt that 40 years from now our granddaughters will still be hooking on weekends to pay the medical bills of this year’s retirees from the IRS, the SEC and the Department of Energy.

Why Isn’t Wall Street in Jail?

Most Americans know about that budget. What they don’t know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the “official” budget in size — a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.

This article appears in the April 28, 2011 issue of Rolling Stone. The issue will be available on newsstands and in the online archive April 15.

Read the rest of it here.



60 Minutes exposes banks’ massive mortgage fraud

This is a truly astounding story about how major banks have routinely used falsified documents to foreclose on people who were lured into the housing bubble.

Liberty Dollar conviction no threat to “barter” exchanges

In the wake of the recent Liberty Dollar case, there has been much concern and confusion about what it means to the alternative exchange and local currencies movement. Here is a clarifying statement that has just been issued by the International Reciprocal Trade Association (IRTA), the trade association for the commercial “barter” industry.

Liberty Dollars Case Does Not Involve the Modern Trade & Barter Industry

No Government Precedent Set Against Private Barter Currencies

Recent news stories suggesting that the Liberty Dollars verdict is a signal that the Government is against private barter currencies are categorically incorrect and ignore the facts of the case.

On March 18, 2011, after a six day trial, a North Carolina jury found the defendant Bernard von NotHaus guilty of making coins resembling and similar to United States coins; of issuing, passing, selling, and possessing Liberty Dollar coins; of issuing and passing Liberty Dollar coins intended for use as current money; and of conspiracy against the United States.

In the trial, the defense improperly tried to argue that Mr. NotHaus’s Liberty Dollar coins represented legitimate voluntary private barter currency transactions. But the government and jury rejected that misplaced argument; “there can be no private currency system that functions through the private creation and distribution of counterfeit coins designed in resemblance and similitude of United States coins.” (Government Brief filed on April 7, 2011 in by U.S District Court by U.S. Attorney Anne M. Thompkins).

Several news stories have highlighted an irresponsible quote made by Liberty Dollar’s counsel, Aaron Michel, which said:

“The prosecutors successfully painted Mr. von NotHaus in a false light and now the U.S. Attorney responsible for the prosecution is painting the case in a false light, saying that it establishes that private voluntary barter currency is illegal.”

However, the fact is that the Government rejected any comparison of VonHaus’s counterfeiting activities with legitimate barter currencies. As the Government stated in their U.S. District Court Brief of April 7, 2011; “the defendant was not operating a private currency barter system, rather he was counterfeiting United State coins and using deceptive means to inject them into the flow of current money to defraud the public.” (Page 5.) Further on page 13, the Government states ” the evidence at trial clearly demonstrated that the activities surrounding the creation and distribution of the Liberty Dollars were in no way a competing private voluntary currency system, but rather constituted a deceptive and fraudulent scheme designed and implemented by the defendant.” Lastly, on page 14, the Government goes on to say, “any comparison of Defendant’s creation and distribution of Liberty Dollar coins to localized private exchange systems such as the Ithaca Hour or Disney Dollar are absurd on their face.”

IRTA moved quickly to set the record straight and was successful in getting the following clarifying statement inserted in a revised version of the http://www.examiner.com article by Mr. Schortgen:

Executive Director of IRTA, Ron Whitney says, “Mr. Michel’s quote suggesting that the Liberty Dollar case is related to the legally recognized organized barter industry is misplaced. The IRS website at http://www.irs.gov/businesses/small/article/0,,id=187904,00.html defines barter as “the trading of one product or service for another.” The Liberty Dollar’s case is not about trading one product or service for another, rather it is about violation of Section 18, 486 of the U.S. Code which prohibits the manufacture of coinage or metals intended as current money resembling coinage of the U.S. Mr. vonNotHaus was convicted of the charges of counterfeiting and making and selling currency, barter had nothing to do with the case. The modern trade and barter industry was recognized by the U.S. government as a legal alternative form of commerce by the Tax Equity and Fiscal Responsibility Act (TEFRA), passed in 1982 whereby barter exchanges were deemed third party record keepers and required to comply with IRS 1099B reporting laws. Barter sales conducted through barter exchanges are taxable sales reported annually to the IRS. The Liberty Dollar’s verdict is completely separate from the legally recognized modern trade and barter industry and in our view it does not represent an effort on the government’s part to declare valid TEFRA compliant barter transactions as illegal activity.”

We trust the information above will operate to clear the confusion on this matter. Please call Ron Whitney at 757-393-2292 if you have any questions.

Money and Oil: The agenda in Libya becomes more evident

I hadn’t noticed it before, but on March 22, Bloomberg reported that, Libyan Rebel Council Forms Oil Company to Replace Qaddafi’s

Well, we’ve grown to expect things like that. The more interesting development reported in the article was this:

The Council also said it “designated the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and the appointment of a governor to the Central Bank of Libya, with a temporary headquarters in Benghazi.”

Amazing! Grab the oil and grab control of the money machine.

For some interesting commentary on these developments read this article: America’s true reason for attacking Libya becomes clear with new central bank, , and this article: Wow That Was Fast! Libyan Rebels Have Already Established A New Central Bank Of Libya.