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NSA, Patriot Act, Bail-in’s, Govt Lies, & Poor Economy – It’s All Related!

A report was delivered to the President this week by a group of outside advisors regarding the NSA’s unconstitutional data collection techniques. Among many of the complaints cited in the report, the most unreported consequence of the NSA’s surveillance is the impact on commerce, and therefore capital flows and growth.

The report specifically mentions that, “Silicon Valley executives complained to Mr. Obama that the N.S.A. programs were undermining American competitiveness in offering cloud services or selling American-made hardware, which is now viewed as tainted.” A specific example was provided on Wednesday, when Brazil ditched Boeing jets, and grants $4.5 bln contract to Saab, citing NSA concerns.

What’s ironic about the concern from Silicon Valley is that it was the big tech companies that cooperated with the NSA (took money) to permit back-door access to their systems and data sharing. It’s almost as ironic as people giving the Fed credit for saving us from a financial collapse that was caused by the Fed; or the govt’s war on terrorism, drugs, poverty, and ignorance that are largely the result of its own insidious policies.

The violation of our Constitutional rights is obvious. So is the perjury by top “intelligence” brass, that should result in serious jail time. After all, if govt officials are permitted to lie with impunity, how do we know they are not lying every time they open their mouths? It is also important to understand the impact of a loss of trust and confidence in government on capital flows and growth.

However, the over-riding point that people should realize is that the NSA’s surveillance and data collection has nothing to do with stopping terrorism, and EVERYTHING to do with tracking down money for a broke government, and maintaining power.  General Alexander admitted months ago in his own words in front of the Senate Judiciary Committee that “one, perhaps two” plots were thwarted, and this new report says no proof exist that any of the NSA’s Constitutional violations have thwarted a single terrorist attack. Yet, people are still permitted to state on TV that if we had these unconstitutional tactics in place before 9/11, then the attacks could have been stopped. Based on what? The Govt had plenty of data that an attack was imminent, and they did nothing. The same thing is true about Bernie Madoff, MF Global, and all of the other cases of fraud and manipulation that have been documented over the last five years. Does it matter if the fraud was “missed” due to incompetence, neglect, or complicit behavior? In a free and just society, incompetence and neglect would result in business failure; and being complicit in a crime would also result in jail time. Only in govt can these type of activities result in bigger budgets, bonuses, and promises of high paying jobs in the private sector.

People have a hard time comprehending that it is their own govt that is at the heart of our biggest problems. After all, our political leaders tell us they are here to help. I’m sorry, but the facts and data say the opposite.  By its nature, govt must take money from its productive citizens to survive; and through its bureaucratic incompetence and inefficiencies, it does more harm than good for the groups it claims to help. The only people who benefit from govt, are those in govt.  If one does not yet understand the big picture or appreciate the Constitutional violations, they would at least have to admit that the NSA and DHS are incompetent, wasteful, and deserve to be shut down now. The only kind of security provided by the Dept of Homeland Security is of the investment type, and therefore they should at least take their security public.

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“Bail-ins” Are Coming

Do you think the “what-if” rescue option for the big banks in Switzerland will be any different that in the U.S.? Do you think the big money in Swiss banks will wait around for the next financial crisis to have their deposits bailed-in? If the big money flees, whose left to bail-in the banks? As the small depositors in Cyprus discovered, there is no such thing as “deposit insurance” when it comes down to you versus the banks.

Under a bail-in, Finma says it would distribute losses “across a range of
creditor groups” of the bank and, if applicable, its holding company. That would
include first shareholders, then bondholders and, as a last resort, “could”
include uninsured deposits of about 300 billion Swiss francs per bank.

Once again, I would refer you to STEP-2.

Spotify Just Got Real Creepy With YOUR Data

Many naïve souls might say they don’t care if Spotify, cell phone providers like AT&T, or the NSA are collecting the data that defines their lives. They argue that “I have nothing to hide. I am not breaking any laws, etc., so why are people so paranoid?”

Spotify wants to be able to access the sensor information on your phone so it can determine whether you’re walking, running or standing still. It wants to know your GPS coordinates, grab photos from your phone and look through your contacts too. And it may share that information with its partners, so a whole load of companies could know exactly where you are and what you’re up to.

What these people fail to grasp is the reason there is a hunt for data (actually money), and the impact it has on capital – you know, that critical ingredient that is required to start and grow businesses. The reason the velocity of money is at 1950’s level and the world economy is contracting is due to capital getting off the grid because broke govt’s are on the prowl for anything that can be converted to cash. The abuse of the Constitution and our privacy has little to do with stopping terrorism, and everything to do with tracking money and the loss of trust and confidence, which is the foundation for a strong economy.

First they came for the Jews

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What Assets Will Crash – Stocks, Bonds, or Real Estate?

Driven by the rise in interest rates, higher taxes, declining home ownership, and the reduction in long-term mortgages, real estate prices should peak with the Economic Confidence Model on 10/1/15, which Armstrong calls the Big Bang (the collapse in sovereign debt and the peak in govt). Since homeowners are only owners as long as they can afford the taxes, the headwinds will convert more and more into renters until the prices reach equilibrium. The only thing that may surprise investors more is the rise of the dollar.

Greece has been the epicenter for the coming sovereign debt crisis, and London real estate looks to be the canary in the coal mine for real estate. The US could continue to benefit in the short-term, because it’s still the best horse on the plot of land where the glue factory resides. However, on the other side of 2015.75, when the economy turns down and declining tax receipts “force” govt to raise taxes (instead of downsizing and reforming), distressed capital will look for a more liquid safe haven that doesn’t have a deflationary tailwind, especially when the cycle has another 17 years to decline.realestate-cycle

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Obama is Targeting Retirement Accts & Mortgages

It’s obvious to most conscious people that Obama thinks govt’s humongous hammer has minor consequences in its hunt for nails and money. What apparently is not so obvious to many are the consequences of Obama’s Marxist actions. The reason I say “not so obvious” is because even those that understand that less freedom means less economic prosperity, don’t seem to understand their rights are being sacrificed daily for the benefit of govt, and at the expense of the economy. The most recent example appears in Obama’s 2016 budget, which targets retirement accounts.

Sub-market returns on you Social Security CONTRIBUTIONS is bad enough, and we are also going to be expected to accept cuts in our Social Security payments. However, now Obama thinks you should be taxed on your retirement savings, which were supposed to be tax-free. Whether it happens through taxation or a govt-induced market collapse, the bottom line is your retirement will get a significant haircut. Why? So those in govt can keep their jobs, perks, and power.

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There Comes a Time When We Must Take a Stand

When capital flees conditions it does not like, it will find a conduit, often with the support of govt and their cronies – at least if the money is flowing in. While broke govt’s will impose liberty-killing laws (capital controls) if people try to take their money out of the country, if money is coming into a country, the govt assists or looks the other way – when money is from Illicit Financial Flows (IFFs).

Just as many citizens do not fully appreciate the NSA data gathering of all of their PERSONAL information (believing they have nothing to hide), they also may not understand the full cost of our govt permitting their bankster donors from laundering money for drug cartels or funneling money from Oligarchs around the world into US real estate.

The consequences of the NSA’s unconstitutional data gathering, sold as fighting terrorism versus the true reason of finding and confiscating money for govt, is that capital will ultimately flee the intrusively-corrupt and selective law enforcement by govt in favor of safer jurisdictions – even if that means going underground or under mattresses.

The consequence of felonious financial flows into the US is that it artificially inflates asset prices, and when combined with the normal flight of capital from troubled regions around the world, it extends normal business cycles into devastating bubbles. While it may temporarily increase the paper wealth of those invested in the assets, it makes real estate/rents unaffordable for the majority and misallocates capital into paper assets with no intrinsic benefits.

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Armstrong Asks the Pivotal Question of our Time

As Twisted recently discussed, there is an inseparable and unquestionable relationship between the rule of law, confidence, and the economy. When the rule of law gives way to govt fraud and corruption, public confidence collapses, along with the economy. The rule of law has already collapsed, although many don’t realize it, because the media keeps wanting you to believe that the problem is out-of-control “thugs”, instead of out of control govt spending and fraud. Like one Baltimore protester said, “it’s unacceptable to burn down your city, but it’s also unacceptable to break a kids neck” (and shoot unarmed citizens, and plant evidence, and lie about forensic data, and confiscate assets with no evidence, and fraudulently ticket people, etc).

In his typically insightful manner, Armstrong reviews how the Rule of Law has collapsed, and asks the pivotal question of our time – “Are we capable as a society of taking that one small step for humankind and learn from history just once?

Occupy_Wall_Street_September_28_2011

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How the CIA made Google & why Google made the NSA

Before getting to an example of real investigative journalism about the incestuous relationship between the Govt and Google, I want to recommend a couple of outstanding reads from Armstrong that will lay the historical foundation as to why and how the current corporatocracy will collapse the world economy. The paranoid and psychotic actions of a govt, whose leaders fear the loss of their job, perks, and power, is nothing new because the passions of man have never changed. However, understanding how it happened before is what makes history interesting.

Whether you do or do not understand why Centrally-Planned Societies Always Fail , an understanding of what propels the world economy is mandatory to comprehend its demise, as well as weathering the coming storm.  This historically informative piece by Armstrong is well worth your time, as is this one that unveils the paradox of inflation and deflation, which explains why gold and other commodities have declined in the face of continuous QE (money/debt creation). These are longish reads, so treat them like chapters of a book, which Armstrong is trying to get out – but why not get a head start.

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Centrally Planned Societies Always Fail

The fundamentally false premise that society is better off by taxing the wealthy and corporations defies logic and common sense. Everyone should understand that govt (and large corporations for that matter) are significantly less efficient and more corrupt than small businesses. Most should also understand that business creation and growth requires capital, either borrowed or saved. If govt confiscates and mis-allocates capital or scares it away, there goes the capital needed to create and grow jobs. This fact has been proven throughout history, and we are seeing it played out again now. So, why are so many ignorant to what is so obvious?

taxes

The “arrogance of officialdom” explains the actions of those in power. What explains the willingness of people to prefer serfdom over freedom? I suppose it’s related to why the Brits (and many others for that matter) idolize and worship a royal family that had such a long history of oppression. It was recently reported that by 2016 the richest 1% will own 50% of the world’s wealth. Forgetting for the moment that much of this wealth will be vaporized when the bond bubble pops between 2016-2020, the misinformation that’s sold as fact is that govt’s are working to fix the problem (a point made at the end of the video). The fact is it is govt that is the big enabler of the 1% (to which govt leaders belong), because they pass laws that give economic advantage to those with political influence.

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Will We Ever Learn?

While the mainstream media will not do their job of holding govt accountable, many in the alternative media understand the source of our problems and the consequences that are headed our way over the next few years. However, there is one misunderstanding that many who like to label corporations as the villain’s have – that govt does not suffer from the same human frailties as corporations (even though both employ humans).

The sin that business-haters say is the root cause of our economic and social demise is that corporations throw their money around to get what they want. Does anyone see the naiveté of this assertion?  Corporations and people will put their hand out even when the chances of getting what they want are low. When the chances are high, not only will they ask, but they will do a lot more work to get what they want (like write a Bill themselves), since the return justifies the investment.

Just as a prudent banker must deny some borrowers, politicians must resist the urge to line their pockets at the expense of the country. Since human nature makes this a risky bet, our Founding Fathers designed a system of checks and balances, that is still dependent on limited govt (since govt has no competition or free market to constrain abuses or eliminate poor performers).

In a good article about the coming crash, the author highlights the ongoing growth of unregulated, Over-the-Counter (OTC) derivatives as the ticking time bomb that will blow up the world. While I have no doubt that derivatives will play a leading role in the financial collapse, it is not derivatives that must be eliminated – it is the career politician. Derivatives have been around since the dawn of trade. It is excessive debt, driven by political promises that are mathematically impossible to meet, and excessive leverage (imprudently granted by politicians) that will be to blame for the economic Armageddon that’s headed our way.

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