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Archive for September, 2009

You’re the First to Know

Thursday, September 17th, 2009

Dear Friend,

Well, it looks like you have made a difference.

Based upon the unbelievable support that I have receieved from 10,000 supporters like you, I have decided to throw my hat into the ring to challenge Chris Dodd for the honor of representing the state of Connecticut in the United States Senate. I will announce my candidacy on MSNBC’s Morning Joe show on Thursday, September 17 at 8:15am eastern time. Sorry for the short notice, but its important to honor commitments and keep these things under raps until the day the news breaks.

At this time last year I could not have imagined that that I would be making such an announcement today. I had never intended to become a candidate for public office. But these are extraordinary times. Our economy is falling apart in front of our eyes and Washington seems intent on making the wheels come off even faster. At a time when we desperately need adult supervison, the economically illiterate are running the show. As I love my country, it now seems clear that I must try to do something to help. The emotional and material support I have received from across the country has made the decision much easier.

So today it begins. As I’m sure you are aware, the rules in politics bear only scant resemblance to those which govern polite society. As a result, I am wading into strange waters, and I’m sure strange things will happen. But I promise to maintain my composure and give it my best shot. Based on the support that I have received thus far, I fully expect to be facing down Chris Dodd in the general election just 14 months from now.

As my campaign takes flight, I appreciate the patience and trust that you have shown. To commit time and money to a long shot candidate for high office is a hard choice. I hope to repay that trust with a first class campaign.

I look forward to your feedback and your continued support.

Thanks again,
Peter Schiff

Healthcare Reform is More Corporate Welfare

Monday, September 14th, 2009

Texas Straight Talk – A Weekly Column
Rep. Ron Paul (R) – TX 14

Last Wednesday the nation was riveted to the President’s speech on healthcare reform before Congress. While the President’s concern for the uninsured is no doubt sincere, his plan amounts to a magnanimous gift to the health insurance industry, despite any implications to the contrary.

For decades the insurance industry has been lobbying for mandated coverage for everyone. Imagine if the cell phone industry or the cable TV industry received such a gift from government? If government were to fine individuals simply for not buying a corporation’s product, it would be an incredible and completely unfair boon to that industry, at the expense of freedom and the free market. Yet this is what the current healthcare reform plans intend to do for the very powerful health insurance industry.

The stipulation that pre-existing conditions would have to be covered seems a small price to pay for increasing their client pool to 100% of the American people. A big red flag, however, is that they would also have immunity from lawsuits, should they fail to actually cover what they are supposedly required to cover, so these requirements on them are probably meaningless. Mandates on all citizens to be customers of theirs, however, are enforceable with fines and taxes.

Insurance providers seem to have successfully equated health insurance with health care but this is a relatively new concept. There were doctors and medicine long before there was health insurance. Health insurance is not a bad thing, but it is not the only conceivable way to get health care. Instead, we seem to still rely on the creativity and competence of politicians to solve problems, which always somehow seem to be tied in with which lobby is the strongest in Washington.

It is sad to think of the many creative, free market solutions that government prohibits with all its interference. What if instead of joining a health insurance plan, you could buy a membership directly from a hospital or doctor? What if a doctor wanted to have a cash-only practice, or make house calls, or determine his or her own patient load, or otherwise practice medicine outside the constraints of the current bureaucratic system? Alternative healthcare delivery models will be at an even stronger competitive disadvantage if families are forced to buy into the insurance model. And yet, the reforms are sold to us as increasing competition.

What if just once Washington got out of the way and allowed the ingenuity of the American people to come up with a whole spectrum of alternatives to our broken system? Then the free market, not lobbyists and politicians, would decide which models work and which did not.

Unfortunately, the most broken aspect of our system is that Washington sees the need to act on every problem in society, rather than staying out of the way, or getting out of the way. The only tools the government has are force and favors. These are tools that many unscrupulous and lazy corporations would like to wield to their own advantage, rather than simply providing a better product that people will willingly buy. It seems the health insurance industry will get more of those advantages very soon.

Government Solutions Lack Understanding

Tuesday, September 8th, 2009

Texas Straight Talk – A weekly column
Rep. Ron Paul (R) – TX 14

Things seem to be unraveling quickly for the new administration. The latest unemployment numbers are worse than the last reports. For all the billions of dollars spent and committed to fixing our economic problems, the situation is only getting worse. This was to be expected by those who understand the root causes of the problems. Throwing money around and creating more government programs is both simplistic and damaging to the economy. Of course, the administration claims that we would have been much worse off without these efforts. You can’t improve this situation by adding to our mountain of public debt for the benefit of big banks and other special interests. The American people know this. When will Washington learn?

In addition, the president’s plans for healthcare reform – or health insurance reform – are becoming more and more unpopular as details are examined. But because of all the alarmist rhetoric, politicians in Washington feel obligated to pass something, even if it doesn’t help. Rarely are liberty and prosperity at greater risk than when politicians feel they must “do something”. It is frightening to watch Washington toy with our healthcare purely for political reasons.

However, the saddest shortcoming of this administration is its utter failure to pursue a more peaceful foreign policy. Just last week up to 90 people, apparently mostly civilians, were killed in Afghanistan in an airstrike, and the violence is only getting worse. The administration is mulling over how many more troops they will send as part of their “Afghan Surge” with advisors getting it exactly backwards. They qualify sending fewer troops as “high-risk” and sending more troops as “low-risk”. This is not the perception at all if you were to ask the families of those being sent over. The best answer would be to stop risking any of our troops for the sake of what is, for all intents and purposes, a violent occupation, helping no one.

But all of these problems and their wrong-headed solutions come from one greater problem – which is not understanding the reasons that we are here. The economy is in bad shape because of too much government intervention producing a myriad of unintended consequences and perverse incentives. Healthcare is broken because the doctor-patient relationship has been broken down by hyper regulation and too much government interference. Afghanistan is a mess because they ignored the mission approved by Congress – to seek out those who attacked us on 9/11. They have instead gotten sidetracked with nebulous interventionist tasks such as promoting democracy and nation building. Eight years later, there is no real progress. The Soviets bankrupted themselves fighting in the mountains and caves of Afghanistan and we’re about to do the same. If we would just look to history it would be self-evident that there is nothing left to win in Afghanistan, and everything to lose.

Most of all, we need to understand that we don’t understand Afghan culture and politics, and for that reason alone, intervening in their affairs is unlikely to produce positive results. The best thing we could possibly do now is to bring our troops home, from Afghanistan, from Iraq, from Japan, from Germany, from all occupied countries, and concentrate on mending badly damaged relationships around the world. Free and honest trade has always been the best way to do that, without fail. Not understanding the benefits of peace, freedom, and nonintervention will always bring about catastrophe.

Audit the Fed Mass Action Event

Monday, September 7th, 2009

Dear Friend of Liberty,

Seventy-five percent of Americans agree with us that it’s time to thoroughly and completely audit the Federal Reserve System.

Every Republican and over one hundred Democrats in the House of Representatives have signed on as cosponsors of HR 1207. Almost a quarter of the Senate has gotten on board with S 604.

So what does this tell us?

It’s time to go get the rest!!

Last month, I announced that we would be holding an Audit the Fed Mass Action Event starting in the last couple weeks of August and culminating in a nationwide Mass Action Day on September 15.

Since then, C4L members have been knocking on doors, standing outside stores, attending county fairs, and gathering petition signatures in support of S 604.

On September 15, C4L National will deliver over 100,000 petitions to Capitol Hill while members across the country deliver the petitions they’ve collected to their senators’ local offices. Many of your fellow members will be holding rallies outside those offices, and several have contacted local media about covering the event.

Here are three ways you can help ensure the success of this Mass Action Event:

1.) Gather petitions – Hit the streets! Make sure your senators hear from as many people in your state as possible. Let’s spread the word and add to the seventy-five percent of Americans who support our cause. You can download petitions at CampaignforLiberty.com and AuditTheFed.com.

2.) Call your senators – Starting Tuesday, September 8, C4L members will be calling their senators’ offices to urge them to cosponsor S 604. Our objective is to keep their phones ringing off the hook by having members call every day for the week leading up to the petition drop. Commit to calling your senators by signing up here.

3.) Show up on September 15 – Congress counts on grassroots activists being content with just calling and sending petitions. To make sure they get our message that it’s time to Audit the Fed, we’re going to take our cause right to their offices in person. These events will be as effective as you make them. Show your senators that you are serious about real reform by rallying with your fellow members right outside their offices.

State and local coordinators and leaders have been working hard to create the most effective and efficient plans for September 15’s petition drop. Click here to find out how to take action in your area.

We were able to secure the support of almost two thirds of the House with your hard work gathering petitions, calling, and showing up at your representative’s offices. This could be the event that tips the scales in the Senate!

As we also announced last month, we’re adding an extra incentive. The person who gathers the most signatures in each state will win a pocket Constitution and a copy of Dr. Paul’s new book, End the Fed, both autographed by Congressman Paul himself.

And whichever state collects the most signatures (as a percentage of population) will win a $1,500 gift certificate to the Campaign for Liberty store!

Our representatives and senators are expecting to settle back in to business as usual when they return to D.C. after Labor Day. They think that they can leave your opinions and concerns behind in their districts while they continue to work on completely taking over our health care and finding other new ways to run our lives.

Let’s show them that their top priority should be finding out how the Federal Reserve has doled out trillions of our dollars, what deals they have locked us into with foreign central banks and governments, and why they refuse to disclose the details.

The day after our petition drop will mark the official release of End the Fed. This comprehensive look at the Federal Reserve System and its disastrous effects on our lives and country is sure to be a powerful tool with which to convince your family, friends, and neighbors that it’s time to restore our economy by reinstituting a sound money system.

A year ago, no one would have said we could make an audit of the Fed into a national, mainstream issue. Join us on September 15 as we show the political establishment, entrenched bureaucrats, and the media that our grassroots Revolution is more energized and determined to take back our country than ever before.

In Liberty,

John Tate

What is the Federal Reserve Hiding?

Thursday, September 3rd, 2009

Dear Friend of Liberty,

Trillions of dollars are being stolen from the U.S. taxpayer.

Right now, you and I are seeing the worst plundering of a country’s wealth in the history of civilization, led by an out of control Federal Reserve.

But together you and I CAN put a stop to it all.

With your help (including submitting the petition linked below to your Congressman and Senators) today, Representative Ron Paul, Senator Jim DeMint and Campaign for Liberty are ready to fight back, by taking the battle straight to the heart of the problem – the Federal Reserve itself.

Just think about the scope of the problem for a minute: The massive, outrageous amount of dollars committed to the economic bailouts in recent months totals:

More than the socialist New Deal … More than the entire Iraq debacle … More than the 1980’s savings and loan mess … More than the Korean War …


When will it all end?

It’s time you and I put a stop to a renegade Federal Reserve by exposing the Fed’s out of control actions to the American people. And Congressman Ron Paul and Senator Jim DeMint have a bill before Congress to do just that, known as the “Audit the Fed” Bill (HR 1207 and S 604).

That’s why it’s vital you click here to submit your “Audit the Fed” petition in support of Congressman Paul’s bill.

You see, Audit the Fed already has almost 300 cosponsors!

Now is the time to make sure your Congressman and Senators feel the heat to support the Audit the Fed bill!

If you and I don’t act today, I’m afraid this crisis will end with the economic ruin of every man, woman and child in America.

Today, nearly 13 TRILLION in taxpayer dollars in bailouts and loans have been agreed to by Congress, the Bush and Obama Treasury Departments, and the out of control Fed.

So is it really any wonder more and more folks are starting to realize the Washington, D.C. establishment is hurtling us toward complete economic disaster?

Whether it’s watching a phony “stimulus” package get rammed into law or watching Congress pass a $700 BILLION bank “bailout” under threat of martial law, the American people are agitated and increasingly angry.

That means it’s a perfect time to unleash the pressure of MILLIONS of outraged Americans on the out of control Fed!

So please click here to sign the petition linked below urging your Congressman and Senators to cosponsor and seek roll call votes to pass the Audit the Fed Bill!

As I know you’re aware, the Federal Reserve is shrouded in secrecy. Their meetings are off-limits to the public. Their inner workings are off-limits to the public.

And just recently, the Federal Reserve told Congress “NO WAY” when asked to account for $2 TRILLION in taxpayer-backed loans!

Well, why do you think they refused?

They know coming clean with Congress and the American people on how they doled out that two TRILLION dollars would result in an anti-Fed firestorm.

So can you imagine the impact of a full-scale audit? You and I will finally be able to show the American people that the Federal Reserve System leads to:
*** Constant economic crises — the housing crisis and the resulting chaos is just one example of an economic bubble created by centrally-planned interest rates and money manipulation;

*** The destruction of the middle class — as fuel, food, housing, medical care and education costs soar, everyone who is NOT on the government dole is forced to make do with less as the value of their money slowly decreases;

*** Currency destruction — history shows us that riots, violence and full-scale police states can result when people finally realize our money isn’t worth the paper it’s printed on and REFUSE to accept it.
And unless you and I do end the madness in Washington, D.C., we may be closer than we’d like to think to learning that history lesson firsthand — right here in our own streets.

That’s why your commitment to helping pass the Audit the Fed Bill –- and helping Campaign for Liberty fight this battle — is so vital.

Just a few months ago, there was no chance of passing any legislation like the Audit the Fed Bill. So I guess there has been one “CHANGE.”

You see, with the piling up of trillions of dollars in out of control “bailouts” of Wall Street and international bankers, even many politicians in Washington want to show you they’re “being responsible.”

What better way for Congress to do this than by auditing the Federal Reserve to account for the trillions stolen from the U.S. taxpayers?

More and more Congressmen are already feeling the pressure and are signing up to support this bill. I’ve even received word this bill could move in the next few weeks in the U.S. House.

When that happens, you and I must be ready to fight.

And, it’s both a bill we CAN pass, and one that is vital to exposing the massive corruption and dollar manipulation at the Federal Reserve.

You see, after regulating, taxing, spending, borrowing and printing us into what looks like the worst recession in decades, establishment politicians and power brokers are assuring us they’re working hard to “fix” our economic woes. What is their solution? You guessed it. More of the same!

And even if the Audit the Fed Bill is defeated this time, just forcing a vote is a win/win situation.

Can you imagine how many politicians will pay the price at the ballot box in 2010 when you and I tell the American people their Congressman somehow lost trillions of taxpayer dollars and refused to even LOOK for it?

Now we just need to show Congress the American people demand action on the Audit the Fed Bill. Here’s how we plan to do that.

First, we’re already busy contacting up to five million activists nationwide through mail, phones and email to generate petitions to the U.S. Congress demanding action on Ron Paul’s Audit the Fed Bill.

But that’s just the beginning. We’ll work the talk radio stations and grant local media interviews to ratchet up the pressure even further on Congress.

And a few days before the vote, if we have the resources, we’d also like to run hard-hitting targeted radio, TV and newspaper ads.

This entire program is designed to send this one, CLEAR message to Congress: Any politician who votes against the Federal Reserve Audit should look for another job.

But such a massive effort won’t be easy — or cheap.

So in addition to submitting your petition, I also hope you’ll agree to make a contribution of $1000, $500, $250, or $100 to Campaign for Liberty.

If $100 is too much to ask right now, please make a contribution of $50 or even $25 today. Every dollar will help, and every dollar will go to this vital fight.

I know times are hard, but if we don’t take action, the America we see in just a few years could look far worse than even the one we see today.

Can I count on you to join the fight to AUDIT THE FED by clicking here to sign the petition, and by making a generous contribution of $1000, $500, $250, $100, $50 — or whatever you can afford — to Ron Paul’s Campaign for Liberty?


John F. Tate

P.S. Please submit the petition urging your Congressman and Senators to cosponsor and seek roll call votes on Rep. Ron Paul’s Audit the Fed Bill TODAY!

Andy, Have You Met Fannie and Freddie?

Thursday, September 3rd, 2009

O. Max Gardner III
Shelby, N.C. March 31, 2008
Times are tough. Suffice it to say, we are embroiled in considerable market, economic and outright personal turmoil. Gas and food prices are going up and up and home values are going down and down. Real wages are flat and as they say “a dollar ain’t what it used to be.” Since we stand to see trillions of dollars’ worth of assets vaporize in the ensuing mess, we ought to take a long look back at history to see how we got into it, and how we might get out of, this god-awful mess. We also need to understand that Henry Paulson and Ben Bernanke, without an explicit vote by the Congress, have put virtually billions of dollars of taxpayer money at risk to save us from the risky and unregulated business practices of the investment bankers and hedge funds.
What has placed the entire American financial capitalism system in jeopardy of a complete collapse? How did we get to the point where the Government of last resort (the U.S. Treasury) is working with the lender of last resort (the Federal Reserve) to shore up housing and credit markets to avoid the Great Depression II? And, what caused a Republican administration to throw overboard the idea that the market can sort out this mess by itself? How did the fifth biggest investment bank in the world implode in approximately 24 hours? In order to understand the present, we must first understand the past.
Just ten years ago the markets and the economy were shocked when John Meriwether’s Long Term Capital Management fund imploded and lost some $4 billion dollars. The failure of LTCM helped foster a global financial crisis and triggered both a Wall Street-led bailout and congressional hearings on the dangers of hedge funds, the free-wheeling pools for wealthy investors and institutions that often trade heavily and rely on borrowed money to bolster returns.
Did we learn anything from this disaster and did Mr. Meriwether? Regrettably, the answer to both of these questions is no. Even today Mr. Meriwether’s biggest fund, JWM Partners LLC, has plunged 28% since the first of the year and some of his investors are trying to get their money out. The struggles of Mr. Meriwether and his new investment funds represent clear warning signals that we have learned nothing from the past and that the perils of the current crisis are far from over. In fact, one observer has noted that we are just in the first inning of an extra-inning game.
The Meriwether problem was not the only warning sign. Half a decade ago, the entire nation was shocked when award-winning “innovator” Enron and George Bush’s favorite son, Kenny-Boy Lay, turned out to be little more than high-end con artists in charge of what was then the largest cash-shredding pyramid scheme in the history of the world. The crucial failing for investors was Enron’s use of opaque, “mark-it-to-model” accounting techniques.
The problem with this type of accounting is that it uses “computer or notional values” where there is no real market for the real-world valuation of assets. So, instead of using an objective market to benchmark the value, you mark your assets to the so-called model, which in many cases is completely divorced from the real world. This accounting magic is especially helpful when you are wrong about the real value of the assets, either because you made an error or because you based it on exceedingly generous assumptions. I don’t know about the rest of you but the theory of “notional asset values” has never really registered with me. Or, to put it another way, this is the type of deal that even Howie Mandel would call out “no deal.”
In the end, of course, we all learned that Enron’s accounting was more or less a mark-to-fairy-tale model, with the company booking enormous gains from assumed future profits on schemes (like bandwidth trading) that sounded great, but had little chance of producing anything besides headlines. Enron actually securitized every receivable and contract it created and in some cases resecuritized the original deals two or three times over. Enron even securitized contracts where there was no real chance of any future income to fund the deal. Enron operated on the theory that if we show you the securitized bond and if you show us the money then we will eventually show you a big future profit.
Does any of this sound familiar? It should because all of this was engineered by Enron’s original golden boy, Andy Fastow. If you want a little hint about why things at Enron went so far south, then you need to know that before he signed on with Enron Andy was one of those tall-building mortgage bankers. Andy really only applied to the questionable Enron receivables and other opaque “assets” the bizarre securitization models and structures that he had worked with on a daily basis in the mortgage banking business. In light of the current market meltdown, I suppose that Andy must be having severe second thoughts about his guilty plea. Kenny-Boy Lay, on the other hand, is well past the second thought process.
Andy Fastow, meet Freddie and Fannie
You might think we’d learned our lessons about fantasy accounting after John Meriwether and Enron, but you would be wrong. Things actually got worse. And I mean much worse. Meriwether and Enron were like the “head start” problems for high school seniors. The Enronization infection moved to the comfy-sounding “homeownership” market. Against a star-spangled, feel-good backdrop of George Bush touting the “American Dream” and increasing homeownership, our recent mark-to-model mania tripped up a lot more than one big company.
The problem is that this infection quickly swept through the entire banking world. Bear Stearns is not the first to choke on the lousy, poorly modeled mortgage-backed securities, and it will not be the last. I would even suggest that the late author Hunter Thompson would find the “collateral debt obligations” and “credit default swaps” to be just plain weird stuff! What did Hunter say, when things turn weird the weird turn pro? Well, we have had our share of pros in this game, that’s for sure. Tony Mozillo, the butcher’s son, is one name that hits the top of this list.
But more dangerous yet was the way this mania also infected our own almost scared Government Sponsored Entities. The fact of the matter is that the most widespread mark-to-model fantasies were actually committed not by some easy-to-blame Wall Street guru like Mozillo, but by Freddie Mac and Fannie Mae, our two most favored GSEs.
One of my dear friends refers to the two GSEs as Fanron and Freddie Kruger. And, her fears as expressed by her naming rights may not be so far-fetched. Mr. Paulson and the Federal Reserve Board just allowed Fannie and Freddie to increase their leverage so that they can buy about $200 billion more in bad mortgage-backed securities. So, Fannie and Freddie will get even bigger but at what price? They accounted for 76% of the new mortgage market share for the fourth quarter of last year, up from 46% in the second quarter. And even though they are not part of the Government, everyone knows that if either Fannie or Freddie stumbles, the taxpayers will get stuck with the tab. Whether or not you agree with Ron Paul on most things you should agree with him with respect to his concerns about our liability for the operations of Fannie and Freddie. We should cut off the implicit government guarantees for their operations and let them take their losses like the rest of the losers.
It was flawed models (and the habit of booking earnings on these models) that enabled financial companies to concoct the elaborate securities that funded the bubble. And now, to save us from disaster the Federal Reserve has agreed for the first time in history to make direct loans to these same investment banks. As a non-lawyer asked me last week, “Is this legal?” The answer is I don’t know but it does not pass the “smell” test. In the first three days of this new era, securities firms borrowed an average of $31.3 billion per day from the Federal Reserve System. These are big numbers any way you do the math. And yes, these are the same investment banks whose CEOs paid themselves handsome bonuses ahead of the current financial tsunami. These guys don’t deserve a bailout with our money. What they deserve is a public flogging and then about 20 years of hard-labor at GitMo.
But the fat-cat CEOs weren’t the only ones making out like bandits. While Wall Street was booking fantasy profits on bad assumptions about real estate mortgages, Freddie and Fannie were securitizing anything that looked like a mortgage, whether the broker-completed application form was based on real numbers or just plain fabricated numbers and made-to-order appraisals. So the thought of using Freddie and Fannie, no matter how you dress them up, to save us from financial ruin seems like another Alice-in-Wonderland story from the dark side. This is akin to selecting Tony Soprano to serve as Director of the Federal Bureau of Investigation. Does this really make you feel safer about the security of our money? I don’t think so.

But, What Were They Really Thinking?
In their pyramid schemes (excuse me I mean in their computer models), house prices always go up. In their models, you can pay any price for a home, so long as you can make the monthlies with a teaser-rate ARM, never mind the upcoming adjustments that will take the APR up to 14% and then double the monthly payments. In their models, it’s OK to take out a Payment Option ARM where you elect to make no monthly payments at all, thereby increasing the total debt owed each month (this is what the accountants call negative amortization). In their models, you avoid all of these problems via a refinance down the line with an equity cash-out to boot. In their models, it’s OK to buy on a less-than-forthcoming, Alt-A so-called “liar loans,” because there’s no real punishment for lying on a mortgage application — particularly if everyone’s doing it. With these models, it makes sense to buy three other homes, in order to flip them later. And it makes sense to extract HELOC cash from the home, based on fantasies about continually increasing “equity.” What goes up never goes down, right? The law of gravity has no application to residential real estate!
The sad truth of the matter is that all of this is not so different from what brother Meriwether and Enron were doing. Freddie and Fannie were marking up the value of their assets (the bonds) to a model (their belief that real estate prices always go up). They were allowing the consumers who were taking out the underlying mortgages to spend their new-found “income” immediately, on iPods, Hummers, $250 designer jeans, and fancy vacations to Maui and Mexico. What was the saying—here today and gone to Maui? This happened all over the country, and millions of people behaved the same way. In fact, the American Fantasy of owning a home (for no money down) that would provide a fully leveraged, 10% annual returns for a decade, is precisely what enabled those Wall Street suits to do what they did. It takes two to tango, folks. And this was the biggest dance party in economic history.
Last year’s model got ugly
Alas, the music stopped and the dance is over. And when the music stopped we all found out that there were not enough chairs for all of us to sit down. It is bye-bye Miss American Pie, we all went to the bank but all the banks were dry. And, finally, we all realize that this dream’s “income” wasn’t actually matched by real cash flows, just fuzzy math and bizarre computer models — precisely the problem at Enron. The “income” was all hot air. And now that the “income” from home appreciation has turned negative, it must be supported by cash mortgage payments. But many people can’t pay those bills, the mortgages are defaulting in huge numbers, and now, we are all paying a huge price, even those of us who didn’t throw our money into a flimsy, overpriced McMansion.
Almost 18 months ago the “industry” lambasted the Center for Responsible Lending when it predicted that foreclosure rates on subprime mortgage loans could hit a outstanding and unbelievable rate of 19%. Well, the most recent figures from December of 2007 reveal that the current rates are 25.2%! As they say on the Verizon commercials, can you hear me now? And just last week Fitch predicted that almost 50% of these mortgages would eventually end up in foreclosure. I think that is 1 out of every 2, regardless of how you do the math or the model.
We all know that the Bear Stearns stockholders were wiped out for either $2.00 or $10.00 per share, take your pick. Hell, their office building in New York is worth more than Morgan has offered for all of the stock. Many other stocks have been creamed. The losses at those companies most directly victimized by their own housing-bubble ineptitude – Citigroup, HSBC, USB and Wachovia — are easy to understand. But, of course, the losses have extended much further than that. Even mighty Apple has dropped like a rock, as investors wonder how many iPods can be sold in Foreclosureville, U.S.A. And if they can’t afford their beloved iPods, what will they buy? That’s the thinking that has crushed everything from trendy togs-sellers like Zumiez to mom and pop carmakers like good old GM and Ford.
Consumers are spending less, and the Federal Reserve is printing money like the banks used to print credit cards. We are in a serious recession and appear to be headed directly into stagflation-a combination of recession and inflation. And the real concern at the kitchen table is that no one appears to be in charge or on top of the problem. The average American does not care what Reverend Wright said, but whether or not they can buy food and fuel next week.
It’s Ugly Out There
By now, it ought to be clear that I have been, and remain, very negative on the state of the American economy. But, I am certain that this systemic failure has steered us into a terrifying and possible direct crash right into the proverbial ditch. And, make no mistake about it, this ditch is deep and nasty and the extraction process will be long and difficult. As the lost safari leader once said, “Folks, there just ain’t no easy way out.”
The real tragedy is that all of these problems were spawned by greed gone amok on Wall Street and by the lack of any meaningful oversight from Washington and the Federal Reserved Board. I am not sure if we will have another Great Depression but it is possible and more of us realize it every day. If it happens, and if the worst case scenario turns into a real American tragedy, then the road to recovery will be long and winding with many bumps and detours along the way. It all makes me think that Andy Fastow must be sitting back in his cell at Club-Fed with a little smile on his face. If so, the Andy is the only one laughing now! The only one.

O. Max Gardner III

The Fed’s Interesting Week

Thursday, September 3rd, 2009

Texas Straight Talk – A Weekly Column
Rep. Ron Paul (R) – TX 14

It has been an interesting week indeed for the Federal Reserve. Early this week, it was announced that President Obama intends to reappoint Fed Chairman Ben Bernanke to a second term in January, signaling a vote of confidence in him. Bernanke seems to be popular with the administration and with Wall Street, and with good reason. His lending policies have left big banks flush with newly created cash that covers up old mistakes and allows for new ones. By buying up mountains of Treasury debt he has also enabled spending to soar to ridiculous levels that should startle any responsible economist, and scare any American concerned about the value of the dollar. However, these highly sensitive decisions about our money are not made by economists, they are made by politicians. Bernanke, like most of his predecessors, is the politician’s best friend. However, there is no reason to believe any other central planner would behave any differently, considering the immense political pressure on the Fed.

Fed policies have been as bad for the economy as they are good for politicians and bankers, as the recently released numbers on the debt and deficit demonstrate. For the first time since World War II the annual budget deficit is projected to be over 11 percent of the nation’s gross domestic product. It is also projected that by 2019 the national debt will be 68% of GDP. Our path, if unchanged, is completely untenable.

The administration claims that it inherited a dire situation from the last administration, which is absolutely true. However, that hasn’t stopped them from accepting all the policies and premises that got us here, and accelerating those policies to rapidly make a bad situation much worse. The bailouts started with the last administration. They have gotten bigger with this one. The last administration gave us expanded government involvement in healthcare with a new prescription drug benefit. This administration gave us a renewal and expansion of SCHIP, and now the current healthcare takeover attempts. In reality, we can afford none of this, but shady monetary policy allows Washington to continue along its merry way, aggravating all our economic problems.

Not everyone in government finds it acceptable that the Fed wields so much power and privilege in secrecy. Last week, a federal judge ruled against Fed secrecy, compelling them to release under the Freedom of Information Act information regarding which banks received emergency loans, and under what terms. The Fed will, of course do everything in its power to fight this ruling and it is certainly not the last word on the issue. Still, it is encouraging to see that the interests of the taxpayers were defended victoriously in court, while the Fed only sees the plight of its big banker friends.

Meanwhile HR 1207 and S604, legislation to open up the Fed’s books to a complete audit, continue to gain momentum in Congress as the people continue to insist on real transparency of the Federal Reserve. One way or another, the days of Fed autonomy are coming to an end, as well they should. No one should have the power to debauch the currency and gut the economy as they do. It is time they answered for their actions, so the people can understand that we truly are better off with freedom instead of Fed tyranny.

Just Drop Health Care Reform!

Thursday, September 3rd, 2009

Let’s be realistic. We know that President Obama and the Democratic majority in Congress want to bring about a government takeover of health care. We know that a majority of Americans don’t want this. And, many of us already know that a deceptive bipartisan compromise bill is being prepared by the Senate Finance Committee that would appear to prevent a government takeover by replacing Obama’s “public option” with “health care cooperatives,” but would actually provide a Trojan horse for a government takeover.

In this environment of deception and power politics, voters must not encourage members of Congress to work on a compromise health care reform bill, no matter what President Obama proposes in his next address to the public after Labor Day. All that President Obama needs is a bill with an embryo of a public option. He could take it from there to develop a completely government-run health care system over time.

What we need is for Congress to just drop health care reform!

This would provide the time to get many constitutionalists nominated and elected to Congress in 2010 and 2012. Once we have a majority of fiscally responsible constitutionalists in Congress, that would be the time to consider health care reform.

Click here to take immediate action to email your representative and senators to “just drop health care reform.”

Be sure to keep the heat on your representative and senators with phone calls, personal visits, attendance at town halls, and partaking in other public meetings and rallies.


Your friends at The John Birch Society

C4L Members Take Action to Reclaim our Republic

Thursday, September 3rd, 2009

Dear Friend of Liberty,

Exactly one year ago today, over 10,000 passionate grassroots activists gathered in Minneapolis, Minnesota to proudly proclaim their support for limited constitutional government, sound money, free markets, and a free people.

The Rally for the Republic was a clear call to all political parties to return to the founding principles that made our nation great. Featuring premier speakers and musicians from our movement, the Rally officially kicked off Campaign for Liberty and energized and motivated us for the battle ahead.

It served notice to the political establishment that our Revolution, which so many assumed would fade away after the Ron Paul presidential campaign, was just getting started.

Every day, you continue to spread the message in innovative ways. It is through your actions and your involvement in C4L that we will take back our country and pass on a legacy of freedom to future generations.

Here are just a few of the exciting activities being done by your fellow C4L members all across the country:

Florida: In our last update on member activities, we reported that Florida Campaign for Liberty was preparing for their Liberty Summit and working hard to recruit additional Local Coordinators to promote liberty in their own backyards.

As one of the attendees, I can proudly say that I was overwhelmed by Florida C4L’s tremendous turnout for the Summit! It is estimated that over 1,500 people came to the Summit’s Liberty Celebration, which featured speakers including Congressman Ron Paul and Tom Woods.

Read Interim Florida State Coordinator Mark Cross’ report here.

And congratulations to Florida C4L for their continued success in recruiting Local Coordinators. Our last report noted that they had 159, and they have since added 44 for a nation-leading total of 203!

Keep up the great work!

Missouri: After the Missouri Information Analysis Center released their report attacking the freedom movement last March (which was eventually retracted after C4L members and others in the freedom community put enormous pressure on them), Missouri C4L members promised to hold those responsible for the report accountable and to do all in their power to prevent another such blatant abuse of power in their state.

On August 31, C4L Director of Membership Services Deb Wells, Interim Missouri State Coordinator Paul Hamby, and C4L member Larry Flinchpaugh testified before the Missouri House Interim Committee on State Intelligence Analysis Oversight. This committee is charged with taking recommendations about the MIAC back to the state legislature.

Read Paul’s report on what happened here, and thanks to all those in Missouri and every other state who are taking such courageous stands for the freedom movement.

California: On August 8, Sacramento Campaign for Liberty held an event called the “Federal Reserve Sunshine Day.”

As member Tom Davenport says, it was an outdoor event to be held in an accessible, high traffic, high visibility location for the specific purpose of promoting Federal Reserve transparency in a non-partisan manner. They decided to hold the event on Second Saturday, which Tom reports is a long standing Sacramento tradition in which local art galleries, restaurants, bars, and businesses participate by keeping extended hours and holding special events. Second Saturday is a draw not only for residents of Downtown and Midtown, but for residents of the greater Sacramento area as well, which made a perfect opportunity for exposure.

Read his full account (including video) of what happened here. Congratulations to Sacramento C4L for their success with this event, which resulted in over 500 petitions signed for Audit the Fed. Tom’s blog post also includes many helpful tips for those who are interested in holding a similar event.

Maryland: In Hartford County, local Campaign for Liberty members gathered outside of Congressman Frank Kratovils office on August 11 to protest the latest government attempt to completely take over health care. Around 400 people gathered to make their views known, and they were able to garner some local press coverage from Fox 45.

The Hartford County Campaign for Liberty has been rapidly expanding, and we congratulate them on their success. Their county blog reports they will be taking seven full buses to D.C. for the 9-12 March!

Across the country, your efforts are also continuing to gain media exposure. In Tennessee, a local newspaper covered Campaign for Liberty members collecting and dropping off petitions for HR 1207 to Congressman Bart Gordons office. In Arkansas, Regional Coordinator Rob Richard was interviewed by Greta Van Susteren on Fox News after asking a question during a town hall meeting on health care. In Pennsylvania, York County Coordinator Michael Koffenberger was interviewed for 30 minutes on a cable access show called Uprisings specifically to discuss Campaign for Liberty, local events, the upcoming Northeast Regional Conference, and much more.

C4L members are using Congressman Paul’s new book, End the Fed, to educate their countrymen on the Federal Reserve and the dangers of fiat money. Brevard County C4L in Florida has a goal of placing a copy in every single Brevard County library, as well as in four college campus libraries.

You are not the usual brand of activist the establishment was expecting to easily dismiss. You are educated on the issues, passionate about our message, and confident in the real change that we can bring about by restoring our Constitution.

Wherever they turn, there you are.

At townhalls. In front of their offices. On their phones. In their inboxes. At county fairs. Writing to editors of local papers. Knocking on doors and recruiting even more supporters.

And later this month, we will gather to hold our biggest Regional Conference yet! Joining us in Valley Forge, PA on Sept. 17-19 will be an incredible roster of speakers including Congressman Ron Paul, Judge Napolitano, Daniel Hannan, Tom Woods, Peter Schiff, and Phil Giraldi. Don’t miss this chance to hear from these leaders in our movement and to network and train with other C4L members. (Register using promotional code Henry to receive a free gift from C4L.)

Be sure to visit our Recent Member Blog Posts section at CampaignforLiberty.com to catch the latest news and reports from your fellow C4L members!

Do you have a state success story you want to see included in future installments? Send them along! Email any reports you would like to see highlighted to StateStories@CampaignforLiberty.com.

Thank you for all of the hard work you do in defense of our freedoms. May we proudly look back one day and know that when tyranny threatened on all sides, we answered the call, overcame the challenges, and took back our country.

In Liberty,
John Tate


No Compromise on Audit the Fed!

Tuesday, September 1st, 2009

Dear Friend of Liberty,

Our grassroots Revolution has set its sights on restoring a sound monetary policy to our nation, and every day we are awakening more of our countrymen to the dangers of Federal Reserve secrecy and its stranglehold on our economy.

A year ago, no one in the political establishment would have believed that a bill to thoroughly audit the Fed would have almost two-thirds of the House (including every Republican representative and nearly one hundred Democrats) and a quarter of the Senate on board.

Certainly, no one would have bet that three-fourths of the American people would support such an audit.

As many of you may have heard by now, recent statements from Representative Barney Frank, chairman of the House Financial Services Committee, have indicated that the House will vote on Audit the Fed in the next few months.

However, rather than voting on HR 1207 as a standalone bill, many in Congress hope to roll it into the comprehensive regulatory reform package recently proposed by the White House.

This reform package grants new, more comprehensive powers to the Fed and strengthens the government’s control over our economy. C4L and other friends of liberty stand in opposition to this proposal, as well as any other attempt to convert this historic movement for transparency into yet another rubber-stamping of politics as usual.

It is imperative that Audit the Fed come before the House and Senate on its own merits.

The American people stand behind a thorough audit of the Fed, and we should not be adding additional powers when we don’t fully know what is being done with the ones they currently have.

Call Speaker Nancy Pelosi’s office today at (202) 225-0100 and urge her to stand with the American people by giving the Audit the Fed bill full debate and a standalone vote on the House floor.

Click here for contact information for your representatives and senators and ask them to get behind Audit the Fed if they have not yet done so. If they have already cosponsored, tell them to push for a roll call vote on HR 1207 and S 604 on the bills’ own merits.

Our movement has worked hard to bring transparency and accountability to one of the nation’s most secretive institutions. Audit the Fed has received a bipartisan level of support that is very rare in politics today.

Together, we can see a comprehensive audit of the Federal Reserve signed into law, but it should not be accompanied by more of the same interventionist legislation that helped create the current crisis.

In Liberty,
John Tate