Archive for the ‘Economic Crisis’ Category

Baby Boomer’s Last Shot

Posted: February 21, 2012 in Economic Crisis, US News

Truth Never Told
February 21, 2012

Youtube
February 16, 2012

The Economic Collapse
January 23, 2012

In recent days, the fact that Mitt Romney has millions of dollars parked down in the Cayman Islands has made headlines all over the world. But when it comes to offshore banking, what Mitt Romney is doing is small potatoes. The truth is that the global elite are hiding an almost unbelievable amount of money in offshore banks. According to shocking research done by the IMF, the global elite are holding a total of 18 trillion dollars in offshore banks. And that figure does not even count any money being held in Switzerland. That is a staggering amount of money. Keep in mind that U.S. GDP in 2010 was only 14.58 trillion dollars. So why do the global elite go to such trouble to hide their money in offshore banks? Well, there are two main reasons. One is privacy and the other is low taxation. Privacy is a big issue for those that are involved in illegal enterprises such as drug running, but the biggest reason why people move money into offshore banks is in order to avoid taxes. Some set up bank accounts in foreign nations because they want to legally minimize their taxes and others set up bank accounts in foreign nations because they want to illegally avoid taxes. You would be absolutely amazed at what some large corporations and wealthy individuals do to get out of paying taxes. Unfortunately, the vast majority of the rest of us don’t have the resources or the knowledge to play these games, so we get taxed into oblivion.

So why do they call it “offshore banking”?

Well, the term originally developed because the banks on the Channel Islands were “offshore” from the United Kingdom. Most “offshore banks” are still located on islands today. The Cayman Islands, Bermuda, the Bahamas, and the Isle of Man are examples of this. Other “offshore banking centers” such as Monaco are actually not “offshore” at all, but the term applies to them anyway.

Traditionally, these offshore banking centers have been very attractive to both criminals and to the global elite because they would not tell anyone (including governments) about the money that anyone had parked there.

These days some governments (particularly the U.S. government) are trying to change this, but we certainly will not see the end of offshore banking any time soon.

The amount of money that goes through these offshore banks is absolutely astounding.

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Avery Goodman
seekingalpha.com
December 28, 2011

Bloomberg reports that Bank of America (BAC) has shifted about $22 trillion worth of derivative obligations from Merrill Lynch and the BAC holding company to the FDIC insured retail deposit division. Along with this information came the revelation that the FDIC insured unit was already stuffed with $53 trillion worth of these potentially toxic obligations, making a total of $75 trillion.

Derivatives are highly volatile financial instruments that are occasionally used to hedge risk, but mostly used for speculation. They are bets upon the value of stocks, bonds, mortgages, other loans, currencies, commodities, volatility of financial indexes, and even weather changes. Many big banks, including Bank of America, issue derivatives because, if they are not triggered, they are highly profitable to the issuer, and result in big bonus payments to the executives who administer them. If they are triggered, of course, the obligations fall upon the corporate entity, not the executives involved. Ultimately, by allowing existing gambling bets to remain in insured retail banks, and endorsing the shift of additional bets into the insured retail division, the obligation falls upon the U.S. taxpayers and dollar-denominated savers.

Even if we net out the notional value of the derivatives involved, down to the net potential obligation, the amount is so large that the United States could not hope to pay it off without a major dollar devaluation, if a major contingency actually occurred and a large part of the derivatives were triggered. But, if such an event ever occurs, Bank of America’s derivatives counter-parties will, as usual, be made whole, while the American people suffer. This all has the blessing of the Federal Reserve, which approved the transfer of derivatives from Merrill Lynch to the insured retail unit of BAC before it was done.

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Stephen Dinan
The Washington Times
November 16, 2011

The Treasury Department said Wednesday that federal debt now tops $15 trillion — a staggering figure that has risen precipitously over the last decade.

The exact debt total stood at $15.034 trillion as of the end of business Tuesday, an increase of $56 billion over Monday’s tally.

All told, federal debt has risen $4.41 trillion since President Obama took office, and is nearly triple the size of the debt in 2001, when President George W. Bush landed in the White House.

Congress earlier this year raised the debt ceiling, which cleared the way for Wednesday’s new record figure, but tasked a special committee with finding ways to at least slow the staggering pace of growth.

Under this summer’s debt deal, the government can only sustain a total debt of $15.194 trillion.

At it stands now, debt is now nearly equal to the projected U.S. gross domestic product for 2011, which the Obama administration said in its February budget would reach $15.079 trillion.

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Aaron Task
Daily Ticker
November 15, 2011

A new survey by Yahoo! Finance shows Americans have a disturbing lack of hope and a frightening lack of retirement planning.

Among the highlights of the poll:

— 41% of Americans say the ‘American Dream’ has been lost.

— 37% of adults have NO retirement savings and 38% plan to live off Social Security.

— 63% of Americans believe the economy is getting worse, including 72% of those over the age of 55.

These findings are consistent with broader trends The Daily Ticker has reported on in the past year: Despite macro data showing the economy has technically recovered from the ‘Great Recession’, the majority of Americans just aren’t feeling it. Considering 49 million Americans are living in poverty, the “real” unemployment rate is 16% and millions of Americans are facing foreclosure, it’s no wonder many believe the recession never ended.

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The Greatest Truth Never Told
November 11, 2011