Sunday, September 23, 2012

WWIII - Are You Ready?




Can you comprehend the concept that the world is heading, at breakneck speed, towards the next major war?  World War III is a logical conclusion to the vast array of serious issues that are causing many parts of the world to be aflame, right now.

Across the Pacific, China and Japan are at odds over an uninhabited island.  Both countries lay claim to the island that lies out in the sea.  Threats have been flying between the nations who have a history of enmity.  The island is located in a strategic position as the waters that surround the island carry importance as to which nation owns control.  The USA has a mutual protection treaty with Japan.

North and South Korea continue to be on edge with the continuing aggressive actions and unending threats spewing from North Korea.  The USA has a mutual protection treaty with South Korea. 

Meanwhile Russia has been sliding towards increased hostility towards America and flexing their muscles (not referring to Putin posing without his shirt) by threats towards some neighbors and making alliances with others, such as Iran.  Their relationship with America appears to have deteriorated over the past few years.  President Obama has backed down, under Russian pressure, to follow through with a missile defense shield for Eastern Europe.  A new version of START (Strategic Arms Reduction Treaty) is being worked out between Russia and Obama’s administration.  Obama expressed his desire for a nuclear free world and promised to set an example by a drastic reduction in our warhead inventory but without a similar requirement for Russia to also reduce warheads.

Iran continues to defy the United Nations and the United States.  As they proceed in the development of nuclear warheads to be attached to the missile delivery arsenal they already possess, they continue to issue threats against Israel (the Little Satan) and America (the Great Satan).  Multiple times Iran’s president has stated his desire to wipe Israel off of the face of the map.  The Prime Minister of Israel, Benjamin Netanyahu stated in the past few days that he believes Iran is within a few months of having a nuclear warhead.  With the well-founded belief that Iran will use the weapon once they have it (as they have stated such) Netanyahu has been preparing for a preemptive strike against Iran.  As this issue escalates towards a boiling point; America, along with several other nations, has been busy positioning Navy ships in the Persian Gulf in hopes of keeping the waterway open for the shipment of much of the oil that supplies the rest of the world.  Iran has promised to shut down the waterway and attack American bases in the Middle East if Israel launches an attack against them.  Iran possesses the capability of launching missiles which could take out large ships. 

The war in Iraq is mostly over but we still maintain a military presence in that country.  The people of Iraq, to a large degree, do not appreciate America and have recently been expressing anti-American sentiment.

Afghanistan is a continuing battleground due to insurgency by the Taliban.  We continue to lose the lives of Americans in that country each week.  We are in the 11th year of this war.  The country appears to be becoming less stable as we get closer to Obama’s stated withdrawal date of 2014.  The various factions are attempting to position themselves to fill the vacuum when we depart.  This country will continue to have shedding of blood as a common practice.

Neighboring Pakistan has lost the cooperating attitude they once had towards America.  Not only was Osama Bin Laden hiding in plain sight in Pakistan, when we found and killed him; they have imprisoned the man who helped point out his location to the U.S.  Taliban forces routinely find safe haven within the borders of Pakistan as they depart Afghanistan and the fighting there.

Syria has been in a state of constant revolution for almost one and a half years with many thousands dead.  Russia and Iran are backing the dictator of Syria and his military in their attempt to put down the unrest (in other words, kill all the opposition).  With Syria having a large stockpile of chemical weapons, neighboring Israel is worried about the potential of these weapons of mass destruction falling into the hands of their enemies.

Lebanon, another of Israel’s neighbors, is also ramping up the rhetoric against Israel.

Egypt, to the other side of Israel, just went through an overthrow of their government and has installed a new president who is from the Muslim Brotherhood, a known sponsor of terrorism and a group which is very outspoken about their hatred for Jews.  The new president has informed his people to prepare for war with Israel.

Libya has not settled down since they also overthrew their government last year.  Various factions are fighting for control of the country and for positions of importance in a new government.  During the past few days, terrorists in Libya stormed the American Embassy with the result that four Americans were killed, including our Ambassador.  This was a coordinated attack on the anniversary of 9/11.   

At the same time our embassy in Libya was being attacked so was our embassy in Egypt.  Since then, over the past few days and continuing, many more American Embassies in other countries have been marched upon with some demonstrators burning American flags and climbing over our walls causing security concerns for the Americans within the compounds.

Egypt is now permitting Iran to use the Suez Canal to bring navy ships into the Mediterranean Sea.  Russia has their navy off of the coast of Syria as support for its leader and to protect the port Russia has been allowed to use in Syria on the sea.

While many Muslim countries are in riot mode and acting out against America and Israel, many European countries are facing problems with Muslims within their borders and at the same time, facing financial calamity over their spending and their social programs.  Several of these countries have had riots, with violence, of their own over the past several months.  The financial situation is heading towards, if not already standing on the edge, of a giant cliff.  Measures being taken in the EU – European Union – appear to be trying to put off the collapse as long as they can, but the results appear to be almost inevitable.  A European court recently requested the leaders of the EU to do whatever it found necessary to avoid financial collapse in Europe, including the placing of leaders in various countries.  Greece is bordering on pulling out of the EU, which some say would cause a chain reaction resulting in the total collapse of the EU and the Euro currency.

Some South American countries have been aligning themselves with countries such as Iran and Russia, as well as China; who all agree on a common enemy, the US of A. 

Meanwhile, back at home, Obama is being seen as very weak in foreign relations and foreign policy.  There is much bark (make that whimper) and no bite.  The rest of the world has lost any respect they once had for America and now sees us as a target for at least ridicule.  We have Russia, China, North Korea and Iran; not to mention other Muslim nations, demonstrating anti-American sentiment from within their countries and governments.  As we disarm by reducing our nuclear weapons, cutting back on Navy ships and Air Force planes; as well as reducing the number of troops we have while we cut the military budget; the rest of the world (at least that portion which is anti-American) is busy making themselves stronger and preparing for war.

Presently, the world is a tinderbox and flames have already been lit in various countries.  The tension is so high on various fronts that the situation exists where small events can trigger major consequences.  Once these escalate, the rest of the world can fall like dominoes into a war mentality.  Opposing sides, on multiple issues, are finding no common ground for compromise and peace does not seem to appear in their vocabulary. 

As the song says, “War!  What is it good for?  Absolutely nothing!”  (“War” by Edwin Starr)

We may detest war, but war keeps finding us and every generation or two, the world reshuffles the deck of life and power.  The world has all the signs that it is heading back in for another round.  This time, will the good guys win?  Their white hats look dingy grey and their soldiers are a little tired. 

Do not pray for God to be on our side.  Pray that we would repent and be on God’s side. Many in America have turned their backs on God and subjected Him to ridicule.  This time, it may just be time for judgment.  God will not be mocked!

The reset button is about to be pushed!

QE4-Just Around the Corner



The Federal Reserve just announced what their latest attempt will be to help rescue the American economy.  It is being called QE3, for Quantitative Easing 3.  Quantitative Easing refers to the policy of creating more money and injecting it into the economy in hopes that the additional dollars will stimulate the economy and cause a growth in employment. 

QE1 began four years ago, right at the time of the last presidential election (11/2008).  By the time QE1 ended in 3/2010, the Fed (Federal Reserve) had purchased $1.25 trillion in mortgage backed securities (MBS) and another $175 billion in government debt.

When this failed to solve the problem, they tried it again with QE2.  This round began in 11/2010 and ended in 6/2011.  During this time, the Fed purchased $600 billion in treasury bonds.  The US Treasury Department is responsible for the funds needed to run our government.  They raise additional money by selling Treasury Bonds, which amounts to an IOU from the government to the buyer of the bonds (national debt).

We are talking about “real money” here as the Fed has injected approximately $2.3 trillion into the U.S. economy since 2008. 

The latest announcement (9/2012) by the Fed is that they are beginning QE3.  The first two attempts did not solve the problems in the national economy, so they want to try again, expecting different results.

QE3 will have the Fed buying $40 billion in MBS each month going forward until they decide the employment situation has improved to an acceptable level of stability.  In other words, the Fed is beginning an open-ended, monthly injection of $40,000,000,000 into the money supply.  At that rate, another half trillion dollars will be added each year until they decide to stop. just published an article by Sen. Jim DeMint, where he discusses QE3 and what it means.  He refers to this policy as QE4-ever as it is an open-ended, monthly event.  But, that is not why this article is named QE4.

QE3 will do what most of QE1 did, buy MBS.  These mortgage backed securities amount to bundles of real estate mortgages.  The Fed will gain ownership of $40 billion of additional mortgages each month, on top of the inventory they already own.  These purchases are adding hard assets to the balance sheet of the Fed.  The Fed has also been busy buying gold over the past few years, which is another hard asset.

So, where does the Fed get so much money to do all of these purchases?  They must be very rich.  Well, they are, but that is getting the cart before the horse.  They are not doing all of these purchases with their accumulated wealth.  (Remember, the Fed is not a government agency or department.  It is a private corporation.)  The Fed has been charged with the duty of printing U.S. dollars.  Since dollars are no longer backed by gold or silver, or anything else for that matter, the Fed is in a position to just print money as they feel the need to do so.

It is this freshly printed (or electronically generated) money that is used to make the purchases of these bonds and hard assets (gold and MBS).  Just in case you have not pieced this together in your mind, the Fed makes up new money and then uses that money to buy hard assets and to lend money to the Treasury (at interest, of course).  Over the past couple years the Fed has become the largest buyer of Treasury Bonds and now is the largest holder of U.S. debt.  So, yes, the owners of the Fed are rich.  They transform paper and ink into money which they use to enrich themselves by us paying them interest or by becoming the owners of hard assets.

It is sort of like the position a counterfeiter would hold as he printed money and used that money to buy goods or make investments.  Well, there is one difference; where it is a crime for the counterfeiter, it is legal for the Federal Reserve.

You may be asking yourself, “Why does this concern me?”  The continual playing with the supply of money has a direct and very real effect on every person living in this country and many people elsewhere.  It relates to “supply and demand” and has to do with the supply of dollars in the system.  As the supply increases (through the printing of more dollars), the price of the item in demand changes.  This concept is called “inflation”.  A greater supply of money causes higher prices for goods and services.  Every time the Fed adds more dollars to the economy, the value (purchasing power) of your dollar diminishes.  It now takes more dollars to buy the same products than it did a few years ago. 

Since 2008, the Fed has and will continue to pump approximately a half trillion dollars into the economy on an annual basis.  This policy cannot help but cause additional inflation.  The goods and services you require in the future will cost more than they do now.

But, what is QE4?  It is my speculation that there is additional quantitative easing taking place on an unannounced basis by the Fed.  The policy for QE3 has to do with the purchase of MBS, not Treasury Bonds.  As mentioned above, the Fed has become the largest buyer of U.S. debt (bonds).  Do they plan on going cold-turkey with the bond purchases?  I do not believe they will or can stop, at all.  So, where will the dollars come from for future bond purchases?  I believe the Fed will magically generate more dollars for the bond buying, just as they will for the MBS buying.  The Treasury Department needs the Fed to buy the bonds.  This helps keep the interest rates lower for those bonds.  If the Fed stopped buying, the Treasury would have to offer the bonds at a higher rate in order to attract other investors.

So, as the Fed launches QE3, they will continue to buy bonds with a quiet QE4.  The money supply will take a double hit as trillions more dollars will be added to the supply over the next couple years.  You don’t like paying $7 for a hamburger now.  Just wait; it will be $10 pretty soon.  Oh, and by the way, you probably will not be getting a raise to make up the higher costs you will incur. 

Tuesday, September 4, 2012


For those of you who have been around for awhile, you may remember earlier articles about the "wall of debt".  In an attempt to translate the utter size of our national debt, I tried to relate the amount in means other than dollars.  The dollar amount is staggering and incomprehensible.  The "wall of debt" consists of dollar bills, laid flat and end-to-end, stacked on top of each other and stretching around the world at the equator.

On 01/04/2011, I wrote "How Much Do You Owe?"  Our national debt had just passed $14 trillion ($14,000,000,000,000) for the first time.  This amount relates to a 19' tall "wall of debt".  It was equal to a debt of $45,000 per citizen.  If we were to pay off the debt, one dollar per second (with no more borrowing and not paying any interest), it would have taken 448,000 years.

On 06/19/2011, I wrote "The 20' Wall of Debt".  The national debt was $14.437 trillion and the "wall of debt" had reached a height of 20 feet.  At that time, it would have taken 457,797 years to pay it off one dollar per second.

UPDATE!  We are now crossing another infamous milestone.  This week, our national debt will cross the $16 trillion mark.  Our current budget year is not yet over, but we already passed $1.2 trillion in budget deficit for the year.  This means that we are adding to the total debt at well over a trillion dollars each year.  (Trillion is equal to a million times a million.)  It will now take over 504,000 years to pay off the debt, one dollar per second.  The debt per citizen is over $50,000 and the debt per taxpayer is over $140,000. 

The annual interest on our national debt was $454 billion for fiscal year 2011, which was up $40 billion from the year before.  These amounts take into account the low interest rates we are having to pay.  Based on these numbers, for 2012, the interest could be near one half trillion dollars.  The government is borrowing around 40 cents of every dollar it spends. 

Unemployment has been above 8% for just about all of President Obama's first term.  And that does not include the number of workers who have given up looking or have jobs with minimal pay.  We have over 45,000,000 people on the food stamp program and nearly half of the country does not pay any income tax due to low income. 

Our country must have drastic changes to spending in order to survive.  ALL of the above in not sustainable.  The government is predicting deficits each of the next several years of over a trillion dollars.  Even if interest rates do not go up on our debt and even if we froze spending at current levels (which no one is attempting to do), our national debt will reach $20 trillion in five years.  This also does not take into account the added cost of Obamacare which will be hitting our budget by 2014. 

"Hope and Change" was a cute slogan four years ago.  Hope for change is essential now!

Many politicians support the BBA (Balanced Budget Amendment) as a solution to this problem.  The BBA is not solution at all.  Even if it were constitutional and a good idea, which it is not; it would not take effect until our debt has risen to the area of $20 trillion.  It has no feature for paying down the debt, but instead, has a feature to allow additional borrowing in order to pay the interest payments.  It could be exempted during any year the U.S. is involved in a serious military conflict (which is every year for the past ten).  It could be voided for any year the Congress gets the sufficient number of votes to increase spending.    The BBA is a farce and a smokescreen.  We do not need another amendment, we need people that have the backbone to drastically cut government spending - NOW!

If you do not see that this coming election is the most important in your lifetime, you do not understand the difference between liberty and slavery.