Mars, the 1st-magnitude star Regulus, and Comet ISON have gathered together in the pre-dawn sky only a few degrees apart. Comet ISON is invisible to the naked eye, but Mars and Regulus are bright enough to see without optics. They form a pretty red-blue "double star" that can lead telescopic observers to the comet. October 13th began with an explosion on the sun. At 00:43 UT, sunspot AR1865 erupted, producing an M1-class solar flare and an Earth-directed CME. NASA's Solar Dynamics Observatory captured the explosion's flash of extreme UV radiation: Travelers who crack jokes about the TSA’s ludicrous security procedures could face arrest, according to a new loudspeaker warning being broadcast at airports in the U.S. While traveling through George Bush Intercontinental Airport in Houston, Matt Miller heard a security announcement repeatedly aired on the airport intercom that left him disturbed. “You are also reminded that any inappropriate remarks or jokes concerning security may result in your arrest,” the loudspeaker message states. These new loudspeaker warnings remind us that the TSA continues to excel at indoctrinating Americans to be well-behaved prisoners via obedience training – reminding them that they can be disappeared if they dare speak out of turn, even in a humorous way. This is a totally unlawful and illegitimate violation of the First Amendment and is obviously designed to intimidate travelers and stop them from complaining about aggressive grope downs which in some cases involve TSA workers touching travelers’ genitals. The message is clear – grovel and enjoy your genitals being groped or face arrest. The prospect of travelers cracking jokes about airport security procedures is by no means unlikely given the increasing absurdity of the policies being enforced by the TSA. As we reported last year, perhaps the mose ludicrous example is the TSA’s “freeze” policy, where travelers are ordered to stand in place like statues while TSA agents resolve some unexplained security threat. The TSA has also provoked controversy by implementing other preposterous policies which have a tenuous security justification, most notably a procedure where TSA agents test travelers’ drinks for explosives after they have already passed through security and purchased beverages inside the secure area of the airport. Test Run for Operation Food Stamp is Complete BOSTON (CBS/AP) - People in Ohio, Michigan and 15 other states found themselves unable to use their food stamp debit-style cards on Saturday, after a routine test of backup systems by vendor Xerox Corp. resulted in a system failure. At about 9 a.m. Saturday, reports from across the country began pouring in that customers’ EBT cards were not working in stores. At 2 p.m., an EBT customer service representative told CBS Boston that the system was currently down for a computer system upgrade. Xerox spokeswoman Jennifer Wasmer released further details later in the afternoon in an emailed statement. “While the electronic benefits system is now up and running, beneficiaries in the 17 affected states continue to experience connectivity issues to access their benefits. Technical staff is addressing the issue and expect the system to be restored soon,” Wasmer said. “Beneficiaries requiring access to their benefits can work with their local retailers who can activate an emergency voucher system where available. We appreciate our clients’ patience while we work through this outage as quickly as possible.” Update: EBT Cards Back In Service Nationwide Wasmer said the affected states also included Alabama, California, Georgia, Iowa, Illinois, Louisiana, Massachusetts, Maryland, Mississippi, New Jersey, Oklahoma, Pennsylvania, Texas and Virginia. U.S. Department of Agriculture spokeswoman Courtney Rowe said the outage is not related to the government shutdown. Shoppers left carts of groceries behind at a packed Market Basket grocery store in Biddeford, Maine, because they couldn’t get their benefits, said fellow shopper Barbara Colman, of Saco, Maine. The manager put up a sign saying the EBT system was not in use. Colman, who receives the benefits, called an 800 telephone line for the program and it said the EBT system was down due to maintenance, she said. “That’s a problem. There are a lot of families who are not going to be able to feed children because the system is being maintenanced,” Colman said. She planned to reach out to local officials. “You don’t want children going hungry tonight because of stupidity,” she said. Colman said the store manager promised her that he would honor the day’s store flyer discounts next week. Ohio’s cash and food assistance card payment systems went down at 11 a.m., said Benjamin Johnson, a spokesman for the Ohio Department of Job and Family Services. Ohio’s cash system has been fixed, but he said that its electronic benefits transfer card system is still down. Johnson said Xerox is notifying retailers to revert to the manual system, meaning customers can spend up to $50 until the system is back online. Recipients of the state’s supplemental nutrition assistance program, or SNAP, should call the 800 number on the back of their card, and Xerox will guide them through the purchase process. Illinois residents began reporting problems with their cards — known as LINK in that state — on Saturday morning, said Januari Smith, spokeswoman for the Illinois Department of Human Services. Smith said that typically when the cards aren’t working retailers can call a backup phone number to find out how much money customers have available in their account. But that information also was unavailable because of the outage, so customers weren’t able to use their cards. “It really is a bad situation but they are working to get it fixed as soon as possible,” Smith said. “We hope it will be back up later today.” In Clarksdale, Miss. — one of the poorest parts of one of the poorest states in the nation — cashier Eliza Shook said dozens of customers at Corner Grocery had to put back groceries when the cards failed Saturday because they couldn’t afford to pay for the food. After several hours, she put a sign on the front door to tell people about the problem. “It’s been terrible,” Shook said in a phone interview. “It’s just been some angry folks. That’s what a lot of folks depend on.” Mississippi Department of Human Services director Rickey Berry confirmed that Xerox, the state’s EBT vendor, had computer problems. He said he had been told by midafternoon that the problems were being fixed. “I know there are a lot of mad people,” Berry said. Sheree Powell, a spokeswoman for the Oklahoma Department of Human Services, started receiving calls around 11:30 a.m. about problems with the state’s card systems. More than 600,000 Oklahomans receive SNAP benefits, and money is dispersed to the cards on the first, fifth and 10th days of every month, so the disruption came at what is typically a high-use time for the cards. Oklahoma also runs a separate debit card system for other state benefits like unemployment payments. Those cards can be used at ATMs to withdraw cash. Powell said Xerox administers both the EBT and debit card systems, and they both were down initially. Like Ohio’s Johnson, Powell said that Oklahoma’s cash debit card system has since been restored, but the EBT cards for the SNAP program were still down. Powell said Oklahoma’s Xerox representative told them that the problems stemmed from a power failure at a data center, and power had been restored quickly. “It just takes a while to reboot these systems,” she said, adding that she did not know where the data center was located. The federal EBT website was unavailable due to the government shutdown. USDA's Food and Nutrition Service administers food assistance, programs intended to help the economically disadvantaged get more to eat and to understand better the importance of proper nutrition. The food stamp program is one of the nation's largest welfare programs, providing benefits to needy people to increase their food purchasing power. The food stamp program was created as a step up, a temporary measure to help when someone has fallen down in their luck, lost a job or became injured and in need of help until they got back on their feet. It has grown into a very convenient way to by voters. The Agencies in charge of administering the Program were heavily incentivized to recruit and register as many people in as many States as possible over the last 4 years. Like most Agency programs, it is abused; only this time it is the Obama Administration that is abusing the people by enslaving more than 60 million US citizens with free food. No bought and paid for voter would think of biting the hand that feeds them. But, rest assured, they will bare their teeth and go after anyone who stands in the way of feeding their kids, once they are hooked on the Program with no path to freedom and self-reliance. The SNAP system is governed by Obama appointee Tom Vilsack, who serves as the Nation's 30th Secretary the Agriculture. According to the USDA’s website, as USDA's leader, Vilsack is working hard to strengthen the American agricultural economy, build vibrant rural communities and secure a stronger future for the American middle class. Vilsack narrowly won the general election and became the first Democrat to serve as governor of Iowa in 30 years and only the fifth Democrat to hold the office in the 20th century. A little background will reveal his long track record for violating Constitutions to redistribute wealth to secure a permanent voter class. The first year of his second term as Governor of Iowa saw creation of the Grow Iowa Values Fund, a $503 million appropriation designed to boost the Iowa economy by offering grants to corporations and initiatives pledged to create higher-income jobs. Vilsack; however, violated the State’s constitution by inventing and using a line-item veto to veto portions of the bill that would have cut income taxes and eased business regulations. Although there was economic fallout costing Iowans hundreds of millions in welfare commitments made by Vislack, the strategy worked. Although political analysts predicted his defeat, in 2002 he won his second term in office by defeating Republican challenger attorney Doug Gross by eight points. Prior to Democratic Presidential candidate Senator John Kerry's selection of Senator John Edwards, Vilsack was thought to be high on the list of potential running mates for Kerry in the 2004 presidential election. In 2005, Vilsack established Heartland PAC, a political action committee aimed at electing Democratic Governors. For this test run, the shutdown of the Food Stamp Program has been blamed on a glitch during routine website maintenance. It works. As I have been saying on this program for a year, when the time is right, the Secretary will support his Party and close the kitchen cabinet to a quarter of the nation until the Republicans are defeated once and for all. US Government Debt Ceiling compared to a Ponzi Scheme I would like to revisit the card game analogy I mentioned again last week just for a moment. I want you to get a clear picture of the game plan so you can tell what’s going on. When Treasury Secretary Jacob Lew testified in the Senate Finance Committee on Thursday, urging Congress to enact a new law allowing the administration to increase the federal debt, his description of how the Treasury handles that debt mirrored the Securities and Exchange Commission’s definition of a Ponzi Scheme. “A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors,” says the Securities and Exchange Commission. “With little or no legitimate earnings, the schemes require a consistent flow of money from new investors to continue,” explains the SEC. “Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.” On Thursday, Lew candidly told the Finance Committee that the U.S. Treasury will not be able to pay off current government debt-holders when their debt is due if the Treasury is not able to turn around and issue an even greater amount in new debt to get the cash it needs to do so. “Every week we roll over approximately $100 billion in U.S. bills,” Lew testified. “If U.S. bondholders decided that they wanted to be repaid rather than continuing to roll over their investments, we could unexpectedly dissipate our entire cash balance.” “There is no plan other than raising the debt limit that permits us to meet all of our obligations,” he said later. “Let me start by saying what I think should be obvious: that if we don't have enough cash to pay all our bills, we will be failing to meet our obligations, and under any scenario we will be defaulting on obligations,” said Lew. “Let me remind everyone,” he said, “principal on the debt is not something we pay out of our cash flow of revenues. Principal on the debt is something that is a function of the markets rolling over.” Lew’s contention that the federal government cannot pay its current debt-holders unless its gets cash by selling new debt to make those payments is demonstrated by the daily accounting statements published by the Treasury. The Daily Treasury Statement for Sept. 30, 2013—the last day of fiscal 2013—shows that during fiscal 2013 the Treasury had to pay off $7,546,726,000,000 in Treasury securities that had matured. That $7,546,726,000,000 in maturing Treasury securities was more than 3 times as much as the $2,419,221,000,000 in total tax revenue the Treasury collected in fiscal 2013. To get the cash to pay off the $7,546,726,000,000 in maturing Treasury securities—and also cover new federal spending over and above the $2,419,221,000,000 in tax revenues collected-the Treasury needed to turn around and sell $8,323,949,000,000 in new Treasury securities. That means that to service the existing debt and cover existing federal spending programs, the government needed to increase the net value of extant U.S. Treasury securities held by the public by $777.233 billion in fiscal 2013. Even if Congress had cut federal spending by $777.233 billion to spare the Treasury the need to sell that much new debt, the Treasury still would have needed to find investors willing to buy $7,546,726,000,000 in new Treasury securities in fiscal 2013 to pay off the $7,546,726,000,000 in old securities that matured during that time. Why was the Treasury forced to pay off such a massive volume--$7,546,726,000,000—in Treasury securities in one year? Because the Treasury keeps churning a large portion of the government’s publicly traded debt in short-term bills and notes. The upside of that is that the Treasury has been able to sell those shorter-term bills and notes for a lower interest rate than it needs to offer to sell longer-term bonds. The downside is that to constantly churn its short-term securities the Treasury needs to find a constant stream of buyers willing to invest massive sums in U.S. government debt on the promise of a very small return. As of Sept. 30, according to the Treasury, the U.S. government had $11,577,400,000,000 in outstanding publicly traded debt. Only about $1.3 trillion of that was in 30-year bonds, earning an average interest rate of 5.101 percent. Another approximately $936 million was in Treasury Inflation-Protected Securities, earning an average interest rate of 1.084 percent. But the lion’s share of that publicly traded debt—$9.3 billion or about 80 percent--was in Treasury notes (about $7.8 trillion), which mature in two to ten years, and Treasury bills (about $1.5 trillion), which mature in anywhere from a few days to 52 weeks. In September, the average interest rate on Treasury notes was just 1.808 percent, and the average interest rate on Treasury bills was a miniscule 0.074 percent. As a result of these low rates on bills and notes, the average interest rate that the Treasury paid in September on all of the U.S. government’s marketable debt (bonds, TIPS, notes and bills combined) was just 1.981 percent. Back in January 2001, the average interest rate on all marketable Treasury securities was 6.620 percent—or about 3.34 times what it was this September. In fact, in January 2001, the average rate even on short-term Treasury bills was 6.059 percent. That is 81 times higher than the average rate this September. “Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out,” said the SEC description of such schemes. “At our auction of four-week Treasury bills on Tuesday, the interest rate nearly tripled relative to the prior week's auction, and it reached the highest level since October 2008,” Lew said in his testimony to the Senate Finance Committee. In fiscal 2013, because of the low interest rates, the government paid out only $224.695 billion in interest on its securities. But if the average interest rate on these securities were to rise to the level they were in January 2001 (3.34 times as great as they were this September), the Treasury would need to pay about $750 billion in interest on just its current volume of marketable debt. However, because the government is running a deficit—by spending hundreds of billions more than the tax revenues it collects—the only way the Treasury could pay that higher level of interest would be to borrow that much more from new investors. Currently, the Federal Reserve is the single greatest investor in U.S. government debt--going into the secondary market and buying up $40 billion per month in longer-term U.S. Treasury notes and bonds. When the Treasury pays the interest on these securities to the Federal Reserve, according to the Congressional Research Service, the Fed counts most of that interest as “profits” and turns around and pays 95 percent of those “profits” back to the Treasury. “In essence, the Fed has made an interest-free loan to the Treasury, because almost all of the interest paid by Treasury to the Fed is subsequently sent back to Treasury,” says the Congressional Research Service. The Federal Reserve only buys Treasury notes and bonds. It does not buy short-term Treasury bills--the securities that, according to Lew, the Treasury needed to triple their interest rates on last week in order to attract buyers in the open market. At the beginning of President Obama’s term, entities in the People’s Republic of China did invest in significant numbers of short-term U.S. Treasury bills. Now, they do not. As of May 2009, according to the Treasury, entities in Mainland China owned $210.407 billion in T-bills. As of this July, the latest month on record, they owned only $4.642 billion. That is a drop of $205.765 billion—or about 98 percent. As of July, the Chinese did still hold $1.2773 trillion in longer-term U.S. Treasury bonds and notes, making them the second largest holders of these securities after the Federal Reserve, which now owns $2.0867 trillion in Treasury notes and bonds. However, the $1.2773 trillion in U.S. Treasury bonds and notes entities in China owned as of July was down from the $1.2973 trillion they owned in May. Where Could We Possibly Make a Cut in Spending? Department of Defense 3,200,000 63.13% Postal Service 800,000 15.783 Department of Veterans Affairs 240,000 4.735 Department of the Treasury 162,119 3.1985 Department of Justice 124,870 2.4636 Department of Agriculture 100,000 1.9729 Department of Transportation 100,000 1.9729 Social Security Administration 65,000 1.2824 Department of Health and Human Services 62,999 1.2429 Department of the Interior 58,026 1.1448 Department of Commerce 41,711 0.8229 National Aeronautics and Space Administration 19,198 0.3788 Environmental Protection Agency 18,879 0.3725 Department of State 18,000 0.3551 Department of Labor 16,818 0.3318 Department of Energy 14,000 0.2762 General Services Administration 14,000 0.2762 Tennessee Valley Authority 13,031 0.2571 Department of Housing and Urban Development 9,300 16.52% Federal Deposit Insurance Corporation 6,437 11.434 Department of Education 4,611 8.1902 Small Business Administration 4,190 7.4424 Office of Personnel Management 3,699 6.5703 Equal Employment Opportunities Commission 3,055 5.4264 Securities and Exchange Commission 2,941 5.2239 National Archives and Records Administration 2,768 4.9166 Nuclear Regulatory Commission 2,500 4.4406 Federal Emergency Management Agency 2,131 3.7851 Agency for International Development 2,074 3.6839 Federal Communications Commission 2,000 3.5525 National Labor Relations Board 1,947 3.4583 Federal Reserve System 1,642 2.9166 Joint Chiefs of Staff 1,268 2.2523 Federal Energy Regulatory Commission 1,250 2.2203 National Science Foundation 1,250 2.2203 Peace Corps 1,112 1.9752 Railroad Retirement Board 1,102 1.9574 National Credit Union Administration 1,022 1.8153 Federal Trade Commission 960 12.50% Court Services and Offender Supervision Agency 860 11.202 Pension Benefit Guaranty Corporation 746 9.7173 Corporation for National and Community 630 8.2063 Commodity Futures Trading Commission 560 7.2945 Consumer Product Safety Commission 480 6.2524 U.S. Holocaust Memorial Council 450 5.8617 American Battle Monuments Commission 369 4.8066 International Trade Commission 351 4.5721 Federal Election Commission 340 4.4288 Federal Mediation and Conciliation Service 280 3.6473 Farm Credit Administration 278 3.6212 Merit Systems Protection Board 233 3.035 Federal Labor Relations Authority 216 2.8136 National Endowment for the Humanities 169 2.2014 Selective Service System 165 2.1493 National Endowment for the Arts 151 1.9669 Federal Maritime Commission 122 1.5892 Federal Housing Finance Board 110 1.4329 Office of Special Counsel 107 1.3938 Federal Retirement Thrift Investment Board 100 1.3026 Office of Government Ethics 78 11.84% Commission on Civil Rights 68 10.319 Occupational Safety and Health Review 68 10.319 National Capital Planning Commission 55 8.346 National Mediation Board 52 7.8907 Postal Rate Commission 50 7.5873 Inter-American Foundation 45 6.8285 Institute of Museum Services and Library 41 6.2215 Trade and Development Agency 41 6.2215 Advisory Council on Historic Preservation 35 5.3111 Access Board 30 4.5524 Committee for Purchase from the Blind and 29 4.4006 African Development Foundation 26 3.9454 Morris K. Udall Foundation 17 2.5797 National Council on Disability 10 1.5175 Commission on Fine Arts 7 1.0622 Japan-U.S.Friendship Commission 4 0.607 Harry S. Truman Scholarship Foundation 3 0.4552 Total 5,133,286 Average Salary = $100,000 $513,328,600,000 Where are the Choices Being Made Instead? Hours before the looming “propaganda shutdown,” the GSA was able to process the US State Department’s $5million order for custom crystal glasses and bar accessories. The State Department finalized the order for custom stemware on September 30, just hours before nearly one million federal workers were put on unpaid leave as a result of the on-going budget dispute in Congress. While you are drinking wine from a goblet made by Libby that you bought at Target, the US Plutocracy drinks from the finest crystal available with special overhead added on top from the GSA’s more than 14 thousand employees. The contract was awarded to Simon Pearce, a Vermont stemware company that makes hand blown crystal that retails for up to $85-per-wine glass. Air Force Defaults On Student Loans In Arizona: Students Kicked Out Of Class & Told Not To Return Saturday, October 12, 2013 12:07 5385 2560642 16 The Facebook post below was just released and as Senior Airman Brian Kolfage says, this facebook post needs to go viral. The United States Air Force is defaulting on student loans for tuition assistance programs and students have been told to NOT come back to classes. BREAKING: AIR FORCE DEFAULTS ON TUITION ASSISTANCE- MILITARY Students kicked out of classes and told not to return. This story has not even made its way out to media yet. This week at a Air Force base in Arizona [Davis-Monthan Air Force Base] Active Duty members attending college courses on base were dropped from their classes due to the US government defaulting on their tuition assistance program. My friend who is on active duty was told by email to not come back to class because the govt never paid the bill [email attached]. Once again the Obama Administration has waged an all out attack on veterans. This week alone he’s allowed family members of the deceased warriors to be neglected by forcing them to buy their own airline tickets and hotels at the last second. He’s closed our open-air war memorials while granting an illegal alien rally to get crazy on the National Mall which resulted in 8 democrat leaders being thrown in jail and many more arrested. Now our active duty warriors are dropped from college courses, and next week all wounded vets from WWII to The War on Terror will not get paid if liberals do not allow congressional bills to be voted on. It’s an all out attack. I’m sick of people saying “well it’s not Obama’s fault” bull crap, he’s the president and he’s aware of what’s going on. As a leader he should be able to see these issues coming before they happen, and he does. He just doesn’t care to rally Americans or his political members to fix anything veteran related until after shits hit the fan; proactive is not in his vocabulary when it comes to anything veteran related. How the US is Being Sold Out China is setting the stage to become the new world reserve currency. As Obama crushes the United States with Debt, China makes a move to Internationalize their currency for world trade and lending purposes. THIS is an indicator that the global banking cartel has made their provisions for the time when the US defaults on their debt to the Federal Reserve….and just to be clear…CHINA is a part of the banking cartel in so much as they do business with HSBC. As you know already, HSBC was cited and fined earlier this year for laundering billions of dollars of Mexican drug cartel money, although the drugs hitting the streets of every US city comes from the Taliban. The Taliban, run by the Karzide clan in Afghanistan, is the largest and most dangerous drug manufacturers and distributors since Britain hooked half of China on Opium. Remember, two wars were fought against China to prevent them from blocking the refined drug from being shipped deep into China via navigable rivers by the British Navy. China lost both wars. BY the way, Harmad Karzide in the US-appointed president of Afghanistan. His brother was running the drug manufacturing operations, until he would not play ball with the West and allow US troops to guard poppy fields and the US to collect a cut of the income. He was shot to death by his own people. It’s payback time for the West. I told you three months ago about the currency war started by Japan when they changed leadership. Japan, for the first time since its dreadful recession, has followed Bernanke’s lead and started printing Yen. The ripple of the world’s third largest US Bond Buyer dumping yen onto the market has affected the other two largest economic communities exactly as planned. China and the European Union today Friday (two days ago) a 350 billion yuan (45 billion euro) currency swap agreement, a major step in pushing international use of the Chinese currency yuan. The deal, signed between the People’s Bank of China and the European Central Bank (ECB), aims to support bilateral trade and protect financial stability, an official statement here said. The central banks of China and the European Union have agreed to supply each other with their currencies. The deal is aimed at accelerating the internationalization of China’s currency, the yuan, and increase trade and investment between the country and the eurozone. The People’s Bank of China said on Thursday that it concluded the currency swap with the European Central Bank. The agreement provides a maximum of 350-billion yuan, or about 56billion dollars, to the ECB and 45-billion euros, or 60.8-billion dollars, to the PBC. The deal is to last for 3 years with the possibility of extension if the banks consent to do so. The agreement allows the banks to borrow currency from each other to provide funds to banks in China and eurozone countries in case of financial emergencies. PBC officials say the deal will provide additional liquidity for Europe’s yuan market and boost trade and investment involving the currency. China has already set up currency swap lines with Singapore and Britain to internationalize the yuan. The one thing missing from this currency trading is the US dollar. In other words, it is no longer the basis of trade between currencies. Get ready. When the money supply collapses, and the world will no longer accept a higher US debt limit, the collections will begin... China's official news agency has called for the creation of a "de-Americanised world", saying the destinies of people should not be left in the hands of a hypocritical nation with a dysfunctional government. Heaping criticism and caustic ridicule on Washington, the Xinhua news agency called the US a civilian slayer, prisoner torturer and meddler in others' affairs, and said the 'Pax Americana' was a failure on all fronts. The official news agency of China, which is seen as the pretender to the world's superpower crown, then rubbed in more salt, calling American economic pre-eminence just a seeming dominance. "As US politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanised world," the editorial said. It asks why the self-declared protector of the world is sowing mayhem in the financial markets by failing to resolve political differences over key economic policy. "... the cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonised," the agency said. It is not the first time Chinese leadership and newspapers have criticised Washington over a policy paralysis that threatens to devalue its dollar assets. According to US Treasury Department data, China is the biggest foreign owner of US Treasuries at $1.28 trillion as of July. Besides, China also holds close to $3.5 trillion of dollar-denominated assets. A US debt default and consequent credit downgrade would significantly erode the value of China's holdings. Most people don’t know that if the US is downgraded again, there will no longer be any State with a AAA bond rating. No State can have a bond rating more than one step higher than the national bond rating. North Carolina protects its bond rating like a bottle of 12-year-old scotch. The county commissions and city councils won’t approve an industrial revenue bond for anything, so that the bond rating remains AAA. Decades of bond hoarding will not pay off for them, because they will be downgraded to AA when the national downgrade is issued in a few more weeks. As the first step in creating a de-Americanised world, all nations must try to shape an international system that respects the sovereignty of all nations and ensures the US keeps out of the domestic affairs of others, Xinhua said. "The developing and emerging market economies need to have more say in major international financial institutions including the World Bank and the International Monetary Fund, so that they could better reflect the transformations of the global economic and political landscape," the editorial says. It also called for an end to the use of the US dollar as the international reserve currency, a step that would ensure the international community could maintain a safe distance from the sideeffects of domestic political turmoil in the United States. Oil, gold, and other global commodities will no longer be based on the almighty dollar. There will be a new global currency. Lead by Example As Washington is struggling with debt and all its political ramifications, American companies and consumers are embracing it, running up record amounts in 2013. Whether it's corporate loans, all quality levels of bonds or simple consumer credit, the debt party is back on in the U.S., whether it's in the boardroom or the living room. Amid the financial crisis of 2008, the U.S. went into what economists call a "debt deleveraging cycle"—akin to a credit hangover, where the party has ended and everyone there decides to quit drinking cold turkey. Somebody has clearly turned the lights back on, though, and corporate and individual buying is soaring. Consumer credit, for instance, surged past the $3 trillion mark in the second quarter of 2013 and continues on an upward trajectory, according to the most recent numbers from the Federal Reserve. At $3.04 trillion, the total is up 22 percent over the past three years. Student loans are up a whopping 61 percent. Total household debt, according to the Fed's flow of funds report, is at $13 trillion, nearly back to its pre-crisis level in 2007 and a shade below government debt of $15 trillion. This was the burden Americans were carrying before the largest crash in global history, and there is another bubble getting ready to burst almost as big as the housing bubble. "We have not solved (anything) when it comes to the deleveraging myth," said Michael Pento, president of Pento Portfolio Strategies. "We have learned nothing." While the specter of another debt crisis might seem scary, some economists tout it as a healthy sign of a recovery. "In a moment of crisis, that's going to come back to haunt you," said Peter Cardillo, chief market economist at Rockwell Global Capital. "As long as you can support that debt through growth, it's really not a major concern." Of course, if everything thinks the economy totally collapses, then who is going to be there to collect the debt? People get to a certain point where they are totally buried. Their job is cutting back. Their rent is going up. The car is broken down, and the card still has some room on it. Gluskin Sheff's noted bear, David Rosenberg, said the rebirth of leverage is actually a reason for optimism for retailers. A July analysis Rosenberg released on the topic marked a sharp change in tone for someone who only a few years ago saw an economy not in recession but rather depression. "The building blocks for the consumer to grab the torch are being put together with each and every passing data point as of late," he said. "Don't fight it. Embrace it." If consumers pay off their debts, instead of going to the mall, it helps no one. Today’s money was all spent a year ago. We need tomorrow’s money and the next year’s money too in order to get through this crisis. You remember the great American Housing Bubble...don’t you? Well, enter and sign in please Mr. Fannie Motors. General Motors has flooded financial markets with auto-backed securities in an effort to offload its risky subprime loans onto banks, a strategy industry insiders say could produce a bubble. Automakers have capitalized on lending by not only loaning money to customers but also packaging and selling those loans to investors in a manner similar to the sale of mortgage-backed securities that created the housing bubble. The dramatic increase in securitization has coincided with GM’s acquisition of AmeriCredit, one of the nation’s largest subprime auto lenders, which it renamed GM Financial (GMF). “It’s becoming Fannie Motors,” said Competitive Enterprise Institute finance scholar John Berlau, referring to the government-backed housing lender Fannie Mae. “They’re still using our tax dollars to break into exotic and money-losing propositions from Chevy Volts to subprime loans, both of which could literally and figuratively blow up in their faces.” 85 percent of GMF loans are subprime. That means only 15% of buyers have a credit score of 700 or higher! GM has redoubled its efforts to capture revenue from the banks. The company issued nearly $60 billion in asset-backed securities (ABS) between 1994 and 2010. The collapse of that bubble bankrupted the company, which was forced to sell 64% of its secure stock to the Obama Administration. The bailed out automaker issued $5.6 billion in securities in 2012, a 50 percent jump from the average ABS issuance between 1994 and 2010 and $1 billion more than 2011, according to GM Financial spokeswoman Chrissy Heinke. “Securitization is happening everywhere in the industry,” said Ed Niedermeyer, an auto industry consultant. “They have to be greedy because the fundamentals of the car business are not sound. If the fundamentals were sound, they could profit like everyone else is.” Auto-loan backed securities are among the fastest growing financial instruments, growing to nearly $100 billion in 2012. Investors are attracted to the relatively low risk, high collateralization, and short turnaround in the auto market, according to risk analyst Christopher Whalen. By the way, if the more than 50 thousand new cars are dumped onto the market in a massive repossession, the value of that collateral will drop way faster than houses did. In addition, a new car parked outside in repossession lots will more than likely be wholesaled, glutting the used car market and obliterating the new car market demand. “Auto paper has behaved well even during the recession,” he said. “The average lifespan is less than two years as people trade or sell often enough to drive the mortgage yields higher. It doesn’t have long term risk of a 30 year mortgage.” GMF has the riskiest lending portfolio of any major car company: 96 percent of its customers have credit scores below 660. GM’s lending habits parallel those in the housing market leading up to the 2008 crash, Niedermeyer said. “There’s no doubt that all the makings of the bubble are here; risk is up subprime is up and this bubble has to exist for GM to look like a viable car company,” he said. GM finished the year with 8.5 percent of loans in delinquency, the highest rate since 2010 and larger than the delinquency rates at Ford, Toyota, and Honda combined. The numbers failed to provoke the calls for oversight that accompanied the collapse of the mortgage industry. President Barack Obama, in an effort to hopefully outlive the bubble collapse, exempted subprime auto loans from the authority of lending watchdogs at the Consumer Financial Protection Bureau. This would effectively pass the disaster on to the next president. Perhaps a new cash for not-so-clunkers would solve the problem. Niedermeyer is worried that GM’s competitors will follow the path down subprime if GM is able to continue its lending practices with little oversight, though he adds that the U.S. is “still years away from a 2008 scenario.” “Bubbles take on a life of their own,” he said. “GM’s risky behavior and the government’s willingness to look the other way threaten the larger economic picture.” Hmm. Maybe don’t buy that new car yet. You might be able to get a heck of deal if you pay cash at the Obama Used Car Corporation. Heroin: The new World Currency KABUL, Afghanistan — For the third year in a row, opium cultivation has increased across Afghanistan, erasing earlier drops stemming from a decade-long international and Afghan government effort to combat the drug trade, according to a United Nations report released on Monday. An Afghan farmer in his poppy field this month in the Khogyani district of eastern Nangarhar province. The report’s findings raised concerns among international law enforcement officials that if the trend continued, opium would be the country’s major economic activity after foreign military forces depart in 2014, leading to the specter of what one official referred to as “the world’s first true narco-state.” Afghanistan is already the world’s largest producer of opium, and last year accounted for 75 percent of the world’s heroin supply. “The assumption is it will reach again to 90 percent this year,” said Jean-Luc Lemahieu, the United Nations’ top counternarcotics official here. The report, the Afghanistan Opium Risk Assessment 2013, issued by the United Nations Office on Drugs and Crime and based on extensive surveys, found that opium cultivation had increased in 12 of the country’s 34 provinces. Herat, in western Afghanistan, is the only province in which cultivation is expected to decrease, the report said. The report suggests that Taliban insurgents took advantage of insecurity in several provinces to assist opium farmers and win popular support — protecting an important form of income for their operations. Opium cultivation has increased the most wherever there has been insecurity. Cocaine production out of Latin America had dropped to a new 21st century low. There is a new and better, more reliable drug for getting high that has reached US towns and cities. The WSJ reports, "Heroin use in the U.S. is soaring, especially in rural areas, amid ample supply and a shift away from costlier prescription narcotics that are becoming tougher to acquire. The number of people who say they have used heroin in the past year jumped 53.5% to 620,000 between 2002 to 2011, according to the Substance Abuse and Mental Health Services Administration. There were 3,094 overdose deaths in 2010, a 55% increase from 2000, according to the federal Centers for Disease Control and Prevention." Given the growing supply, dealers have flooded local markets with heroin. Former users interviewed in Ellensburg, who didn't want to be identified, said dealers promoted the drug aggressively. A 21-year-old recovering addict said she made the switch from pain pills to heroin after her dealer one day held out both options in his hands and encouraged her to choose the cheaper one. And, after all, with youth unemployment sustained by job-killing regulations at more than 10%, and more than 14% among black young people, what else is there to do but get high? What Happens when Military Leaders Say Enough is Enough? The Defenders of the Constitution are being Fired from Their Leadership Positions. They have been fired over various things ranging from sexual harassment to lack of trust. One thing they all have in common is their combat roles. They were all commanders of combat units. Major General Michael Carey Commander, 20th Air Force, he was in charge of 9,600 people and 450 ICBMs at three operational wings and served in operations Iraqi Freedom and Enduring Freedom. It lists 13 major awards he has received. Vice Admiral Tim Giardina Deputy commander of United States Strategic Command. His most recent command assignment was as commander, Submarine Group Trident, Submarine Group Nine, and Submarine Group 10 where he was responsible for all 18 U.S. Trident Submarines. Giardina has been awarded the Navy Distinguished Service Medal, Legion of Merit (six awards), Defense Meritorious Service Medal, Meritorious Service Medal (two awards), Joint Service Commendation Medal (two awards), Navy and Marine Corps Commendation Medal (four awards), Navy and Marine Corps Achievement Medal (three awards), and various campaign and unit awards. Major General C.M.M. Gurganus Commanded Regional Command Southwest and I Marine Expeditionary Force (Forward) in Afghanistan. Awards include the Defense Superior Service Medal, Legion of Merit W/ Valor (2), Meritorious Service Medal (3), Joint Service Commendation Medal, Navy Commendation Medal, Navy Achievement Medal, Combat Action Ribbon. Major General Gregg A. Sturdevant Director of strategic planning and policy for U.S. Pacific Command and commander of the Aviation Wing At Camp Bastion, Afghanistan. Awards include the Defense Superior Service Medal (2), Legion of Merit, Bronze Star, Meritorious Service Medal (2), Air Medal with gold star, “V”, and Strike/Flight numeral 2, Navy and Marine Corps Commendation Medal (2), Navy and Marine Corps Achievement Medal, Good Conduct Medal Brigadier General Bryan Roberts Roberts took command at Ft. Jackson in 2011 and was on the fast track towards his second star. He has served in Iraq as commanding officer of the 2nd Brigade Combat Team, and was deputy commanding general of the U.S.Army Recruiting Command at Fort Knox, Ky. Major General Ralph Baker Commander of Joint Task Force – Horn at Camp Lemonnier in Djibouti, Africa Rear Admiral Charles Gaouette You’ll recall that he was relieved of duty within one minute of disobeying a direct order from the State Department to stand down from the rescue mission at the Benghazi Embassy. Commander of Carrier Strike Group Three, April 5, 2012. He most recently served as Deputy Commander, U.S. Naval Forces, U.S. Central Command. In 2003, he was awarded the Vice Admiral James Bond Stockdale Award for inspirational leadership in recognition of the hard work by the crew of Oldendorf. He is the recipient of various personal decorations and unit awards The Media fails to connect the dots. One by one, these discharges do not mean much to anyone. But, when considering the circumstances together, we see that activities that are customary, outdated, or altogether trumped up by the President have been used to discharge these heroes with the threat of losing pensions, rank, and even being incarcerated in Fort Leavenworth. It is clear that these heroes have been defending the Constitution and the soldiers with whom they were entrusted for many decades without fail. They never swerved from their duty and sacred charge, even when ordered to do so by the Commander in Chief. Of course, disobeying the President in order to honor the oath to protect and defend the Constitution, is grounds for removal from office. The question I have for you, is do you believe that the US military community will facilitate a changing of the guard in the White House? A coup-d-tat without the violence. I recall the heavily documented and researched Ark of Millions of Years, Volume One, where the truth behind the Freemasons involvement with the Revolutionary War. The British far out gunned and out manned the Colonial armies. But the officers leading the battles on the British side were mostly Freemasons. They knew the prophecy and believed that in fact, the United States was the New Jerusalem prophesied in the scriptures. They could not fight against the higher truth and faith. So, they in essence threw the war to accomplish the greater good. The firing of these 7 military leaders was a wake-up call for the rest of the military leadership. They know now not to openly defy Mr. Obama. Instead, they will not follow through on the President’s orders in order to accomplish the greater good without being so bold and loud. They will simple serve in their respective places with the Constitution as their guiding principle. And if the order comes to begin arresting Americans for demanding the impeachment of Mr. Obummer, the military will be in a position to say, “No sir. You have been relieved of command.” World Bank Head Jim Yong Kim Warns US Is ‘Five Days Away From A Very Dangerous Moment’ Because of the Gov’t’s Borrowing Crisis Sunday, October 13, 2013 11:34 World Bank chief Jim Yong Kim warned on Saturday that the United States was headed toward peril as politicians failed again to resolve the shutdown standoff The US and world economies face higher interest rates, falling confidence and slower growth if the US Congress does not raise the $16.7 trillion borrowing cap, Kim said By JAMES NYE * MAIL ONLINE The president of the World Bank on Saturday warned the United States was just ‘days away’ from causing a global economic disaster unless politicians come up with a plan to raise the nation’s debt limit and avoid default. ‘We’re now five days away from a very dangerous moment. I urge U.S. policymakers to quickly come to a resolution before they reach the debt ceiling deadline…Inaction could result in interest rates rising, confidence falling and growth slowing,’ World Bank President Jim Yong Kim said in a briefing following a meeting of the bank’s Development Committee. ‘If this comes to pass, it could be a disastrous event for the developing world, and that will in turn greatly hurt developed economies as well,’ he said. The alarming remarks from the Korean-American came after three days of talks revolving around meetings of the 188-nation International Monetary Fund and its sister lending agency, the World Bank, top officials pressed the U.S. to resolve the political impasse over the debt ceiling. The standoff has blocked approval of legislation to increase the government’s borrowing limit before a fast-approaching Thursday deadline. U.S. Treasury Secretary Jacob Lew has warned that he will exhaust his borrowing authority Thursday and the government will face the prospect of defaulting on its debt unless Congress raises the $16.7 trillion borrowing limit. Why the Government Operates on Borrowed Money JP Morgan dumps short-term US treasuries! Sunday, October 13, 2013 11:04 Posted on 12 October 2013 Arabian Money. The US Government shutdown continues and we are only five days from national bankruptcy when the debt ceiling is reached. Fund managers at Fidelity and JP Morgan have taken the prudent view and have dumped all their short-term US treasuries just in case of the first default in the history of the union. Not wishing to panic markets the bank said: ‘Although JPMorgan Investment Management continues to believe that the probability of a US government default is low, it has taken certain precautionary measures with respect to the money markets.’ Armageddon plan Selling out is certainly a way to protect against the Armageddon scenario. But then if it is bordering on the impossible to imagine why take this precaution? Does somebody at the largest US investment bank have an inside track and not like what they are hearing? JP Morgan dumps short-term US treasuries! Sunday, October 13, 2013 11:04 Posted on 12 October 2013 Arabian Money. The US Government shutdown continues and we are only five days from national bankruptcy when the debt ceiling is reached. Fund managers at Fidelity and JP Morgan have taken the prudent view and have dumped all their short-term US treasuries just in case of the first default in the history of the union. Not wishing to panic markets the bank said: ‘Although JPMorgan Investment Management continues to believe that the probability of a US government default is low, it has taken certain precautionary measures with respect to the money markets.’ Armageddon plan Selling out is certainly a way to protect against the Armageddon scenario. But then if it is bordering on the impossible to imagine why take this precaution? Does somebody at the largest US investment bank have an inside track and not like what they are hearing? The answer is complex. JP Morgan has the largest precious metals vault in America, possible the world. They use it as a basis for bullion, which is a tradable stock certificate that is backed by the metals. Well, it is supposed to be. There are strong suspicions that the metal is either no longer there, or that is has been grossly oversold by JP Morgan. That means that each gold or silver bar has more than one owner. It is no sweat as long as all the owners don’t ask for delivery of their metal at one time. The easiest way to balance the books is to short the metals, even though you have them in the vault, and then tell the investors to get liquid as quickly as possible. The investors will sell their bullion, earning JP Morgan billions as the price drops, and make the metal even cheaper to scoop up with cash made ready by savvy investors who were standing by waiting for the panic. That is the way the big boys play. They play you, the average guy. What we are trying to do here at X-Squared Radio is let you know what they are doing, so you can match their moves and make money or protect yourself against currency collapses.