Just when Americans thought that the bailouts were over, Bloomberg Financial News service reported on June 13 that the final tab for Fannie Mae and Freddie Mac bailout is increasing and may total as much as $1 trillion.
The Federal Reserve’s monopoly on money and credit has caused so many problems for average Americans and the nation that addressing this issue is a prerequisite for returning the nation to economic sanity. Congressman Ron Paul has introduced a bill called the “Free Competition in Currency Act” (H.R. 4248), which would end the government-enforced monopoly by repealing “legal tender” laws, allowing private mints, and eliminating taxes on gold and silver coins.
Before the economic meltdown was in full swing, a Florida real-estate developer named William Pitts correctly read the signs pointing toward tough times ahead. In an effort to preserve some of his savings, he bought financial products that would increase in value as real-estate and banking collapsed. It seemed like the sensible thing to do. But though his analysis was correct, his investments went bust — because the U.S. Federal Reserve made them go bust.
The Wall Street Journal took another look at the $13 trillion national debt written about here last week and announced that, according to a study by economists Carmen Reinhart and Kenneth Rogoff, the economy has now reached the tipping point, the Reinhart-Rogoff Line, better known as the point of no return.
The U.S. Bureau of Labor Statistics just released its employment figures for the month of May, and they would appear to be very encouraging indeed: 431,000 new jobs were created, and the unemployment rate fell to 9.7 percent. President Obama hailed this as proof that his economic policies are succeeding, saying, “This report is a sign that our economy is getting stronger by the day.”
When CNBC announced that the number of workers filing new claims for unemployment benefits fell last week while private employers added new jobs in May, this was “further evidence [that] the labor market was improving.” In more muted fashion, the Associated Press called it a “slow-motion recovery,” but a recovery nevertheless.
Bank closures throughout the United States continue to be telling of the state of the economy. Friday witnessed the closing of three more banks in Florida and one in Nevada and California, totaling 78 failed banks in this year alone.
The Obama administration is pushing for a second “stimulus” package as the amount of money flowing in the U.S. economy contracts at a pace not seen since the Great Depression, according to international news reports.
According to the New York Times, “A growing number of the people whose homes are in foreclosure are refusing to slink away in shame.” They are just refusing to make their mortgage payments but continue to live in their home until the bank evicts them. LPS Applied Analytics says the average borrower in foreclosure “has been delinquent for 438 days before actually being evicted.” This means that the homeowner essentially lives rent-free for nearly 15 months, and can use his mortgage payment to make other payments such as car loans and credit cards.
After six straight months of gains in consumer spending the April numbers showed no change from March, according to the Commerce Department. This was a surprise to some who have been tracking such things as the University of Michigan’s index of consumer confidence (higher), consumers’ expectations on the economy over the next 12 months (higher), moderate real job creation (higher), savings rate (higher) and manufacturing activity (higher).
The timing of the sellout by Senator Bernie Sanders (I-Vt.) could not have been more politically auspicious — or more suspicious. For months the Senator had been denouncing the secrecy of the Federal Reserve’s bailout operations, which have exceeded two trillion dollars. For months he had been pledging that he would push for a genuine audit of the Fed. He authored an amendment in the Senate identical to “Audit the Fed” legislation in the House (H.R. 1207) authored by Congressman Ron Paul (R-Texas).