Tag Archives: Federal Reserve

Ready For A Bout Of Stagflation, After The Next Depression, Like We’ve Never Seen Before

Money manager Michael Pento says don’t believe the Fed when it says “the economy is doing well.” It’s not. Pento explains, “As long as the stock market continues to go up, the Fed is going to continue to slowly raise interest rates. So, when the inevitable collapse occurs, and that’s what the Fed does, the Fed is in the business of lowering interest rates, creating asset bubbles, which pile up the level of debt, then raising rates and collapsing the economy. That’s their mantra. That’s their MO (modus operandi) and it has happened over and over again. The occurrences are going to be much more dire as we go through time. So, the Fed is trying to get bullets in the chamber. The Fed is going to raise rates slowly. The yield curve is going to invert. . . . We are going to have another catastrophe in the stock market and in the bond market and in the real estate market and in the global economy.”

With the latest GDP number now coming in at less than 1%, Pento says the Fed will be forced to reverse course soon when the economy tanks again. Pento contends, “They will have no choice, this is what they are going to do. They are going to do everything they can to rebuild the asset bubble, but it’s going to take a lot more than lowering interest rates and a little bit of QE. They’re going to have to have helicopter money, and I think that’s going to happen right after we enter this next depression. I don’t use hyperbole here either. I say depression because I look at the data. The data tells me the great recession that was headed towards a depression started in 2007 and ended in 2009. They were talking about not getting money out of the ATMs and massive bank defaults. That was going to make the Great depression in the 1930’s look like a Sunday picnic. That was caused by a Fed Funds rate at 1% for one year and a housing bubble. You look at the bubbles we have today, the national debt in 2008 was $10 trillion. It’s now $20 trillion. . . . You have the entire globe that has massively and exponentially raised its level of debt . . . and the level of asset bubbles. . . . Most of the metrics are at all-time record highs. The GDP has been artificially boosted by 100 months of 1% or lower Fed Funds rate. I think a depression is absolutely unavoidable. What did they fix? Absolutely nothing. They just made the economy exponentially more artificial and more dependent on free money.”

Pento predicted the bond market would ultimately collapse in his 2013 book titled “The Coming Bond Market Collapse.” He says the collapse has started and will get worse quickly. Pento is watching Europe and says, “When the European Central Bank (ECB) announces they are going to take the $60 billion a month of easing and take it to zero, you are going to see a bond market revolt. The free market, whatever is left of it, is going to aggressively start shorting bonds. You will see yields spike in Europe, which is going to drag up bond yields across the globe. That’s when this thing will all unravel and unravel very, very quickly.”

In closing, Pento predicts, “The stock market is a bubble. It’s going to fall at least 50% for starters and before The Fed gets to helicopter money. You better be ready.”

By Greg Hunter | USA Watch Dog

War And Chaos Ahead: How Mega-Rich Are Preparing

Exclusive: Barrett Moore previews West’s ‘impending implosion of the empire of debt’

Candidly, I don’t have the time right now to be writing an article that most in the West would ignore or repudiate. I wrote this piece, however, for the staff of WND with whom I have consulted over the years. WND is one of the few news organizations in America that is interested in truth, and unconcerned with the consequences of reporting it. I admire that, and so should you. Few news organizations remain that are not just inundating us with misinformation and propaganda. But I digress.

We are at the precipice of war, and this is a call to action. While it might not come tomorrow, the threat does grow by the day as conflict between the largest and most powerful nation states becomes inevitable, driven by the impending implosion of the empire of debt accumulated by Western democracies, and by the yearning of Russia and China (and their surrogates) to escape the constraints of almost 70 years of American hegemony.

I am not talking about another one-sided skirmish in the desert, but rather a real war, where satellites fall from the sky, ships sink, supply chains are disrupted and there is a loss of life not seen since the last century; a war of such a magnitude that few Westerners alive today can comprehend it. Such a war will alter the world as we know it. And, reading the tea leaves, it seems there is little we could do now to stop it. At this stage, all that is missing is the spark that ignites the inferno. It might come tomorrow, it might delay a while longer. We can prepare, but preparation takes years and years, and requires a threshold level of certainty that the threat exists, that it merits attention, that it demands action.

Why do our kids’ novels and movies (“Hunger Games,” “Divergent”) assume a game-changing war, but writers and talking heads on our mainstream news sites and channels serve up mindless banter about the Kardashians, the climate, Twitter trends and gender engineering? Even thinking Americans have traded serious conversation about geopolitics for Facebook page updates, thereby providing every intelligence organization on the planet the opportunity to further profile them. We are sinking further and further into blind ignorance about how the world really works, even as we strengthen the powers threatening us.

Are you still with me? Then read on. You need to re-prioritize your life today and start fulfilling the most important obligation you have to your family aside from serving God. It’s not your next vacation, a new car, or a club membership that I am talking about. No. It is the need to protect and provide for your family in a conflict situation where the supply chain no longer works. Do you think your wealth will protect you? Or that ready access to modern aircraft will make a difference? Or maybe you are fortunate enough to own a second home, or even a boat? I am sorry to say that these luxuries will prove all but useless when the coming storm arrives.

If you question my advice, then tell me, why did Mr. Jamie Dimon buy an island? Or why does Hank Paulson actually live on one? Or what about James Cameron, who up and moved to New Zealand? Or the thousands of bankers and hedge fund managers that have sought safety in havens throughout the Caribbean, and in Central and South America? Oh, you didn’t know about that? Or maybe you are having trouble placing those names? Well, Mr. Dimon is the current chairman and CEO of J.P. Morgan/Chase Bank. Mr. Paulson was the chairman of Goldman Sachs, before becoming the U.S. secretary of the Treasury. And Mr. Cameron is the director and creative genius behind the movie “Avatar,” among others – which made him a billion dollars or so. But don’t be envious. Based on my experience building havens, Mr. Dimon and Mr. Cameron overlooked some serious geopolitical threats during their haven selection process, and this is despite their huge resources, connections and intuition about where the world is going. In my opinion, Mr. Paulson made a wiser choice to stay in North America, and so have hundreds of others.

Let me explain further. You see, each of these very smart and successful people understands that the political leadership of our nation, irrespective of party affiliation, are as much in denial regarding the threats we face as they are wholly unprepared and ill-equipped to make the hard financial decisions that are essential to preserving our way of life. They recognize that we are steaming right along, business as usual, such that virtually every governmental action is partisan and is made without restraint or consequence, and that the population remains blissfully ignorant as to how this inability to change direction tightens the proverbial financial noose around our necks. Think about it – how many times have you heard a politician or member of the media comment about the size of our national debt and how our path is unsustainable? Yet nothing changes.

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While it sounds like a joke, ask yourself, what is the difference financially between Greece and the United States? In many ways, very little. Both nations are broke, both are living well beyond their means, and both are hobbled by politicians incapable of making the hard (i.e., right) decision for their citizens. Think about the news lately. If it were not for the Federal Reserve and the ability of the U.S. Treasury to borrow with impunity, our leadership would be begging for loans from creditors, much like Greece is begging its EU creditors (read: Germany), for additional financial help.

In short, our leadership won’t change the trajectory we are on until they are forced to do so. Don’t listen to what they say, but observe what they do. For example, the Reagan, Bush (41), Clinton, Bush (43) and Obama administrations have each saddled the nation with successively larger and now record amounts of debt (and please, don’t give me any nonsense about Clinton not adding to the debt; he was just a little more clever about trying to market the narrative). We have all seen these numbers before, but, to refresh your memory, they are as follows (approximately):

Think about the implications. The federal government is spending $5-$5.5 trillion annually (using GAAP-adjusted accounting) yet taking in approximately $3.1 trillion in annual revenues. We are thus only paying for, roughly, 60 percent of expenditures; the rest is being borrowed. How would that go over in your household?

Yawn, you say, I have heard all this before and we are still here – what makes it different this time? Answer: The Federal Reserve has, in the last year, begun to monetize our national debt, which means we are buying our own debt back with borrowed (or newly created) dollars. So what? Well, this is the sign that sophisticated financial insiders have looked for as the beginning-of-the-end, and this is why they are preparing to flee their metropolitan bases of operation.

Bear with me while I explain: The insiders understand that the monetization of our debt will eventually drive an increase in interest rates, which will in turn increase the cost of the nation’s borrowing (think of it as an increase in the rate on your credit card), thus creating the need to spend more money to pay the increased interest cost to service the national debt, which increases the budget deficit, that in turn increases the need to borrow more money and monetize even more debt, eventually creating a self-fulfilling prophecy of increasing interest rates to attract more and more capital, which in turn increases the cost of servicing the underlying debt etc. etc.; eventually hastening the coming financial collapse insiders fear. Furthermore, they know the Federal Reserve’s current and careful balancing act is susceptible to an upset due to some black swan event that triggers a global financial panic, thereby ripping the legs out from under the debt-supported Western democracies with the United States at the hub of that collapsing wheel. What does this mean? No one is quite sure, but analysts predict a forced bank holiday, (i.e., the banks, including ATMS, close for some indefinite period of time), massive employment layoffs, disruptions of the usual supply chain (i.e., of truck and rail transportation of food, medicine and other staples), non-payment of pensions and social assistance programs (welfare) and the destruction of much of the nation’s paper-based wealth (i.e., your stock portfolio, among other assets), along with the emergence of broad social upheaval to include gangs, mobs, riots and other social disruptions. Remember that following the financial crisis in 2008, Mr. Paulson, as U.S. Treasury secretary, stated that at the time of the $700 billion bailout from the Federal Reserve, we were within 24 hours of the collapse of the global economy. If this information does not create a pit in your stomach, then perhaps this story will.

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While you were preparing to celebrate this past Christmas with your family, in mid-December 2014, hidden away on page 615 of a 1,603-page Continuing Resolution that was passed by Congress and signed by the president, there was a little-known provision that put the American taxpayer on the hook for derivative trading loses by major trading banks. What? Really? What does that mean? Well, our illustrious leaders thought it appropriate for the American taxpayer to guarantee any derivative trading loses the banks suffer, through subsidiaries that are insured by the Federal Deposit Insurance Corp. In other words, the banks can continue to write, sell, and trade these sophisticated financial instruments, and profit from them, and, if they become financially untenable (read: BAD), walk away from them and let the American taxpayer wear the liability. Oh yes, I forgot to tell you the best part: These same banks currently have over $303 trillion of these financial instruments (derivatives) on their books.

Going just a bit deeper, remember (what my fourth-grader knows) that a trillion dollars is a thousand-billion dollars. Further, in 2014, the value of ALL the economic activity in the world, commonly referred to as the global domestic product, or GDP, was $72.6 trillion. So, yes, the guys on Wall Street figured out how to stick the federal government (read: you, the American taxpayer) with a potential further liability of $303 trillion, representing over four times the world’s entire GDP. And you wonder why Jamie Dimon bought an island?

I remind you of the adage of MI-5, the British Internal Security service: Western civilization is only four meals away from anarchy.

People like Dimon, Paulson and thousands of other members of the banking and financial communities recognize that during the financial crisis of 2008, our leadership did not make the hard decisions necessary to fix the system, but merely applied a $700 billion Band-Aid. By kicking the proverbial can down the path, they simply delayed and laid the groundwork for an even larger and broader crisis in the future. Hence the reason that so many have established havens where they can ride out the coming financial tsunami that will envelop the world; while others have killed themselves, with some 60 odd bankers/financiers dying either by their own hand or under mysterious circumstances in the last couple years.

So this is the lens through which many in the financial and banking industry look. They know the system is untenable, yet they know they have been provided a once-in-a-generation opportunity to legally make obscene sums of money. (Note: Many won’t admit this fact; they just think they are (were) much smarter than everyone else.) Yet they know that it is mathematically and financially impossible for the United States, much less all the other Western democracies, to repay the mountains and mountains of debt they have borrowed to finance our lifestyles. They have resigned themselves that a collapse is inevitable. They don’t yet know the date, the time, or the ferocity of that collapse, but they intend to use their wealth to insulate themselves as best they can, e.g., by buying an island in the South Pacific, stocking it well and hiring a bunch of Navy SEALs for protection.

What I believe most people overlook is that politicians will always be politicians, and there is no way they will ever allow themselves to be blamed for the excesses of the last 30-odd years. Think about it. If a collapse were to take place, the politicians would need to hide from the citizens who lose everything. Literally. What would you do if, in a matter of days, you lost almost everything you had worked for during your entire life, including your pension, IRA, Social Security benefits, insurance benefits, etc.?

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Interestingly, the government has done much to protect itself. Or might I rephrase that statement to say that our government leaders have done a great deal to protect themselves and their families. Over the course of the last two decades alone, the federal government spent hundreds of billions of dollars designing, building and refining an elaborate Continuity of Government Plan (COG) that consists of over 100 classified facilities designed to protect the leadership of the nation during crisis – any crisis, of any magnitude and any duration.

Oh, you say, you have not received the briefing necessary, nor been issued the credentials by FEMA or DOD, to access one of these facilities? Well, don’t feel bad, you are in the same situation as most Americans … unprepared and suffering from Normalcy Bias. All the while the Russians have built the most formidable offensive (nuclear) rocket force in the history of mankind and have increased their investments in their impenetrable Yamantau mountain complex that is rumored to be over 400 square miles in size. (Yes, miles). The Chinese have made similar investments in offensive nuclear capability, including the construction of 3,000 miles of underground tunnels to protect their populace. In the meantime, and particularly under the current administration, the United States accelerates its voluntary disarmament.

So where am I going with this? Where we started, or should I say, where it ends. War. Unfortunately, this is the only way that no one group can be held accountable for decades of poor decision making and the financial calamity that is upon us. Whether they be bankers, politicians, or their advisers, they are all culpable. They are, however, way too connected and way too smart to take any blame for the coming financial collapse.

Other players are emerging on the world stage who have their own agenda and will likely facilitate, or at the very least, take advantage of, the financial crisis that looms over the West. Most Americans are ill-equipped to recognize such threats, much less foresee their logical outcome. In follow-on articles, I hope to explore specific geopolitical threats the United States faces and why our cultural blinders prevent us from acknowledging or preparing for them.

“The Dead Man’s Curve” is an expression used by helicopter pilots to describe a particular flight profile where the aircraft is flown so low and slow that, if the engine were to quit, the pilot would surely die, as there would be insufficient altitude to complete an auto rotation.

Due to the monetary house-of-cards outlined here, and the confluence of growing geopolitical threats, political impotence and pressing cultural change, the United States and most other Western democracies are operating well within “The Deadman’s Curve.”

You have been warned. Recalibrate your mindset. Now prepare.

What The New 5.5% Unemployment Rate Means For Full Time Job Seekers

Amazing Math from the Bureau of Labor Statistics

by Hambone’s Stuff

According to the most recent Bureau of Labor Statistics release, the UE (unemployment) rate fell to 5.5% as of February. The last time the UE rate was this low was May of 2008.

What I’m fascinated by is the fact that the US population grew from February 2008 to February 2015 by 16.8 million persons, or a 5.5% increase in total population, and on a net basis, not a single one of those 16.8 million persons got a FT (full time) job… while a net 2.7 million were lucky enough to get a (or multiple) PT (part time) job.

This means that 14.3 million persons, or 4.4% of the current US population, were added without a single job among them (chart below). This makes for fascinating math when a 4.4% increase of the total US population without jobs can nearly halve the UE rate down to 5.5%, equal to 2008’s UE rates?

Source; Bureau of Labor Statistics

The recent BLS data are considered “strong employment reports” and are taken as such booming harbingers of economic accomplishment that the Federal Reserve feels rates need to begin their long awaited hikes.

Just to avoid some confusion on this 16.8 million population growth…this does not mean there was a baby boom over this period…quite the opposite as a flat birth rate has been offset by an even faster declining death rate (the baby boom and older generations are living much longer than previous generations…thus the pig through the python population growth).

And just to make sure this isn’t cherry picking data…below is non-seasonally adjusted raw data from the Bureau of Labor Statistics back to ’08 showing rising PT jobs and declining FT jobs.

https://i1.wp.com/www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/03/bls%202.jpg
Source; Bureau of Labor Statistics

To add perspective we back it up to ’00…and note that over the entire period the US created 7.6 million net new FT jobs and (4 million net PT jobs). But not a single net FT job since prior to Feb ’08.

https://i0.wp.com/www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/03/bls%203.jpgSource; Bureau of Labor Statistics

I’m pretty confident to say that the stagnant household income data is simply noting the loss of higher quality FT jobs with benefits being replaced with lower quality, lower hour, little to no benefits PT jobs.

I’m sure economists will try to explain away the above raw data as the demographic shifts of retiring baby boomers…but that old chestnut isn’t exactly supported by the data (below). Population growth and jobs growth since ‘07 is clearly in the 55+ year old segment (+17 million population, +7 million employees) while the 25-54 year old working core is shrinking (-1 million population and even faster declines in employment of -5 million).

https://i0.wp.com/www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/03/bls%204.jpgSource; Bureau of Labor Statistics

The chart below highlights the substitution of debt creation for the breakdown of jobs creation (and note the unwillingness to tax ourselves now versus willingness to indebt our future generations).

https://i1.wp.com/www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/03/bls%205.jpgSource; BLS, Treasury, Federal Reserve

And below you can see the impact of the falling 25-54 year old segment from ’07 onward…resulting in declining mortgage debt, oil consumption, and general economic activity…and the substitution of debt in place of growth.

https://i0.wp.com/www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/03/bls%206.pngSource; Treasury, EIA, BLS, Federal Reserve

So you decide, strong jobs data, out and out propaganda, or something in between?

The $100 Trillion Reason the Fed is Terrified of Deflation

by Phoenix Capital Research

Falling Prices Ahead

Over the last few months, Janet Yellen, head of the Federal Reserve Bank repeatedly stated that lower oil prices were “positive” for the US economy. This is simply astounding because the Fed has repeatedly told us time and again that it was IN-flation NOT DE-flation that was great for the economy.

And yet, repeatedly, the head of the Fed admitted, in public, that deflation can in fact be positive.

How can deflation be both positive for the economy at the same time that the economy needs MORE inflation?

The answer is easy… Yellen doesn’t care about the economy. She cares about the US’s massive debt load AKA the BOND BUBBLE.

Yellen knows deflation is actually very good for consumers. Who doesn’t want cheaper housing or cheaper goods and services? In fact, deflation is actually the general order of things for the world: human innovation and creativity naturally works to increase productivity, which makes goods and services cheaper.

However, DEBT DEFLATION is a nightmare for the Fed because it would almost immediately bankrupt both the US and the Too Big To Fail Wall Street Banks. With the US sporting a Debt to GDP ratio of over 100%… and the Wall Street banks sitting on over $191 TRILLION worth of derivatives trades based on interest rates (bonds), the very last thing the Fed wants is even a WHIFF of debt deflation to hit the bond markets.

This is why the Fed is so obsessed with creating inflation: because it renders these gargantuan debt loads more serviceable. In simplest terms, the Fed must “inflate or die.” It will willingly sacrifice the economy, and Americans’ quality of life in order to stop the bond bubble from popping.

https://i1.wp.com/www.silverbearcafe.com/private/images/inflation2.jpg

This is also why the Fed happily talks about stocks all the time; it’s a great distraction from the real story: the fact that the bond bubble is the single largest bubble in history and that when it bursts entire countries will go bust.

This is why the Fed NEEDS interest rates to be as low as possible… any slight jump in rates means that the US will rapidly spiral towards bankruptcy. Indeed, every 1% increase in interest rates means between $150-$175 billion more in interest payments on US debt per year.

If you’ve ever wondered how the Fed can claim inflation is a good thing… now you know. Inflation is bad for all of us… but it allows the US Government to spend money it doesn’t have without going bankrupt… YET.

However, this won’t last. All bubbles end. And when the global bond bubble bursts (currently standing at $100 trillion and counting) the entire system will implode.

Know Your Enemy

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A Veteran Policeman’s Observations on The Free Shit Army

Source: SurvivalBlog

A lot has been written warning us of what will happen when the City Dwellers find their homes are untenable and vacate [en masse as The Golden Horde] for “the country”, but I haven’t seen anything on what the make-up of these hordes will be. The generic term “city dwellers” encompasses a lot of territory. Who will they be,what kind of shape will they be in, how will they be armed…all of these need to be examined.

One category needs to be examined, I feel, more closely than others. Since I have seen posts on your site lately dealing with the nitty-gritty, unpleasant aspects of prepping, I think this is a needed look into what’s out there. I’ve been a cop over 20 years, my last uniform assignment before moving to Investigator being a two year stretch of Anti-Crime patrols in the Section 8 Housing projects of my city. This put me into contact with some of the “Worst of the Worst” that will be fleeing the cities in time of trouble. Gang-bangers, common street thugs, dope dealers and users, all have a place in the hierarchy of the streets. And they will certainly be part of what preppers will be facing in times of troubles. Here’s some of what I have learned:

The bottom rung is occupied by the drug addicts and users. They exist, not live as we understand the word. They have no assets, no goals, no drive. But they do have an almost animal instinct to continue living. They will be armed with anything they can steal or lay hands on. Most will have a knife of razor box cutter, and some sort of cheap pistol, or they will not live to get out of the city. Since they have no resources or assets, they will be on the edge of starvation and desperation almost within a day of an event. With no fixed residence or place to defend, they will be hitting the road and coming towards us. They will become violent without any provocation and there will be no negotiating or bargaining with them. They don’t want to hear your story or excuses. All they want is what you have. And have no doubts: They will do anything to get what they want. And this does include catering to their most base instincts of rape, murder and mutilation. Letting someone like this even close to you and what you have is flirting with death.  

The next and most numerous will be the drones who make up the majority of the project dwellers. They live on Government Entitlement checks, have no assets and, on any given day will have no more than 3 or 4 days supply of food in their apartments,most of this being refrigerated. There will be a high percentage of females without male companions,will have a large number of children and will be absolutely vicious and violently inclined. Their day to day existence within the defined society they live in demands they be aggressive and violent.They fight more, and are arrested more,than the males they live around. The males will have more serious charges, but the females will have more of them. They too cannot be trusted. If they are drug users, they will, and have, traded their children for drugs, and, based on this proven behavior, will most certainly abandon them or trade them if the situation calls for it. Seeing that you are supplied, they will leave their children in your yard and walk away, counting on your liberal Good Samaritan instinct that has always bailed them out in the past to care for their offspring and justify that to themselves as “doing what they have to do”. Knowing that they will do something as low as this,be assured they will do much worse. They habitually carry razor knives and small pistols such as .25 ACPs and .380 ACPs. They are very dangerous and unstable folks to be around. These females may or may not be accompanied by men. The males may be linked biologically to one or more of the children but will abandon them as easily as the females. These males come from the lower order of males (see next classification) and will be armed as described next.  

The next order of classification will be unattached or drone males. These males tend to be convicted of felonies before they are 21 and who hang around the other, more productive males who deal drugs and have money. They will also be the so-called “foot soldiers” of the drug and street gangs. They exhibit sociopath behavior and have no allegiance to anyone except maybe a family member, usually referred to as a “cousin” or a gang. They live off the female drones by paying cash rent, gained by low level drug dealing and petty crimes, to a female who has Section 8 housing, for a room that they sleep in and usually have no other attachment such as taking meals there.They live off fast food,carry guns of dubious origin and consume massive amounts of drugs and alcohol, mostly beer and cheap brandy and marijuana. They will not have any assets to defend, may accompany the female who rents them a room and will hang around the cities and projects only as long as their cohorts do. They will leave in junky vehicles,steal what they need along the way and kill,rob,rape and pillage their way across the countryside. Their weapons tend to be of the pistol variety although they may have access to shortened, easily concealable shotguns or rifles. Their lifestyle doesn’t give them a secure place to hide or keep long guns,but they will steal and use them if given a chance. They will also have some type of blade weapon and be proficient with the use of them. They are very dangerous to anyone who comes into contact with them. The last and highest order will be the moneyed drug dealer.He will have a flashy vehicle such as an Escalade or Lexus variety. He will have quality firearms, preferring Glock handguns and SKS or AK type rifles and will have ammunition for them in quantity. He will be arrogant and a definite killer. He will have assets to defend and may not leave his comfort zone until forced by authorities or circumstances. He will have “foot soldiers” and a woman traveling with him, but probably not children. He will travel well and be charming when trying to gain confidence or talk himself out of a jam. He will also be vicious and hateful, full of spite at those he sees as having taken away his lifestyle and means of making a living. He most probably will not have a lot in the way of supplies such as food and medical equipment, tending to live in the moment and not for the future. He will be one of the opportunistic “I’ll just take what I need” types. He will be very cunning, having risen to the top of the street hierarchy,and all the more dangerous because of this.  

When dealing with all of the above types, caution is the word. Never let them get even a glimpse of what you have. Never let them get past your outer barrier, be that a fence, abatis or boundary line. Its best to keep verbal contact to the barest minimum. A terse: “We have nothing, go away or we will shoot” is a good example. I have seen them be charming and seemingly harmless while edging into a fence gate or otherwise getting closer until they are in range to strike. You must always remember the 20 foot rule (Never let anyone get closer than 20 feet from you at any time). It is important to remember also that the longer they have been roaming and stealing,the better armed they may be, having stolen others firearms and equipment. Seeing an obvious street thug carrying an expensive scoped rifle or an engraved shotgun should be a tip off as to what they are. These type people would never spend money on a gun that may be taken by the law at anytime in their day to day existence. They do worship Glocks and the glamor they see in them. A dealer told me once, when confessing to an assault “I just outs with my Glock .40 and let it holla” as if he had done something great.  

I know that most people who read your blogs are aware enough to keep strangers away from their refuge.But if someone has never lived around these types of people,they may not be aware of just how dangerous they really are. As I mentioned,they can be charming,cunning and deceitful. They have lived their entire lives off the goodwill of others and The Government and are past masters at pretending to be needy,harmless and “safe”. Guile is engrained in them.   I leave you with one short story. In the days after Hurricane Katrina, we were reinforced with officers from other agencies, many states away, who had volunteered to help. (I was not in New Orleans, but on the edge of the hurricane strike) I was partnered with a state SWAT officer from up North. This man was experienced and a “steady hand”. As we walked through some of the power blacked-out , sweltering-in-the-heat projects, he turned to me and said: “This is worse than Mogadishu”. He was scared and had good reason to be. And this was after only three days of no electricity and relief was just starting to arrive. Think about those same areas after a real failure of services and food deliveries.   Good Luck.

50 Years Later: Reagan’s ’A Time for Choosing’ Speech

Fifty years ago Monday, Ronald Reagan gave the speech that launched his career in politics and made him a star.  The speech, called “A Time for Choosing,” aired to a prime time NBC audience and made him a household name.

 

 

Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required


Carole Hinders at her modest, cash-only Mexican restaurant in Arnolds Park, Iowa. Last year tax agents seized her funds. Credit Angela Jimenez for The New York Times

by Shaila Dewain

ARNOLDS PARK, Iowa — For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

“How can this happen?” Ms. Hinders said in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?”

The federal government does.

Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up.


The I.R.S. seized almost $33,000 from Ms. Hinders. Credit Angela Jimenez for The New York Times

“They’re going after people who are really not criminals,” said David Smith, a former federal prosecutor who is now a forfeiture expert and lawyer in Virginia. “They’re middle-class citizens who have never had any trouble with the law.”

On Thursday, in response to questions from The New York Times, the I.R.S. announced that it would curtail the practice, focusing instead on cases where the money is believed to have been acquired illegally or seizure is deemed justified by “exceptional circumstances.”

Richard Weber, the chief of Criminal Investigation at the I.R.S., said in a written statement, “This policy update will ensure that C.I. continues to focus our limited investigative resources on identifying and investigating violations within our jurisdiction that closely align with C.I.’s mission and key priorities.” He added that making deposits under $10,000 to evade reporting requirements, called structuring, is still a crime whether the money is from legal or illegal sources. The new policy will not apply to past seizures.

The I.R.S. is one of several federal agencies that pursue such cases and then refer them to the Justice Department. The Justice Department does not track the total number of cases pursued, the amount of money seized or how many of the cases were related to other crimes, said Peter Carr, a spokesman.

But the Institute for Justice, a Washington-based public interest law firm that is seeking to reform civil forfeiture practices, analyzed structuring data from the I.R.S., which made 639 seizures in 2012, up from 114 in 2005. Only one in five was prosecuted as a criminal structuring case.

The practice has swept up dairy farmers in Maryland, an Army sergeant in Virginia saving for his children’s college education and Ms. Hinders, 67, who has borrowed money, strained her credit cards and taken out a second mortgage to keep her restaurant going.

Their money was seized under an increasingly controversial area of law known as civil asset forfeiture, which allows law enforcement agents to take property they suspect of being tied to crime even if no criminal charges are filed. Law enforcement agencies get to keep a share of whatever is forfeited.

Critics say this incentive has led to the creation of a law enforcement dragnet, with more than 100 multi-agency task forces combing through bank reports, looking for accounts to seize. Under the Bank Secrecy Act, banks and other financial institutions must report cash deposits greater than $10,000. But since many criminals are aware of that requirement, banks also are supposed to report any suspicious transactions, including deposit patterns below $10,000. Last year, banks filed more than 700,000 suspicious activity reports. Owners who are caught up in structuring cases often cannot afford to fight. The median amount seized by the I.R.S. was $34,000, according to the Institute for Justice analysis, while legal costs can easily mount to $20,000 or more.

There is nothing illegal about depositing less than $10,000cash unless it is done specifically to evade the reporting requirement. But often a mere bank statement is enough for investigators to obtain a seizure warrant. In one Long Island case, the police submitted almost a year’s worth of daily deposits by a business, ranging from $5,550 to $9,910. The officer wrote in his warrant affidavit that based on his training and experience, the pattern “is consistent with structuring.” The government seized $447,000 from the business, a cash-intensive candy and cigarette distributor that has been run by one family for 27 years.

There are often legitimate business reasons for keeping deposits below $10,000, said Larry Salzman, a lawyer with the Institute for Justice who is representing Ms. Hinders and the Long Island family pro bono. For example, he said, a grocery store owner in Fraser, Mich., had an insurance policy that covered only up to $10,000 cash. When he neared the limit, he would make a deposit.

Ms. Hinders said that she did not know about the reporting requirement and that for decades, she thought she had been doing everyone a favor.


Jeff Hirsch, an owner of Bi-County Distributors on Long Island. The government seized $447,000 from the business, a candy and cigarette distributor run by one family for 27 years. Credit Bryan Thomas for The New York Times

“My mom had told me if you keep your deposits under $10,000, the bank avoids paperwork,” she said. “I didn’t actually think it had anything to do with the I.R.S.”

In May 2012, the bank branch Ms. Hinders used was acquired by Northwest Banker. JoLynn Van Steenwyk, the fraud and security manager for Northwest, said she could not discuss individual clients, but explained that the bank did not have access to past account histories after it acquired Ms. Hinders’s branch.

Banks are not permitted to advise customers that their deposit habits may be illegal or educate them about structuring unless they ask, in which case they are given a federal pamphlet, Ms. Van Steenwyk said. “We’re not allowed to tell them anything,” she said.

Still lawyers say it is not unusual for depositors to be advised by financial professionals, or even bank tellers, to keep their deposits below the reporting threshold. In the Long Island case, the company, Bi-County Distributors, had three bank accounts closed because of the paperwork burden of its frequent cash deposits, said Jeff Hirsch, the eldest of three brothers who own the company. Their accountant then recommended staying below the limit, so for more than a decade the company had been using its excess cash to pay vendors.

More than two years ago, the government seized $447,000, and the brothers have been unable to retrieve it. Mr. Salzman, who has taken over legal representation of the brothers, has argued that prosecutors violated a strict timeline laid out in the Civil Asset Forfeiture Reform Act, passed in 2000 to curb abuses. The office of the federal attorney for the Eastern District of New York said the law’s timeline did not apply in this case. Still, prosecutors asked the Hirsch’s first lawyer, Joseph Potashnik, to waive the CARFA timeline. The waiver he signed expired almost two years ago.

The federal attorney’s office said that parties often voluntarily negotiated to avoid going to court, and that Mr. Potashnik had been engaged in talks until just a few months ago. But Mr. Potashnik said he had spent that time trying, to no avail, to show that the brothers were innocent. They even paid a forensic accounting firm $25,000 to check the books.

“I don’t think they’re really interested in anything,” Mr. Potashnik said of the prosecutors. “They just want the money.”

Bi-County has survived only because longtime vendors have extended credit — one is owed almost $300,000, Mr. Hirsch said. Twice, the government has made settlement offers that would require the brothers to give up an “excessive” portion of the money, according to a new court filing.

“We’re just hanging on as a family here,” Mr. Hirsch said. “We weren’t going to take a settlement, because I was not guilty.”

Army Sgt. Jeff Cortazzo of Arlington, Va., began saving for his daughters’ college costs during the financial crisis, when many banks were failing. He stored cash first in his basement and then in a safe-deposit box. All of the money came from paychecks, he said, but he worried that when he deposited it in a bank, he would be forced to pay taxes on the money again. So he asked the bank teller what to do.

“She said: ‘Oh, that’s easy. You just have to deposit less than $10,000.’”

The government seized $66,000; settling cost Sergeant Cortazzo $21,000. As a result, the eldest of his three daughters had to delay college by a year.

“Why didn’t the teller tell me that was illegal?” he said. “I would have just plopped the whole thing in the account and been done with it.”