The Golden Truth: Here's Some "Change" From Obama

Tuesday, December 15, 2009

Here's Some "Change" From Obama

$38 billion in spare change given to Citigroup, in a unique, unprecedented IRS ruling which, in effect, transfers $38 billion of potential tax revenue from the Taxpayers to Citigroup. I borrowed this from Jesse's Cafe Americain because Jesse was too kind in his related commentary:

The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis.

The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.

Here's the link to the entire article from the WashPo: Obama's "change" in action

Just when you thought Obama's charity to the banking industry couldn't get any worse, he goes and hands Citigroup $38 billion. Oh don't worry, Barack, I'm sure every single public school district in the country, each faced with many millions in tax cuts, won't miss that tax revenue. We'll just cut more teachers and close more schools so you can make sure the corrupt Vic Pandit and his band of merry bankers at Citigroup can pay themselves huge bonuses.

Barack, I hope you really enjoy your brief four years in the Oval Office. And just like Clinton, I hope you turn your tenure as President into massive wealth. But if elections were held today, judging from the polls, I think you would lose even to Sarah Palin. I can't think of any fate more pathetic than that.

11 comments:

JesseTuesday, 15 December, 2009
Too kind. ;p
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Dave in DenverTuesday, 15 December, 2009
LOL. This is beyond aggravating. Might be time to look for place to move out of the country. Might look into Uruguay.
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GaryWednesday, 16 December, 2009
I'm renting an apt now, so that when I retire in 3-5 yrs I can move to the lowest tax area.

Politicians have gone nuts. In the future, when budgetary pressures get even worse than today, they will be taxing anything that moves.
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Dave in DenverWednesday, 16 December, 2009
Gary, you might want to think about liquidating your IRA, paying the 10% penalty and doing something else with that money. Even just keep in a taxable account or buy bullion with it and get that money completely "off the radar screen."

A colleague of mine and I, back in 2002, predicted that the bankers/Govt would hold up the system until the elitists were able to sweep every last middle class wealth crumb off the table and into their pockets. Retirement assets, for those who have not already cashed them out to pay bills, are the last form of middle class wealth. Expect that the current Government will look to take advantage of that. Bush already ready tried once with his proposal to consolidate all tax-deferred accounts into one general Govt-administered account to be managed by Wall Street. Remember that?

This move by Obama's IRS has, in effect, transferred $38 billion of potential wealth from the taxpayers to Citibank. Obama does not have our interests at heart.
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GaryWednesday, 16 December, 2009
Dave, Saw that possibility 15 years ago. Bit the bullet and cashed out my 401K, paid the tax.

Now I'm out of the system. Unbelievable relief knowing there's nothing hanging over my head (ie possible Govmnt takeover of my money).
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GaryWednesday, 16 December, 2009
Dave, Recently I've even gotten paranoid about putting money in CD's because I've read that if crunch time ever comes Geithner will force time deposits of banks to Treasuries. With what I see now I'm thinking demand deposit account only. Will probably cost me some money but there's too much uncertainty now.
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Dave in DenverWednesday, 16 December, 2009
Gary, souds like you're way ahead of the curve!

CD's are very risky, even if an amount below FDIC coverage. Granted, if the issuing bank collapses, the FDIC, for now, will keep using Fed-printed money to pay out depositors, but you're getting paid in increasingly devalued dollars. At some point, that vicious cycle has to stop and CD investors will take gas.

When you think about it, FDIC insurance in CD's only serves to magnify and perpetuate moral hazard, as the issuing bank is taking those funds, knowing there's no downside, and recklessly lending that money to commerical real estate developments and risky residential mortgages. At some point they'll be forced to end this insanity and CD investors might be vicitms once again.
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GaryWednesday, 16 December, 2009
Dave, I've been checking bank balance sheets of prospective banks for when my CD's come due in feb/mar. Will stay in a savings acct. None are in great shape. Thinking maybe Fox Chase Bank outside Philly. Already have some gold/silver bullion. Have been considering small exposure to mining cos.
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Dave in DenverWednesday, 16 December, 2009
Gary, to tell you the truth, I'd be inclined to keep as much as possible outside the banking system. Even when you look at what they publicly disclose, they have off-balance-sheet garbage they hide. Almost every regional bank/credit union has exposure to a lot of commercial loans and home equity paper. Fox Chase may be okay.

You might think about opening a brokerage account with a non-bank broker like Schwab or Fidelity and keeping cash balances in really short Treasuries. You can link your brokerage account to a bank checking/savings account with what's known as a "money line" and you can move money electronically between your broker and the bank, usually overnight, and with no transfer charge. The difference between that and a Fed wire is that a Fed wire is guaranteed w/in 24 business hours and the moneyline transfer is not. I've never had issues with both Fidelity and Schwab.

Mining stocks are the best way to play the "hyperinflate the money supply and the stock market goes bonkers" theme.
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U6Wednesday, 16 December, 2009
Schwab is both my broker and my bank. When my local bank started paying zero interest on checking, I moved to Schwab, and have no complaints.

Uruguay: I'm thinking about it too. I presume you read Sovereign Man: http://www.sovereignman.com/
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Dave in DenverWednesday, 16 December, 2009
Thanks for the link - I had not seen that blog before. I've been researching places to move for quite a while. Right now I like the looks of Panama, Uruguay, Barbados. Been to Barbados but need to visit the other two.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.