Greek Debt Crisis Sparks Flight to Safety, Could Trigger Global Economic Meltdown By: Curtis Ophoven 4/27/2010 - 21 Comments Panic began to grip the market on Tuesday, with the Dow dropping over 200 points. Your Ad Here Earlier in the day, Standard and Poor's downgraded the sovereign debt ratings of Greece to junk status and lowered the investment grade status of Portugal, citing weak "macroeconomic structures" for nations. The Greek debt meltdown could lead investors to abandon risky investments in favor of safer ones, like Treasuries. For the last few months, economists have continued to say, “It’s contained, it’s an isolated nation that accounts for only 2 percent of Europe’s GDP".  Where have we heard that before? But the rising interest rates that result from this debt crisis will spread the impact to many other nations that will affect all of Europe.  Spiking interest rates could put many Banks in a lot to trouble.  And if the public starts to panic, even a little bit, they will begin pulling their money out of banks, which will quickly exacerbate the problem.  Perhaps the crisis will be supportive for the dollar and Treasury bonds, the ultimate havens, which will give Obama and Fed Chairman Ben Bernanke another break before the U.S. finds its own Bonds downgraded by S&P.  This window of opportunity could be the last chance that Obama has to cut our debt. Another interesting area for the foreseeable future is in the potential breakdown of the European Monetary Union, which could lead to global financial meltdown – even greater than what we had in 2008. The yield on Greek bonds surged to unprecedented levels since the introduction of the euro in 2002, with the 10-year note yielded 9.76% on Tuesday, up more than 2% from the previous day's close. Greece was in trouble at 6%, they have almost no chance at 10%.  It is now clear that they are likely to have to default on their debts and bond holders are going to take a large loss.  What is even more troubling is that many other nations are running just as high debt ratios and the entire world is swimming in debt.  If this is just the beginning of many national defaults, than there is no long-term safety in moving from Greece Bonds to Treasury Bonds. If this is the beginning of the second global market meltdown as investors are forced to unwind their leveraged positions, than this is a good time to shore the market as I have suggested a few months ago. Here is a video with the latest news about the Greece financial meltdown. Related Articles Major Indicators Point to Trouble Ahead as Government Stimulus Continues to Fail Government Stimulus Continues to Paralyze the Economy Stock Market Tremors Continue as Investors Struggle to Find a Safe Place Which Nation Will Default Next? Take Advantage of the Market Rally, Before the Economic Collapse Resumes   Subscribe via RSS Copyright © 2010 PennyJobs.com. All rights reserved. << FREE >> Weekly Newsletter... Signup today and start receiving our free weekly newsletter! Reader Comments Comment 1 Jen Says: on Tuesday, April 27, 2010 2:25:51 PM "Failing to curb federal budget deficits would do "great damage" to the U.S. economy in the long run, Federal Reserve Chairman Ben Bernanke warned Tuesday. Bernanke again urged the White House and Congress to come up with a credible plan to reduce the nation's red ink, which hit a record $1.4 trillion last year. The Fed chief made his most urgent call yet to get the nation's fiscal house in order. His plea came in prepared remarks to the first meeting of President Barack Obama's commission to tackle the soaring deficit." Fed Boss: Trim Deficit Or Economy Will Be Hurt http://newsmax.com/InsideCover/US-Bernanke-Deficits/2010/04/27/id/357024 Comment 2 WhistleBlower destroys BP's engineering credibility Says: on Thursday, May 06, 2010 6:59:06 PM All I can say is "Incompetence" http://www.truthout.org/whistlelower-bps-other-offshore-drilling-project-gulf-vulnerable-catastrophe59027 "Last May, Mike Sawyer, a Texas-based engineer who works for Apex Safety Consultants, voluntarily agreed to evaluate BP's Atlantis subsea document database and the whistleblower's allegations regarding BP's engineering document shortfall related to Atlantis. Sawyer concluded that of the 2,108 P&IDs BP maintained that dealt specifically with the subsea components of its Atlantis production project, 85 percent did not receive engineer approval. Even worse, 95 percent of Atlantis' subsea welding records did not receive final approval, calling into question the integrity of thousands of crucial welds on subsea components that, if they were to rupture, could result in an oil spill 30 times worse than the one that occurred after the explosion on Deepwater Horizon last week." Comment 3 Jobs bill for Accountants! Says: on Thursday, May 06, 2010 7:41:16 PM Health care law's massive, hidden tax change http://money.cnn.com/2010/05/05/smallbusiness/1099_health_care_tax_change/index.htm?source=cnn_bin&hpt=Sbin "The bill makes two key changes to how 1099s are used. First, it expands their scope by using them to track payments not only for services but also for tangible goods. Plus, it requires that 1099s be issued not just to individuals, but also to corporations. Taken together, the two seemingly small changes will require millions of additional forms to be sent out. "It's a pretty heavy administrative burden," particularly for small businesses without large in-house accounting staffs, says Bill Rys, tax counsel for the National Federation of Independent Businesses. The notion of mailing a tax form to Costco or Staples each year to document purchases may seem absurd to small business owners, but that's not the worst of it, tax experts say. Marianne Couch, a principal with the Cokala Tax Group in Michigan and former chair of a citizen advisory group to the IRS on small business and self-employed tax issues, thinks the bigger headache will be data collection: gathering names and taxpayer identification numbers for every payee and vendor that you do business with." Comment 4 Jim Says: on Tuesday, May 11, 2010 5:49:24 AM I’m giving away a copy of this article on at my blog. I’m going to link back to your review. Cool. Comment 5 steve Says: on Tuesday, May 11, 2010 8:02:34 PM The collapse of Greece and the other PIIGS does matter & will have a serious effect on life in the USA as our standard of living will tank!!! http://www.zerohedge.com/article/second-leg-great-depression-was-caused-european-defaults "Many Americans know that the Great Depression was started by the bursting of the giant Wall Street bubble of the 1920's (fueled by the use of bank deposits on speculative gambling, which is why Glass-Steagall was passed) , which in turn caused a run on American banks. But most Americans don't know that the second leg of the Depression was caused by European defaults." Comment 6 Borgert Says: on Tuesday, May 11, 2010 8:16:04 PM I lived in Europe for 20 years and visited Greece for business on many occasions. Aside from the island/beach businesses and employees/owners that cater for 9 months to the tourists from northern Europe, the rest of the counrty is the most lazy I have ever seen! No work ethic whatsoever! The socialist welfare mentality is so ingrained and inbred that I am surpised the country has lasted this long! http://www.washingtonpost.com/wp-dyn/content/article/2010/05/10/AR2010051004897.html "Greece, for example, is considered by the IMF to be one of the most inefficient economies in Europe because of the patchwork of rules governing its labor markets -- including the public sector's "employment for life" practices; the syndicates that keep control over pharmacies, law offices and other professions; and the array of early-retirement rules that drive up pension costs. The government is pushing through changes to the pension plan this week, and the unions are gearing up for a fight." Comment 7 sally Says: on Tuesday, May 11, 2010 8:27:13 PM The sooner the USA takes this same medicine the better. http://www.newsweek.com/id/237705 "Americans dislike the term "welfare state" and substitute the bland word "entitlements." Vocabulary doesn't alter the reality. Countries cannot overspend and overborrow forever. By delaying hard decisions about spending and taxes, governments maneuver themselves into a cul-de-sac. Budget deficits and debt are the real problems; they stem from all the welfare benefits (unemployment insurance, old-age assistance, health insurance) provided by modern governments. The welfare state's death spiral is this: Almost anything governments might do with their budgets threatens to make matters worse by slowing the economy or triggering a recession. By allowing deficits to balloon, they risk a financial crisis as investors one day—no one knows when—doubt governments' ability to service their debts and, as with Greece, refuse to lend except at exorbitant rates. Cutting welfare benefits or raising taxes all would, at least temporarily, weaken the economy. Perversely, that would make paying the remaining benefits harder. Greece illustrates the bind. To gain loans from other European countries and the International Monetary Fund, it embraced budget austerity. Average pension benefits will be cut 11 percent; wages for government workers will be cut 14 percent; the basic rate for the value-added tax will rise from 21 percent to 23 percent. These measures will plunge Greece into a deep recession. In 2009, unemployment was about 9 percent; some economists expect it to peak near 19 percent." Comment 8 Viper Says: on Tuesday, May 11, 2010 8:37:10 PM The six big banks control the USA market & brought it down last week to scare/threaten Congress into not passing the AUDIT THE FED bill. http://www.thedailybeast.com/blogs-and-stories/2010-05-11/look-whos-after-the-fed/?cid=hp:beastoriginalsR1 "Liberal bomb-thrower Alan Grayson and libertarian icon Ron Paul don’t agree on much. But they’ve joined forces and achieved a rare outbreak of bipartisanship on Capitol Hill: a bill to audit the secretive Fed just passed the Senate." Comment 9 Titan Says: on Tuesday, May 11, 2010 8:43:24 PM I think you have it figured out Viper! http://www.lifeaftertheoilcrash.net/Archives2010/GoldmanRiseFall.html "Last week, the U.S. stock market suffered the greatest sudden drop in its history, for reasons that nobody on Wall Street can seem to decipher. But of all the explanations being examined—a tech glitch, Greek debt worries and fraud have all been discussed--the most troubling is not being given sufficient attention. Coming on the very day that Congress considered two key financial reforms, the timing of the "flash crash" raises concerns that Wall Street is resorting to extreme tactics in its efforts to intimidate politicians who want to rein in the capital markets casino. Thursday's market plunge could have been an act of financial terrorism. Wall Street has both the motive and the means: Goldman Sachs, which is currently under investigation for a very different kind of fraud, has the trading power to make just such a market crash occur, and has much to lose from financial reforms moving through Congress. On Thursday afternoon, the Dow Jones Industrial Average plummeted 700 points in about 10 minutes. A few hours later, top Democratic negotiators reached a compromise with Sen. Bernie Sanders, I-Vermont, over a plan to audit the Federal Reserve's secret bailout operations. The Fed has pumped nearly $4.3 trillion in bailout funds into the banking system since the onset of the crisis, and we know almost nothing about that money. The "Audit The Fed" amendment would finally tell the public the full extent of Wall Street's bailout operations. Later Thursday night, Congress voted on—and rejected—an amendment that would have forced the break-up of the six largest U.S. financial behemoths into banks that can fail without wrecking the economy. Goldman Sachs would have been one of those six banks. Meanwhile, riots in Greece and inaction from the European Central Bank raised the possibility of major trouble for our financial titans across the pond. This amalgamation of events is eerily similar to what took place on Sept. 29, 2008, after the U.S. House of Representatives shot down the Troubled Asset Relief Program. Immediately after the vote, big banks made the market plunge a record 778 points, sparking widespread fear and panic that helped convince Congress to eventually pass the bailout. Can these conveniently timed market freak-outs be chalked up as a simple, if stunning, response to significant political events? Or is there something more sinister going on? Right now, there is enough financial firepower concentrated in the hands of a few individuals to move the stock market whichever way these people want it to go. These 10-minute 700 point drops could very well be a precision-guided High Frequency Trading (HFT) attack designed to show Congress who's boss. In today's stock market, 70 percent of all trades are executed by computer algorithms via High Frequency Trading. And Goldman Sachs completely dominates the HFT business, with a virtual monopoly over trading at the New York Stock Exchange, as Tyler Durden describes for Zero Hedge: Goldman's dominance of the NYSE's Program Trading platform, where in addition to recent entrant GETCO, it has been to date an explicit monopolist of the so-called Supplementary Liquidity Provider program, a role which affords the company greater liquidity rebates for, well providing liquidity, and generating who knows what other possible front market-looking, flow-prop integration benefits. Yesterday [5/6/10], Goldman's SLP function was non-existent. One wonders -- was the Goldman SLP team in fact liquidity taking, or to put it bluntly, among the main reasons for the market collapse. Importantly, Durden notes that in April, Goldman executed a huge proportion of trades for its own account—enough to significantly move the market, if it wanted to. What is notable here is that of the 1.4 billion in principal shares, or shares traded for the firm's own account, Goldman was the top trader by a margin of over 100% compared to the second biggest program trader. We have long claimed that Goldman is the de facto monopolist of the NYSE's program trading platform. As such, it is certainly the case that Goldman was instrumental in either a) precipitating yesterday's crash or b) not providing the critical liquidity which it is required to do, when the time came. There are no other options. For further investigation, I turned to Max Keiser, who has written and authored similar Program Trading and HFT computer algorithms. I asked him if he thought this was an attack, and here is his response: May 6th was an unequivocal act of domestic financial terrorism in America. A day that will live in infamy. To scare the lawmakers, themselves large owners of the very banks and stocks that they are supposed to be regulating, a financial weapon of mass destruction was put to their head and they acquiesced. As the inventor of the continuous double-action, market-making technology (VST tech. US pat. no. 5950176) that is referenced 132 times by program trading and HFT patents since 1996, I can tell you that Goldman, JP Morgan and the gang simply pulled the "buys" from their computer trading programs and manufactured a crash. And when the coast was clear, and it was clear the politicians were not going to vote for anything that would break up the "too big to fail" banks; all the "sells" were pulled from the computers and the market roared back. This is a Manchurian Candidate market where program trading bots start the ball rolling in whatever direction Wall St. wants the market to go -- and then hundreds of thousands of day traders watching Cramer on CNBC jump on the momentum bandwagon and commit the crime for the Wall St. financial terrorists, who then say, "It wasn't us, it was 'the market!'" On Friday, the day after the "flash crash" and the defeat of the "break up the banks" amendment, Goldman just happened to be meeting with the SEC to work out a settlement in the Abacus fraud case. These two major market crashes are not the only grounds for suspicion. On January 21 and 22 of 2010, President Barack Obama had a press conference and came out in favor of the Volcker Rule, which would have limited these HFT and "proprietary trading" schemes. At that time, the market dropped 430 points. Soon afterward, the Volcker Rule faded away and Obama has not seriously addressed this reform since then. We know banks are willing to put the entire global economy at risk in order to pursue their own reckless profits. We also know that bankers at the largest U.S. financial firms are fighting like hell to keep their too-big-to-fail gun pointed at the head of the U.S. economy, and to keep their riskiest and most abusive activities beyond the scope of regulators. Consider what they've already accomplished over the past two years: * 50 million Americans are now living in poverty, which is the highest poverty rate in the industrialized world; * 30 million Americans are in need of work; * Five million American families foreclosed on, with 15 million expected by 2014; * 50 percent of U.S. children will now use a food stamp during childhood; * Soaring budget deficits in states across the nation and a record national debt * Record-breaking profits and bonuses for themselves. Motive and means are not enough to prove a case. You have to show that someone actually executed the dirty deed. But right now there is an alarmingly narrow scope of the calls for investigation into the flash crash. The SEC is considering "market manipulation" investigations, while members of Congress want to investigate whether technological malfunctions are to blame. But shouldn't somebody at least be looking into whether the flash crash was not merely fraud perpetrated for profit, but outright political intimidation—an act of economic terrorism? We'll never know if we don't investigate." Comment 10 slippery media Says: on Thursday, May 13, 2010 6:44:32 PM http://market-ticker.denninger.net/archives/2292-Hmmmm....-A-Crack-In-The-Dam.html Another good video of which explains why the US Dow really crashed - an honest answer actually slipped out! "The world has no money," stay home... Comment 11 Mo Says: on Thursday, May 13, 2010 6:47:06 PM http://news.moneycentral.msn.com/category/topicarticle.aspx?feed=PR&Date=20100510&ID=11497788&topic=TOPIC_ECONOMIC_INDICATORS&isub=3 The World's Fiat Currency System Risks Collapse May 10, 2010 FORT LEE, N.J., May 10 /PRNewswire/ -- The National Inflation Association today released the following inflation update to its http://inflation.us members: "On February 12th, NIA released an article entitled, "Greece Distracting from Real Debt Crisis in U.S." in which we said, "We hope that Greece doesn't get bailed out, because a bailout would cause foreign investors to become more irresponsible than ever and create even greater moral hazards. Unfortunately, not only is it likely that Greece will get bailed out, it's possible our own Federal Reserve will get involved. The U.S. Federal Reserve has the ability to make loans to foreign central banks without disclosure to the U.S. public. European banks have already benefited $50 billion from the U.S.'s bailouts of AIG, so it's not out of the realm of possibility that the Federal Reserve will intervene due to eurozone countries being key U.S. trading partners." NIA was right; late Sunday evening the Federal Reserve announced the re-establishment of U.S. dollar liquidity swap facilities with foreign central banks, as a part of the European Union (EU)'s nearly $1 trillion bailout plan. The Federal Open Market Committee has authorized swap lines through January 2011 with the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Swiss National Bank, and the Bank of Japan. While the Federal Reserve may say these swap lines are necessary "to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and financial centers," NIA recognizes that this is nothing more than another transfer of wealth from the American middle class to bankers around the world through inflation. This program was originally enacted in 2008 when the Federal Reserve loaned $582.8 billion to foreign central banks without any disclosure of which central banks got the money. NIA believes it is unconstitutional for the Federal Reserve to make loans to foreign central banks. Most likely, the Federal Reserve was pressured by Wall Street to re-establish the swap facilities because Bank of America, Citigroup, JP Morgan, Goldman Sachs and Morgan Stanley have about $2.5 trillion in exposure to Europe, and Wall Street doesn't want to see their bets go bad. Not only will Americans now be exposed to the European debt crisis through the Federal Reserve's swap lines, but the U.S. will be giving money away to Europe through the IMF. The IMF is contributing up to 220 billion Euros as a part of the bailout, which equals $283.1 billion at the latest exchange rate. The U.S. represents approximately 20% of IMF funding, which means the bailout is costing U.S. taxpayers $56.7 billion, not including the potential losses from loans made by the Federal Reserve and the inflation it will create. The moral hazards of the EU bailout are immeasurable. It sets a dangerous precedent that the ECB won't allow any eurozone nations to fail, just like the Federal Reserve won't allow any major financial institutions on Wall Street to fail. Eventually, if you don't allow the free market to punish countries and financial institutions that recklessly speculated and made poor financial decisions, the financial crisis we are preventing will turn into a currency crisis that the western world will never be able to recover from. Although NIA still believes the U.S. dollar will win its race to the bottom with the Euro, we are now at risk of a total collapse of the world's fiat currency system. Imagine if baseball teams weren't allowed to fail. You probably remember playing t-ball as a kid and at the end of every game, both teams were declared the winner. Think about what would happen if Major League Baseball declared there will no longer be losers at professional baseball games, both teams will be declared the winners of every game. Would you still pay $300 for a ticket to see a Major League Baseball game? Of course not, the value of the tickets would collapse to nothing, similar to how fiat currencies will soon lose their purchasing power if we don't allow countries and financial institutions to fail. NIA is almost done producing its nearly hour-long documentary "Meltup." We spent quadruple the time and money producing Meltup than we did producing our previous critically acclaimed documentary "The Dollar Bubble," which has already surpassed 710,000 views since November 23rd. We believe Meltup will be the best economic documentary ever produced in world history and a must see for yourself, your friends, and your family. Last week, NIA conducted an hour-long interview with Gerald Celente, founder of the Trends Research Institute. We can honestly say that our interview with Mr. Celente was the single most shocking, insightful and informative interview we have ever witnessed or heard. NIA will be using footage from our interview with Mr. Celente in Meltup. We highly recommend that you visit Mr. Celente's Trends Research Institute web site at http://www.trendsresearch.com and subscribe to his Trends Journal. We just got done reading his latest Trends Journal and it is one of the most compelling pieces of journalism we have ever come across." Comment 12 Ron Paul Rules Says: on Thursday, May 13, 2010 7:11:28 PM http://www.infowars.com/ron-paul-euro-bailout-will-lead-to-currency-collapse/ "As Europe is bailed out to the tune of nearly $1 trillion dollars, Congressman Ron Paul warns that the constant monetization of debt, allied with taxpayer-funded bailouts, will inevitably lead to runaway inflation and the collapse of paper currencies. Under the terms of the Federal Reserve’s credit swap deal with the EU – in addition to an additional IMF bailout of which U.S. taxpayers will be picking up 20 per cent ($57 billion dollars) of the tab, Paul pointed out that not just taxpayers but “anybody that buys anything” will be funding the European bailout because of the attendant inflationary consequences. “The prices are going up already, producer prices are going up, the cost of living will go up so everyone in American will suffer and eventually the whole world will suffer because we cannot carry the whole world with our dollar,” Paul told Fox Business, adding that eventually people will lose confidence in the dollar." Comment 13 Ronlad Says: on Thursday, May 13, 2010 7:14:17 PM With the eliminaion of welfare will there be riots in California like in Greece? http://www.bloomberg.com/apps/news?pid=20601087&sid=aMHZOCQK9hC4 "Schwarzenegger’s newest plan will revise the proposals introduced in January to account for the tax-collection shortages. In January, the governor said California may have to eliminate entire welfare programs, including the main one that provides cash and job assistance to families below the poverty line, without an influx of cash from the federal government." Comment 14 yorkie Says: on Thursday, May 13, 2010 7:19:13 PM You beach bums in CA may not riot but us hounds in Yorkshire are not going to take this sitting laying down. http://www.dailymail.co.uk/news/election/article-1276386/Unions-warn-Greece-style-riots-civil-servant-redundancy-court-victory.html Unions warn of Greek-style riots in Britain against public sector cuts after court victory over capping of redundancies By Becky Barrow "Militant unions today sent a chilling warning of Greek-style strikes and protests after winning a major legal victory for civil servants made redundant. The warning raises fears of months of chaos triggered by a furious public sector who refuse to accept painful changes to tackle Britain's financial crisis. With one in five workers employed by the State, the scale of the crisis could be crippling with unions warning of a 'tidal wave' of strike action. The Public and Commercial Services Union signalled the nightmare facing the future Prime Minister who tries to wield the axe" Comment 15 Heinrick Says: on Thursday, May 13, 2010 7:24:17 PM Palying kick the can is one of my fondest childhood memories! http://www.spiegel.de/international/business/0,1518,693991,00.html SPIEGEL: Is it really the right thing to do for the IMF and the EU to help out Greece with €110 billion? Roubini: That is only kicking the can down the road for a year. I am afraid that Greece, more likely than not ,isn't just illiquid, but insolvent. And providing an insolvent country with money and forcing it to make painful cuts isn't going to do it. Even if taxes are raised and spending is cut, Greece won't necessarily become more competitive. On the contrary, output might fall, unemployment might rise and market share will be lost. We need a plan B. Comment 16 Chen Says: on Thursday, May 13, 2010 8:17:33 PM Debt to Break the Back of the Welfare State http://whiskeyandgunpowder.com/debt-to-break-the-back-of-the-welfare-state/ READY OR NOT! Comment 17 Slick Bloomberg Says: on Friday, May 14, 2010 8:24:51 PM 15 Scary Reasons Why It's NEW YORK That's The Next Greece http://www.businessinsider.com/new-york-is-the-next-greece-2010-5#since-april-1-the-state-has-operated-on-week-to-week-emergency-spending-bills-1 Comment 18 rooht oh Says: on Friday, May 14, 2010 8:26:47 PM http://www.theatlantic.com/business/archive/2010/05/fannie-and-freddie-make-the-us-look-a-lot-like-greece/56627/ Fannie and Freddie Make the U.S. Look a Lot Like Greece "As Americans shake their heads at the Greek debt crisis, they think, "Well, that could never happen here." Greece was hiding their debt so that investors didn't know the full extent of their fiscal problems. The U.S. wouldn't do something like that, would it? The government's current policy to leave a great deal of its liabilities off-balance sheet makes the U.S.'s current debt levels look a lot more favorable than they really are. Future entitlement costs, for example, are already accrued, but remain included as unfunded liabilities, so aren't taken into account when the government talks about its debt." Comment 19 Fredrich Says: on Friday, May 14, 2010 8:28:47 PM France to pull out of the Euro??? http://www.guardian.co.uk/business/2010/may/14/nicolas-sarkozy-threatened-euro-withdrawal The markets were initially unsettled by news that the French president had threatened to pull France out of the eurozone Comment 20 Cally Says: on Friday, May 14, 2010 8:29:58 PM http://www.latimes.com/news/health/healthcare/la-me-state-budget-20100513,0,266819.story Schwarzenegger's revised budget plan is expected to eliminate health programs Home healthcare for the elderly and disabled and the Healthy Families program for low-income children could be dismantled. Comment 21 Waldo Says: on Friday, May 14, 2010 8:39:52 PM http://blogs.telegraph.co.uk/finance/edmundconway/100005657/us-faces-same-problems-as-greece-says-bank-of-england/ Mervyn King, Governor of the Bank of England, fears that America shares many of the same fiscal problems currently haunting Europe. He also believes that European Union must become a federalised fiscal union (in other words with central power to tax and spend) if it is to survive. Write a Comment Please keep comments civil and on-topic. Abusive or inappropriate comments will be removed without warning.  Name (required)     Email Address (required)     Website URL  Comment

Related Articles Major Indicators Point to Trouble Ahead as Government Stimulus Continues to Fail Several major indicators show the economy getting much worse, just as predicted. Read More... Government Stimulus Continues to Paralyze the Economy The expanding power of the government undermines the economy and society to support itself. Read More... Stock Market Tremors Continue as Investors Struggle to Find a Safe Place Here we go again.  2010 could see another global meltdown like we saw in 2008.  Read More... Which Nation Will Default Next? Contrary to the media cheerleaders that the recession is over, a deeper look at the world economic picture reveals that much darker clouds are on the horizon. Read More... Take Advantage of the Market Rally, Before the Economic Collapse Resumes With GM and Chrysler now facing bankruptcy, the bankruptcy of the auto industry supply chain will surely follow adding 8-10% to the unemployment rate. Read More... The Revolution: A Manifesto Dr. Ron Paul's THE REVOLUTION: A MANIFESTO is a concise and convincing argument for a return to America's libertarian principles. But the best and most important chapter, without a doubt, is Chapter 6, "Money: The Forbidden Issue in American Politics." Here Dr. Paul details the operations of the Federal Reserve System in stunning clarity. You see, the effects of inflation are not uniform -- the Fed System works as a wealth redistribution system from poor and middle-class to the rich and politically connected. This is the true cause of the increase in inequality and the diminishing middle class. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse In discussions of today's economic meltdown and what to do about it, the Federal Reserve is a stealth helicopter: it never shows up on the radar. With the exception of a few esoteric specialists and those Ron Paul Revolutionaries who burst into chants of "Abolish the Fed!" Historian Thomas Woods notes in this important book, the Federal Reserve bears a large part of the blame for the mess we're in. In the first part of "Meltdown," Woods shows how both in theory and in practice, Fed policy fueled an artificial boom and is now leading us to a much larger meltdown. How Capitalism Saved America This book is an excellent presentation on the problems of government 'regulations' into free market mechanisms. This book illustrates simply and clearly how many chaotic economic problems were caused by interference from government regulations and how capitalism has overcome them. Master this book and you have overcome most of the bad economic thinking of our time. Government is the cause of capitalism failure. The Case Against the Fed This book, written by Murray Rothbard, an economist and historian of fairly well known repute, is a scathing attack on not only the Federal Reserve, but the interests that created this institution. Rothbard explains how the Federal Reserve is the true source in the destruction of wealth, which has led to the destruction of the middle class and continues to sift money into the hands of the wealthiest.