As the US Dissolves: Mad Max Monday

Lots of gloom to be found as witnessed in the two stories below, counter-balanced by the shameless cheerleading on the financial news networks that are celebrating the rally in US equities and the economic recovery.

Both points of view are a bit extreme and probably unrealistic for my palate, although I am in a sufficiently grumpy mood having spent the weekend cleaning, waterproofing, painting, and reshelving our storeroom, workroom, and pantry. Herself and the children return this evening from holiday, and so the repairs must be completed before the horde is once again underfoot. Oh head is spinning from fumes, and oh my aching back. lol.

I have to wonder if the mass of the people will ever do something and react to the abuses of government in cooperation with the corporations, or if they will seek to lose themselves in the day to day of their lives, allowing a minority to set their course. The next twelve months should prove interesting, especially around the mid-term US elections. Although eyes are on the US, the UK and Europe will likely lead the way.

When Globalism Runs Its Course...
The Year America Dissolved
By Paul Craig Roberts

It was 2017. Clans were governing America.

The first clans organized around local police forces. The conservatives’ war on crime during the late 20th century and the Bush/Obama war on terror during the first decade of the 21st century had resulted in the police becoming militarized and unaccountable.

As society broke down, the police became warlords. The state police broke apart, and the officers were subsumed into the local forces of their communities. The newly formed tribes expanded to encompass the relatives and friends of the police.

The dollar had collapsed as world reserve currency in 2012 when the worsening economic depression made it clear to Washington’s creditors that the federal budget deficit was too large to be financed except by the printing of money....

Read the rest here

Emergency Care Drugs In Short Supply
Warren E. Pollock

CFTC's Bart Chilton On Financial Reform, Position Limits, and Curbing 'Disruptive Practices'

Actions will speak much louder than words, especially given the many disappointments in the past from the SEC and CFTC. Position limits are a good idea. Let's see how long banks like JPM and HSBC have to implement them if they are covered at all. And as for 'disruptive practices' in the market, I will be impressed if Goldman Sachs and Citigroup are ever called out for their abusive market practices in the US as they have been in Europe and Asia.

I like Bart Chilton, quite a bit actually. If he delivers on these promises, I would work for him to be elected or appointed to higher office. But after the great disappointment of Obama, it will take actions first to gain people's enthusiasm for a reformer.

We are all for you Bart, but now you must deliver.

Here is an introduction to this presentation by Bart Chilton from another good guy, GATA's Chris Powell:

"The member of the U.S. Commodity Futures Trading Commission who has been advocating imposing position limits on traders in the precious metals markets, Bart Chilton, has made a video explaining why he thinks the financial regulation law just enacted by Congress and President Obama promises great progress, particularly in making the commodity markets freer and more transparent. The law, Chilton explains, requires the CFTC to establish position limits and authorizes the commission to prosecute "disruptive trading practices." Chilton says he is especially pleased with that, because the commission's market manipulation standards have failed almost completely for many years.

Chilton has been amazingly conscientious on the precious metals manipulation issue and has been amazingly responsive to gold and silver investors who have complained to the CFTC about market manipulation. He'll need their support as the CFTC writes the position limits regulations required by the new law. The big commercial shorts are sure to be heard as the commission continues to take public comment, so gold and silver investors can't let up yet."

The Health Care Bill Change in 1099 Reporting Requirements Does NOT Target Gold and Silver

I had originally included this in my weekly gold and silver market wrap up. But I have received so many emails from alarmed readers about the topic that I thought it would be useful to give it a separate blog entry that is linkable, so it would be easier to answer those who express concern.

Those who originally raised this issue of a change in the law stated it rightly, but since then it has been fanned into a falsehood and a bogeyman, far beyond the proportions of its original scope and intent.

It is true that transactions in gold and silver and more particularly rare coins were exempt from 1099 reporting under the previous 1099 MISC rules. But they were always reportable and taxable on one's tax returns. Goods were exempts, but services were not exempt from 1099 MISC reporting and the thresh hold for them was $600. This law primarily applied to the self-employed and small businesses.

The change in the law removed the exemption for all goods, and not just for gold and silver and rare coins and collectibles, which are a small if not minuscule percentage of all commercial business transactions in goods and services.

It is well and good to remain vigilant to encroachments of the government on the rights of individuals and of private property. But one must also be on guard against becoming an unthinking member of a mob, reacting to those who would play on their emotions for their own ends.

Insidious men will use any issue, any crisis, any emotion, and turn it to their devious intentions. The central bankers and politicians began selling and leasing gold and property that did not belong to them but to their people, on the principle that controlling the price and the markets was a necessary instrument, a tenet, in their financial engineering, according to the counsel of their well-credentialed advisors. This was turned to the profit of the few, the financiers, and took on a life of its own, and became a looting of public wealth, and an abuse of property. Before it ends these abuses may become more egregious and widespread. It is no vain effort then to be on guard against them.

And as for us in times of official deceit and the abuses of the few, we must therefore hold even more firmly to the truth, and make every effort to find it, or risk being swept away in the swell of retribution and the restoration of justice that may turn to madness unbidden.

The Change in 1099 Reporting Requirements in Section 9066 of the Health Care Bill Does NOT Target Gold and Silver

On another matter, there is some misinformation creating concern, bordering almost on mild hysteria at times, about a change that was made in the Health care Bill Section 9066 regarding the reporting of sales of over $600.

There are those who say that the purpose of this law is to track the sale of gold and silver.

A decent discussion of the change is the law is available here and here.

The change in the law does NOT 'target the sale of gold and silver.'

I don't like the provision and think it was written badly, generating senseless paperwork for small businesses in a desire to make more business to business transactions subject to 1099 MISC for purposes of income reporting. I suspect and would hope that the interpretation of this law and its requirements will clarify the issues. If this change in the requirements includes what are essentially retail transactions then it is very badly written indeed.

But the point I wish to make here, and I want to be very clear on this, is that this change in the law is NOT specifically targeting gold and silver sales. It is targeting unreported income from transactions of any sort, the vast majority of which are no more sinister than common supplies, computers, and routine business goods. And coin sales in particular may be affected, along with quite a few other things.

Some might correctly say that this provision targets 'cash businesses' where income is easily hidden and unreported. So if one has been cheating on their taxes and hiding income, this change in the rules will most likely be an inconvenience. There are other more substantial issues with the burden placed on small businesses and the need to generate 1099's.

But this does not specifically target the sale of gold and silver, the income from which has always been taxable, and reportable.

The reporting requirement seems to have an unusually low thresh hold. This is has it has always been, it is primarily the exclusion for goods that has been eliminated.

I do not imagine that the IRS wishes to be inundated with useless mountains of 1099's. I do not believe they even have the capability of processing them effectively.

And I have to wonder why the Democrats slipped this change into the health care bill essentially chasing small loopholes for what is really small change, 20 billions over ten years, when there are so many large loopholes yawning wide open for the use of their corporate benefactors and the super wealthy.

Yes, that was a rhetorical question. The wealthy, who sit contentedly, fat on the spoils of their deceptions, and their bought politicians and judges, still greedy for more to be squeezed from the many, should well bear in mind the consquences of their perversion of the law in these wise words from the American revolution:

"When the rich plunder the poor of his rights, it becomes an example for the poor to plunder the rich of his property, for the rights of the one are as much property to him as wealth is property to the other, and the little all is as dear as the much.

It is only by setting out on just principles that men are trained to be just to each other; and it will always be found, that when the rich protect the rights of the poor, the poor will protect the property of the rich. But the guarantee, to be effectual, must be parliamentarily reciprocal."

Thomas Paine