It seems that the US government and the Federal Reserve are looting taxpayers’ until there is nothing left.
If you take into account what Peter Schiff and Lindsey Williams are telling us….
– Peter Schiff: US Dollar is on the verge of collapse; This is hyperinflation; This is Zimbabwe (12/17/2008):
“I am a 100% convinced that anybody who has their wealth in US Dollars will be just as broke as the people who had their money with Madoff.”
– Peter Schiff on CNBC: The government is pouring gasoline on a fire that it set (12/29/08):
“We are in the process of creating another Great Depression.”
…with the odd timing that there is an ‘Army combat unit to deploy within the U.S.’ plus ‘Pentagon: 20,000 Troops to Bolster Domestic Security’ …
((Of course those troops need training: Northcom Combat Team Conducts “Humanitarian Support” Exercise in Maryland: “The Armed Forces Press Service has initiated a propaganda campaign designed to convince the American people that deploying the 3rd Infantry Division in the United States in violation of the Posse Comitatus Act is a good thing.”))
…then it does not sound like a crazy conspiracy theory anymore that the government will deploy more and more soldiers within the U.S. in preparation for civil unrest in case US citizens realize that they are betrayed by the government and the Fed, who ‘are’ destroying the future of the US by creating massive debt and hyperinflation, which will ultimately lead to the total collapse of the US.
Soon the government and the Fed will have turned the U.S. into a ‘Third World’ country.
Treasury Opens Door to Aid for Broad Array of Firms, Industries
Jan. 1 (Bloomberg) — The U.S. Treasury threw the door open to taxpayer financing for a widening array of companies and industries by drafting broad guidelines on aid to the auto industry.
The Treasury’s guidelines, published yesterday, would let officials provide funds to any company they deem important to making or financing cars. That leaves room for the government to provide money from the Troubled Asset Relief Program beyond loans already committed to General Motors Corp., GMAC LLC and Chrysler LLC.
“There are going to be other industries that are going to have just as good a case,” as the auto companies, former St. Louis Federal Reserve Bank President William Poole said in an interview on Bloomberg Television. “We don’t know what those other industries are going to be. Where does this process stop?”
Shares of auto suppliers including American Axle & Manufacturing Holdings Inc. and Lear Corp. jumped yesterday after Treasury announced the guidelines. The Motor & Equipment Manufacturers Association has been lobbying for the use of federal funds as a backstop in case parts makers can’t collect money the auto manufacturers owe them.
Analysts have speculated that companies such as GM’s bankrupt former parts unit Delphi Corp., might be eligible for assistance. The Treasury guidelines may encourage more guessing on what companies and industries are next, said Vincent Reinhart, resident scholar at the American Enterprise Institute in Washington.
Treasury officials “much prefer discretion, and so they would view the statement as being constructively ambiguous,” Reinhart said. “It’s appropriate that they end the year the way they spent most of it — that is, adding uncertainty into an environment in which there’s a lot of uncertainty.”
The guidelines don’t bind the government, so the lack of specifics gives President-elect Barack Obama plenty of leeway to decide who succeeds and fails when he takes office in three weeks. The bailout was originally designed to buy assets from banks and has instead become a fund for Treasury to prop up lenders, insurers, carmakers, auto-finance companies and, now, any firm that may be important to those industries.
“The further you go, the slipperier the slope becomes, the more you open the door to anyone who says, ‘Look, my firm is in trouble, I need help too,'” said Lyle Gramley, a former Fed governor and now a Washington-based senior economic adviser for Stanford Group Co. “We don’t want to go any further down that road than we absolutely have to.”
The Treasury already has provided $6 billion in aid to GMAC, the financing arm of GM, and up to $17.4 billion in financing for GM and Chrysler, using funds from the $700 billion bank-rescue package.
“Treasury will determine the form, terms and conditions of any investment made pursuant to this program on a case-by-case basis,” the Treasury said in the new guidelines. “Treasury may consider, among other things, the importance of the institution to production by, or financing of, the American automotive industry.”
The government will weigh “whether a major disruption of the institution’s operations would likely have a materially adverse effect on employment and thereby produce negative spillover effects on economic performance” or on credit markets, the Treasury said.
Supplier Shares Leap
Shares of American Axle, GM’s largest supplier of axles, and Lear, the world’s second-largest maker of auto seats, both leapt in the minutes after the Treasury’s announcement yesterday. Detroit-based American Axle rose 56 cents, or 24 percent, to $2.89 in New York Stock Exchange composite trading. Southfield, Michigan-based Lear, which gets almost a third of its revenue from GM, rose 26 cents, or 23 percent, to $1.41.
This week’s funding agreement between the Treasury and GMAC opened a new rescue program for the auto industry as part of the TARP. Treasury said then that the GMAC agreement was “part of a broader program to assist the domestic automotive industry in becoming financially viable.” A Treasury official said there’s no cap or deadline for aid to the auto industry under the TARP.
“We would not be surprised to see additional government funds to GM to support a Delphi solution,” JPMorgan Chase & Co. analyst Himanshu Patel said in a report Dec. 30.
With this week’s funding for GMAC, the Treasury has now earmarked $358.4 billion out of the $700 billion bailout. Its actual spending has been less — for example, the department so far has handed out only $172.5 billion out of the $250 billion designated for bank capital injections.
When Congress approved the TARP in October, it gave the Bush administration the first of two $350 billion tranches. After injecting capital into GMAC on Dec. 29, the Treasury reiterated its call for legislators to release the rest of the money.
The auto-rescue program could range anywhere from full bailouts of specific companies to merely keeping others going while in bankruptcy to ensure production isn’t interrupted, said Kirk Ludtke, an analyst at CRT Capital Group Inc. in Stamford, Connecticut.
“The Detroit three are still at risk,” Ludtke said, referring to GM, Chrysler and Ford Motor Co. “The government is acknowledging it needs to assure at least an orderly restructuring of the key players in the auto industry.”
To contact the reporters on this story: Rebecca Christie in Washington at Rchristie4@bloomberg.net;
Last Updated: January 1, 2009 00:00 EST
By Rebecca Christie