UPDATE ~ Financial Armageddon - New World Order

[Charles Kolb]

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UPDATE ~ Financial Armageddon - New World Order


Reestablishing the Economy of the United States of America in the Collapse of the Worldwide Financial System - The Collapse of the Federal Reserve Note

The federal reserve note (the FRN) is not the currency of the United States of America.

Article I, section 10 declares that no State shall make any thing but gold and silver coin a tender in payment of debts.

Given the federalist system in place prior to the Civil War and the enactment of the 14th Amendment, this authority applies individually and collectively. In other words, if no single State could make any thing but gold and silver coin a tender in payment of debts, the 50 States acting collectively are without the authority to do so as well, unless such authority was granted constitutionally – which it was not.

The creation of the Federal Reserve System comports with the statutory authority of the federal government. The creation of Federal Reserve Notes, on the other hand, requires an amendment to the constitution of the Unites States of America. No such amendment has been made.

Therefore,

Federal Reserve Notes are not the legal currency of the United States.

The notes themselves claim legitimacy, containing the following indicia of legality:

1. A claim “THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE” is made on the face of the note. This claim is false, as the debt instrument is without constitutional empowerment.
2. The note is signed by the Treasurer of the United States. This endorsement makes the Treasurer personally liable for the instrument, since the legality of the note has never been established constitutionally.
3. The note is signed by the Secretary of the Treasury. This endorsement makes the Secretary of the Treasury personally liable for the instrument, since the legality of the note has never been established constitutionally.
4. To give further credence to the claim that the FRN is currency of the United States, the instrument is labeled The United States of America on both the front and the back, contains a picture of a noteworthy fellow in American history, and sets forth the two-fold Great Seal of the United States of America.

The eye over the pyramid and the motto Annuit Coeptis allude to the many signal interpositions of providence in favor of the American cause (He (God) has favored our undertakings). The phrase Novus Ordo Seclorum is Latin for “New Order of the Ages.”

The fact that Congress has been silent as to the illegality of this currency is an indictment of the misfeasance and malfeasance of Congress, and adds nothing to the reality that FRNs are illegal currency, without proper constitutional authorization.

Instead, FRNs are privately created debt instruments, fraudulently claiming to be legal tender of the United States, endorsed by the Treasurer of the United States and the Secretary of the Treasury, whose creation, volume and distribution is controlled by privately held banks pursuant to an immoral banking system whose system of accounts is fraudulent to its customers and whose policies have created a worldwide financial system that is almost entirely fraudulent.

This system is now claimed to have created nearly $200 trillion in derivative debt instruments worldwide, cash accounts which exceed $60 trillion, with cash on hand in excess of $12 trillion worldwide, while the American GDP (readjusted for recent devaluation against other currencies) sits at a purported $13.86 trillion. The federal government, using Generally Accepted Accounting Principles (GAAP), currently spends in excess of $4 trillion per year (30% of the GDP) above gross revenues.

As a consequence, the FRN is adjusting against world currencies in a massive devaluation that does not appear to have a floor. Currently, the US government has initiated a financial bailout of its banking and investment systems by flooding the market with additional amounts of FRN currency, authorizing a blind $180 billion distribution to taxpayers in the form of rebates to offset 4th quarter devaluation in the housing industry, and dropping $260 billion in the bailout of Bear, Stearns and Co. Nonetheless, Goldman Sachs has indicated that additional first quarter losses will come in at another $500 billion. For those of you with an adding machine, that amounts to almost a trillion dollars in new cash since January 1.

If pressure continues in the housing industry – an industry currently at a standstill with an accumulated inventory the highest since Jimmy Carter destroyed the American economy, these losses will exceed all expectations. Rather than understanding the mortgage crisis as a crisis in sub-prime versus prime, it is better understood as private and public mortgages. There are those mortgages which originated in the private sector – non Fannie Mae, non Freddie Mac, and those mortgages which were Fannie Mae and Freddie Mac (quasi-government mortgages). The private mortgages have an exposure of about $2.5 trillion in pre-collapse value, while the public mortgages have an exposure of about $4 trillion in pre-collapse value. The adjustment in real value – an adjustment necessitated to correct by the fraudulent practices of the banking and investment community to drive up the values of their real estate portfolios – has currently caused mortgage lenders to declare nearly $1 trillion in losses, much of which were developed in the private mortgage portfolio. There remains a $1.5 trillion dollar exposure in the so-called sub-prime.

However, there are two triggers which could set off a complete firestorm in both private and public mortgage valuations. These triggers are best understood in an “A” axis and “B” axis form.

The “A” axis is the fair market value of residential property. Such a value can be determined in several ways, the most common of which is the price an arm’s length buyer would pay for the property. This price now must reflect the fact that the current inventory of homes for sale is sufficient to satisfy the current demand for the next three years, without a single new home being built. Reviewing our basics in microeconomics, we know that a massive supply and a shrinking demand establishes a declining price. How low such prices will go is unknown, but you can look for the following:

* A complete collapse in rental prices in some markets;
* An increase in fires as the unscrupulous attempt insurance fraud as a bailout;
* Foreclosed properties being available at fractional prices compared to appraised values.

I would use the following formula: Housing prices will readjust some 5-10% beyond the percentage of mortgages in distress. For instance, of the $2.5 trillion in private mortgages, we have already seen distress in $1 trillion worth of these mortgages, or 40%. Consequently, you can look to a market correction in price of 40-50%. If these private mortgages completely fail (although complete failure is unlikely, an additional $1 trillion is possible), the adjustment will be as high as 90% in some markets in pre-existing homes. For instance, it is likely that condos that sold in early 2007 for $600,000 will be purchased for as little as $75,000.

An additional factor is the complete failure of so-called “jumbo loans” in excess of $450,000. The complete evaporation of these loans is more or less a veto by the banks of anyone claiming their home is worth more than $450,000. It is therefore possible that homes which were appraised as high as $1.5 million will eventually be sold for no more than $450,000. Such adjustments represent a substantial correction, which leads us to our “B” axis – market perception in declining values.

At some point, even public mortgages with strong buyers will suffer great distress, depending on the confidence of the buyer that the balance of his mortgage is of equal or greater value than the principal amount of his mortgage. At some point of decline, a buyer may make the decision that the debt is no longer worth holding, if he comes to believe that the market will never support a purchase price close to his mortgage obligation. Where is that number?

This axis then is two-fold: the dotted line on this axis plots the actual value of the home as appraised. If a buyer holds a $500,000 note on a home that when purchased had a value of $650,000, but the home is now selling for $400,000, he may question whether the market will regain its footing in the next couple of years long enough for him to regain his negative equity. However, if there is substantial downward pressure, where homes of a similar quality are being sold at a 40%, 50% or greater devaluation to him such that it the buyer could believe that he will never regain negative equity, the tendency will be to toss the keys back to the bank. There is additional motive to do so when everyone else is doing the same, in order to secure protection in numbers behind a non-judicial foreclosure tsunami.

Consequently, standing inventory drives down prices, which in turn drives down equity, and which in turn drives up the number of foreclosures. Such foreclosures then increase inventory, driving down equity, and creating a market perception to ditch the investment. Such decisions then result in increased foreclosures and transfers in lieu of foreclosures, which in turn create greater inventories and further devaluation of prices. When values hit a certain point, the rental market is decimated, which means homeowners can rent for next to (and sometimes for) nothing, creating a greater incentive to ditch the property.

Under such a scenario, housing prices at the national average could make as much as an 80-90% correction, creating bank losses in the $5.5 – 6.5 trillion dollar range. Such a correction is 50% of GDP, and will offset the rise of the GDP over the last twenty-five years. That is to say, such a correction will wipe out all of the gains made since the Reagan tax cuts in 1982.

International Currency Crisis

There are other considerations as well. The worldwide GDP, estimated at around $40 trillion, requires currency for international trade. The FRN is the currency currently at the center of such trade. Our currency alone is available in sufficient volume to grease the engines of commerce. As I joked to a friend of mine: we have solved the debt crisis in the United States. We are introducing printers which can print at twice the rate of speed as the old ones!

While it is possible to trade in virtual commerce and in virtual numbers, there remains an issue of cash on hand. The US appears to be capable of dealing with virtual cash, yet Europe is much less capable and the rest of the world is virtually completely cash dependent. Consequently, the necessity of actual cash as currency remains. The devaluation of the FRN on the world’s stage therefore represents a worldwide financial crisis in money, not just a US crisis with worldwide ripple effects. It is highly unlikely that the fiscally responsible (as compared with the United States Congress) bankers in the EU will print the number of Euros necessary to meet actual cash demand throughout the world, so as a matter of practical reality, the devaluation of the FRN represents a real and immediate crash of lifestyle for people around the world. The irony is that the virtual world of book values continues to escalate in price as inflation moves at a pace not seen since Jimmy Carter’s disastrous presidency (and which promises ultimately to rival the Weimar Republic), yet cash is not available. Making such cash available would be the last and greatest mistake of the US financial managers, however, even though it looks like the ultimate solution. (Consider giving each American $40,000 in cash. That’s about $12 trillion. Think of the spending power! Everyone would have a 52” plasma TV!).

The FRN is in real trouble, and wealth funds holding this currency will ultimately experience complete loss.

The fallacy of the “Amero”

Many Americans believe that the US Congress has fiddled away the FRN knowing full well that the current “dollar” would be replaced by the Amero in a few short years, so they felt free to spend as much as they wanted on “earmarks,” or as we in the private sector would call them, “grandiose monuments typically named after the ego-maniac we placed in public office.”

The Amero, for those of you in the dark on this subject, is the currency being proposed for the North American Union, a political entity that is going to emerge joining the United States with Mexico and English-speaking Canada (the Quebecois can join the EU!). This currency would be fixed at a 1-to-1 ratio with the EU, and maintained at that ratio, because this time, the federal reserve would use discipline!

The creation of this currency, of course, assumes that the citizenry of these three countries would go along with the scheme without complete rebellion or open civil war and revolution. It also assumes that the bureaucracies of these three nations will be able to move expeditiously to reach agreement on this, and to do so before a complete collapse of the international banking system.

All of this is nonsense. The Amero will suffer the same fate as the Brazilian Real, created on a similar promise that it would remain fixed on a 1-to-1 ratio with the US dollar (the FRN). Currently it trades at 0.575076, factoring in the complete collapse of the dollar worldwide to record lows. There is not enough time to advance this agenda, and the possibility of a merged North American Union is less likely than a merged Europe, who suffered two major wars of conquest (Napoleon’s and Hitler’s) prior to making agreement. Don’t count on reaching the NAU any time soon.

Finally, there is the problem of valuation when it comes to exchanging your existing FRNs for an Amero. How many Americans are going to accept an exchange rate of 3 or 4 to one? How about 20 to 1? The Amero will represent the single greatest abolition of wealth in human history, as it will necessarily reflect the complete loss of manufacturing and industry in the United States (virtually decimated under the brilliant policies of “free trade”) together with an 80-90% correction in the value of real property within the country.

The introduction of the Amero will be the emergence of the United States of America as a third world nation.

Reestablishing the Economy of the United States

Are there solutions? In cases like this, it is always good to return to the fundamentals in order to reestablish the foundations of commerce.

The United States does not have a legal currency in place at this time. FRNs are illegal instruments of debt controlled by private banks, as referenced above. Coins minted by the US that are not of gold and silver are not constitutionally authorized and are therefore not legal tender, notwithstanding any federal statute to the contrary.

First priority then, is for the United States government to create a currency in gold and silver coin, and to do so under the auspices of a United States Bank. This bank would mint currency, and distribute the currency pursuant to economies of real value. In addition, this bank would maintain what we currently call social security, under a completely revised system of accounts maintained pursuant to GAAP standards.

(Note that the US government need take no action respecting the FRNs, other than to require the federal reserve to remove the phrase “The United States of America,” to remove the Great Seal of the United States, to remove the signature of the Treasurer of the United States, to remove the signature of the Secretary of the Treasury and to remove the phrase “Legal Tender for all debts, public and private” from their notes. Congress should of course repeal the federal reserve act, and abolish the federal reserve system, but given its real value, it isn’t necessary.)

With the creation of a federal United States bank, restricted from lending by charter, and whose function would be to mint legal currency and maintain the social security accounts of American citizens, the federal reserve becomes a worthless entity, following the course of its notes. This is the natural course of things, whether Congress acts, or does nothing.

With the creation of the United States bank and the coining of currency in gold and silver, the country can set about righting its tax code. Progressive income taxes should be constitutionally prohibited, and the flat income tax limited to no more than 13.3% (the biblical standard). The social security system should then be managed by the United States bank, applying the prime lending rate of interest to the funds held within the bank, and allowing for privatization of the accounts every seven years (the biblical standard). The rate of withholding should be 10%, and the retirement stipend should be fixed according to the funds on deposit with the bank at the time of retirement. This system comports with scripture as well.

All other taxes on Americans should be abolished, including value added taxation and excise taxation, including taxes on gas (over $500 billion per year) and those fraudulent taxes on telecommunications. There is no constitutional authority for these taxes, and as such, they amount to theft.

Additionally, property taxes as imposed by the states, counties and municipalities throughout the nation should be constitutionally prohibited. The state has no title to the property it confiscates by means of property tax. Property tax is theft, pure and simple, even if it is endorsed by a majority of people.

To the extent that this tax proposal is not revenue neutral, then the government should consider cutting back spending. In fact, a balanced budget should be constitutionally imposed.

Conclusion

In conclusion, the collapse of the Federal Reserve Note’s value worldwide is predictable, given that it is an illegal currency and is supported by nothing more than the signatures of the Treasurer of the United States and the Secretary of the Treasury. I doubt these gentlemen are well-heeled enough to mount a $260 trillion bail-out. It should be no surprise to anyone that commerce based on these fraudulent debt instruments would eventually collapse.

The way out is the creation of hard currency, and a structurally sound economy based on a sound and reasonable scheme of taxation that provides enough money for a government to manage its proper affairs, and for economic freedom at a sufficient level to generate growth and prosperity. The accumulation of wealth and capital in the United States is not a bad thing when it is done in actual terms. The growth of the American economy is only a threat to the world when the growth is fraudulent and financed by an ever-increasing pool of fraudulent debt instruments known as the federal reserve note.

by Stephen Pidgeon
Attorney at Law, P.S.
http://decalogosintl.org/?p=129#more-129

Broe vs Reed - BHO Eligibility - Gauntlet of Justice

Stephen Pidgeon is the attorney in Broe v Reed, the lawsuit in Washington state challenging Obama's eligibility for POTUS. This lawsuit has been granted a hearing with the Washington Supreme Court.

Stephen Pidgeon, juris doctorate, is a recipient of the 2008 Presidential Commission, the 2008 Reagan Congressional Commission, a two-time recipient of the Congressional Medal of Distinction (2006, 2007), and a designee’ for the 2006 Businessman of the Year award. He has been named in Who’s Who, and Who’s Who in Business, is an ally of the Alliance Defense Fund, a friend of Advocates International, the Rule of Law Institute, the Individual Rights Foundation, the Human Action League, the Institute for Justice, the Federalist Society, the International Justice Society, the Christian Legal Society, the World Evangelical Alliance, and others promoting religious freedom, economic freedom, and civil society throughout the world.

James Broe and 11 other Washington voters have filed in Washington’s Supreme Court to have the votes cast for Senator Obama set aside, because he failed to establish that he was even an American citizen running under his own name at the time of the election, let alone a “natural born citizen” as required by the U.S. Constitution. Unlike other cases that have been dismissed for lack of standing, these plaintiffs have standing under a unique Washington statute that allows any registered voter to challenge the election of someone who, at the time of the election, was ineligible to hold the office. http://decalogosintl.org/

The Secretary of State disallowed Socialist Worker’s Party candidate Frank Colero’s presence on the ballot, due to his ineligibility.

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Please sign petition - http://www.ipetitions.com/petition/OurConstitution/index.html

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[JinOhio]

There are several states working on sound money bills in their state legislation. For more information see the Committees of Safety.
http://www.committeesofsafety.org/

In Ohio http://www.ohiohonestmoney.com/

In New Hampshire and info about sound money effort in Indiana
http://goldmoneybill.org/
Or see Constitutional Tender
http://www.constitutionaltender.com/

Also, more information about things that can be done in your state or your community, there is quite a long document you can download from
http://www.nvcca.net/documents.html
or watch Dr. Edwin Vieira talk about economic federalism
http://www.nvcca.net/media.html