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Our April 2, 2008 Newsletter
Edition
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DOMINICAN REPUBLIC
REAL ESTATE:
.
Global Property Guide has just finished a survey in March of 2008 regarding Caribbean
Real Estate prices, and guess what? The Dominican Republic is STILL THE ONE OF
THE BEST VALUES in the entire Caribbean. Bermuda is found
to be the worst, with the average price of a three bedroom house and
lot at about US$1.5 million. Do you know what you can buy in the
Dominican Republic for that kind of money? Do you know what you
can buy in the DR for just twenty percent of that amount? The
answer may surprise you, but then again, if you have been reading our
articles for a few years not, maybe not. Regardless, Global
Property Guide also reports the following:
.
Property prices in highly-developed areas such as Bermuda and Bahamas
exceed US$7,000 per square meter. Coastal properties in Barbados
are also expensive, at around US$6,700 per sq. m. In the British Virgin
Islands (BVI), the US Virgin Islands (USVI), real estate prices are
around US$5,000 per square meter. Saint Marten also has expensive
properties at around US$5,300 per square meter. Property prices
in St. Kitts and Nevis, Puerto Rico, Martinique, St. Lucia and Antigua
and Barbuda range from US$3,170 per square meter to US$4,500 per square
meter. The cheapest Caribbean properties are found in Jamaica,
Aruba and Dominican Republic, with prices ranging from US$1,300 per
square meter to US$1,500 per square meter for houses near the
beach.
.
For apartment buyers, Bermuda and Turks and Caicos Islands (TCI) are
among the most expensive with prices at around US$5,000 to US$8,000 per
square meter. A two bedroom apartment costs around US$841,000 in
Bermuda and US$670,000 in TCI. Despite these high prices,
Caribbean properties are now considerably cheaper than coastal
properties in Mediterranean Europe. For instance, apartment prices in
Barcelona are around US$10,000 per square meter, more than twice the
price of apartments in Bahamas or Cayman Islands.
.
http://www.globalpropertyguide.com/
.
In short, with the US dollar heading for the basement, and gold plus
other commodities already demonstrating an exponential run-up,
reasonably priced real estate may be one of your best options to
maintain purchasing power, or better said, as a hedge so inflation does
not wreck havoc on your personal wealth. Of course, the key is to
buy something of value and at reasonable cost as opposed to either
over-paying or buying real estate some where that may see further
declines in value during 2008.
.
For more information about a home or luxury apartment in the Santo
Domingo, Juan Dolio and greater outlying areas (Bani, etc.), please
feel free to visit the following:
.
http://www.dominican-republic-info.com
.
.
QUOTE OF THE MONTH:
.
If the American people ever allow private banks to control the issue of
our currency, first by inflation, then by deflation, the banks and the
corporations that will grow up will deprive the people of all property
until their children wake up homeless on the continent their fathers
conquered. - So Said Mr. Thomas Jefferson, 200 years ago.
.
.
IN THE NEWS:
.
ARE ASIAN ECONOMIES
DECOUPLING FROM U.S.?
By Howard Winn - March 20, 2008
.
The debate over whether emerging markets are decoupling from the US
continues to rumble on. With the US economy slowing and probably
heading into recession, the debate is of particular interest at this
time. Here Jonathan Garner, managing director and head of global
emerging markets equity strategy with Morgan Stanley, explains why he
thinks that emerging markets will weather this slowdown far better than
in previous US slowdowns. The emerging markets are now 30% of the
global economy at current exchange rates. They are even larger now than
developed Europe and their share of global GDP is steadily rising and
will continue to rise, I suspect, for the foreseeable future. I
would say we are exiting the US-centric world pretty quickly. And if we
are right about this, emerging markets will contribute over 60% of
global growth this year. Last year they contributed about 48%.
.
http://www.businessweek.com/globalbiz/content/mar2008/
.
.
THINK BUBBLE TROUBLE
IS OVER? KEEP AN EYE ON COMMODITIES
March 25, 2008
.
The commodity bubble could be the next to burst. Oil prices had one of
their sharpest falls ever last week, and other markets seem to be
teetering. Commodities have kept soaring despite the credit
crunch. Oil, copper, iron ore and foodstuffs have risen to record
prices in the last few months. The contrast with stocks, let alone
housing and credit, has been stark. Bulls argue that demand from
rapidly developing countries like China and India justifies the high
prices. But in reality, commodities have become the last refuge for
speculators as other bubbles have popped. Rapidly growing demand
only explains why prices stay high enough to fund new investment in
wells and mines. For oil, that is somewhere between $40 and $60 a
barrel. The story is similar in most other commodities.
Speculation explains much of the gap. Commodity traders until now have
enjoyed low margin requirements, meaning they can leverage their bets
to the hilt. It's too early to say that the top is history. But
U.S. demand is weakening and Chinese authorities are trying to rein in
domestic growth. Potentially more important, the credit crunch could
finally catch up with commodity speculators.
.
http://online.wsj.com/
.
EDITORS NOTES:
This is a legitimate economic argument, and the gentlemen that wrote
this, could be on to something. Which is to say, in a normal free
market, prices are set by supply and demand. Not enough supply,
and too much demand - prices rise. Too much supply and not enough
demand - prices fall. At least, that is the way it is supposed to
work. However, certainly it can be argued that investment money
has recently been chasing commodities as an inflation, investment
hedge. We could say even, that there has been speculation in the
commodities markets by players who are not end users of such materials
(such as pipe or plumbing supply manufacturers in terms of copper,
bakeries in terms of wheat or other grains, and so on). And so,
maybe it can be argued that there is now a bubble forming in commodity
markets. After all, the inflation money supply has to show up
somewhere, and that money is surely not going into the domestic US
housing, stock or bond markets.
.
While it is true that demand from India and China is driving demand for
many of the world's commodities, the argument is that a severe US
recession would certainly reduce demand somewhat going forward, thus
taking some of the pressure off. That being the assumption, if a
good portion of commodity price increases has been caused by a buying
binge from investors (speculation for investment purposes rather than
true end users), and that money investment all of a sudden pulls out,
then of course one can make the argument for a decline in some of these
market prices as a result. What is the solution?
.
First off, do not speculate, but rather consider swapping out the
devaluing fiat paper money for something else that will hold it's
value, and preferably something that is going to be a long term core
asset comprising your personal wealth. Two of our favorites are
gold, and real estate. Gold of course has had a decent run, but
in inflation adjusted terms, still not at an all time high just yet (in
fact, in today's inflation adjusted dollars, the previous high of
January 21, 1980 comes in at US$2,284 in today's equivalent, and we are
not even half way there just yet). The key to real estate of
course involves the old maxim of buying low or at reasonable
prices. Certainly the US real estate market looks like it may
have some more to go in terms of a meltdown, and some other foreign
markets have gotten out of whack in terms of being over priced (Mumbai,
Dubai, and Acapulco come to mind). However, there still is some
reasonably priced (read not over inflated) real estate out there, and
owning dirt never hurt anyone (unless of course it was mortgaged to the
hilt). Of course, at the ridiculous price of US$7,000 per square
meter, one may wish to stay clear of the Bahamas and
Bermuda.
.
.
US TAXPATRIATES
COMPILED BY THE INTERNAL REVENUE SERVICE
By John Gaver - February 15, 2008
.
The list below contains links to the US Government's official lists of
Tax-Patriates, as compiled quarterly by the IRS, required under 26 USC
877(a)(1). Under this law, the people on this list may be taxed for ten
years after they renounced their citizenship. Furthermore, under 8 USC
1182(a)(10)(E)), these persons may not be allowed back into the US for
any reason. For some unknown reason, the lists are not always published
in order. We present links to these lists, to demonstrate just how far
our government will go to control us. If you think that it can't happen
to you, just imagine how many people on these lists thought the same
thing, prior to 1996.
.
Even facing such penalties, wealthy US
citizens continue to leave the US at an alarming rate. The
following lists show conclusively that the exodus of US citizens and
their wealth is not only continuing, but growing (see chart below).
What these lists fail to show is the vast and increasing numbers of
wealthy US citizens who are just dropping out - taking ALL of their
wealth and leaving the US without ever renouncing. They just disappear
off of the US tax rolls and appear on some other country's tax rolls. The INS estimated the total at over 300,000
per year and rising, in their 2000 Statistical Yearbook and that
was prior to the 9-11 terrorist attacks. Tax haven countries are
recording significantly larger numbers of US applicants for permanent
residence or second citizenship every year.
.
Keep in mind that most of those expatriates are wealthy, since poor
people can't afford to leave. In fact, millions of poor people risk
their lives in the back of trailers or crossing Arizona desert every
year, to take advantage of our increasing welfare state. It is the
wealthy, who are leaving and they represent lost US investment dollars
and subsequently, LOST US JOBS.
.
Instead of reducing the number of tax-patriates, these oppressive laws
have actually increased tax-patriation. But, to make matters worse,
wealthy expatriates are now taking ALL of their money with them, to
prevent it from being taxed for ten years after they leave (26 USC
877(a)(1)). The small flood of tax-patriates predicted by the Forbes Magazine article, The New
Refugees (Nov 21, 1994 v154 n12 p131(5)) is threatening to become a
large flood in the not too distant future. Also see the Forbes article,
And don't come back, (Nov 18, 1996 v158, n12, p44(2)). See the article,
The Economy Bomb, for more information on these numbers. When big
money is forced out of the US, it is the average citizen who has to
make up the difference in higher taxes. The Income Tax and US
government attacks on wealth is costing you money in more ways than you
know!
.
http://actionamerica.org/taxecon/taxpats.shtml
.
EDITORS NOTES:
Three Hundred Thousand Americans per year are heading for the exit so
says the above article, or more correctly, so estimates the US
Immigration and Naturalization Service (and you might want to take note
of all those green card holders deciding to head for the border, or
back home to their country of birth as well). Perhaps incredible,
but not unforeseen. And of course, as the above author mentions,
that number is theoretically only those persons that they know about,
and not inclusive of those that perhaps decided to simply disappear
(and not report in or otherwise formally renounce citizenship).
However, we have heard the argument and criticism about so-called tax
exiles many times before. Which is, that such persons are
socially irresponsible ingrates and so on. On the other hand, who
in their right mind wants to hang around when you know a hurricane,
metaphorically speaking, is on it's way? One would have to be a
special kind of stupid to willfully and voluntarily see your family go
broke or be put into hardship when other options are available
(especially when the problems was none of your doing or fault).
Naturally the Fabian Socialists will counter with the slogan: we are
all in this together. Funny how we are only all in this together
when some bank or brokerage firm goes bust, but you never see these
folks when you children's dental bills need to be paid, or when you
wife is ill and the insurance company regrets to inform you they will
only pay 50 percent of the medical costs, or when inflation is running
amuck but your paycheck is not, and the list goes on and on and
on. Must be something in the water supply.
.
.
WHAT CREATED THIS
MONSTER?
By Nelson D. Schwartz and Julie Creswell - March 23, 2008
.
Like Noah building his ark as thunderheads gathered, Bill Gross has
spent the last two years anticipating the flood that swamped Bear
Stearns about 10 days ago. Even though Mr. Gross, 63, is a market
veteran who has lived through the collapse of other banks and brokerage
firms, the 1987 stock market crash, and the near meltdown of the
Long-Term Capital Management hedge fund a decade ago, he says the
current crisis feels different in both size and significance.
.
The Federal Reserve not only taken has action unprecedented since the
Great Depression by lending money directly to major investment banks,
but also has put taxpayers on the hook for billions of dollars in
questionable trades these same bankers made when the good times were
rolling. Bear Stearns has made it obvious that things have gone
too far, says Mr. Gross, who plans to use some of his cash to
bargain-shop. The investment community has morphed into something
beyond banks and something beyond regulation. We call it the shadow
banking system.
.
As Congress and Republican and Democratic presidential administrations
pushed for financial deregulation over the last decade, the biggest
banks and brokerage firms created a dizzying array of innovative
products that experts now acknowledge are hard to understand and even
harder to value. On Wall Street, of course, what you do not see
can hurt you. In the past decade, there has been an explosion in
complex derivative instruments, such as collateralized debt obligations
and credit default swaps, which were intended primarily to transfer
risk. These products are virtually hidden from investors,
analysts and regulators, even though they have emerged as one of Wall
Streets most outsized profit engines. They do not trade openly on
public exchanges, and financial services firms disclose few details
about them. Used judiciously, derivatives can limit the damage
from financial miscues and uncertainty, greasing the wheels of
commerce. Used unwisely when greed and the urge to gamble with borrowed
money overtake sensible risk-taking, derivatives can become Wall
Streets version of nitroglycerin.
.
Bear Stearns vast portfolio of these instruments was among the main
reasons for the banks collapse, but derivatives are buried in the
accounts of just about every Wall Street firm, as well as major
commercial banks like Citigroup and JPMorgan Chase. What's more,
these exotic investments have been exported all over the globe, causing
losses in places as distant from Wall Street as a small Norwegian town
north of the Arctic Circle. With Bear Stearns forced into a sale
and the entire financial system still under the threat of further
losses, Wall Street executives, regulators and politicians are
scrambling to figure out just what went wrong and how it can be
fixed. But because the forces that have collided in recent weeks
were set in motion long before the sub-prime mortgage mess first made
news last year, solutions won't come easily or quickly, analysts
say. In fact, while home loans to risky borrowers were among the
first to go bad, analysts say that the crisis did not stem from the
housing market alone and that it certainly won't end there.
.
http://www.nytimes.com/2008/03/23/business/
.
EDITORS NOTES:
In a recent March television news interview with former US Treasury
Secretary Lawrence Summers, he admitted that one of the down sides to
the current policies being pursued by the US Federal Reserve is
inflation, with the focus being on trying to avoid or assuage recession
as opposed to controlling run away inflation. However, this is
not any new news for you (you saw this coming back in 2007). What
caught our attention (and perturbed us as well) was a comment by
another participant as it pertained to this problem of sub-prime
mortgages and foreclosures (which was the main theme of the
discussion). This individual, a conservative university academic
who seemingly has the ear of those that make fiscal and economic
policy, had commented that the US Treasury and the US Federal Reserve
need to coordinate some strategic solution that strikes a balance
between the banks, the borrowers and the US Tax-Payer. The US
tax-payer? Since when was a tax-payer in Texas or Hawaii or
Montana involved with a private business transaction between a bank (or
other lender, such as a mortgage company) and a borrower in Ohio, for
example? There are two parties involved in a mortgage process
(count them, only TWO), the lender and the borrower. If both were
extremely stupid, greedy, or a combination of the two, this is indeed a
problem, but for both of them alone. What of the US tax-payer
living miles away, who was not involved at all?
.
Politicians always love to socialize the costs and responsibility of
all economic screw-ups. It is so easy to spend someone else's
money, to solve the problem of yet another third party (such as a
bank) - is it not? And yet this is the nature of
politicians. Our concern about all these issues is not that these
problems have occurred (although they were avoidable), but rather the
solution and outcome for those not responsible. Which is to say,
one can feel sympathy for those that may have gotten into difficulty,
but does sympathy translate into going broke yourself? We once
again repeat the caution to watch out for politicians who start telling
you: We Are All in This Together. That is political
code-speak for: We Plan on Picking the Pockets of Everyone that
is still solvent in order to pay for this nonsense. Even so,
where do you go? We have made the comment that other countries
will probably fair better through all this mess, simply because of
culture and economic differences, in terms of money matters.
Stated another way, in many of the developing nations, credit is hard
to come by and a substantial portion of the populations pay CASH for
their purchases. Even in the industrialized nations of Germany
and Italy, banks there were not willing to offer so-called NINJA loans
(no income, no job). What bank in their right mind would loan
money to a borrower who was not putting up any equity at all, or who
was broke and maybe even unemployed? Too many American banks is
the answer to that question unfortunately, and therein lies the
problem, and also the difference. Of course, the British seem to
share more than just a common language with the Americans as well in
terms of this theme (see news item below).
.
.
DEBT-GORGED BRITISH
START TO WORRY THAT THE PARTY IS ENDING
By Julia Werdigier - March 22, 2008
.
At one point, Alexis Hall had more than 50 pairs of designer shoes and
handbags. It never occurred to the 39-year-old media relations
executive from Glasgow that her £31,500 in debt ($63,000) would be a
problem. It was so easy to get the loans and the credit that you
almost think the goods are a gift from the shop, she said. You do
not fully realize that it is real money you are spending until you
actually sit down and consolidate your bills and then it is a
shock. As the United States economy weakens, many Americans are
being overwhelmed by personal debt, but Britons are even more
profligate. For most of the last decade, consumers here went on a
debt-financed spending spree that made them the most indebted rich
nation in the world, racking up a record £1.4 trillion in debt ($2.8
trillion), more than the country's gross domestic product.
By comparison, personal debt in the United States is $13.8 trillion,
including mortgage debt, slightly less than the country's $14 trillion
G.D.P.
.
And while the Federal Reserve in Washington has cut interest rates, in
an effort to loosen lenders grip on credit, the Bank of England's
interest rate increases last year are trickling through to mortgages at
the very time home values are dropping and banks are becoming more
reluctant to lend. Economists say Britain's relationship to debt
is complex, but at its core is a phenomenon more akin to recent
American history than European trends. As in the United States, a
decade-long housing boom and strong economic growth bolstered consumer
confidence, creating a perception of wealth almost unknown in countries
like Germany and Italy. Culturally, maybe also because of the
defeat in the war, Germans remain reluctant to borrow and banks are
often state-owned, pushing less for profits from lending, said Alistair
Milne, a professor at Cass Business School in London.
.
http://www.nytimes.com/2008/03/22/business/worldbusiness/
.
.
PARTYING LIKE IT'S
1929
By Paul Krugman - March 21, 2008
.
If Ben Bernanke manages to save the financial system from collapse, he
will rightly be praised for his heroic efforts. But what we
should be asking is: How did we get here? Why does the financial
system need salvation? Why do mild-mannered economists have to
become superheroes? The answer, at a fundamental level, is that
we are paying the price for willful amnesia. We chose to forget what
happened in the 1930s and having refused to learn from history, we are
repeating it. Contrary to popular belief, the stock market crash
of 1929 was not the defining moment of the Great Depression. What
turned an ordinary recession into a civilization-threatening slump was
the wave of bank runs that swept across America in 1930 and 1931.
This banking crisis of the 1930s showed that unregulated, unsupervised
financial markets can all too easily suffer catastrophic failure.
As the decades passed, however, that lesson was forgotten and now we
are relearning it, the hard way.
.
The financial crisis currently under way is basically an updated
version of the wave of bank runs that swept the nation three
generations ago. People are not pulling cash out of banks to put it in
their mattresses, but they are doing the modern equivalent, pulling
their money out of the shadow banking system and putting it into
Treasury bills. And the result, now as then, is a vicious circle of
financial contraction. Mr. Bernanke and his colleagues at the Fed
are doing all they can to end that vicious circle. We can only hope
that they succeed. Otherwise, the next few years will be very
unpleasant - not another Great Depression, hopefully, but surely the
worst slump we have seen in decades. Even if Mr. Bernanke pulls
it off, however, this is no way to run an economy. It is time to
relearn the lessons of the 1930s, and get the financial system back
under control.
.
http://www.nytimes.com/2008/03/21/opinion/
.
EDITORS NOTES:
We are not always a fan of Paul Krugman, but we have to give him credit
for discussing topics others will not. However, ironically we
started using the D word (Depression) in some newsletters last year,
and received some criticism for it, and yet here we are. Now it
is the New York Times (and a few other media sources) using the word in
print, and not just us. A rose by any other name, as they say.
.
Does this mean the US is going to hell in a hand basket? Not
necessarily, but there are, and possibly will be some problems, and
some of them very similar to social ills experienced during the Great
Depression of the 1930's, albeit with a new twist. Abdolreza
Abbassian, economist and secretary of the Intergovernmental Group for
Grains for the U.N. Food and Agriculture Organization does say that
consumers still face at least 10 years of more expensive food,
according to preliminary FAO projections. Obviously she is
speaking in general terms about the world economy and the fact that
higher foods costs is a global problem (in part, but not entirely, due
to US dollar inflation). Food riots and shortages are already a
problem in some other countries and the list includes Egypt, Cameroon,
Burkina Faso and Senegal, for the moment. Countries that are net
exporters of rice (such as Egypt, Vietnam, India and Cambodia) have
restricted exports to make sure they have enough for their own
citizens. The Philippines is having a rough time trying to buy
rice on world markets to feed its citizens and cover the shortfall, so
if you are traveling to Manila, then BYOB (bring your own bag).
In any event, we of course do wonder what all these things will mean
socially? Here are some interesting statistics to give us a clue
regarding the trends in the US:
.
The ratio of American wage expenditure to gross domestic product (GDP)
has dropped to the lowest since records began in 1947. The average
income of households consisted of members at working age has seen a
continuous decline in the past five years, and is 17% less than five
years ago (U.S. News & World Report, January 1, 2007; USA Today,
October 24, 2007). The poor population in the United States has
been constantly increasing. According to the U.S. Census Bureau in
August 2007, the official poverty rate in 2006 was 12.3%. There were
36.5 million people, or 7.7 million families living in poverty in
2006. Hungry and homeless people have increased significantly in
American cities as well. According to the U.S. Department of
Agriculture in a report released on November 14, 2007, 35.52
million Americans, including 12.63 million children, went hungry in
2006 (Over 30 Million Americans Faced Hunger in 2006, Reuters, November
15, 2007). It is estimated that 750,000 people are homeless on any
given day in the United States. Will the sub-prime housing
problem exponentially increase this number, and if so, what will be the
solution?
.
There might be the start of another new trend emerging, which is the
equivalent of the Hoover-Villes that were common to the 1930's era,
although the press is calling them tent cities these days (fascinating
that the BBC and not the US news services originally broke that
story). The jury is still out regarding conclusive proof, but it
would seem that the growing ranks of the tent city population is made
up of those that have lost their homes due to sub-prime mortgage issues
(as opposed to those that have traditionally made up the major ranks of
the homeless). What offers such a conclusion? The growing
number of recreational vehicles and campers found parked at such
encampments (the existing homeless or poor people usually do not have
recreational vehicles). Which is to say, it would seem that some
people might be loading up the kids into the family camper and taking
off, leaving the house for the bank to worry about. In fact, home
abandonment and the angry trashing of same by perturbed mortgage
holders has gotten so bad (and common), that some banks are actually
offering cash incentives if people simply leave quietly (and not wreck
the place).
.
Regardless, what is the solution? What will government do to
assuage some of these possible social problems that could be on the
horizon? Is this so-called crisis really something that has
caught all the brilliant government officials off-guard and by
surprise, or did they see this coming and have they been planning for
it all along? Interesting and provocative questions all. If
the US government's own statistics are accurate, 35 Million Poor and
Hungry people is no small number to start with, and even more of a
problem if you believe that segment of the population is now
growing. One may argue and surmise that the new homeless, hungry
and poor are made up of the former educated, middle class and or
so-called working class segments of the population. Hell has no
fury like a guy that just lost his McMansion, his leased Audi, and is
currently living in a tent encampment (see recent news stories about
angry and hostile former home dwellers trashing their own houses before
they leave, or are foreclosed upon). Maybe the plan is to offer
these folks tax-payer funded housing, albeit the involuntary kind (AKA
Club Fed or should we say, Camp Fed). Yes sir, there are a whole
lot of angry former yuppies out there. Read on as to what
conclusions some people have come to regarding recently passed
legislation:
.
.
RULE BY FEAR OR RULE
BY LAW?
By Lewis Seiler, Dan Hamburg - March 2008
.
Since 9/11, and seemingly without the notice of most Americans, the
federal government has assumed the authority to institute martial law,
arrest a wide swath of dissidents (citizen and non-citizen alike), and
detain people without legal or constitutional recourse in the event of
an emergency influx of immigrants in the U.S., or to support the rapid
development of new programs. Beginning in 1999, the government
has entered into a series of single-bid contracts with Halliburton
subsidiary Kellogg, Brown and Root (KBR) to build detention camps at
undisclosed locations within the United States. The government has also
contracted with several companies to build thousands of railcars, some
reportedly equipped with shackles, ostensibly to transport detainees.
According to diplomat and author Peter Dale Scott, the KBR contract is
part of a Homeland Security plan titled ENDGAME, which sets as its goal
the removal of all removable aliens and potential terrorists.
.
But the real question is: What kind of new programs require the
construction and refurbishment of detention facilities in nearly every
state of the union with the capacity to house perhaps millions of
people?
.
Sect. 1042 of the 2007 National Defense Authorization Act (NDAA), Use
of the Armed Forces in Major Public Emergencies, gives the executive
the power to invoke martial law. For the first time in more than a
century, the president is now authorized to use the military in
response to a natural disaster, a disease outbreak, a terrorist attack
or any other condition in which the President determines that domestic
violence has occurred to the extent that state officials cannot
maintain public order.
.
The Military Commissions Act of 2006, rammed through Congress just
before the 2006 midterm elections, allows for the indefinite
imprisonment of anyone who donates money to a charity that turns up on
a list of terrorist organizations, or who speaks out against the
government's policies. The law calls for secret trials for citizens and
non-citizens alike.
.
Also in 2007, the White House quietly issued National Security
Presidential Directive 51 (NSPD-51), to ensure continuity of government
in the event of what the document vaguely calls a catastrophic
emergency. Should the president determine that such an emergency
has occurred, he and he alone is empowered to do whatever he deems
necessary to ensure continuity of government. This could include
everything from canceling elections to suspending the Constitution to
launching a nuclear attack. Congress has yet to hold a single hearing
on NSPD-51.
.
U.S. Rep. Jane Harman, D-Venice (Los Angeles County) has come up with a
new way to expand the domestic war on terror. Her Violent
Radicalization and Homegrown Terrorism Prevention Act of 2007 (HR1955),
which passed the House by the lopsided vote of 404-6, would set up a
commission to examine and report upon the facts and causes of so-called
violent radicalism and extremist ideology, then make legislative
recommendations on combating it. According to commentary in the
Baltimore Sun, Rep. Harman and her colleagues from both sides of the
aisle believe the country faces a native brand of terrorism, and needs
a commission with sweeping investigative power to combat it. A
clue as to where Harman's commission might be aiming is the Animal
Enterprise Terrorism Act, a law that labels those who engage in
sit-ins, civil disobedience, trespass, or any other crime in the name
of animal rights as terrorists. Other groups in the crosshairs could be
anti-abortion protesters, anti-tax agitators, immigration activists,
environmentalists, peace demonstrators, Second Amendment rights
supporters ... the list goes on and on. According to author Naomi Wolf,
the National Counter-terrorism Center holds the names of roughly
775,000 terror suspects with the number increasing by 20,000 per
month. What could the government be contemplating that leads it
to make contingency plans to detain without recourse millions of its
own citizens?
.
http://www.coastalpost.com/08/03/28_Rule_by_Fear_or_Rule_by_Law_.html
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EDITORS NOTES:
We reported to you in a previous newsletter regarding calamity Jane's
(Rep. Jane Harman) legislation that she sponsored in 2007 (and was
passed by a margin of 404 to 6). What is interesting is the focus
on so-called homegrown or domestic issues with this new law.
Meaning, can we conclude that domestic dissent or even peaceful civil
disobedience is now defined as an act of terrorism? Were there
not laws on the books already that defined, punished by law and that
differentiated between the destruction of property in such acts of
protest versus say, non-violent forms of dissent? Why is a new
law necessary for this? Why all of a sudden be concerned about
civil disobedience or dissent? What could the US government be
contemplating? Here are some more views on the subject (see news
items below):
.
.
THE CONTRARIAN - THE
BEAT GOES ON
By Dave McGill - March 07, 2008
.
Most anyone's first reaction concerning the government's acquisition of
additional powers is that these laws and executive orders must be for
our own protection. The government - our government - would never
set out to restrict our time-honored freedoms. After all, aren't we
involved in two wars to specifically spread freedom to other
countries? Well something's going on. Something is definitely
going on.
.
It's easy to understand why we might remain unconcerned, however,
because the power grab has extended over time and the bits and pieces
have been largely ignored by the mainstream media. It's sort of
like a wooden structure under attack by termites. No one might notice
until the day the house falls down. And let me be clear right up
front. This is not aimed at any one political party. Both parties and
the Bush administration are involved. The domestic power of
government, on the one hand, and civil liberties, on the other, are
mutually exclusive, Any increase in one creates a shrinking of the
other.
.
The following is a summary of the increases that have occurred in the
government's powers during the Bush presidency, as well as certain
other related developments. Please note that the powers we are talking
about here are those that have impacted on American citizens, not on
foreign terrorists. Look at the facts and the commentary....then
you decide.
.
THE RAY GUN - Last Sunday night, Sixty Minutes aired a segment on a ray
gun developed by the Pentagon that shoots out a 100,000-watt beam at
the speed of light, temporarily disabling anyone it hits within its
range of at least one half mile. It's harmless as long as it is used
properly, according to the report. The Pentagon was reported to
have said the weapon could change the rules of war and save huge
numbers of lives in Iraq. Who are they kidding? And shame on
Sixty Minutes for allowing itself to be spoon-fed such an obvious line.
This isn't intended for foreign wars. Can you imagine the military
using it against groups that may or may not be armed with lethal
weapons? - Not on your life, and certainly not on theirs. No,
this is the first weapon in the Pentagon's arsenal to be used against
its brand new adversary - us! The ray gun is the twenty-first century
version of the high-powered fire hose of the 1950's. And all the
credit for its intended use by the Pentagon goes to something called:
.
THE JOHN WARNER DEFENSE AUTHORIZATION ACT - HR5122, also known by the
above name, was passed by Congress and signed into law by the president
on 10/17/06. Thus, with a stroke of a pen, the president took away the
protection that Americans had enjoyed for the past 128 years against
the government's potential abuse of power. The Posse Comitatus
Act, passed way back on June 16, 1878, had previously limited the
federal government from using the military for law enforcement, except
on federal property. The Warner Act has changed all that. Under
the Warner Act, if the president declares a public emergency, which he
can do at his discretion, he can station troops anywhere in America to
be used as he sees fit to quell any disturbance or demonstration.
Another feature of the law allows the president to take control of all
state-based national guard units without the consent of the governors
or local authorities involved. This prompted a strong letter of protest
signed by every one of the nation's governors. Senator Patrick
Leahy (D-Vermont) was the only member of Congress to warn that this
bill will actually encourage the president to declare a national
emergency. The law also facilitates the military round-up of
protestors, who might then presumably be held in:
.
THE NEW DETENTION CAMPS - On January 24, 2006, a subsidiary of
Halliburton, by the name of KBR, announced that it had been awarded a
contract for as much as $385 million to construct detention facilities
by the Department of Homeland Security. On June 7, 2006, Fox News
reported that the contract has sparked wide speculation that massive
prisons are going to be built to detain illegal immigrants or even U.S
citizens, fears that government officials say are unfounded. Of
course, if they are unfounded, then why build them? Tom Hennessy
reported in the Long Beach Press Telegram on February 3, 2006 that the
camps are, indeed, cause for concern. The facilities are
described as temporary, but have extensive, high-tech features designed
to prevent escapes. To sharpen its ability to be able to
successfully direct and manage the massive roundups that might be
required to fill such detention camps, the government has conducted:
.
OPERATION FALCON - USA Today reported on 11/2/06 that the government
had carried out three extensive sweeps over the previous two years
bringing in more than 30,000 felons. The operations, known as Falcons
I, II and III were unique in that they involved federal agents rounding
up individuals who were guilty only of state and local crimes. An
Information Clearinghouse article by Mike Whitney on 2/26/07 warned
that the government is fine tuning its shock troops. The article goes
on to say that This should be a red flag for anyone who cares at all
about human rights, civil liberties, or simply saving his own
skin. If you are wondering how the government could possibly
process such a sudden and overwhelming wave of detainees through the
courts, that problem has been solved by what is known as the:
.
MILITARY COMMISSIONS ACT OF 2006 - In the final hours before adjourning
in 2006, when hardly anyone would notice amid the flurry of new
legislation, Congress passed the above act which was subsequently
signed by the president. Some did notice, however, and expressed
grave concern over the fact that the law appears to cast aside the
principle of habeas corpus. As the ACLU said, Habeas corpus isn't
a fancy legal term. It's the freedom from being thrown in prison
illegally, with no help and no end in sight. No president should ever
be given the power to call someone an enemy, wave his hand, and lock
them away indefinitely. The Founders made the president subject to the
rule of law. They rejected dungeons and chose due process.
.
Experts have concluded, according to the online encyclopedia,
Wikipedia, that the law could apply to U.S. citizens. It gives the
president the power to order the arrest and indefinite detention of
anyone he deems to be an unlawful enemy combatant. An unlawful
enemy combatant is vaguely defined as a person who has engaged in
hostilities or who has purposefully and materially supported
hostilities against the United States.
.
EDITORS NOTES:
Conspiracy theory quackery or something more? Hard to say, and of
course that ray gun thing does sound a bit wacky (but I bet if someone
told you thirty years ago there would be radio frequency chips
containing your personal details embedded in your passport, or even
under your skin, you would think such a person would be a prime
candidate for a mental health facility). On the other hand, I can
tell you that the United States of America is already the world's
largest prison and has the highest inmate to overall population ratio
in the world. A December 5, 2007 report by EFE news agency quoted
statistics of U.S. Department of Justice as saying that the number of
inmates in U.S. prisons has increased by 500% over the last 30 years.
By the end of 2006, there were 2.26 million inmates in U.S.
prisons. The U.S. population only accounts for 5% of the world
total, but its inmates make up 25% of the world total. There were 751
inmates in every 100,000 U.S. citizens, far higher than the rates in
other Western countries. But Mr. Jerry Mazza puts the number even
higher, at roughly 1,000 per every 100,000 citizens. He writes in
a March 11, 2008 article
titled Land Of The Free Is World's
Top Jailer: Do not let the anthem fool you. The land of
the free says Go to Jail to more than one in every 100 adult Americans,
actually 99.1. What's scarier is that one out of every 34 of the 230
million adult Americans are under the correctional system, in jail or
out on probation. This makes the US el numero uno jailer in the world,
ahead of China, Russia, Brazil, India, Mexico, South Africa, England
and Japan (end of quote). Is the land of the free becoming the
land of the incarcerated? Will potential social problems
resulting from the economy cause people to, dare we say, engage in acts
of civil disobedience, and as a result increase the number of guests
staying at government facilities? I do not know, but the
possibility exists. As the gentleman in one of the above news
articles asks the very pointed question: why build the jails if you do
not intend to fill them?
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