December 17, 2017

STEALING A CITIES WEALTH AND THEN RAISING TAXES: Detroit’s Bankruptcy: What Happens to Pensions, Taxes and City Services

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The basic plan goes like this. In 1937 the Federal Tax Code was changed by Congress to allow State Cities to File for Bankruptcy, which had been prohibited up until that time.

Under the U.S. Constitution, the Federal Government and States were not subject to Bankruptcy. So a change was made that somehow changed the State Chartered City Status that somehow separated it from the State and Federal Government System.

This is how Words and Laws are used warp reality. Cities are part of the State and the State is part of the Government, Period! It’s really that simple.

But when Citizens have no voice and no power, any kind of crazy, no sense rules and laws can be passed by those in control. And those in control, do not have to be members of that Country. In Minority Rule Governments, you need only control a few at the top in key positions of power.

The Plan has always been to Force Cities and States into Bankruptcy and make them Wards of the Bank. A simple change of the Tax Code will allow States to follow suit, and themselves become ‘Wards of the Bank’.

The only answer of course is a Majority Rule form of Governship. How we get there, is a work in progress.

But the True Democracy Party is a beginning. 🙂


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Detroit’s Bankruptcy: What Happens to Pensions, Taxes and City Services

by FOXBusiness Jul 20th 2013


Detroit made history Thursday as the largest American city in history to ever file for Chapter 9 bankruptcy protection. The once vibrant city rooted in auto manufacturing and music finally fell victim to its dire financial situation, with between $18 billion and $20 billion in debt.

While city emergency manager Kevyn Orr says it will be “business as usual” in Detroit, experts say residents may be impacted in three major areas–pensions, city services and tax rates.

The Pension Problem

The city has yet to confirm how pensions will be impacted, although there have been suggestions that pensions will be reduced, says Bob Tomarelli, IHS Global Insights economist. The wildcard in the situation is the fact that the Michigan state constitution has a provision which some union leaders say bars pension cuts.

The provision says “the accrued financial benefits of each pension plan and retirement system in the state and its political subdivisions shall be a contractual obligation which shall not be diminished or impaired thereby.”

“The next question here is what does the judge do? The provision seems pretty clear cut, but a judge can rule that they can cut pensions,” Tomarelli says.

There are an estimated 30,000 retirees who are currently receiving pensions, he says, and an estimated $9.2 billion in pension debts.

Pensions potentially have some major changes ahead, says Alison Fraser, Heritage Foundation senior fellow and director of government finance programs.

“They are already in lawsuits with the pension programs themselves,” Fraser says of the city. “It’s unclear what the legal questions are when you go into bankruptcy. There is some possibility pensions will be redone in some way, and it will be very difficult for those who area already retired on those pensions.”

Overall, Fraser believes bankruptcy was the right way to go, as the city was irresponsible with its finances and the process will allow Detroit to restructure its debt.

City Service Cuts

Orr says the filing is the “first step toward restoring the city” and that it will be business as usual in Detroit.

“He says the lights will stay on, but it depends on what haircut the creditors will take on secured bonds, and knowing if and how much pension payments will be cut,” Tomarelli says. “They then decide how much money will be cut and saved on public services.”

Detroit has lost a massive number of residents over the past half century, and now is home to around 700,000 citizens, post-auto bailout and Great Recession. Tomarelli says if the city cuts public services, it would likely be less appealing to potential residents.

“People are still leaving Detroit at a faster rate than they are Michigan,” he says. “If there is a great reduction in services, it may be a less attractive city to live in.”

Tax Hikes on the Way?

Detroit’s current tax rates are 2.4% for residents, 1.2% for non-residents and 2% for corporations and Fraser says a hike would be the wrong way to go post-bankruptcy.

“Detroit already has high taxes,” she says. “It’s difficult for cities to levy taxes, but they do.”

If taxes are hiked on the heels of cuts to city services and pensions, she says it’s a recipe for disaster.

“They shouldn’t try to squeeze every last dollar out of city businesses and residents-that is really the key,” she says. “Will residents flee, or will it remain stable?”

Detroit instead should look at its own problems and tackle them, including investigating its regulatory culture to see if it is encouraging new businesses to launch in the city.

“This should be a wake-up call to our federal government regarding pensions and entitlement programs,” Fraser says.



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3 Questions on State Bankruptcy

By Jennifer Burnett, CSG Senior Research Analystkatkin

States face colossal fiscal pressures, including mounting public pension obligations that now represent a $1 trillion unfunded gap, according to the Pew Center on the States. That gap—combined with other mounting fiscal woes—has led to a national conversation about whether states should be allowed to file for bankruptcy.

That conversation has prompted state officials to react, most arguing that the mere existence of a federal law allowing states to declare bankruptcy would increase interest rates, rattle investors, raise the costs of state government, create more volatility in financial markets, and erode state sovereignty under the 10th Amendment to the U.S. Constitution. To help explain this complicated issue, CSG asked Kenneth Katkin, a law professor at the Salmon P. Chase College of Law at Northern Kentucky University, a few questions about bankruptcy and states.

1) Why can’t states use the federal bankruptcy system to reorganize their debt?

“There are two reasons why state governments currently cannot use the federal bankruptcy system to reorganize their debt. First, the federal bankruptcy code does not allow—and has never allowed—state governments to declare bankruptcy. Since 1937, the bankruptcy code has allowed ‘municipalities’ to declare bankruptcy.

The term ‘municipality’ is defined in the bankruptcy code as a ‘political subdivision or public agency or instrumentality of a state.’ This definition is broad enough to include cities, counties, townships, school districts and public improvement districts. It also includes revenue-producing bodies that provide services which are paid for by users rather than by general taxes, such as bridge authorities, highway authorities and gas authorities. But it does not include state governments.

“The second reason stems from the U.S. Constitution. The contracts clause of the U.S. Constitution prohibits state governments from ‘impairing the obligation of contracts.’ As originally understood and enforced, this clause prohibited state legislatures from passing any laws to relieve either private debt or the state government’s own debt. Beginning in 1934, however, the Supreme Court began to interpret the contracts clause more flexibly and not as an absolute bar to state debt relief laws.

Even under the flexible modern approach, however, the Supreme Court in 1977 reiterated that ‘a state cannot refuse to meet its legitimate financial obligations simply because it would prefer to spend the money (on something else.)’ Thus, were Congress to amend the federal bankruptcy code to authorize states to repudiate debt, the Supreme Court would then need to decide the novel constitutional question of whether such debt repudiation would nonetheless violate the contracts clause of Article I, Section 10.”

2) What benefits would allowing states to file for bankruptcy provide?

“Bankruptcy is designed to give a ‘fresh start’ to debtors who enjoy no reasonable prospect of satisfying their financial obligations. It is difficult to predict all the consequences that would follow a state government’s voluntary entry into bankruptcy. Clearly, state governments that pursue voluntary bankruptcy would seek relief from certain debt obligations, particularly pension debt now owed to retired state employees and interest payments now owed to holders of state bonds. In bankruptcy, state governments also might seek relief from contract debt owed to vendors and contractors that have done business with the state. A federal bankruptcy court has the power to grant all such relief.

Like private parties who declare bankruptcy, a state government that declared bankruptcy would find it more difficult and more expensive to obtain credit in the future. Vendors would be justifiably hesitant to conduct business with the state unless they were paid in full for their work, in advance. Morale within the state government’s career work force could be expected to suffer. And although state legislators presumably would recoil at the loss of state government buildings or state parks or state vehicles to foreclosure, liquidation of some components of a bankrupt’s estate to satisfy creditors is an ordinary incident of bankruptcy.”

3) What steps would the federal government have to take to allow for state bankruptcy?

“To allow for state bankruptcy, Congress would need to amend the federal bankruptcy code to add state governments to the list of entities who may apply for bankruptcy. In addition, a state would need to amend its own state laws to authorize it to make application for federal bankruptcy. Finally, the United States Supreme Court would need to rule on whether the contracts clause of Article I, Section 10 of the United States Constitution prohibits states from declaring bankruptcy even if authorized to do so by Congress, or imposes any restrictions on the terms, conditions or circumstances under which state governments might declare bankruptcy.

If it chose to do so, Congress could require the Supreme Court to rule expeditiously on these questions.”
Kenneth Katkin teaches and writes in the areas of constitutional law, communications law, legislation, federal jurisdiction and entertainment law at the Salmon P. Chase College of Law at Northern Kentucky University. He received his law degree from the Northwestern University School of Law.

SOURCE: [ Capital Ideas ]


Sheeple Test

SHEEPLE: a portmanteau of “sheep” and “people” is a term of disparagement in which people are likened to sheep, a herd animal. The term is used to describe those who voluntarily acquiesce to a suggestion without critical analysis or research.


10 signs you’re a sheeple
By wise sloth
16 Votes

10. You own an expensive vehicle. You don’t need a $40,000 vehicle to get from point A to point B. The only reason to own a $40,000 car us because you want one. Why do you want one? Because you were told to want one…and you obeyed.

9. You watch the top 10 highest rated television shows. This wouldn’t be the case if the top 10 television shows were beacons of genius. As it stands, the top 10 television shows are beacons of petty ignorance because stupid sells better than genius. The reason stupidity sells so well is because people who don’t think flock towards stupidity because it’s familiar and safe. It reinforces their egos without ever challenging them. If you’re confused as to whether or not you’re a sheeple you can check to see if any of your favorite television shows are on the top of the Neilsen ratings. If you don’t know what the Neilsen ratings are, just Google it.

8. You believe that the music you listen to and the clothes you wear make you unique and/or rebellious. Music and fashion are mass produced consumer goods no matter what label they fall under. I don’t care if you’re hip/hop, grunge, indie, metal, emo, punk, hard core, country, death metal or classical. There’s somebody else out there listening to the same music as you, wearing the same clothes (that were made in the same sweat shops), congratulating themselves for being unique just like you. But you’re not unique. You’re defining your identity by associating it with mass produced consumer products that you’re going to stop listening to/wearing when it goes out of style. I’m not saying you can’t listen to music or wear clothes. Just don’t assume any of it makes you a rebel.

7. You don’t read or you only read popular fiction. In order to grow and change you need to learn. In order to learn eventually you’re going to have to read a book. If you’re not reading then you’re not learning much outside of the pop culture you’re bombarded with every day.

6. You get along with pretty much everybody. On the surface it sounds noble and virtuous to get along with everybody, but most people are stupid. Stupid people are afraid of ideas. Smart people have ideas. If you’re smart, stupid people won’t like you. If you get along with everybody you either don’t have any ideas to offend their stupidity with or you’re not standing up for your intelligent ideas, and if you’re not going to stand up for what’s right then you’re stupid.

5. Similar to #6: You automatically disagree with people all the time. If you do this you probably don’t notice, but it’s pretty easy to spot when other people do it. So think about this. Non-thinking people don’t weigh pros and cons logically. They just defend what they already believe and automatically reject everything else even if it’s mundane and trivial. If it doesn’t already have a place in their mind already it’s not coming in. So they constantly disagree with other people. They think this makes them smart because they’re so “good” at coming up with arguments and playing the devil’s advocate. The more they shoot down other people’s ideas and shut them up the more smug and maniacally genius it makes them feel, but all they’re really doing is building a higher and higher wall around their mind.

4. Your best friends are stupid. We hang out with people we’re comfortable with. Now be honest. Are your best friends stupid? If they are, then the reason you’re friends with them is because you’re stupid.

3. You have no philosophy or your philosophy is vague to the point of being useless. Here’s a simple sheeple test in one question: What’s your philosophy on life? Don’t have an answer ready to go? Your mind is empty. You’re following the herd.

But don’t take my word for it. Go do a survey. Go ask everyone you know what their philosophy on life is. Most people won’t have an answer. That means they don’t know how to live. So all they can do is just follow the herd and convince themselves that whatever they’re already doing is novel and ideal. But what they’re doing is neither novel nor ideal.

A thinker would be able to immediately give you a summary of their philosophy and tell you a long, arduous story about how they came to that conclusion, and they would go out of their way to make the disclaimer that their answers aren’t conclusive, their journey isn’t over and they’ll have more to say on the matter every year.

2. You believe in religion. All religion is mythology. It’s just stuff humans made up and told their descendants not to question. Believing something that isn’t true and refusing to consider the evidence is the definition of a blind follower. Don’t get mad at me for calling people who worship mythology sheeple, get mad at Jesus for comparing himself to a shepherd. I’m also not saying that being an atheist makes you smart and independent. There are plenty of pop atheists who have rejected religion just because it’s trendy, and that makes them sheeple as well.

housr and reason

1. You don’t think you’re a sheeple. I don’t say this hypocritically. I say it self-deprecatingly. Every one of us is a product of the environment we were raised in. Our most basic assumptions about life, existence and our own identity are interwoven with the fabric of society so tightly it’s usually impossible to tell where society’s ideas end and ours begin. The world simply can’t be divided into sheeple and nonconformists. We’re all sheeple.

If you don’t think you’re a sheeple you’ll never have any motivation to analyze your beliefs and behaviors objectively to decide if you’re doing anything stupid or herd-minded. However, once you admit you’ve been guilty of following the herd your entire life then you’ll be motivated to tear yourself apart looking for the disgusting stains of society within yourself. And when you do that you’ll also find the good parts of your personality that society helped build within you.



Study proves 95% of people really are sheeple
Wednesday, January 18, 2012 by: Mike Bundrant

(NaturalNews) Scientists at the University of Leeds have conducted research that proves the tendency many have to act like sheep, unwittingly following crowd as if they didn’t possess a reasoning mind. While this tendency may have its uses in some situations, such as planning pedestrian flow in busy areas, it doesn’t inspire a ton of hope for humankind.

The study showed that it takes a minority of just five percent to influence a crowd’s direction – and that the other 95 percent follow without even realizing what is going on.

Professor Krause, with PhD student John Dyer, conducted a series of experiments in which groups of volunteers walked randomly around a large hall. Within the group, a few received instructions regarding where to walk. Participants were not allowed to communicate with one or intentionally influence anyone.

The findings in all cases revealed that the informed individuals were followed by the others in the crowd, forming a self-organizing, snake-like structure (or flock of sheep, take your pick).

“We’ve all been in situations where we got swept along by a crowd,” said Professor Krause. “But what’s interesting about this research is that our participants ended up making a consensus decision despite the fact that they weren’t allowed to talk or gesture to one another. In most cases the participants didn’t realize they were being led by others at all.”

Scary. Are we such sheeple that we allow a few “informed” people to lead us around without even knowing what’s happening? Sadly, it makes sense. How many fall for scams of all kinds because of friends or “informed” sources, from pyramid schemes to religious hoaxes and political coverups. We seem to believe just about anything, or blindly tolerate it as long as the message is delivered with enough social credibility.

How to be your own person

There some things you can do to not only avoid living as a sheeple, but enjoy a full, prosperous and exciting life to boot. Here are a couple of the fundamentals that sheeple tend to miss.

Determine what you want in life. Over 25 years teaching Neuro Linguistic Programming (NLP) I’ve asked thousands of people the question what do you want? I’ve been amazed at the incredibly low percentage of people who can answer it. What are your primary goals? Which direction are you headed? Where do you want to be in five years? The most common answer: I don’t know. We’ll see what happens. Perhaps one in ten can answer with certainty and specificity, which looks like this:

My top 3 goals right now are…

In five years my life will be different in the following, specific ways…

The primary obstacles in my way are the following…

The skills I need to develop to accomplish my goals are the following…

No one can predict the future, but few things serve us better than intentionally pursing a chosen future, rather than waiting to “see what happens.” If you do not choose your goals, your family, friends, community and culture will do so for you (knowingly or unknowingly). This is called status-quo. Not surprisingly, status quo is not that inspiring.

Learn to make intentional, full decisions. So many of our decisions are not well considered. In NLP, we learn that decisions and motivation are simply comprised of visual, auditory and kinesthetic (feeling oriented) phenomena. These are the building blocks of mental processes. Bad decisions, impulsive decisions and ultimately regrettable decisions are so often missing a building block. We make impulse decisions without discussing things (missing the auditory). We make emotional decisions without considering other options (missing visual and auditory). Or we get caught in mental loops with no exit (endless internal dialogue with no feeling that prompts toward action).

In all of these cases, because we lack the foundation for solid decisions, we are vulnerable to the whims of others. If we lack the ability to discuss and analyze decisions, we may accept someone else’s analysis as gospel. If we tend to make emotional decisions, we may fall prey to whomever can pump us up into an emotional state. If we can’t bring our thoughts to completion with a feeling of certainty, we may just do what others are doing to get ourselves out of the endless internal loop.

Fascinating we don’t teach goal setting and decision making skills in our education system. These help form the foundation of real character and individuality – and protect us from over dependency on the ideas or opinions of others.

Make your decisions with all of your building blocks in place and with a clear set of goals in mind. This will keep you out of the realm of the sheeple.

But don’t take my word for it. Think it through.

Sources for this article include:


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13 Ways to Be a Sheeple
Posted In Sheeple

Think of the common sheep: docile, naive and easily led. I find that many people are precisely the same. They are what some call “sheeple” (a portmanteau of “sheep” and “people”). For the most part, they just follow the herd and succumb to their shepherd.

When you’re a sheeple, life is very simple. Each day you wake up, go to work, get back home, watch some TV, eat three meals and take one good shit. You’re not exactly living to your full potential, but you’re not stressing yourself either.
And being a sheeple is not hard, which is probably why lots of folks are doing an excellent job at being one. There is just a small set of specific things you have to do, and you’re guaranteed to be a certified sheeple. Here they are:

1. Emulate Other People’s Goals in Life

When you decide how you’re gonna spend the next 10, 20 or 50 years of your life, just look around at what other people want and want the same. Take on their life goals as your own.

You’ll probably decide to get a 9 to 6 job, get married, get a mortgage, buy a house and have a couple of kids. Because that’s what most people do in life, right?

Who cares that most of them hate their jobs, over 50% of their marriages end up in divorce and the rest aren’t exactly heaven either, many of them have serious health problems and they retire broke? Play it safe and imitate the pack.

2. Always Follow the Latest Trends

Remember: your image is everything. And if you want others to have a good opinion of you, you have to keep up with the latest trends and fashion at all times.

In order to do this, you need to constantly be cognizant of the latest trends regarding everything: clothing, gadgets, music, clubs, slang, etc. And you need to always be in line with them.

If this season torn up jeans are in style, that’s what you’re gonna wear. And 6 months from now you’re gonna throw them away because you don’t want to appear like a retard following the fashion from 6 months ago.

3. Buy Expensive Stuff just because it’s From Famous Brands

All people will know you’re cool and they’ll respect you if they see you own and use expensive stuff from the top brands. That’s what they base their approval of another person on.

And since other people’s approval is so important in life, you should spend as much money as you can to buy pricey branded stuff.

For example, buy an Omega watch, which will cost you at least $3000. Sell a kidney to pay for it if you have to.
It doesn’t matter that you can buy a watch of identical quality in terms of functionality and design for less than $300. It’s a fucking Omega watch! James Bond wears one! You wanna be like James Bond, don’t you?

4. Hang Out With Mediocre People

Screw high achievers! They can be arrogant and intimidating. And they talk about shit you don’t understand. Interacting with high achievers is not for you. Surround yourself with average individuals and only interact with them.
That guy who spends all his free time drinking beer, watching football and whacking it to internet porn is your ideal friend. You’ll never feel inferior, incompetent or invalidated in any way when he’s present. Hang out with him as much as possible.

5. Get All Your Information from Mainstream Media

We all know that what you hear on TV or read in popular magazines is the proven, accurate truth. Getting all your data from mainstream media will insure that you’re always well informed and properly educated about the most important aspect of today’s reality.

If some guy on TV tells you to avoid eating fat because it will make you fat, then it certainly must be true.

It doesn’t matter that there is little actual scientific research to indicate this, and the one that exists is either poorly done or badly interpreted, and that the most rigorous scientific research actually shows that eating fat doesn’t make you fat, eating carbs does.

The guy speaking to you through the monitor is never wrong.

6. Don’t Stay Too Well Informed

Whatever information you do acquire, make sure it’s not too much of it. There is only so much space in your memory, and if you put too much info in there you might forget the password to your email account.

Avoid reading to many books, if any. And if you do read books once in a while, choose fiction over non-fiction and books with lots of pretty pictures instead of books with heavy text. It has almost zero educational value, but it doesn’t strain your brain.

Moreover, books cost money, which you need to save to buy that pricey Omega watch.

7. Adopt the Opinions of the Majority

One of the best ways to have intelligent opinions is to adopt the opinions of the majority. And the majority can mean the majority in your peer group, your community or society at large. Because what most people believe is what is accurate.
Therefore, don’t think for yourself. What the majority thinks, you think. Your thoughts should be a barometer of public opinion.

And even if sometimes an idea most people believe in is not accurate at all, you still score points with them for believing it and proudly declaring this. They’ll adore you!

8. Always Obey Authority Figures

Whatever your parents, teachers or bosses say is the law. You must never question it and you must always act in accordance to it.

The fact these people have a contextual authoritative position over you clearly signifies that they know a lot more than you and they are superior to you in every way. Act humble around them and do what they say.

Plus, if you don’t obey them and you break the rules, you are certain to get into trouble. Fire and brimstone will come down upon you. So, no matter how insipid a rule or command seems to you, comply with it.
9. Avoid Disapproval like the Plague

Disapproval is bad; really bad. And it hurts like shit. So you should avoid it at any cost. Avoid getting embarrassed, upsetting others, being inappropriate, tainting your reputation or getting rejected in any situation.

In order to do this, you have to mimic the opinions, ideals, behavior and lifestyle of others around you. You have to conform to all norms and expectations, and fit in perfectly. It’s not easy, but if you manage to strip away your individuality entirely, you’ll be able to never elicit other people’s disapproval.

On your death bed you’ll look back at your life and see an empty and unremarkable existence, but at least you’ll know you didn’t bother others.

10. Reject Divergent Ideas by Default

When someone expresses a perspective that’s different from your own, immediately assume it is wrong and ignore it or shut it down. If you actually assess it and analyze the evidence, you might find out it makes much more sense than yours, and you’ll feel like a sucker for having believed something else.

Not to mention that assessing a new idea can entail a lot of mental effort, and maybe even some hardcore research.
In addition, if you accept a perspective that differs from yours as more sensible, others will also expect you to align your behavior with this perspective. And that’s a lot of hard work, which can be easily avoided by being stubborn as a mule. Or, should I say, sheep.

11. Let Inertia Be Your Guide

Since intentionally behaving in a certain way you’re not used to is hard and entails effort, you want to avoid it. Only do what comes easy and feels natural to you. Inertia should be the only force propelling you through life.
If inertia directs you towards doing something that gets you no results, so be it. If inertia directs you towards not doing anything, lying on the couch all day, eating potato chips and watching reruns all day, then that’s what you’ll do. Conscious change is overrated.

12. Judge Others Based On Appearances and Stereotypes

There is no need to genuinely get to know another person before forming a firm opinion about them. Relying on appearances and stereotypes is sufficient, as they are exact and universal indicators of how people are deep down.
If a person is from a small town, they are clearly stupid. If a person is Asian, they are obviously a nerd. If a person is overweight, they are evidently slothful. What’s so hard to understand?

By the way, some people will think you’re a narrow-minded, superficial fuck for judging others in this manner and they won’t wanna make friends with you. Pay no heed to them. They’re just haters.

13. If Your Life Sucks, Blame the System

If you live by the rules I outlined so far, without any doubt, your life will suck. Yes, it will be simple and uncomplicated, but it won’t be fun and fulfilling either. Your emotions will mostly swing from boredom to mild amusement to frustration to depression to boredom again.

You’ll have little noticeable accomplishments and the main “adventures” you’ll go through will be stuff like spending an entire night at the office to get “an important report” ready for the next day.

When they realize their life sucks, the distinctive reaction of any authentic sheeple is to blame the system. So, do this.
Convince yourself that it’s not your fault; it’s the system’s fault. The system should have taken care of all your needs and make you happy, without requiring you to think for yourself, not believe everything you’re told, have initiative, find your own path and follow it.

Assuming responsibility for your own existence implies thinking responsibly and rationally. And that’s not what a sheeple does. It’s so much easier to blame the system! Your life will continue to suck, it will probably get worse with every passing day, but at least you will not feel guilty about it.

Okay! You now have the precise instructions for being a sheeple. I hope it’s obvious from the tone of this article that I showed you these instructions hoping that you’ll to the exact opposite of what they prescribe. This article is intended as a satire.

However, if taking the easy path is more important to you than living the best life you can, than by all means, follow these instructions. After all, that’s what a good sheeple does. It follows. And it’s possible that society needs sheeple, just as it needs free thinkers.

Any path you choose in life, I wish you massive success!
Eduard Ezeanu




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Sheeple of Amerika

$4 PER GALLON GAS BUBBLE – Matt Taibbi: Secret US Gov’t /Goldman Sachs Deal Raises Gas Prices! “Barack And The American Sheeple”

This is why you can’t rely on the Government to solve our problems. They help create the problems to start with. Under True Democracy, this issue would be solved with a simple vote. No, we don’t want Wall Street setting the price of Oil, PERIOD!!! NO SECRET Govt./Wall Street DEALS!!!

Just Say NO to Secret Govt. Wall Street Energy Deals. Just Say NO!

gas rising

Why are gas prices so high? Should we blame President Obama as Republicans suggest? Is more domestic drilling the answer? The Keystone XL Pipeline maybe? How and Why oil speculators (such as Goldman Sachs and the Koch Brothers owned Koch Industries) can determine almost 2/3 of the price of gas.

Gas Prices Soar

By Matt Taibbi
April 5, 2010 3:58 PM ET

BUBBLE #4 $4 a Gallon

By the beginning of 2008, the financial world was in turmoil. Wall Street had spent the past two and a half decades producing one scandal after another, which didn’t leave much to sell that wasn’t tainted. The terms junk bond, IPO, sub-prime mortgage and other once-hot financial fare were now firmly associated in the public’s mind with scams; the terms credit swaps and CDOs were about to join them. The credit markets were in crisis, and the mantra that had sustained the fantasy economy throughout the Bush years — the notion that housing prices never go down — was now a fully exploded myth, leaving the Street clamoring for a new bullshit paradigm to sling.

Where to go? With the public reluctant to put money in anything that felt like a paper investment, the Street quietly moved the casino to the physical-commodities market — stuff you could touch: corn, coffee, cocoa, wheat and, above all, energy commodities, especially oil. In conjunction with a decline in the dollar, the credit crunch and the housing crash caused a “flight to commodities.” Oil futures in particular skyrocketed, as the price of a single barrel went from around $60 in the middle of 2007 to a high of $147 in the summer of 2008.

That summer, as the presidential campaign heated up, the accepted explanation for why gasoline had hit $4.11 a gallon was that there was a problem with the world oil supply. In a classic example of how Republicans and Democrats respond to crises by engaging in fierce exchanges of moronic irrelevancies, John McCain insisted that ending the moratorium on offshore drilling would be “very helpful in the short term,” while Barack Obama in typical liberal-arts yuppie style argued that federal investment in hybrid cars was the way out.

But it was all a lie. While the global supply of oil will eventually dry up, the short-term flow has actually been increasing. In the six months before prices spiked, according to the U.S. Energy Information Administration, the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the short-term supply of oil rising, the demand for it was falling — which, in classic economic terms, should have brought prices at the pump down.

So what caused the huge spike in oil prices? Take a wild guess. Obviously Goldman had help — there were other players in the physical commodities market — but the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once-solid market into a speculative casino. Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures — agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.

As is so often the case, there had been a Depression-era law in place designed specifically to prevent this sort of thing. The commodities market was designed in large part to help farmers: A grower concerned about future price drops could enter into a contract to sell his corn at a certain price for delivery later on, which made him worry less about building up stores of his crop. When no one was buying corn, the farmer could sell to a middleman known as a “traditional speculator,” who would store the grain and sell it later, when demand returned. That way, someone was always there to buy from the farmer, even when the market temporarily had no need for his crops.

In 1936, however, Congress recognized that there should never be more speculators in the market than real producers and consumers. If that happened, prices would be affected by something other than supply and demand, and price manipulations would ensue. A new law empowered the Commodity Futures Trading Commission — the very same body that would later try and fail to regulate credit swaps — to place limits on speculative trades in commodities. As a result of the CFTC’s oversight, peace and harmony reigned in the commodities markets for more than 50 years.

All that changed in 1991 when, unbeknownst to almost everyone in the world, a Goldman-owned commodities-trading subsidiary called J. Aron wrote to the CFTC and made an unusual argument. Farmers with big stores of corn, Goldman argued, weren’t the only ones who needed to hedge their risk against future price drops — Wall Street dealers who made big bets on oil prices also needed to hedge their risk, because, well, they stood to lose a lot too.

This was complete and utter crap — the 1936 law, remember, was specifically designed to maintain distinctions between people who were buying and selling real tangible stuff and people who were trading in paper alone. But the CFTC, amazingly, bought Goldman’s argument. It issued the bank a free pass, called the “Bona Fide Hedging” exemption, allowing Goldman’s subsidiary to call itself a physical hedger and escape virtually all limits placed on speculators. In the years that followed, the commission would quietly issue 14 similar exemptions to other companies.

Now Goldman and other banks were free to drive more investors into the commodities markets, enabling speculators to place increasingly big bets. That 1991 letter from Goldman more or less directly led to the oil bubble in 2008, when the number of speculators in the market — driven there by fear of the falling dollar and the housing crash — finally overwhelmed the real physical suppliers and consumers. By 2008, at least three quarters of the activity on the commodity exchanges was speculative, according to a congressional staffer who studied the numbers — and that’s likely a conservative estimate. By the middle of last summer, despite rising supply and a drop in demand, we were paying $4 a gallon every time we pulled up to the pump.


What is even more amazing is that the letter to Goldman, along with most of the other trading exemptions, was handed out more or less in secret. “I was the head of the division of trading and markets, and Brooksley Born was the chair of the CFTC,” says Greenberger, “and neither of us knew this letter was out there.” In fact, the letters only came to light by accident. Last year, a staffer for the House Energy and Commerce Committee just happened to be at a briefing when officials from the CFTC made an offhand reference to the exemptions.

“I had been invited to a briefing the commission was holding on energy,” the staffer recounts. “And suddenly in the middle of it, they start saying, ‘Yeah, we’ve been issuing these letters for years now.’ I raised my hand and said, ‘Really? You issued a letter? Can I see it?’ And they were like, ‘Duh, duh.’ So we went back and forth, and finally they said, ‘We have to clear it with Goldman Sachs.’ I’m like, ‘What do you mean, you have to clear it with Goldman Sachs?’”

The CFTC cited a rule that prohibited it from releasing any information about a company’s current position in the market. But the staffer’s request was about a letter that had been issued 17 years earlier. It no longer had anything to do with Goldman’s current position. What’s more, Section 7 of the 1936 commodities law gives Congress the right to any information it wants from the commission. Still, in a classic example of how complete Goldman’s capture of government is, the CFTC waited until it got clearance from the bank before it turned the letter over.

Armed with the semi-secret government exemption, Goldman had become the chief designer of a giant commodities betting parlor. Its
Goldman Sachs Commodities Index — which tracks the prices of 24 major commodities but is overwhelmingly weighted toward oil — became the place where pension funds and insurance companies and other institutional investors could make massive long-term bets on commodity prices. Which was all well and good, except for a couple of things. One was that index speculators are mostly “long only” bettors, who seldom if ever take short positions — meaning they only bet on prices to rise. While this kind of behavior is good for a stock market, it’s terrible for commodities, because it continually forces prices upward. “If index speculators took short positions as well as long ones, you’d see them pushing prices both up and down,” says Michael Masters, a hedge fund manager who has helped expose the role of investment banks in the manipulation of oil prices. “But they only push prices in one direction: up.”

Complicating matters even further was the fact that Goldman itself was cheerleading with all its might for an increase in oil prices. In the beginning of 2008, Arjun Murti, a Goldman analyst, hailed as an “oracle of oil” by The New York Times, predicted a “super spike” in oil prices, forecasting a rise to $200 a barrel. At the time Goldman was heavily invested in oil through its commodities trading subsidiary, J. Aron; it also owned a stake in a major oil refinery in Kansas, where it warehoused the crude it bought and sold. Even though the supply of oil was keeping pace with demand, Murti continually warned of disruptions to the world oil supply, going so far as to broadcast the fact that he owned two hybrid cars. High prices, the bank insisted, were somehow the fault of the piggish American consumer; in 2005, Goldman analysts insisted that we wouldn’t know when oil prices would fall until we knew “when American consumers will stop buying gas-guzzling sport utility vehicles and instead seek fuel-efficient alternatives.”

But it wasn’t the consumption of real oil that was driving up prices — it was the trade in paper oil. By the summer of 2008, in fact, commodities speculators had bought and stockpiled enough oil futures to fill 1.1 billion barrels of crude, which meant that speculators owned more future oil on paper than there was real, physical oil stored in all of the country’s commercial storage tanks and the Strategic Petroleum Reserve combined. It was a repeat of both the Internet craze and the housing bubble, when Wall Street jacked up present-day profits by selling suckers shares of a fictional fantasy future of endlessly rising prices.

In what was by now a painfully familiar pattern, the oil-commodities melon hit the pavement hard in the summer of 2008, causing a massive loss of wealth; crude prices plunged from $147 to $33. Once again the big losers were ordinary people. The pensioners whose funds invested in this crap got massacred: CalPERS, the California Public Employees’ Retirement System, had $1.1 billion in commodities when the crash came. And the damage didn’t just come from oil. Soaring food prices driven by the commodities bubble led to catastrophes across the planet, forcing an estimated 100 million people into hunger and sparking food riots throughout the Third World.


Now oil prices are rising again: They shot up 20 percent in the month of May and have nearly doubled so far this year. Once again, the problem is not supply or demand. “The highest supply of oil in the last 20 years is now,” says Rep. Bart Stupak, a Democrat from Michigan who serves on the House energy committee. “Demand is at a 10-year low. And yet prices are up.”

Asked why politicians continue to harp on things like drilling or hybrid cars, when supply and demand have nothing to do with the high prices, Stupak shakes his head. “I think they just don’t understand the problem very well,” he says. “You can’t explain it in 30 seconds, so politicians ignore it.”

Gas Prices Soar in California; $6 Per Gallon Gas


This is the 3rd time we’ve run this Post and many say America’s won’t do Jack. Nothing but a bunch of controlled Sheeple.

Sheeple a portmanteau of “sheep” and “people” is a term of disparagement in which people are likened to sheep, a herd animal. The term is used to describe those who voluntarily acquiesce to a suggestion without critical analysis or research.




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