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Top Investor Warns of “Financial Armageddon” as Billionaires Dump Stocks, Buy Gold

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In what analysts say is another indication that the economy will get worse in the not-too-distant future, recent filings by billionaire financier George Soros show he dumped virtually all his holdings in major financial companies like JP Morgan, Goldman Sachs, and Citigroup. His multi-billion-dollar U.S. fund also loaded up on gold, with the portfolio now holding more than $130 million worth of the precious metal.

Data compiled by analysts based on Soros’ most recent 13F filing with the Securities and Exchange Commission (SEC) showed that during the last quarter, his American fund sold more than a million shares of the big financial companies with a value of almost $50 million. During that period, Soros Fund Management also more than doubled its position in the SPDR Gold Trust to nearly 900,000 shares.

“When a major global player with direct ties to the White House, Wall Street, and the banking system starts off-loading stocks and starts stacking gold, it suggests a very serious market move is set to happen,” observed commentator Mac Slavo, a generally pessimistic analyst who follows financial news closely and has long predicted unprecedented economic chaos.

Despite his far-left political agenda, Soros has a solid track record of making wise financial moves. Americans should pay attention. “Soros is getting out of those companies which are most at risk should the financial system buckle like it did in 2008 and he’s shifting his assets into what may be the only asset class left standing when it’s all said and done,” Slavo concluded.

Major banks have already started drawing up plans for a potential financial calamity, news reports in recent weeks revealed. But Soros was hardly the only heavyweight investor whose recent actions foreshadow potential economic trouble to come.

Another billionaire investment legend, John Paulson, who successfully predicted the sub-prime meltdown and made a fortune in the process, also added a significant amount of gold to his already-gold heavy hedge fund portfolio — an increase of more than 25 percent in the last quarter worth some $700 million, regulatory filings show. Paulson’s largest holdings are in the SPDR Gold Trust, and Bloomberg reported that almost half of his U.S.-traded equities are now tied to bullion.

Read more from this story HERE.

Obama Admin: “Proud” that stimulus produced jobs at $738k each (+video)

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Photo credit: merfam

Secretary of Transportation Ray LaHood told The Daily Caller that he is “very proud” of the Economic Recovery Act of 2009 that put 65,000 people to work with $48 billion in federal funds for the Department of Transportation, amounting to $738,461 per job.

The Recovery Act of 2009, which in total cost taxpayers $825 billion, has been criticized because it did not prevent the unemployment rate from rising above 8 percent, contrary to what the Obama administration predicted.

“Yeah, we spent $48 billion and we put 65,000 people to work in 15,000 projects in two years with no problems,” LaHood told The Daily Caller in a video interview in Alexandria, Va., on Friday. “I’m very proud of that. I know that the governors can spend this money because over two years we gave them $48 billion, they created 65,000 jobs in 15,000 projects. This is doable. We’re going to get the money out and get people to work.”

TheDC also asked LaHood about the Obama administration’s decision to send an additional $473 million in unspent earmarks to states.

“You know what? These are old earmarks. There are earmarks that were set aside by members of Congress going back several years,” LaHood said. “We’re in the no earmark era. There are no more earmarks. This money needs to be spent because we need to get people to work.”

General Motors headed for bankruptcy . . . again

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President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.

GM is unlikely to hit the wall before the election, but, given current trends, the company could easily do so again before the end of a second Obama term.

Read more from this story HERE.

US Recovery Worst Since at least the Great Depression, foreign debt at record levels

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By Paul Wiseman. The recession that ended three years ago this summer has been followed by the feeblest recovery since the Great Depression, according an extensive review of the country’s economic ups and down over the past eight decades.

Since World War II, 10 U.S. recessions have been followed by a recovery that lasted at least three years. An Associated Press analysis shows that by just about any measure, the one that began in June 2009 is the weakest.

The ugliness goes well beyond unemployment, which at 8.3 percent is the highest this long after the end of a recession.

Economic growth has never been weaker in a postwar recovery. Consumer spending has never been so slack. Only once has job growth been slower.

More than in any other post-World War II recovery, people who have jobs are hurting: Their paychecks have fallen behind inflation.

Many economists say the agonizing recovery from the Great Recession, which began in December 2007 during the George W. Bush administration and ended in June 2009, is the predictable consequence of a housing market collapse and a grave financial crisis.  Read more from this story HERE.

U.S. Government’s Foreign Debt Hits Record $5.29 Trillion

By Terence P. Jeffrey.  The money the U.S. government owes to foreign entities rose to a record $5.2923 trillion in June, according to data released by the U.S. Treasury Wednesday afternoon.

In May, the U.S. Treasury had owed $5.2581 trillion to foreign entities. On net, in June, the U.S. government borrowed an additional $34.2 billion from foreign entities in order to fund U.S. government operations.

The U.S. government’s indebtedness to foreign interests has grown by 72.3 percent during President Barack Obama’s term in office. In January 2009, when Obama was inaugurated, the U.S. government owed $3.0717 trillion to foreign entities, according to the Treasury Department. That has increased by $2.2206 trillion—or 72.3 percent—to the record $5.2923 trillion reported for yesterday.

Entities in the People’s Republic of China remain the largest holders of U.S. government debt. Entities in Japan, however, are on track to eclipse the Chinese as the top holders of U.S. government debt.

In June, the Chinese held $1.1643 trillion in U.S. government debt, up slightly from the $1.1640 trillion in U.S. government debt the Chinese held in May. However, Chinese ownership of U.S. government debt hit an historical peaked of $1.3149 trillion in July 2011 and has been on a generally downward trend since then.  Read more from this story HERE.

Video: Newt drills CNN Host-“You’re An Extension of the Obama Campaign”

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Gingrich hands Piers Morgan’s hat to him in this interview.  Not only does Gingrich accuse Morgan of, essentially, working for Obama, he eviscerates the Obama record, noting that the US is in the worst recovery in 75 years and that Obama’s approach is “crippling” the poor.

The Economics of Abortion: Hundreds of Billions of Dollars Lost

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As we all know, there are so many effects that abortion has on our society and the whole world. What seems to be overlooked is how abortion can hurt the economy. People make the mistake that abortion is solely a moral issue, and therefore cannot be related to the effects of the economy.

In the United States, we have a national debt nearing $16 trillion, which has surpassed the nation’s annual GDP. In other words, our federal government is spending beyond our means. Since abortion was legalized in 1973 by Roe v. Wade, over 50 million babies have died, with over 3,000 killed on a daily basis.

It’s horrible enough that these innocent babies are murdered, but can you imagine how many more contributions those 50 million lives would have made? Perhaps one of those aborted could have found a way to cure AIDS, cancer, or asthma, just to name a few. Plus, with more people contributing to society through work, we would have a higher GDP, which would greatly help reduce the burden of our government spending, which spends about $4 billion daily. Much progress could be made to shore up the social security of the 10,000 individuals who retire every day.

According to the Bureau of Labor Statistics, Social Security Administration, Guttmacher Institute, and National Center for Health Statistics, if abortion had never been legalized in 1973, more than 17 million people would be employed, resulting in an additional $400 billion from those workers, with $11 billion contributed to Medicare and $47 million contributed to Social Security. Although it is important to also reduce government spending, these added incomes would nevertheless help the country.

It doesn’t take a world-renowned economist to figure out that when you’re decreasing the youth from abortion and with all the baby-boomers retiring, Social Security is going to eventually run out if we continue with abortions and the amount of spending by the federal government. Even though Social Security cannot last forever with the amount of federal spending today, not having abortion would help Social Security last longer, assuming that the amount of federal spending is the same.

Read more from this story HERE.

Photo credit: utsfl

Another Obama first: Americans now toil over half the year to pay for unconstitutional government

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This year, Americans have to work until July 15 to pay for the burden of government, more than six months.

In a new report, Americans for Tax Reform (ATR) has calculated that Americans will spend a total of 197 days toiling to pay for the cost of government.

“Cost of Government Day is the date of the calendar year on which the average American worker has earned enough gross income to pay off his or her share of the spending and regulatory burden imposed by government at the federal, state and local levels,” reads the report.

The report, Cost of Government Day, shows that Americans will work 88 days to pay for federal spending; 40 days for state and local spending; and 69 days for total regulatory costs.

“From a different perspective, the cost of government makes up 54.0 percent of annual gross domestic product (GDP),” reads the report. “What’s more, the largest tax hike in the nation’s history is scheduled to take place at the end of 2012 unless Congress acts to protect taxpayers. If this tax increase is allowed to hit, COGD [Cost of Government Day] could permanently be pushed back into August and beyond.”

Read more from this story HERE.

Photo credit: politibear

Bernanke, the Wizard Behind Obama’s Sham Economy

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On July 11, The Center for Vision & Values posted my article decrying the insulting name-calling directed toward Federal Reserve Board Chairman Ben Bernanke. The very next day, Bernanke made me question my forbearance by telling Congress that a third round of “quantitative easing,” or “QE3,” could be a near-term option.

Now it’s my turn to call Bernanke a name, but I’ll use a clinical label, not a crude one. He is an inflationist, although he may prefer the label “anti-deflationist.” He so fears a deflationary spiral that he will create however many dollars he believes necessary to avert deflation.

Bernanke’s repeated attempts to patch over the nation’s economic weakness, rottenness, and dead wood with newly created dollars remind me of the “Potemkin village” ruse. The Soviet communists duped foreign visitors into thinking that communism was a viable and prosperous system by steering them to sham factories, stores, villages, etc., which appeared to be productive, bustling, and attractive. In reality, Potemkin villages were like movie sets, built to disguise the widespread poverty and backwardness that characterized life in the “workers’ paradise.”

Official statistics insist that the Great Recession ended two years ago. Yet unemployment is creeping up, record numbers of workers are remaining unemployed for record lengths of time, income is down for small proprietors, and millions of people feel as though the recession never ended.

It is proverbial that statistics lie. One such statistic is the gross domestic product. GDP has risen modestly the last two years, supposedly indicating growth rather than recession. Here is the flaw in GDP: By definition, GDP=C+I+G. In other words, GDP equals the sum of consumer spending, private investment, and government spending. (There is also a problematical addendum of net exports, reflecting the mystical mercantilist notion that a country is richer if foreigners obtain more goods and services than domestic residents do, but let’s omit that here.)

Read More at Floyd Reports By Mark W. Hendrickson, Floyd Reports