International Forecaster: Obama Rock & Hard Place For His 2nd Term - James Corbett

Obama In A Rock And A Hard Place For His Second Term

An excerpt from The International Forecaster's weekly publication.


November 10 2012: Bernanke's second term at the head of the US Federal Reserve will come to an end in early 2014, Expect sweeping changes under 4 more years of Obama, but the real challenges have nothing to do with whether its a Republicrat or Democan in the White House, Congress will go back to shuffling the chairs on the Titanic, Matt Gilotti feels that America's true disastrous economic situation is yet to be revealed.
Link: The Corbett Report

By James Corbett

The voting machines have spoken: Barack Hussein Obama will retain the Oval Office for another term, or #4 more years as the Twitterverse has termed it. The left's fears of a Romney presidency have been put at ease, and the right finds itself dealing with the devil they know. The analysts and talking heads in the controlled corporate media are now busily asking themselves what has changed as the result of the election, and the markets have provided their own unmistakable answer: gold surged nearly $50 and the dollar fell overnight Tuesday on news of the Obama win. The reason why is not hard to see, and it has more to do with what will not change under an Obama presidency than what will.

Ben Bernanke's second term as chairman of the Federal Reserve comes to an end in early 2014. On the campaign trail, candidate Romney at least gave lip service to the notion of canning Bernanke and perhaps changing course on the Fed's disastrous quantitative easing madness. Under Obama, however, the Bernanke will doubtless get the green light for a third term and no drastic shift is likely in the Fed's one-size-fits-all printing press solution to the disintegration of the American economy.

Gone, too, are candidate Romney's promises (for whatever they were worth) to repeal Obamacare if elected. Now with the electoral question behind him and the Supreme Court's controversial ruling last June that the individual mandate is a tax (and therefore not unconstitutional), sweeping changes to American health care are set to take place in the next few years. One of the first changes will be two significant Medicare taxes that are being levied to cover the federal subsidies that Obamacare will provide those buying health insurance. In addition to a surtax on individuals earning over $200,000 (or couples earning over $250,000), a 3.8% tax will also be levied on a portion of capital gains and dividends. By 2022, the tax is expected to apply to 8.3 million households, or 4.6% of households in the country.

But beyond the surface differences between candidate Obama and candidate Romney are the more important challenges for the USA in the next four years, challenges that have nothing to do with whether a Republicrat or Democan is infesting the White House.

Like the fiscal cliff, for starters. On January 1, 2013, a combination of tax increases and spending cuts are due to kick in, and put a halt to whatever type of “jobless recovery” the talking heads have been touting in recent months. On the tax cut side, many of the provisions of the laboriously named Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 will expire as the apple drops in Times Square, including the Bush tax cuts and deductions of the alternative minimum tax. At the same time, emergency unemployment benefit extensions and payroll tax deductions for Social Security will end, and a number of automatic enforcement procedures of the Budget Control Act of 2011 will kick in, reducing federal spending by a modest amount. All told, the end of the tax cuts will amount to a 19.63% tax increase and the spending controls will only reduce spending by 0.25%, but the combination will reduce the deficit by almost $500 million, down from the $1.1 trillion of FY 2012 to $641 billion for FY 2013...

...assuming it goes ahead as planned. At the moment, everything is up in the air, from whether the Bush tax cuts will be extended to whether the tax code itself will be reformed. And if all of this sounds a bit pointless in the face of the fraud that is the current monetary system—with government debt being bought up by the Federal Reserve from money printed out of nothing at interest to the American people—it is in fact much worse than that. Now a new problem has emerged that promises to make the whole Congressional shouting match over the fiscal cliff look like the shuffling of deck chairs on the Titanic. The Treasury just announced (as quietly as possible) that the federal government is likely to bump against the debt ceiling before the month is out, meaning that the lame duck Congress is going to have to agree on another debt ceiling raise even while they squabble over tax increases and spending cuts, all in the knowledge that a good number of them will be out of office next year. If you thought that the amount of hot air coming out of the District of Criminals during last year's shouting match over the debt ceiling raise was too much, you better turn on the A/C for the next couple of months of political wrangling.

Matt Gilotti : US MARKETS

As Pres. Barack Obama has maintained his position at the helm of the irreparable US sinking, while the GOP retain control of the house and the Democrats kept control of the Senate, we should expect to see more of the same as Obama unleashed will push full steam ahead with his socialist program agendas and the enslavement of US people through an extensive push to expand the already over weighted entitlement programs all while maintaining the constant attacks at our civil liberties. As the debt of the United States continues to pile on beyond it's already unsustainable and un-repairable level we should expect to see higher US consumer costs as well as a much lower standard of living as the new norm. America's true disastrous economic situation will be revealed as the US Dollar continues it's accelerated path towards it's devaluation.

As Ben Bernanke continues his plight to assist the US dollar in its severe devaluation through the addition of the feds $85 billion per month injections in which the outcome could spell out a devastating US bond market collapse that could send us spiraling towards a depressive how the likes of which has never been seen before. Beyond the already stated, there are a vast majority of issues at their breaking point, all of which could start the downward spiral to which there would be no end until the last domino falls.

The Fiscal cliff – automatic spending cuts to take the fact while tax breaks expire bringing higher taxes for all while the automatic spending cuts would equate to huge losses in employment.

The US debt – with the US debt at$16 trillion plus the government continues to add over $1 trillion per year with no positive outlook on how to curb deficit spending while reducing the overall debt without complete financial Armageddon occurring – severe rock and a hard place.

US Debt ceiling – we are only a short jump away from hitting the US debt ceiling again in which government parties would have to agree to raise the debt ceiling again, shut down the government, or cut like hell to remain within limits any of the choices could be detrimental to the US financial frailty and could lead to US downgrade.

Israel vs Iran – we could see the Israelis growing impatience lead to a preemptive strike on Iran to delay it's forward moving nuclear program. Such a strike could have a far-reaching aftermath as severe violence could spread across the Middle East. There is also the possibility with Iran's threats to shut down the Strait of Hormuz that oil prices would skyrocket.

Eurozone – remember what happens in the Eurozone can have a devastating financial ripple effect on the United States and vice versa. With the Eurozone financial woes heating up daily the likely break up that has been a bone of contention for months could finally come to light with its devastating effects in tow.

Social Security, Medicaid, and Medicare – half of seniors have income under $20,000 in which they currently spent 17% on health care. There are currently 40 million Medicare beneficiaries and the number is expected to rise to 80 million by 2030. With over 56 million receiving Social Security benefits in 2012 almost 25% of seniors rely on social security for 90% plus of family income. With Social Security, Medicaid, and Medicare already running at unsustainable levels with unfunded liabilities around $60 trillion, the possibility of some of these programs participants to double in the next 10 to 15 years the cuts that need to be made to keep the programs for future generations could leave current participants reeling with hardship.

Inflation – the current rate of inflation is severely understated, as most who do their weekly shopping will tell you. As the dollars devaluation continues, we should see those already rising prices reach unattainable levels for those already struggling to make ends meet. There will be many devastating effects of the higher inflation to come, but none would seem to be more important than food security, currently there are roughly 49 million Americans who are considered food insecure with another 6.5 million Americans who have very low food security. Just over 16 million of the food insecure are children.

With so many devastating economically negative events with the ability to unfold before our eyes over the next few months, we would like to remind everyone to take time to stock up on essential items – food, water, guns, ammo, gold, and silver. Remember you can never have too much of something that may save your life or the life of those we love. Pray for the best and prepare for the worst.

It is quite interesting in recent news that the current investigation into the Benghazi attacks that led to the US ambassador and 3 other Americans to be killed, that prior to her testifying, Hillary Clinton has taken on a team of lawyers and General Petraeus has resigned from his position due to supposed marital infidelity, and now will seemingly be testifying in the Benghazi court hearings. It would seem that the recent push for deeper investigation as to who and when the multiple stand down orders were given has begun to shake things up amongst the handful of people that were there for the live feed during the attack. We should look for the scenario to further unfold as the Benghazi hearing testimonies come forth. MG



Obama In A Rock And A Hard Place For His Second Term | International Forecaster Weekly Bob Chapman The International Forcaster | Economy News | Investing | US Market Information | Gold | Silver | Wall Street Bailouts | Investment Trends | Money Resou