James 5:1 (KJV) Go to now, ye rich men, weep and howl for your miseries that shall come upon you.

Tuesday, January 31, 2012

You Are The Battlefield

There are some things better left unsaid in life. But now is the time to speak because everything - and I do mean everything - is at stake.

Now is the time of decision for every person on earth. Every individual's eternal future is determined by his relationship to the Creator. That eternal future is upon us: the Omega point of this time/space reality. Time is about to run out, and when it does you will have nothing more to decide. No choices left. Your eternal future is then permanently set. It is finished.

If that isn't a heavy reality, I don't know what is.

In the midst of all of life's busy-ness (business) it is imperative that you stop, put all that aside and make your spiritual condition the top priority in life.

There is a cosmic battle going on for your soul. If you are oblivious to this truth you are in the greatest possible danger. People have gone to fantastic lengths to own you, to own your very soul. The biggest problem is that in order to comprehend and 'see' any of this it can be done only through spiritual eyes because it is a spiritual battle. But it has real, tangible consequences. Forever.

There is one truth. Many lies and deceits are battling that one truth. Your eternal soul is the prize.

The one truth is that Jesus Christ - the Supreme Deity of all creation manifest in human flesh - came to earth, died on the cross to pay the required sacrifice for your sin and mine, rose from the dead, walked among the people, and was translated to the realm of the upper heaven. He did all this so that you could live forever, with Him. He wants you to assist Him in His great cosmic program. He wants you to be His friend - a friend who is as loyal to Him as He is to you.

There is a price to pay on both sides of this friendship. Everything.

He is the way - the truth - and the life, for all eternity.

Clear your calendar for a couple of days. Take vacation time, get a babysitter, whatever it takes. Turn off the TV for the entire time. Turn off the computer. Commit two days to truth. Get a King James version of the Bible, start with John 3:16 and read straight through the New Testament, clear through the Revelation.  Ask the Lord to reveal the truth of His word to you as you commit yourself to reading and learning. Fast and pray and read for two days. Talk to the Lord, and I guarantee that He will speak to you in a still, small voice that can be heard only with spiritual ears.

This is the most important thing you will ever do. Establish a personal relationship with Jesus Christ. He is on your side, and He wants you on His side in this battle.

You know who is on the other side. The wrong side. He hates humankind and has been out to destroy us from the beginning.

After these two days, set aside 30 minutes every single day to spend with your heavenly Father. Every single day. Top priority.

Choose this day who you will serve, and let Him know.

Royal Heir

Monday, January 30, 2012

Too Much News ...

I'm inundated with news on every front. It's impossible even to choose a subject on which to write, so for today I'll just put links to four of my many news items. Choose one or all, whatever interests you. I'll try to get back on track tomorrow, but I have a strong suspicion that this situation will only escalate ... that, I believe, is the nature of our immediate future. CMR

Strange noises in the sky ... Trumpets of the Apocalypse? 11 minute video HERE.

Excellent (very long) and fascinating article regarding cosmic changes, planetary instability and extreme weather. Touches on Elenin, PlanetX, etc. HERE.

How The Illuminati Cult Programs People. This article is written by one of the 'escapees' from the Illuminati who became a Christian and managed to get out. Very few people have the motivation to do this, and fewer still remain alive after doing so. She changed her name and went underground. I don't know the date of this article (and links to others). I have studied MK-Ultra and Monarchy Mind Control extensively and have several books detailing the processes from A-Z. Unless a person needs the information for research purposes, the average person would not want to read these details. It's beyond imagination, evil and unbelievable. Satan himself must have put it together, and it's been going on since probably Nimrod. Her article is HERE.

HERE you will find an article about the practice of our government microchipping people without their consent.


Saturday, January 28, 2012

Official Government Notice: New $100 Bill

There is a short video, or if you prefer 
there is a PDF Transcript of the video right below it.
Also an FAQ Section.

It's all HERE

Tim Tebow - A Rare, REAL Christian?


By Coach Dave Daubenmire
January 26, 2012

“America! America! God Shed His Grace on Thee; And Crown Thy Good, With Brotherhood…” -America The Beautiful

Woe unto them that call evil good, and good evil; that put darkness for light, and light for darkness; that put bitter for sweet, and sweet for bitter! -Isaiah 5:20

In case you have not noticed, sleeve-wearing Christian Tim Tebow has been causing quite a stir across the football world with his unashamed living out of the Gospel. His I-love-Jesus-more-than-anything approach to life has proved to be quite unsettling to those who are uncomfortable with his bold proclamation of Romans 1:16.

“For I am not ashamed of the gospel of Christ: for it is the power of God unto salvation to every one that believeth; to the Jew first, and also to the Greek.”

In my lifetime I cannot name a single public figure, apart from those who make a living off of the Gospel, who has been as bold of a witness as Number 15 for the Denver Broncos.

He is not the only Christian in the NFL. The past two Super Bowl Champions had Christians under center, Drew Brees of the New Orleans Saints, Aaron Rodgers of the Packers, yet one would have to dig to find stories of their witness to their Faith.

Former Super Bowl QB Kurt Warner of the St. Louis Rams claims Christ, yet he recently advised Tebow that he would be better off if he removed Jesus from his sleeve…or at least put a sweatshirt over the top of his arms.

“But I’d tell him, ‘Put down the boldness in regards to the words, and keep living the way you’re living. Let your teammates do the talking for you. Let them cheer on your testimony.’ Kurt Warner

Yeah right Kurt. Hide that light under a bushel. That I’ll-show-them-Christ-by-the-way-I-live approach hasn’t gotten us very far in spreading the Gospel. America is a vast moral wasteland because we have hidden the light.

In this country we no longer “crown the good.” Because of our silence our culture has evolved to the point where we “crown the bad.” Tim Tebow is bad. Lady Gaga is good. Tim Tebow won’t be at the Super Bowl, but Madonna will.

In the NFL the Material Girl trumps the Spiritual Guy. (I wonder if Kurt Warner would ask Madonna to tone it down a bit.) It seems to me that the wrong folks are ashamed.

“The wicked flee when no man pursueth: but the righteous are bold as a lion.” Proverbs 28:1.

Bold Christianity would make Madonna run to the locker room.

Tim Tebow is a mirror. He exposes how shallow most of our Christianity is. That’s what makes us so uncomfortable…"I am a Christian, but I am not as fanatical about it as Tebow is."

No kidding. I wonder which one is more like Jesus…you or Tim Tebow? Would Jesus tell Tim to “tone it down?” Would Jesus tell you to?

No. He doesn’t have to. You already have toned it down yourself. That’s why Christianity is so under assault in the culture. We are ashamed of the Gospel. We are ashamed to speak up for what is right.

We have allowed them to put a crown on the head of the evil. We have failed to understand that nature loves a vacuum. The removal of the Christian standard of morality from our culture has opened the floodgates to secular debauchery.

Silence isn’t golden…it is yellow. Our Christian-laryngitis has resulted in no prayer in schools, no Ten Commandments, sodomite-“marriage,” legalized baby-murder, Christ-less Christmas…

I wonder if any of the heathen have asked Lady Gaga to tone it down? Have they impugned her for her vicious assault on the morality of America’s children?

It is one thing when the God-haters want Tim to tone it done. It is quite another when those on his own team are knocking the ball out of his hands.

Even in the church we no longer “crown the good.” Humanism has forced its way into the void, and the Gospel has been relegated to a self-help, best-life-now, felt-needs formula for success in life.

Tim Tebow crushes that paradigm like a snot-snorting, blitzing line-backer.

Jesus IS life. Tim Tebow has his arms around something bigger than the NFL!

In this age of self-centered narcissism Tebow carries a different message. The answer to America’s problems is not government. The problems in America are Spiritual. Turn to Jesus and not to politics.

We must return to an America where good is crowned. 

But that is not the message of the world. They want an America where everyone is on the same level. Homosexual marriage is as valid as heterosexual marriage; Humans are on the same level as the baby seals; Abortion is on the same level as appendicitis; Dr Phil is as wise as the Apostle Paul; Christianity is on par with Islam, Buddhism, and Taoism; Sinners are no different than saints; Jesus and Mohammed share the same throne. 

No standards…no judge…no right and wrong…no good and evil. America is ravaged with the gospel according to Rodney King, “Why can’t we all just get along?”

No wonder we crown the bad.

But there is hope. Tim Tebow has revealed something about us. For those who have eyes to see, God has used him to reveal a hunger for righteousness in the hearts of Americans.

In spite of the fact that his bold-Christianity has been pillaged by those on the right as well as those on the left, Tim Tebow has touched a nerve in the soul of America, and no matter how hard they may try, the secularists cannot not gauze over the blood seeping out of a heart that is yearning for something to believe in.

That’s Tim’s message, you know. Believe, not in yourself or your abilities, but in the ONE who makes all things possible.

Tim Tebow has torn off the scab and exposed the spiritual-malignancy sweeping over this land. 

The media is telling him to tone it down…other Christians are telling him to tone it down…but Mom and Pop America is telling him to turn up the volume.

Did you know that the Bronco’s playoff game against the Patriots was the most watched non-Super Bowl football game in history?

Did you know that Tim Tebow was recently voted the most popular athlete in sports-obsessed America?

How can that be?

Because in their hearts, most American parents wish their son had turned out like Tim Tebow, and they long for their daughter to marry a man like him. They have had enough of the Lindsay Lohans, the Charlie Sheens, and the decadence of America’s pop culture icons.
The dirty little secret is that fly-over country wants a return to a crowning of the good.

Look at this picture of Tebow and his mom. The culture crowns the playboys, while America is crying for choir boys.

Did you know that after the game with the Steelers that John 3:16 was the most “googled” phrase on the internet? 

“How then shall they call on him in whom they have not believed? and how shall they believe in him of whom they have not heard? and how shall they hear without a preacher?” -Romans 14.

Living the Gospel is not enough. I say roar Tim Tebow, ROAR! Proclaim the Truth of the Lion of the Tribe of Judah! Let the world see that you don’t have to be in Detroit to root for a Lion! 

God has put a crown on Tim Tebow. He is not ashamed to wear it.

Click Here for an audio version of this commentary.
Order the CDs here.
Do you think like a Christian or a humanist? Did the Founders really separate Church and State? Is Judicial tyranny ruining America? Check out these great teachings by the Coach
© 2012 Dave Daubenmire - All Rights Reserved

Used by permission.


Friday, January 27, 2012

The Fool: "There Is No God."

This article is taken from the FREE monthly newsletter put out by
The Berean Call. You can find the Jauary 2012 issue HERE.

~ ~ ~ ~ ~
by Dave Hunt
Excerpts from Seeking and Finding God by Dave Hunt

   WITHOUT TAKING TIME to explain the many disagreements, it is undeniable that there are such great basic differences between the world’s religions that it seems irrational to suggest that they are essentially in agreement and all lead to the same place. Nevertheless, in spite of these differences, there is evidence that those who follow world religions will indeed all end up in the same place—but not where they promise to take their followers.

   All religions have in common a universal opposition to the God of the Bible and His gospel concerning salvation by grace and faith alone through Christ Jesus and His sacrifice on the Cross. This commonality places them all on one side—and Christianity on the other.

   Indeed, so wide is the chasm between Christianity and all the world’s religions that it seems equally clear that Christians will definitely arrive at a different eternal destiny from everyone else. Yes, the various religions differ in the details relevant to the appeasement of their particular god or gods and the methods of attaining to nirvana, moksha, or whatever paradise they may offer. However, they all have in common the belief that their religious goals can somehow be achieved through their own good efforts and/or faithful participation in rituals and sacraments. Whether by yoga or paying off bad karma for the Hindu, or by good deeds for the Muslim (or dying in jihad [holy war] or on the hajj pilgrimage to Mecca), or through appeasing the spirits in African tribal religions and Shintoism, or by meditation techniques to escape desire and return to the void for the Buddhist, or by the sacraments of a supposed Christian church—it is all a matter of self-effort, which the God of the Bible firmly tells us He will not accept as even partial payment for having broken His laws.

   The Bible clearly states: “But to him that worketh not, but believeth on him that justifieth the ungodly, his faith is counted for righteousness” (Romans 4:5). Jesus said, “I came not to call the righteous, but sinners to repentance” (Mark 2:17). Paul emphasized that point: “Christ Jesus came into the world to save sinners” (1 Timothy 1:15). The world’s religions, along with the false Christianity that trusts in works and sacramentalism, attempt to make a person righteous enough for heaven. In contrast, the Bible says that everyone, by very nature, sins, must confess it, and must believe the gospel to receive forgiveness of sins and thereby be admitted eternally into the true God’s presence.

   Biblical salvation is by faith, and faith necessarily involves that which is unseen. It is not faith to believe in that which is present in visible form. Faith reaches out to the unseen world of the spirit and the eternal. And right here we encounter a major problem with ritual and sacraments: they attempt a moral rescue of the unseen and nonphysical spirit and soul of man with physical and visible ceremony. That won’t work.

   This grave error of sacramentalism persists even among a majority of those who call themselves Christians. They imagine that through participation in the visible, and thus temporal, sacrament, they receive invisible and eternal spiritual benefits. Clearly, this is impossible. The Bible declares, “Faith is the substance of things hoped for, the evidence of things not seen” (Hebrews 11:1). Salvation, because it necessarily involves the eternal and invisible, not that which is seen and is therefore temporal, must be by faith, not by physical works or ritual.

   Furthermore, ritual and sacraments have nothing to do with either justice or punishment and therefore cannot possibly pay for sin. One might as well imagine that some ritual could satisfy a court of law in paying the penalty prescribed for a major crime as imagine that God would accept sacraments in payment of the infinite penalty He has prescribed for breaking His law.

   The Bible gives two sacraments for the Christian: baptism and communion (also called the Lord’s supper). Both are symbolic reminders of a spiritual and eternal transaction that has already taken place: Christ’s death, burial, and resurrection, and our identification with Him by faith in His full payment of the penalty for our sins.

   Neither baptism nor communion is efficacious. To imagine that they are—and therefore to rely upon either or both of them to effect, even partially, one’s salvation—is to reject the salvation God offers in grace to those who believe His promise.

   In none of the world’s religions is there any concept of God’s perfect justice having to be satisfied for the sinner to be forgiven. Instead, works and rituals and mystical experiences are offered to appease God and/or to earn one’s salvation. The Bible, however, finds all the world guilty of rebellion against God and insists that human guilt can be forgiven only on a righteous basis. The penalty that God decreed must be paid in full.

   No one can pay for his own sins, either by sacrifice (even of himself in death) or by good works. Only Christ, who is God and man in one person and who lived without any sin, could pay for the sins of the world. Nor can we merit, earn, or purchase from God—who is perfectly holy and just—the benefit of Christ’s sacrifice in forgiveness of our sins. If we are to receive the pardon that Christ has earned, we must receive it by faith as those unworthy of it—the gift of God’s grace.

   The purpose of the Ten Commandments was not to offer salvation to those who could keep them (no one has ever done so except Christ), but to show us our guilt so that we would accept Christ’s payment that satisfied God’s justice on our behalf:
Wherefore, the law was our schoolmaster to bring us unto
Christ, that we might be justified by faith. (Galatians 3:24)

Therefore by the deeds of the law there shall no flesh be
justified in his sight: for by the law is the knowledge of
sin...that every mouth may be stopped, and all the world
may become guilty before God.... For God hath concluded
them all in unbelief, that he might have mercy upon all.

For the wages of sin is death; but the gift of God is eternal
life through Jesus Christ our Lord. (Romans 3:19-20;
11:32; 6:23)

   The attempt to offer works or rituals in payment for salvation is true even of some groups who claim to be Christian but who set up their own rules for gaining heaven in opposition to the biblical gospel of salvation by faith and grace alone without works. The Bible clearly says, “…that whosoever believeth in him [Christ] should not perish, but have everlasting life” (John 3:16). “For by grace are ye saved through faith…not of works, lest any man should boast” (Ephesians 2:8-9); “Not by works of righteousness which we have done, but according to his mercy he saved us…that being justified by his grace, we should be made heirs according to the hope of eternal life” (Titus 3:5-7). Any attempt to make even a partial payment for God’s gift by His grace is a rejection of that gift.

   That good deeds cannot pay for sins is not only biblical but logical. Even a traffic ticket cannot be paid on that basis. It will not avail to ask the judge to dismiss the charge for speeding because the guilty party has driven more often within the speed limit than he has exceeding it. Nor would the judge waive the payment of any crime in response to the defendant’s promise never, ever to break the law again. The judge would simply say, “If you never break the law again you are only doing what the law requires. You receive no extra credit by which to pay for having broken the law in the past. That penalty is a separate issue and must be paid as prescribed.”
   The Bible further asserts that God’s justice is infinite and that man, being finite, could never pay the infinite penalty it demands. We would be separated from God forever if we tried to work off the debt owed to His justice. God, being infinite, could pay that infinite penalty, but it wouldn’t be just, because
He is not one of us. Therefore, God became a man through the virgin birth in order to take upon Himself, in our place, the judgment we deserve. And it is only on the basis of that penalty having been paid in full that God can justly offer forgiveness.

   How amazing that religions that rely upon good works and rituals are considered to be “faiths.” Faith can only engage the unseen and eternal and, therefore, does not mix with works and ritual. In search of a valid faith, it is folly to look at that which is visible. Even to look to a visible cross or crucifix is of no merit. What occurred on the cross for our salvation was invisible and must be accepted by faith.

   The visible torture men inflicted upon Christ, the scourging, mocking, and nailing to the cross, is not the basis of our salvation—though that was the message of the popular film The Passion of the Christ. There is no virtue in making the “sign of the cross” or waving a cross or crucifix to ward off Satan or
evil. It was the judgment Christ endured at the hands of God in payment of the penalty for our sins that makes it possible for God to offer salvation. That suffering, endured by Christ, was totally invisible to man and must ever be. It is by faith alone that we believe Christ paid the penalty and by which we receive the eternal salvation He offers.

   The Bible speaks of “the faith which was once [for all time] delivered unto the saints” and declares that we must “earnestly contend” for this unchangeable truth because there are false teachers even inside the church who will seek through subterfuge to oppose it (Jude 3–4). Jude is not referring to faith in the sense of believing that a prayer will be answered or an event will occur. “The faith” is the body of truth that must be believed for one to be a Christian.

   The Bible allows for no compromise, no discussion, no dialogue with the world’s religions (remember, Christianity is not a religion but distinct from all of them) in search for common ground. There is no common ground as far as God, Jesus Christ, and salvation are concerned. The very suggestion that dialogue may be appropriate denies that “the faith” has unique doctrinal content as a definitive body of truth for which we must earnestly contend, and opens the door to compromise in the interest of public relations.

   Jesus didn’t say, “Go into all the world and dialogue about faith.” He said, “Go ye into all the world, and preach the gospel” (Mark 16:15). Paul didn’t dialogue with the rabbis and philosophers and pagan priests. He “disputed in the synagogue with the Jews, and with the devout persons, and in the market daily” (Acts 17:17). Was it because he was angry and argumentative? No, it was because the eternal destiny of his hearers depended upon whether they believed or rejected the gospel.

   A reasonable and genuine faith must take very seriously what Jesus said—not what somebody says about what Jesus said, but His very words as recorded in the Bible. And we must face this truth for ourselves, not look to someone else to interpret it for us, no matter what credentials that person or church or institution might claim qualifies them to think for us. We must arrive at this serious faith personally, for true faith is between each individual and God.

Except ye repent, ye shall all likewise perish.
— LUKE 13:3,5

Compliments of

Thursday, January 26, 2012

Alzheimer's REMEDY - Coconut Oil

I have read this in every medical newsletter to which I subscribe (about 5). Watch this 5 minute video.

Wednesday, January 25, 2012

The Peace-and-Freedom Deception

The Bible certainly doesn't overstate the end time deceptions. 

There is another one being played out by satanic forces, and this one says that we are in the very end of time, about to enter a Golden Age - with a Golden Leader, of course. (This New Age theme is seven years too early.)

They want you to believe that we are on the verge of truth revealed and the take-down of the global elite. The global elite has been led by these same satanic forces for a number of years, and now these forces are in the process of double-crossing these elite and bringing them down. Or so they say.

The "golden age" about to be brought in is the New Global Order, which Bible students understand is anything but a golden age. And yet, the New Agers are eagerly awaiting their "ascension," which is - to put it bluntly - demonic possession. This is the blindness of which the Bible speaks - when people have refused over and over again to receive the truth of the Creater. God will then turn them over to a great delusion, a blindness to real truth.

There is no doubt that much truth has been hidden and is beginning to be revealed (the "awakening.") The god of this world has dealt in lies and deceit since the beginning, and we are starting to see the truth revealed of many matters which Lucifer caused in the first place for use at this very moment. But, there is much more deceit to follow, an endless stream of new 'revelations' and deceptions which will lead to the mental subjection of the majority of people. Great discernment is needed to sort it all out. The world is being prepared for a golden age headed by a 'golden savior' - it will all seem so true.

The next great deception will come under the guise of returning to the Constitution, to peace and freedom. This will work itself out in the political process in the U.S. over the next 9 months. This is another lie - but I have no doubt that it will be successful. The Antichrist will be/is now cloaked in peace and freedom - the same 'freedom cover' that Satan used to bring forth the French Revolution and the American Revolution, all the while bringing to fruition the his plans through the backers of these revolutions - the Illuminati, the Freemasons, the Jesuits etal (our government leaders).

Don't be misled by promises of "back to the Constitution...freedom... and peace." These are nothing more than the newest ploys designed to fool the sheeple. Satan is a real fan and promoter of freedom. He always pretends to give you what you want ... and then the axe falls. This is his modus operandi and it has worked for centuries. It wll work this time, too. Just remember: you have been warned.

Your minds and emotions will be so overloaded trying to accept the terrible truths of past deceptions in America that you will be too exhausted to realize when the false 'truths' are added into the mix, and you will believe all of it. Brilliantly clever. And evil.

Excerpts from Lucifer's spokesmen:

A beautiful New Dawn is approaching, bringing with it truth and light, removing all the confusion of the past.
All that you had accepted as truth must be discarded.
Embrace the changes that we are putting in place as we continue to awaken mankind so that we can restore peace and freedom.
Those who have no right or any good intentions towards mankind will be removed from the planet, never to return. (This refers to the Rapture.)
Your future is bright and full of will be so different. 
All the sacred sites around the world will be re-energized.
The world as you know it will end; all the suffering over, all control gone. Light and peace will return to all mankind. 
Mind-to-mind communication will be possible. We decide everything. You just follow our instructions.
This is all unmitigated foolishness. There is only one way to stay on the path of truth. Pray for guidance and discernment, read the Word daily, rid yourselves of the distractions of the world ... concentrate on the Lord and put on the full armor of god (Ephesians 6).  

We are entering a most dangerous period. Yet, there is no need whatsoever to be fearful. Read the watchman blogs; stay in the Bible and in touch with the Lord. He is all-sufficient. 


Tuesday, January 24, 2012

While We Wait

(From Scott's blog HERE)

Let's face it - waiting is hard. For this reason, being a prophecy watcher is very difficult and it is a long, long process. First, a quick look at the scriptures for some guidance. 

"I have fought the good fight, I have finished the race, I have kept the faith. Now there is in store for me the crown of righteousness, for which the Lord, the righteous Judge will reward to me on that day - and not only to me, but also to all who have longed for His appearing."
(2 Timothy 4:7-8)

The scripture above tells us a lot. Think of a "good fight". This image brings to mind a boxing match, which is often more of a battle of endurance than anything else. If you watch a boxing match, by the end, the fighters are so tired that they can barely keep their hands up; they can barely swing due to fatigue, but they keep battling with whatever strength they have left. 

Think about a race; particularly a distance race, which is clearly referenced here. By the end of the race it's also a battle of endurance - fighting through fatigue and pain in order to finish strong. Its really a battle of "mind over matter". 

Don't forget; the apostle Paul was also watching and waiting for Christ's return. He was no different from us in that respect. He had to fight through incredible hardships during his watching and waiting for Christ's potential return - all of which must have been on his mind as he wrote these scriptures. He understood the difficulty of waiting. 

Perhaps more importantly, Jesus knew the difficulties of watching for His return. 

We know that we will be rewarded for our "works" which will take place during the Bema "Judgement" (2 Corinthians 2:5, 1 Corinthians 3:10-15).

We won't be judged for our sins - Jesus already took that on our behalf as He suffered on the cross. We will, however, be rewarded for our works while on earth.

Although we will be rewarded for a large variety of these works, the scriptures actually describe five specific "crowns" which will be rewarded to believers. One of these crowns is the "Crown of Righteousness" for believers who have been watching for Christ's return:

"...the crown of righteousness", which the Lord, the righteous Judge, will award to me on that day - and not only to me, but also to all who have longed for His appearing."

So we can see the importance of our "watching" for His return. 

It is of tremendous importance to Jesus.
Just take a look at Luke 12: 35-40 and 54-56. Jesus describes the vital importance of watching for His coming. He also spent considerable time and effort in the Olivet discourse describing the importance of watching (see Matthew 24:42, 44 and 25:13, Mark 13:32-36, and Luke 21:28, 31 and 36). It obviously means a great deal to Jesus. 


Why is it so important to Jesus that His church (aka His "Bride") is watching and longing for His return?

Doesn't it reveal our deep love for Christ? Shouldn't the Bride be anxiously awaiting the Bridegroom's coming? 

How you love someone and not have great anticipation of being with that person? 

If the believer is indifferent regarding Christ's coming - how much love does that reveal?

Perhaps better stated - and directed to those Christians who have no interest in Christ's return: How can you profess to love Christ, and have an awareness that He may return soon - yet show no interest in watching for the signs of His return? 

Those two ideas are completely inconsistent. 

As John Hagee says "If you aren't excited about Christ's return, then you need to re-examine your faith". That seems obvious.

Additionally - let's assume that we are wrong and we are not in the season of Christ's return.

Wouldn't it be better to face Christ having been wrong, yet, wanting to be with Him so much and to be in His presence - so desperately - that we did indeed watch and hope for His return - rather than having no interest at all in His return?

Which scenario would Christ prefer?

The answers seem clear. Jesus wants to find us watching the signs and awaiting His return. It shows a deep love and an intensity that any bride should have for the bridegroom as that day approaches. 

And let us not forget - Jesus called those "followers" of His "Hypocrites" for not knowing and understanding the signs of His first coming on earth (Luke 12:54-56). That's a pretty strong accusation isn't it? 

But there is a caveat to all of the above. It's hard continually watching and waiting for His return. 

Perhaps that explains Revelation 3:10:

"Since you have kept my command to endure patiently, I will also keep you from the hour of trial that is going to come upon the whole world..."

We do "endure patiently" don't we?

As contrasted with Christians who have no interest - we endure this world every day, with the knowledge that we will imminently be in New Jerusalem and in the very presence of Christ Jesus. 

Having that knowledge makes enduring the hardships of this world even more difficult. We appreciate on a daily basis that this world is not "our world". We know that our home is in New Jerusalem; our permanent home and where we should be. We know that we are just a breath away from actually being in the very presence of Jesus Himself.

As we long for Jesus and as we long for our permanent home, we have to endure this world.

The knowledge that Jesus is coming for us makes the "enduring" aspect of life on earth even more difficult and we also become fatigued as we continually keep watch. 

Jesus knows this. It has to be one of the reasons that we will be rewarded for these efforts. 

But we watch for one reason: We love Jesus and we desperately want to be in His presence. 

We are acutely aware of the fact that we are only here, on this earth, temporarily - and that a far far better place awaits. We know that we are in this world (for now) but we are not of this world. 

We just have to be patient as we watch the signs and that is a long, hard process. 

But we cannot forget - Jesus knows who is watching and longing for His return. 

It pleases Him that we do so. It reveals our deep love, and after all, isn't that what our faith is all about? 

He will be coming soon and He will find us watching and waiting with great anticipation. 

What a great way to begin our life with Jesus in New Jerusalem - so take heart - our watching and waiting, despite the hardships we face will be richly rewarded. 

As we watch the world beginning to crumble around us - as we watch the world approaching the Tribulation, with all of the necessary evil, corruption, violence, sin, draconian government, oppression, persecution, hardships, etc., we see these instructions from the apostle Paul:

"Now may the Lord of peace Himself give you peace at all times and in every way. The Lord be with all of you." (2 Thessalonians 3:16). Amen and Maranatha. 

We will all be in New Jerusalem soon - and experiencing the most epic celebration ever seen. 

Each of us will participate:

"After this I heard what sounded like the roar of a great multitude in heaven shouting:
Salvation and glory and power belong to our God...'
'Amen, Hallelujah!'
'For our Lord God Almighty reigns.
Let us rejoice and be glad and give him glory!
For the wedding of the Lamb has come,
and the bride has made herself ready.'"
(Revelation 19)

It will happen, and it will happen soon. 

Jesus is putting the final touches on His Bride's new home and soon He will come. 

And when He does, it will please Him greatly to find us watching and waiting. 

Keep looking up. Jesus will fulfill His promises - that is an iron-clad guarantee. 

Compliments of

Monday, January 23, 2012

Saudi-funded textbooks being used in America’s K-12 classrooms.

Teaching, among other things, that Jesus was a “Palestinian,” the state of Israel never existed, and that the Muslims discovered America before Columbus. At this rate, perhaps even Saudi grade-school textbooks, complete with jihadi and dhimmi declarations, will come to instruct American school-children.

“Public Schools Teach the ABCs of Islam,” by Erick Stakelbeck for CBN News, October 9, 2008 (FOUR YEARS AGO): – Several recent studies have shown that American students are alarmingly ignorant about U.S. history and world events.

Experts have attributed the problem to everything from failing schools to substandard teachers.
But what about content?

For instance, did you know that Muslims discovered America? Or that Jerusalem is an Arab city? That’s just some of the “history” that students in America’s K-12 classrooms have been taught in recent years–with the help of taxpayer money.

A new report by the non-profit Institute for Jewish and Community Research finds that American high school and elementary textbooks contain countless inaccuracies about Christianity, Judaism, Israel and the Middle East.

The Institute examined 28 of the most widely-used history, geography and social studies textbooks in America. It found at least 500 errors.

Sunday, January 22, 2012

The Corruption of America

This article is very long, and very important. I hope you can read it all. If certain sections can't keep your attention, move to the next paragraph. If more experts had been writing these things a few years ago we might not be where we are today.  CMR


By: Porter Stansberry

The numbers tell us America is in decline... if not outright collapse.

I say "the numbers tell us" because I've become very sensitive to the impact this kind of statement has on people. When I warned about the impending bankruptcy of General Motors in 2006 and 2007, readers actually blamed me for the company's problems – as if my warnings to the public were the real problem, rather than GM's $400 billion in debt.

The claim was absurd. But the resentment my work engendered was real.

So please... before you read this issue, which makes several arresting claims about the future of our country... understand I am only writing about the facts as I find them today. I am only drawing conclusions based on the situation as it stands. I am not saying that these conditions can't improve. Or that they won't improve.

The truth is, I am optimistic. I believe our country is heading into a crisis. But I also believe that... sooner or later... Americans will make the right choices and put our country back on sound footing.

Please pay careful attention to the data I cite. And please send me corrections to the facts. I will happily publish any correction that can be substantiated. But please don't send me threats, accusations against my character, or baseless claims about my lack of patriotism. If I didn't love our country, none of these facts would bother me. I wouldn't have bothered writing this letter.

I know this is a politically charged and emotional issue. My conclusions will not be easy for most readers to accept. Likewise, many of the things I am writing about this month will challenge my subscribers to re-examine what they believe about their country. The facts about America today tell a painful story about a country in a steep decline, beset by problems of its own making.

One last point, before we begin... I realize that this kind of macro-economic/political analysis is not, primarily, what you pay me for. You rightly expect me to provide you with investment opportunities – whether bull market, bear market, or total societal collapse. And that's what I've done every month for more than 15 years.

But that's not what I've done this month. You won't find any investment ideas at all in these pages. This issue is unlike any other I have ever written.

I'm sure it will spark a wave of cancellations – costing me hundreds of thousands of dollars. I fear it will spark a tremendous amount of controversy. Many people will surely accuse me of deliberately writing inflammatory things in order to stir the pot and gain attention. That's not my intention. The truth is, I've gone to great lengths throughout my career to protect my privacy.

I am speaking out now because I believe someone must. And I have the resources to do it. I am sharing these ideas with my subscribers because I know we have arrived at the moment of a long-brewing crisis.

Our political leaders, our business leaders, and our cultural leaders have made a series of catastrophic choices. The result has been a long decline in America's standard of living.

For decades, we have papered over these problems with massive amounts of borrowing. But now, our debts total close to 400% of GDP, and America is the world's largest borrower (after being the world's largest creditor only 40 years ago)... And the holes in our society can no longer be hidden...

We've reached the point where we will have to fix what lies at the heart of America's decline... or be satisfied with a vastly lower standard of living in the future.

How do I know? How do I statistically define the decline of America?

The broadest measure of national wealth is per-capita gross domestic product (GDP). Economists use this figure to judge standards of living around the world. It shows the value of the country's annual production divided by the number of its citizens. No, the production isn't actually divided among all the citizens, but this measure provides us with a fair benchmark to compare different economies around the world. Likewise, this measure shows the growth (or the decline) in wealth in societies across time.

So... is America growing richer or poorer based on per-capita GDP? Seems like a simple enough question, doesn't it? Is our economy growing faster than our population? Are we, as individuals, becoming more affluent? Or is the pie, measured on a per-person basis, growing smaller?

This is the most fundamental measure of the success or the failure of any political system or culture. Are the legal and social rules we live under aiding our economic development or holding us back? What do the numbers say?

Unfortunately, it's a harder question to answer than it should be. The problem is, we don't have a sound currency with which to measure GDP through time. Until 1971, the U.S. dollar was defined as a certain amount of gold. And the price of gold was fixed by international agreement. It didn't actually begin to trade freely until 1975. Therefore, the value of the U.S. dollar (and thus the value of U.S. production, which is measured in dollars) was manipulated higher for many years.

Even today, our government's nominal GDP figures are greatly influenced by inflation. The influence of inflation is particularly pernicious in GDP studies. You see, inflation, which actually reduces our standard of living, drives up the amount of nominal GDP. So it creates the appearance of a wealthier country... while the nation is actually getting poorer.

The only real way to accurately measure per-capita GDP is to build our own model. The need to build our own tools tells you something important – the government doesn't want anyone to know the answer to this question. It could easily publish data far more accurate than the indexes it puts out. But government doesn't want anyone to know. And it wants to be able to say "those aren't the real data" when studies like ours produce bad news.

So pay attention to how we built our charts. You can see for yourself that our data are far more accurate than the government's figures. Our data are based on the real purchasing power of the currency, not the nominal numbers, which are completely meaningless in the real world.

The question we are trying to answer is: What would per-capita GDP numbers look like, if we used a real-world currency, like gold, or a basket of commodity prices, instead of the paper-based U.S. dollar? What would the figures be if we measured GDP in sound money instead of the government's funny money?

Here's how we figured it out. We took the government numbers for nominal GDP and measured them first against commodity prices, and later (after it began to trade freely) gold. We used a standard commodity index (the CRB) up to 1975 and gold post-1975. The result of this analysis shows you the real trend in U.S. per-capita GDP, as measured on a real-world purchasing power basis.

Our analysis shows you what's actually happened to our real standard of living. The results, we suspect, will surprise even the most bearish among you.

America is in a steep decline.

Americans Are Getting Poorer – Fast

Let me anticipate the "official" criticism of our study. Many people will claim that our numbers aren't "real." They will say that we "mined" the data to produce a chart that showed a steep decline.

That's simply not so. All we've done is convert the government's nominal GDP stats into a fixed currency value that's based on real-world purchasing power. The fact is, our data are far more accurate than the government's because they represent the real-world experience. That's why our data are far more closely correlated to other real-world studies of wealth in America.

Consider, for example, annual sales of automobiles. Auto sales peaked in 1985 (11 million) and have been declining at a fairly steady rate since 1999. In 2009, Americans bought just 5.4 million passenger cars. As a result, the median age of a registered vehicle in the U.S. is almost 10 years.

Our data shows that real per-capita wealth peaked in the late 1960s. Guess when we find the absolutely lowest median age of the U.S. fleet? In 1969. At the end of the 1960s, the median age of all the cars on the road in the U.S. was only 5.1 years. Even as recently as 1990, the median age was only 6.5 years.

Rich people buy new cars. Poor people do not.

Most important, our data "proves" something I know many of you have felt or perceived for many years. You've seen the decline of your neighborhoods. You've gone years without being able to earn more money in your job. Or you've seen your purchasing power decrease to the point where you're now substituting lower-quality products on your grocery list for the brand-name products you used to buy.

You can see how much harder it is on your children to find good jobs, to buy good housing or a new car. As a result, few people under the age of 40 have the same kind of "life story" as their parents.

And because they can't "make it," many have decided to "fake it." The average college student now graduates with $24,000 in debt... and by his late 20s has racked up more than $6,000 in credit card debt. Meanwhile, median earnings for Americans aged 25-34 equals $34,000-$38,000. (Source:, "The Economic State of Young America," November 2011.)

Can you imagine starting your life out as an adult with a personal debt-to-income level at close to 100%? What does this say about the state of our economy? What does this say about the state of our culture?

Who Suffers Most

It's not only the young that are having trouble in America. It is also the old.

Debt levels among households headed by people older than 62 have been rising for two decades. The average mortgage size for this population is now $71,000 – five times larger than it was in 1987 (adjusted for inflation), according to William Apgar of Harvard's Joint Center for Housing Studies.

Older Americans are also more reliant on credit card debt than ever before... credit card debt. From 1992 through 2007 (which is the latest data available) older Americans took on credit card debt at a faster pace than the population as a whole. According to USA Today, lower- and middle-income Americans aged 65 and older now carry an average of more than $10,000 in credit card debt, up 26% since only 2005.

Given average interest rates of 20% for these debts, it's a fair bet that these obligations will never be repaid. But they will have a terrible impact on the standard of living of these older Americans.

What in the heck is going on? Don't Americans pay off their mortgages before they retire? Don't they work hard during their careers, save, and invest, so they can move to Florida and spend their retirement in comfort?

Older Americans living with credit card debt! This doesn't sound like America, does it? Or maybe it does.

My bet is that most of my subscribers know that something has gone terribly wrong with America. It's not easy to figure out how all of this happened... but you know from your own experiences that these numbers aren't wrong. It might not be pleasant to think about... but these figures paint a sad but accurate picture: America is not the country it was 40 years ago. These changes are warping our economy, politics, and culture.

In this month's issue, I'd like to try to define a few of the core reasons we're in this situation. I can't possibly analyze all the factors that have led to this decline. But I want to document the growth of graft in politics. I want to demonstrate – with real facts and examples – how public company leadership has deteriorated. And I want to document some of the things that are occurring in the broader society, all of which I believe are linked to this fundamental decline in our standard of living.

You see, I believe the decline of our country is primarily a decline of our culture.

We have lost our sense of honor, humility, and the dedication to personal responsibility that, for more than 200 years, made our country the greatest hope for mankind. I want to detail some of the factors that gave rise to the current entitlement society. We have become a country of people who believe their well-being is someone else's responsibility.

I've labeled these problems: The Corruption of America.

These problems manifest themselves in different ways across institutions in all parts of our society. But at their root, they are simply facets of the same stone. They are all part of the same essential problem.

The corruption of America isn't happening in one part of our country... or in one type of institution. It is happening across the landscape of our society, in almost every institution. It's a kind of moral decay... a kind of greed... a kind of desperate grasp for power... And it's destroying our nation.

The Ethos of 'Getting Yours'

Americans know, in their bones, that something terrible is happening. Maybe you can't articulate it. Maybe you don't have the statistics to understand exactly what's going on. But my bet is, you think about it a lot.

For me, a poignant moment of recognition came this month.

Bloomberg news published an article based on confidential sources about how Henry Paulson, the former CEO of Goldman Sachs and the Republican U.S. Treasury secretary during the financial crisis, held a secret meeting with the top 20 hedge-fund managers in New York City in late July 2008. This was about two weeks after he testified to Congress that Fannie Mae and Freddie Mac were "well-capitalized."

I knew for a fact that what Paulson told Congress wasn't true. I wrote my entire June 2008 newsletter detailing exactly why Fannie and Freddie certainly had billions in losses that they had not yet revealed to investors – $500 billion in losses, at least. There was no question in my mind, both companies were insolvent – "zeros," as I explained.

And yet, in front of Congress, the U.S. Treasury secretary was saying exactly the opposite. Either I was a liar... or he was.

Then... only a few days later... what did Paulson tell those hedge-fund managers?

He told them the same thing I had written in my newsletter. He told them the opposite of what he'd said publicly to Congress. He told these billionaire investors that Fannie and Freddie were a disaster... They would require an enormous, multibillion-dollar bailout... The U.S. government would have to take them over... And their shareholders would be completely wiped out.

Here you had a high-government official, explicitly lying to Congress (and by extension, the general public), while giving the real facts to a group of people who represented the financial interests of the world's wealthiest folks. The story didn't come to the public's attention for two years.

This was the most outrageous example of graft and corruption I have ever seen. Certainly it involves more billions of dollars in misappropriated value than any other similar story I can recall. These managers had the risk-free ability to make tens of billions of dollars, if not hundreds of billions, by using derivatives to capitalize on what they knew was the imminent collapse of the world's largest mortgage bank. Who picked up the tab? You know perfectly well. It was you and me, the taxpayers.

(One of the investment managers present at this meeting was Steve Rattner, who by that point was already deeply involved in another bit of graft, his efforts to bribe New York state pension-fund managers for large investments into his hedge fund, from which he earned perhaps as much as $100 million. He later settled the charges for a mere $10 million shortly after Andrew Cuomo was elected governor of New York.)

The Bloomberg story... about a crooked Treasury secretary handing a room full of crooked billionaires inside information worth billions of dollars... hardly caused a ripple. As far as I know, no actions are being planned against Henry Paulson or any of the hedge-fund managers involved. No other major media outlet picked up the story. I saw nothing about it from the Department of Justice or the Securities and Exchange Commission.

What does that say about our country when even the most egregious kind of corruption – involving hundreds of billions of dollars – is simply ignored?

It seems like everyone in our country has lost his moral bearing, from the highest government officials and senior corporate leaders all the way down to schoolteachers and local community leaders. The ethos of my fellow Americans seems to have changed from one of personal integrity and responsibility to "getting yours" – the all-out attempt, by any means possible, to get the most amount of benefits with the least amount of work.

You can see this in everything from the lowering of school standards (revising the SAT) to the widespread use of performance-enhancing drugs in professional, college, and high school sports. Cheating has become a way of life in America.

I have an idea about how this happened... about the root cause of this kind of corruption and why it was inevitable, given some of the basic facts regarding how we've organized our government and our corporations.

Let me show you the numbers – the hard facts – behind what's happened to our country...

The Corruption of Politics

I'll start with one of the biggest factors in the decline of our civilization – the link between welfare, education, crime, and politics.

It is routinely alleged in national political debates that something is fundamentally unfair and un-American about the huge "wealth gap" between the poorest Americans and the wealthiest. Some politicians like to argue that the poor never have a real shot at the American dream, and as a nation, we owe them more and more of our resources to correct this injustice. Most important, it is alleged that only the government has the resources to correct this inequality.

This is a dangerous notion...

First, it promotes the idea of entitlement. Entitlement is a fairly new idea in the American political lexicon – perhaps because most of our nation's wealth is still fairly new. The American idea of entitlement argues that because you were born into a rich society, other people owe you something. The idea has become pervasive in our culture. It underlies the basic assumptions behind the idea of a "wealth gap." Implicit is the assumption that successful Americans haven't rightfully earned their wealth... that in one way or another, they've taken advantage of the society and have an obligation to give back most of what they've "taken."

As you'll see, I believe the idea of entitlement lies at the root of many of our most serious cultural problems.

The more obvious problem is the idea that the government is responsible for fixing the "wealth gap." But the government has proved wholly ineffective at dealing with poverty in America. The data is nearly conclusive that government efforts are far more likely to be the cause of the wealth gap than the solution.

The simple fact is, the government has to take resources from someone before it can dole them out to others. And this act of taking turns out to be economically destructive. It reduces the market's incentives for entrepreneurs. The more you take from the productive members of society, the less productive they become. That's the primary lesson of the history of socialism. Yet... many of our political leaders seem oblivious to this iron law of human nature.

Consider a simple analysis that compares the unemployment rate with the size of the federal government's spending, as measured against GDP. (We created this chart after reading a similar analysis at Mark Perry's excellent financial blog, Carpe Diem.)

As you can see in this chart, the larger the government grows as a percentage of our economy, the higher unemployment rises. The more government, the less opportunity. These figures are similar when studied comparatively across many different countries.

We also know from decades of experience that little of the government's funding for the poor will ever reach those who are actually in need. Instead, these kinds of socialist policies end up sending billions of dollars into the hands of unions, "community organizers," and other sponsors of the Democratic Party. This tightens their political control of America's inner cities, which have become the source of our country's most intractable social problems.

Believe me, I have reams of data and decades of case studies for these conclusions. But before we get to my proof, I want you to simply assume that what I'm saying is 100% correct. Assume most of the government's social spending ends up corrupting the politics of the inner city. Assume these efforts actually make the "wealth gap" larger. Assume these policies and the politicians who sponsor them are actually creating a society of complete dependence, where the spread of ignorance has created entire generations of people who aren't educated enough to know they've been enslaved by their own leaders.

If these things are true, if my conclusions are exactly right, what would America's poorest communities look like today?

It has now been almost 50 years since the start of the War on Poverty, President Lyndon Johnson's program to radically increase domestic welfare spending. These programs and their various spinoffs have been at the center of Democratic politics ever since. In fact, if you compare speeches about these programs from the mid-1960s until today, you will find the verbiage never changes. Obama is merely echoing the same calls for "social justice" that Robert Kennedy used in his ill-fated 1968 campaign for president.

But besides the soaring rhetoric, besides the promise of a "chicken in every pot," what have these programs actually achieved? The wholesale destruction of urban communities across America, communities that are overwhelmingly African American. If the intention of these programs had been to destroy black communities, you could have hardly done more damage than the last 50 years of Democratic policy.

I don't think most Americans realize how dangerous these communities have become or the toll they take on our country as a whole. That's primarily because talking about this problem is seen as racist. That's complete nonsense. The victims of these policies are primarily black people. Trying to help them restore dignity and independence to their communities isn't a racist goal. It's humanitarian.

And let me offer a prediction... Sooner or later, the people in these communities are going to finally point their finger at the politicians who've lied and pandered to them for decades, all while stealing from them at every turn. When that moment comes, having a track record of correctly speaking out about the real nature of these problems will be a valuable political asset.

No, I'm not running for office... I'm just trying to buck-up the politicians who I know read this letter. They need to get out in front of this issue.

Let me give you some of the numbers that define the enormous scope of these problems.

According to the NAACP, Texas taxpayers spent $175 million in 2009 to imprison residents from a small part of Houston – only 10 zip codes out of 75. Thus, people from neighborhoods that are home to only about 10% of the city's population account for more than 33% of the state's entire $500 million annual prison spending. These neighborhoods are overwhelmingly poor and African American.

In Pennsylvania, taxpayers will spend $290 million in 2009 to imprison residents from just 11 of Philadelphia's neighborhoods, representing about 25% of the city population. On this relatively small urban area, the state will spend roughly half its $500 million prison budget. These neighborhoods are overwhelmingly poor and African American.

In New York, taxpayers will spend $539 million to imprison residents from only 24 of New York City's 200 different neighborhoods. Only 16% of the city's population lives in these areas, but they will account for nearly half of the state's $1.1 billion prison budget. These neighborhoods are overwhelmingly poor and African American.

America has many problems... but these neighborhoods represent more than a society in decline. Life in these places reflects a complete collapse of Western civilization. What's happening in these communities? A breakdown of the family and the resulting collapse of the school system. What you have left is crime – violent and political.

In Detroit, only 27% of the black male students in the school system graduate from high school. This is not a racial problem: Only 19% of the white male students graduate from those same schools. What's causing this problem? A complete breakdown of society. When communities can no longer teach their children the most basic academic skills, such as reading, math, history, literature, and economics... what future can we expect? And what kind of society do you expect after several generations of total ignorance?

These problems are still found primarily in urban areas, but they are spreading across the country. In Pinellas County, Florida, only 21% of black male students graduate from high school. In Palm Beach County, Florida, you find a similar number. Likewise Duval County, Florida... and Jefferson Parish, Louisiana... and Charleston County, South Carolina. In Nebraska, only 40% of black male students graduate from high school. In Nevada, only 45%. In New York state, only 25%.

What opportunities are available in America to people without even a basic education? The New York Times reports almost 70% of black males without a high school diploma are unemployed in the United States.

In many predominantly black, urban communities, the actual unemployment rate is close to 100% for young dropouts. Given these figures, it isn't surprising that many of these people end up in jail.

According to various studies, black males who dropped out of school by age 16 are four times more likely to end up in jail than those who remained in school. Crime is literally all they know. Likewise, a black youth whose mother was a high school dropout is 88% more likely to end up in jail. These are the two primary reasons nearly one in 11 adult black men are either in jail or on parole.

How did this all happen? How did we end up with expensive schools that can't teach? How did we end up with young mothers who aren't married? How did we end up with entire generations of people who won't – and probably can't – work in the labor force? How did we end up with a skyrocketing prison population? The prison population in America has soared from less than half a million people in 1980 to more than 2.5 million people today. More than 7 million adults are in prison or on parole in the United States. We have an incarceration rate that's seven times higher than any other industrialized nation.

The land of the free?

Let's ask the most basic question: What has the gigantic increase in welfare spending and education spending done for the underclass of America? It seems apparent that growth in federal spending has caused far more harm than good. When you study these neighborhoods, what you find is a horrifying story that's been repeated, generation after generation since the early 1960s. It's a story of families who have been destroyed by their dependency on the state.

The truly extraordinary part is that all these things happened after these neighborhoods began voting and electing their own (typically black and Democratic) leadership. The socialism they voted for themselves led most directly to the destruction of their communities. It was their own mayors, ward leaders, and congressmen who chose this path for these communities.

Let me show you one case study – Detroit.

How Socialism Came to America...
and Destroyed Detroit

In 1961, the last Republican mayor of Detroit, Louis C. Miriani, lost his re-election bid. He probably would have lost to anyone who ran against him because he was known to be a crook. He later served 10 years in prison for tax evasion.

The man who defeated him, Jerome Cavanagh, was a Democrat. He ushered in a new kind of politics in Detroit. Cavanagh, who was white, got elected by promising to give Detroit's African American population the civil rights they deserved. But he didn't stop there. Seeing the political advantage to serving this community's interests, he did all he could to bring government benefits and government spending to Detroit's black community.

Cavanagh brought socialism to Detroit.

Mayor Cavanagh was the only elected official to serve on President Johnson's Model Cities task force. The program was modeled after Soviet efforts to rebuild whole urban areas in Eastern Europe. At the time, this centralized approach to urban development was proclaimed as an advantage to the Soviet system, something that could give them an edge in the Cold War.

Detroit received widespread acclaim for its leadership in the program, which attempted to turn a nine-square-mile section of the city (with 134,000 inhabitants) into a "Model City." To help finance the effort, Cavanagh pushed a new income tax through the state legislature and a "commuter tax" on city workers. He promised the mostly poor and black residents of the Model City area that the rich would pay for all of these benefits. He bought their votes with taxes they didn't have to pay.

It was classic American socialism.

More than $400 million was spent on the program – and that was back when quarters still had actual silver in them. The feds and Democratic city mayors were soon telling people where to live, what to build, and what businesses to open or close. In return, the people received cash, training, education, and health care.

But they didn't like being told what to do... or how to live. Not surprisingly, the Model Cities program was a disaster for Detroit. Within five years, it had helped trigger a complete breakdown of civil order and the city's population began to rapidly decline.

On July 23, 1967, police attempted to break up a notorious "blind pig" in the heart of the new Model City. Blind pigs were after-hours clubs that featured gambling and prostitution. They were part of the black culture of Detroit, with many having been in operation since the Prohibition period. The community tolerated these establishments – but the political leadership didn't want any blind pigs in the new Model City area.

On this particular night, at this particular club, the community was celebrating the return of two Vietnam War veterans. More than 80 people had packed into the club. The police decided to arrest everyone present, including the two war vets. This outraged the entire neighborhood, which began to riot. The scene turned into the worst race riot of the 1960s.

As my friend Doug Casey likes to say about the War on Poverty, "The poor lost." The violence killed more than 40 people and left more than 5,000 people homeless. One of the first stores to be looted was a black-owned pharmacy. The largest black-owned clothing store in the city was also burned to the ground. Cavanagh did nothing to stop the riots. (He claimed a large police presence would make matters worse.) Five days later, President Johnson sent in two divisions of paratroopers to put down the insurrection.

The situation destabilized the entire city. Most of the people who could afford to leave did. Over the next 18 months, 140,000 upper- and middle-class residents – almost all of them white – left the city.

And so, you might ask... after five years of centralized planning, higher taxes, and a fleeing population, what did the government decide to do with its grand experiment? You'll never guess...

Seeing it had accomplished nothing but failure... The government expanded the Model City program with 1974's Community Development Block Grant Program. Here again, politicians would decide which groups (and even individuals) would receive state funds for various "renewal" schemes. Later, big business was brought into the fold. In exchange for various concessions, the Big Three automakers "gave" $488 million to the city for use in still more redevelopment schemes in the mid-1990s.

What happened? Even with all of their power and all of the money, centralized planners couldn't succeed with any of their plans. Nearly all of the upper- and middle-class citizens left Detroit. The poor fled, too. The Model City area lost 63% of its population and 45% of its housing units from the inception of the program through 1990.

Even today, the crisis continues. At a recent auction of nearly 9,000 seized homes and lots, less than one-fifth of the available properties sold, even with bidding starting at $500. You literally can't give away most of the property in Model City areas today. The properties put up for sale represented an area the size of New York's Central Park. Total vacant land in Detroit now occupies an area the size of Boston. Detroit properties in foreclosure have more than tripled since 2007.

None of this is surprising. It's exactly what you'd expect to see given the implementation of a socialist scheme like a Model Cities' program. Quite simply, coercion doesn't work for economic development. You cannot tax yourself into prosperity.

It might buy votes... but sooner or later the voters will realize all that's been promised was a lie. Won't they?... Maybe not.

You see, the failure of the Model Cities program and of the War on Poverty wasn't surprising. What is surprising is that every single mayor of Detroit since 1961 has been a Democrat. And extremely liberal, black politicians have filled almost every major political office in the city since the mid-1960s.

For example, John Conyers, Jr. has represented most of Detroit's worst neighborhoods since 1965. Today, Conyers is the second-longest serving congressman in the House. And his election track record could be described as "Putin-esque." Conyers doesn't merely win all of his election campaigns... He wins by margins that aren't explainable in a normal, two-party system.

He defeated Republican Robert Blackwell in 1964, getting 84% of the vote. He was re-elected 13 times in a row from that district, all with a greater margin of victory than 85%. Ironically, the district was so ill-served by his socialistic policies that about half of the people moved away. The population losses led to redistricting. From then on, his margin of victory has fallen... to "only" around 80%.

These election results don't seem reasonable, do they? They aren't. By controlling the state legislature in Michigan, the Democrats are able to draw the congressional districts in a way that guarantees them almost permanent control. It's no different than what despots do all over the world. They hold an "election." But it's only for show.

And what do the Democrats do with this power? They push a form of American socialism. This political system features transfer payments, government jobs, and lucrative government contracts to voters in exchange for political support – and in many cases, outright bribes. They do all of these things under the cover of "progressive" politics and "social justice."

But if you brush away the veneer, what you find is a history of abuse of power, corruption, and outright bribery. Conyers himself was found guilty of several minor ethical violations in 2006 – mainly of using his staff as personal servants, forcing them to babysit and chauffer his children. In 1992, he was one of the most egregious abusers of the House Banking scandal. He wrote 273 bad checks and left his account overdrawn for nine months. But that's all small-time graft compared to how things really work in his office and in his district.

How do I know? Well... just ask yourself where Conyers' wife sleeps today.

Monica Conyers, the wife of the second-longest tenured congressman in the United States, sleeps in a federal prison in West Virginia. She pled guilty to bribery in June 2009. She is serving a 37-month sentence for accepting $60,000 in bribes as the president pro tempore of the Detroit City Council. And yet... and yet... Conyers won re-election handily in 2010.

How is that possible?

These kinds of people and their political philosophy have destroyed what was once America's fourth-largest city. There is almost nothing left of what was the capital of America's industrial heartland. It's not hard to understand what has happened. When you start taxing people at extremely progressive rates to pay for socialist "benefits"... when you start telling them which schools their children must attend... when you start giving jobs away to people based on political patronage, race, or anything other than ability... you quash human freedom, you create dependency. And you deter capital and investment... which bogs down productivity and economic growth. If continued for long enough, it leads to social collapse.

And Conyers is hardly an anomaly. Just look at those same blighted districts in Houston and Philadelphia...

In Houston, most of the city's worst neighborhoods in terms of high-school graduation rates and crime are found in Texas Congressional District 18, where Democrats have won every election since the district was created through re-zoning in 1972. In 1994, Sheila Jackson Lee won the seat by promising to deliver more federal benefits to her constituents...

To appreciate the sterling representation the Honorable Ms. Jackson Lee provides, consider this... In 2010 in bizarre remarks before Congress, she demanded the government recognize victory in Vietnam. You can try to figure out what she's talking about here. She also alleged racism on the part of her fellow members of Congress who were voting against raising the debt ceiling. Don't believe it? View for yourself.

In Philadelphia, Chaka Fattah represents the worst parts of the city, Pennsylvania's 2nd Congressional District. The 2nd District is the fifth-most Democratic Congressional District out of the 435 in Congress (and the most Democratic outside of New York) based on the consistency and margin of Democratic victories. A black Democrat has held the seat since 1963.

Among Chaka Fattah's political highlights is his economically illiterate plan to implement a 1% surcharge on all financial transactions and transfers in lieu of all other forms of tax. This ill-fated plan, which hasn't gotten a single co-sponsor, ignores everything we know about actual human behavior. (If you implemented such a cost to financial transactions, the viability of those transactions would be destroyed and they wouldn't occur.)

Fattah's other notable political position is his support for convicted cop killer Mumia Abu-Jamal. Mumia's case has been a cause célèbre for years. The details of his endless appeals are tedious... just know the evidence presented against him is overwhelming. And the Fraternal Order of Police has consistently campaigned against Fattah's re-election over his support of Mumia.

The larger point is... These districts are among the most blighted in our nation. Society has broken down there to a horrible degree. Opportunity has vanished... Crime is rampant... Dependency on the state is the norm. The leadership in these communities should be the most scrutinized, their elected positions among the most contested. And yet, they are the safest seats in Congress. The officials dominance goes unchallenged.

Why haven't these policies and these leaders been dropped – even after they've pled guilty to outright bribery? You would think having experienced enough failure, having lived through horrible riots, terrible crime, total economic collapse, brazen corruption... that sooner or later, the voters in Detroit (and many other cities in America) would come to their senses. But that's not what happened. Instead, these systems have continued to fail up to the point of total collapse. It is as if one part of our society decided to run off the cliff... and then continued to do so for decades.

Why? Why did this happen? Why does it continue to happen?

Government Employee Unions:
Organized Corruption

A big part of the answer lies in understanding the key mechanism in the Democratic Party's funding system. (Don't worry... so far, we've been talking about Democratic Party failures, but I'll get to the Republicans next. The corruption of America is a bipartisan problem.)

We can trace the origins of these ultraliberal politicians and the beginnings of America's severe urban decline to the early 1960s. Yes, that was when the civil rights movement inspired the black community to take political power. But that wouldn't have necessarily led them to embrace socialism. Americans of all races largely rejected socialism for decades.

That all changed in the mid-1960s. Facing tough mid-term elections, the Democratic Party convinced President John F. Kennedy to allow the federal workforce to unionize. Executive order 10988 – signed on January 17, 1962 – permitted federal employees to organize unions and bargain collectively for higher wages and benefits. This set the stage for similar measures in cities and states across the country and led to a transformation of the union workforce. (Technically, Wisconsin became the first state to allow collective bargaining from state employees in 1959. But that's an outlier. Most states followed the federal lead.)

This represented a major change in both Democratic Party strategy and a major revolution in American politics. Even Franklin Delano Roosevelt, who was the most liberal president in history prior to Barack Obama, recognized that allowing collective bargaining on behalf of government workers was incompatible with a free democratic system of government...

    All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. – President Franklin Roosevelt in a letter to Luther Steward, president of the National Federation of Federal Employees, August 16, 1937.

A government union turns the public servant into the public's master. It is a means of using the government's own spending to organize control of that government. And that is exactly what's happened. The government, unlike private companies, isn't limited by normal economics because the government controls the monopoly on force and has the power to levy taxes.

The power of unions had long been held in check by market forces. Companies that gave too much to the unions in terms of pay or benefits soon found themselves driven out of the market because of high costs or poor products. Except in cases of government bailouts (like GM), these companies soon went out of work and their union members were left unemployed.

Nobody could reliably adopt truly socialistic policies because eventually, the costs of those bad ideas limited the power of the people promoting them. The growth of unions stalled in the 1950s, and they began to shrink in the 1960s. This caused a crisis in the Democratic Party (among the principal beneficiaries of union dues). Something had to be done.

Organizing unions made up of state employees completely eliminated the ability of market forces to temper their power. After all, taxes aren't subject to the demands of consumers. Following Kennedy's executive order, membership in public employee unions – The American Federal of State, County and Municipal Employees (AFSCME), the Service Employees International Union (SEIU), and the Teachers' National Education Association (NEA) – boomed. So did their contributions to liberal, Democratic politicians.

These socialist organizations now had access to funding that wasn't limited by market forces. They could control entire generations of politicians. And they did. From 1989 to 2004, AFSCME was the largest single donor to federal political campaigns in the country. More than 98% of its donations went to Democratic candidates.

To see the damage the heavy involvement of these unions has on the community, consider one government service – education.

The Democrats largely control all the areas plagued by the worst schools in the United States – the inner city schools of America's big cities. A voucher system that would empower parents to send their children to better schools and introduce competition for government funding is a simple and proven way to improve both the results and cost-effectiveness.

If the Democratic Party were truly interested in the actual well-being of the communities it serves, supporting voucher plans and charter schools is among the first things you'd expect them to pass. But in fact, it is the last thing they would ever voluntarily do. It is the Democratic Party that stands firmly against any significant changes to the public school system – despite its obvious failure – because of lobbying by the NEA.

This is so clearly an example of graft and corruption that you must doubt the ability of the system to function.

Besides this obvious problem, there is a tremendous amount of corruption in the various direct transfer payment programs that have been organized and supported by the Democrats and their union backers, which have created an entire subculture of people who live and trade in various forms of welfare. If you don't believe me, spend a few days shopping in your nearest ghetto. Look for the "Use EBT Here" and "We Accept WIC" signs... They're essentially gift tags... demonstrating your compulsory largesse to the good folks of that neighborhood.

And people addicted to transfer payments will never see how their dependency is destroying their community. That's exactly what happened in Detroit.

Today, we have a black, Democratic president, who came to power in the most corrupt state in the union – Illinois. Right now, two former Illinois governors have been convicted for corruption. One for blatantly trying to sell the Senate seat Obama vacated when he became president.

And realize... not a single member of Obama's cabinet has any kind of private-sector experience.

On the other hand, he has extremely close ties to the unions. He had the most liberal voting record of any senator during his tenure in Congress. His agenda is explicitly socialist: "I think we should spread the wealth around a little bit."

The likelihood America will become more and more like Detroit is growing – rapidly. Politicians now control the banking sector, most of the manufacturing sector (including autos), and a large amount of media. They are threatening to take over health care and the production of electricity via cap-and-trade rules and subsidies promoting solar power. These are major threats to the wealth and well-being of America. America is under siege by corrupt socialists.

And the big problem is... these kinds of political systems can't be reformed because their power base is the government itself, thanks to the creation of government employee unions. That sets the stage for a collapse...

Look around... Taxes can no longer be raised without people actively fleeing states. This has happened in several places – New York, New Jersey, and California, to name a few.

In Maryland – where my company is headquartered – the Democratic state government couldn't balance the budget in 2009, so it decided to double the income tax rate on citizens with more than $1 million in annual income. That left the rich facing a 9.45% marginal state and local income tax. Put that on top of a 36% federal rate, throw in another 6% for Social Security and Medicare, and you're looking at a top marginal rate in excess of 50%. What kind of smart, hard-working citizen is going to give the government more than half his income if he can move somewhere else and pay substantially less?

The liberal editorial board at the Baltimore Sun happily praised the measure and predicted Maryland's top earners would "grin and bear it."

What a bunch of fools.

Instead, the rich left town. The number of million-dollar incomes in the state of Maryland declined by more than 30%, from 3,000 filers to only 2,000. Rather than gaining the predicted $106 million in income from these filers, Maryland collected $100 million less than it did the year before.

Do you think Maryland will rescind such stupidly progressive taxes? No way. It's good politics to promise the voters that only the rich will pay. No, it doesn't work. But that doesn't matter – not until the entire system collapses. And that's why such a collapse is inevitable. It happens all the time. The political promises expand and expand. The rate of marginal tax goes higher and higher. The tax base narrows and tax collection declines. Government debts soar, until... sooner or later... the interest rate soars because lenders realize there is no way they will ever get their money back.

That's what's happening now all over Europe.

And it will happen here next.

The states and their union employees have reached the inevitable endgame. The numbers in many states are mind-numbing. Illinois' pension liability now exceeds $100 billion. Roughly half is unfunded. In California, the pension liability is $50 billion. Another 10 states have unfunded pension liabilities in excess of $10 billion.

The Pew Foundation estimates when retiree health care benefits are included, the total unfunded liabilities of the state governments currently exceed $1 trillion.

These debts are not currently on the books of any institution in America. They're merely promises made by our state and local governments. But these promises add up to a bill we cannot possibly pay – not if we plan to honor the $20 trillion the federal government currently owes (which includes all of the debts of Fannie Mae and Freddie Mac).

What does this mean for the future of America? I'm sorry... But it's not good.

Everyone knows what happens to socialist countries. They eventually collapse for the simple reason that everyone cannot live at the expensive of his neighbor – not for long.

And if you want to see what socialism will do to our country, don't go to the Eastern-bloc countries of the former Soviet Union. They got rid of that kind of government 20 years ago. Now they've got low, flat taxes and booming economies. You might visit Cuba or spend time in Venezuela. You'll find socialism there, certainly. But you don't have to go that far...

All you really have to do is visit Detroit.

You can drop Congressman Conyers a Thank You note after your visit.

Welfare for the Rich, Too

Our country's core problems are not found in only one political party.

There is just as much corruption, if not more, on the Republican side of the aisle. It was, for example, as I pointed out earlier, a white, Republican-appointed Treasury secretary (Henry Paulson) who tipped off 20 top hedge-fund managers about Fannie Mae and Freddie Mac's imminent collapse after assuring the public that it wouldn't happen.

For big business, the powerful role of government in our society is simply too valuable to ignore. And the amount of corruption it inspires is stunning. Few politicians even bother trying to hide the fact that they're bought and sold like furniture.

Take Newt Gingrich. The white, Republican former House speaker was paid $1.6 million for "consulting" by Fannie Mae and Freddie Mac during a period of time the two firms were under constant attack by Newt's fellow Republicans. Were the attacks efforts to truly reform a major threat to our financial system... or were they merely shakedowns? All we know for certain is Fannie and Freddie collapsed, just as many Republicans warned they would. The Republican effort to reform the firms failed. Newt collected $1.6 million.

Fannie and Freddie could end up costing taxpayers as much as $500 billion. No, I'm not ignoring the colossal role the Democrats played in staffing Fannie and Freddie, lobbying Congress for the companies, etc. I'm simply pointing out that, in Washington, everything and everyone seems to be for sale, on both sides of the aisle.

I realize that's nothing new. What is new is the scope of the corruption and how brazenly our leaders have embraced it.

Think about the new prescription drug benefit – 2003's Medicare Modernization Act. The law provided public funding for both public and private prescription drug benefits. (IBM, for example, estimated it would save $400 million over 10 years on retiree benefits thanks to the law.) At the same time, the law banned the federal government from negotiating with pharmaceutical companies. In summary, the law basically requires the federal government to pay for the prescription drugs of just about anyone over the age of 65 and requires the government to pay full retail prices.

There are now around 25 million beneficiaries of this law (not including the pharmaceutical companies). The average annual benefit is currently about $1,500. The total cost of the legislation over the next decade is expected to be around $1 trillion. This represents the largest expansion of Medicare in the history of the U.S.

The benefit was approved by a Republican-dominated Congress, in a midnight vote. Louisiana Republican Billy Tauzin, then chairman of the Committee on Energy and Commerce, which oversees the pharmaceutical industry, organized the vote. Two months later, Tauzin resigned his seat and took a job paying $2.5 million per year as a lobbyist for the Pharmaceutical Research and Manufacturers of America. The pharmaceutical industry continues to spend $100 million per year on campaign contributions and lobbying.

Americans are left paying the world's highest prices for drugs. Worse, we have extended the entitlement sentiment into the one area of the economy where personal responsibility is crucial. For most people, good health can be achieved by maintaining a disciplined diet and simple exercise. Offering free pills in lieu of such steps will only further the serious problem of diabetes and obesity we face.

And remember... this law was passed by Republicans and signed into law by a Republican president.

I could go on and on here...

There is a tremendous amount of corruption between the federal government and big business. There's even more corruption at the state and local level. Here's one simple expression of what's happening...

As late as 1969, the U.S. tax code required "only" 16,500 pages. By 2007, the code grew to 67,506 pages. The current form 1040 instruction booklet is 155 pages long. Obviously none of this is necessary for the collection of taxes. The code has been shaped by the corruption of our government, which in turn was shaped by the corruption of our society.

Here's another simple measure. Look at how much of federal spending goes directly to millionaires and big business.

Republican Sen. Tom Coburn, of Oklahoma, recently published a report on the subject entitled "Subsidies of the Rich and Famous." According to the study, the feds are now spending around $200 billion annually on direct transfer payments to the very rich.

Given the state of our national finances, this is patently absurd. Merely getting rid of these payments would result in a substantial reduction (almost 15%) of our annual federal deficit. And yet... despite the collapsing dollar, our soaring debt loads, and the lowest civilian employment levels since the Great Depression... everything seems to be business as usual in Washington D.C.

Doesn't that make you sick? There's simply no excuse for this kind of governance. None. Americans deserve a vastly better and more ethical federal government. But we will never get it unless we can find a way to hold our leaders personally accountable for what's happening.

Here's a simple solution. Hold the senators and congressmen personally liable for any deficit, each year. We elected these people to be our leaders. We did not elect them to spend us into bankruptcy. We did not elect them to feather their own nests with unlimited public spending. We did not elect them to buy votes. The only way to stop what's happening is to make them personally responsible for their actions. Either they will balance the budget or face personal financial ruin.

Demanding personal accountability for fiduciary responsibilities would have an immediate and profound impact on our society. It would wipe out the entitlement mentality that's destroying our society – almost overnight.

Restoring personal accountability is also crucial if we hope to restore confidence in our public corporations and capital markets, which were once the broadest, most efficient, and most trusted in the world.

The Corruption of the Corporation

If you think I'm exaggerating the problems we face or the far-reaching impact of the entitlement culture we've allowed to develop in America... then explain the following fact...

The 10 largest American bankruptcies in history have all occurred in the last decade: Lehman Brothers ($691 billion), Washington Mutual ($327 billion), WorldCom ($103 billion), General Motors ($91 billion), CIT ($80.4 billion), Enron ($65 billion), Conseco ($61.4 billion), MF Global ($41 billion), Chrysler ($39.3 billion), and Thornburg Mortgage ($36.5 billion).

All of these failures have a few things in common: extremely well-compensated CEOs with long tenures (which suggests the board of directors was asleep at the wheel), vast amounts of debt that would seem completely unsafe by any reasonable standard, and accounting policies that deliberately misled investors. Most tellingly, in the majority of these cases, board members and the executive management have no material investment in the company.

In every single case, the financial jeopardy was apparent – for years. In fact, at Stansberry & Associates, we accurately predicted several of these bankruptcies and warned about nearly all of them. (Several others we accurately forecast were narrowly avoided thanks to the TARP program and other federal bailouts.) We are far from the best-connected or the smartest financial analysts in the world. Yet... almost every single Wall Street firm remained silent… and so did the ratings agencies.

You never saw most of these problems revealed to the public, either in the Wall Street Journal or other mainstream news sources. What was almost common knowledge in financial circles was never shared with the public, which continued to buy these stocks (and many others in a similar situation) all the way down. Most Americans' 401(k)s were eviscerated. But the bonuses on Wall Street never fell.

I can't name a single major Wall Street firm that hasn't engaged in massive fraud over the last decade. Not one. They have all paid massive fines to the SEC. But in only one of these cases was any firm held criminally responsible. And that firm was Arthur Anderson – Enron's accountant! What about the bankers who actually lent the firm money against collateral they knew was bogus? What about the investment bankers who sold Enron's stock to the public, even though it knew the earnings were fraudulent? And what happened to the huge corporations whose depositors, executives, and lawyers were full, active partners in the fraud that bankrupted Enron – namely Citigroup and JPMorgan, the two largest banks on Wall Street?

The Senate subcommittee investigating Enron's collapse had this to say about Citigroup and JPMorgan: "The evidence... demonstrates that Citigroup and JPMorgan actively aided Enron in executing transactions, despite knowing the transactions utilized deceptive accounting or tax strategies, in return for substantial fees or favorable consideration in other business dealings."

So what happened? Almost nothing. In August 2003, the banks settled with the SEC for a combined $255 million. They did not admit guilt. Nor did they stop committing fraud.

The very next year, in 2004, Citigroup settled for $2.65 billion (yes, billion) to get out of charges it had defrauded lenders and investors in the collapse of WorldCom.

(Ironically, the plaintiff who brought this case was New York State Comptroller Alan Hevesi. Hevesi, like Monica Conyers, is currently in jail, for corruption charges. Yes, really. In April, he was sentenced to up to four years in prison in the Steve Rattner-related bribery case I also mentioned earlier. In America today, even the people who are going after the banks for fraud are themselves corrupt.)

AIG paid $800 million in a settlement in 2006 – just two years before its collapse nearly triggered a global financial catastrophe, requiring a $125 billion federal bailout. Fannie Mae paid $400 million to settle accounting charges in 2006, just two years before its collapse cost taxpayers more than $100 billion. Its CEO, Franklin Raines, walked away with close to $100 million in compensation and was never criminally charged.

Goldman Sachs paid $550 million in 2010 related to fraudulent mortgage securities. Citigroup paid $400 million in 2003 for bogus equity research. Invesco paid $325 million in 2004, after it admitting to ripping off its own mutual-fund investors via a late-trading scheme. Prudential was also "dinged" $270 million in the same scandal.

I could go on... but you surely get the point. Nearly every major financial fiduciary in the United States has been involved in serious malfeasance in the last decade. The sums of these settlements indicate transgressions that should rise to the level of criminal indictments...

The Rigas family, for example, was thrown into prison after defrauding investors in Adelphia Communications. Their settlement with the government was "only" $715 million. Citigroup, on the other hand, has paid settlements close to five times that amount over the last decade... but not a single criminal charge has been filed. Adelphia Cable didn't owe their subscribers a fiduciary duty. All of the Wall Street firms I mentioned did.

If that's not corruption, what is? And if all of this doesn't make you sick, what will?

We've written volumes about the other major corporate scandals over the past decade. We broke the executive options abuse story, for example, in 2002, showing how companies like Broadcom, Juniper Networks, and Apple Computer were ripping off shareholders by printing massive amounts of employee stock options (most of which went to executives) and then re-pricing them when their stock prices fell.

Under the system, all of the company's cash flows (and more) would have to go to share buybacks in order to prevent massive dilution. Thus, the employees were actually stealing the company's earnings. Most people on Wall Street knew this and were shorting the companies whose abuses were the most egregious. But the scheme wasn't revealed to the public (outside of our newsletter) until 2006 when the Wall Street Journal finally wrote about the issue.

Steve Jobs, who was one of the most flagrant options abusers at both Apple and Pixar, got off the hook by naming Al Gore to the board of directors... and giving him millions in options grants. To this date, Apple Computer has not paid out a single penny in dividends to its rightful owners (its shareholders). Yet over the last decade, it has increased its outstanding share count via options issuance by 47%.

What can you do about the corruption of America's public companies? Here's a very simple solution: Make the board of directors personally liable for fraud, negligence, and depositor losses. If you're on the board of MF Global, for example, and your firm fails because your CEO bet $6.3 billion in Italian bonds… your depositors – who are still missing more than $1 billion – ought to be allowed to sue you personally. Currently, a combination of legal liability limits and insurance (so-called D&O policies), paid for by the corporation, prevent any real personal liability – even in clear cases of fraud.

Franklin Raines, for example, who had Fannie Mae's accounting set up to maximize his annual bonuses in violation of accounting standards was fined $2 million in a settlement with regulators. An insurance company paid the fine. The company paid the premiums on that policy.

The concept of the corporate shield for legal liability was created so that limited partners (like common-stock holders) couldn't be held liable for the damages caused by the general partner's actions or misdeeds. Over time, that shield has been extended to the general partners of public companies – the board of directors and the executive management team. But these people are paid to run the company. If they engage in fraud or are negligent in their duties, they ought to be held liable.

If you were to simply make that one legal change, the conduct of America's corporations – especially those with fiduciary responsibilities to depositors – would change overnight. Confidence in America's public companies and capital markets would soar. But... as long as the idea of entitlement remains ascendant, dictating that executives keep most of the profit but none of the risk... our capital markets will continue to suffer and the management of our public companies will be rife with negligence and fraud.

Is This Fascism?

Earlier this year, in my June issue, I tried to define the unique blend of socialism for the poor, corporate welfare for the rich, paper money for the government, and credit excess for the middle class that has shaped America for most of the last 40 years. I wrote...

    You can't just call our economic system "socialism." It's not. There's a profit motive and private ownership of nearly all assets. Socialism has neither of these. Besides, far too many people have become far too rich in our system to simply label it "socialism"...

    Our system isn't truly capitalism either, though. The State intervenes in almost every industry, often in a big and expensive way. With government at all levels making up more than 40% of GDP, it's fair to say we live in a State-dominated society...

    A certain class of people has the power to not only protect itself from these policies but to profit as well. These people have used the last 40 years to produce massive amounts of paper wealth. And they are now desperately trying to convert those paper accounts into real wealth, which explains the exploding price of farmland and precious metals.

    This explosion of wealth at the top of the "food chain" is the main feature of what I call New American Socialism. It's a system fueled by paper money, the constant expansion of debt, and a kind of corruption that's hard to police because it occurs within the boundaries of the law...

    In the New American Socialism, the power of the system produces private profits. In this way, it provides a huge incentive to entrepreneurs and politicians to work together on behalf of the system. This is what keeps the system going. This is what keeps it from collapsing upon itself. And this, unfortunately, is why the imbalances in the world economy will continue to grow until the entire global monetary system itself implodes.

I continue to believe that's a very accurate description of what's happening to our country. But... many subscribers wrote in and complained that what I was calling "New American Socialism" was nothing new at all – it was actually fascism.

Webster's defines fascism as...

    a political philosophy, movement, or regime that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition.

That's not what's happening in America – at least, not yet. To this point, there's little direct forcible suppression of opposition and little exultation of the federal government. And while certain congressional districts have become socially regimented and politically repressive, that's not a widespread phenomenon.

Many people fear this is where we're heading... that as conditions deteriorate and the currency collapses, the government will move to take still more power. I don't think that's likely – at least, not for long...

I do agree that the nation will soon face a choice between heading down the path towards fascism... or turning back the power of government and restoring the limited Republic that was our birthright. I continue to believe Americans will choose personal liberty.

I believe they will choose more freedom rather than more totalitarian rule. I don't believe Americans will tolerate martial law for long – even in the advent of a real emergency, which I do believe will occur.

What gives me confidence for the future? Gun sales, for one thing. U.S. citizens legally own around 270 million firearms – about 88 guns per 100 citizens (including children) today.

That's a hard population to police without its consent. America is the No. 1 country in the world as ranked by the number of guns per-capita. That plays a major factor in the kind of government you will see take root in America. Things might go too far in this country for a while... And I'd argue they've been going the wrong way for too long. But the government can only take things so far before they'll be faced with a very angry, well-armed opposition.

If the government attempts to take our guns... my opinion would change immediately. But that's one right the Supreme Court has been strengthening recently. It gives me hope that most people in America still understand that the right to bear arms has little to do with protecting ourselves from crime and everything to do with protecting ourselves from government...

Thanks for a Great Year

I hope you've enjoyed – or at least been challenged to think in new ways – by this issue of my newsletter. I've been thinking about the issues for a long time and believe they are important. Whether you agree with my analysis or not, I hope you'll share these ideas with people in your circle of influence. Together, we can certainly draw far more attention to the moral failings of our leaders and the risk we face by the growth of the entitlement culture.

Once again… please realize, I'm not taking a political side here. I'm not saying the Democrats are singularly responsible for the state of our country. I'm not saying the Republicans are all to blame. And I'm not saying this is a black problem or a white problem. The problem is rooted in the corrupt belief that you can live at the expense of your neighbor... that we have become a nation where the vast majority of people believe their well-being is primarily, someone else's responsibility.

This bankrupt belief has taken complete control of our government, educational system, medical industry, and our corporations. And unless we demand better from each other and our political leaders, our society is doomed to collapse under the crushing weight of the Corruption of America.

It's time we got back to our traditions as Americans and started doing more to take care of our families, communities, and ourselves.

I feel so strongly about these ideas, I'd like you to forward this issue to everyone you know. We almost never allow this copyright violation... But in this case, feel free to forward as many times as you want. Print it up and pass copies around your hometown.

We are wrapping up the best year ever for this advisory in terms of readership. I hope you'll agree that many of the key themes we've been working on have turned out an awful lot like we predicted. The global sovereign debt crisis continues. The stock market has not been a great place for your savings. Many of our short sell recommendations – particularly First Solar (Nasdaq: FSLR) – have led to big profits. For those of you unwilling or unable to speculate and hedge, my advice to hold gold and Treasury bills has produced double-digit gains, with almost no volatility.

For subscribers who are new to this publication, I don't often focus on this kind of political analysis. I know our main job is to find ways to help you make more money with your investments. But the fact is... right now, politics drives the markets. And that may be true for some time...

Regardless... I pledge to get back to my knitting in the next issue.

Thank you very much for your support. You've given me the best job in the world. I take it – and the trust you show in me – seriously.

Warm regards,

Porter Stansberry
Baltimore, Maryland
December 15, 2011

P.S. If you are interested in learning more about these ideas—what has gone wrong in America in recent years, and what I believe will happen next—you might enjoy watching a free video I recently produced. In this video, I explain what is probably the biggest corruption in America today, and how it will likely lead to yet another U.S. crisis, affecting everything about your everyday life. I also explain some simple steps you can take today, to protect yourself and your family. You can watch this free video on the Internet, here.

Published by Stansberry & Associates Investment Research
1217 St. Paul Street, Baltimore, MD 21202 888-261-2693

Stansberry & Associates Investment Research is committed to providing our readers with the very best in independent financial analysis. Our subscribers are our highest priority and we welcome any comments or suggestions that you might have. Please e-mail us your feedback: This link is for editorial feedback only. It is not for customer service.

LEGAL DISCLAIMER: This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. Stansberry & Associates Investment Research expressly forbids its writers from having a financial interest in any security they recommend to our subscribers. And all Stansberry & Associates Investment Research (and affiliated companies), employees, and agents must wait 24 hours after an initial trade recommendation is published on the Internet, or 72 hours after a direct mail publication is sent, before acting on that recommendation.