Merrill Lynch downgrades GM

[Oracle of Delphi]

July 2, 2008 - 11:00 am ET

DETROIT (Reuters) -- General Motors will need to raise about $15 billion in cash to shore up liquidity and bankruptcy is "not impossible" if the U.S. auto market continues to slump, Merrill Lynch said on Wednesday.

Merrill Lynch analyst John Murphy said in a research note he cut GM to "underperform" from "buy" and lowered his price target for the largest U.S. automaker to $7.

GM shares fell Wednesday to as low as 10.80 on the report. As of 10:50 a.m. EDT, shares of GM were trading at 11.04, down 71 cents, or 6.0 percent.

The downgrade comes one day after GM said that June sales fell 18.5 percent from the same month a year ago. Despite the decline, GM shares closed up on Tuesday. Investors and analysts expected worse, with some predicting Toyota would pass GM in sales for the month.

For the first half of 2008, GM's U.S. sales totaled 1,604,942, down 16.5 percent from last year's 1,922,762.

Murphy also lowered his forecast for 2008 U.S. industry-wide light vehicle sales for the third time this year and said the recent drastic decline in sales would likely to continue through 2009.

He expects 14.3 million U.S. auto sales this year and 14 million units for next year. That compares with 16.15 million units in 2007.

Although analysts have said GM will need to raise capital to cover continued losses before 2010, $15 billion is a higher estimate than any other analysts have suggested.

"The recent extreme deterioration in volume and mix is driving much higher cash burn and eroding GM's cash position," Murphy said. "We believe $15 billion is necessary because there is downside risk to our current estimates and a greater cushion is essential."

Murphy said a decline of 1 million vehicles in annual U.S. auto sales equates to about $3 billion in cash burn.

Any capital GM raises has the potential to dilute equity if it's done through convertible offering, one of the possibilities for the automaker.

Link: http://www.autonews.com/apps/pbcs.dll/arti...p;rssfeed=RSS33

Edited July 2, 2008 by Pontiac Custom-S

[michaelv13]

Indeed it is. See how those armchair analysts like Jim Jubak and cohorts talk about GM. GM's situation seems less worse than it is made to be perceived by these people. They argue that sales increased because of rebates and that rebates WILL hurt GM. Yeah? What is worse - a $50,000k SUV sitting on the lot or a SUV that moved out for $45,000? At least GM is not offering rebates on Malibus and Lambdas, which says something. Three years ago almost everything used to be on bumper sale.

Edited July 2, 2008 by michaelv13

[longtooth]

Indeed it is. See how those armchair analysts like Jim Jubak and cohorts talk about GM. GM's situation seems less worse than it is made to be perceived by these people. They argue that sales increased because of rebates and that rebates WILL hurt GM. Yeah? What is worse - a $50,000k SUV sitting on the lot or a SUV that moved out for $45,000? At least GM is not offering rebates on Malibus and Lambdas, which says something. Three years ago almost everything used to be on bumper sale.

Heaven deliver us from learned people. Any time after Friday is fine.

[Newbiewar]

Heaven deliver us from learned people. Any time after Friday is fine.

what is of friday?

[longtooth]

what is of friday?

It is the day we sacrifice fingers to small personal explosives here in the USA.

I'm just being goofy in the face of adversity.

[daves87rs]

This can't be good......

Remind myself again why I became a business major again?

Well, at least it is a good time to buy stock....

[longtooth]

This can't be good......

Remind myself again why I became a business major again?

Well, at least it is a good time to buy stock....

Seriously, fess up. What was your motivation? Don't say world peace please. Mercy no.

[Newbiewar]

It is the day we sacrifice fingers to small personal explosives here in the USA.

I'm just being goofy in the face of adversity.

ohh yea, you guys blow things up, because you are proud of people like me who get blown up on a daily basis... ahh i understand the tradition now...

[longtooth]

ohh yea, you guys blow things up, because you are proud of people like me who get blown up on a daily basis... ahh i understand the tradition now...

By the rocket's or the bandage's red glare. The IEDs exploding at ground level. A celebration and reaffirmation of life. Got Oil? Violence and death are what we export best.

[Drew Dowdell]

I'll be the black sheep here and say that the guy is probably at least partially right. I base that on what the economy looks like as a whole rather than just what GM is doing. There are going to be a LOT of downgradings forthcoming. The national financial picture is much bleaker than most people realize. The next 12 - 18 months is going to be very very bumpy. A substantial part of the blame will fall on the major banks who have been playing a shell game with their massive amounts of bad debt and it's only prolonging the problem while simultaneously making it worse. I'm hearing numerous reports of banks being so far behind in foreclosures that they have started ignoring missed payments in certain parts of the country. Banks are losing the ability to lend money even if they wanted to and this is causing deflationary pressures on the market at the same time prices are rising.

In summary, we're in as identical situation as we can be to June 1929.

Hold on to your butts!

[longtooth]

I'll be the black sheep here and say that the guy is probably at least partially right. I base that on what the economy looks like as a whole rather than just what GM is doing. There are going to be a LOT of downgradings forthcoming. The national financial picture is much bleaker than most people realize. The next 12 - 18 months is going to be very very bumpy. A substantial part of the blame will fall on the major banks who have been playing a shell game with their massive amounts of bad debt and it's only prolonging the problem while simultaneously making it worse. I'm hearing numerous reports of banks being so far behind in foreclosures that they have started ignoring missed payments in certain parts of the country. Banks are losing the ability to lend money even if they wanted to and this is causing deflationary pressures on the market at the same time prices are rising.

In summary, we're in as identical situation as we can be to June 1929.

Hold on to your butts!

Allow air to hit the wound. This must be spoken of more often.

[Drew Dowdell]

Allow air to hit the wound. This must be spoken of more often.

I'm afraid I don't follow.

[longtooth]

I'm afraid I don't follow.

With regard to the unseemly nature of our finances. Our corrupt system. (imo)

[FUTURE_OF_GM]

Looks like this country is falling faster than even I predicted.

As for GM... This country WILL destroy GM, one way or another. People are itching to see the company get a big punch in the face BEFORE the 100th anniversary. (The same thing happened to Ford when they hit 100-- The celebration was overshadowed BIG TIME by every hack in the market/media trying his/her best to kick the company) They've tried it through media, they've tried it through environmental issues and 'fashion', they've tried it through regulation and now they'll try it through finances.

It used to just be the media that attacked Detroit. Now it's the media, which won over the government, which now affects the finance opinion and ultimately will turn the majority against the company (Not the 60% of the population that hates GM now, try 80-85%)

[longtooth]

Looks like this country is falling faster than even I predicted.

As for GM... This country WILL destroy GM, one way or another. People are itching to see the company get a big punch in the face BEFORE the 100th anniversary. (The same thing happened to Ford when they hit 100-- The celebration was overshadowed BIG TIME by every hack in the market/media trying his/her best to kick the company) They've tried it through media, they've tried it through environmental issues and 'fashion', they've tried it through regulation and now they'll try it through finances.

It used to just be the media that attacked Detroit. Now it's the media, which won over the government, which now affects the finance opinion and ultimately will turn the majority against the company (Not the 60% of the population that hates GM now, try 80-85%)

I am sorry for any time where I've offered an over-inflated opinion here or there. But when Millions are listening and reacting to what these so-called experts are saying, it is unconscionable and reflects an inherent evil in our system. One of many. (imo)

[Drew Dowdell]

Looks like this country is falling faster than even I predicted.

As for GM... This country WILL destroy GM, one way or another. People are itching to see the company get a big punch in the face BEFORE the 100th anniversary. (The same thing happened to Ford when they hit 100-- The celebration was overshadowed BIG TIME by every hack in the market/media trying his/her best to kick the company) They've tried it through media, they've tried it through environmental issues and 'fashion', they've tried it through regulation and now they'll try it through finances.

It used to just be the media that attacked Detroit. Now it's the media, which won over the government, which now affects the finance opinion and ultimately will turn the majority against the company (Not the 60% of the population that hates GM now, try 80-85%)

The country isn't going to fall apart just to spite GM/Ford/Chrysler, but all three, amongst many many others, will be suffering from this country's financial problems.

I'm afraid that something I said was missed by the readers of this forum. Banks are losing the ability to lend money even if they wanted to. This is a very very very big deal and applies to everyone, individuals and corporations alike.

[CARBIZ]

The U.S. current account drain of the past several years has finally come home to roost.

For example: if I don't have a job, but max all my credit cards to keep buying groceries and paying my mortgage, all is well as long as the banks keep extending me credit. Sooner or later, my debt equity ratio becomes intolerable and the banks will balk at giving me any more loans.

This is the essential position the U.S. has been in for several years: borrowing money (ironically) from Asia and the middle East to finance your positions on buying imported goods from those same countries. This closed loop works until there are no more savings left in America to back the loans, or collateral (property values) start to sag. Both have occurred recently.

This had to happen sooner or later. Wall Street has been shuffling the papers for a couple years now to hide the losses and now they can no longer hide them.

This mess is going to get very ugly. Can you say twelve million annual car sales?

[longtooth]

The U.S. current account drain of the past several years has finally come home to roost.

For example: if I don't have a job, but max all my credit cards to keep buying groceries and paying my mortgage, all is well as long as the banks keep extending me credit. Sooner or later, my debt equity ratio becomes intolerable and the banks will balk at giving me any more loans.

This is the essential position the U.S. has been in for several years: borrowing money (ironically) from Asia and the middle East to finance your positions on buying imported goods from those same countries. This closed loop works until there are no more savings left in America to back the loans, or collateral (property values) start to sag. Both have occurred recently.

This had to happen sooner or later. Wall Street has been shuffling the papers for a couple years now to hide the losses and now they can no longer hide them.

This mess is going to get very ugly. Can you say twelve million annual car sales?

GM chief Elliot 'Pete' Estes would have thought this number 'swell' in 1978 of course knowing that GM would've taken home 5.8 or 6 million sales for it's troubles.

[Brett]

-GM is burning Money

-One day they will run out of Money to burn

-They will need to borrow Money to operate

-Credit markets are seized, so there is no money to Borrow

-BK or Stock Offer

Not a conspiracy, just reality

[CMG]

July 2, 2008 - 11:00 am ET

DETROIT (Reuters) -- General Motors will need to raise about $15 billion in cash to shore up liquidity and bankruptcy is "not impossible" if the U.S. auto market continues to slump, Merrill Lynch said on Wednesday.

Strange, VenSeattle is in the Chrysler forum chewing popcorn while contributing to the SPECULATION of Chrysler bankruptcy, I wonder when he will come in here and do the same...?

:AH-HA_wink:

I'm sure there won't be excuses here and self glee over there....

The domestics had better tighten their belts and ride out this time of trouble, GM, Ford and Chrysler are the only vehicles I usually care about.....?

Too much image perception is giving the imports an unfair advantage IMO. Domestics bashing domestics AIN'T helping.

[FUTURE_OF_GM]

The country isn't going to fall apart just to spite GM/Ford/Chrysler, but all three, amongst many many others, will be suffering from this country's financial problems.

Nah... The country falling apart is an entirely different, but related issue.

The problem runs much, much, MUCH deeper than Detroit and what's left of our domestic auto industry. But alas, it was one of the last few pillars (Both economically AND confidence-wise) that this country had Subconsciously, every american could always fall back on the auto industry as a powerhouse of economics, like the industry or not. Now that it is (will be) gone, what takes it's place in the mind of the consumer to increase confidence levels? Nothing...

I'm afraid that something I said was missed by the readers of this forum.Banks are losing the ability to lend money even if they wanted to. This is a very very very big deal and applies to everyone, individuals and corporations alike.

Bingo... Which is one thing that prompted me to make the statement about the country falling faster. Sooner, rather than later, what last little bit of american industry and ingenuity we have left will be financed, and OWNED by other countries. I'd be willing to bet that Asia will control more of what this country does than our own government in, say, 10 years...

Edited July 2, 2008 by FUTURE_OF_GM

[FUTURE_OF_GM]

The U.S. current account drain of the past several years has finally come home to roost.

For example: if I don't have a job, but max all my credit cards to keep buying groceries and paying my mortgage, all is well as long as the banks keep extending me credit. Sooner or later, my debt equity ratio becomes intolerable and the banks will balk at giving me any more loans.

This is the essential position the U.S. has been in for several years: borrowing money (ironically) from Asia and the middle East to finance your positions on buying imported goods from those same countries. This closed loop works until there are no more savings left in America to back the loans, or collateral (property values) start to sag. Both have occurred recently.

Exactly...

Just like you and I have always said.

The industry that CREATED the savings left (or was sold out and stolen, rather) and for the past 10-15 years the 'global economy' has been BLEEDING america dry of wealth, technology, industry and talent. Now it looks like the blood is all gone an there's nothing left but for the organism to die.

This had to happen sooner or later. Wall Street has been shuffling the papers for a couple years now to hide the losses and now they can no longer hide them.

This mess is going to get very ugly. Can you say twelve million annual car sales?

Agreed and agreed...

I worked in investments and I saw it first hand. You can make any pile of sh*t look like gold as long as you mess with the stats a bit and fix the wording. Looks like the polishing cloths have lost their magical touch.

[daves87rs]

Seriously, fess up. What was your motivation? Don't say world peace please. Mercy no.

World peace.

I always wanted to do ads for companies like GM....I think I have some good ideas.....

[daves87rs]

I'll be the black sheep here and say that the guy is probably at least partially right. I base that on what the economy looks like as a whole rather than just what GM is doing. There are going to be a LOT of downgradings forthcoming. The national financial picture is much bleaker than most people realize. The next 12 - 18 months is going to be very very bumpy. A substantial part of the blame will fall on the major banks who have been playing a shell game with their massive amounts of bad debt and it's only prolonging the problem while simultaneously making it worse. I'm hearing numerous reports of banks being so far behind in foreclosures that they have started ignoring missed payments in certain parts of the country. Banks are losing the ability to lend money even if they wanted to and this is causing deflationary pressures on the market at the same time prices are rising.

In summary, we're in as identical situation as we can be to June 1929.

Hold on to your butts!

Yep, agree there....

I was preaching this a while back....along with people's "image" issues- to keep them spending beyond what they can afford....

[haypops]

I'm afraid that something I said was missed by the readers of this forum. Banks are losing the ability to lend money even if they wanted to. This is a very very very big deal and applies to everyone, individuals and corporations alike.

I read(MSN money?) that the European banks are just starting to go through what US banks have been dealing with and that they will be less able to adapt.

Comments?

[daves87rs]

Exactly...

Just like you and I have always said.

The industry that CREATED the savings left (or was sold out and stolen, rather) and for the past 10-15 years the 'global economy' has been BLEEDING america dry of wealth, technology, industry and talent. Now it looks like the blood is all gone an there's nothing left but for the organism to die.

Agreed and agreed...

I worked in investments and I saw it first hand. You can make any pile of sh*t look like gold as long as you mess with the stats a bit and fix the wording. Looks like the polishing cloths have lost their magical touch.

I gotta agree with FOG here...the $h! is really going to hit the fan soon...

As the housing market falls apart, car sales disappear-guess what's next?

[longtooth]

World peace.

I always wanted to do ads for companies like GM....I think I have some good ideas.....

I believe you. I'd suspect spawning salmon have it easier in accomplishing that upstream run.

So, have you suspended that idea for good?

[ZL-1]

-GM is burning Money

-One day they will run out of Money to burn

-They will need to borrow Money to operate

-Credit markets are seized, so there is no money to Borrow

-BK or Stock Offer

Yep, that simple. This is not a philosophical issue, it's just business.

Edited July 3, 2008 by ZL-1

[Drew Dowdell]

I read(MSN money?) that the European banks are just starting to go through what US banks have been dealing with and that they will be less able to adapt.

Comments?

A big reason Europe is less able to cope is because their banking system doesn't allow them to "print" their way out of a recession and on major policy the different countries have to reach somewhat of a consensus. I believe the term "herding cats" applies here.

The U.S. banks however, have been hiding their problems for a while hoping they would eventually just go away. They've given their institutionalized fraud many different names like SIV - Strategic Investment Vehicle and CDS - Credit Default Swap but it's still just a whole lotta lipstick on a whole lotta pig. The trouble is, instead of seeing a tarted up pig, investors saw Selma Hayek and dumped tons of money into these things. SIVs are packages of insane mortgages made to people who couldn't get a loan for a hamburger. CDSes are were investors and banks sell each other credit protection for the bad loans they've made. Europe doesn't have as many of these in their own system, but the European banks bought into the US ones as speculative investments.

[Drew Dowdell]

I gotta agree with FOG here...the $h! is really going to hit the fan soon...

As the housing market falls apart, car sales disappear-guess what's next?

Banking system collapse. We're going to see at least one of the major nationals fall. My bet is on Bank of America with Citigroup a close second. There have already been runs on two banks in the past year.

Retail will fall as the banking system does. Retailers operate heavily on lines of credit to purchase inventory. We've already seen Disney, Sharper Image, Linens -n- Things, Starbucks, Toys -R- Us, and a bunch of others I can't remember at 7:15 in the morning, close or announce closures. Unfortunately, Walmart will survive.

[Oracle of Delphi]

Part of the problem is the Unconstitutional Federal Reserve.

I have been reading a lot about President Kennedy and his battle to strip the Federal Reserve of it's power. Here are some highlights:

On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business.

When President John Fitzgerald Kennedy - the author of Profiles in Courage - signed this Order, it returned to the federal government, specifically the Treasury Department, the Constitutional power to create and issue currency - money - without going through the privately owned Federal Reserve Bank. President Kennedy's Executive Order 11110 [the full text is displayed further below] gave the Treasury Department the explicit authority: 'to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.' This means that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation based on the silver bullion physically held there. As a result, more than $4 billion in United States Notes were brought into circulation in $2 and $5 denominations. $10 and $20 United States Notes were never circulated but were being printed by the Treasury Department when Kennedy was assassinated. It appears obvious that President Kennedy knew the Federal Reserve Notes being used as the purported legal currency were contrary to the Constitution of the united States of America.

United States Notes' were issued as an interest-free and debt-free currency backed by silver reserves in the U.S. Treasury. We compared a 'Federal Reserve Note' issued from the private central bank of the United States (the Federal Reserve Bank a/k/a Federal Reserve System), with a 'United States Note' from the U.S. Treasury issued by President Kennedy's Executive Order. They almost look alike, except one says 'Federal Reserve Note' on the top while the other says 'United States Note'. Also, the Federal Reserve Note has a green seal and serial number while the United States Note has a red seal and serial number.

President Kennedy was assassinated on November 22, 1963 and the United States Notes he had issued were immediately taken out of circulation. Federal Reserve Notes continued to serve as the legal currency of the nation. According to the United States Secret Service, 99% of all U.S. paper 'currency' circulating in 1999 are Federal Reserve Notes.

Kennedy knew that if the silver-backed United States Notes were widely circulated, they would have eliminated the demand for Federal Reserve Notes. This is a very simple matter of economics. The USN was backed by silver and the FRN was not backed by anything of intrinsic value. Executive Order 11110 should have prevented the national debt from reaching its current level (virtually all of the nearly $9 trillion in federal debt has been created since 1963) if LBJ or any subsequent President were to enforce it. It would have almost immediately given the U.S. Government the ability to repay its debt without going to the private Federal Reserve Banks and being charged interest to create new 'money'. Executive Order 11110 gave the U.S.A. the ability to, once again, create its own money backed by silver and realm value worth something.

just five months after Kennedy was assassinated, no more of the Series 1958 'Silver Certificates' were issued either, and they were subsequently removed from circulation. Perhaps the assassination of JFK was a warning to all future presidents not to interfere with the private Federal Reserve's control over the creation of money. It seems very apparent that President Kennedy challenged the 'powers that exist behind U.S. and world finance'. With true patriotic courage, JFK boldly faced the two most successful vehicles that have ever been used to drive up debt:

1) war (Viet Nam); and,

2) the creation of money by a privately owned central bank. His efforts to have all U.S. troops out of Vietnam by 1965 combined with Executive Order 11110 would have destroyed the profits and control of the private Federal Reserve Bank.

Executive Order 11110

AMENDMENT OF EXECUTIVE ORDER NO. 10289 AS AMENDED, RELATING TO THE PERFORMANCE OF CERTAIN FUNCTIONS AFFECTING THE DEPARTMENT OF THE TREASURY. By virtue of the authority vested in me by section 301 of title 3 of the United States Code, it is ordered as follows:

SECTION 1. Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended - (a) By adding at the end of paragraph 1 thereof the following subparagraph (j): '(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821 (b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption,' and (b) By revoking subparagraphs (b) and © of paragraph 2 thereof. SECTION 2. The amendment made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.

JOHN F. KENNEDY

THE WHITE HOUSE,

June 4, 1963

-------------------------------------------------------------------

Once again, Executive Order 11110 is still valid. According to Title 3, United States Code, Section 301 dated January 26, 1998:

Executive Order (EO) 10289 dated Sept. 17, 1951, 16 F.R. 9499, was as amended by:

EO 10583, dated December 18, 1954, 19 F.R. 8725;

EO 10882 dated July 18, 1960, 25 F.R. 6869;

EO 11110 dated June 4, 1963, 28 F.R. 5605;

EO 11825 dated December 31, 1974, 40 F.R. 1003;

EO 12608 dated September 9, 1987, 52 F.R. 34617 The 1974 and 1987 amendments, added after Kennedy's 1963 amendment, did not change or alter any part of Kennedy's EO 11110. A search of Clinton's 1998 and 1999 EO's and Presidential Directives has also shown no reference to any alterations, suspensions, or changes to EO 11110.

The Federal Reserve Bank, a.k.a Federal Reserve System, is a Private Corporation. Black's Law Dictionary defines the 'Federal Reserve System' as: 'Network of twelve central banks to which most national banks belong and to which state chartered banks may belong. Membership rules require investment of stock and minimum reserves.' Privately-owned banks own the stock of the FED. This was explained in more detail in the case of Lewis v. United States, Federal Reporter, 2nd Series, Vol. 680, Pages 1239, 1241 (1982), where the court said: 'Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stock-holding commercial banks elect two thirds of each Bank's nine member board of directors.'

The Federal Reserve Banks are locally controlled by their member banks. Once again, according to Black's Law Dictionary, we find that these privately owned banks actually issue money:

'Federal Reserve Act Law which created Federal Reserve banks which act as agents in maintaining money reserves, issuing money in the form of bank notes, lending money to banks, and supervising banks. Administered by Federal Reserve Board (q.v.)'.

The privately owned Federal Reserve (FED) banks actually issue (create) the 'money' we use. In 1964, the House Committee on Banking and Currency, Subcommittee on Domestic Finance, at the second session of the 88th Congress, put out a study entitled Money Facts which contains a good description of what the FED is: 'The Federal Reserve is a total money-making machine. It can issue money or checks. And it never has a problem of making its checks good because it can obtain the $5 and $10 bills necessary to cover its check simply by asking the Treasury Department's Bureau of Engraving to print them.'

Any one person or any closely knit group who has a lot of money has a lot of power. Now imagine a group of people who have the power to create money. Imagine the power these people would have. This is exactly what the privately owned FED is!

No man did more to expose the power of the FED than Louis T. McFadden, who was the Chairman of the House Banking Committee back in the 1930s. In describing the FED, he remarked in the Congressional Record, House pages 1295 and 1296 on June 10, 1932:

'Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government Board, has cheated the Government of the United States and he people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the maladministration of that law by which the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.'

Some people think the Federal Reserve Banks are United States Government institutions. They are not Government institutions, departments, or agencies. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers. Those 12 private credit monopolies were deceitfully placed upon this country by bankers who came here from Europe and who repaid us for our hospitality by undermining our American institutions.

The FED basically works like this: The government granted its power to create money to the FED banks. They create money, then loan it back to the government charging interest. The government levies income taxes to pay the interest on the debt. On this point, it's interesting to note that the Federal Reserve Act and the sixteenth amendment, which gave congress the power to collect income taxes, were both passed in 1913. The incredible power of the FED over the economy is universally admitted. Some people, especially in the banking and academic communities, even support it. On the other hand, there are those, such as President John Fitzgerald Kennedy, that have spoken out against it.

Kennedy apparently reasoned that by returning to the constitution, which states that only Congress shall coin and regulate money, the soaring national debt could be reduced by not paying interest to the bankers of the Federal Reserve System, who print paper money then loan it to the government at interest. He moved in this area on June 4, 1963, by signing Executive Order 11110 which called for the issuance of $4,292,893,815 in United States Notes through the U.S. Treasury rather than the traditional Federal Reserve System. That same day, Kennedy signed a bill changing the backing of one and two dollar bills from silver to gold, adding strength to the weakened U.S. currency.

[Drew Dowdell]

While the fed is a problem <putting it lightly>, it isn't the primary cause of the problems we are facing today. Bernake, however, is doing his best to F it up even worse.

[Blake Noble]

In summary, we're in as identical situation as we can be to June 1929.

Hold on to your butts!

It looks like I might be hitting Europe before college rather than after then. :AH-HA_wink:

[MRDETROITMETAL]

MASS MEDIA HYSTERIA CONTROLS THE USA TODAY.

...who controls the media ?....the FCC ? the Fed?.. the White House ?

YOU Do, by buying into the BS.

Reality Checked.

lets' see ...15 some million er billion...equals how many cars sold ?

14 million cars @ ave price of 25k....uh....seems doable to me. But oh yeah...."the sky is falling" !!!

Just go buy a Chevy an it's all good.

[gmcbob]

Part of the problem is the Unconstitutional Federal Reserve.

I have been reading a lot about President Kennedy and his battle to strip the Federal Reserve of it's power. Here are some highlights:

On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business.

When President John Fitzgerald Kennedy - the author of Profiles in Courage - signed this Order, it returned to the federal government, specifically the Treasury Department, the Constitutional power to create and issue currency - money - without going through the privately owned Federal Reserve Bank. President Kennedy's Executive Order 11110 [the full text is displayed further below] gave the Treasury Department the explicit authority: 'to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.' This means that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation based on the silver bullion physically held there. As a result, more than $4 billion in United States Notes were brought into circulation in $2 and $5 denominations. $10 and $20 United States Notes were never circulated but were being printed by the Treasury Department when Kennedy was assassinated. It appears obvious that President Kennedy knew the Federal Reserve Notes being used as the purported legal currency were contrary to the Constitution of the united States of America.

United States Notes' were issued as an interest-free and debt-free currency backed by silver reserves in the U.S. Treasury. We compared a 'Federal Reserve Note' issued from the private central bank of the United States (the Federal Reserve Bank a/k/a Federal Reserve System), with a 'United States Note' from the U.S. Treasury issued by President Kennedy's Executive Order. They almost look alike, except one says 'Federal Reserve Note' on the top while the other says 'United States Note'. Also, the Federal Reserve Note has a green seal and serial number while the United States Note has a red seal and serial number.

President Kennedy was assassinated on November 22, 1963 and the United States Notes he had issued were immediately taken out of circulation. Federal Reserve Notes continued to serve as the legal currency of the nation. According to the United States Secret Service, 99% of all U.S. paper 'currency' circulating in 1999 are Federal Reserve Notes.

Kennedy knew that if the silver-backed United States Notes were widely circulated, they would have eliminated the demand for Federal Reserve Notes. This is a very simple matter of economics. The USN was backed by silver and the FRN was not backed by anything of intrinsic value. Executive Order 11110 should have prevented the national debt from reaching its current level (virtually all of the nearly $9 trillion in federal debt has been created since 1963) if LBJ or any subsequent President were to enforce it. It would have almost immediately given the U.S. Government the ability to repay its debt without going to the private Federal Reserve Banks and being charged interest to create new 'money'. Executive Order 11110 gave the U.S.A. the ability to, once again, create its own money backed by silver and realm value worth something.

just five months after Kennedy was assassinated, no more of the Series 1958 'Silver Certificates' were issued either, and they were subsequently removed from circulation. Perhaps the assassination of JFK was a warning to all future presidents not to interfere with the private Federal Reserve's control over the creation of money. It seems very apparent that President Kennedy challenged the 'powers that exist behind U.S. and world finance'. With true patriotic courage, JFK boldly faced the two most successful vehicles that have ever been used to drive up debt:

1) war (Viet Nam); and,

2) the creation of money by a privately owned central bank. His efforts to have all U.S. troops out of Vietnam by 1965 combined with Executive Order 11110 would have destroyed the profits and control of the private Federal Reserve Bank.

Executive Order 11110

AMENDMENT OF EXECUTIVE ORDER NO. 10289 AS AMENDED, RELATING TO THE PERFORMANCE OF CERTAIN FUNCTIONS AFFECTING THE DEPARTMENT OF THE TREASURY. By virtue of the authority vested in me by section 301 of title 3 of the United States Code, it is ordered as follows:

SECTION 1. Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended - (a) By adding at the end of paragraph 1 thereof the following subparagraph (j): '(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821 (b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption,' and (b) By revoking subparagraphs (b) and © of paragraph 2 thereof. SECTION 2. The amendment made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.

JOHN F. KENNEDY

THE WHITE HOUSE,

June 4, 1963

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Once again, Executive Order 11110 is still valid. According to Title 3, United States Code, Section 301 dated January 26, 1998:

Executive Order (EO) 10289 dated Sept. 17, 1951, 16 F.R. 9499, was as amended by:

EO 10583, dated December 18, 1954, 19 F.R. 8725;

EO 10882 dated July 18, 1960, 25 F.R. 6869;

EO 11110 dated June 4, 1963, 28 F.R. 5605;

EO 11825 dated December 31, 1974, 40 F.R. 1003;

EO 12608 dated September 9, 1987, 52 F.R. 34617 The 1974 and 1987 amendments, added after Kennedy's 1963 amendment, did not change or alter any part of Kennedy's EO 11110. A search of Clinton's 1998 and 1999 EO's and Presidential Directives has also shown no reference to any alterations, suspensions, or changes to EO 11110.

The Federal Reserve Bank, a.k.a Federal Reserve System, is a Private Corporation. Black's Law Dictionary defines the 'Federal Reserve System' as: 'Network of twelve central banks to which most national banks belong and to which state chartered banks may belong. Membership rules require investment of stock and minimum reserves.' Privately-owned banks own the stock of the FED. This was explained in more detail in the case of Lewis v. United States, Federal Reporter, 2nd Series, Vol. 680, Pages 1239, 1241 (1982), where the court said: 'Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stock-holding commercial banks elect two thirds of each Bank's nine member board of directors.'

The Federal Reserve Banks are locally controlled by their member banks. Once again, according to Black's Law Dictionary, we find that these privately owned banks actually issue money:

'Federal Reserve Act Law which created Federal Reserve banks which act as agents in maintaining money reserves, issuing money in the form of bank notes, lending money to banks, and supervising banks. Administered by Federal Reserve Board (q.v.)'.

The privately owned Federal Reserve (FED) banks actually issue (create) the 'money' we use. In 1964, the House Committee on Banking and Currency, Subcommittee on Domestic Finance, at the second session of the 88th Congress, put out a study entitled Money Facts which contains a good description of what the FED is: 'The Federal Reserve is a total money-making machine. It can issue money or checks. And it never has a problem of making its checks good because it can obtain the $5 and $10 bills necessary to cover its check simply by asking the Treasury Department's Bureau of Engraving to print them.'

Any one person or any closely knit group who has a lot of money has a lot of power. Now imagine a group of people who have the power to create money. Imagine the power these people would have. This is exactly what the privately owned FED is!

No man did more to expose the power of the FED than Louis T. McFadden, who was the Chairman of the House Banking Committee back in the 1930s. In describing the FED, he remarked in the Congressional Record, House pages 1295 and 1296 on June 10, 1932:

'Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government Board, has cheated the Government of the United States and he people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the maladministration of that law by which the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.'

Some people think the Federal Reserve Banks are United States Government institutions. They are not Government institutions, departments, or agencies. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers. Those 12 private credit monopolies were deceitfully placed upon this country by bankers who came here from Europe and who repaid us for our hospitality by undermining our American institutions.

The FED basically works like this: The government granted its power to create money to the FED banks. They create money, then loan it back to the government charging interest. The government levies income taxes to pay the interest on the debt. On this point, it's interesting to note that the Federal Reserve Act and the sixteenth amendment, which gave congress the power to collect income taxes, were both passed in 1913. The incredible power of the FED over the economy is universally admitted. Some people, especially in the banking and academic communities, even support it. On the other hand, there are those, such as President John Fitzgerald Kennedy, that have spoken out against it.

Kennedy apparently reasoned that by returning to the constitution, which states that only Congress shall coin and regulate money, the soaring national debt could be reduced by not paying interest to the bankers of the Federal Reserve System, who print paper money then loan it to the government at interest. He moved in this area on June 4, 1963, by signing Executive Order 11110 which called for the issuance of $4,292,893,815 in United States Notes through the U.S. Treasury rather than the traditional Federal Reserve System. That same day, Kennedy signed a bill changing the backing of one and two dollar bills from silver to gold, adding strength to the weakened U.S. currency.

That's an interesting post. I have a friend here in Houston that loves to get on the topic of how the Federal Reserve Bank is essentially unconstitutional and is almost 100% responsible for a lot of the mess we're in now. It's interesting that you really don't hear this topic being brought up much in the mainstream media. Moreover, from what I understand, when Ron Paul tried bringing up this topic during candidate debates, he would instantly become ignored by the host, and have the topic either diverted or have the host go straight to a different candidate.

This country is so screwed up, it's completely amazing. I love the United States - we can read and say what we want, and we're basically free to start any business we want to (with enough cash), and we have some of the most beautiful landscapes and National Parks in the entire world, but our Govt. is absolutely ridiculous. The power of the almighty dollar has corrupted the body politic in this country to the point where they aren't for you and I, but they're for lining their own pockets at our expense. Just look at what deregulating the energy industry (Enron) has done to our electricity and gas prices. That was all done for the benefit of large banks, which had their hands straight in the pockets of all the major players in Govt. I think it's funny when Congress has a hearing on whether or not some baseball player is on steroids, but doesn't bother looking into the mess that is our "energy trading" policies and how the Federal Reserve Bank works. Barry Bonds never tried to get into my wallet and suck my money out.

Edited July 6, 2008 by gmcbob