INDUSTRY INSIGHTS

May 2009 EDITORIAL

Unfortunately for America's Working Class, and Income Tax Paying Class, Mr. Obama is NOT the Answer to the USA's Continuing Economic Rot. The USA will see Additional False Dawns, and more Stock Market Sucker Rallies. Here's Some Advice for Saving Yourself.

By Andrew Molchan

(May 12th 2009). The Obama administration is 100 days old, but the picture is already clear. President Obama is NOT trying to reform America and make the American system competitive internationally.

THE VERY FIRST THING THAT PRESIDENT OBAMA DID WAS WRONG. Three days after coming into power President Obama punched through the Leadbetter Act. This gift to Tort lawyers Act makes it possible for employees who have NOT worked for a company for years to charge pay discrimination and sue for a million dollars in punitive damages. When asked about the ACT, speaker of the House, Nancy Pelosi said, "Well, if a company does not want to be sued just don't have any pay discrimination." Ms. Pelosi is a total jerk. She's so far out of it she doesn't have a clue. The minds of the Democrats are on the dark side of the moon. America Tort law has almost nothing to do with justice. It's all about giving the lawyers and excuse to get their fans into a company's assets, and then suck out as much blood as possible. Giving loser crackpots the right to sue a company they worked for ten years ago is a disaster for American business, and is a portent of what the Obama administration is going to be all about.

(The PGRA Association will shortly post the "Leadbetter Protection Form) for employers, and any business can freely copy and use the form.)

DISAPOINTED: I had high hopes for Mr. Obama. Mr. Obama being black, that never bothered me. When I was 19 years old I was a member of the NAACP. Why? Because helping the NAACP was the right thing to be doing at that time. In 1960 it wasn't easy or safe for a poor white boy to be in the NAACP, but I've never done what was easy. I really wanted Mr. Obama to be a major "change" agent after years of Napoleon Bush who could only think about how many Muslims he could murder.  

THERE IS SOME HOPE: Admittedly, there is some hope on the international front. However, that's mainly because President Bush, with everything connected to the Middle East, was living in his own dream world that only had a casual connection to reality. It's easy to look good when you come right after somebody like President Bush.

WE'LL SOON HAVE A VERY BIG ANSWER. President Obama is going to give a speech in Egypt, the first week of June. His speech will tell us a lot. If the speech is the same faggot mouthing about how we all have to get together, and play kissey-face, and touchy-feely, than we'll know we should pack our bags and get out of the USA before the coming nuclear war. However, if President Obama says that the 30 years of talking to area politicians who have no real power to do change anything has ended, and the USA is going to punch through a solution, then we might at long last be on the right road,

I HAD THE BEST ANSWER FOR VICTORY OVER MIDDLE EAST TERRORISM TEN YEARS AGO: I have a world-class record of being correct on mega issues. Forty-four years ago I had the correct strategy for winning in Vietnam, (a strategy never followed). Five years ago I said that America's efforts to turn Iraq into an American puppet colony would fail. However, I always had the right strategy for a decisive win the Middle East. Five years ago I mail a grand strategy outline to the total US Senate. The outline if followed would have produced a big win for the USA in the Middle East while saving a lot of lives and money. My plan was not, and is not wrong, but it is politically incorrect and does NOT fit into America's matrix of lies.

A MAJOR VICTORY OVER AL QAEDA IS STILL POSSIBLE - ALL MR. OBAMA HAS TO DO IS "CHANGE." My strategy is still the best plan, and the only plan that has any chance of reversing the continuing growth of al Qaeda. An outline of the same plan that I sent to the Senate five years ago can be seen on our website, www.amfire.com under "News Articles" and "Gaza War..." YOU should do something for America. Run out a hard copy of the plan and email it to your Senators and Congressman. Who knows, maybe someday Washington really will change? We'll see in a few weeks with President Obama's Egypt speech.  Here's the bottom line for Mr. Obama, after DECADES OF FAILURE in the Middle East, rather than doing the same old failed things in the same old failed way we have to do something radically new. I had the correct answer years ago. If President Obama has the courage to pick it up than he will have earned his place in history no matter what else happens.

LAW AND PROGRAMS THAT WOULD FUNDAMENTALLY "CHANGE" AMERICA FOR THE BETTER

LETS STOP IN ITS TRACKS THE DOULBE CROSSING OF FEDERAL/GOVERNMENT EMPLOYEES WHO TRIED TO PLAY THE GAME IN AN HONEST AND ETHICAL WAY. The Obama administration is doing a lot of "groundwork" towards doing away with the VA medical program, and related medical programs for Federal/military employees (except Congressmen and Presidents). In other word, the real meaning of "fair and equal" is that a person who was a military officer, or Federal law enforcement officer for 30 years, would end up in ordinary Medicare along with the bums and whores who have been drains on the American economy from before they were born.

WHAT WE NEED IS A "FAIR" RATING OF PEOPLE. We need a version of the "credit score" system but only for national worth. What is each individual worth to America? What has each person contributed, or not contributed, to America? To me, what's "fair" is that those who gave more to American society should get more in return.    

BANKS: Banks are short of funds. The best way to re-finance America's banks is to make all savings accounts up to any amount tax-free. This would bring cash into banks, and there would be no need to nationalize them. President Clinton in particular (con man Clinton), turned bank deposits negative. The government lies about the real inflation rate, and then people with bank deposits pay income tax on their so-called "earnings." Putting money into a bank is a LOSSING MOVE. It's all really simple, make it more profitable to have money in a bank and the money will be there. 

ENERGY: Pass a series of laws that stop the delaying lawsuits, and all of the other non-sense that currently makes it impossible to build new nuclear power plants.  Pass whatever laws are needed to fast tract the building of 200 additional nuclear power plants inside of the USA.  Two hundred new nuclear power plants are the ONLY workable solution to America's energy crises.

ARE WE TOTALLY DESLUSIONAL? President Obama's glittering generality statements about, "creating two million new jobs building clean technology of solar panels and wind turbines," is delusional. The current American system cannot fix the New York City hole in the ground that use to be the World Trade Building, but we're going to build ten million wind turbines. Sure! Aside from that, solar panels will continue to be built by workers in Germany and Eastern Europe, and wind turbines will continue being built by workers in India. Why? Because no American manager in his right mind wants to build a factory in Tort lawyer infested America, regulation crazy America, and Tony Soprano union boss America. With the new tax laws against American corporations that have overseas businesses, the USA now as the highest taxes of any industrialized country in the world.

LET'S GET REAL! The bottom line is that anyone who talks about "increasing America's energy independence" without talking nuclear is one of three things: (1) profoundly stupid, (2) a political or journalistic con man, or (3) both one and two.

LEGAL REFORM: American business has to operate in the world. It's NOT "planet America." The USA will NEVER be able to turn around its production decline without getting the termite Tort lawyers out of the pockets of USA manufacturers. America needs the "everywhere except the USA" law of having the plaintiffs pay for the expenses of the defendants if the plaintiffs lose. Also, lawsuit filling fees for anything over a $5,000 question should go up to $1,000, and should increase by $10 a month for the next 10 years.

IF IT'S SO GOOD THAN WHY ISN'T IT WORKING? Here's a question for the Obama new age socialists. If the American legal system is so good for manufacturers, then why have manufacturers been running away from America for the last quarter century? The usual excuse from Washington D.C. is "other places have lower wages." That's true, but NOT the total story. The bottom line is that you have to change what you can change. We cannot tell American workers that they are going to get $1 an hour, but we CAN get the scumbag Tort lawyers off of the backs of American manufacturers. Places like Switzerland and Canada are NOT unsafe because they do NOT have an army of Trot lawyers.

LET'S MAKE IT EVEN HARDER TO RUN AN AMERICAN BUSINESS: The latest "better idea" from the Obama gang is to tax corporate overseas income as-earned per year, for companies like: General Electric, Exxon, Cisco Systems, Hewlett Packard, Johnson & Johnson, Procter & Gamble, Google, etc. and so forth. What's going to happen in the real world is that some of these companies will re-incorporate in another country, and move their headquarters out of the USA. This will mean even more jobs lost to Americans, and long-term US tax receipts from these companies will in the long-run decline. What those in Washington sincerely CANNOT comprehend is that the Googles and Hewlett Packards of America really do NOT need the USA. It's not 1949 anymore. It's the USA that needs corporations, NOT the other way around.

WHY DOES A PRODUCTIVE COMPANY WITH WORLD CLASS PRODUCTS NEED THE USA? Do they need a country where corporate taxes are now the highest in the world? Perhaps they need a country where the tax code is over 5,000 pages long and changes by the hour? Perhaps they need a country where the balance of trade is a disaster, and the currency is a crash waiting to happen? Perhaps they need a banking system that has been so "gamed" by the government that it's a train-wreak? Perhaps they need a country where the government bet the farm on real estate - AND LOST? Perhaps they need a government that fights stupid never-end wars in stupid places and for stupid reasons? Perhaps they need a country that has more debt than any country in the history of the world? Perhaps they need a country that has more lawsuits than any other three countries in the world? Perhaps they need a country where the President sincerely thinks that wealth is created by union thugs, welfare whores, lawyers, and dumb government hacks telling creative people what the creative people should be paid?        

CONSUMPTION IS NOT AN ECONOMY: The ONLY way to have a true, real, and lasting economic recovery in for Americans to manufacturer MORE than we consume. That means doing everything possible to make America a more manufacturing friendly country. All over America both large and small business people, who actually work, are asking "What's in it for me?" They're NOT coming up with good answers.

STOP THE GOVERNMENT'S FRAUD: All of the Federal government's economic statistics are doctored. They range from acceptable "puff," to over or under reporting of 50% to 300% with numbers that are fraudulent. The official inflation rate is probably the worst case of fraud, but every other number is also doctored: Employment, GDP, Productivity, and right down the line. America has become a profoundly dishonest country. Anyone who makes their financial decisions based on the US Government's official numbers will probably lose money. An honest step forward would be to pass a law making it a criminal offense to continue the falsification of the government's numbers.

AMERICA NEEDS A REUTRN TO HONESTY. Right now, the Democrats are NOT trying to fix the matrix of lies and dishonesty. The Democrats are trying to breathe new life into the matrix of lies, and make all of the old con games work again. Rather than kill the Frankenstein monster of systemic dishonest, the government is trying to make it walk again.

MORTGAGE SOLUTIONS: Pass a Federal law making at minimum 10% down payment for homes mandatory. No more lire-mortgages. A person's income is what they pay tax on, or what they can prove is money in the bank and/or other financial accounts they control, and/or property in their name. Canada has a very healthy banking system and no real estate crises because there's a 20% mandatory down payment on homes.

A CON GAME DEFINITION OF "HOME OWNERSHIP." Right now, home "ownership" in the USA is basically a government propaganda "feel good" fraud. The majority of so-called "home owners" do NOT really "own" their homes. Ninety percent of the homes of "sub-primes" are really owned by Freddie Mac and Fannie Mae, which are the government. Here's the big picture of what happened with real estate."Public Housing" for bums was a horrible failure. The government (mainly Bill Clinton) with the help of many Republicans disguised public housing as "sub-prime private ownership." The government told the banks to "not worry," makes loans to any bum, and then sell the crap loans to the stupid Chinese, Muslims, Europeans, etc. However, real estate socialist engineering did NOT change basic DNA. The irresponsible, lazy, no talent bums were still bums after they got their $300,000 loan.

HOW STUPID IS IT TO LOAN MONEY TO A PERSON WITH NO FUTURE? As I've pointed out over the years, and in many of my columns, the "sub-prime class" in the USA does NOT have any future tense in their speech or thought patterns. Turn on any "Rap" radio station and listen to the words. There's no future tense. How stupid to do have to be to give a 30 year, $300,000 loan, to a person who has no future tense in their thought patterns, and no provable income? That's what the American government told USA banks to do - and the American banks complied. The smart US banks sold the crap to the brain dead European banks that had more dollars then they knew what to do with. Anyway, one problem is solved. Many foreign banks don't have as many US dollars to worry about.

PROOF. The country most like the USA is Canada. The Canadian government never forced Canadian banks to make loans to bums like the US government forced the banks to make so-called "equal and fair" loans to bums. The result is that in 2009 all of the Canadian banks are in OUTSTANDING condition compared to America's banking disaster.

LOANS BASED ON THE ABILITY TO PAY THEM BACK: For many years the government encouraging (and sometimes forced) banks to make loans based on race and/or social class. This was the biggest single reason for the current financial crises. Foreign banks in particular should demand that the US government pass a law making it illegal for US banks to make loans based on anything other than the probability of the loan being repaid. If the US government does not want to pass such a law, then foreign banks should have any money used to buy US mortgages a farewell, goodbye kiss as they send it to the USA because they'll probably never see the money again.

FOREIGN BANKS ARE STILL BRAIN DEAD. If foreign bankers (and foreign governments) had anything in their pants besides loose change they'd be suing dozens of American banks, rating agencies, and the American government itself. This would help the real working people of America, and the people of the world. What the world needs is for somebody to start slapping the jerks in Washington D. C. across the face, and to tell them to "wake-up!" America has to stop trying to solve problems with more lies, more fraud, and more bombs.     

A PROGRAM FOR REAL OWNERSHIP: If we want to promote home ownership then lets have an honest system that's not a word-game fraud. That means: 10% minimum and mandatory down payments. No more Alt-income (un-provable income) mortgages. No more negative amortization (net-am) mortgages. No more principle only mortgages. No more balloon payments. Once a mortgage is 20 years old the interest is no longer tax deductible, and the big one, many restrictions on home equity loans.

DEMAND REAL HOME PROTECTION. All of America needs a Federal law like Florida's home ownership law. The only States that currently protect homes are: Florida, Iowa, Kansas, Oklahoma, South Dakota and Texas. In Florida your home is safe from lawsuits and debt collectors. In Florida you can have a five million dollar home, but if you declare bankruptcy your home is totally safe. If you have a million dollars in medical bills they cannot go after your home. If you have a million dollar civil judgment against you, the lawyers cannot touch your home. The voters in the 44 States that do NOT protect home ownership should be demanding the same laws as Florida. My advice for young people is to NOT live in any State that does not protect your home.

PREDICTION: Lawyer loving President Obama will continue to sweet talk us about protecting American homeowners. However, I can give you a 1000% guaranteed that President Obama will NEVER give home owners real protection by signing a Florida like, Federal home protection Bill. This kind of home protection would be an outstanding campaign issue for the Republican candidate of 2012.  

CREDIT CARDS: Pass a law that creates a national database of all credit cards, and sum-total credit limits on all of the cards in a person's (couples) name. No more cases of people who are on social security, with few assets, running up a combined $250,000 in total credit on 35 different credit cards in their name. I personally know of just such a case. A couple that was in their mid 70's, and had few real assets, except their home which in Florida cannot be touched. They ran up $287.000 in credit card debt on 43 cards. In 2005 banks sent out something like a billion credit card solicitations. My God, let's get some common sense into this sickness.

STOCK MARKET INSANTIY: Stocks are supposed to be a way for companies to raise money, expand, create jobs and build products to be exported. However, the American stock market has degenerated down into an insane casino. A step towards a solution is to put a 1/4^th of 1% Federal sales tax on the purchase of all stocks, ESPECIALLY if purchased by a hedge or mutual fund. This will stop hedge funds from the insane buying and selling of the same stock three times in one day. With many "funds" there are no people doing the buying and selling, it's a computer program. Buying and selling the same stock three times in one day is NOT investment. That's insane game playing that does NOTHING for the average American worker.

WHERE WILL STOCKS GO SHORT TERM? Long-term stock trends are much easier to predict than short term ones. In the short term a lot of basically irrelevant factors can move the stock market up or down. That said, and keeping in mind that I'm writing this column on May 12, 2009, my crystal ball sees a summer rally, an Obama hope rally, into the 9,000s. However, this will be another sucker rally and in the fall and winter of 2009-2010, people will start to see that nothing much has improved. The public will say, "We spent two trillion dollars on so-called stimulus and nothing is happening! We took the whole bottle of Viagra and nothing is going up!" Then, the stock market will go down again, possible way down.

INSANE LEVERAGE: Financial institutions made money by leveraging their positions anywhere from 30 to 1, to 50 to 1. Then the gross gambles where "insured" by a house of cards system of "Credit Default Swaps." This Ponzi like insurance-pyramid included most of the major banks, major insurance companies, and many of the world's largest hedge funds, etc. Only a few of them ever had the ability to pay the insurance if required. They re-insured their positions with people who also did NOT have the ability to pay. In 2008 the whole rot house of cards started to fall in on itself. Pass a law making it mandatory that anyone issuing insurance Credit Default Swaps (CDSs) have reserves of at least 10% liquid class A assets under their control. Also, people who sell insurance should be licensed and regulated as insurance companies - no more shadow insurance industry.

A $54 TRILLION DOLLAR CIRCLE OF FRAUD: When I looked into the details of CDSs my mind was staged. I was shocked. At the end of 2008 the world's Credit Default Swaps had balloon to $54 trillion dollars. That's not a misprint, $54 TRILLION. The 2008 Gross World Product (GWP) was 53 trillion. The CDSs were one trillion MORE than the world's GWP. This market was 70% uncontrolled and trillions of dollars worth of CDSs were underwritten by irresponsible hedge funds that were recklessly gambling. Most of the funds never had the assets to pay the insurance if something went wrong. Some insurance companies like giant AIG did NOT have the money! This is one reason why, in last month's issue, I suggested that everyone get out of all hedge funds. The hedge fund/CDS bomb is still armed and could still explode. The bottom line is that all of the thousands of hedge funds that were in fact operating like unlicensed insurance companies need to be supervised, audited, and have cash assets to back their insurance, and/or not issue any kind of insurance "swaps" to anyone. 

A NATIONAL SERVICE FEE: What's fair and equal is that if a person lives in the USA, they should at the very least symbolically help pay for the USA. There should be a "A Patriotic National Service Fee," of one average days pay per year, and paid as a "Service Income Tax" by the 55% of the adult American population that current pays no income tax whatsoever. That would only bring in a100 billion dollars, but the symbolic effect on everyone paying the majority of taxes would be very healthy for America. It's hard to have your taxes raised, and raised and raised again knowing that over 50% of the adults in the USA are getting a free and unequal ride on income taxes, but have equal voting rights. If a person cannot pay the National Service Fee, or refuses to pay, they should lose their right to vote. This last part will probably have to wait until after the revolution.

THE ULTIMATE UNWANTED TRUTH is that if the United States is going to have any chance of surviving as a significant power then voting has to be restricted. "Democracy" has a fatal flaw. (This is why Jesus Christ never had anything good to say about Democracy.) When all of the bums become the majority, and when they see that they can exploit "Democracy" to steal the money of anyone who has money, than that civilization is finished. 

WILL CHINA EVER GET ITS MONEY BACK? America needs a President that understands that a nation MUST in the long run produce MORE than it consumes. The American economy is basically functioning as a giant Ponzi game. The Chinese (and everyone else) should worry about their US Treasure Bonds because the matrix of lies inside of America is not being honestly addressed, and that means America's Treasury Bonds will never be redeemed for like value.

ALL OF THE WORLD'S MAJOR DEPRESSIONS OF THE PAST HAVE PRODUCTED WARS.  The Chinese have already made it clear that they are NOT going to stand around like everyone else in the world while the American government steals their money via hidden inflation and financial games. The Chinese gave America fair products for a fair price and they expect to be paid. The Obama administration is pooping any Chinese threat. The last time Americans laughed at a big Chinese threat was in November of 1950 when the Chinese told General Douglas MacArthur that they would attack if MacArthur went up to the Yalu River. MacArthur's staff laughed and kept pushing towards the Yalu. The Chinese did attack as they warned, and the Chinese army pushed the American army 200 miles south with great lose of America life. (The American Empire has NOT clearly won any significant shooting war in the last 63 years).   

THE VAMPIRE PRINCE OF AMERICA? Everything in a society is connected. The instant popularity of the HBO show "True Blood" is NOT an accident. The current popularity of Vampire everything is not an accident. America is rapidly becoming a vampire economy where blood is being sucked out of everything will any life to support an army of the "living-dead" like General Motor, AIG, Chrysler, Fannie Mae, bum homeowners, Tony Soprano union bosses, spineless bankers, U.S. Treasury Bonds, Tort Lawyers, a failed education system, and a bloated, quickly expanding government that's only interested in buying votes.

GREAT LINES. In the series, "True Blood" there's a great line that says it all about modern America. A person is in a bank trying to get a bank loan for an exorcism, but the banker is hesitating. The black person trying to get the loan immediately accuses the white banker of being prejudice. The banker says, "No, no the bank is not prejudice! Why - just the other day we gave a loan to a vampire-American." That line is a summary of the banking problem in America, too many loans to too many vampires. 

I WANT TO BE A PROUD AMERICAN: I do not say the above with any joy. It gives me no pleasure to be a citizen of a country that's borrowing money that will never be repaid. There used to be a time when being an America really made a person feel special. Americans used to be citizens of an honest country that spoke the truth, and worked at doing the right thing. About once a week, when thinking about America, the words of King Theoden from The Lord of the Rings comes into my mind, "How could it have come to this?"

THE SYSTEM IS THE PROBLEM: If a nation, like America, has a legal system, tax system, and regulation system that is NOT competitive worldwide. Then any business trapped inside of that uncompetitive system CANNOT in the long run be worldwide competitive. For example, how could be operate a business inside of Cuba, or North Korea, and be competitive worldwide? This is the core problem with General Motors, and many other big failing American businesses. GM to be successful must be successful worldwide because the auto industry is now worldwide. However, GM's cowardly management trapped itself in both the USA, and in Detroit. Ten years ago I looked at GM, with total labor cost of $36 an hour, and saw death written all over it. Every big American company that needs worldwide business will eventually fail because they are trapped in an America that's full of termite Tort lawyers, the highest corporate taxes in the industrialized world, welfare whores, bums, too many regulations, people who cannot speak English, too many restrictions, too many Tony Soprano union bosses, a majority of voters that pay no income tax and are economically illiterate, and an army of self serving political vampires who's only real talent consists of sucking the money out of productive people to buy the votes of bums.

WASHINGTON D.C.'S INABILITY TO LEARN: The most frightening thing for me is the inability of our government to learn. For example, President Obama's economic programs are NOT new. Lowering the Fed Rate to almost zero, flooding the system with manufactured money, running massive deficits, this was Japan's exact program in the 1990's. In the 1990's most of the world was booming, so Japan had much better world economic conditions than the USA has today. Even with that great advantage, Japans programs of almost zero Fed Rates, plus massive spending - that was A FAILURE. When Japan's real estate bubble burst Japan's national debt was 60% of gross national product, like the USA's national debts was 60% of GNP in 2008. After years of  "stimulus" exactly like the USA has now, the end result was that Japan's national debt went from 60% of GNP to 190% of GNP. The USA will follow the same road and for the same reasons.

THE UNWANTED TRUTH IS THAT THE DEVALUATION OF THE US DOLLAR IS NOW GUARANTEED. With the current President Obama program a run on the US dollar is not an "if" but only a "when." I say the above with great pain and sorrow because it will produce massive suffering for millions of Americans.

NO EXIT: When the run on the US dollar happens, Mr. Obama will be caught between a rock and a hard place. The government can only defend the dollar by substantially raising interest rates. Or, buy selling the Gold in Fort Know - if there's still any owned by the USA.  In 2010 real state will still be down. Home prices could go down another 20% in 2009-2010, and the crash in commercial real estate has only started. Real unemployment will still be 10% in 2010. Cities and States will be going bankrupt and/or on Federal life-support.  Millions of Americans will only have the cash that's in their pocket. So, the government raising interest rates to defend the dollar would clobber the economy. However, not raising rates will send the price of oil, food, manufactured products, etc, right through the roof.

IT WILL BE A TIME FOR REPUBLICANS. There's going to be a lot of unhappy voters in 2010. If anyone ever wanted to run for Congress on the Republican ticket 2010 is going to be the chance of a lifetime. I'm predicting an 80% chance that the House will have a Republican majority.

AMERICA WILL HAVE WAGE AND PRICE CONTROLS. Mr. Obama's answer to the run on the US dollar will be wag and price controls (as I predicted in 2008). Like President Nixon's wage and price controls, they will break down. The Muslims are not going to sell the US oil at artificially low prices, and China is not going to sell their manufactured goods at artificially low prices. The Washington spoiled-brats are unbelievably childlike in there never ending belief that the real world is just going to give the brats whatever they want, and in some magical way of Democrats dream of "plantation America" will work.

DID YOU EVER NOTICE THAT ALL OF THE COMMUNISTS WORLDWIDE HAVE HAD THE SAME SOLUTION FOR THEIR FAILURE? People point out to communists (i.e. left-wing Democrats) that their programs are NOT working. The answer from the communists worldwide for the last century has always been the same, "Yes, it's not working now, but when we make it bigger and all inclusive it will work."

DEAD: After the last-ditch wage and price controls fail, then the America economy will be totally and profoundly screwed. The DOW stock index will fall below 6.000, possible below 3,000. What's left of millions of people's retirement money will be gone, and average workers in the USA will be totally f**ked.

PREDICTIONS FOR THE 2012 PRESIDENTIAL ELECTION. As I said last month, I'm sure that the 2012 election is the Republican's election to lose. My caveat is that the brain-dead Republicans have become highly skilled at losing elections. Suggestions for winning: (1) do NOT pick a combat loser like McCain or Bob Dole. (2) Pick somebody under age 55. (3) Fire all of the advisors that tell candidates, "Don't say anything specific - just stick to the glittering generalities." (4) Have a very specific and bold agenda of real change and take command of the process. Force the Democrats to answer you, move fast, and move boldly. Hammer them with a major new proposal every week. (5) If you really wanted to win - hire me.

AMERICA WILL SURVIVE: After the old, rotten, kingdom-of-debt US economy is destroyed, a significant number of voters will finally check out of hotel delusion and check into hotel reality. America may or may-not suffer a revolution for the changes, but one way or the other America will start to enact all of the points (and more) that I outlined. Long term the Obama/Democratic party plantation welfare dream is unworkable and will fall apart just like the old USSR fell apart. Voting will be restricted to those who are intelligent enough to understand what they are voting for or against. A new America based on production, savings, education, speaking good English, and responsibility will rebuild itself.

A GRAND STARTEGY OVERVIEW. I'm one of the most talented people in the world for grand strategy analysis. Here's the overview, Mr. Obama is destroying America's worldwide competitiveness to build his welfare plantation paradise for sub-prime people. However, Home sapiens are obsolete - all of them. It's dumb to destroy America economically to save an obsolete species. To really jump-start America we should be the first to create and expand the new species. (If we don't do it, the Chinese will).

GENERAL ADVICE

ADVICE FOR YOUNG PEOPLE: My continued advice for young people who have talent, and want to work hard, is to move out of the USA. Right now, April of 2009, the government's debt liability is $515,000 per taxpaying US household. In eight years that number will be up over a million dollars per taxpaying household. It's like buying stock in a company that owes more than it's total value - why? The grim facts about the USA speak for themselves.

WHERE TO GO? If you have no family ties, move to Australia. If you want to frequently return to the USA to see relatives, then move to western Canada: Vancouver, Edmonton, or Calgary and take our Canadian citizenship. Do NOT move to Mexico because Mexico is definitely on the road to what will be a nasty revolution.

CANADA GOT IT RIGHT. Among all of the daily horror stories about Bank of America, Citigroup, J.P. Morgan, Goldman Sacks, Wells Fargo, AIG, Merrill Lynch, etc. etc. There is nothing about Canadian banks going broke. There's nothing about big numbers of Canadian subprime mortgage foreclosures. Canadian banks are in excellent condition, and the Canadian economy produces more than it consumes. The Canadian government runs Canadian society for the benefit of working people, not for the benefit of bums. Try this experiment, walk across the bridge from Detroit USA to Windsor Canada, and you'll see two separate worlds. 

ADVICE TO OLD PEOPLE: Anyone nearing 60 years old has to decide to either start taking Social Security at 62, with lower rates, or wait until 65 with higher rates. First of all, Social Security is part of the USA's matrix of lies. Social Security is a classic Ponzi game. The money that comes into Social Security on Money is already gone by Friday. Democrats like Al Gore who talk about the, "Social Security lock box," are in my opinion all Benny Madoffs. 

REWARDING BUMS: Social Security MUST eventually be "means tested."  That "means" that anyone who saved money, acted responsible and paid off their home, and so forth, will NOT get Social Security, and/or greatly reduced payments. The government will tell us that this will make Social Security "fair and equal."

GET ONTO S.S. WHILE YOU CAN: My advice to older people is to start taking Social Security when you turn 62, (Medicare does not start until 65 years old regardless). There are no guarantees, but perhaps when the government gets around to "means testing" those who are already in the system will do better?

YOUNG VOTERS VERUS OLD VOTERS: One thing is for sure, about 10 years from now, without massive reductions in Social Security, there will be almost open warfare between people under 50 years old and everyone on Social Security. In 2025, to support Social Security at current levels, working people will have to be paying 22% of each paycheck to Social Security, plus Federal and State income tax on top of that. In 2025, if you're work for a company with weekly paychecks, you'll have 40% of your gross salary taken out before you even get your check.

IN THE LONG RUN SOMEBODY HAS TO MAKE SOME PROFIT: I'm a fundamentalist that I look long-term. How can US stocks have a true sustained rise in stock prices without real earnings? For true earnings, we need fundamental changes in America to make America more worldwide competitive. At this point, May 2009, I believe we'll have another sucker rally this summer that will take the Dow into the mid 9,000s. However, long term I thing the Dow will see 5,000 before it once again sees 14,000.

US STOCK ARE THE LONG-MARCH TO NOWHERE: As I've pointed out in past issues, on January 14, of 2,000, the Dow was 11,722. In May 2009, the Dow is around 8,200. Today, in gross numbers, the Dow is 33% lower than it was nine years ago. In addition, from January 2000 to January 2009 the US dollar has lost 38% of its purchasing power, so in purchasing power the DOW today is 42% lower than it was nine years ago!

A BIG HILL TO CLIME: On October 12^th 2007 the Dow was at 14,093. From where the Dow is at now (8,200) it will have to increase by 78% to get back to where it was in 2007. That's a big hill to clime when you companies have one of the highest tax rates in the world on their backs.

THE BIGGEST FINANCIAL BUBBLE IN HISTROY RAISED STOCKS BY LESS THAN ONE POINT A DAY. For 2001 to 2007 the stock market was driven by trillions of dollars worth of borrowed money. There were trillions of dollars worth of insane 30 to 1, and 50 to 1 speculations. There were hundreds of billions of dollars in loans to bums juicing the system. If you were breathing, and could sign an X on a piece of paper, then you could get a $100,000 loan. There were over 6,000 hedge funds that were in many cases managed by people who were intellectual first cousins to Benny Madoff. Because of all the financial manipulations almost every company on the stock exchange was reporting record profits. With all of that total game playing and accounting fraud, the stock market only went from 11,722 in 2000 to 14,093 in 2007. During the greatest financial bubble in the history of the world the Dow from year 2000 to year 2007 only went up an average of 270 points a year. (Less than one point per day!) In non-inflated dollars the Dow's dollar purchasing power value actually went DOWN. In reality, the American Empire was already into a steep decline. The "good times" were an illusion.

WHAT'S GOING TO DRIVE THE STOCK MARKET UP? The American economic house of cards is coming apart. Today, the government is in the process of banning the crazy 40 to 1 casino like speculations. With new regulations the banks might actually have to keep reserves again. Bums off of the street are actually being turned down for loans. Today, almost every company on the NYSE is reporting sales declines, and many are going bankrupt. In the middle of the most insane financial speculation in the world (2000 to 2007), the Dow was only going up by an average of 270 points a year. So, now that all of the crazy speculation and fraud is dying, where is the stock market going? The answer is - nowhere.

WHAT TO DO WITH YOUR MONEY? For my industry, firearms, for some time now I have recommended that one of the best places for firearms industry people to invest is the firearms industry. For the past half-year firearms retailers have sold well OVER a million guns a month. Retailers are expanding their stores. Manufacturers are going after more market share. Ranges are being built. At this time, May 2009, I think firearms manufacturer are the only industry in the USA that's really booming.

KEEP WHAT YOU HAVE: At this point, I think the objective is to not lose money. For that I'd recommend opening an offshore account in something other than US dollars. The Swiss Franc is good. It's the only currency in the world that has some gold backing. For 2009 the Swiss Franc is up 7.5% on the US dollar. Long term the Australian dollar is good. The Canadian dollar is good long term. The second biggest currency in the world is the Euro, it's up over the dollar for 2009.

PROTECTION. As I said above, I sincerely believe that a run on the US dollar is only a question of "when" and not ‘if." Parting your money is an overseas account and in another currency gives you an added layer of protection. Foreign bank accounts, and brokerage accounts, can be opened via mail. You have to provide notarized copies of your passport, drivers' license, and whatever information the bank might want. You can find a bank by looking on the Internet. Use a big and well establish bank or brokerage house. Warning, the very best banks do NOT want American clients, but keep looking.

LAW SUITS. If you have an account in a large and safe bank that has NO branch offices in the USA, than you have a little extra protection from civil lawsuit judgments. 

KEEP IT LEGAL: It is NOT illegal to have an offshore bank or brokerage account in another currency, but you MUST follow the American law. On your income tax return, Form 1040, Part III is titled "Foreign Accounts and Trusts." You have to check "yes" for a foreign account and give the foreign country where the account is located. The really import form you MUST file is the TD F 90-22, the Report of Foreign Bank and Financial Accounts, known by its nick name, (FBAR) - Foreign Bank Account Report. It is a felony to not file this report.

FORMS? You can get your FBAR forms by Googling "Federal Forms FBAR," and printing the form off the Internet. In the FBAR you have to list the controllers of the account, where the account is located and the amount of money in the account at its highest point during the last year. If you have an account at Charles Schwab the government has exactly the same information about your account that you are giving them via the FBAR.

KEEP IT LEGAL. The FBAR is NOT part of your tax return. It goes directly to the US Treasury Department's office in Detroit, Michigan. The address will be on the FBAR form you will print out via the Internet. The deadline for the FBAR is June 30^th for the previous year. Some countries pay interest "gross," like US banks do for foreigners who have US bank accounts. That means taxes are not withheld at the point of origin. Some locations withhold taxes. You have to choose what you want, but either way you have to report the interest/earnings as income on your 1040 income tax form. If you check the "yes" box on your 1040 form, and send in your FBAR report, and list your interest/earnings on your tax return, then you are 100% legal.

MORE THAN A BANK ACCOUNT: I would give my highest recommendation to having an overseas bank account in a good, safe bank, and in a major currency like the Swiss Franc, Euro or possible the British Pound. The Euro is at 1.29 as of the writing of this article. Within the next 24 months I would not be surprised to see the Euro at 2 to the dollar. That would be a 54% increase in dollar terms for an "investment" that was literally "money in the bank."

PATRIOTIC? Some people view a foreign bank account as not exactly patriotic, but that's not true. The money belongs to an American, and is earning money overseas. That's a help to our balance of payments. There will be a run on the US dollar someday. After the dollar crises, the people with foreign accounts will bring their money back to America because once converted to dollars it will buy much more. The money will be used to reopen businesses, buy real estate, and so forth. Having foreign accounts is as much of a protection for the government as it is for the individuals. It's basic platoon combat tactics, i.e. spread yourself out so one bomb won't destroy everything.

FOREIGN BANK ACCOUNTS ARE A CONVIENT POLITICAL WHIPPING BOY. There's been a lot in the news lately about bank accounts at UBS in Switzerland. Washington D.C. is exploiting an economic side issue The American money in UBS Swiss Bank is probably 1/10,000 of 1% of America's GNP. The core grand strategy mistake with America's economy is that the Fed and Treasury Department think that global Keynesian economics and American Keynesian economics are one and the same. What the American government does NOT understand is that Keynesian economics only works IN A CLOSED SYSTEM. The American economy in 1909, and even 1949, was a closed system. As late as 1969 it was mainly closed. However, in 2009 the American economy is like a bucket with lots of holes in the bottom.  You fill the bucket with water, (TARP, etc.) and in a short time the water is gone. You fill the bucket again, and again, and again with a trillion dollars each time, and in a short while the money is drained away.

WHERE TO SEE THE REAL PROBLEM? Anyone from the government can find the real problem at any Wal Mart. Just go up and down the manufactured product isles at Wal Mart and see where everything is made: China, Mexico, India, South Korea, Nicaragua, Japan, Taiwan, Finland, and Germany - everywhere EXCEPT the USA! Then go up to the front of the store and look at the rows and rows of ringing cash registers. THOSE ARE ALL HOLES IN THE BOTTOM OF THE BUCKET. It will NOT make any difference how many trillions of dollars the government dumps in to the buck, it will always drain away UNTIL America is once again made a manufacturing friendly county.   

TIME BOMB: US currency is in wide circulation outside of the USA. The Treasury Department has said that perhaps as much as 70% of all the US $100 bills in existence are outside of America. That's okay so long as the American economy is okay. However, when the run on the US dollar starts, the people all over the world holding US currency will run to have their US dollars converted into their local currency. That will be a disaster for the value of the dollar, and for the American worker.

WHAT WILL THE YEAR 2012 LOOK LIKE? Real estate could still be falling, but at a slow rate. Unemployment will still be a real 9%. Underemployment will be very high. The Stock market will be nowhere. American manufacturing will be leaving America at the fastest rate in history. We could have a run on the US dollar. Overall there will be a significant reduction in living standards for almost everyone (Federal employees included). There will be a lot of profoundly unhappy voters who will be looking for a change.     

CASH: So many people today pay for everything with credit cards. My point is this, in a war or national disaster, if the electrical grid and/or Internet is sabotaged and does down, YOUR CREDIT CARDS ARE USELESS. In January I predicted a terrorist attack inside the USA in the next two years, and I still have that prediction. My point is that a normal family should have about $2500 in cash hidden away in your home. For a normal upper middle class family, $4,000 to $5,000 would not be too much. Under the very worst case scenario, if your passports are up to date (and they always should be), and you have money in a foreign bank. You could leave America with only the clothing on your back (plus your passport) and you'd still be able to give yourself shelter and food.  

YOU CANNOT BUILD ANYTHING WILL LIES: Many Americans today become angry when anyone like myself says anything they don't want to hear. It's like if we all pretend that the delusions are real then in some magical way they will be real. The more fascist or communist a country becomes the more the truth becomes an enemy. I do not like what's happening, and I'm profoundly bothered by a terrorist attack. The massive suffering that the government's cowardly actions, and lack on honesty, have brought on millions of Americans is a deep personal sorrow for me. However, intellectual dishonesty is the core of America's current problems. I'm not going to be part of the problem by being politically correct dishonest. I'm going to be part of the solution by telling people what they don't want to hear, but need to hear. The very first stop in effective problem solving is honesty. American society is going nowhere but DOWN until it starts to challenge the matrix of lies that currently dominates American culture.

If you have a young adult son or daughter, the best gift you could give them would be a subscription to AFI. The record is crystal clear, AFI Magazine is one of only a handful of publications in America with the courage and honesty to tell it like it is.

All the best,  Andrew Molchan

P.S Look for Andrew's New Book,  Rome II - The Sequel.  Out this fall. Advance orders only $12.

Call 954-467-9994 or email, Andrew@amfire.com