Bernard Madoff defrauded a few hundred clients of some $65 billion.
Yet his scam pales next to the swindle being perpetrated at this
moment on hundreds of millions of Americans who have been told they
have accumulated more than $40 trillion in future retirement benefits.
This scam is the Social Security system.
Those who conceived the Social Security swindle promised that it would
end the plight of the aged and disabled by guaranteeing them
"security" - a steady income in disability and old age. It was
promoted as a life raft that would carry everyone safely through to
the end of his or her days.
Today, 74 years later, Americans continue to be told that regardless
of what happens to the economy, the government will never renege on
this promise. As the population has aged, Social Security
beneficiaries have become the biggest political lobby in America. To
get elected, any political candidate must participate in the swindle.
Both as a candidate and now as President, Barack Obama has
consistently maintained that the Social Security program's financing
is basically sound, and can be assured far into the future. He's
lying.
I became aware of the technique of the fraud in 1975 when Arthur
Andersen & Company published a lengthy report titled "Sound Financial
Reporting in the Public Sector." It disclosed both the magnitude of
the crime, and the simple accounting subterfuge used to disguise the
fraud.
The report pointed out that the government keeps its books using the
"cash basis" method of accounting rather than the "accrual basis." The
cash basis is what you use to balance your checkbook. If you deposit
$50,000 in your account for the year and write $49,000 in checks to
cover your expenses, your checkbook will show a $1,000 surplus for the
year.
However, this does not tell the true story. If you took a vacation in
December and ran up $5,000 on your credit card, but the payment didn't
come due until the following year, your true expenses for the year
were $55,000. You actually ran a $4,000 deficit which didn't show up
in your checkbook. Every rational business owner knows that to track
the true condition of the business he must add in the cost of
purchases he made but must pay for in future years. Sound businesses
always use the accrual method of accounting.
In its 1975 report, Arthur Andersen reviewed the U.S. federal budgets
for fiscal years ending 1973 and 1974, and came up with shocking
figures. Using the cash basis of accounting, the government had
reported federal deficits of $14.3 billion for 1973 and $3.5 billion
for 1974.
"Decade after decade the total of the swindle has been inexorably
rising, until today the estimated shortfall owed Americans is an
incredible $40 trillion."
Recalculated according to the accrual method and including future
Social Security payments and government pensions, the true 1973
deficit jumped from $14.3 billion to a staggering $86.6 billion. The
1974 budget was even worse, jumping from $3.5 billion to just over $95
billion. The government underreported its deficits by more than $160
billion in a two-year period.
Peter G. Petersen, former Chairman of the Federal Reserve Bank of New
York, began sounding the alarm on this looming financial catastrophe
more than a decade ago. In his 1996 book, Gray Dawn: How the Coming
Age Wave Will Transform America and the World, he pointed out that if
federal law required Congress to fund Social Security the way private
pensions must be funded, the annual federal deficit in 1996 would have
instantly risen by some $675 billion. Add in lavish and unfunded
federal-employee pensions and the deficit would have risen by $800
billion. Add in Medicare and it would have risen by more than $1
trillion.
The cash and accrual deficits that Arthur Anderson discussed in his
1975 report seem trivial compared to last year's federal deficit of
$454 billion, and especially compared to this year's projected deficit
of $1.8 trillion. Decade after decade the total of the swindle has
been inexorably rising, until today the estimated shortfall owed
Americans is an incredible $40 trillion. Nor has it stopped. The total
continues to rise at a rate of $2 to $3 trillion per year.
Bernie Madoff was able to get away with his fraud by using the same
technique as Charles Ponzi did in the 1920s. He sold fictitious
securities, promised a high return, and paid off old investors out of
monies taken in from new investors. It collapsed when new victims
could no longer be found to support withdrawals from old victims.
The Social Security swindle has worked exactly the same way. It
receives "contributions" in the form of FICA taxes, pretends to place
those funds in trust, and pays benefits to current retirees out of
taxes collected from current workers. Just as in the case of Madoff,
there is no trust, there is no income to the non-existent trust, and
the payments are simply made from current collections. Madoff's scheme
lasted 20 years before collapsing. The Social Security swindle is now
in its 74th year...the end is near.
It's clear that Social Security cannot fulfill its promises to future
retirees, but the casualties will not be limited to those victims,
like Miriam Siegman, who find there is no life raft to carry them
safely through retirement. In order to continue the fraud, politicians
have no alternative except to issue more promises. Retirement checks
will come, but they will be financed by more federal borrowing. Cash
basis deficits will rise. Treasury IOUs will be converted by the
Federal Reserve into dollars. As the monetary inflation morphs into
price inflation, the victim list will swell to include everyone who
doesn't see it coming.
Last year, former Comptroller of the Currency, David Walker, teamed up
with Addison Wiggin of Agora Financial to produce an eye-opening
movie, I.O.U.S.A., which documented the stunning financial swindle
being perpetrated on the nation. This compelling addition to
Petersen's disclosure of the government's financial fraud is being
widely shown, and has just become available on DVD.
Unfortunately, we will never enjoy the sight of the politicians
responsible for the Social Security swindle being sent to jail, but we
can protect ourselves from their fraud.
It's time to don your lifejacket.
Best regards,
John Pugsley
for The Daily Reckoning
P.S. What's the smartest way to prepare for retirement? If you've been
pondering offshore banks or investments, consider moving forward now.
If you've been considering dual citizenship, now's the time to learn
the process. If you want to protect yourself from the collapse of the
dollar, listen to the currency experts and special recommendations
we've put together in a new report available here, which details how
to protect your wealth and grow your portfolio.
-
These THREE DANGEROUS LIES
being spread by Wall Street and Washington
could destroy YOUR life savings overnight.
Here's how to protect your wealth and
grow your portfolio up to 267% no matter what...
Dear Duped-American,
Raymond Jansen woke up broke today!
Why should you care?
Raymond is a 63-year-old retired English teacher who became yet
another victim of just one of Wall Street's most horrific lies. He put
his life savings into garbage bonds Wall Street told him were as safe
as 28 day CDs!
And literally overnight — he lost EVERYTHING.
Sound familiar? Another hard working American who did everything he
was supposed to. Only to end up with nothing because he was lied to.
By "experts" he THOUGHT HE COULD TRUST.
While Wall Street executives collected tens of millions of
dollars...politicians continue living lives of power and
privilege...and honest folks like Raymond are forced to struggle in a
future of uncertainty.
It's a damned outrage!
Next to your family and your health, your most important concern is
probably your financial well being. You've worked, planned and saved.
But now that's all being threatened by forces far beyond your control.
Forces that swear they're working to "save the economy for our
children." BAH! Instead of save it, their actions will sink it — and
quite possibly your savings — like the Titanic. They'll betray our
future generations and sell the remnants of our economy to the highest
bidder. That's why I'm writing...
Because Wall Street and Washington are currently spreading three lies
that threaten to financially decimate those who take them at face
value. Three tales that have been told, sold and swallowed by most
Americans.
And I don't want you to become one of their victims.
But WHY would these captains of the financial industry lie...
Why would those we elect to enforce the laws and regulations already
in place turn a blind eye to them? And why would those we trust to
report fairly and truthfully, spew the same garbage year after year?
I think you know. But I'll state it for the record anyway.
GREED!
The lust to pad their bottom lines no matter the cost to YOU!
CEOs like Stan O'Neal — just one among many — who let Merrill Lynch
collapse under his watch and still walked away with $161 million...
Politicians — career "public servants" — riding the gravy train of tax
dollars that fund their salaries and lavish perks...
The news media who'd never risk exposing the real truths for fear of
not "getting the next interview"... And losing the advertising revenue
that comes with it...
They abuse your trust,
then toss you aside.
Well I won't stand for it!
John Pugsley photoMy name is John Pugsley and I've seen it over and
over. For over 40 years. And it still sickens me today. Over those
four decades, I've thrown my share of rocks at the economic and
political establishment. And I've taken my lumps for it. I've taken
all the criticism the establishment could dish out. But I never
regretted a minute of it.
Because I knew in my heart — when what they were doing was wrong —
someone had to call them on it. I believed if I kept shouting someone,
somewhere would listen.
Perhaps my life's work won't amount to a hill of beans. But I'm not
going to stop. Not now. It's possible I may never change the system...
But I can help YOU.
And, friend, that's why I'm writing.
To help you see the truth if you've been lulled into complacency by
their slick oratory and empty promises... To confirm what you may have
already suspected was going on under the table...
...So that you can take action. If not to change the world, then at
least to use what you know about their lying ways to protect yourself
and your loved ones.
But this is not a history lesson. Let's cut to the chase...
LIE #1:
The Banking Industry is Sound...
And Your Money is Safe
"Our banking system is a safe and sound one...[the increasing
number of troubled banks] is a very manageable situation...our
regulators are focused on it."
— Treasury Secretary Henry Paulson
"Overall, banks are quite safe and sound."
— FDIC Chairman Sheila Bair
Since 2007 — and as of this writing — 34 banks in the U.S. have
failed. The government says that's not a problem. They claim banks are
sound and that the FDIC is insuring your assets.
Let's see...
How safe IS your money
with the FDIC insuring it?
Last year, in a massive public relations campaign, the FDIC went all
out trying to convince the public their deposits were safe. The truth
is...they're not.
Why? Simple math.
The FDIC only has total assets of $45.2 billion to cover depositors'
accounts. Add in lines of credit — money they could borrow — their
total resources come to $115.2 billion.
chart
But here's what they won't tell you. As I write this, they're insuring
roughly $4.5 TRILLION of depositor money (with plans to more than
double that)!
Their funds could be depleted faster than you can say "bank run."
IndyMac — a recently failed bank — drained nearly $9 billion of the
FDIC's funds. Had not Washington Mutual been sold to a private bank,
they would have cost the FDIC another $24 billion.
Now consider the thousands of banks the FDIC insures. They're walking
a tightrope of insolvency — WITHOUT A NET. Can you see how fast this
"insurance fund" could go belly up?
The reality of this lie...
I hate to be an alarmist, but having lived through the aftermath of
the last Great Depression, I know first hand the devastating pain and
suffering — both financial and emotional — events like these can
cause. I do not want that for you....
The truth is, if you have money on a bank's balance sheet right now it
may not be safe as you think. Any rash of failures could quickly
deplete the FDIC's reserves and leave depositors without access to
their money for weeks, months and even years. Or worse. Completely
insolvent.
Understanding this truth now, you can continue to trust the FDIC. Or
you can take simple, alternative actions to protect your capital in
the event of virtually ANY crisis. I'll show you exactly how in just a
moment. But first let me tell you about the second lie threatening
your money...
LIE #2:
Strong Dollar Lip Service...
Weak Dollar Policy
For years now, every government official with a soapbox has preached a
"strong dollar policy" for the United States.
"This government is for a strong dollar..."
— Former President George W. Bush
"The Federal Reserves commitment...ensuring that the dollar
remains a strong and stable currency."
— Fed Chairman Ben Bernanke
But their ACTIONS have betrayed this bald—faced lie....
Years of deficit spending have bankrupted our country and our
currency. Sweetheart "pork" deals and social entitlements have amassed
a monstrous debt. I'm sure that's not news to you. chart
But now all that "living beyond their means" has begun to take its
toll. And it'll be prudent hardworking Americans like you who pay the
price!
Because no matter what they call their current spending program — a
bailout...a stimulus... It'll be nothing more than a massive
devaluation of your savings. In the name of saving "main street,"
they're...
...Mortgaging YOUR FUTURE!
The new administration is going to ratchet up the printing presses.
And that will change all the rules for you... chart
Because flooding the economy with more worthless dollars actually
SHRINKS YOUR SAVINGS. It eats away at your wealth. Unnoticed. Until —
that is — you need your money.
A dollar today is worth nearly HALF of what it was only 2 decades ago.
But now this bailout will continue that devaluation even faster.
It's a MASSIVE, INVISIBLE TAX they've levied upon YOUR savings and
YOUR future. Without your permission — without your knowledge. Your
purchasing power — your entire standard of living — has been drained
away by the government's "strong dollar policy."
See through the lies and insulate your wealth from their "strong dollar" lie
Now is the time to take action. To protect your wealth against these
lies that would bankrupt your future.
I want to show you how. In a series of special reports compiled by a
fiercely independent research group. A group that isn't afraid to tell
the truth when it must be told. Whose only mission is to help its
members make money. And then make sure that money is protected from
the forces that would steal it.
I'll tell you how you can get them in just one more moment. But first
let me tell you about the third and most insidious lie they're
spreading. One that could have far more significant costs. Costs to
our entire economic sovereignty...
LIE #3:
Foreign Capital and Sovereign Wealth Funds Don't Pose a Threat to Our
Economic System
"I think that's quite constructive and I think that we should be
open to allowing that kind of investment."
— Fed Chairman Ben Bernanke
"...there is no doubt that sovereign wealth funds are growing in
size and number and are making increasingly significant investments in
financial services organizations worldwide."
— Federal Reserve Board General Counsel,
Scott Alvarez
"As we seek to open new markets abroad, America will keep our
markets open at home to investment from private firms and from
sovereign wealth funds."
— Treasury Secretary Henry Paulson
You know the government has spent our country into oblivion. And the
only way to keep funding their spending is to borrow. For years they
have looked overseas for investors to purchase our debt.
But things are beginning to change. Today these Sovereign Wealth Funds
are buying far more than securities. They're buying businesses
crippled by the credit crisis. They're buying banks. Real estate. You
name it, they have a hand in it.
The price of foreign money
These Sovereign Wealth Funds are making massive investments here in
the U.S. The China Investment Corporation (CIC) had recently been in
talks with Morgan Stanley to buy up to 49% of the investment bank.
Nearly A MAJORITY INTEREST in one of our oldest financial
institutions.
Other New York banks are also busy selling minority shares to foreign
funds. There have been major capital infusions from both Middle East
and Russian funds, among others. Why is this so troubling? One word.
CONTROL.
chart
In financing so much of our economic engine, these foreign powers
could easily gain influence over U.S. economic decisions. Where and to
whom financial institutions could lend money. Where businesses should
build factories. Where they should set up R&D facilities. How they
should structure their investments...
The potential dangers are truly staggering.
The thought that foreign entities could control the purse strings of
our country is a clear and present danger. Countries, like China, are
not neutral investors in their own markets, why should we expect them
to be neutral in ours?
Profiting from a shift in supremacy
This wholesale sell-out to foreign powers will not come without
consequences. Those in power are saying there's nothing to worry
about.
I believe THEY'RE WRONG!
The sovereignty of the United States could hang in the balance.
And with it, the global financial supremacy of the U.S. Remember Great
Britain was once the greatest military and economic power in the
world. Until it became a great debtor to the U.S...
The U.S. is now the largest debtor in the world. And the world could
cash in at anytime.
And as global financial powers shift, you need to know exactly what
dangers they present to you. You need to know where the best and
safest opportunities lie.
And you can get that and the other information I've promised you in a
brand new series of online reports called "The Lie Reports."
In this critical collection of research you'll get:
"Protecting Your Money from the FDIC" — this report explains the
whole truth about the FDIC insuring your money. About their liability.
And about their shortcomings. And then it will SHOW YOU EXACTLY where
you can put your money to make it untouchable in the event of your
banks failure. Plus, it will show you one of the best profit
opportunities you can take advantage of in these unsure times.
"Defending Your Wealth from the Government's Invisible Tax" — here
you'll discover the effects of the government's actual "inflated
dollar" policy on your savings. And then you'll learn the best
investments to neutralize the dollar's drain on your capital. Simple
opportunities that you could implement right away. Locking down your
wealth against this unrelenting assault on your future.
"Insulating Yourself from the Foreign Capital Invasion" — a
shocking report that will detail all the threats facing our country
now from Sovereign Wealth Funds. And it will show you the most
promising investments for the future where U.S. economic dominance is
no longer the case.
Each of these brand new online reports is valued at $79, making the
set a value of $237. But I want you to have them all ABSOLUTELY FREE.
They're far too important to quibble over a few dollars.
But first a word of warning...
Before you think about ordering, please understand this. The
information contained in these reports is NOT for the mainstream
thinker.
If you're among those who honestly believe the government is working
with your best interests at heart — that the new administration is
really a vehicle of change instead of more politics-as-usual wrapped
in slick new packaging...
If the bailout money these banks receive in the form of your tax
dollars will help them see the light and change their ways...
If you think the media will keep it all honest by reporting the real truth...
...Then please don't waste your time. These reports are not for you.
And you have my apologies for taking up your time.
But the fact that you've read this far suggests to me that you may not
fall into that category.
And if you are that independent thinker...someone who understands
something's rotten... And wants to understand the real truths behind
the lies of Wall street and Washington...
Then you must send for these reports now.
Because the lies that have already been spread have taken too many
victims. And because I don't want you to fall victim to these current
lies
Vital information that you need
for the next 12 months and beyond
"The Lie Reports" could contain the most important information you can
read today. The truth that can protect you from the reckless lies and
misinformation being spread by those in power.
I want you to have them absolutely free. All I ask is a small favor in
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I'd like to introduce you
to The Sovereign Society
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I want to extend to you — absolutely risk free — an opportunity to
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Just have a look at all the benefits you could receive as a Sovereign
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How much is this kind of security worth?
A one-year membership in The Sovereign Society is $99. A trivial price
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But because this time bomb of lies is such an overwhelming danger to
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My personal promise of your satisfaction
I hope this letter proves my sincerity and the seriousness of the
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my personal guarantee to this report as well.
If you're EVER dissatisfied with the service or the VALUE YOU GET from
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And even if you cancel, all your issues of The Sovereign Individual,
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Again I ask you, when has your broker or anyone else given you the
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Act now before these lies begin
to destroy YOUR future
Your personal wealth — your entire future — is at significant risk
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Call 1-888-856-1403 right now and give my special offer a no risk try.
You have nothing to lose — until the truth is revealed.
For your financial safety,
John Pugsley
Chairman
The Sovereign Society
P.S. — Imagine what your life would be like if Raymond Jansen's fate
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P.P.P.S. — And your subscription is always risk free. That means we
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