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The Dangerous Fed

Here’s an infographic that’s been making the rounds this week and for good reason – it paints a none-too-flattering picture of what the Fed is and what it does.

Also, I didn’t know that Ron Paul’s Audit the Fed Bill has been held up in the Senate for over a year now – I guess that shouldn’t come as too much of a surprise.

Dangerous Fed
For the entire graphic, see The Dangers of an All-powerful Federal Reserve.

Inequality for All

Robert Reich’s highly regarded new documentary Inequality for All debuted across the country over the weekend and, as a result, its garnering a good deal of media attention, for example in Prosperity for the Few, Inequality for All at U.S. News and World Report along with Is America Catching Up With Robert Reich’s Income-Inequality Crusade? at NY Mag.

Here’s the trailer:

The Rotten Tomatoes Tomatometer gives it a 100% rating.

I’ve always liked Robert Reich and I hope this kicks off some sort of a broader movement as the growing divide between rich and poor, enabled by the Federal Reserve and Washington lawmakers, is headed for a French Revolution style ending at some point if left to take its natural course. Then again, this kind of ending would actually be its natural course…

In this CNBC interview, former Congressman and Presidential hopeful Ron Paul shares a few thoughts about the Detroit bankruptcy filing, the U.S. government, and the price of gold.

Says Paul, “Long term, you can expect governments not to change” and that they’ll keep taking on more debt and printing more money until people lose confidence in both the U.S. dollar and the U.S. military, both of which will be good for precious metals.

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From Bad to Worse in Detroit

Things aren’t getting any better in Detroit as detailed in this Washington Post report indicating that, later this month, the town of San Bernardino, California could lose its title as the nation’s biggest city to seek bankruptcy protection.

After decades of sad and spectacular decline, it has come to this for Detroit: The city is $19 billion in debt and on the edge of becoming the nation’s largest municipal bankruptcy.

DetroitAn emergency manager says the city can make good on only a sliver of what it owes — in many cases just pennies on the dollar. A decision about whether to file for bankruptcy is widely expected this month.

Detroit’s dire fiscal condition is sending ripples of concern through the normally placid capital markets that all state and local government rely on to raise cash for everything from road improvements and school roofs to libraries and parks. Holders of Detroit’s municipal bonds — always touted as among the safest investment vehicles — are being asked to take on staggering losses.

It also has worried the city’s 9,500 employees and nearly 20,000 retirees, who have much to lose. Under the plan put forward by emergency manager Kevyn D. Orr, a former D.C. bankruptcy lawyer, retirees will have to absorb significant reductions in pension and health benefits.

The choice before bondholders and retirees is stark, given that both groups would inevitably face steep cuts in a bankruptcy.

Note that provides a convenient list of municipal bankruptcies along with an interactive graphic that, while not very cluttered right now, could become so someday.

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