Saturday, June 21, 2014

Big Brother and his henchmen are getting bigger

The ever-more-intrusive centralized dictatorship that the United States has become is growing more so.  Three reports over the past week illustrate the extent to which Big Brother is preparing to dictate to us, the citizens of this Republic, whether or not there's constitutional justification for what's being imposed.

First, the Consumer Financial Protection Bureau has granted itself new powers to shut down any business at the stroke of a pen, without prior legal proceedings.

Last week the Consumer Financial Protection Bureau, through the power of Dodd-Frank, passed a rule giving the agency unprecedented power to shut down businesses, no matter what the reason, at any time it wishes through a cease-and-desist order. Further, the rule puts businesses at the mercy of the CFPB and they cannot go back into operation until government approval or a court ruling is made over an issue. Subsequently because bureaucratic decisions and court rulings take a substantial amount of time to happen, businesses cannot survive during those waiting periods.

. . .

The new rule comes on the heels of revelations the Department of Justice has been smothering firearms dealerships and other "high risk" entities out of business by "choking" banks and stripping funding through Operation Choke Point.

Consumer groups are pushing back against the rule and issuing a warnings to businesses everywhere about what the rule means for them. The United States Consumer Coalition in particular is sounding the alarm:

"This unprecedented rule created by the CFPB grants the agency unilateral authority to literally shut down any business overnight. It is a doubling down of Operation Choke Point (OCP), the Administration's program to target lawful industries by intimidating banks from doing business with them. This rule allows the CFPB to immediately issue a cease-and-desist order, which terminates all business practices — and a hearing doesn’t have to be granted for 10 days, effectively shutting down businesses for at least 10 days. This is a 'guilty until proven innocent' tactic of the Administration that goes against every historical notion of justice under the law in America."

There's more at the link.  I think this is a vitally important report, essential reading for all who care about the ongoing rape of the US constitution and our civil and constitutional rights.

Second, the Federal Reserve has quietly revealed a significant change in its use of a traditional financial measure, one that has profound implications for our economy.  Casey Research reports:

The Fed’s claim that inflation is contained and that there is no need to raise interest rates is just a show put on for people who believe the government. If we applied a more accurate inflation rate to GDP calculations, real GDP would not be growing at all.

My point is that the Fed and the media tell us things are better than they actually are. Meanwhile, the Fed is taking secret actions that reveal where Yellen and friends really think the economy might be headed.

Traders have used Repurchase Agreements ("repos") for decades. A repo is essentially a collateralized loan. A borrower sells government securities to a lender and buys them back later at an agreed-upon date and slightly higher price. The lender takes on very little risk, to earn a small amount of compensation while it holds the government securities as collateral.

Repos can last for any amount of time, but they are often ultra-short-term. Overnight repos are the most common.

The Fed has announced that it’s using “reverse repos” as a new tool to manage monetary policy. Don’t let “reverse” confuse you: Reverse repos are just a way the Fed soaks up cash from financial institutions. The Fed is the “borrower,” swapping its Treasuries for banks’ cash. You might call it the opposite of quantitative easing: reverse repos drain money from the financial system.

I was surprised to find that the use of reverse repos has exploded since last September, by about $200 billion, bringing their total to $300 billion.

. . .

In effect, the Fed has sopped up $200 billion in the last nine months in “stealth tightening.” I use the word "stealth," because most investors, and even most Fed watchers, aren’t aware of the effects of reverse repos.

You’re probably wondering, "What’s the Fed’s ultimate plan here?" I think that the Fed is using reverse repos to build up a hidden source of funding so that it can unwind its tightening quietly, if need be. The Fed now has $200B in “ammunition” that it can deploy without much (or any) fanfare, because nobody is following this closely. “Reverse Repos” isn’t the headline grabber that “Quantitative Easing” is.

. . .

One last reason the Fed might be secretly building a rainy day fund: As my analysis in the newest issue of The Casey Report demonstrates, foreigners have recently stopped lending money to the US. That’s a huge problem for a country that had a $111.2 billion trade deficit in the first quarter alone, and will spend half a trillion more dollars than it takes in during 2014.

As I said earlier, the Fed has been very quiet about this repo program, so we can only surmise what its true motivations are. But as the US government’s lender of last resort, the Fed may be raising this source of cash so it can lend more money to the US government as foreign lending continues to dry up.

Again, more at the link, including some very useful graphics that explain the process visually.  Once more, I think this is very important reading, and I highly recommended you click over there and go through the whole article.

So businesses can now be shut down on a bureaucratic whim, and the Fed's quietly stashing away what looks very much like a secret war chest to fund the operations of the US government when the fiscal policies of that government drive the country to the wall.  Do these developments give you the same sinking feeling they give me?

Finally, vehicle license plate readers are now being linked to other databases.

Car-tracking technology is becoming ubiquitous in cities around the United States, and the types of data collected and analyzed with the help of license-plate readers is expanding into other realms of personal information.

Documents obtained by the Center for Investigative Reporting show that a leading maker of license-plate readers wants to merge the vehicle identification technology with other sources of identifying information. Vigilant Solutions is pushing a system that eventually could help fuse public records, license plates and facial recognition databases for police in the field.

The Livermore company released facial recognition software last year for use in stationary and mobile devices. The technology uses algorithms to determine whether a person's face matches that of someone in a law enforcement database. Like license-plate readers, privacy advocates say, the technology can make incorrect identifications that ensnare innocent people.

. . .

Privacy advocates said combining historical plate-reader data with public records and facial recognition technology runs contrary to law enforcement's argument that license plates are not considered personally identifying information.

Jennifer Lynch, a senior staff attorney at the Electronic Frontier Foundation, which is suing the Los Angeles County Sheriff's Department and Los Angeles Police Department to obtain information about their collection and use of license-plate data, said Vigilant's plans could represent a major change in the technology.

By combining the location data from license-plate readers with public records such as court files and property records - as well as photographs of people from criminal or DMV databases - into one search tool that could be used with facial recognition software, license-plate readers could move into uncharted territory.

A plate reader could tag a passing car and the names of people associated with the vehicle and keep a log of where that person traveled.

Again, more at the link.

Once that information is collected, it can be accessed by almost anyone.  What if your spouse wants a divorce, and subpoenas such records to show where you were on any given date at any given time?  What if a crime occurred while you were demonstrably in the area, and police have no other suspects?  Automatically, such records would make you an object of suspicion, even if you had nothing to do with the offense.

So much for privacy and personal security . . .



Anonymous said...

It would appear -- whether or not any significant portion of we-the-people understands -- that our government is at war with us.


Rolf said...

Look at the attitude of the IRS commissioner at the congressional hearings. His contemptuousness, arrogance, and cluelessness.
Look at the attitude of the representatives, the Dems vs the Repubs, and read between the lines.
Putting it together, I see a clear picture: The IRS thinks it's above the law, and it's actions are by definition good and legal because they ARE THE LAW (they think). The Republicans are telling them "Buddy, when we get to the bottom of this, we are going to cut you down to size." The Dems are sucking up to the top bureaucrat, telling him "keep doing what you are doing, and as long as you target THEM, we have your back and they'll never get to the bottom of it! Destroy them!" Who do you think the IRS bureaucracy and leadership will be supporting, moving forward at this and all elections? What will happen to conservative whistle-blowers in the agency? I can't be the only one that sees this as the obvious way forward, can I?

IronOx said...

Another new visitor from LC's blog. Added yours after reading a number of the other past posts.

Regarding the CFPB rule, after tracking down the actual rule from the link provided, it isn't quite as draconian as intimated []. Though like most such rules, it will probably take some caselaw to clarify, from what I can gather a full shutdown of a legitimate business goes wholly against the justification given. And it can only be used in the context of a formal proceeding having been initiated. Though as with any agency, abuse is certainly possible and the bureacrats overly insulated from the consequences.

Just a note, one huge difference in approach between liberal and conservative alarms - the conservative ones almost always link to sources, the liberal ones almost never do so. I take that as an indicator of both the legitimacy of the concern, and the writers opinion of the intelligence of the target audience.