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Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (81923)	12/9/2012 10:05:24 AM
From: lorne	2 Recommendations Respond to of 103300

Despite Tax Increase, California State Revenues in Freefall by Chriss W. Street 8 Dec 2012 breitbart.com California State Controller John Chiang has announced that total state revenue for the month of November 2012 fell $806.8 million, or 10.8%, below budget. Democrats thought they could hammer “the rich” by convincing voters to pass Proposition 30 to create the highest state income tax in the nation. But it now appears that high income earners have already “voted with their feet” by moving themselves and their businesses out of state, resulting in over $1 billion shortfall in corporate and income taxes last month and the beginning of a new financial crisis. Passage of Proposition 30 set off euphoria and expectations of higher spending for public employees. The California Teachers’ Association (CTA) trumpeted: "California students and working families won a clear victory today as voters clearly demonstrated their willingness to invest in our public schools and colleges and also rejected a deceptive ballot measure aimed at silencing educators, other workers and their unions.” State bureaucrats immediately ramped up deficit spending far beyond the state's $6 billion annual tax increase, with the Departments of Health Services and Developmental Services increasing this month’s spending by over $1 billion versus last year. The lower tax collection and higher spending drove the State’s deficit after the tax increase to $2.7 billion for the first 5 months of this fiscal year. State Controller John Chiang reported: November's disappointing revenues stand in stark contrast to recent news that California is leading the nation in job growth, has significantly improved its cash liquidity to pay bills, and even long-distressed home values are starting to inch upward... This serves as a sobering reminder that, while the economy is expanding, it is doing so at a slow and uneven pace that will require the State to exercise care and discipline in how its fiscal affairs are managed in the coming year. The improved “cash liquidity” Chiang referred to turns out to be $24.9 billion of debt. During the election campaign, Governor Jerry Brown and his pro-tax coalition had the California Board of Equalization request a report from the Stanford Center on Poverty and Inequality, which claimed to have looked at state tax records and found no risk of the super-rich leaving. Based on their access to California state income tax records from 1992 to 2009, the researchers concluded that millionaire migration is a myth by anti-tax advocates and “other factors, such as personal and business contacts, seem to weigh more heavily in deciding where to live.” The study’s authors, Stanford's Cristobal Young, an assistant professor of sociology, and Princeton's Charles Varner, a doctoral candidate in sociology, expounded that the temporary nature of high earnings may help explain why the additional taxes didn't cause a noticeable flight of millionaires. Top income tax payers seem to fall into and out of the millionaire income bracket as their income rises and falls across the million-dollar mark from year to year. Personal connections weigh more heavily than tax rates in deciding where to live, and “people are tied to states for different reasons,” Young said. “They don't want to take their kids out of school; they want to stay connected with friends, with families… with business contacts. People crowd together, from Silicon Valley to New York City, because of the returns associated with collaboration.” The findings dispel the “market metaphor,” in which states advertise low tax rates in a competition to woo high-income individuals. "This is a poor representation of how people decide where to live.” Young added that looking at the tax flight issue only scratches the surface of state financial woes. “People need to think about the depth of California's budget problems,” he said. “I think there's much, much bigger things to worry about than this issue of tax flight because it's really hard to find any evidence of it… I hope people hear, listen to and absorb what the evidence says on this issue," Young insisted. Following the tax increase victory, Reuters published an article titled “Super-rich flight from California? Not so fast.” Authors Jim Christie and Peter Henderson attempted to reassure readers there was very little risk that wealthy Californians would depart for income tax-free Nevada, Washington, and Texas. Although some Silicon Valley business owners had expressed interest in a move after California's top rate was raised by 29% to 13.3%, they wrote, “business groups from the Beverly Hills Chamber of Commerce to the tech industry policy group TechNet backed the tax, and the state Chamber of Commerce took no position.” As panic spreads that goosing taxes on the rich may have created enough “tax flight” that the California will actually collect less taxes, there was welcome news that a business had committed to opening in the State. Executives of the 99 Cents Only Stores Inc. proclaimed they would be opening a new location in Beverly Hills on formerly posh Rodeo Drive.

To: GROUND ZERO™ who wrote (81923)	12/9/2012 9:24:44 PM
From: lorne	2 Recommendations Read Replies (3) \| Respond to of 103300

Fed To Commit To A Staggering $1 Trillion Of QE For 2013 in Markets / by admin / on November 29, 2012 at 9:35 pm / thestockvine.com Dan Norcini continues: “Goldman Sachs expects, next month, for the Fed to come out of their policy meeting announcing QE4. It will be a purchase of $45 billion each month in Treasuries. This number will be in addition to the already existing QE3, which is $40 billion per month in mortgage-backed security debt. But in a sense, Eric, QE4 is going to be a replacement for Operation Twist. Operation Twist was designed to push down the long end of the curve in order to keep interest rates artificially low…. “But here we go, now we’re talking about an additional $85 billion each month. This is fresh purchases of Treasuries. Here’s what is interesting, Goldman Sachs expects that to continue all the way through 2013. So do the math, that’s more than $1 trillion worth of QE for 2013. In 2014, Goldman believes the economy to pick up. They believe there will also be a drop in unemployment at some point in 2014 which will allow the Fed to drop those $85 billion in purchases back down to $50 billion each month. So you are talking about $600+ billion for 2014. Goldman expects this to continue all the way into 2015. So we are looking at close $2 trillion of QE over the next couple of years. Keep in mind this is already in addition to the $2.5 trillion of QE1 and QE2. We are talking about close to $4.5 trillion which has been and will continue to be manufactured out of thin air in order to keep interest rates artificially low. Goldman also predicts there will be no change in the Fed’s interest rate policy until 2016. So we are talking three full years, 2013, 2014, and 2015 where we will have these near zero interest policies from the Fed. Now as you know, any time you have a net-negative real interest rate environment like this it is friendly to gold. So you take that near zero interest rate environment, with negative real interest rates, plus close to an additional $2 trillion of upcoming additional QE, and here is what I can say to that: Anyone who does not own physical gold is committing financial suicide. You simply have to own the metal to protect yourself from what these people are going to do to the currency over the next three years. There is no way to avoid an increase in the price of gold based on what Goldman sees coming out of the Federal Reserve at this upcoming policy meeting. So gold had the big sell order yesterday that knocked it down, but the fact is they could not break the market down below $1,700. The reason they could not break the price down is because there are some very big players in the world who understand full well what the Federal Reserve is going to be doing for the foreseeable future. These players are among those big buyers accumulating physical gold on pullbacks. KWN readers should be buying gold on dips, and if some of them don’t have a position in gold yet, they need to get some physical gold to protect themselves from what these people are going to be doing.”