Revolution Time

September 27, 2013

  • The War on Small Business, cash edition
  • Don’t call surveillance programs “surveillance programs,” senator insists
  • Why the NSA might consider you one of America’s “adversaries”
  • Something else that won’t be ready for Obamacare’s big rollout next week
  • Supplanting the dollar: Chuck Butler on two Chinese chess moves
  • California walnut capers… the NSA and insider trading… Obamacare illusions… and more!

  A friend send this along a couple of days ago. We’re not sure of its origins. If you can’t make it out right away, look closer…

After reading about Terry and Sandy Dehko, you might agree. They own a grocery store in the Detroit suburb of Fraser.

  Last January, the feds seized their checking account without warning. It’s civil asset forfeiture in action — again.

“Federal forfeiture law allows the government to take your entire bank account just because it doesn’t like the way you deposit or withdraw your money,” says attorney Clark Neily from the nonprofit Institute for Justice, which has taken up the Dehkos’ case.

As you might be aware, federal law requires banks to report all cash transactions over $10,000. It is illegal to “structure” cash deposits to get around this requirement. Naturally, the Dehkos’ store has a lot of cash-paying customers.

The IRS swooped in and seized their account — more than $35,000 — on the grounds it violated the “structuring” law. That’s even though the same agency reviewed their accounts in 2010 and 2012 and affirmed it found nothing wrong.

Alas, under civil asset forfeiture, the Dehkos are charged with no crime. So all the inconvenient rules of criminal law — like proof beyond a reasonable doubt — go out the window. The Dehkos now face a long and Kafkaesque court fight like that of Russ Caswell, the man from Massachusetts whom the feds graciously allowed to keep his motel last March after years of struggle.

But the Dehkos’ case seems more sinister to us, another facet of the War on Small Business we’ve chronicled for three years now. See, many small-business insurance policies limit coverage for theft or other loss of cash to $10,000.

We can’t fathom the number of people who might find themselves subject to the same treatment on the same grounds.

 “A lot of Americans have lost trust in what you’re doing,” tut-tutted Sen. Mark Warner (D-Va.).

NSA chief Gen. Keith Alexander appeared yesterday before the Senate Intelligence Committee. To call it a “hearing” is to grant the proceedings more dignity than they deserve. The first three witnesses were government officials, including Alexander, who defended the NSA’s surveillance programs. The other two were Beltway policy wonks, who also defended the NSA’s surveillance programs. Balance.

The most ludicrous moment came when the committee’s chairwoman, Sen. Dianne Feinstein (D-Calif.), demanded the press stop using the term “surveillance programs” to describe the NSA’s surveillance programs because the NSA is collecting “only” the metadata that indicates whom you called, when and from where.

Never mind that the form letter Feinstein sends her own constituents refers to these surveillance programs as “these surveillance programs.” For real.

  If Americans have “lost trust” in the NSA, the feeling appears to be mutual. Especially if you’ve ever said a cross word about drones.

The latest document drip from The Guardian via NSA whistle-blower Edward Snowden reveals the existence of a top-secret internal government website that’s a sort of Wikipedia for the national security state.

There you find an entry discussing “threats to unmanned aerial vehicles.” The list includes not only “air defense threats” and such… but also “propaganda campaigns” by America’s “adversaries.”

“Attacks against American and European persons who have become violent extremists,” it says, “are often criticized by propagandists, arguing that lethal action against these individuals deprives them of due process.”

Well, that covers the gamut from the ACLU to Sen. Rand Paul. They’re America’s “adversaries.”

“In the eyes of the U.S. government,” says The Guardian’s Glenn Greenwald, “‘due process’ — the idea that the U.S. government should not deprive people of life away from a battlefield without presenting evidence of guilt — is no longer a basic staple of the American political system, but rather a malicious weapon of ‘propagandists.”

[Ed. Note: Feinstein is fibbing about the metadata, by the way. A former FBI counterterrorism agent told CNN months ago the actual content of phone calls is being swept up too.

You do not have to feel helpless in the face of the feds’ relentless assault. Our special report, Make Yourself Invisible to the NSA, is packed with tips like…

  • How to browse anywhere online safely… visiting the pages you want, reading and looking at whatever you like, without anybody cracking into your “history”
  • How to keep all your passwords and search words safe from hackers… and how to stay safe from snooping “malware” or “keystroke loggers” that try to record what you type
  • How to automatically encrypt all your texts and calls… conceal your GPS location from peeping eyes… and hide your mobile browsing history automatically.

The sooner you act, the better off you’ll be. Start here.]

  So much for “the first positive day for stocks in five days.” As we write, every major index has coughed up yesterday’s gains and then some. The S&P 500 sits at 1,692.

For lack of any obvious explanation, financial media are latching onto the threat of a “partial government shutdown” next Tuesday — the mind-numbing details of which we’ll spare you. Suffice to say the holdup is still about “defunding Obamacare,” which as we explained Wednesday would do no such thing.

  Another day, another blown deadline for Obamacare. The small-business “exchanges” won’t be fully ready for launch next Tuesday.

These exchanges are different from the ones for individuals, which are also set to open for business Tuesday. (Whether the software that powers the exchanges will spit out accurate prices is another issue entirely.)

“Small businesses looking to enroll in coverage on so-called SHOP exchanges run by the federal government,” Politico reports, “can start their applications on Oct. 1 — they just won’t be able to enroll online until November.”

  “Obamacare’s Achilles’ heel is technology,” suggests columnist Daniel Henninger in today’s Wall Street Journal. “The software glitches are going to drive people insane.

“Creating really large software for institutions is hard. Creating big software that can communicate across unrelated institutions is unimaginably hard. Obamacare’s software has to communicate – accurately — across a mind-boggling array of institutions: HHS, the IRS, Medicare, the state-run exchanges and a whole galaxy of private insurers’ and employers’ software systems.”

But the president is still determined to use the Travelocity analogy. Three days ago, he said, “They’re going to be able to go to a computer, tap on the Web page and they’re going to be able to shop just like you shopped for an airline ticket…”

Y’know, considering what a miserable experience air travel is these days, maybe he should reach for a different analogy. And note well: Many of Obamacare’s biggest effects are still three months away. There’s still time to prepare for impact, but not much.

  Gold popped $15 in early morning trading after the latest Fed-speak. During a speech in Europe, Chicago Fed chief Charles Evans said the dreaded “tapering” might not take place until 2014.

At last check, gold is holding onto those gains, at $1,340. Silver’s rise has been weaker; it sits at $21.88.

  “The Chinese appear to be moving ahead of schedule,” writes EverBank’s Chuck Butler, “on making their currency available as the new reserve currency replacing the dollar standard.”

Chuck points to two developments only yesterday. First, China plans to launch CDs that can be traded in the interbank market. “Think about this from a bank’s point of view,” he says. “Having CDs that are traded, and can be traded before maturity date in the international market, provides a ton of liquidity.”

Second, “China has announced that they are going to test convertibility of the renminbi /yuan in a free-trading zone being established in Shanghai. The 29-square-kilometer free trade zone in Shanghai will set up a foreign exchange management system for Chinese banks to do offshore business and facilitate trade and investment.”

Step by step, Chuck’s long-standing forecast that China aims to supplant the dollar as the world’s reserve currency continues to unfold…

  The latest entry in our ongoing chronicle of strange commodity thefts: walnuts.

“The theft is getting bad,” farmer Skipp Foppiano tells Sacramento’s KOVR-TV. “You’ll see more fences going up around fields,” he said. “It’s gotten worse lately because the price of the walnuts is so much higher now.”

Indeed, it is — only 60 cents a pound a few years ago, now $2.

He can’t afford to leave his truck unattended: “They’ll come with a truck and unhook it and steal it all,” So now he puts all his gear away at night and has 24-hour security on duty.

But the thieves are getting inventive: “There’s trucks that come in with phony paperwork. They’ll hook up to a trailer, sign out and then take off.”

  “Two things,” a reader writes: 1) Why do all of these people think that the Affordable Care Act is about universal health care? It is about protecting and enhancing the profitability of the health care industry, including the insurance companies.

“If universal health care were the goal, there would be a dual health care system — public and private. If you can afford the private system (with or without insurance), you get good bedside manner and fast service. Otherwise, you are in the public health care system, generally run by the government, and live with something like most nationalized health care systems offer.

“2) You want to know who to blame for the mess? Look in the mirror. The STOUCD (Slime That Oozes Under the Capitol Dome) which brought all of this on got into office somehow, like by stupid voters…”

  “I’m surprised,” another writes, “no one has discussed the potential abuse of the NSA’s metadata collection for trading advantages.

“We’ve already read about how NSA employees have used the data inappropriately to spy on their significant others or how easily the data was shared with local police when an unfortunate couple decided to do searches on pressure cookers and backpacks at the same time.

“Hard to imagine that someone inside the NSA isn’t being paid handsomely to provide data that could be used for the equivalent of insider trading. Imagine how valuable it would be to obtain private company emails with defined keywords such as ‘future earnings revision’ or ‘downward sales revision’ and the like before they are public. As we have seen over and over, if the potential for abuse exists, it will be abused. Libor rigging is but one example.

“There is a sense of inchoate rage building in this country. So far, the ruling class has managed to keep the pot stirred and the rage focused against each other, rather than on themselves. Dems versus Republicans, rich versus poor, gun control and lately the re-emergence of race baiting.

“I am personally hoping for a government shutdown for as long as possible with no pay for nonessential personnel, which includes the president and Congress, in my view. Time for a little extraction of our own.

“I know, I know. But let me dream a little…”

The 5: You’re assuming that would actually change something…

Have a good weekend,

Dave Gonigam
The 5 Min. Forecast

P.S. Close enough to civilization, far enough to feel splendidly isolated: Much has taken place at Rancho Santana in the 18 months since your editor visited.

The big news is that ground will be broken in January — barely three months from now — on an airport located a mere 15 minutes from the ranch’s gates on Nicaragua’s Pacific Frontier. And this airport will be big enough to have its own customs office and accommodate 72-seat planes.

We know of at least two high-profile athletes visiting the ranch in the next few months; we’ll preserve their anonymity here. Suffice to say with the imminent construction of a nearby airport, Rancho Santana is on the fast track to becoming the next Cabo.

You have a chance to check out the property during the next Chill Weekend, Nov. 9-13. We still have a handful of spots available. Good times, and no hard-core sales pitch. If you’ve ever given thought to foreign real estate, drop a line to Marc Brown.


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