Stop the Coming Civil War: My Savage Truth

by Michael Savage

Nothing could have been further from the truth. Period.

  We’ve done nothing but foot the bill for Wall Street’s financial mismanagement.

  The banks have continued to engage in extremely high-risk trading while at the same time manipulating everything from interest rates to the price of commodities such as gold and silver.

  Let me give you a few examples:

  LIBOR, the London Interbank Offered Rate, is the interest rate banks charge when they’re borrowing money from each other. Big bankers decided to get together, write down what they think their borrowing costs should be, average those costs, and agree that that average interest rate would be what they charge when they trade interest-rate derivatives among themselves.

  The thing is, the banks aren’t borrowing their money from each other, they’re borrowing your money from each other, and then fixing the interest rate however they see fit. It’s a win-win, unless of course you’re an average American taxpayer.

  In the third quarter of 2013, the big banks in the United States collectively pocketed $2.8 billion on their interest rate derivatives alone.14

  The riskiest markets for banks intent on keeping interest rates low are precious metals. Gold has been trading at artificially low levels between $1,200 and $1,350 an ounce for an extended time. Silver remains stuck in the $20-dollar-an-ounce range. There’s a reason for this: If those prices ever do rise to the levels they should be trading at, it’s likely that our economy will collapse.

  Gold, for instance—if it were being traded freely and without manipulation—would be priced at around $7,000 an ounce, according to one knowledgeable investor.15

  Why do banks want to keep the price of gold and silver artificially low?

  As the Fed continues to print fiat money at the rate of nearly a trillion dollars a year, the market is flooded with new U.S. currency. That drives the value of the currency down relative to commodities such as silver and gold. If the banks, including the Fed, ever let the value of the gold rise to its normal level, the value of our currency—and of many currencies around the world—would plummet.

  And interest rates would likely skyrocket.

  The cost of servicing our federal debt would escalate beyond our ability to pay.

  In order to prevent that from happening, U.S. banks, especially JPMorgan Chase, sell paper contracts for gold they do not own. It’s called naked short selling, and it has the effect of damping the price of gold, keeping it down so that the U.S. dollar will manage to artificially maintain its value against gold and silver.16

  It’s market manipulation at its most subversive.

  The Fed’s activities are also at the root of what amounts to the indirect manipulation of the stock market.

  Because the Fed is essentially giving money to the banks in exchange for taking fraudulent mortgage-backed securities and other derivatives off their hands, the banks are constantly on the lookout for places to “invest” their excess cash. With low interest rates, the ongoing housing market uncertainty, and the risks associated with lending to small and midsized businesses, banks have virtually stopped lending to the American people.

  With interest rates close to zero, banks can’t make much money lending to small businesses and for other purposes, including mortgages. And so the money gets shuttled into the stock market, which has been on a dramatic climb.

  In other words, instead of lending money to the American people—who could use it to build small businesses, or buy houses, or pay for their kids to go to college—the banks are playing the stock market.

  But they’re not investing in the way you and I would invest.

  They’re letting robots do their trading for them.

  It’s called high-frequency trading.

  High-frequency trading involves the use of powerful computers to analyze market data at unimaginably high speeds. Based on their analyses, the computers execute trades—often involving hundreds of thousands of shares—that generate enormous profits in microseconds, even though the value of the stocks they’re trading may change by only hundredths of a cent as the trade is completed. A single one of these powerful robot traders can execute as many as twenty thousand transactions in a single second.

  Robot trading has changed the way the stock market works. It’s driven normal people interested in developing a stock portfolio out of the market. More than 70 percent of U.S. stock trades are now executed by robot traders, and that number is rising.17

  While all this market manipulation and centralization of wealth has been going on, the Dodd-Frank bill has proven to be worthless in preventing corruption. The big banks’ blatant, reckless manipulation of the value of fraudulent derivatives continues to rise to unheard-of levels.

  Let me just point out a few of the many failures of this legislation.

  First, as I’ve just explained to you, banks are still gambling with your money—money that the Federal Deposit Insurance Corporation guarantees will be safe in your bank account—by using it to make risky trades.

  Even though banks, despite Dodd-Frank, have actually increased the number of illegal practices they engage in, not a single banker has been arrested and tried, let alone sent to jail. Let me put that in perspective. In the 2008 crash alone—and not taking into account the continuing Wall Street larceny since then—the average American household lost $108,000. Whether or not you had that much in the bank at the time, that’s the figure the crash would eventually cost you.18 Every single American family was robbed of over a hundred thousand dollars, first because the Fed has kept the interest rates at zero so that money in the bank earns nothing, and second because federal policies have led to no income growth, not to mention a dramatic decrease in the number of jobs available.

  Not one person has been put on trial, let alone served time, for perpetrating what I see as an enormous crime.

  The Rise of Poverty

  As many opinions as there are about the turning point of the Civil War, there are that many and more over what caused it. State versus federal rights, economic differences, Abraham Lincoln’s election, and other reasons are often mentioned as the impetus behind the war. In fact, it was money that caused the Civil War.

  If you listen to today’s liberals, however, you would think that slavery is the reason for the high unemployment rate among African-Americans today.

  In the past fifty years, as Lyndon Johnson’s War on Poverty grew exponentially, the U.S. has spent some $20 trillion in taxpayer money to fund such programs as Medicaid, Head Start and the Food Stamp Act.

  The result?

  The poverty level in the United States recently reached a five-year high.19

  One of the key demographics that Democrats depend on to maintain their hold on American politics has been African-Americans. Over the years, the left has effectively consigned American blacks to life in inner-city ghettoes and bought their votes with government-subsidized programs that discourage 14 percent of the American population from seeking meaningful jobs and careers. By the beginning of the president’s fifth year in office, African-Americans had the lowest participation rate in the labor force ever recorded.20

  While the White House boasted that the unemployment rate among blacks had fallen by 5 percent, they failed to mention that the statistical drop occurred only because blacks had dropped out of the job market at an unprecedented rate: Only 60 percent of African-Americans were even bothering to look for jobs.

  The picture for minority youths looking for jobs is not any better. Some 25 percent of African-American youths do not work.21 And 18 percent of Hispanic people between the ages of sixteen and twenty-four—the future of the Democratic Party—are unemployed.22

  I just don’t understand how Mexican- and South American–Americans can vote for this president in such numbers. He might promise you the world, but he delivers on nothing. The unemployment rate among American minority youth is almost guaranteed to continue to worsen under this administration.

  The consequences of the current U.S. economic poli
cies have also been devastating for the middle class. While the administration continues to focus on what it characterizes as the decline in the unemployment rate, in fact what we’re seeing is nothing more than a decline in the number of people who are searching for jobs.

  More than 90 million Americans have given up looking for jobs.

  That’s the lowest the labor participation rate in thirty-five years.23

  What is this administration’s solution?

  Increase the minimum wage.

  One of the themes that Democrats are pushing is “income inequality.”

  How do they plan to address the fact that successful Americans make more money than those less successful?

  Bump up the wages we pay to those working the lowest-paying jobs.

  As if that will somehow make so much as a dent in the lives of the increasing number of Americans living at or near the poverty level.

  Let me explain why this strategy won’t work.

  First, less than 3 percent of working Americans are employed in minimum-wage jobs. More than half of those are people who come from families whose average income is more than $50,000 a year. They may be students working as they attend school, or people starting out in the labor market. They are only temporarily working these jobs.24 Or, as Joe Biden pointed out on The View, they may be single mothers “trapped in that job because if you leave, you lose your health insurance.”25

  The Congressional Budget Office, normally supportive of this administration’s unworkable economic policies, didn’t cooperate when Obama announced he wanted to raise the minimum wage. In fact, the CBO couldn’t have been any clearer in its opposition to Obama. It said that raising the minimum wage would cause the loss of half a million jobs.26

  That report came at about the same time the CBO told the American people that Obamacare is a disincentive for people to work, and that the Affordable Care Act would cause the loss of another 2.5 million jobs over the next several years.27 That’s because if you’re an unemployed person getting a subsidy to help you pay your medical insurance premiums, you lose that subsidy if your income goes up. Not only do the Obama regime’s policies cause the loss of jobs, they provide an incentive for people not to look for a job.

  What most people on the left will not tell you is that’s exactly what the president wants to accomplish.

  As I see it, the president is after nothing more than to make America into a permanent welfare state, where people who once worked for a living no longer have any incentive to do so. He’s out to expand even further the permanent underclass that liberal policies have created over the past half century. He will not stop until the 99 percent have no means of support beyond what the federal government gives them.

  Even though he couldn’t push through legislation to increase the minimum wage, the president had a solution. In his weekly radio address, he said too many Americans haven’t seen increases in their wages, while the wealthy “are doing better than ever.”28 Because of that, he decided to issue an executive order raising the minimum wage of federal employees to $10.10 an hour.

  Raising the minimum wage will do absolutely nothing to help the tens of millions of people trapped in poverty by the policies of an administration that actually encourages them to become dependent on the government as they give up their jobs and career aspirations.

  Let me ask you, what would you do if you were a young black man trapped in poverty with no hope of ever escaping your chains? Would you take a job for $10.10 an hour? At thirty hours a week, the workweek this administration now deems as full-time, you’re making $300, taking home say $250, $240. Or you can make that much on unemployment, get $75 a week in food stamps, and free health insurance for doing nothing. What would you do?

  Those now trapped in poverty are being discouraged from even looking for jobs by federal policy. If they do find a job, they’ll lose government benefits that pay much more than they could earn in the increasingly poor job market.

  The dramatic rise in federal benefit payments, including welfare, unemployment benefits, food stamps, and other federal government subsidies, is killing our economic freedom.

  The food stamp program is the federal government’s way of instituting food rationing in the United States, something every centralized government in history has done as their economies collapsed.

  Nearly 50 million Americans—almost a sixth of our population—are receiving food stamps. For months, the administration flooded the radio market with advertisements in order to attract more and more people to sign up for what are now known as SNAP (Supplemental Nutrition Assistance Program) benefits. That number is up by more than 20 million people since 2009.29 Many of those now getting food stamps are illegal aliens.30

  But do you know who makes the real money that this administration steals from taxpayers to fund food stamps for illegal aliens?

  JPMorgan Chase.

  Yes, I mean the same JPMorgan Chase bank that has been running up huge hidden balance-sheet deficits through keeping worthless securities off its books, short sales of precious metals, and trading worthless securities.

  Chase processes Electronic Benefits Transfer cards. In fact, the bank has made more than $560 million processing food stamp cards, charging the U.S. government between thirty-one cents and $2.30 for every person on food stamps, whether they’re here legally or not.31

  As the federal government executes its takeover of the medical industry in the United States—the same thing it did to the trillion-dollar-a-year college loan business—new regulations regarding what it means to be employed full-time have driven down Americans’ hopes for securing employment even further.

  Every person and family who drops through Obama’s trapdoor into poverty enters a life of hell on government subsidies. The same goes for those businesses that board their windows and lay off their employees as they’re forced to fold.

  Is it possible that with every life and business destroyed, this administration takes one step closer to its ultimate goal: a post-civil-war socialist society that is at the command of a global über elite?

  More Economic Similarities to the American Civil War

  I’ve explained to you that I believe the American Civil War was not primarily about freeing the slaves. It was about dislodging wealthy Southern farmers from their position of economic power. That power was based on their plantation economy, and that economy would have been impossible to create without slavery.

  The elimination of slavery became the battle cry of the Northern elites who wanted a larger piece of the economic pie.

  Their reasoning?

  If slavery was abolished, the Southern economy would implode, and Northerners would assume economic control in the power vacuum that followed.

  Here’s some background.

  Prior to the Civil War, wealthy Southerners dominated the U.S. government. But with the great majority of new factories being built in the North and employing 90 percent of the country’s skilled industrial workers, much of the country’s wealth had moved to the northeast.32

  In the middle of the nineteenth century, you were wealthy if you had a net worth of more than $100,000, the equivalent of several million dollars today. Thanks to the industrial revolution, by 1860 there were more than five times as many wealthy men in the North as there had been only thirty years earlier.

  At the same time, the presidency, the Senate, and the Supreme Court continued to be dominated by Southerners. There was no room in Washington for the North’s nouveau riche.

  Slavery may have been a rallying cry—and the abolition of slavery was the paramount achievement of the conflict—but economics and political power were at the heart of the Civil War.33

  Today something similar is happening.

  In 2009, there were fewer than one thousand billionaires in the world. Since then, the number has increased more than 60 percent, to over two thousand. The net worth of this group has more than doubled, from $3.1 trillion to $6.5 trillion, in that time.34

  There�
��s a critical difference between the wealth that was created in the years leading up to the American Civil War and the wealth that has been created in the lead-up to the coming twenty-first-century civil war. The nineteenth-century wealth was built on a real-world foundation of manufacturing and trade. Today’s über-wealthy exist overwhelmingly because of the creation of money that amounts to nothing more than global theater.

  The increase in the number of today’s billionaires is, as I’ve explained, the result of the rise of an economic oligarchy that creates debt by printing money in order to give that money to banks so the banks can buy bonds that the government prints.

  The whole reason for this corrupt process is to enable the government to keep interest rates near zero, therefore depriving Americans from receiving a return on their savings and making sure that small businesses can’t get loans that would enable them to expand.

  While the president complains that the 1 percent control too much of the wealth of this nation, his policies and those of the Fed are enabling the 1 percent to radically increase their wealth. They’re doing this at the expense of the middle class.

  Do you know what this administration’s policies are doing to the middle class?

  They’re driving the businesses that depend on middle-class customers for their revenues out of business. In every area of the country, restaurants like Red Lobster and Olive Garden—which cater to the middle class—are having financial difficulties. At the same time, you can’t get a table at upscale restaurants like The Capital Grille and the haunts of the Wall Street fat cats.

  You fly coach today, and they stuff you in your seat with a shoehorn. You pay extra for your bags, a can of Coke, and even a skimpy pillow. Yet there are more private jets flying today than ever before.

  General Electric reports that demand for high-end appliances dwarfs the sales of the appliance models middle-class customers choose. The fact is that businesses that appeal to middle-class customers are having an increasingly difficult time surviving as the Obama economy destroys the middle class, while businesses that cater to the upper class are thriving.35