Federal Reserve Says Banks Need to Brace For Economic Impact

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The Federal Reserve Bank (FRB) warned financial institutions to reserve on-hand cash, government bonds and all highly rated assets to survive a severe economic “downturn”.

The FRB outlined essential “liquidity” requirements to ensure that cash can be assessed in an instant.

Those financial institutions with more than $250 billion in assets on the books are now required to hold those cash reserves to fund banking operations for 30 days during severe market “stress”.

Smaller banks with an estimated $50 million in worth are expected to have that much in in-house accounting to survive for 21 days.

Banks are being subject to international standards as disseminated by the Bank for International Standards (BIS).

Ben Bernanke, chair of the FRB said: “Liquidity is essential to a bank’s viability and central to the smooth functioning of the financial system. [The new regime] would foster a more resilient and safer financial system in conjunction with other reforms.”

Last January the BIS and the Basel Committee on Banking Supervisors (BCBS) has applied the underlying pressure on US banks to liquidate to appease global markets. The American taxpayer is picking up the tab for this turn of events. BIS is giving these banks until 2019 to comply with their new rules. Capital to prop up the banks will be needed while they liquidate assets such as bonds, mortgages, loans and stock shares.

Consequences of the liquidation have been evidenced in governmental austerity and movement toward sovereign debt by the technocrats. Any asset assessed by Basel can and is being used as collateral of the banksters in an anything goes temperament while the squandering of wealth continues.

BIS has used the scheme of forcing capital from the banks to control the measures taken globally. International banking constraints mandated in these new rules are putting more control into the hands of “shadow banks” where supervision is unheard of.

Michel Barnier, commissioner of BIS, stated that the Basel Committee has “revised liquidity coverage ratio and the gradual approach for its phasing-in by clearly defined dates. This is significant progress which addresses issues already raised by the European Commission. We now need to make full use of the observation period, and learn from the reports that the European Banking Authority will prepare on the results of the observation period, before formally implementing in 2015 the liquidity coverage ratio under EU law in line with the Basel standards.”

Liquidity is seen by the technocrats as a necessity for “the stability of banks as well as for their role in supporting wider economic recovery.”

At a time when the introduction of a global currency to replace all fiat across the globe is at hand, it makes perfect sense that the technocrats are positioning themselves to control the central banks as offshoot branches of their operation. At the head of this monster, the BIS sets the tone and directs the banksters with limitations and orders.

The European Central Bank (ECB) is setting the stage of a complete financial collapse of fiat currencies across the globe. Joining in the scheme are other technocratic institutions such as the Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan and the Swiss National Bank.

Under the guise of preventing a system failure during the global financial crisis, there will be “an extension of the existing temporary US dollar liquidity swap arrangements until February, 1 2014.” This action allows the central bankers to liquidate currencies under their jurisdiction “should market conditions so warrant.” Under this plan, euros backed by nothing can continue to pour into the system throughout the Eurozone “in addition to the existing liquidity-providing operations” in the US. This liquidation will take place “until further notice.”

The UN has proposed a complete overhaul in the report entitled, “Adapting the International Monetary System to Face 21st Century Challenges”.

They call for a “more intense debate on and reforms to the international monetary system imply that the current system is unable to respond appropriately and adequately to challenges that have appeared, or become more acute, in recent years. This paper focuses on four such challenges: ensuring an orderly exit from global imbalances, facilitating more complementary adjustments between surplus and deficit countries without recessionary impacts, better supporting international trade by reducing currency volatility and better providing development and climate finance. After describing them, it proposes reforms to enable the international monetary system to better respond to these challenges.”

They recommend movement toward a global currency that will replace all current currencies. Revaluation will be accessed and the worth of money would redistribute with oversight of the IMF, WTO and ultimately the UN.

source: occupycorporatism

China’s Largest Conglomerate Buys Building Housing JPMorgan’s Gold Vault

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In what is the most remarkable news of the day, which has so far passed very quietly under the radar, Fosun International, China’s largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as “Shanghai’s Hutchison Whampoa”, announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM’s iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

Here is Bloomberg described the transaction:

Over the past year, other Chinese developers and wealthy investors have been buying real estate in the U.S.

China Vanke Co., the biggest home builder listed in mainland China, said in February it joined a residential real estate venture in San Francisco. The families of Zhang Xin, co-founder of Soho China Ltd. (410), the biggest developer in Beijing’s central business district, and Brazilian banking billionaire Moise Safra this year bought a 40 percent stake in New York’s General Motors Building.

The landmark 1 Chase Manhattan Plaza, designed by architect Gordon Bunshaft and built in the 1950s, was once the headquarters of Chase Manhattan Bank. Rockefeller, as head of the bank’s building committee, selected the site and oversaw its construction.

JPMorgan intends to relocate about 4,000 employees, most of the people who work in the 60-story skyscraper, to other New York locations, Brian Marchiony, a spokesman, said in August. JPMorgan occupies about half of its space.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm’s commercial gold vault: incidentally, the largest in the world.

Recall:

What do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world’s sixth tallest building, not much.

So we set off to learn more.

To learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed…

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed…

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the “world’s largest bank vault.”

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock – the “largest bank vault in the world, longer than a football field.” It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world’s biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).

So, what the real news of today is not that JPM is selling its gold vault, we knew that two months ago, or that it is outright looking to exit the physical commodities business, that too was pre-announcedWhat is extremely notable is that in one very quiet transaction, China just acquired the building that houses the world’s largest gold vault.

Why? We don’t know. We do know that China’s gross gold imports from Hong Kong alone have amounted to over 2000 tons in the past two years. This excludes imports from other sources, and certainly internal gold mining and production.

One guess: China has decided it has its fill of domestically held gold and is starting to acquire gold warehouses in the banking capitals of the world.

For now the reason why is unclear but we are confident the answer will present itself shortly.

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MAJOR NEWS: CHASE Bank Limits Cash Withdrawals…

Chase Bank has moved to limit cash withdrawals while banning business customers from sending international wire transfers from November 17 onwards, prompting speculation that the bank is preparing for a looming financial crisis in the United States.

Numerous business customers with Chase BusinessSelect Checking and Chase BusinessClassic accounts have received letters over the past week informing them that cash activity (both deposits and withdrawals) will be limited to a $ 50,000 total per statement cycle from November 17 onwards.

The letter reads;

Dear Business Customer,

Starting November 17, 2013:

– You will no longer be able to send international wire transfers. You will still be able to send domestic wires and receive both domestic and international wires. We’ll cancel any international wire transfers, including reccurring ones, you scheduled to be sent after this date.

– Your cash activity limit for these accounts(s) will be $ 50,000 per statement cycle, per account. Cash activity is the combined total of cash deposits made at branches, night drops and ATMs and cash withdrawals made at branches (including purchases of money orders) and ATMs.

These changes will help us more effectively manage the risks involved with these types of transactions.

Another letter (PDF) received by Peak to Peak Charter School, a college in Colorado, states that the option to send both international and domestic wire transfers has been withdrawn from Chase business savings account holders.

Shortly after we posted this story, other Chase business customers confirmed they had also received similar or identical letters.

“I’m a Chase customer with both of the type accounts mentioned and got the letter posted,” wrote one.

“I have been a loyal customer of Chase for 11 years and I received the letter for my business and when I called about this I was told basically piss off and find another bank!” added another.

Chase is obviously very keen to make it hard for their customers to have any kind of control over their savings and is trying to prevent them from sending dollars abroad, prompting concerns that Cyprus-style account gouging could occur in America.

The move to limit deposits and withdrawals while banning international wire transfers altogether is a bizarre policy and will cripple many small and medium-sized businesses with Chase accounts. Buying stock from abroad in any kind of quantity will now become impossible for many companies, while paying employees will also be a headache.

Why has Chase announced such a ludicrous and restrictive policy change and is it related to the potential for a US debt default?

Speculation is rife that the bank is preparing for some kind of economic crisis by “locking down” its customers’ money. Although most still expect a deal to be struck to prevent a US debt default, its impact would “shake financial markets to a degree not seen since the Great Depression,” according to experts.

Others fear the move to restrict international wire transfers is part of a plan to protect against a near-future collapse of the US dollar.

Whatever the truth behind the policy change, Chase really needs to publicly explain its reasoning in order to quell the speculation.

The bank’s reputation was already under scrutiny after an incident earlier this year where Chase Bank customers across the country attempted to withdraw cash from ATMs only to see that their account balance had been reduced to zero. The problem, which Chase attributed to a technical glitch, lasted for hours before it was fixed, prompting panic from some customers.

Earlier this month it was also reported that two of the biggest banks in America were stuffing their ATMs with 20-30 per cent more cash than usual in order to head off a potential bank run if the US defaults on its debt.

The image below shows another example of a Chase business customer receiving the same letter.

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What China Really Thinks of the Shutdown

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In the midst of a domestic crisis, it is easy to forget that the rest of the world is watching. Now that the U.S. federal government has shut down for the first time since the mid 1990s, the talk of the town is the political problems of the world’s largest economy and sole superpower. In China, most media reports about the shutdown have been merely informative, but every now and then they offer a rare insight into what the Chinese have learned about America’s shortcomings.

“As far as the Chinese populace is concerned, the government shutdown is like the Arabian Nights,” writes Wang Xuejing of Hong Kong Daily News. Evidently, for the citizens of a totalitarian state, the prospect of a government shutdown seems otherworldly. The newspaper Qilu Wanbao complains, “To us, far on the other side of the ocean, the information appears contradictory. Some say Americans are furious […] Some say [everyday] life remains unchanged. Have or haven’t Americans been affected by the federal shutdown?”

The notion of a government shutdown is strange for the average Chinese person because its consequences in the People’s Republic would go far beyond closed federal agencies and parks. In mainland China, and increasingly Hong Kong, every school and every agency (national and local) answers to a party minder. Banking and internet traffic are also closely monitored by Beijing. Should the party overseers be absent one day, many organizations crucial to China’s social structure would suddenly find themselves without official guidance. The effects of such an abrupt and unfamiliar decentralization are impossible to predict.

Yet other commentators find the federal shutdown inspiring. Dr. Li Xiaohui, Assistant Professor of Law at Xiamen University writes, “The life of the average American has not been greatly affected by it and the economy has continued to grow. This reflects the clear limits between America’s government and the market. Our country should likewise move forward and decouple the government from the economy.” Similarly, the newspaper Nanfang Dushi Bao commended the strength of American society for being able to function without the government.Interestingly, while the American public sees the shutdown as a government failure, some Chinese are seeing it as a sign of efficiency. The common belief that the Chinese words for “opportunity” and “crisis” are the same, though wildly untrue, seems applicable in this case.

While common Chinese citizens muse over the implications of a shutdown, China’s leadership has been giving the impression of merrily promenading through Southeast Asia, stealing the international spotlight. Taking advantage of Obama’s absence at the recent APEC and East Asia summits, President Xi Jinping visited Malaysia and Indonesia with a friendly demeanor that his predecessor would have likely avoided, greeting the Indonesian parliament in the local language and visibly travelling with his celebrity wife Peng Liyuan. In Brunei, on the other hand, Premier Li Keqiang stuck to the usual rhetoric of making progress on a code of conduct for the South China Sea disputes and indirectly urged the U.S. not to get involved.

But aside from bewilderment and contentment over the shutdown, there is also concern in China about the possibility of a future U.S. default. At a recent news conference in Beijing, China’s Vice Finance Minster Zhu Guangyao said that the U.S. must protect its creditors, stating, “safeguarding the debt is of vital importance to the economy of the U.S. and the world […] This is the United States’ responsibility.” Dr. Li echoed the Minister’s message, “The shutdown of the American government is a warning to our compatriots that we should optimize the allocation of our foreign exchange reserves.”

As the largest holder of U.S. debt, China unsurprisingly appears more concerned about American solvency than about the unfamiliar mechanics of a representative democracy. Despite this, China as a whole also appears to be learning a great deal from the shutdown, not only about the American political system, but also about itself and its future. As the shutdown enters its third week, it remains to be seen if America will learn something as well.

Source

Food stamp debit cards not working in 17 states

obamacardHERE WE GO. HOPEFULLY IT’S JUST TEMPORARY AS THEY SAY IT IS. WITHIN 72 HRS PEOPLE WILL START RIOTING IF  THEY DO NOT HAVE  FOOD.

Fox News reports:

People in Ohio, Michigan and 15 other states found themselves unable to use their food stamp debit-style cards on  Saturday, after a routine check by vendor Xerox Corp. resulted in a system failure.

The electronic benefits system experienced a temporary shutdown during a routine test of Xerox back-up systems,  company spokeswoman Jennifer Wasmer said Saturday.

“While the system is now up and running, beneficiaries in the 17 affected states continue to experience connectivity  issues to access their benefits. Technical staff is addressing the issue and expect the system to be restored soon,”  Wasmer said in an emailed statement. “Beneficiaries requiring access to their benefits can work with their local retailers  who can activate an emergency voucher system where available. We appreciate our clients’ patience while we work  through this outage as quickly as possible.”

U.S. Department of Agriculture spokeswoman Courtney Rowe underscored that the outage is not related to the  government shutdown.

Shoppers left carts of groceries behind at a packed Market Basket grocery store in Biddeford, Maine, because they  couldn’t get their benefits, said fellow shopper Barbara Colman, of Saco, Maine. The manager put up a sign saying the  EBT system was not in use. Colman, who receives the benefits, called an 800 telephone line for the program and it said  the system was down due to maintenance, she said.

“That’s a problem. There’s a lot of families who are not going to be able to feed children because the system is being  maintenanced,” Colman said. “No one should put maintenance in during the daytime.”

She planned to reach out to local officials.

“I’m trying to reach out to everybody because I’m not thinking of me an adult who can figure out things. I’m thinking of the simpler person in the world who is sitting there trying to just do basic shopping to feed their kids. You don’t want children going hungry tonight because of stupidity,” she said.

Colman said the store manager promised her that he would honor the day’s store flyer discounts next week.

Ohio’s cash and food assistance card payment systems went down at 11 a.m., said Benjamin Johnson, a spokesman for the Ohio Department of Job and Family Services. Ohio’s cash system has been fixed, however he said that its electronic benefits transfer card system is still down. Johnson said Xerox is notifying retailers to revert to the manual system, meaning SNAP customers can spend up to $50 until the system is back online. SNAP recipients should call the 800 number on the back of their card, and Xerox will guide them through the purchase process.

Illinois residents began reporting problems with their cards — known as LINK in that state — on Saturday morning, said Januari Smith, spokeswoman for the Illinois Department of Human Services.

Smith said that typically when the cards aren’t working retailers can call a backup phone number to find out how much money a customer has available in their account. But that information also was unavailable because of the outage, so customers weren’t able to use their cards.

“It really is a bad situation but they are working to get it fixed as soon as possible,” Smith said. “We hope it will be back up later today.”

In Clarksdale, Miss. — one of the poorest parts of one of the poorest states in the nation — cashier Eliza Shook said dozens of customers at Corner Grocery had to put back groceries when the cards failed Saturday because they couldn’t afford to pay for the food. After several hours, she put a sign on the front door to tell people about the problem.

“It’s been terrible,” Shook said in a phone interview. “It’s just been some angry folks. That’s what a lot of folks depend on.”

Mississippi Department of Human Services director Rickey Berry confirmed that Xerox, the state’s EBT vendor, had computer problems. He said he had been told by midafternoon that the problems were being fixed.

“I know there are a lot of mad people,” Berry said.

Sheree Powell, a spokeswoman for the Oklahoma Department of Human Services, started receiving calls around 11:30 a.m. about problems with the state’s card systems. More than 600,000 Oklahomans receive SNAP benefits, and money is dispersed to the cards on the first, fifth and 10th days of every month, so the disruption came at what is typically a high-use time for the cards.

Oklahoma also runs a separate debit card system for other state benefits like unemployment payments. Those cards can be used at ATMs to withdraw cash. Powell said Xerox administers both the EBT and debit card systems, and they both were down initially.

Like Ohio’s Johnson, Powell said that Oklahoma’s cash debit card system has since been restored, but the EBT cards for the SNAP program were still down. Powell said Oklahoma’s Xerox representative told them that the problems stemmed from a power failure at a data center, and power had been restored quickly.

“It just takes a while to reboot these systems,” she said, adding that she did not know where the data center was located.

Powell said that some grocery store cashiers had been speculating that the federal government’s shutdown caused the problem, but state officials have been assured that that is not the case.

“We are hopeful it will be up this afternoon but we were not given a specific time frame,” she said.

David Akerly, a spokesman for Michigan’s Department of Human Services, also confirmed that residents in his state have reported problems using their cards.

source

Catastrophic Default Looms As Global Economy On The Verge Of Collapse

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The foundation for the original financial architecture and economic systems of the modern era was laid over the last two to three centuries.  Much of the actual architecture and various systems were designed, engineered and constructed during a time that would be considered the Stone Age when compared to the Information Age of 2013.  Herein lies the crux of the matter.

Way back in the days there were relatively few stock and bond exchanges, as well as limited currency and commodity trading. Of course, real estate investments have always been around but certainly not in the form of Real Estate Investment Trusts, Real Estate Limited Partnerships, and Collateralized Debt Obligations that we see today.

Over the last century there has been exponential growth experienced in every single market across the globe.  Equity, bond, currency, commodity, real estate, derivative to name the primaries.  Each of their original trading platforms were built to accommodate a vastly different world.  You could say that the foundation specs were quite minimal, especially relative to the 21st century.

Was Superstorm Sandy really an OMEN?

By way of an analogy we all saw Superstorm Sandy blow through the Northeast in October of 2012.  As it wended its way though New York City, what was revealed was just how vulnerable the Big Apple really is.  Especially the business district in Lower Manhattan.  Even the subway lines from Wall Street down to the Battery were incapacitated for an unheard of amount of time.  Much of Wall Street all the way to the Battery was either without power or completely shut down for days after the storm.

What’s the point?

The city of New York was also built over a few centuries.  However, much of the infrastructure was built over the past one hundred years.  Each decade of expansion brought with it new layers of technology and building materials and design changes.

As each new phase of construction was overlaid on top of the preceding one, the infrastructure became burdened by the outdated or obsolete technology from previous times.  Equipment and machinery that was old and worn out became easily stressed when forced to operate under extraordinary pressures such as weather events like Superstorm Sandy.  Likewise, inferior parts and substandard components served to further weaken the entire system, especially the older infrastructure and creaking architecture, just as we saw happen in the wake of Sandy.

Images from the Metropolitan Transit Authority of Sandy damage in the NYC area.

The following statement concerning technospheric breakdown accurately describes not only the predicament of NYC infrastructure, it’s also applicable to the current state of the global economic foundation and financial architecture.

“Equipment, machinery and technology which has not been proportionately upgraded to meet obvious requirements, ever-growing needs, newly emerging challenges and contingencies of the 21st century will begin to fail and breakdown at an ever-increasing rate.”
– “Technospheric Breakdown: Ongoing, Ubiquitous and Unstoppable

When the economic foundation cracks and the financial architecture teeters

Herein lies the greatest challenge of the 21st century regarding the consequences of globalization and current state of worldwide commerce.  The world is now one huge marketplace. However, the current global marketplace was assembled over decades (and centuries) by the piecing together of a multitude of little markets. A veritable hodgepodge of financial patchwork and economic mishmash have been somehow jumbled together to make it all stick together to function as a cohesive global economy.

How the markets (read global marketplace) continues to function, given all of the obvious flaws and inherent weaknesses  is anybody’s guess. Truly, only by the daily manipulations and monthly machinations of the Hidden Hand does it really continue to present some semblance of order and efficiency. Were it not for the artificially propping up of so many collapsing platforms, the whole House of Cards would have fallen many years ago. The following quote sums up the true state of affairs quite well.

“The global money matrix, worldwide financial architecture and planetary economic landscape most closely resemble the proverbial House of Cards in the form of a Pyramid-Ponzi scheme superstructure built on quicksand.”
– “The FOUR HORSEMEN Herald the Death Knell of ‘Free Market’ Capitalism

US Government Shutdown, Debt Ceiling, and Budget Debate

Clearly Obamacare has served as a worthy pretext to initiate the much more serious issues facing the US Government and American people. Whereas it has the potential to bankrupt the nation over the long term, so does the failure to reign in the burgeoning $17 trillion dollar debt and ballooning federal budget deficits.

In this regard, Oct. 17 functions merely as the latest in a long series of wakeup calls. Managing the largest economy on earth with virtually no budgetary consensus or attention to a catastrophic national debt level is a recipe for disaster. Overlaying the most costly and forced piece of legislation (aka Obamacare) during this time of economic turmoil and financial uncertainty has only further upped the ante.

Kicking-the-can

No, the proverbial CAN can no longer be kicked down the road. And to continue to do so will only make matters much worse. The various market bubbles, which are expanding against all odds at this very moment, will deflate sooner or later. If they pop in a disorderly fashion, it will not be a pretty picture.

There’s no question that the derivative market provides the glue, tape and staples which hold the entire House of Cards together. The myriad bets being placed and hedge positions being held are literally keeping this global Ponzi scheme from falling apart. Therefore, it’s imperative that serious regulatory controls be enacted for this ever-burgeoning derivative market.  Otherwise, the consequences will be too great to even consider putting “Humpty Dumpty back together again”.

It would be much better for every stakeholder playing this game, if the current opportunity (read government shutdown) for a reality check triggers a genuine attempt toward finding real solutions. Denial is no longer an option. The whole world will fall victim to whatever financial apocalypse and/or economic armageddon awaits in the absence of a durable resolution.

If October 17th comes and goes without the President and Congress appropriately addressing the actual systemic issues related to government spending, tax reform and the national debt, the USA risks even greater calamity when things do reach the final breaking point.

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12 Very Ominous Warnings About What A U.S. Debt Default Would Mean For The Global Economy

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A U.S. debt default that lasts for more than a couple of days could potentially cause a financial crash unlike anything that the world has ever seen before.  If the U.S. government purposely wanted to damage the global financial system, the best way that they could do that would be to default on U.S. debt obligations.  A U.S. debt default would cause stocks to crash, would cause bonds to crash, would cause interest rates to soar wildly out of control, would cause a massive credit crunch, and would cause a derivatives panic that would be absolutely unprecedented.  And that would just be for starters.  But don’t just take my word for it.  These are the things that top financial experts all over the planet are saying will happen if there is an extended U.S. debt default.

Because they are so close together, the “government shutdown” and the “debt ceiling deadline” are being confused by many Americans.

The “partial government shutdown” that we are experiencing right now is pretty much a non-event.  Yeah, some national parks are shut down and some federal workers will have their checks delayed, but it is not the end of the world.  In fact, only about 17 percent of the federal government is actually shut down at the moment.  This “shutdown” could continue for many more weeks and it would not affect the global economy too much.

On the other hand, if the debt ceiling deadline (approximately October 17th) passes without an agreement that would be extremely dangerous.

And if the U.S. government is eventually forced to start delaying interest payments on U.S. debt (which could potentially happen as soon as November), that would be absolutely catastrophic.

Once again, just don’t take my word for it.  The following are 12 very ominous warnings about what a U.S. debt default would mean for the global economy…

#1 Gerald Epstein, a professor of economics at the University of Massachusetts Amherst: “If the US does default, that will make the Lehman Brothers bankruptcy look like a cakewalk”

#2 Tim Bitsberger, a former Treasury official under President George W. Bush: “If we miss an interest payment, that would blow Lehman out of the water”

#3 Peter Tchir, founder of New York-based TF Market Advisors: “Once the system starts to break down related to settlement and payments, then liquidity disappears, as we saw after Lehman”

#4 Bill Isaac, chairman of Cincinnati-based Fifth Third Bancorp: “We can’t even imagine all the things that might happen, just like Henry Paulson couldn’t imagine all the bad things that might happen if he let Lehman go down”

#5 Jim Grant, founder of Grant’s Interest Rate Observer: “Financial markets are all confidence-based. If that confidence is shaken, you have disaster.”

#6 Richard Bove, VP of research at Rafferty Capital Markets: “If they seriously default on the debt, what we’re really talking about is a depression”

#7 Chinese vice finance minister Zhu Guangyao: “The U.S. is clearly aware of China’s concerns about the financial stalemate [in Washington] and China’s request for the US to ensure the safety of Chinese investments.”

#8 The U.S. Treasury Department: “A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse”

#9 Goldman Sachs: “We estimate that the fiscal pull-back would amount to 9pc of GDP. If this were allowed to occur, it could lead to a rapid downturn in economic activity if not reversed quickly”

#10 Simon Johnson, former chief economist for the IMF: “It would be insane to default, but it’s no longer a zero-percent probability”

#11 Warren Buffett about the potential of a debt default: “It should be like nuclear bombs, basically too horrible to use”

#12 Bloomberg: “Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just weeks away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever seen.”

A U.S. debt default could be the trigger for the “nightmare scenario” that so many people have been writing about in recent years.  In fact, it could greatly accelerate the timetable for the inevitable economic collapse that is coming.  A recent Yahoo article described some of the things that we would likely see in the event of an extended U.S. debt default…

A default would upend money markets, destroy bond funds, slam the brakes on lending, cause interest rates to spiral, make our banks insolvent, and deal a blow to our foreign trading partners and creditors around the globe; all of which would throw the U.S. and the world into economic disarray.

And of course stocks would crash big time.  Deutsche Bank’s David Bianco believes that if the U.S. government starts missing interest payments on U.S. Treasury bonds, we could see the S&P 500 go down to 850 by the end of the year.

There would be almost immediate panic among ordinary Americans as well.  In fact, it is being reported that some banks are already stuffing their ATM machines will extra cash just in case…

With just 10 days left to raise the debt ceiling and congressional Republicans threatening to force the government to default on its obligations, banks are taking some dramatic steps to prepare for the economic chaos that would result should the brinkmanship continue.

The Financial Times reports that one major U.S. bank has started stuffing its automatic teller machines with extra cash in preparation for a possible bank run from panicked depositors. The New York Times reports that another bank is weighing a plan to advance funds to customers who rely on Social Security and other government payments that could stop in the event of a default.

Let’s hope that cooler heads will prevail and that a U.S. debt default will be avoided.

Unfortunately, it appears that the Democrats are absolutely determined not to be moved from their current position a single inch.  They have decided to refuse to negotiate and demand that the Republicans give them every single thing that they want.

And who can really blame them for adopting that strategy?  After all, it has certainly worked in the past.  Whenever Democrats have stood united and have refused to give a single inch, the Republicans have always freaked out and caved in eventually.

Will this time be any different?

The funny thing is that once upon a time, Barack Obama was adamantly against any increase in the debt limit.  The following comes courtesy of Zero Hedge

Obama Debt Ceiling

But now Obama says that it is so unreasonable to be opposed to a debt limit increase that any negotiations are out of the question.

So which Obama is right?

If the Democrats will not negotiate, a debt default could still be avoided if the Republicans give in.

And that is what they always do, right?

Perhaps not this time.  Just check out what John Boehner had to say on Sunday

“I, working with my members, decided to do this in a unified way,” the speaker said — with demands to defund, delay or otherwise alter the Affordable Care Act.

Boehner had expected that the Obamacare fight would come during the next vote to raise the debt ceiling, “but, you know, working with my members, they decided, let’s do it now,” he said. “And the fact is, this fight was going to come, one way or another. We’re in the fight. We don’t want to shut the government down. We’ve passed bills to pay the troops. We passed bills to make sure the federal employees know that they’re going to be paid throughout this.”

“You’ve never seen a more dedicated group of people who are thoroughly concerned about the future of our country,” he said of House Republicans. “It is time for us to stand and fight.”

But will the Republicans really stand and fight?

In the past, betting on the intestinal fortitude of the Republican Party has been a loser every single time.

So we’ll see.  Boehner insists that this time is different.  Boehner insists that he is not going to fold like a 20 dollar suit this time.  In fact, when he was asked if the U.S. government was headed toward a debt default if Obama continued to refuse to negotiate, Boehner made the following statement

“That’s the path we’re on.”

The mainstream media has certainly been placing most of the blame at the feet of the Republicans, but at least the U.S. House of Representatives has been trying to get an agreement reached.  The House has voted 26 times since the Senate last voted.  Harry Reid has essentially shut the Senate down until the Republicans fold and give the Democrats exactly what they want.

The funny thing is that this could probably be solved very easily.  If the Democrats agreed to a one year delay to the individual mandate, the Republicans would probably jump at it.  And because of epic technical failures, hardly anyone has been able to get signed up for Obamacare anyway.  So a one year delay would give the Obama administration time to get their act together.

Unfortunately, the Democrats seem absolutely obsessed with the idea that they will not give the Republicans one single inch.  They seem to believe that this will be to their political benefit.

But this is a very dangerous game that they are playing.  The U.S. government must roll over 441 billion dollars of short-term debt between October 18th and November 15th.

If a debt ceiling increase is not in place by that time, it will send interest rates soaring.  Borrowing costs for state and local governments, corporations, and ordinary Americans will go through the roof and economic activity will be hit really hard.

And as detailed above, we could potentially be looking at a financial crash that would make 2008 look like a Sunday picnic.

So let us hope for a political solution soon.  That will at least kick the can down the road for a little bit longer.

If a debt default were to happen before the end of this year, that would bring a tremendous amount of future economic pain into the here and now, and the consequences would likely be far greater than any of us could possibly imagine.

Source

Spain Considers Taxing the Sun

You know the Spanish economy is in dire straits when politicians propose a tax on the sun.

 

Solar cells on Spain's Cíes Islands / via Wikimedia Commons.

Far from rewarding enterprising citizens by offering net metering rebates, Spain is considering a more ass-backwards approach by instead taxing those who would dare take it upon themselves to produce their own energy.

 

In alleged efforts to tackle a debt mountain of $35 billion, Spain’s energy sector wants solar panel users to pay a “backup toll,” essentially forcing people who use solar panels to pay for “self-consumption.”

“We will be the only country in the world charging for the use of the sun,” the director of a Spanish sustainable energy firm named SEBA, Jaume Serrasolses, told the BBC. “Strange things are happening in Spain. This is one of them.”

Those who produce their own energy through solar panels typically accrue enough savings to pay them off within eight years. The new solar tax would ensure that timeline extends to 25 years.

The logic behind the proposal is that with increased “’self-consumption,’ the income for conventional energy systems will decrease, but grid maintenance will cost the same,” according to the BBC.

“If I produce my own energy, but am connected to the grid, having the backup in case my production fails, I have to contribute to the cost of the entire system,” Energy Secretary Alberto Nadal explained.

In other words, even though the Spanish government was responsible for a massive campaign six years ago promoting solar energy, the people that actually jumped on the initiative are now burning holes in the pockets of Spain’s five biggest energy companies – and the taxpayers must once again come to the rescue.

Dutch lawyer Piet Holtrop has assumed the task of defending over 1,000 people who, due to the proposed tax, are now in danger of holding “toxic assets” and even losing their homes.

“The majority are people like your or my parents who at one time had savings and wanted to make an investment with a better return,” Holtrop says.

 

Spanish lawmakers seek "backup toll" for solar energy producers / via Wikimedia Commons

“Many of these people are going to lose their houses (that they used as collateral to buy solar panels). They are unable to pay back at the bank. They can’t sell the installations, because the government has made them toxic assets.”

 

Serrasoles says that although the toll has yet to go into effect, the photovoltaic sector is already feeling the pinch. “Nobody is going to make significant investment if it takes over 20 years to pay it off.”

Meanwhile, Spain’s five major energy providers are experiencing an uptick in consumption due to the fact people are suddenly not-so-eager to purchase solar panels, something Autonomous University of Barcelona professor Richard Jornet thinks may have been the plan all along.

“I think they (the government) know this proposal does not make sense. They just want to gain time,” Jornet reportedly stated. “[And] during all these months the energy oligopoly is making thousands of millions of euros.”

The BBC claims at least four other European Union member states – Latvia, Italy, the Czech Republic, and Greece – are watching Spain closely and seem destined to follow suit if the tax goes off without a hitch.

This is just the latest example of how big governments will stop at nothing to tax their people out of existence, all the while declaring it’s in everyone’s best interests. What’s next? An oxygen tax?

But perhaps this type of insane megalomania is to be expected, after all President George W. Bush did seek to claim U.S. ownership of outer space.

source

Nazi America…America is going over the top

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When I saw the headlines today I thought to myself, what is going on in the U.S.A.? We have a Gestapo style government taking over who are all on power trips. We need people to wake up, there is a global awakening going on but the majority of the people are in a hypnotic zombie like trance. We have become a bunch of roll overs either from fear or from being in the zombie trance. This culture has become so petty, rotten and so viscous, just look at the comments on articles and YouTube videos and such, people are acting like animals. I don’t want to come down on the American people especially because it is not our fault, this is what the elites have been grooming us to be through every avenue and not to mention all the slow kill weapons they use on us like the fluoride in our water, the GMO food, the vaccines, the Chemtrails and microwave radiation exposure. The American people need to take what these imperialist authoritarians are doing to us personal. We need to stop being week and asleep, and be strong. We need to be more like the people that founded this nation. Don’t you love freedom? I’m not a professional journalist or writer at any level, I am just a man that sees what is going on, it’s like we are living in the Twilight Zone, and I am disgusted by it and I feel the need to wake up other people. This is why I have made this blog and others. If we keep going down this slippery slope we will be in deep, deep trouble.

Where do we even begin? The globalists are killing and walking all over us. As I mentioned above with the “soft kill”, the fluoride etc. Mind control, manipulation and the sewage in our entertainment industry, it is all designed to keep us dumb and week. We hardly have any rights left. They attack our First Amendment, you have no freedom of speech anymore, in small ways we still have a glimmer left but it’s deteriorating fast. There was a student who questioned Kerry about his affiliation with Bush in the secret society Skull and Bones and they came to arrest him and tazered him. Here’s the link to that video:

https://www.youtube.com/watch?v=FJXzohdF-MA&feature=player_detailpage

Don’t speak against Islam either, it’s now hate speech, it’s unbelievable the way our government sticks up for Muslims but stomps all over Christianity. You can be court martialed for sharing the Christian faith in the military. The Second Amendment is on thin ice, this is why all these false flags or “frame ups” as others call them such as Rush Limbaugh. Rush called the Syrian Chemical attack a frame up which is a whole other subject. Obama was on the verge of attacking Syria without Congressional approval which he did do in Libya. That alone is grounds for impeachment. This current president is involved in numerous scandals, it’s sick. Want to see the scandal list?

1. IRS targets Obama’s enemies: The IRS targeted conservative and pro-Israel groups prior to the 2012 election. Questions are being raised about why this occurred, who ordered it, whether there was any White House involvement and whether there was an initial effort to hide who knew about the targeting and when.

2. Benghazi: This is actually three scandals in one:

  • The failure of administration to protect the Benghazi mission.
  • The changes made to the talking points in order to suggest the attack was motivated by an anti-Muslim video
  • The refusal of the White House to say what President Obama did the night of the attack

3. Watching the AP: The Justice Department performed a massive cull of Associated Press reporters’ phone records as part of a leak investigation.

4. Rosengate: The Justice Department suggested that Fox News reporter James Rosen is a criminal for reporting about classified information and subsequently monitored his phones and emails.

5. Potential Holder perjury I: Attorney General Eric Holder told Congress he had never been associated with “potential prosecution” of a journalist for perjury when in fact he signed the affidavit that termed Rosen a potential criminal.

6. The ATF “Fast and Furious” scheme: Allowed weapons from the U.S. to “walk” across the border into the hands of Mexican drug dealers. The ATF lost track of hundreds of firearms, many of which were used in crimes, including the December 2010 killing of Border Patrol Agent Brian Terry.

7. Potential Holder Perjury II: Holder told Congress in May 2011 that he had just recently heard about the Fast and Furious gun walking scheme when there is evidence he may have known much earlier.

8. Sebelius demands payment: HHS Secretary Kathleen Sebelius solicited donations from companies HHS might regulate. The money would be used to help her sign up uninsured Americans for ObamaCare.

9. The Pigford scandal: An Agriculture Department effort that started as an attempt to compensate black farmers who had been discriminated against by the agency but evolved into a gravy train delivering several billion dollars in cash to thousands of additional minority and female farmers who probably didn’t face discrimination.

10. GSA gone wild: The General Services Administration in 2010 held an $823,000 training conference in Las Vegas, featuring a clown and a mind readers. Resulted in the resignation of the GSA administrator.

11. Veterans Affairs in Disney World: The agency wasted more than $6 million on two conferences in Orlando. An assistant secretary was fired.

12. Sebelius violates the Hatch Act: A U.S. special counsel determined that Sebelius violated the Hatch Act when she made “extemporaneous partisan remarks” during a speech in her official capacity last year. During the remarks, Sebelius called for the election of the Democratic candidate for governor of North Carolina.

13. Solyndra: Republicans charged the Obama administration funded and promoted its poster boy for green energy despite warning signs the company was headed for bankruptcy. The administration also allegedly pressed Solyndra to delay layoff announcements until after the 2010 midterm elections.

14. AKA Lisa Jackson: Former EPA Administrator Lisa Jackson used the name “Richard Windsor” when corresponding by email with other government officials, drawing charges she was trying to evade scrutiny.

15. The New Black Panthers: The Justice Department was accused of using a racial double standard in failing to pursue a voter intimidation case against Black Panthers who appeared to be menacing voters at a polling place in 2008 in Philadelphia.

16. Waging war all by myself: Obama may have violated the Constitution and both the letter and the spirit of the War Powers Resolution by attacking Libya without Congressional approval.

17. Biden bullies the press: Vice President Biden’s office has repeatedly interfered with coverage, including forcing a reporter to wait in a closet, making a reporter delete photos, and editing pool reports.

18. AKPD not A-OK: The administration paid millions to the former firm of then-White House adviser David Axelrod, AKPD Message and Media, to promote passage of Obamacare. Some questioned whether the firm was hired to help pay Axelrod $2 million AKPD owed him.

19. Sestak, we’ll take care of you: Former White House Chief of Staff Rahm Emanuel used Bill Clinton as an intermediary to probe whether former Rep. Joe Sestak (D-Pa.) would accept a prominent, unpaid White House advisory position in exchange for dropping out of the 2010 primary against former Sen. Arlen Specter (D-Pa.).

20. I’ll pass my own laws: Obama has repeatedly been accused of making end runs around Congress by deciding which laws to enforce, including the decision not to deport illegal immigrants who may have been allowed to stay in the United States had Congress passed the “Dream Act.”

21. The hacking of Sharyl Attkisson’s computer: It’s not clear who hacked the CBS reporter’s computer as she investigated the Benghazi scandal, but the Obama administration and its allies had both the motive and the means to do it.

22. An American Political Prisoner: The sudden decision to arrest Nakoula Basseley Nakoula on unrelated charges after protests in the Arab world over his anti-Muslim video is an extraordinarily suspicious coincidence. “We’re going to go out and we’re going to prosecute the person that made that video,” Hillary Clinton allegedly told the father of one of the ex-SEALs killed in Banghazi.

23. Get rid of inconvenient IGs: Corporation for National and Community Service Inspector General Gerald Walpin was fired in 2009 as he fought wasteful spending and investigated a friend of Obama’s, Sacramento Mayor and former NBA player Kevin Johnson. The White House says Walpin was incompetent.

24. Influence peddling: An investigation is underway of Alejandro Mayorkas, director of the U.S. Citizenship and Immigration Services, who has been nominated by Obama for the number two post at the Department of Homeland Security. Mayorkas may have used his position to unfairly obtain U.S. visas for foreign investors in company run by Hillary Clinton’s brother, Anthony Rodman.

They are exercising power to break our will and degradate us to make us think they can do anything. If we think they can do these things and get away with it and just roll over, this is when they will throw us in the FEMA camps. Former Washington Post executive editor Leonard Downie said “This is the most closed, control-freak administration I’ve ever covered.” The government is funding Al-Qaeda, running the drugs in this country, groping and harassing us at the airports, shipping children in C-130’s to Saudi Arabia, they get up on MSNBC and say your kids belong to the state, they’re giving 47 trillion to the foreign banks shredding our rights and treating us all that are not on team Obama like terrorists. Divide and conquer.

During this government shutdown you see police and forest rangers armed to the teeth at the memorials and national parks but they have soldiers disarmed at bases such as the Navy yard. Where were all the police with M-4’s jumping out at people at the shootings we have seen? Instead they are told to stand down like the SWAT team at the Navy yard. Insane!

park-rangersHere’s an article titled ‘Gestapo’ tactics meet senior citizens at Yellowstone. Feds used “gestapo tactics” to treat senior citizens like terrorists during the shutdown of Yellowstone National park, placing them under armed guard in a locked hotel as panicked tourists thought they had been arrested, vowing never to return to America.

Pat Vaillancourt was part of a tour group of senior citizen visitors from Japan, Australia, Canada and the United States who were in Yellowstone national park when the government shutdown was announced last week.

When the party briefly exited their tour bus to take photos of a herd of bison, they were aggressively ordered by armed National Park Service rangers to get back in the vehicle on the grounds that they were involved in “recreation,” and that this wasn’t permitted during the shutdown.

The group had booked to stay in a hotel within the park, which soon turned into a prison as the visitors were told to remain in the building until their stay expired, despite the fact that the tour guide had already paid the $300 fee to enter the park.

“We’ve become a country of fear, guns and control,” Vaillancourt told the Eagle-Tribune, adding “They looked like Hulk Hogans, armed. They told us you can’t go outside.”

The tourists were placed under armed guard and locked inside the hotel as NPS rangers stood outside the doors.

Asian tourists visiting from more authoritarian countries thought they had been placed under arrest.

“Some of the Asians who were on the tour said, ‘Oh my God, are we under arrest?’ They felt like they were criminals,” said Vaillancourt.

They are trying to destroy this nation and that is what Obamacare will do and it was designed to do just that. It was designed to do that so well that it will happen too fast.  Rhetoric over Obamacare and the government shutdown has reached a point of insanity. Mike Adams of Natural News said: Obama himself has begun using “gun to the head” rhetoric, invoking highly-inappropriate violent imagery and trying to cast it upon his political enemies. Furthermore, with Obama’s approval, White House spokespeople have also begun characterizing Republicans as “terrorists, kidnappers and arsonists” for their taking a stand against Obamacare. Even the more mild characterizations depict Republicans as “holding the nation ransom” while behaving like “suicide bombers” for daring the question the sanity of government gone insane.

I do not have the enough skills to try and tell you all about the totalitarian globalist take over of america in perfect terms and there is so much I don’t even know where to begin. That is how crazy this is, there is just so much corruption, so many scandals and so much madness going on while I am away at work I think of many things to write about when I get home but then when I sit down at the computer and think of all the things happening and going on I almost have a short circuit from the magnitude of the overwhelming amounts of madness. All I have to say is WAKE UP, and take what these globalists and authoritarians are doing to us PERSONAL. These are personal attacks on all of us, on our rights and freedom as individuals and citizens of the land of the free and home of the brave. Let us start acting like it.

US employers slashing worker hours to avoid Obamacare insurance mandate

ObamaCare_-_Dr_Obamaxxx
Trend sparks fears among low-paid workers that they will be hit twice: by having earnings cut and paying more for healthcare
Avita Samuels has worked at the Mall of America in Minneapolis for the last four years, juggling a sales job with her studies in political science and law at the University of Minnesota. The 24-year-old has been the top sales associate for the last three years and works between 29 and 35 hours a week. But over the past few months, she said, she has watched as friends working in stores around her have their hours and benefits slashed – and she’s worried that she will be next.

Forever 21, the clothing store, told staff last month in a memo leaked to the press that it planned to cut hours and reclassify some full-time workers as part- time. The move, which the company denied had anything to do with President Barack Obama’s health reforms, the Affordable Care Act (ACA), will nevertheless help it avoid a mandate under the legislation requiring companies with 50 or more employees to offer those working 30 hours a week or more health insurance. Earlier this month, Seaworld, which operates 11 entertainment parks across the US, capped hours for part time workers at 28, down from 32, according to the Orlando Sentinel.

Other retailers, such as Trader Joe’s and Home Depot have said they will no longer provide medical coverage for part-time employees, and will shift them instead to the public healthcare exchanges which open Tuesday, 1 October. Some employers have said their health costs will rise as a result of various provisions of the ACA, which takes full effect in 2015, when larger companies have to provide health benefits to full time workers or pay a $2,000 per-person fine.

The trend has caused fears among low-paid workers living on the breadline that they will be hit twice – by having their hours and thus earnings cut and by having to pay more for healthcare. Based on what she said is happening in the stores around her, Samuels is concerned she too will have her hours cut and with it her eligibility for company healthcare under the ACA.

“It’s a really scary situation,” said Samuels, who earns $9.25 an hour and is trying to reduce a student loan debt of close to $50,000. She currently receives subsidised healthcare through her university, but it runs out next year, when she had hoped her employer healthcare would kick in.

“Technically, I should be eligible,” she said. “But at least 20 stores around me have cut hours. I live paycheck to paycheck. I have credit card debts. It’s a balancing act. I’m afraid I won’t be able to afford healthcare.”

As one of the nation’s lowest-paid workers, with little job security, Samuels is not alone in her fears that she may be worse off when the ACA takes full effect.

Following a callout to hourly workers who had experienced recent changes in hours or health benefits, the Guardian was contacted by employees and their families. Two of them said they were so concerned about additional costs of healthcare, they were considering not buying insurance at all.

Typing Samuel’s average earnings of $15,000 a year and her state into the subsidy calculator on the Kaiser Family Foundation website, reveals that, if her employer did not offer healthcare and she were to enter a healthcare exchange, she would be eligible for government subsidy and would pay $300 a year towards the $1,449 cost of a plan. Samuels, who is already struggling financially, said this will represent a massive additional burden should her hours be cut by her employer.

survey by the International Foundation of Employee Benefit Planspublished last month, found that 15% of large employers (50 or more employees) and 20% of smaller employers had plans to adjust hours so that fewer employees qualify for full-time medical insurance under the ACA.

Kavita Patel, a fellow in economic studies at the Brooking Institution who worked on healthcare reform in the White House, said: “The big question everyone is asking is: ‘Will it increase the premiums?’ If you are being dropped by your employer and you are going into the exchanges, it depends on how much much money you are making. In New York, for instance, the rate in the exchange is cheaper than the group markets.”

The Kaiser Family Foundation published a report earlier this month which worked out the cost of premiums in 17 states plus DC.

To hourly workers, many of whom are living below the poverty line, a small increase in healthcare costs can represent the final straw for their already stretched family budgets.

The wife of a Trader Joe’s part-time worker who contacted the Guardian in response to a callout said her husband was so concerned about potential cost increases, he was considering not buying healthcare insurance at all.

The mother of two, who did not want her name published, said: “My husband is debating getting insurance which scares me as the job is physical so there is always a risk of on site injuries that require medical attention. We are expecting to pay more out of pocket. We are working on putting aside some now so we can afford coverage next year.

“I am worried there will be months when we will have to choose paying health insurance or paying a bill. Neither is a good option with two children to think of.”

People without health coverage in 2014 may have to pay a fine of up to $95 per person and 100% of their healthcare costs.

She told the Guardian that she and her children had been covered by her husband’s company, Trader Joe’s, until he was informed in August that, as a part-time worker of 30 hours or less, his healthcare benefits would no longer be paid when the ACA comes into effect. An internal memo by Trader Joe’s announced that each affected employee would be given $500 and said it hoped that “many of you should be able to obtain healthcare coverage at very little if any net cost to you”.

A college student, she said her research had shown that the cost of an alternative plan would be greater than the $500 they will receive. Her husband previously paid $99 for coverage, she said.

She said she felt let down. “Finding out that we were losing health benefits seems (coupled with the previous reduction in contributions to retirement) like the company has reached a size/level will it no longer makes sense to put employees first. This makes me very sad.”

Unions and worker’s organisation say that, at a time of growing concerns over the level of minimum wage earned by the nation’s lowest paid workers, it is the same workers who are being worst hit by the changes, ahead of the ACA.

David Wehde, organising director of Working America, an affiliate of AFL-CIO with three and a half million members, said: “What we are hearing from our workers is a lot of frustration, particularly lower wage workers in retail or service jobs.”

However, Wahde said there is “huge scepticism” of the claims made by some employers that they had been forced to make changes in benefits because of the costs of the ACA.

“Our workers are frustrated, saying that their employers don’t have to do it this way, but they are just using the ACA as an excuse” said Wehde. “It is not winning workers’ trust.”

Janna Pea, the deputy communications director of the Retail Wholesale and Department Stores Union, said the shift some employers were taking towards part time workers was an unfortunate side effect of the ACA.

Pea said: “We are hearing from our members who are concerned about what is happening with their companies. Not only are they looking at having their healthcare coverage cut they are also looking at less hours.”

“You have a trend where employers are saying they have no obligation to do anything for anybody who works less than 30 hours a week. Part of the act created incentives for employers to take away benefits from employees. It is an unfortunate side effect. The act ignores part time workers.”

Source