The Goldman Wars and Your Family's Financial Security

Published: Sat, 03/24/12

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In This Issue:

The Goldman Wars and Your Family’s Financial Security By Richard C. Young
A Jobs Killer By E.J. Smith
Ted Cruz for America The Editors
Global Positioning System (GPS) The Editors
P.J. O’Rourke on the Koch Billionaires and the Cato Institute By Richard C. Young

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February Client Letter: Alarming: Inflation a Destroyer of Wealth
With the Federal Reserve pumping trillions of dollars into a global monetary system already soaked with liquidity, inflation is and will continue to be the result. For retired and soon-to-be-retired investors, the future inflation outlook should be alarming. Inflation is a destroyer of wealth—it’s compound interest in reverse. Owning commodities and hard assets that increase in value along with inflation may help. Read about Young Investment’s strategies in the new February client letter by clicking here.

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The Goldman Wars and Your Family’s Financial Security

I have been writing about the two Goldmans. One is a Wall St. bank that speculates with cheap borrowed money courtesy of the Fed. The other Goldmans are retired and because of manipulation, misallocation, and mispricing by the Fed can earn only crumbs on retirement savings in U.S. Treasury securities. Wall Street is nothing less than a casino populated with traders and speculators growing ever fatter on the Fed’s cheap money.

America is broke. The Obama administration has lost America’s AAA credit rating. Massive deficits and borrowing have caused an ever exploding debt burden financed by the Fed’s printing presses. Texas governor Rick Perry drew the wrath of politicians and the media with this now famous quote “If this guy [Bernanke] prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treasonous in my opinion.”

Pat Buchanan has written “What should be done to those who have sworn an oath to defend the Constitution and then steal the wealth of citizens by secretly manipulating the value of the currency, the store of wealth upon which those people depend?”

For a clear look at the end result of the Fed’s created bubble economy and environment of excess and speculation, read the letter about Goldman Sachs from Greg Smith linked here. Your family’s savings have been eroded by the deliberate creation of money by the Fed. This is, as Pat has rightly labeled it, legalized counterfeiting. The Fed (founded in 1913 by politicians and bankers for their benefit) should be abolished!

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A Jobs Killer

You hear politicians talk about creating jobs and helping the economy. They speak in generalities, right? Well here’s a specific example of how politicians ruin jobs and hurt the small businesses that create them.

The Rhode Island Economic Development Committee and the Chaffee Center have rolled out the red carpet for a box company. It’s located in El Salvador. They hope it will produce boxes on the cheap. They didn’t get the memo that a box company already exists in the state.

Taylor Box operates in Warren, Rhode Island. It employs 35 people. It makes boxes. You may know it from the packaging for Swiss Army knives. A new box company would be a direct competitor. Jobs would be lost to a foreign company.

Taylor Box is owned by Dan Shedd. Listen to his discussion with Helen Glover on the Helen Glover Show. You can’t make this stuff up.

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Ted Cruz for America

We called him “Easily the Best Candidate in America,” back 2011, and he’s even been called the “next Marco Rubio.” But a better comparison for Ted Cruz, a U.S. Senate candidate from Texas, is Sen. Mike Lee. Ted Cruz and Sen. Lee understand the importance of having conservative justices serve on the Supreme Court, and each will fight for conservative justices’ confirmation in the Senate. Lee said of Cruz, “Ted and I share much in common. We’re both proven conservatives who clerked for strong conservative Justices on the U.S. Supreme Court, and we both believe passionately in limited government and the U.S. Constitution.”

Even from his position as Texas Solicitor General, Cruz has been fighting for the rights of all Americans. Cruz took on the leader of his party—and his former boss—George W. Bush, and “successfully represented Texas before the U.S. Supreme Court in Medellin v. Texas, which upheld U.S. sovereignty and held that the World Court cannot bind the U.S. justice system and the President cannot order the state courts to obey the World Court.” Cruz won the case with a majority of six of the nine justices on the bench at the time.

Cruz is a longtime supporter of the 9^th and 10^th Amendments, and even wrote his college thesis on the two. His former professor at Princeton, Robert P. George said of Cruz “Ted was very drawn to the idea of constitutional originalism. He was a strong supporter of the idea that the federal government possesses delegated and, therefore, limited powers.”

Further evidence of Cruz’s commitment to the Constitution is his receipt of the NRA Harlon B. Carter-George S. Knight Freedom Fund Award. Cruz won the Carter-Knight award for his efforts in the Supreme Court case of McDonald v. Chicago. Cruz’s work helped Second Amendment supporters win the day. Cruz also participated in the D.C. v. Heller case, initiated by the Cato Institute’s Bob Levy. NRA Civil Rights Defense Fund Chairman Bill Dailey said that Cruz’s contributions to the Heller and McDonald “cases were vital to the Supreme Court’s ruling in favor of gun rights. We are deeply grateful for his unwavering efforts in our fight to protect the Second Amendment.”

Another positive for Cruz is that he is no neocon. In an interview with National Review, Cruz said, “I don’t think we should be engaged in long-term nation building. I think there are too many nations on earth to build up, and it’s not our military’s job. What I don’t think is acceptable is for us just to stay there in perpetuity and try to rebuild each nation into a perfect utopia. That’s not our job and not our role. I think we have an important role stopping and killing terrorists.”

As a candidate for the office of United States Senator from Texas, let’s hope Ted Cruz gets much national attention for his Reagan-like stance on free market principles, the Constitution, national defense and foreign policy.

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Global Positioning System (GPS)

The Global Positioning System (GPS) is a U.S.-owned utility that provides users with positioning, navigation, and timing (PNT) services. This system consists of three segments: the space segment, the control segment, and the user segment. The U.S. Air Force develops, maintains, and operates the space and control segments.

GPS satellites fly in medium Earth orbit (MEO) at an altitude of approximately 20,200 km. Each satellite circles the Earth twice a day.

Satellite Orbits
The satellites in the GPS constellation are arranged into six equally-spaced orbital planes surrounding the Earth, each containing four “slots” occupied by baseline satellites. This 24-slot arrangement ensures there are at least four satellites in view from virtually any point on the planet.

The Air Force normally flies more than 24 GPS satellites to maintain coverage whenever the baseline satellites are serviced or decommissioned. The extra satellites may increase GPS performance but are not considered part of the core constellation.

In June 2011, the Air Force successfully completed a GPS constellation expansion known as the “Expandable 24″ configuration. Three of the 24 slots were expanded, and six satellites were repositioned, so that three of the extra satellites became part of the constellation baseline. As a result, GPS now effectively operates as a 27-slot constellation with improved coverage in most parts of the world.

Current and Future Satellite Generations
The GPS constellation is a mix of new and legacy satellites. The following text describes the various generations, or blocks, of GPS satellites that are currently flying. It also describes the satellites under development as part of the GPS modernization program.

GPS Block IIA

Block IIA is an upgraded version of the GPS Block II satellites launched in 1989-1990. The “II” refers to the second generation of GPS satellites, although Block II was actually the first series of operational GPS satellites. The “A” stands for advanced.

Developed by Rockwell International (now Boeing), the IIA series production comprised a total of 19 satellites: Space Vehicle Number (SVN) 22 through SVN-40. The first IIA was launched in November 1990, and the last launch occurred in November 1997. As of January 2012, there were 10 Block IIA satellites remaining in the GPS constellation, including two that have operated for over 20 years.

Key Features:

• Coarse/Acquisition (C/A) code navigation for civil users.

• Precision P(Y) code navigation for military users.

• 7.5-year design lifespan.

GPS Block IIR

The IIR series were produced to replace the II/IIA series as the II/IIA satellites gradually degraded or exceeded their intended design life. The “R” in Block IIR stands for replenishment.

Developed by Lockheed Martin, the production consisted of a total of 13 satellites: SVN-41 through SVN-47, SVN-51, SVN-54, SVN-56, and SVN-59 though SVN-61. The first successful launch occurred in July 1997, and the last in November 2004. As of January 2012, there were 12 IIR satellites in the GPS constellation, forming the backbone of today’s GPS along with the IIR(M) series.

Key Improvements:

• On-board clock monitoring.

GPS Block IIR(M)

The IIR(M) series of satellites are an upgraded version of the IIR series, completing the backbone of today’s GPS constellation. The “M” in IIR(M) stands for modernized, referring to the new civil and military GPS signals added with this generation of spacecraft.

Developed by Lockheed Martin, there are eight IIR(M) satellites: SVN-48 through SVN-50, SVN-52, SVN-53, SVN-55, SVN-57, and SVN-58. The first IIR(M) was launched in September 2005, and the last launch occurred in August 2009. As of February 1, 2012, there were seven healthy IIR(M) satellites in the GPS constellation, with the final one (SVN-49) set to “unusable” status but transmitting signals for test purposes.

Key Improvements:

• Second civilian GPS signal (L2C) for improved performance in commercial applications.

• Two new military signals providing enhanced military jam-resistance.

• Flexible power levels for military signals.

GPS Block IIF

The IIF series expand on the capabilities of the IIR(M) series with the addition of a third civil signal in a frequency protected for safety-of-life transportation. The “F” in IIF stands for follow-on. Compared to previous generations, GPS IIF satellites have a longer life expectancy and a higher accuracy requirement. Each spacecraft uses a mix of rubidium and cesium atomic clocks to keep time within 8 billionths of a second per day. The IIF series will improve the accuracy, signal strength, and quality of GPS.

Developed by Boeing, the IIF series includes a total of 12 satellites: SVN-62 through SVN-73. The first IIF satellite launched in May 2010. As of January 2012, there were two operational IIF satellites in the GPS constellation.

Key Improvements:

• Operational version of the third civilian GPS signal (L5) for transportation safety.

• 12-year design lifespan.

• Extremely accurate atomic clocks.

• Additional information about the GPS IIF satellites is available from the manufacturer’s website.

GPS Block III

Currently under development by Lockheed Martin, the GPS III series (fact sheet) is the newest block of GPS satellites (SVN-74 and up). GPS III will provide more powerful signals in addition to enhanced signal reliability, accuracy, and integrity — all of which will support precision, navigation, and timing services. Based on the current contracts and funding, four GPS III satellites will be produced with options to purchase an additional eight satellites. Future versions will feature increased capabilities to meet demands of military and civilian users alike.

Key Improvements:

• Fourth civilian GPS signal (L1C) for international interoperability.

• 15-year design lifespan.

• Future: Distress Alerting Satellite System (DASS) for search and rescue.

• Future: Satellite crosslinks for rapid command and reduced age of data.

Update On January 12, 2012, the Air Force awarded Lockheed Martin a contract for production of the third and fourth GPS III satellites.

Source: GPS.gov

Mr. O’Rourke was a featured speaker at the recent Palm Beach/Breakers Cato Benefactor’s summit that Debbie and I attended. The three of us are strong Cato supporters and backers of Cato co-founder and long-time president Ed Crane. Debbie and I, like P. J., clearly have a dog in the Koch bros./Cato lawsuit fight. With that disclaimer, I thought that O’Rourke’s current Family Feud posting at Weeklystandard.com was especially well done, even by Mr. O’Rourke’s normal high standards. After reading P. J.’s thoughtful essay, you’ll come away wondering why in the world the multi-billionaire Koch brothers would want to interfere with the Cato Institute’s policy-not-politics stance. The Cato Institute, in contrast to the Koch’s wishes, is simply not a political beast. We all understand, I hope, the golden rule: He who has the gold makes the rules! The Kochs have the gold and are acting like the schoolyard bully here, with little good to come of it. Why in the world bother? The Kochs obviously have the money to start all the Cato-type institutes they would ever want.

It is important for you to know that at not a single Cato meeting I have attended have the names David and Charles Koch come up. Unless you were to dig into a Cato annual report, it would probably come as a surprise to many Cato conference attendees that the Koch brothers have anything to do with Cato. I have always thought of David and Charles as fairly low-key billionaires not looking to rock boats or draw the attention of the media. Now a hornet’s nest has been kicked.

P. J. O’Rourke’s essay will help clear the air for you. Enjoy, and if you ever have the opportunity to hear P. J. speak, make sure you catch him.