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Is America the New Rome? Minimize
 

 

The            Sovereign Society Offshore A-Letter
 

Thursday, June 21, 2007
Vol. 9 No. 148
In Today's Letter:
Comment: Is America the New Rome?
Wealth: Bond Yields Make a Roundtrip – But Will Rates Climb Still Higher?
Privacy: Bush Administration Quietly Eviscerates Medical Privacy Part II
Is America the New Rome?

Today’s comment is by Bob Bauman, our Legal Counsel and author of many Sovereign Society bestselling books and reports.

 Dear A-Letter Reader,

 A few years back, I wrote about my concern that the United States was becoming a world empire under the policies of President George Bush – in the worst sense of that word.

 As one who loves history and has read hundreds of histories and biographies in my lengthening lifetime, I agree with the late George Santayana’s sentiment carved into the wall of the National Archives in Washington, D.C. – “Those who cannot remember the past are condemned to repeat it.” Of course, as with many memorable aphorisms, William Shakespeare got there first with: “What is past is prologue.”

 On my library shelves are two books I’ve read bearing on this issue of imperial America. Both are by Niall Ferguson, a Brit who is both a history professor at Harvard and a senior research fellow of Jesus College, Oxford.

 His impressive book, Empire (2002 Basic Books), details the rise and fall of the British colonial empire. The parallels with present day America are there to see, enough to make a thoughtful reader more than uneasy.

 I also read Ferguson’s book Colossus, subtitled The Rise and Fall of the American Empire (2004 Penguin). The author suggests that the United States already is the most powerful empire in all of history, with economic, political and military resources unequaled by any other nation, now or before.

 Are We the Next Fallen Empire?

 Now comes a new book that I intend to add to my summer reading list: Cullen Murphy’s Are We Rome? The author argues that we are a modern day replica of the Roman Empire, but in unexpected ways.

  He says it’s not so much a declining America’s tendency toward moral decadence and our astounding military might that make us like Rome. It’s the dangerous blurring of public and private responsibilities. These shirked responsibilities paired with an inflated sense of power can blind us to what’s happening not only beyond our borders, but right here at home.

  Looking across the nation and the world we should consider seriously the obvious question: Is this enormous power America holds being used wisely and well?

  Official Washington, like imperial Rome, prizes its status as the city around which the world revolves, according to Are We Rome?

   Yet author Colin Murphy claims there’s a crucial difference. Where Rome was all about self-satisfaction and glory, America, he says, prides itself on self-improvement and improvement of the world. It’s this optimistic quality, he believes, that may make it possible for us to reinvent ourselves instead of going the way of the ancient empire.

I hope he’s correct, but based on recent history I have my doubts.

It’s Hard to Be Optimistic When the Similarities Are So Striking

   Aside from the moral objections to abusing military power to achieve laudable ends, Professor Ferguson points to the real reason the British Empire fell.

   According to Ferguson, it wasn’t just the loss of colonies in India and Africa that killed the Empire. The British Empire rapidly disintegrated after World War II because the U.K.’s resources were depleted by its war against Germany. The country was worn out by massive borrowing and expenditures the U.K. couldn’t afford. It was this financial and economic over extension that drained the imperial lifeblood and caused a rapid demise.

  Need we cite the tremendous human cost in American and other lives, plus the huge cost in dollars of the war in Iraq, (not to mention a possible war with Iran)?

  Debt Threatening to Bury the U.S. in Our Own Complacency

      Consider the precarious U.S. economic and financial position today.

 If you often read the A-Letter , you already know the sad facts about the dollar, the budget and trade deficits, the seemingly limitless costs of entitlement programs, plus many billions more for the war and the military.

 As of earlier this week, the U.S. national debt was US$8.8 trillion dollars (excluding billions in unfunded entitlements). That’s about US$29,901.00 for each American – and over 53% of that debt is owned by foreign interests. Throw in the decline in value of the U.S. dollar, and we have a major financial dilemma to face.

 Civil Liberties Stripped Away One by One

   Of course, we at The Sovereign Society are concerned particularly with the unjustified intrusions by the government into offshore financial matters and the destruction of personal and financial privacy.

  Curbing civil liberties of all kinds has been a hallmark of the Bush administration. From U.S. military intrusions into civilian life, by taking over what once were domestic police activities and data gathering, to the unconstitutional wiretapping of phones and the detention of U.S. citizens for years without charges, once rigorously guarded freedoms have been stripped away one by one.

   Another historian, Edward Gibbons wrote his classic Decline and Fall of the Roman Empire , which interestingly was first published in 1776, the year of the signing of the American Declaration of Independence. Gibbons eloquently made the case that most historic empires last for just about 200 years before eventual decline and collapse.

  By that measure, the American Empire is 31 years past due. Think about that when the fireworks go off this July 4th.

 That’s the way it looks from here,

BOB BAUMAN, Legal Counsel 
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In the aftermath of the 9/11 tragedy, the PATRIOT Act became law with great haste while cloaked in secrecy.

Bob Bauman calls it the "greatest single assault on personal and financial privacy in U.S. history." To learn about this far-reaching privacy invasion -- and what you can do about it -- click below.

LINK: http://www.isecureonline.com/reports/190SPATY/E190H606/
Wealth/Investments

 
 Bond Yields Make a Roundtrip – But Will Rates Climb Still Higher?

We can thank restless fixed-income investors for the recent volatility in financial markets.

This return of risk in the stock market was largely triggered by the recent bond market rout, as yields on the benchmark 10-year U.S. Treasury bond surged (briefly) above 5.25% – the highest level since about this time last year – and a full 50 basis points (0.5%) higher since early May.

In fact, yields have just completed a roundtrip.

The Fed was busy still contemplating further rate increases when 10-year Treasuries last reached 5.25%, at this time last year. Last June, the U.S. economy and corporate profits were growing at robust rates, along with the rest of the world.

This time around, the Fed has been in an extended holding pattern. The U.S. economy has slumped to a growth rate of just 0.6% in the first quarter, while U.S. after-tax corporate profits expanded only 6%, according to the latest government data.

But the rest of the world is still humming right along, and seems to be more than making up for America’s slack.

In fact, official government policy rates have been moving higher around the world, and so are global long-term bond yields. In the U.K. where the Bank of England has been tightening monetary policy, the yield on 10-year gilts recently edged up to 5.5% – the highest rates since 2001.

The recent bond market turbulence in the U.S. seems to be caused more by investors recognizing this robust global expansion, rather than worrying inflation is getting out of hand.

You can see evidence of this in the Treasury Inflation Protected Securities (TIPS) bond yields. These yields have only moved up about as much as the real yields on 10-year Treasuries; without much additional increase as an inflation premium. In effect, the 10-year “breakeven” inflation rate remains pretty much unchanged.

The U.S. economy continues to grapple with mixed economic data at present and may be unable to rebound to much more than a sub-par rate of 2% to 2.5% GDP growth for the full year.

Meanwhile, the latest IMF forecasts call for global GDP growth to continue surging at an above trend rate of about 5.5% in 2007.

That’s well above long-term trend line growth of about 3.5%. This is another great reason for you to seek out international profit opportunities to diversify your global holdings away from the slowing United States this year.

Rather than inflationary fright, global bonds are more likely reacting to stronger than expected economic growth going forward, and the possibility of further interest rate hikes by central bankers around the world.

According to data from Biryini Associates, the 10-year Treasury bond is close to an extremely oversold level, thanks to the recent rout.

Since 1990, whenever bonds have sold off this much, they have typically rebounded to post price gains within the next three months – and so have stocks. So we could be headed for another boost in the stock and bond markets – at least on a short-term basis. Stay tuned!

MIKE BURNICK, Senior Editor & Global Markets Analyst

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Privacy&Rights

  Bush Administration Quietly Eviscerates Medical Privacy Part II

As I explained yesterday , your physician’s sworn Hippocratic Oath to “respect the privacy of patients” has been clouded by five years of President George Bush’s anti-privacy policies.

For example, in 2001, the Department of Health and Human Services (HHS) issued preliminary regulations under HIPAA. These regulations required that you, as a patient, consent for third party use of “protected health information.” This means you’re giving up your information for such common activities as treatment, billing and “other healthcare operations.”

Fast forward six years, and today, your medical information can be given to any “covered entity.” This includes business affiliates of healthcare organizations such as data clearinghouses, accounting firms, law firms, credit bureaus, and banks.

What’s more, a federal rule that went into effect in 2006 allows creditors to obtain or use medical information for determining how worthy you are of credit. Credit grantors aren’t supposed to use medical data in determining eligibility for a loan or in setting loan terms. However, credit grantors who have such information can share it with their “affiliates.”  This magically converts the data into credit information, not medical data.

This proliferation of medical data has also caused an epidemic of medical identity theft. “An insurance card is like a Visa card with a US$1 million spending limit,” says Byron Hollis, national antifraud director of the Blue Cross and Blue Shield Association. 

Research conducted by the World Privacy Forum suggests that through mid-2006, between 250,000 and 500,000 Americans had already been victims of medical identity theft. The results can also be deadly: One woman found that her blood type had been changed in the hospital record.

What can you do to take back your right to medical privacy? The simplest suggestion is find a physician that has “opted out” of HIPAA’s requirements for electronic transmission of insurance claims.

To qualify for this status, your physician must:

  • Not transmit “protected health information” outside the physician’s office
  • Not file via electronic transmittal, or engage a billing service or clearinghouse to file claims on the physician’s behalf – including private and Medicare claims
  • Not volunteered to become a “covered entity” by contract or certification

If your physician hasn’t opted out of HIPAA – and unfortunately, the overwhelming majority haven’t—there’s another solution. Ask your physician for all copies of your medical records, including the originals. Keep these records in a safe place, and bring them with you when you have an appointment.

There’s a third privacy option as well, but it’s risky: To obtain medical treatment in a fake name, and pay cash only to the treating physician or hospital. It’s risky because if you need a prescription, and are asked for ID (as may be required for some medications, particularly those that are frequently abused), you might not be able to pick it up. 

Finally, you can opt for private treatment in another country. Mexico is a popular choice for lower-cost – and private – medical services.

Ridiculous? You bet. But if you value your medical privacy, these options are the only way to keep it, thanks to the Bush administration’s deliberate corruption of the HIPAA rules.

MARK NESTMANN, Privacy Expert &
President of The Nestmann Group
www.nestmann.com

P.S. For more ideas on how to protect your privacy, under the Bush administration, click here.

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