Travel Insecurity – Why the TSA Has Not Made Us Safer

If you have traveled by air any time in the last few years you known the routine: Stand in huge security lines . . .take off your coat, belt and shoes . . . put all change and metal objects in a tray . . . unpack your laptop . . and be prepared to be patted down or interrogated if you sweat a lot, someone thinks you look suspicious, or you just have bad luck.

Then there are the “no-fly” and watch lists, secret government databases which now have over 119,000 U.S. citizens on them, and hundreds of thousands more non-citizens. Many on the lists have no business being on them. 60 Minutes recently obtained a copy of the lists and found that everyone
named “Robert Smith” in the U.S. is on the watch list because some alleged terrorist allegedly once used that name as an alias. “Unlikely Terrorists On No-Fly List,” 10-8-06, 60 Minutes, http://www.cbsnews.com/stories/2006/10/05/60minutes/printable2066624.shtml

You would think the TSA could tell the difference between the 20-something alleged terrorist who once used the name “Robert Smith” and 80-year-old men or 7-year-old kids, but no, everyone named
“Robert Smith” gets extra scrutiny and sometimes is denied boarding. The president of Bolivia is also on
the list because his name is similar to that of some alleged terrorist, as is Democratic congresswoman Loretta Sanchez, who has been a strong critic of TSA lists.

What’s more, thousands of people are added to the lists every week, and the TSA has no provision for ever getting off. Even the criteria for being listed is a government secret. At best, if you are
erroneously put on a no-fly list, you may be able to get on another “correction list,” which may help you get on a plane at some airports. All of this “security” might make some sense if it worked or if it made us much safer, but it doesn’t.

TSA tests earlier this year found that undercover agents were able to get knives, guns, and simulated bombs on planes more often than not, and at about the same rate as before the TSA was created — despite a cost of billions of your taxpayer dollars. (Many TSA employees are paid 2-3 times what their private counterparts get.) Some “security” measures make no sense whatsoever. For example, while shoes are routinely screened for explosives, an April 2005 Department of Homeland Security report found that current X-Ray machines are unable to detect explosives. (“Quit Xraying Shoes,” Contra Costa Times, 8-16-06.)

The same is true for most liquid explosives. Yet the TSA continues with the charade of “checking them,” “because it makes people feel safer.” Worst of all, while airline passengers are heavily screened, 5 years after 9-11 there is no screening for mechanics, food-service personnel, baggage
handlers and dozens of others who enter airports through largely unscreened “employee-only” entrances.

In addition, some 90% of air cargo is still unscreened, and much of it is picked up from cargo bins in unguarded lots, where anyone could put in a package with a time bomb. I don’t know about you, but I’m a lot more concerned about food-service personnel, mechanics, and cargo handlers smuggling in bombs and poisoned food, than I am concerned about passengers with “illegal nail files” or lipsticks.

One final note: In the rush to staff the TSA, background checks on thousands of employees were delayed or waived, resulting in the hiring of thousands of convicted felons. The bottom line: TSA-enforced safety is largely a fraud, which at best makes people feel safer — at the cost of our privacy, dignity, and freedom to travel.

Some post-9/11 airline security measures certainly make sense, such as securing cockpit doors, arming pilots, and screening baggage and cargo for explosives. However, treating passengers like dangerous cattle makes no sense at all.

What should be done about current TSA security?

-Drastically cut security for passengers, including immediately ending the X-raying of shoes and bans
on liquids and gels.

-Accelerate arming pilots.

-Screen all cargo for explosives as soon as possible, and screen all airline food.

-Limit “no-fly” and watch lists, and have a clear and simple procedure for getting off the lists for those
erroneously put on.

-Abolish the Transportation Security Agency. It is far cheaper, safer, and less intrusive to let airlines
and airports handle their own security.

Mortgage Bailout Could Make Crisis Worse

The property of millions of “homeowners” is now at risk due to the mortgage meltdown. As interest rates reset, not just subprime borrowers but millions of prime-rate borrowers are now facing imminent foreclosure.

According to CBS News (12-6-07) in the first quarter of 2007 alone, some 994,000 homes were foreclosed. Horror stories of monthly payments going from $1,000 a month to $2,000 in a heartbeat, are now reported by newspapers across the country. And it’s getting worse:

Some 2.5 million borrowers are now behind on their mortgages, and millions more will likely slip into arrears in the coming year. Also at risk are banks, insurance companies, and thousands of independent
lenders. Moody’s Economy.com now reports that “Housing markets from Punta Gorda, Florida, to Stockton, California, will crash and suffer price drops of more than 30% before the housing crisis is over.

And the financial damage isn’t confined to the U.S. Millions of U.S. home loans have been bundled together and sold to banks across the planet as CDOs — collateralized debt obligations. As a result, if the mortgage meltdown continues, we could see many bank and business failures . . . hundreds of thousands of families out on the streets . . . and a major recession in 2008.

In the wake of all of this calamitous news, it isn’t surprising that the government has taken action. Specifically, President Bush has called for a “voluntary” 5-year freeze on low introductory mortgage rates for families now making payments but unable to afford higher rates. Only primary home owners would qualify, and they must have a perfect record of home payments.

Once such a measure is introduced, it would likely expand. Indeed, others, are already proposing a permanent, mandatory freeze in rates. While the desire to “do something,” about the mortgage crisis is natural, a mortgage rate freeze is unlikely to do more than prolong the grief and could well turn what would have been a short recession into a protracted depression.

You see, the fundamental problem isn’t that so many families are facing default and foreclosure. The problem is that many of these families simply do not have income sufficient to make house payments and shouldn’t have borrowed the money in the first place. Consequently, freezing rates could well create even worse problems a few years from now, because freezing payments for people who aren’t even able to afford interest (much less interest plus principal) means their total debt will continue to increase while rates are frozen, resulting in them being hit by even higher payments a few years from now, and an even worse crisis.

There is also the legal problem of the government unilaterally rewriting mortgage contracts for millions of borrowers. What lender in their right mind would loan funds when the government can force them to take “payments” that don’t even cover their costs, and blocks them from repossessing their property when borrowers default? If banks, insurance companies and other lenders stop making loans, the mortgage crisis will get far worse. Any freeze of interest rates also inevitably means huge losses and failures by banks and other lenders which were counting on higher, reset interest rates to make a profit on their loans, after a few years of loss-leader low teaser rates.

There is also the sticky question of how Chinese, Japanese, and European banks will react when they told they can’t collect increased payments that they were anticipating. Loss of their investments would be economically disastrous for our economy. For all of these reasons, freezing interest rates and mortgage payments for subprime borrowers could well be a cure much worse than the disease.
Certainly living through a 2008 recession would be painful, and no one wants to see lots of families lose
their homes.

But that would certainly be far less painful that creating an international depression that lasts for many years and harms billions. As documented in the late Murray Rothbard’s brilliant book America’s Great Depression, that is precisely what happened in 1929, when government “help” turned what should have been a 6-month recession into a 10-year long depression. Let’s hope history doesn’t repeat itself today.

Year of the Bear in 2008?

2008: Year of the Bear?

We ended 2007 with a worsening mortgage meltdown, plummeting consumer confidence, huge equity market volatility, and ever-more expensive war on terrorism, there seems little doubt that 2008 will be a lackluster year for most stock investors, at best.

However, since 2008 is a presidential election year, you can expect the Bush administration to go all out to boost the economy and make the Republican Party look good. We are already seeing signs of this in the Fed’s recent interest rate cuts, and the pending deal to bail out desperate subprime borrowers. (See
“Mortgage Bailout Could Make Crisis
Worse.”)

Will they succeed or will 2008 mark the beginning of a major recession?

My guess is that official economic statistics will continue to paint a rosy picture, while middle
class Americans suffer even more pain from rising interest rates on credit cards, higher mortgage
payments, and higher prices for everything they borrow.

What About the Stock Markets?

As I have argued here for several years, just to compensate for the real rate of inflation (which is
now about 12% , in contrast to the “official rate” of 2% to 3%), you will
need to get a 12% return on your investments in 2008.

I don’t expect most stocks to return anything like that much. However, there will be exceptions.
I expect agriculture-related stocks, for instance, to be among the top-performing stocks, as well as
energy-related stocks. (See our new picks at TheInvestorReport.com)

Precious Metals & Foreign Currencies

I also expect precious metals (particularly gold and platinum) and strong foreign currencies
(including the Canadian dollar, Australian dollar, and euro) to resume their meteoric rise in 2008. The recent downturn in prices for these investments is in my opinion principally a result of end-of-
the-year profit-taking, and investors selling to cover their 2007 taxes, combined with investor
nervousness over extreme market volatility.

Preparing for Recession

Typically authorities don’t admit a recession exists until long-after the fact. This will be doubley true in 2008, as the Bush administration does everything in its power (including refusing to acknowledge economic reality), to win as many votes as possible for their party in November 2008. The current 12% real rate of inflation alone combined with stagnant wages is enough to further depress the living standards of most middle class families.

The by-words for 2008 will be “frugality,” and “preparing for the worst,” while hoping for the best.

Recession Ahead? Leading Indicators Predict 2008 Recession

by Jarret B. Wollstein, Editor

The Dow is at an all-time high. The Fed just cut the prime Fed funds rate by 0.5%. Paychecks are growing. So why are so many analysts — including former Fed chairman Alan Greenspan — talking more and more about the possibility of recession next year?

Despite the rosy indicators mentioned above, many leading economic indicators forecast recession next year. Those indicators include:

The Consumer Price Index (M2) and the Producer Price Index. Despite occasional, official claims to the contrary, both are rising. The basic cause: expansion of the money supply, which is controlled by the “inflation-fighting” Federal Reserve. In reality, the Fed is the engine of monetary inflation and hence the primary cause of price inflation. Expect lots more of both in 2008.

Productivity and Labor Costs. In the 12 months ending June 2007, U.S. labor costs were up a huge 4.9%. At the same time, productivity fell. This is a recipe for falling profits, increased bankruptcies and higher inflation. Source: Bureau of Labor Statistics

Non-Farm Payrolls. Falling non-farm payroll is a leading economic indicator of economic contraction ahead. Between August 2006 and August 2007, non-farm payroll declined by 4,000 jobs. Source: Bureau of Labor Statistics. New jobs are needed each month to absorb new workers.

Jobless Claims — First Time. First time claims for unemployment benefits have been rising since this past April, and now are at 334,000. This is another recession indicator. Source: Department of Labor.

Consumer Confidence (U. of Michigan “Consumer Expectations Index”). This indicator has been trending lower since December 2006. Source: University of Michigan.

Retail Sales. Year-over-year, inflation-adjusted retail sales have dropped sharply over the past six months. At the same time, same-store sales fell to the lowest level in July 2007 since March 2003. Source: U.S. Census Bureau.

Business Inventories. Year-over-year change in business inventories has fallen sharply over the past year, and could soon turn negative. This indicates the U.S. economy is about to enter a recession. Source: U.S. Census Bureau.

Durable Goods Orders and Non-Defense Capital Goods (other than aircraft). Durable goods are items designed to last at least three years, such as cars and refrigerators. Some 15% of consumer discretionary spending goes for durable goods. When durable goods and non-defense capital goods orders fall — as they are currently — that indicates recession soon. Source: U.S. Census Bureau.

New Housing Starts and Building Permits. Directly and indirectly, housing construction has a huge impact on the U.S. economy. In the wake of the subprime mortgage meltdown, housing starts have fallen through the basement, and have now fallen 74% through
July of this year. Source: U.S. Census Bureau.

Corporate Profits. The year-over-year change in corporate profits is a major leading indicator of where our economy is going. This indicator is down sharply during the past three quarters. Source: Bureau of Economic Analysis.

Recession in 2008?
The title of a new article by- Robert Murphy — author of The Politically Incorrect Guide to Capitalism, published by the free-market Von Mises Institute — summarizes what may be ahead: The Worst Recession in 25 years? http://www.mises.org/story/2728

As Murphy points out, we are at the end of an enormous financial bubble, created by Federal Reserve
monetary expansion — and the party is now over.

Exchange Traded Funds, A Great Alternative to Mutual Funds

by Jarret Wollstein, editor

Note to first-time readers: Over the last 24 months, 5 out of 6 of my stock picks have been winners, with 44% average returns – making IIR one of the top investment newsletters in the world. I write quality articles every month on topics such as “How the Recession in 2008 Will Affect You and How to Profit From It” and “10 Ways to Invest in Foreign Currencies as the Dollar Falls.” Go to TheInvestorReport.com to subscribe. Now back to the article…

With stock markets now displaying some of the highest volatility ever, where can you invest for consistent high returns year-after-year? One good alternative is commodity and international Exchange Trade Funds (ETF). As you know if you’ve been reading IIR for even a few months, we strongly recommend investing in commodities, international stocks, and foreign currencies, which have been soaring while the dollar has been plummeting.

ETFs provide an easy and profitable way for the average investor to invest in commodities, without having to set up a commodity or currency account (which requires a minimum of $10,000). Here are some examples of the huge one-year returns from top-performing commodity and currency ETFs:

• Oil Services Holders Trust (OIH), + 54% (5 yr., +289%)
• Energy Select Sector SPDR (XLE) +46% (5 yr., +255%)
• Vanguard Emerging Markets Stock ETF (VWO) + 55% (5 yr, +115%)
• iShares Singapore Index Fund (EWS) + 54% (5 yr., + 283%)
• iShare Brazil Index Fund (EWZ) + 87% (5 yr., +1,135%)
• iShares FTSE China 25 Index Fund (FXI) +120% (5 yr., +248%)
• iShares Korea Index Fund (EWY) + 45% (5 yr., +271%)
• iShares Hong Kong (EWH) +48% (5yr., +182%)

What is an ETF?

An Exchange Traded Fund (ETF) is an investment company which invests in a particular market sector, a specific group of stocks, or even commodities or currencies. When the underlying investments go up, your ETF shares go up. When the underlying investments go down, your ETF shares go down. Thus, ETFs usually closely track the performance of what they invest in. An Exchange Traded Fund is
similar to a mutual fund or index fund, in that many ETFs enable you to invest in a variety of different
investments for one low fee. For instance, one ETF might invest in dozens of different energy
companies.

Thus while you may not be able to afford to buy shares in 30 different energy companies, you almost certainly will be able to afford to buy shares of an energy ETF. Like mutual funds, ETFs also provide you with diversification, while enabling you to select types of investments which can beat the
market. ETFs also give you a certain degree of protection from risk:

Even if one or a few stocks which an ETF invests in perform poorly, others are likely to perform better,
minimizing your risk of huge losses. Also, like mutual funds, ETFs enable you to control your cost and risks. With ETFs, you can place “limit buy” and “limit sell” orders (which limit your initial cost and enable you to set minimum selling prices), and automatic stop-losses. This is often not possible with mutual funds.

ETFs and mutual funds do have one big disadvantage compared to stocks:

Returns are less than those for top-performing individual stocks. That’s one reason why you probably
should have both in your portfolio.

Differences between mutual funds & ETFs

Although ETFs are similar to mutual and index funds, there are also some major differences:

Difference #1: Trade any time. You can only buy and sell mutual and index funds during normal market hours, Monday-Friday. Some even require you to own shares for months before you are allowed to sell them. However, you can trade most ETFs 24-hours-a-day, 365 days-a-year. That’s a huge advantage when markets are moving quickly.

Difference #2: Lower entry costs. You can buy ETF shares for as little as $200, compared to the thousands of dollars needed to buy shares in mutual funds and index funds.

Difference #3: Lower transaction fees. Most mutual funds pile on the fees. There are fees for buying, fees for selling, and even fees to compensate the mutual fund for its marketing expenses. ETFs don’t usually charge any of these fees.

Difference #4: Lower management fees. ETF annual management fees are a fraction of those charged by most mutual funds. For example, the Barclays i- Share S&P 500 ETF charges .09% a year in fees, versus twice that much for the Vanguard 500 Index Fund.

Difference #5: Easier Asset Management. You can buy a variety of different ETFs – stock, bond and commodity, for instance – in just one, online brokerage account;
then track your accounts in that one account. If you buy several mutual funds, you will have to set up several different brokerage accounts, unless all of the mutual funds are sold by the same vendor.

Difference #6: Greater Transparency. ETFs are openly traded on exchanges, with publicly-available bid/ask spreads. In contrast, mutual funds have to be purchased at set prices after
the U.S. stock market closes, creating the possibility of excessive bid/asked spreads and even fraud.

Difference #7: You Can Short – Sell ETFs. Short-sales – in which you technically “borrow” shares and then sell them (replacing them later), is not possible with most mutual funds.
While short-sales are risky (your risk is unlimited if the market goes against you), they are useful trading tools for advanced traders.

In additional to these differences, ETFs have these further advantages over most mutual funds and stocks:

• International Reach. ETFs make it easy to invest in commodity stocks in China . . . energy companies in South America . . . and banks in Europe.

• Sector Concentration. If you think technology stocks are great and want to save yourselves
the trouble of massive research, just pick a high-returning technology ETF.

• Easy investment in Treasury Bills and municipal bonds. There are many ETFs that specialize in these investments.

• Multiply Your Returns. There are also ETFs designed to go up twice as fast as the underlying index they track.

Major ETFs

There are now thousands of different Exchange Traded Funds throughout the world, and over 300 in the U.S. alone. Exchange Traded Funds have grown from virtually zero in the 1990s to over one thousand today, with combined assets of over $500 billion.

Here are some of the major sponsors of Exchange Traded Funds:

Barclays iShares. With over 100 ETFs with hundreds of billions in assets, Barclays is one of the largest ETF vendors. Most of Barclay’s ETFs are based on equity and fixed-income stocks which are listed by vendors, such as S&P, Russell, Dow Jones, and Goldman Sachs. This makes Barclays the standard for the ETF industry.

Claymore. Claymore issues a number of creative ETFs, including one fund – Claymore/Zacks Yield Hog ETF (CVY) which aims to beat Dow Jones returns. Another interesting Claymore fund is their BNY BRIC ETF (EEB), which invests in U.S.- listed ADRs of companies based
in Brazil, Russia, India and China. An ADR is an American Depository Receipt of ownership in shares of a foreign company trading on a U.S. stock exchange.

PowerShares. PowerShares ETFs are designed to out-perform similar ETFs offered by other vendors. PowerShares has also been appointed by NASDAQ as the sponsor of the widely-followed Cubes (QQQQ) index, which tracks the Nasdaq 100 index, which is heavily-
dominated by technology stocks.

ProFunds Advisors. This ETF-issuer specializes in funds designed to match or out-perform the stock indices like the DOW and S&P 500. ProFunds also has ETFs designed to go up, when the underlying indices go down; essentially bear-market ETFs.

Rydex Instruments. Rydex ETFs are unusual since they are weighted equally for each stock in their portfolio, as opposed to the usual practice of weighing ETFs by the market capitalization of the stocks. In other words, if Rydex buys $20 million worth of one stock in a particular ETF, they will buy $20 million worth of all other stocks in that ETF, giving each stock “equal weight” in the value of the ETF. Rydex equally-weighted ETFs include their S&P 500 Equal-Weighted ETF (RSP), Energy ETF (RYE), and Technology ETF (RTM). A number of Rydex ETFs are designed to double the performance of the underlying securities. Rydex has received a five-star rating from Morningstar.

State Street Global Advisors. State Street created the first U.S. ETF, the S&P 500 SPDR (SPY). They now issue dozens of ETFs, with new ones added all the time.

Vanguard. Vanguard has become internationally famous for the large variety of ETFs that they issue. Their fees are among the lowest in the industry.

How to Invest

With hundreds of different Exchange Traded Funds to choose from, selecting one can be a difficult
task. Here are some suggestions:

1. Be clear on your investment objectives. The first question you need to ask yourself before making any investment, is what are your investment goals. Are you looking for steady income? High appreciation? Consistent returns? An insurance policy for recession? Before you can pick an ETF, you need to be clear about your financial goals. Once you have decided what your goals are, you will almost certainly be able to find an ETF designed to help you achieve them.

For instance, if you are looking for steady income, you may want to invest in ETFs heavily-invested
in dividend stocks. If you are looking for high appreciation, carefully examine the performance of the highest appreciating ETFs currently. If you want an insurance policy for recession, consider ETFs
that go up when equity markets go down.

2. Research any ETFs you are interested in. See what information is available on major financial websites, such as Fortune.com, Businessweek.com, YahooFinance.com and Big-Charts.com. Also be sure to look at recent news

3. Only invest in ETFs that have been going up for both the last two years and the last six months. The two-year record gives you a reasonably long-term trend. Any ETF that isn’t selling for significantly more now (say 50% to 100%) than it was two years ago, is not worth investing in, in my opinion.

Similarly, you don’t want to buy shares while the price is declining. Wait until it bottom’s out and then purchase.

4. Diversify by investing in several types of ETFs. Although buying shares of a single ETF can provide you with significant diversification (for instance a metals ETF might invest in several
dozen different metals stocks), you should still not put all of your eggs in one ETF basket.

Thus you might consider investing in a commodity ETF . . . and an energy ETF . . . and an ETF based on the Indian economy.

5. Buy several different foreign ETFs. If you favor investing internationally, I recommend you invest in ETFs from several different countries – such as India, and Brazil, and Australia.

This will give you an important hedge against problems in a single country or region of the world. For instance, recently, British investments took a hit because of problems in the sub-prime mortgage
markets in that country. And in the 1990’s, Mexican investments were devastated in a matter of days when the peso was devalued.

6. Compare ETFs with mutual funds, index funds, and other alternative investments. Although ETFs have distinct advantages over most mutual funds and index funds, that doesn’t mean they are always the best investment. We all have limited funds, and it pays to shop around.

7. Watch your investments carefully. The days of “invest and forget” for long periods of time are over. You should check on how your ETF shares are performing at least once a week, if not daily. If you don’t like what you see, SELL.

The in/out cost of buying and selling ETF shares is not very much compared to your investment,
and how much you could lose if markets suddenly turn against you.

8. Use automatic stop-losses. As is the case with stocks, we strongly recommend that you put automatic stop-losses on all of your ETF positions, to protect yourself from sudden downturns in the market.

You will need to adjust your stop-loss figures, depending upon the type of ETF that you buy. Thus ETFs based on highly volatile investments – such as currencies and commodities – should have stop-losses set at 25% or 35% below the most recent daily high, as opposed to our normal 15%.

ETFs which have lower volatility, such as those based upon large baskets of Blue Chip stocks,
could have stop-losses at our normal 15% or even less.

9. If you have large amounts of capital to invest, get a professional investment advisor.
If your investments total $100,000 or more, the few thousand you might pay a professional
investment advisor will be well worth the cost. Ask family members and friends for names of advisors they have used and trust. Shop around for a professional you are comfortable with.

10. Don’t make ETFs your only investment. You should also keep at least 30% to 50% of your funds in cash and cash-equivalents, such as CDs, foreign-currency accounts, and precious metals.

Also consider investing in top-performing individual stocks in sectors you like, plus bullion, gold, silver, options, foreign currencies, and — when the market bottoms out — real estate.

Recommended ETFs

Prices are as of market close, 9-28-07. Because of high market volatility, we recommend that stop-losses at 25%, rather than our usual 15%.

Note: This is the end of the article for non-paying readers. I hope you’ve learned something new about ETF’s, and I hope you make lots of money from them. Specific ETF recommendations, along with great stock recommendations, are available for paying subscribers. To find out more about how to subscribe so that you can get hard-hitting analysis and advice month after month, click here or go to TheInvestorReport.com

Protect Yourself From Medical Identity Theft

by Jarret B. Wollstein, Editor

Imagine opening up your mail only to discover a bill from a hospital you never visited, for an operation you never had. The amount: $95,000 due immediately.

That’s precisely what happened to one medical ID theft victim in New York, and it’s happening to more and more innocent Americans every month.

According to a new report by the World Privacy Forum, a San Diego-based research group, over 250,000 Americans have had their medical information stolen in recent years.

The consequences of medical ID theft can be severe. They include enormous medical bills . . . cancellation of medical and life insurance . . . liens on your bank accounts and home . . . and even permanently disability or death when the medical ID thieve’s medical history gets mixed up with yours’.

One victim’s record had the wrong blood type. Another, a Pennsylvania man, received bills from five different hospitals totaling over $100,000. A victim in Virginia almost had his leg amputated by mistake. Many others, like 60-year-old Joe Ryan of Colorado, have had their credit permanently ruined.

What is Medical ID Theft?

Medical ID theft occurs when an imposter uses your name, Social Security number, and other information to obtain medical services at your expense. Seniors are particularly vulnerable.

There are many ways ID thieves get this information. One of the most common is when clerks and other low-level employees at hospitals, medical insurance companies, and clinics simply copy your information and sell it.

In Florida, a scheduling clerk at Cleveland Clinic’s Weston hospital passed on the personal information of over 1,100 patients to her cousin, who then submitted $2.8 million in false claims to Medicare.

In fact, armed with just your name and Social Security number – which is now demanded by everyone from cell phone salesmen to department store credit clerks – imposters can often get medical treatment in your name, and you get the bill.

Limited Recourse

If you become a victim of Medical ID theft, you will find your options for legal recourse are extremely limited.

While a growing number of federal and state laws protect you from personal ID theft and credit card fraud, there are few laws protecting you from medical ID theft.

Further, while credit reporting agencies, like Equifax and Trans Union, are required by law to correct false entries in your credit records, there are no such laws requiring that hospitals and clinics correct mistakes in your medical records. Further, there is no single place you can go to correct your medical records. Every doctor, clinic, hospital and health insurance agency you deal with will have their own separate records.

All of this makes getting rid of false medical charges and correcting mistakes in your medical records a legal nightmare.

Although the Bush administration’s push to require all doctors and hospitals to create electronic medical files for patients could make it easier to correct medical records, such centralization of sensitive information (available to thousands of government employees) will also facilitate medical ID fraud. After all, IRS employees have been repeatedly caught selling taxpayer records.

How to Protect Yourself

At present, there is no sure-fire way to protect yourself from medical ID theft. However, these steps will help:

• Give out your social security number and home address to as few people as possible. Every time you give out that information, you increase your risk of ID theft. Never give out your social security number to low-level employees, such as department-store clerks who ask you to open a store account.
• Ask your health insurer what they are doing to protect you from Medical ID theft, and what help they offer if you become a victim. If you don’t like their answer, consider switching insurers.
• Consider opening up a Medical Savings Account as an alternative to health insurance. Now legal throughout the US, these accounts enable you to control your own funds earmarked for health care and give you much more legal protection from fraud and ID theft.
• Regularly check your Medical Information Bureau file, www.mib.com, 1-866-692-6901. The MIB is a private medical-information agency which has files on most Americans. You can check your records once a year free.
• Respond immediately if you become a victim of medical ID theft. Your best chance of minimizing the damage is if you respond quickly. Immediately contact police, major credit agencies, the Medical Information Bureau, your health-insurance company, Medicare, and all doctors, hospitals and clinics with which you have had contact.
• Immediately change health insurance account ID numbers. Also consider seeing if you can get your driver’s license number changed.

What the Media Isn’t Telling You About the Military Commissions Act

On Wednesday, October 18, 2006, President Bush signed into law the Military Commissions Act (MCA) legalizing indefinite detention without trial of anyone Bush says is an “enemy combatant.” Other sections of this new law not reported by the mainstream media legalize:

• Secret prisons throughout the world
• Violent kidnapping of “suspects” from countries throughout the world (“extreme rendition”)
• “Harsh interrogation” (i.e., torture) of prisoners
• Use of evidence obtained by torture to convict and even kill prisoners
• Denial of the right to trial or appeal by anyone so imprisoned
• Trial by military judges
• Use of secret evidence in trial, and
• Exoneration of members of the government, the military and CIA who committed or sanctioned previously illegal acts, such as torture, summary execution, and kidnappping.

For all practical purposes, the Military Commissions Act places the military in control of prisons and courts for anyone accused of being a terrorist – thus eliminating the judicial branch of government. It also abolishes fundamental legal rights (such as the writ of habeas corpus) which date back over 700 years to the Magna Carta.

This new system makes it impossible to determine actual innocence or guilt, and celebrates arbitrary judgment and brutality.

Not Just “Foreign Terrorists” At Risk

So this only applies to foreign terrorists who “deserve what they get,” including torture, being imprisoned forever without trial, and summary execution, right?

That’s what you might believe from the way the media is reporting this story. But the reality is that nothing in the Act prevents U.S. citizens in America from being secretly arrested, imprisoned and tortured for the rest of their lives.
To see a copy of the law click here and run a search for Military Commissions Act.

In addition, foreign tourists and resident aliens are explicitly included under the MCA-regime. Halliburton subsidiary Kellogg, Brown and Root, has already been given a $345 million contract to set up secret detention camps in the U.S. capable of housing tens of thousands of innocent people.

Contrary to Bush’s claim that his secret prisons only house “the worst of the worst”, the military’s own Taguba report found that 70% of the prisoners at Abu Ghraib Prison in Iraq were not terrorists. Other groups put the figure at more like 90%. Among the prisoners have been children as young as 10, pregnant women, sheep herders trying to defend their livestock, village elders, and foreign tourists.

Worldwide, the U.S. now imprisons approximately 35,000 people (including women and children) swept up in the global war on terror, virtually all without charges, trial, or any access to family, friends or the media. Many have been beaten and tortured. Some have been killed.

Before October 18, 2006, all of these activities were illegal under the U.S. Constitution, the Geneva Conventions, and many international treaties signed by the U.S. Now almost anything is legal.

If you think this can’t happen to you, think again. In the five years since 9/11, hundreds of U.S. citizens have been charged with “issuing terroristic threats, including school yard bullies, and even children who draw “violent pictures.”

Under the MCA anyone who “gives material support to terrorist groups,” even unknowingly can be labeled an enemy combatant. Indeed, some commentators like Ann Coulter and Bill O’Reilly, have already called for opponents of the War in Iraq to be arrested and charged with treason.

The Military Commissions Act does nothing less than legally transform the U.S. into a “democratic dictatorship,” with more in common with the old Soviet Union and Nazi Germany than with the just and free American Republic created by our forefathers.

There are already 88 lawsuits challenging the Military Commissions Act. For the sake of our children and the future of our country, let us pray that they succeed.

One Million Americans To Be Chipped?

VeriChip Corp. of Florida has proposed implanting all 1.4 million U.S. servicemen and women with RFID (radio frequency identification) chips in their right arms. Unlike dog tags, the chips can’t be lost.

Reportedly, some elite troops have already been chipped. And dozens of seniors and hospitals patients, have been voluntarily chipped.

The military RFID chips would contain detailed personal information on each soldier (including their medical history), and could be read by radio scanners. That means their every movement could be tracked. It is unknown if, in combat, the chips could be dislodged, blocking veins, creating infections or causing other health problems.

Nevertheless VeriChip and other manufacturers are pushing hard for chipping not just U.S. troops, but also prisoners, parolees, mental health patients, seniors with Alzheimer’s Disease, and even children to “make them safe.”

While some see the movement to implant chips in millions of Americans as benign, others see it as an Orwellian nightmare. Liz McIntyre, author of Spychips: How Major Corporations and Government Plan to Track Your Every Move With RFID, says:

“They’re circling like vultures for any opportunity to get into our flesh, They’ll start with people who can’t say no, like the elderly, sex offenders, immigrants and the military. Then they’ll come knocking on our doors.”

The chips could also threaten our soldiers. Sen. Patrick Leahy (D, Vt) asks, “What information would be entered on the chips, and could it endanger our soldiers or be intercepted by the enemy?”

Energy Crisis: Made in Washington, DC

This summer witnessed record temperatures and power blackouts from New York to California, causing or contributing to over 1,000 heat-related deaths nationwide. Some places, like Queens, New York, were without power for weeks.

Politicians and power company executives blamed the usual litany of “demons” including a hotter than normal summer, greedy oil companies, and “overuse” of air conditioners by consumers.

However, a growing chorus of libertarian and conservative commentators are challenging the official view and instead laying the blame at the doorstep of our politicized, power grid.

Robert Bradley, author of Energy: The Master Resource, argues that the problem is centralization and cartelization of energy production, which began nearly a century ago.

In the name of “protecting the public,” government has steadily increased its control over energy production in America.

Today, every aspect of energy production and distribution has been politicized.

The result:

• Competition in production of energy is limited.
• Energy companies’ first responsibility is not to serve consumers but to comply with government regulatory mandates.
• Profits and innovation are obstructed.
• Capital improvements, such as expansion of the electrical grid, are impeded.

The net effect of all of the state, federal and local energy regulations is stagnation, shortages, and, ultimately, deaths such as we saw this summer from blackouts.

As commentator Llewellyn Rockwell points out, only in a politicized market is increasing demand for a resource seen as a problem rather than an opportunity:

“After all, do shoe manufacturers see a massive increase in footwear as a problem? Do fast food companies see lunchtime munchies as a terrible threat? On the contrary, these are profit opportunities.”

Politicization of energy is also responsible for rising prices. As biochemist Dr. Arthur B. Robinson, editor of Access to Energy, explains:

“Our principal energy problem is the same as with virtually all American economic problems: taxation, regulation, and litigation.

“In the case of the immediate rise in energy prices – specifically automobile fuel prices – there is a terrible shortage of oil refineries. The United States hasn’t built any new oil refineries in the past 35 years.”

“Yet the oil refining industry spends huge amounts of capital complying with government regulations, only to have the bureaucrats and politicians change their minds and change the rules. . .”

“Then there is taxation. Oil company capital that would and should be going into exploration, extraction, and refining is instead being consumed by government taxes.”

“Then, of course, litigation is a major problem because no matter how much a company spends on compliance, regulatory bureaucrats and/or environmental activists can be depended on not to be satisfied and to launch another costly delaying lawsuit.”
(Mary Benoit, “An Expert Looks at the Energy ‘Crisis’,” The New American, 6-26-06.)

If you want more and cheaper energy, we need to slash energy taxes, regulation, and law suits.

For more information on how political control corrupts energy markets, see past issues of IIR, including October 2004 and Nov-Dec 2004. We also recommend Access to Energy newsletter: www.accesstoenergy.com

US Baghdad Embassy Warns: Iraq is Falling Into Chaos

by Jarret B. Wollstein, Editor

Just days before President Bush declared that the U.S. is making “good progress” in Iraq and our plan to bring democracy to that country is “advancing well,” the U.S. embassy in Baghdad (Iraq’s capital) sent a long memo to the Secretary of State depicting an Iraq mired in chaos, despair and hopelessness.

As the following quotes from that memo, released by the Washington Post on 6-18-06, makes it clear, that there is little doubt that Iraq is now far worse off under U.S. occupation than it was under Saddam Hussein’s tyranny.

While most Iraqis applaud Saddam’s departure from power, they do not support the horrors that unending war and foreign occupation has brought to their country.

R 1243PZ JUN 06
FM AMEBASSY BAGHDAD
TO SECSTATE WASHDC 5042
INFO IRAQ COLLECTIVE

UNCLAS BAGHDAD 001992

SENSITIVE
(SBU) Beginning in March, and picking up in mid-May, Iraqi staff in the Public Affairs section have complained that Islamist and/or militia groups have been negatively affecting their daily routine. Harassment over proper dress and habits has been increasingly pervasive. They also report that power cuts and fuel prices have diminished their quality of life. Conditions vary by neighborhood, but even upscale neighborhoods such as Mansur have visibly deteriorated.

Women’s Rights
The Public Affairs Press Office has nine local Iraqi employees. Two of our three female employees report stepped up harassment beginning in mid-May. Indeed, some groups are pushing women to cover even their face, a step not taken in Iran even at its most conservative.
Another, a Sunni, said that people in her middle-class neighborhood are harassing women and telling them to cover up and stop using cell phones (suspected channel to licentious relationships with men). She said that the taxi driver who brings her every day to the green zone checkpoint has told her he cannot let her ride unless she wears a headcover.

Evictions
6. One colleague beseeched us to weigh in to help a neighbor who was uprooted in May from her home of 30 years, on the pretense of application of some long-disused law that allows owners to evict tenants after 14 years. The women, who is a Fayli Kurd, says she has nowhere to go, no other home, but the courts give them no recourse to this new assertion of power.

Power Cuts and Fuel Shortages A Drain on Society
Temperatures in Baghdad have already reached 115 degrees. Employees all confirm that by the last week of May, they were getting one hour of power for every six hours without. That was only about four hours of power a day for the city.
Central Baghdad neighborhood Bab al Mu’atham has had no city power for over a month.
Fuel lines have also taxed our staff. One employee told us May 29 that he had spent 12 hours on his day off (Saturday) waiting to get gas.

Security Forces Mistrusted
11. In April, employees began reporting a change in demeanor of guards at the green zone checkpoints. They seemed to be more militia-like, in some cases seemingly taunting. One employee asked us to explore getting her press credentials because guards had held her embassy badge up and proclaimed loudly to nearby passers-by “Embassy” as she entered. Such information is a death sentence if overheard by the wrong people.
14. Some of our staff do not take home their American cell phones, as this makes them a target. Planning for their own possible abduction, they use code names for friends and colleagues and contacts entered into Iraq cell phones. For at least six months, we have not been able to use any local staff members for translation at on-camera press events.
More recently, we have begun shredding documents printed out that show local staff surnames. In March, a few staff members approached us to ask what provisions would we make for them if we evacuate.

Sectarian Tensions Within Families
16. Ethnic and sectarian faultlines are also becoming part of the daily media fare in the country. One Shiite employee told us in late May that she can no longer watch TV news with her mother, who is Sunni, because her mother blamed all government failings on the fact that Shiites are in charge.

Frayed Nerves and Mistrust in the Office
17. Against this backdrop of frayed social networks, tension and moodiness have risen. One colleague told us he feels “defeated” by circumstances, citing the example of being unable to help his two year old son who has asthma and cannot sleep in the stifling heat. Another employee tells us that life outside the Green Zone has become “emotionally draining.” He lives in a mostly Shiite area and claims to attend a funeral “every evening.”
19. Staff members say they daily assess how to move safely in public. Often, if they must travel outside their own neighborhoods, they adopt the clothing, language, and traits of the area. In Jadriya, for example, one needs to conform to the SCIRI/Badr ethic; in Yusufiya, a strict Sunni conservative dress code has taken hold. Once upscale Mansur district, near the Green Zone, according to one employee is an “unrecognizable ghost town.”