Government

British Paper: ISIS, Al-Qaeda Call For Donald Trump’s Assassination, Inauguration Day Terror In Washington, D.C.

According to an “exclusive” report published yesterday on the Daily Star (UK) website, jihadist terror groups are urging followers to take out President-elect Donald Trump and Inauguration Day onlookers in Washington D.C. tomorrow. Rachel O’Donoghue reported:

Terrorists living in war-torn zones in the Middle East are calling on believers to target the inauguration ceremony on January 20, which is expected to attract more than a million people…

Al-Qaida – which is active worldwide – said in its propaganda magazine “Inspire” that its followers should use drones containing improvised explosive devices (IEDs) to cause devastation in the “target rich” area.

Another edition of the vile publication states wannabe jihadis should look to attack areas “flooded with individuals, e.g. such as sports events in which tens of thousands attend, election campaigns, festivals and other gatherings [sic]. The important thing is that you target people and not buildings”.

It adds Washington DC is its number one symbolic target.

Fellow Islamic terror group ISIS has also announced its intentions to kill the incoming 70-year-old Republican President.

In an edition of its propaganda magazine “Rumiyeh”, it called on believers to target the inauguration.

It advises that brainwashed jihadis should look to cause carnage at “excellent target” events that attract masses of people by staging a “Nice-style” strike

(Editor’s note: Bold added for emphasis)

Truly disturbing.

The Wall Street Journal quoted Homeland Security Secretary Jeh Johnson this morning as saying:

We know no specific, credible threat directed toward the inauguration…

Earlier this week I blogged about potential threats by jihadists/sympathizers to the event and U.S homeland/interests that I’ve come across in the last couple of weeks.

Head on over to the Daily Star website here to read their full “exclusive” report on this potential terror attack.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Calvert, Scott. “Tight Security Planned For Donald Trump’s Inauguration.” The Wall Street Journal. 19 Jan. 2017. (http://www.wsj.com/articles/tight-security-planned-for-donald-trumps-inauguration-1484842326). 19 Jan. 2017.

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CNN: Inauguration Day ‘Disaster Could Put Obama Cabinet Member In Oval Office’

And here I was thinking the local PBS station (WTTW11 Chicago) airing a show Saturday night about JFK’s assassination was in “bad taste.” From CNN yesterday:


“Who is ‘designated survivor’ at inauguration?”
YouTube Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Chicago Restrictions To Gun Ranges Ruled Unconstitutional

The City of Chicago lost yet another court battle versus gun “rights.” From a news release yesterday on the website of the Second Amendment Foundation:

A three-judge panel of the Seventh U.S. Circuit Court of Appeals today handed the Second Amendment Foundation a victory in its challenge of firearms regulations in the City of Chicago, striking down a zoning provision, reversing an earlier ruling that upheld “distancing” restrictions for gun ranges, and reversing an earlier ruling that upheld certain age restrictions.

Writing for the court, Judge Diane S. Sykes noted, “To justify these barriers, the City raised only speculative claims of harm to public health and safety. That’s not nearly enough to survive the heightened scrutiny that applies to burdens on Second Amendment rights.”

“We are delighted with the outcome of this lengthy case,” said SAF founder and Executive Vice President Alan M. Gottlieb. “The extremes to which the city has gone in an attempt to narrow its compliance with the Supreme Court ruling in McDonald v. City of Chicago can only be described as incredible stubbornness. In the 6½ years since the high court ruling in our McDonald case, the city has had ample opportunity to modify its regulations. Instead, Chicago has resisted reasonableness.

“We had already sued Chicago successfully to knock down its outright ban on gun ranges within the city,” he recalled. “Then they adopted new regulations that included the zoning, distancing and age restrictions that we contested in this legal action, known as ‘Ezell II.’

“The city tried to severely limit where shooting ranges could be located, and they failed,” he continued. “The city put up arguments about the potential for gun theft, fire hazards and airborne lead contamination, and they failed. Even the judge’s opinion today noted that the city had ‘produced no evidentiary support for these claims beyond the speculative testimony of three city officials.’ This nonsense has got to stop

(Editor’s note: Bold added for emphasis)

The “nonsense” Gottlieb speaks of is well-documented on the Chicago Tribune website this morning. From the Associated Press article:

Chicago has suffered a string of defeats in its efforts to restrict guns, which top officials have cited as a major reason for a sharp rise of violence in the city.

The U.S. Supreme Court forced the city to rewrite its firearms ordinance in June 2010, which had banned the ownership of guns in the city. In response, the city came up with an ordinance outlawing the sale of firearms in the city.

A judge ruled in 2014 the city’s ban on gun shops violated the Constitution.

Chicago imposed a blanket ban on shooting ranges in 2010. The Court of Appeals struck down the ban in 2011, prompting the city council to pass ordinances accomplishing the same thing. The Second Amendment Foundation and others took the city to court over the ordinances in 2014.

Sounds like City Hall could really use a refresher course on the U.S. Constitution.

Plus, how much more of the taxpayer dime was blown on this latest anti-Bill of Rights legal activity?

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Associated Press. “Appeals court rules restrictions to gun-ranges in Chicago are unconstitutional.” Chicago Tribune. 19 Jan. 2017. (http://www.chicagotribune.com/news/local/breaking/ct-chicago-gun-range-restrictions-20170118-story.html). 19 Jan. 2017.

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Inflation Rises At Fastest Pace In 5 Years

It’s been some time since a Survival And Prosperity post focused on inflation.

I suspect I’ll be blogging about it more in the coming months.

Jeffry Bartash wrote on MarketWatch this morning:

Inflation rose in 2016 at the fastest pace in five years, as rising rents and medical care and higher gas prices put a squeeze on consumers.

The consumer price index jumped 0.3% in December, the government said Wednesday…

A string of sharp gains since late summer helped drive up inflation by 2.1% for the full year, marking the biggest increase since a 3% gain in 2011

(Editor’s note: Bold added for emphasis)

Bartash added:

For now it doesn’t look like inflation will wane soon. Gas prices rose again in January and many economists predict that aggressive stimulative measures by the new Trump administration could lead to even higher inflation

(Editor’s note: Bold added for emphasis)

Jeffrey Sparshott added over on The Wall Street Journal website late this afternoon:

The latest figures- driven in part by an uptick in energy prices- suggest a four-year stretch of historically low inflation could be ending

While details remain uncertain, the president-elect has pledge lower taxes and more infrastructure spending. That could lead to faster economic growth and accelerating inflation

(Editor’s note: Bold added for emphasis)

As to what this might mean for interest rates, Fed Chair Janet Yellen spoke to the Commonwealth Club of California this afternoon. Ann Saphir reported on the Retuers website:

With the U.S. economy close to full employment and inflation headed toward the Federal Reserve’s 2 percent goal, it “makes sense” for the U.S. central bank to gradually lift interest rates, Fed Chair Janet Yellen said on Wednesday…

The Fed chief said that she and other Fed policymakers expected the central bank to lift its key benchmark short-term rate “a few times a year” through 2019, putting it near the long-term sustainable rate of 3 percent

(Editor’s note: Bold added for emphasis)

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Bartash, Jeffry. “Inflation climbs at fastest pace in 5 years, CPI shows.” MarketWatch. 18 Jan. 2017. (http://www.marketwatch.com/story/inflation-climbs-in-2016-at-fastest-pace-in-5-years-cpi-shows-2017-01-18). 18 Jan. 2017.

Sparshott, Jeffrey. “U.S. Inflation Gauge Tops 2%, Supporting Fed’s Plan to Raise Rates.” The Wall Street Journal. 18 Jan. 2017. (http://www.wsj.com/articles/u-s-consumer-prices-up-2-1-in-december-from-year-earlier-1484746534). 18 Jan. 2017.

Saphir, Ann. “Fed’s Yellen says ‘make sense’ to gradually raise interest rates.” Reuters. 18 Jan. 2017. (http://www.reuters.com/article/us-usa-fed-yellen-idUSKBN1522VH). 18 Jan. 2017.

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Chicago’s 2016 Violence, ‘Fetal’ Policing Suggests Residents Focus On Personal Safety

Last Thursday, I wrote the following concerning some Chicago Tribune reader correspondence entitled “Letter: I’m leaving Chicago and I’m never coming back”:

I remain optimistic about the long-term prospects for the “Windy City.” That being said, I do believe conditions in the city will erode before improving again. For those dead set on remaining in town, please do yourself a favor and take a good, hard look at your financial and personal safety capabilities for successfully navigating any “storm” that may lie ahead. For example, how do your finances look with the real prospect of future tax hits down the road?

More later…

Later is today- as least as that bit about “personal safety capabilities” is concerned.

Regular readers of Survival And Prosperity know that the physical well-being of Chicagoans in the face of growing criminal threats has been a priority of this blog since its inception. A recent post on the popular Chicago police blog Second City Cop and a just-released report from the University of Chicago Crime Lab seem to justify such concern.

“SCC” posted the following on Second City Cop on December 29, which suggests the Chicago Police Department is becoming increasingly “fetal”:

[Chicago Police Superintendent Eddie Johnson] claims we’re “still policing” despite all evidence to the contrary:

-street stops down from 159,000 in 2015 to 21,000 in 2016
-property crime skyrocketing in formerly “quiet” areas
-arrest down tens of thousands
-a 20% homicide clearance rate

The list is near endless, and the price is paid in bodies…

(Editor’s note: Bold added for emphasis)

Yesterday, the University of Chicago Crime Lab released a report entitled Gun Violence In Chicago, 2016, which utilized data obtained from the Chicago Police Department and other sources “to provide a more complete picture of the change in our city’s crime problem in 2016.”

The “change” was disturbing. From the report’s “Introduction”:

Between 2015 and 2016, Chicago experienced 58 percent more homicides and 43 percent more non-fatal shootings. Annual increases of this size are not unprecedented among American cities, particularly in recent years, but are rare for a city of Chicago’s size. One striking feature of Chicago’s increase in gun violence is how sudden it was: as of December 2015, there was no indication that gun violence was on the verge of rising sharply. But in January 2016, homicides and shootings surged relative to their 2015 levels and remained higher in almost every month that followed, threatening 20 years of progress on violent crime in Chicago…

What changed in Chicago was not so much the nature of our violence problem, but rather its prevalence. Most murders involved guns, occurred in public places, and stemmed from what police believe was some sort of altercation. This violence continues to be very regressive in its impact, disproportionately affecting the city’s most disadvantaged residents. Most gun violence victims and suspects were African American men, more often than not having had some prior encounter with the criminal justice system.

Compared to other cities, a larger share of homicide suspects in Chicago consists of adolescents, although the majority of all homicide suspects are in their 20s or older. The increase in gun violence occurred disproportionately in several disadvantaged neighborhoods on the city’s South and West sides, which now account for an even larger share of the city’s homicides. Another change is that from 2015 to 2016, the share of homicides that CPD believes stemmed from an altercation, as well as the share of homicide offenders who were recorded by CPD as having a gang affiliation, seemed to decline

(Editor’s note: Bold added for emphasis)

“The share of homicide offenders who were recorded by CPD as having a gang affiliation, seemed to decline”

And here I was parnanoid about the tens of thousands of gang bangers infesting the city.

Further suggesting Chicagoans’ really need to look after their personal safety were these nuggets found within the report:

-“In 2016, 77 percent of gun homicides and shootings took place on the street or in an alley, up from 75 percent in 2015…”

-“Around 64 percent of homicides in 2016 were described by CPD as stemming from an altercation, down from 74 percent in 2015. Unless there was a change in how CPD recorded the circumstances of homicides from 2015 to 2016, this suggests that homicides stemming from other motivations increased more rapidly (by 121 percent) than did homicides stemming from an altercation (by 35 percent)…”

-“Individuals arrested for a homicide or shooting in Chicago in 2016 and 2015 had similar prior criminal records: around 90 percent had at least one prior arrest, approximately 50 percent had a prior arrest for a violent crime specifically, and almost 40 percent had a prior gun arrest. The average person arrested for a homicide or shooting in both years had nearly 12 prior arrests, with almost 45 percent having had more than 10 prior arrests, and almost 20 percent having had more than 20 prior arrests…”

-“The share of offenders with a current or prior gang affiliation, as noted by CPD, declined from 73 percent in 2015 to 67 percent in 2016, suggesting that individuals not affiliated with gangs may have been overrepresented among those driving the increase in violence…”

-“In 2016, Chicago police made 24 percent fewer arrests than in 2015, accelerating the steady downward trend in arrests the city has seen in recent years…”

-“Chicago police recorded over 80 percent fewer stops in January 2016 than they had in November 2015. This drop, from an average of over 50,000 stops per month in 2015 (through November) to approximately 10,000 stops per month starting in early 2016, began a few months before rates of gun violence in Chicago began to increase. What caused the decline is itself unclear. Several frequently-mentioned candidate explanations—the release of video footage showing the shooting by a CPD officer of teenager Laquan McDonald, announcement of a U.S. Department of Justice (DOJ) investigation of CPD, implementation of an agreement between the City and the American Civil Liberties Union (ACLU) concerning street stops, and a new state law regarding street stops—all happened essentially within a few weeks of each other in late 2015 and early 2016…”

More on Chicago and personal safety later. In the meantime, head on over to the University of Chicago Crime Lab website here to read their entire report (.pdf file). It’s enlightening, to say the least.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

SCC. “The War on Cops Continues.” Second City Cop. 29 Dec. 2016. (http://secondcitycop.blogspot.com/2016/12/the-war-on-cops-comtinues.html). 18 Jan. 2017.

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Sustained Effort To ‘Talk Down’ The Dollar Begins?

Gold and silver prices are surging today, no doubt related to statements made by President-elect Donald Trump concerning the strong U.S. dollar. Mark DeCambre reported on MarketWatch this morning:

The buck stops with Donald J. Trump. The president-elect, who has developed an early knack for challenging U.S. corporations via Twitter, reserved his most biting comments for the U.S. dollar, which vaulted 4% higher at its peak in the wake of the real estate billionaire’s Nov. 8 election victory over Hillary Clinton.

In a Friday interview with The Wall Street Journal, Trump said the U.S. currency, which touched a more-than 14-year high about two weeks ago, has gotten “too strong,” especially considering the China’s yuan is “dropping like a rock.” “Our companies can’t compete with them now because our currency is too strong. And it’s killing us,” he told WSJ…

(Editor’s note: Bold added for emphasis)

Trump’s comments may just be the opening volley in a sustained effort to “talk down” the greenback. Roger Blitz pointed out over on the Financial Times (UK) website early this morning:

Economists and currency analysts have speculated about the risks a robust US currency, which is trading at a 14-year high against a basket of its peers, poses to the president-elect’s growth strategy, and predicted that the incoming administration in Washington would soon start talking down the dollar.

The first inklings of that tactic emerged in an interview Mr Trump gave to the Wall Street Journal…

That was echoed by Anthony Scaramucci, a senior member of Mr Trump’s economic advisory council, in remarks made on Tuesday at the World Economic Forum in Davos about the US Federal Reserve. “The Fed has to be independent and we have to be careful about the rising currency,” Mr Scaramucci said…

(Editor’s note: Bold added for emphasis)

So, “all systems go” with precious metals then?

Maybe not, as certain “crash prophets” like Jim Rogers and Martin Armstrong believe it’s possible the U.S. currency might get even stronger due to foreign money pouring into the country to escape turmoil elsewhere, creating headwinds for any gold and silver price “lift-off.”

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Sources:

DeCambre, Mark. “Trump sends shiver through stock market with shot across dollar’s bow.” MarketWatch. 17 Jan. 2017. (http://www.marketwatch.com/story/trump-comments-on-too-strong-dollar-send-shivers-through-stock-market-2017-01-17). 17 Jan. 2017.

Blitz, Roger. “Dollar retreats on Trump’s concern over currency’s strength.” Financial Times. 17 Jan. 2017. (https://www.ft.com/content/b921b994-dca3-11e6-9d7c-be108f1c1dce). 17 Jan. 2017.

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Chicago Mayor Rahm Emanuel To ‘Kneel Before Zod’- Donald J. Trump?

The editorial board at Crain’s Chicago Business published the following about Chicago’s impending loss of clout in Washington, D.C., on the Crain’s website this past Saturday:

Chicago residents, regardless of their personal politics, are going to miss having one of their own in the White House.

As President Barack Obama moves on to his post-presidential life, he takes with him the last vestiges of our once-formidable clout in the nation’s capital. Chicagoans have become accustomed to the idea that, with the right connections, they can be just a phone call away from the highest levels of power. With the incoming Trump administration, that’s about to change

(Editor’s note: Bold added for emphasis)

Regular readers of Survival And Prosperity may recall what I blogged back on December 7:

If readers still don’t think there will be repercussions to Chicago from a Trump administration despite its unabashed support for Hillary Clinton on Election Day (the Democrat received 83.63% of the city’s votes on Election Day), its official policy of providing “sanctuary” to illegal aliens, and political grandstanding (Trump’s honorary street signs downtown were removed this past weekend, courtesy of the City Council), then consider what was published on the Bloomberg website yesterday:

“Chicago Faces Political Power Outage as Trump Succeeds Obama”

Chicago is racing the clock.

Nowhere will political power evaporate more dramatically at noon on Jan. 20 than in the third-largest U.S. city, a bastion of Democratic power that’s enjoyed special access to Washington during President Barack Obama’s eight years in the White House.

When Donald Trump becomes the 45th president, Chicago will trade a first family and top advisers with deep ties to the city for a chief executive who has repeatedly called it a violent mess embodying the failed policies of his predecessor and the Democratic Party…

Not since the era of Abraham Lincoln have Chicago and Illinois enjoyed such strong ties to the White House and Washington. Obama’s exit will bring an end to that

I wrote back on November 11 in a post entitled “Chicago Could Lose Billions In Federal Funding Under Trump Administration”:

Drip. Drip. Drip.

That’s the sound of federal funds to the “City By The Lake” drying up.

A real possibility. And a lot of moolah at stake…

Crain’s editorial board brought up the much-publicized planned renovation of Chicago’s Union Station in their piece. They penned:

As City Hall pushes for federal funding to revamp Union Station—a project that will require Trump administration support—Chicago may soon learn the limits of its clout in this new era.

(Editor’s note: Bold added for emphasis)

If the presence of Trump International Hotel & Tower in downtown Chicago isn’t enough to gain the President-elect’s support for the renovation, then I wouldn’t be surprised if Trump requires the city to renounce its “sanctuary city” status and/or other concessions he deems important before federal funds are made available.

Will Mayor Emanuel be forced to “kneel before Zod”?

Stay tuned…


“Kneel before Zod!”
Clip from Superman II (1980)
YouTube Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Editorial Board. “Chicago’s D.C. clout exits with Obama.” Crain’s Chicago Business. 14 Jan. 2017. (http://www.chicagobusiness.com/article/20170114/ISSUE07/301149996/chicago-will-miss-president-barack-obama). 17 Jan. 2017.

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Potential Inauguration Day Terror Threats

“Officials say so far there has been no specific or credible threat to Friday’s ceremony…”

-CBS News website, January 16, 207

Inauguration Day in the United States is set to take place this Friday, January 20. Here’s some potential threats by jihadists/sympathizers to the event and U.S homeland/interests that I’ve come across in the last couple of weeks. Siobhan McFadyen reported on the Daily Express (UK) website back on December 5:

Islamic State has declared the day Donald Trump is inaugurated as US president ‘Bloody Friday’ as it fears a brutal backlash from the new regime.

And the Islamic terror organisation is reported to have recruited a number of new English speaking operatives in recent months in a major bid to communicate messages ahead of the day.

US special forces will be on high alert when Mr Trump takes over as 45th President of the United States on Friday, January 20, 2017, in Washington, DC.

Security analysts have been following communications between members of the group.

According to reports ISIS has expanded production of special editions of official videos with English subtitles in recent weeks and with a view to reinforcing targets on US soil

(Editor’s note: Bold added for emphasis)

There’s also this from non-partisan watchdog group Judicial Watch on January 4:

A Jihadi-cartel alliance in the Mexican state of Nuevo León is collaborating to carry out attacks in American cities and ports of entry along the southern border, according to intelligence obtained by Judicial Watch from confidential U.S. and Mexican law enforcement sources. As part of the plan, militant Islamists have arrived recently at the Monterrey International Airport situated in Apodaca, Nuevo León, about 130 miles south of the Texas border.

An internal Mexican law enforcement report obtained by Judicial Watch confirms that Islamic terrorists have “people along the border, principally in Tijuana, Chihuahua, Coahuila, Nuevo León and Tamaulipas.” Cartel informants tell law enforcement contacts that “they are only waiting for the order and the times to carry out a simultaneous attack in the different ports of entry or cities of the United States of America.” Drug cartels have a working “agreement” with Islamic terrorists, according to a high-ranking Mexican police administrator, who said that men from the Middle East arrive regularly into the country to “train” jihadists…

(Editor’s note: Bold added for emphasis)

Finally, the January 4 discovery of a “cache” of long guns, handguns, possible homemade silencers, and ammunition in a wooded area near the Potomac River in Washington, D.C. could be terrorism-related:


“Authorities continue to investigate cache of weapons, ammunition found near Potomac River”
FOX 5 Video

Hope everyone has a happy and safe Inauguration Day.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

McFadyen, Siobhan. “Exclusive: ISIS declares Trump inauguration day ‘Bloody Friday.'” Daily Express. 5 Dec. 2016. (http://www.express.co.uk/news/world/739508/ISIS-declare-Bloody-Friday-war-on-Trump-inauguration-day). 16 Jan. 2017.

“Jihadists Train, Plan U.S. Attack from Mexican Border State of Nuevo León.” The Judicial Watch Blog. 4 Jan. 2016. (http://www.judicialwatch.org/blog/2017/01/jihadists-train-plan-u-s-attack-mexican-border-state-nuevo-leon/). 16 Jan. 2017.

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Illinois ‘Grand Bargain’ Legislation Includes 32 Percent Personal Income Tax Hike

Illinois taxpayers may get hit with a significant income tax hike pretty soon. John O’Connor of the Associated Press reported Sunday on The State Journal-Register website:

If last week’s action is any indication, the Democratic and Republican leaders of the Illinois Senate are serious about attempting to bust the state’s 18-month budget deadlock – quickly…

Promising to act on a package by month’s end, they introduced 13 measures Wednesday that included non-budget-related sweeteners for both sides. By Thursday, they had been rapidly assigned public committee hearings…

Here’s a look at other major pieces of the legislation some in the Capitol have nicknamed the “grand bargain”:

* Income tax increase: The personal income tax would jump from 3.75 percent to 4.95 percent, a plan to generate $4.1 billion a year. With spending cuts, Democrats argue, that could eliminate what the governor’s office estimates will be a $5.3 billion deficit on the June 30 end of the fiscal year…

(Editor’s note: Bold added for emphasis)

The proposed 32 percent income tax hike is not a sure thing, as O’Connor noted:

The outstanding question is if a Senate-approved deal would ultimately pass muster with Democratic House Speaker Michael Madigan, who has refused to entertain Rauner’s pro-business agenda as part of budget talks…

Six years ago, the 3 percent personal income tax rate jumped to 5 percent until 2015, when the rate rolled back to the current 3.75 percent.

Like I just suggested to Chicago taxpayers in the previous post, Illinois taxpayers might want to take heed of what’s potentially coming down the pipeline.

Other pieces of legislation include $7 billion more borrowing to pay off overdue bills (now at $10.7 billion), which you can read about on the The State Journal-Register site here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Moody’s On Chicago Public Schools Crisis: Consider Tax Levy, Pension Contribution Stoppage, Or Bankruptcy

“Chicago and New York rank at the bottom of a new analysis of fiscal strength based primarily on data from 2015 financial reports issued by the cities themselves. The analysis includes 116 U.S. cities with populations greater than 200,000.

Chicago’s position at the bottom of the ranking is no surprise to anyone who follows municipal finance. The Windy City has become a poster child for financial mismanagement, having suffered a series of ratings downgrades in recent years. Aside from having thin reserves and large volumes of outstanding debt, Chicago is notorious for its underfunded pension plans…”

The Fiscal Times, January 9, 2107

Moody’s Investors Service recently weighed in on Chicago’s well-publicized financial crisis. Last Thursday its Global Credit Research division published the following on the Moody’s website:

While unfunded pension liabilities will continue weighing on the City of Chicago’s (Ba1 negative) credit profile, plans to significantly increase contributions with higher taxes is a favorable departure from prior funding practices. However, the liquidity crisis at Chicago Public Schools (CPS — B3 negative) is worsening amid a continued budget impasse at the state level, Moody’s Investors Service says in two new research reports released today…

In “City of Chicago: Frequently Asked Questions,” Moody’s says despite the city’s expanding economy, revenue growth, and healthy liquidity, its pension burden is likely to remain among the highest of any rated, major local government for many years.

“While Chicago’s recent tax increases will provide revenue to significantly increase pension funding, the city’s unfunded pension liabilities exceed seven times its revenue and are projected to grow for at least 15 more years,” says Matt Butler, Vice President of Moody’s…

(Editor’s note: Bold added for emphasis)

The well-known credit rating agency added this about the city’s public school system:

In a separate report, “Chicago Public Schools: Frequently Asked Questions,” Moody’s states CPS’ fiscal pressures are intensifying due to depletion of reserves following years of imbalanced operations, unrealistic budget assumptions, and escalating pension costs…

Moody’s says CPS could consider more difficult options to address its finances should the State of Illinois (Baa2 negative) be unable or unwilling to provide additional relief: levy for debt service on GO alternate revenue bonds, stop making employer pension contributions, or seek state authorization to file for Chapter 9 bankruptcy…

(Editor’s note: Bold added for emphasis)

MarketWatch news editor Rachel Koning Beals expanded on Moody’s suggestions for dealing with the CPS situation. She wrote Saturday:

Moody’s has a revised shortlist of painful fixes for the public school system in Chicago.

One idea is to approve another increasingly politically unpopular property-tax levy to pay off debt, as the nation’s third-largest school district just issued another batch of high-interest bonds.

The second idea from the credit-ratings agency is to skip a pension payment to the Chicago Teachers’ Pension Fund, which would come just months after the district and its teacher‘s union hammered out an 11th-hour contract to avoid a second labor strike in a span of four years.

And last resort? Just declare bankruptcy already

(Editor’s note: Bold added for emphasis)

Who’s the say the City will act on any of these suggestions (at least, right away)? That being said, Chicago taxpayers and CPS employees/retirees might want to take heed of all this.

Head on over to the Moody’s Investors Service website here to read the entire release from the Global Credit Research division. It ain’t pretty.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Koning Beals, Rachel. “Maybe Chicago schools should declare bankruptcy and get it over with, says Moody’s.” MarketWatch. 14 Jan. 2017. (http://www.marketwatch.com/story/maybe-chicago-schools-should-declare-bankruptcy-and-get-it-over-with-says-moodys-2017-01-13). 16 Jan. 2017.

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Survival And Prosperity
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Christopher E. Hill, Editor

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RSS Chris Hill’s Other Blog: Offshore Safe Deposit Boxes

  • Related Reading: Another Take On ‘Old’ Gold Coins Being Better Than Bullion Against Confiscation
    Earlier this week I discussed two recent blog posts by economist Martin Armstrong concerning what he thinks is the most effective way to possess and retain physical gold in the face of government confiscation. My understanding was “genuine old coins,” as: Coins are better than bullion for they have some historical value. Their historical value […]
  • Happy Inauguration Day
    Just wanted to wish American readers of Offshore Safe Deposit Boxes a happy- and safe- Inauguration Day. Christopher E. Hill Editor Betty White, It’s a Good Day (1954) YouTube Video
  • Related Reading: Jewelry Investing Article In Town & Country Magazine
    This afternoon I was surfing the Internet when I came across an article about jewelry investing on the website of Town & Country, the venerable monthly American lifestyle magazine. In “Is Jewelry the Last Brilliant Investment?” (published January 17), Stellene Volandes discussed “the role of stones and jewels as a new asset class” and the […]
  • Martin Armstrong: Old Gold Coins Better Than Bullion Against Confiscation
    In two January blog posts on his company’s website, economist Martin Armstrong shared what he thinks is the most effective way to possess and retain physical gold in the face of government confiscation. On January 10, Armstrong advised his blog readers: As we move forward, it will be best to hold assets out of banks […]
  • New Year’s Half-Price Domain Sale
    A little housekeeping to start off the blogging week on Offshore Safe Deposit Boxes. I’d like to direct your attention to the following on the blog’s sidebar: Opening An Offshore Private Vault? New Year’s HALF-PRICE Domain Sale Limited Time Only! elitevaults.com $100 offshoreprivatevault.com $500 offshoresafedepositbox.com $500 Inquire Via “Contact” Page Have a great week, Christopher […]