Shall We Break Bread

Ignore Ron Paul

2011-08-16T09:28:00.000-07:00

The Daily Show
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Mr. Stewart makes a pretty good case for the idea that the media really doesn't want to acknowledge Ron Paul or his ideas.

Galbraith on Fixing the economy: We got it wrong

2011-08-16T08:13:00.000-07:00

The wrong solutions to fixing our economy - latimes.com

"This crisis was caused by financial collapse, rooted in massive banking fraud."

My question for Mr. Galbraith is who has gone to jail for this "massive banking fraud"?

Bernanke "he's screwed all those nice old people who saved all their lives" to recapitlize the banks.

2011-04-05T14:03:00.000-07:00

http://video.cnbc.com/gallery/?video=3000014541

There is a nice widget that allows you to search the transcript of the video, click the text and jump right to that portion of the video interview.

Directly from the CNBC transcript :

"the largest position i have had for the last eight months has been being short the two-year treasury. i've made a moderate amount of money doing it. and i still have a relatively large position being short of the two-year treasury. and my timing has been fair. no better than fair. but i've made some money. and it's an exciting position. you know, it's fighting the fed in the heart of their view. love to fight the fed. one hears that. there's a cliche to that effect. but that's the largest portion. i mean, all these rates are artificially at these levels, don't you think? i do think, yeah. don't you feel badly that all those quadrillions of geriatric savers have really gotten killed over these years. yes. and no one talks about them? that bernanke or ber nancy pelosi atka as the cynics call him, he's screwed all those nice old people who saved all their lives to retire and he's paying them half of 1% or some other numbers it insufficient for them to live? recapitalize the banks, right. to live the rest of their lives in comfort. the journal pointed that out yesterday. we don't talk about very often at all. they don't matter i guess. they don't matter."

John Quincy Adams on U.S. Foreign Policy

2011-03-20T15:42:00.000-07:00

John Quincy Adams on U.S. Foreign Policy

But she goes not abroad, in search of monsters to destroy.

She is the well-wisher to the freedom and independence of all.

She is the champion and vindicator only of her own.

NY Times : Call for Ideas to Raise the Savings Rate

2010-05-30T06:44:00.000-07:00

Good lord, do you think they would actually allow a discussion on this subject to take place? Would one be allowed to bring up that it is not U.S. policy to encourage savings right now? It is our policy to encourage people to spend even if they have to borrow to do so. Will you be allowed to discuss our current central bank policy? Can we quote Bernanke and Krugman and get them to understand that they don't want people to save?

This little "Call for ideas" should bring us out of the woodwork.

Mr. Market beats a bailout every time - CSMonitor.com

2010-05-30T06:43:00.000-07:00

Mr. Market beats a bailout every time - CSMonitor.com

I enjoy Mr. Bonner's take on things. To me, this article echoes Hayek.

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

F A Hayek
The Fatal Conceit

Meltup

2010-05-16T06:31:00.000-07:00

Ron Paul on Morning Joe : Pat Buchanan on the Real Reason the Gold Window Closed

2010-05-05T14:26:00.000-07:00

At around 3:55 Buchanan talks about the real reason we closed the gold window. We had printed to much during LBJ's term and were found out.

Listen to this man relive that day and the panic in his voice. Our country had been found out as a fraud on that day.

Bill Black's Testimony on Lehman and the Fed Watching it Happen

2010-04-22T05:10:00.000-07:00

The Federal Reserve watched fraud be perpetrated by an entity that it had the unique authority to regulate. It did nothing. Free markets don't function without the rule of law and its appropriate impact upon perpetrators of fraud and contract enforcement.

Banks are unique in that they participate in the process that creates money in our system. We have a monetary system of bank credit. Our money is effectively backed by the promises to repay (loans) and their collateralized assets that are offered when a bank extends credit. If banks are purposefully misstating the value of those assets they are undermining the stability and viability of the monetary system. Ours is unique, as it acts as the reserve currency for the world. In the event that the world does not like purported regulators, like the Federal Reserve, turning a blind eye to fraud and its undermining of their investments in our currency and dollar denominated assets, they will choose to no longer participate in trade with us, or anyone else, using dollars. This will be the day of reckoning where the sleeping masses in America will wake up and realize what non-trivial portion of their quality of life was due to our monetary hegemony in the world.

U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion | The Onion - America's Finest News Source

2010-04-04T10:50:00.000-07:00

U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion | The Onion - America's Finest News Source

Classic.

Sales of Previously Owned Homes Fell 7.2% in January (Update1) - BusinessWeek

2010-02-26T09:20:00.000-08:00

Sales of Previously Owned Homes Fell 7.2% in January (Update1) - BusinessWeek
Money down a rathole. Only delaying the inevitable.

Hayek vs. Keynes : Incredible Education in 8 Minutes

2010-02-05T13:07:00.000-08:00

Via LewRockwell.com
The Road To Serfdom changed my life.

With respect to Keynes, we should understand how this man assessed his own theory :

"The theory of aggregate production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire. This is one of the reasons that justifies the fact that I call my theory a general theory."

SUBJECT : Vote NO on H.J. Res 45

2010-02-04T07:59:00.000-08:00

Representative,

I wanted to write to encourage you to vote NO on H.J. Res 45 to increase the statutory limit on the public debt.

The fear that we would have to default on Treasury obligations to debt holders somehow holds more sway than our current monetary policy of printing money to fund more failed economic policy. This policy not only reduces the value of the assets our creditors hold, which I would describe as “Default through Inflation”, but it reduces the value of every dollar held and earned by American citizens. This policy disproportionately hurts the poor and the lower middle class as they are the last to realize the benefits of this newly created money, while those on Wall Street and in D.C. are the beneficiaries, having first access to this new credit which is now shoring up their balance sheets and their pork filled budgets.

Allowing the Federal Reserve to monetize $1.25 Trillion of Mortgage Backed Securities with no congressional approval is one example of this destructive and unacceptable policy. Allowing the Federal Reserve to continue with its policy of Quantitative Easing, monetizing hundreds of billions of sovereign debt, which no one will buy at the current rates in our purportedly free markets, will prove to be net loss to our society. This is simply confiscating the wealth of our people, and all dollar holders throughout the world, through taxation by inflation.

Your vote against raising the debt ceiling is one weapon we the citizens have in offsetting this abuse of power.

Since men like Paul Krugman have brought John Maynard Keynes back into vogue, I would like to encourage you to read his essay on inflation which was first published in his 1919 book called “The Economic Consequences of Peace”. This is one of my favorite passages from that book:

“Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

PBS has been so kind as to provide the relevant portion of this text online for easy review:
http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_inflation.html

I would suggest that our fellow citizens are starting to understand the root cause of this destruction and today I would put that number at one in one thousand. I would also suggest that our numbers are increasing day by day, this trend should not be ignored by the political saavy.

You have the opportunity to be a truth teller in Washington D.C. Stating what is becoming more obvious to your constituents day by day. Political promises have been made that cannot be kept. As the rest of the world raises itself out of poverty and begins to compete with us we must not encumber our citizens or their assets with excessive debt or taxation, or we will surely stumble and waste the efforts of generations.

I would like to balance out the quote of Keynes with two from Thomas Jefferson:

“Funding I consider as limited, rightfully, to a redemption of the debt within the lives of a majority of the generation contracting it; every generation coming equally, by the laws of the Creator of the world, to the free possession of the earth he made for their subsistence, unincumbered by their predecessors, who, like them, were but tenants for life.”

“And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”

These particular quotes are found in the transcription of a letter to John Taylor held in our Library of Congress:
http://memory.loc.gov/cgi-bin/query/r?ammem/mtj:@field(DOCID+@lit(tj110172))

In closing, I want to again thank you for your co-sponsorship of H.R. 1207, the Federal Reserve Transparency Act of 2009, and would strongly encourage you to continue this trend of sound fiscal policy by voting no on H.J. Res 45.

Respectfully,

Embrace the Police State

2010-02-03T06:26:00.000-08:00

via LewRockwell.com
I am not sure what Beyonce is trying to convey, but to me it seems she is just a propaganda pawn putting the police state front and center and doing her part to convince her fans that people walking around in riot gear and body armor either are or will be the norm.

Talk to Bunning : Vote NO on Bernanke

2010-01-27T09:19:00.001-08:00

SUBJECT : Vote no on Bernanke

Dear Senator,

I want to encourage you to vote NO on cloture for the confirmation of Ben Bernanke as the Chairman of the Federal Reserve. Should cloture be achieved I want to encourage you to vote no on Mr. Bernanke's confirmation.

I would encourage you to personally speak to Senator Bunning and review the AIG related Federal Reserve documents which the New York Fed, according to Mr. Neil Barofsky, "Improperly limited disclosure" upon.

Newsweek quoted Mr. Bunning as saying that if every senator reviewed the AIG related Fed documents that had been provided to the banking committee, “then I’m sure he would be never confirmed.”

http://www.businessweek.com/news/2010-01-27/bernanke-gains-backers-as-reid-sets-procedural-vote-update1-.html

It is my understanding that the tax payer money given to AIG was then passed through to a multitude of banks, including $13 Billion to Goldman Sachs at 100 cents on the dollar. Mr. Bernanke along with Mr. Paulson were the architects of this sham and this is your opportunity to hold Mr. Bernanke accountable for his actions.

Until a better candidate can be found I would support a decision by you to advocate for his replacement by Mr. Paul Volcker or Mr. John Taylor, the latter of whom recently chastised Mr. Bernanke publicly for the misunderstanding and misapplication of the 'Taylor Rule' which bears his name.

Should you be unwilling to vote against Mr. Bernanke I will expect your office to publish a written statement detailing the very specific reasons why. One specific question I will follow up with is "Did you talk to Mr. Bunning and did you personally review the documents that so concerned him?"

Respectfully,
Yours Truly

Vote NO on Ben Bernanke

2010-01-27T09:16:00.000-08:00

SUBJECT : Vote NO on Bernanke

Dear Senator,

I wanted to write to encourage you to vote NO on cloture for the confirmation of Ben Bernanke as the Chairman of the Federal Reserve. Should cloture be achieved I want to encourage you to vote no on Mr. Bernanke's confirmation.

Until a better candidate can be found I would support a decision by you to advocate for his replacement by Mr. Paul Volcker or Mr. John Taylor, the latter of whom recently chastised Mr. Bernanke publicly for the misunderstanding and misapplication of the 'Taylor Rule' which bears his name.

While Mr. Bernanke claims to be a student of the Great Depression, it seems his scholarly understanding begins at 1929 and ignores the credit expansion that occurred during the 1920's. If he understood this, I doubt he would have continuously advocated lower and lower interest rates as a member of the Board of Governors of the Federal Reserve from 2002 to 2005.

Mr. Bernanke's monetization of $1.25 Trillion in Mortgage Backed Securities has gone beyond stabilizing the market. Mr. Bernanke has become the market. He purchased more than was issued last year during this questionable activity and like many I am concerned that he paid 100 cents on the dollar for securities that could have been bought in a free market for 60 cents on the dollar. Should these losses be realized and passed through to the treasury, it would have been done without any appropriations bill from the congress. Abuses of power like this must stop.

Policies such as this which are meant to support unsustainable housing prices seem to support the assertion that Mr. Bernanke's interests lie with enabling large banks to shore up their balance sheets at the expense of the tax payer instead of being taken into receivership by the FDIC and being liquidated as the law would demand.

Mr. Bernanke continues to disregard the concept of moral hazard and has in fact encouraged more irresponsible behavior. The actions of Mr. Bernanke and Mr. Paulson during the crisis, specifically their forced shotgun weddings between relatively healthy institutions and failed institutions only consolidated risk and made 'To Big To Fail' 'To Incredibly Monstrous To Fail'. To a simple man like me, it would seem that they have increased systemic risk by these actions.

Mr. Bernanke's support and urging of FASB to change mark to market accounting rules to allow what would have been called fraud just a year before will not stabilize our system; it will instead encourage more risk taking. Instead of the insolvent banks realizing these losses on their books now and being taken into receivership as the law requires they instead will be allowed to kick the can down the road and foist these losses upon the taxpayer when the inevitable realization of these losses occurs. Unless, of course, Mr. Bernanke purchases or has purchased these assets at a premium during his monetization of this trash.

As I understand it, Mr. Barofsky, whose responsibility it is to officially oversee the TARP debacle has publicly stated that the Treasury, backed by the Federal Reserve, have made what amounts to $23.7 Trillion in promises to backstop our entire financial system. It seems to me that we cannot meet these promises in real terms, and it will only be a matter of time until the market begins to discern which promises will be kept and which will not. When this occurs we will realize the very real consequences of Mr. Bernanke's policy of rewarding failure and encouraging stupidity.

In closing, Mr. Bernanke did not see the bubble coming nor did he foresee its inescapable bust. Instead he lauded the rise in home prices as a sign of the strong fundamentals in our economy. This by itself is reason enough to deny his confirmation. When he was finally forced to accept reality he chose to bail out Wall Street at the expense of the tax payer. These policies continue to this day despite the promises of the current president and his supporters in congress.

I encourage you to look past the thin veil which appears to be economic stability and to fully recognize the potential destruction that can be wrought upon our people by confirming Mr. Bernanke. This thin veil is only held in place by continued borrowing, continued printing of money and making promises we know we cannot keep.

Should you be unwilling to vote against Mr. Bernanke's confirmation I will expect your office to publish a written statement detailing the very specific reasons why.

Respectfully,
Yours Truly

Existing-home sales take biggest fall in at least 40 years - washingtonpost.com

2010-01-25T16:39:00.000-08:00

Existing-home sales take biggest fall in at least 40 years - washingtonpost.com
For all of 2009, the median existing home prices fell to $173,500, down 12.4 percent from $198,100 in 2008.

John Stewart : Balsa Wood and Baby Tears

2010-01-14T15:04:00.000-08:00

Dylan Ratigan

2010-01-11T16:53:00.000-08:00

Visit msnbc.com for breaking news, world news, and news about the economy

I wish he were a little more civil to the Honorable Brad Sherman. I think he does himself a disservice by not doing so.

The Christmas debacle really pisses me off, though it doesn't suprise. Not the first time something like this has been done.

American Experience | John & Abigail Adams | Primary Sources | PBS

2010-01-05T11:49:00.000-08:00

American Experience | John & Abigail Adams | Primary Sources | PBS: "Fear is the foundation of most governments; but it is so sordid and brutal a passion, and renders men in whose breasts it predominates so stupid and miserable, that Americans will not be likely to approve of any political institution which is founded on it."

Bailed-Out Banks Profit on Rescued Assets - BusinessWeek

2010-01-05T11:48:00.000-08:00

Bailed-Out Banks Profit on Rescued Assets - BusinessWeek: "'Managers are trying to figure out whether the rally in residential mortgage-backed securities is sustainable, or if there will be some sort of pullback,' Papier said.
Bill Eigen, manager of the $5.4 billion JPMorgan Strategic Income Opportunities Fund, said he bought residential mortgage- backed securities in the spring. Since then, he has sold and begun shorting both residential and commercial mortgage-backed securities, anticipating that their price would fall.
'This stuff was supposed to trade on fundamentals and will again trade on fundamentals,' he said in an interview. 'PPIP is not going to fill up buildings.'"

U.S. fears Iraq projects will go to waste

2009-11-21T10:30:00.002-08:00

U.S. fears Iraq projects will go to waste:
Whether you like / believe John Perkins or not, this reads as if it came straight out of Confessions of an Economic Hit Man. My questions would be a) what were the margins made on each of these projects? b) who were the companies who received these contracts? c) were they open bid or just handed to the contractor?

"In its largest reconstruction effort since the Marshall Plan, the United States government has spent $53 billion for relief and reconstruction in Iraq since the 2003 invasion, building tens of thousands of hospitals, water treatment plants, electricity substations, schools and bridges.
But there are growing concerns among American officials that Iraq will not be able to adequately maintain the facilities once the Americans have left, potentially wasting hundreds of millions of dollars and jeopardizing Iraq’s ability to provide basic services to its people.
The projects run the gamut — from a cutting-edge, $270 million water treatment plant in Nasiriya that works at a fraction of its intended capacity because it is too sophisticated for Iraqi workers to operate, to a farmers’ market that farmers cannot decide how to share, to a large American hospital closed immediately after it was handed over to Iraq because the government was unable to supply it with equipment, a medical staff or electricity."

Mark Spitznagel: The Man Who Predicted the Depression - WSJ.com

2009-11-08T13:11:00.000-08:00

"Government-imposed expansion of bank credit distorts our 'time preferences,' or our desire for saving versus consumption. Government-imposed interest rates artificially below rates demanded by savers leads to increased borrowing and capital investment beyond what savers will provide. This causes temporarily higher employment, wages and consumption.
Ordinarily, any random spikes in credit would be quickly absorbed by the system—the pricing errors corrected, the half-baked investments liquidated, like a supple tree yielding to the wind and then returning. But when the government holds rates artificially low in order to feed ever higher capital investment in otherwise unsound, unsustainable businesses, it creates the conditions for a crash. Everyone looks smart for a while, but eventually the whole monstrosity collapses under its own weight through a credit contraction or, worse, a banking collapse."

IMF Sells Gold to India, First Sale in Nine Years (Update2) - Bloomberg.com

2009-11-03T15:00:00.000-08:00

"“The fall in the U.S. dollar seems to be pushing all the central banks to strengthen their portfolio with gold,” said N.R. Bhanumurthy, professor at the National Institute of Public Finance and Policy in New Delhi. “Gold is a safe store of value compared to the U.S. dollar.”
...
“There seems to be consensus among the central banks that it’s better to cut down on currency holdings and diversify into assets like gold, which has upside potential,” Krishna Reddy, a precious metal analyst at Way2Wealth Commodities Pvt. said in Mumbai. “The Reserve Bank of India gold purchase is a clear reflection of this belief.”"

A significant amount of experience with people of Indian heritage has led me to the conclusion that they are fairly good at math.

"Americans are flooding back into bankruptcy court at the rate of 5,593 per day"

2009-09-22T11:56:00.000-07:00

Bankruptcy filings return to pre-reform-law pace: "In 2004, just before the more stringent rules took effect, 6,339 bankruptcy petitions were filed during an average business day. In 2006, with the law fully in force, the rate plunged to 2,372 per day. Now, Americans are flooding back into bankruptcy court at the rate of 5,593 per day.
The data on bankruptcy (see interactive bankruptcy statistics graphic) illustrates the coast-to-coast pain. Per-capita rates have increased in virtually every state since 2007 -- in many cases, doubling or tripling."

Question : In a consumer driven economy what does this foretell?

The Tyranny Of Good Intentions

2009-08-07T00:11:00.000-07:00

"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity at some point may be satiated; but those who torment us "for our own good" will torment us without end, for they do so with the approval of their own conscience." -- Lewis, C. S. (1970). God in the Dock. Wm. B. Eerdmans Publishing Company. p. 292. ISBN-13 978-0802808684. Google Book Search. Retrieved on August 7, 2009.

I do not know the intentions of our current administration, but I trust that those who support them really think they are doing good.

UnAudting the Federal Reserve

2009-05-11T17:23:00.000-07:00

Via Solari

Sign of the Times : Hyundai Wants No Part of GM

2009-04-23T00:09:00.000-07:00

Article - WSJ.com: "South Korea's Hyundai Motor Co. (005380.SE) will have no interest in a stake in General Motors Corp. (GM) if the beleaguered company goes bankrupt and is up for sale, a company executive said Thursday.

'We don't have such a plan even though the U.S. market is very important to Hyundai Motor,' T.H. Chung, senior executive vice president of Financial & Accounting Division, told Dow Jones Newswires."

Peter Schiff Addressing Mr. Obama's Speech

2009-04-14T20:35:00.001-07:00

via LewRockwell.com

Judge Napolitano : Natural Law and Constitutional Disorder

2009-04-11T23:53:00.000-07:00

Via LewRockwell.com

The judge identifies the philosophical foundation of our system of law and lays out an indictment of our present leadership.

Bingo Statement of the Day

2009-04-02T23:46:00.000-07:00

Mish's Global Economic Trend Analysis: Geithner's Plan Can Succeed: "Returning to the original thesis, Geithner's statement about 'will' now makes sense.

The 'will' Geithner is referring to is the 'will' of Congress to allow the Treasury and the Fed to sell off our future and the future of our children to prevent the bondholders of U.S. financial corporations from taking losses."

Daniel Hannan : Speaking the Truth in the UK

2009-03-30T10:41:00.000-07:00

The Importance of Saving Money

2009-03-27T21:23:00.000-07:00

Via LewRockwell.com

The Debt Star

2009-03-27T04:38:00.000-07:00

Via LewRockwell.com

Housing starts unexpectedly rise in February - Mar. 17, 2009

2009-03-26T08:23:00.000-07:00

Housing starts unexpectedly rise in February - Mar. 17, 2009: "Still, starts are down more than 47% from February 2008, when over 1.1 million new homes broke ground."

What was the change from January 2008 to February 2008? Is it because companies always file in January expecting winter to end soon? Even if that is not the case, does this article warrant that headline when it is still down 47% from the year before?

Cheerleading the stock market is what I would call it.
########################
Chris was kind enough to write and point out that the 22% represents the increase in the seasonally adjusted annual rate, not the month to month increase. With that, I will try to refrain from reading / blogging in the early, early morning or the late, late evening.

Stocks manage moderate gain after erratic session - Yahoo! Finance

2009-03-25T14:59:00.000-07:00

Stocks manage moderate gain after erratic session - Yahoo! Finance: "Weak demand during an auction of government debt stirred up worries about how easily Washington will be able to raise money to fund its economic rescue program, market analysts said. The fear in the market is that the government might not be able to easily raise the hundreds of billions of dollars it needs."

The only reason equity markets are moving upward is because the Fed and Treasury promised to pump over $1 Trillion into the banks. It seems they may have put the cart before the horse. The credit markets will not so politely remind them they must raise that $1 Trillion first.

U.K. Bond Auction Fails for First Time Since 2002 (Update2) - Bloomberg.com

2009-03-25T14:55:00.000-07:00

U.K. Bond Auction Fails for First Time Since 2002 (Update2) - Bloomberg.com: "“This is a warning signal investors are sending to the government,” said Neil Mackinnon, chief economist at hedge fund ECU Group Plc in London, who helps manage about $1 billion in assets and is a former U.K. Treasury official. “Investors are giving the thumbs down to the gilt market.”"

INSTANT VIEW: New home sales rise 4.7 percent in February | Special Coverage | Reuters

2009-03-25T09:33:00.000-07:00

INSTANT VIEW: New home sales rise 4.7 percent in February | Special Coverage | Reuters: "Despite the increase, February sales were the second lowest ever after the drop in January to the slowest pace in records going back to 1963, the department said."

Again, the headline says 4.7% rise. From when to when? If it was from last year, that is notable. But when it is from the worst month on record to the second worst month on record, does that merit this headline?

U.S. home sales climb at fastest pace in 10 months | U.S. | Reuters

2009-03-25T09:28:00.000-07:00

U.S. home sales climb at fastest pace in 10 months | U.S. | Reuters: "Despite the increase, February sales were the second lowest ever after the drop in January to the slowest pace in records going back to 1963, the department said."

Compare the headline with the sentence above from the same article. What are the historical increases between January and February?

Looks like desperate propaganda to me.

2009-03-24T08:51:00.000-07:00

Via PerotCharts

Keep in mind, it is only March. This is the estimate in March. I would bet a steak dinner there will be at least another $500 Billion added on to this by the end of the year.

Additional Tidbit on Debt : You Are The Collateral

2009-03-20T04:34:00.001-07:00

Here is a different take on what "The Full Faith and Credit of the United States" means. Something to consider when we evaluate the morality of our government's decisions to bailout individuals or corporations from their obligations.

Debt does not survive the death of an individual or a corporation, nor does it survive their bankruptcy. It is not passed on to heirs or to individual stockholders. It must be written off by the lender as a bad decision. Remember that banks especially, in their one true legitimate function, assessing and managing risk, failed miserably. They deserve to realize these losses and if that means their own bankruptcy, they deserve it.

So for one moment lets think about the morality of our government stepping in to relieve individuals and corporations of their poor decisions in both borrowing and lending. Our government advocates relieving both lenders and borrowers of the burden of their own poor decisions as they decide to lay these burdens upon the shoulders of all taxpayers and in the process, convert this debt to perpetual debt.

What do I mean by that? Our government is not paying cash for these obligations, it is just racking them up on the 'company credit card'. This debt will now survive the individuals and corporations that created it. It will not go away until it is either paid back or our entire country is deemed bankrupt.

It is as if the citizens of the United States, their property and their children are being put up as collateral, to guarantee the payment of these debts that should have been expunged when the borrowers either died or declared bankruptcy. It will survive as long as the United States exists.

A modern day slavery. A modern day serfdom. You are the collateral.

Who is benefiting from this arrangement? Other than the borrower being spared the difficulty and embarrassment of bankruptcy (which they so richly deserve for mismanaging their affairs) the lender benefits. Their assets, the loans, are being bought at a premium by our government as advocated by certain politicians. The lender is being made whole, or near whole at our expense. Their assets (again, the loans) are worth a fraction of what they claim it is, yet our government will pay them a premium for them.

If we are the slaves and serfs, who are the masters and lords? Who or what has such power, such sway over our politicians to cause them to bypass our well established system of profits and LOSSES, laws and courts to punish a whole country for the actions of a minority (including politicians and bankers)?

Is it other governments? Powerful special interests? Their own ideology?

So every time some politician tells us we must take these "toxic assets" off the balance sheets of banks and other financial institutions, so that we can preserve the house of cards that is our banking system, remember this tidbit, because I guarantee they will not bring it up.

National Debt Officially $11,000,000,000,000

2009-03-20T04:26:00.001-07:00

If you haven't noticed the debt clock on the right hand side of the page, it has officially rolled over to $11 Trillion.

CBS had this to say :

"By the time George W. Bush was inaugurated in 2001, the National Debt stood at $5.7-trillion. He ran up more debt faster than nearly all of his predecessors combined: just under $4.9-trillion.

The National Debt stood at $10.6-trillon on the day Barack Obama took office. But if his budget projections are accurate, he’ll run up nearly as much government debt in four years as President Bush did in eight."

First Rule of Holes : When you find yourself in a hole, stop digging.

It seems the geniuses who run our government are either morons or they have other agendas.

Adding Up the Government’s Total Bailout Tab - Interactive Graphic - NYTimes.com

2009-03-20T04:26:00.000-07:00

Adding Up the Government’s Total Bailout Tab - NYTimes.com: "Through March 18, the government has made commitments of about $9.9 trillion and spent $2.2 trillion. Here is an overview, organized by the role the government has assumed in each case."

China backs talks on dollar as reserve -Russian source | Currencies | Reuters

2009-03-19T19:59:00.000-07:00

China backs talks on dollar as reserve -Russian source | Currencies | Reuters: "China and other emerging nations back Russia's call for a discussion on how to replace the dollar as the world's primary reserve currency, a senior Russian government source said on Thursday. Russia has proposed the creation of a new reserve currency, to be issued by international financial institutions, among other measures in the text of its proposals to the April G20 summit published last Monday.

Calls for a rethink of the dollar's status as world's sole benchmark currency come amid concerns about its long-term value as the U.S. Federal Reserve moved to pump more than a trillion dollars of new cash into the ailing economy late Wednesday."

In August of 2007 I wrote concerning China threatens nuclear option of dollar sales :

"Our destiny is not in our own hands.

Because of our fiscal irresponsibility the rest of the world is starting to view both the U.S. Dollar and U.S. debt as a poor investment. Who can blame them?"

We are now giving them every incentive to make good on their threats. One week we send Hillary Clinton to China, begging them to continue to fund the profligate waste in D.C., the next we openly announce we will devalue their holdings by printing money instead of embracing austerity. Hubris did not exit the White House with the Bushes.

Even Well-off Consumers Aim to be Less Conspicuous - NYTimes.com

2009-03-13T15:34:00.000-07:00

Even Well-off Consumers Aim to be Less Conspicuous - NYTimes.com: "“It’s kind of funny, but I feel much more satisfied with the things money can’t buy, like the well-being of my family. I’m just not seeking happiness from material things anymore.”"

The feeling is mutual.

What If : Reloaded

2009-03-03T06:16:00.001-08:00

Jim Rogers : 02/25/2009

2009-02-26T09:25:00.001-08:00

Via LewRockwell.com

Carnival Float Genius

2009-02-25T08:56:00.000-08:00

via Reuters

Notice Bush already in the life boat and escaping?
Notice the ship that is actually sinking?

Byrd: Obama in Power Grab

2009-02-25T08:54:00.000-08:00

Byrd: Obama in power grab
Mr. Obama speaks of democracy but lays the foundation for a totalitarian regime.

Peter Schiff : A Plain Spoken Response to Mr. Obama's Speech

2009-02-25T08:28:00.000-08:00

Feed Me!

2009-02-24T12:36:00.001-08:00

Clinton "Urges" China to Buy More US Debt!!

2009-02-22T13:01:00.001-08:00

If her husband had a hard time defining the word 'is' I would like to know Secretary Clinton's meaning of the word 'urge'. What is being promised / threatened to convince / coerce the Chinese to keep buying our increasingly worth less debt?

read more | digg story

German Finance Minister Warns of Inflation

2009-02-22T12:48:00.001-08:00

'The time will come, once we've overcome this recession and the financial market crisis, when we'll see if we can take this liquidity out of the market again. And that will be very hard.'

read more | digg story

If any developed nation in the world should know inflation, it should be Germany.

Timing is the key. If the economy has not recovered, more bad news is being reported day to day and yet prices of commodities begin to rise, hold on to your hats. They will not have the political will to absorb this 'liquidity' when that time comes.

Personally, I think our present leadership has decided that they will not default on our national debt, but will seek ways to inflate so that they may make it more manageable. When the seek the power to unhinge the creation of money from existing credit mechanisms (Treasuries and banking) then you know we are entering that stage.

My favorite piece of propaganda from the piece :

"However, a number of leading economists have said that by freeing up huge sums of money to stabilise the global economy, policy makers risk laying the foundations for the next crisis."

"freeing up huge sums of money" as opposed to "creating or printing huge sums of money".

Priceless

Tip of the Iceberg

2009-02-22T12:23:00.000-08:00

Click here for larger PDF.

Mr. Karl Denningner Explains Illiquid Assets and Government Intervention

2009-02-17T09:26:00.000-08:00

"10 minutes of your day and you will understand."

"Illiquid Assets" didn't happen as a consequence of the market. Nope - it was market interference that caused that to happen, and guess who was responsible?"

"To put it bluntly: You've been gamed America, by your government, so that a handful of rich campaign donors wouldn't have to confess to creating and holding the worthless trash on and off their balance sheets. Our economic deterioration will end only when interference in the market's clearing mechanisms ceases."

A few folks have complained in the past that they don't like Mr. Denninger's style. I say get over it. Listen to what the man says here because it is absolutely the truth and the understanding he imparts is critical to addressing our current circumstances.

Oh, and I do agree with Mr Denninger on this point, men like Treasury Secretary TurboTaxCheatTimmy fully understand the consequences of their actions with respect to their policy causing confusion and uncertainty in the markets. If he doesn't, he is the biggest fraud on the planet.

Ron Paul : Nobody in the House Could Have Read the Stimulus Bill

2009-02-13T20:36:00.000-08:00

The Economic Views of Robert Higgs

2009-02-13T20:27:00.000-08:00

Ron Paul : What If?

2009-02-13T20:18:00.000-08:00

The Economic Views of John Williams

2009-02-12T18:46:00.000-08:00

I subscribe to Mr. Williams's newsletter and highly value his input. He calls his website is Shadow Government Statistics.

Small exercise of bragging rights : It was upon my request/suggestion that Mr. Williams implemented and provided his Inflation Calculator. As soon as he published it I applied it to this anecdote.

The Views of Gerald Celente

2009-02-12T15:10:00.000-08:00

The YouTube video and audio get out of sync. You can watch the original here. The transcript is here.

Mr. Celente's forecast would be mirror image of my own worst case scenario. It seems that he believes this scenario is more likely than a slow burn or longer term collapse. I cannot say that I disagree with him. Frankly, things are deteriorating faster than I had anticipated eighteen months ago.

February 9, 2009: Solving the Economic Crisis

2009-02-12T14:02:00.001-08:00

The Daily Show With Jon StewartM - Th 11p / 10c

Solving the Economic Crisis

Daily Show Full Episodes
Important Things With Demetri Martin

Funny Political News
Joke of the Day

Jim Rogers - Bloomberg Interview (February 11, 2009)

2009-02-12T10:42:00.000-08:00

What is this Jim says? Our new Treasury Secretary, TurboTaxCheatTimmy, leader of the IRS, was President of the New York Federal Reserve Bank since 2003? Who knew? All of these shenanigans happened under his tenure? No Way!?

Simple CYA

Add Four, Carry the One - Nancy Pelosi - Genius

2009-02-11T21:38:00.000-08:00

Pure Genius

Dr. Paul's Walls II - Taft on the Draft

2009-02-10T19:53:00.000-08:00

Via LewRockwell.com

I wholeheartedly agree with Dr. Paul and Senator Taft on this one. The draft is slavery.

If the American people ever sensed a true threat to their country, you would have no problem raising a sufficient army to defend her. But when you sully her image with a foreign policy of stupidity and hubris, you increase the likelihood that there would be difficulty in convincing her people to rise to her defense should that fateful day come.

Barnito Mussolini

2009-02-09T10:00:00.000-08:00

Hat tip to Tommy :
Barney Frank: TARP's comp curbs could be extended to all businesses - Financial Week: "He said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies."

Smells like (sniff)(sniff) Fascism to me - private ownership, government control. The ironic thing is those on the 'left' don't see themselves as fascists.

Geithner Says U.S. Financial System Remains 'Badly Damanged' - WSJ.com

2009-02-07T14:36:00.000-08:00

Geithner Says U.S. Financial System Remains 'Badly Damanged' - WSJ.com: "'I don't think we know yet how bad the industry's insolvency problem is,' Mr. Miller said. 'If we had regulators go in and examine the books like we did at Fannie Mae and Freddie Mac a great number of our systemically important financial institutions could be insolvent.'"

Could be? I suppose you must couch those statements in hopeful terms so not to cause a panic.

If the bulk of the public understood that these institutions are in fact insolvent and began to understand the real mechanics of Fractional Reserve Banking, its impacts and its enablers, I have to believe that this system would not make it through the week.

But they don't, so it will.

Marc Faber on the Zimbabwean School of Economics

2009-02-07T11:41:00.000-08:00

Via LewRockwell.com

Bread and Circuses

2009-02-07T07:30:00.001-08:00

Modern Day Bread and Circuses

Peter Schiff Why I'm Right and My Critics Are All Wrong

2009-02-06T10:45:00.000-08:00

Peter Schiff Why I'm Right and My Critics Are All Wrong: Tech Ticker, Yahoo! Finance: "First blogger Michael Shedlock and then The Wall Street Journal noted how Schiff's investment thesis - centered on shorting the dollar and buying foreign currencies, commodities and related stocks - had run aground in 2008."

I posted the confrontation between Mr. Shedlock and Mr. Schiff in my reading list, Breaking Bread in the upper right corner.

I read both of these gentlemen because they are both sympathetic to the Austrian school and their analysis fits my own.

Schiff's argument is that the potential loss of a dollar collapse is so devastating that hey didn't think it was worth the risk to try and time the market.

Mr. Shedlock's chief criticism is that he see's Mr. Schiff as being so overly committed to his longstanding analysis that he didn't bother to look at the current market conditions and try to protect his clients' investments.

Mr. Schiff says that was not worth the risk because he sees the collapse in the dollar as imminent. Mr. Schedlock does not and actually argues that we will be looking at deflation for near term.

I say it depends on what happens in the next several weeks as our government begins to try and float Trillions of new debt as well as rolling over existing debt. Who will buy? If no one buys with existing capital then interest rates will shoot up and the deflationary spiral tightens. If the Fed begins to monetize it then I don't see how we escape this without massive inflation. If the Fed buys then I would think holders of treasuries will sell into the Fed and they will be left with the decision of buy it all or nothing.

I see the Fed buying as bringing about the scenario Mr. Schiff worries about.

For full disclosure, I was on the verge of funding accounts with Euro Pacific Capital when I was convinced by the writing of Mr. Shedlock and Mr. Gary North that this was not the time. I have benefited from their advice. I have been in cash and Treasuries since and will keep my powder dry, ready to move when the path is a bit more clear.

For what it is worth, I have begun to hedge further towards the scenario Mr. Schiff warns about, the collapse of the dollar. Mr. North and Mr. Shedlock have begun to part ways on their analysis of near term future events, where they had been in agreement before.

With that said, this is not dogma to me, so I will follow Mr. Shedlock's piece of advice where he said you must analyze what is going on now and adjust accordingly. However, at some point, the risk will be too great for me as well and I will lock in my 'insurance policy' right along with Mr. Schiff.

Lies, Damn Lies and Statistics

2009-02-06T10:00:00.000-08:00

Revelations About Cabinet Nominees, Wall St. Bonuses Spark Outrage - washingtonpost.com

2009-02-04T15:35:00.000-08:00

Revelations About Cabinet Nominees, Wall St. Bonuses Spark Outrage - washingtonpost.com: "'Obviously, folks on Wall Street tend to have a tin ear from time to time, but I don't think [the rhetoric] appreciates what the deal is on Wall Street -- people make a minimal salary, and the bonus is what it is,' he said. 'Heaven forbid someone earns $400,000 from a company getting TARP money. Well, maybe leaders in Washington should be paying their taxes?'"

Ah, resorting to fallacies when there is no other defense.

This is from an article that is focused on the recent problems President Obama has had in finding people to fill his cabinet who have actually paid their taxes. I guess he runs in the wrong circles.

I provide the above quote for a different reason though. Mr. Schwed can't comprehend why the American People might be upset by the money earned in Wall Street firms who currently only exist because they have taken to sucking on the teat of the state.

If these firms operated in the real world, outside the umbrella of state largess and preferential treatment, their firms would have had to cut their staff, cut their salaries or close their doors. But this man is so dense, he can't understand why the guy working 60 hours to make ends meet would be pissed that a Wall Street executive, in part paid with his tax money, which was taken from him by the force of government, might be a bit miffed. Or the irony that the single mother working two jobs whose Social Security taxes (look up fungible) went to support this failed and insolvent banking system, receives no benefit from the TARP while his peers make $400,000 on the government dole.

While I can appreciate his righteous indignation at the behavior of the elite in our government and their fundamental inability to pay their taxes like the rest of us, he still appears not to be the sharpest tool in shed.

Simple, Accurate, Very Clear

2009-02-03T21:25:00.000-08:00

More Ponzi Damnit! - The Market Ticker: "Welcome to the real world where debt written on an asset must be supported by the current cash flow generated by today's production of things, not tomorrow's projections of exponential growth that are mathematically impossible to sustain over long periods of time."

Where's My "Change"? - The Market Ticker

2009-01-29T13:32:00.000-08:00

Where's My "Change"? - The Market Ticker: "The only 'change' I see is that this is all my daughter will be left with in her future when your coverups and bailouts are done, starting with your appointment of a tax cheat to head the US Treasury who it is clear also either knew or should have known of the fraud in the mortgage industry - but did nothing - as head of the NY Fed."

If you voted for Obama, or you feel the least bit of "Hope" now that he is in office, you need to realize there will be no change until seeks justice against those who have committed fraud. This includes former administration officials, Wall Street / Bank Executives and Federal Reserve Officials. Without this justice, all those promises ring completely hollow.

Behold the Genius of Printing Money to Solve a Nations Problems

2009-01-29T13:22:00.000-08:00

Tip of the hat to Tommy
BBC NEWS | Africa | Zimbabwe abandons its currency: "Zimbabweans will be allowed to conduct business in other currencies, alongside the Zimbabwe dollar, in an effort to stem the country's runaway inflation.

The announcement was made by acting Finance Minister Patrick Chinamasa.

BBC southern Africa correspondent Peter Biles says the Zimbabwean dollar has become a laughing stock. A Z$100 trillion note was recently introduced."

Two thoughts I would like to leave you with :

When you relinquish your ability to regulate your own currency you relinquish a significant portion of your sovereignty. This is a fundamental part of the argument against the concept of a private central bank, like the Federal Reserve. We have relinquished this extraordinary power to a private institution who has shown a proclivity for preserving the status quo and the power and position of its member banks, their owners and management at the expense of the American tax payer and the holders of United States Dollars.

If credit were capital, Zimbabwe would be the richest country on the planet and have the most prosperous people. However, credit is not capital. Now that our people have reached the limits of their credit, or have made the choice to begin to save, our government will take out a credit line on their behalf and on the behalf of their progeny.

December new home sales hit lowest point since 1963 - Memphis Business Journal:

2009-01-29T13:04:00.000-08:00

December new home sales hit lowest point since 1963 - Memphis Business Journal:: "That’s down nearly 15 percent from a revised 331,000 annual rate in November. December’s total was the lowest on records dating back to 1963."

Please note the word 'total'. Also note this is a seasonal adjustment, meaning that they told you it was higher when the number originally came out. Someone without my sense of refinement might say "adjusted my ass".

The headline is dramatic, but not as dramatic as saying "lowest point on record".

The current headline implies that it has been worse before, and perhaps it has.

With that said, now consider that the population in 1960, according to the Eighteenth United States Census, was 179,323,175 where now it is approximately 306,000,000. That is roughly 1 sale for every 540 people in 1960 and 1 sale for every 924 people in 2008. Adjust that ... carry the one ... apply new math ... one might argue we are actually 58% below that all time recorded low, assuming it was in the 332,000 range, when adjusting for population.

Again, the recurring theme recently is this is a set of problems on a different scale than what we have seen in recent history.

Fed Fail : It is a Matter of Scale

2009-01-27T23:32:00.000-08:00

This is for all of those who tell you, "don't worry, we've been through this before".

Stephen Halbrook on Obama's Attorney General Nominee

2009-01-27T15:23:00.000-08:00

If you don't understand why the Second Amendment was explicitly put into the Bill of Rights, here is a clue, it wasn't for hunting or to protect your home. And if you think our civilized country is beyond political collapse or chaos, I would offer Greece and Iceland as examples of what could accompany an economic collapse.

"That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness."

These are serious words, written by serious men.

You should take note of current events, that our leadership aids and abets the banking class in the confiscation of our wealth and they do it with impunity. Should this government choose to disarm its citizens, effectively making them subjects, what will keep them from total tyranny?

Hope and Change?

Ron Paul : Folks on Morning Joe with Fingers in their Ears Screaming "Lalalalalalalalallala Can't Hear You"

2009-01-27T09:43:00.000-08:00

These folks just don't want to listen. They ask for solutions, Dr. Paul says (paraphrasing) "stop spending a Trillion $$$ a year on maintaining an empire" but that doesn't qualify for them. They ask again for solutions, Dr. Paul says (paraphrasing) "get rid of the income tax and corporate tax, stop burdening the people with unproductive government expenditures" but that doesn't qualify for them. They ask should there be regulation, Dr. Paul says (paraphrasing) emphatically "Yes, regulate the Fed and the Treasury, these are the logs in your eyes, stop worrying about the dust specs in mine" but they don't believe / won't admit that these institutions had anything to do with our current circumstances. They try to lay double digit unemployment at his feet as if it was his fault and he says "You must hold accountable those who created these circumstances not those who are telling you now have to accept some tough medicine", but that is kicking their sacred cows, so they ignore it and mumble something about "looking forward, at least Obama is looking forward." He is looking forward all right, straight into the gaping maw of out right collapse and he is sprinting towards it on the same path that brought us to our present circumstances. Change my ass.

The saddest thing about this interview is the hosts' unwillingness (like our society's) to accept that there is going to be pain for somebody. I see three options (in order of increasing moral depravity) :

1. This generation : Pain to be suffered by those who lived beyond their means, made poor choices, invested in something they didn't understand, believed house prices go up forever, didn't manage their exploding government (federal and state) for the last 20 years, sought to wage never ending war.

2. The next generation : Pain to be suffered by those who have to pay back the exploding national debt, like my generation and my kids' generation.

3. Or the pain will be spread globally, as we print money upping our seigniorage take, disproportionately taxing the poor of the planet through inflation, relatively shrinking our debt obligations but increasing the probability of the nightmare scenario Dr. Paul fears where the dollar is rejected as the world's reserve currency and rapidly moves towards its intrinsic value of zero. I see this scenario as very likely to result in a major war.

Whatever influence for good the United States has been or could be will be lost down the memory hole should we arrive at #3.

(these statements are generalizations, obviously there are exceptions to each option, but I believe as a generalization it is accurate)

Ron Paul : Borrowing More and Spending More Won't Solve Our Problems

2009-01-27T09:04:00.000-08:00

The funniest part of this interview is when the host says nobody will accept the message that they must quit spending, quit borrowing and save. Dr. Paul acknowledges that politically, this is unacceptable and that is why Mr. Obama will continue to give us more of the same. I wish he would have continued on to say something to the affect that "this will be the result, one way or the other."

Roubini Predicts U.S. Losses May Reach $3.6 Trillion

2009-01-27T08:52:00.000-08:00

Roubini Predicts U.S. Losses May Reach $3.6 Trillion : "“I’ve found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers,” Roubini said at a conference in Dubai today. “If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”"

An insolvent banking system seems like a good reason to revoke World Reserve Currency privileges and the Seigniorage that goes with it.

With that said, the fact of the matter is there are currently no better alternatives. Also, we have yet to see how much policy enforcement the establishment is willing to use to preserve these privileges. In plain English, how much the establishment is willing to either threaten war or go to war to preserve these privileges.

It depends upon the world willing to balance the threat of our military might with the amount Seigniorage they are willing to pay to fund our largesse.

Wars have been fought over much, much less.

City Minister Lord Myners attacks bankers for greed and arrogance - Times Online

2009-01-26T14:32:00.000-08:00

City Minister Lord Myners attacks bankers for greed and arrogance - Times Online: "“We were very close on Friday, October 10. There were two or three hours when things felt very bad, nervous and fragile. Major depositors were trying to withdraw — and willing to pay penalties for early withdrawal — from a number of large banks.”"

My question is what was promised to keep these depositors from withdrawing?

Have the people of the UK been told about these promises?

Bloomberg titled this story differently : "U.K.’s Myners Tells Times Bank System Nearly Failed on Oct. 10"

‘Soviet’ Britain swells amid the recession - Times Online

2009-01-26T12:57:00.000-08:00

‘Soviet’ Britain swells amid the recession - Times Online: "The state now looms far larger in many parts of Britain than it did in former Soviet satellite states such as Hungary and Slovakia as they emerged from communism in the 1990s, when state spending accounted for about 60% of their economies."

With a Trillion $$$ here (Obama stimulus plan) and a Trillion $$$ there (TARP II), it won't be long before the U.S. is in this position.

No real wealth creation in this scheme, just an overbuilding of infrastructure and paying people to dig holes, then fill them.

The key to recovery is to get banks lending again so we can then borrow to have more shit we don't need.

Zimbabwe to launch Z100 trillion dollar note-report | Antiwar Newswire

2009-01-16T13:58:00.000-08:00

Zimbabwe to launch Z100 trillion dollar note-report | Antiwar Newswire

If credit were capital Zimbabwe would be the richest country in the world. Unfortunately, for this scheme of governmental plunder to work there must be a modicum of savings and wealth left in the hands of the people. There isn't, so as a tool of the central bank these shenanigans are ineffective.

Banks : I got your accountability right here

2009-01-09T14:28:00.001-08:00

Originally On VarvelBlog

Peter Schiff on the Eventual Bond Bubble Pop

2009-01-09T10:46:00.000-08:00

Via LewRockwell.com

Actually, Mr. Schiff himself characterizes it as happening right now. I think he is right in that it will collapse eventually, with the Fed monetizing more and more of it, however I think he dismisses the psychological and geopolitical aspects for people buying dollars and treasuries right now.

For instance, people worldwide don't just consider our economic strength, but also our military strength when deciding to buy or not to buy treasuries. When seeking safety, our military strength most definitely is on the plus side of buying treasuries. If you dislike our military dominance / empire, then you may choose not to support it, which may be an increasing factor in the decisions of China, Russia and Oil producing countries.

We will see how our military strength impacts decisions four or five years down the road when our troops refuse to deploy and sing the red flag (bit of history there).

Merrill Lynch says rich turning to gold bars for safety - Telegraph

2009-01-09T08:19:00.000-08:00

Merrill Lynch says rich turning to gold bars for safety - Telegraph: "Gary Dugan, the chief investment officer for the US bank, said there has been a remarkable change in sentiment. 'People are genuinely worried about what the world is going to look like in 2009. It is amazing how many clients want physical gold, not ETFs,' he said, referring to exchange trade funds listed in London, New York, and other bourses."

The barbaric metal? Why would that be?

An American CEO Who Quotes Friedman and Knows Mises - Is There Hope?

2009-01-09T08:14:00.000-08:00

Via LewRockwell.com

Peter Schiff on President Elect Obama

2009-01-08T19:01:00.000-08:00

Ron Paul : Balance the Budget - CNN

2009-01-07T14:05:00.000-08:00

Via LewRockwell.com

U.S. Economy : The Philosopher's Stone

2008-12-18T21:39:00.000-08:00

Fred Thompson Knows What To Do

2008-12-15T21:12:00.001-08:00

Even though Mr. Thompson was completely oblivious during the Republican Presidential Primary, it is nice to see that he has adopted Ron Paul's line of thinking.

Truth is truth so I'll give him a pass on this one. Truth be told, he does deliver a bit better than Dr. Paul. All those acting lessons weren't wasted.

Dollar Staggers as U.S. Unleashes Cash Flood, Deficit

2008-12-15T05:48:00.000-08:00

Bloomberg.com: Dollar Staggers as U.S. Unleashes Cash Flood, Deficit : "“The dollar will go to new lows as the U.S. attacks its currency,” said John Taylor, chairman of New York-based FX Concepts Inc., which manages about $14.5 billion of currencies."

I haven't seen language like that on Bloomberg outside of an interview with Mr. Rogers or Mr. Schiff.

"Treasuries due in two years yield 1.49 percentage points less than German bunds of similar maturity, near the most since mid-October. Three-month bill rates fell below zero last week for the first time. Bill Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., which oversees the world’s largest bond fund, said “Treasuries have some bubble characteristics.”

“The government and the Fed cannot continue to talk about trillions of dollars of financing and expansion of the Fed’s balance sheet without the dollar going south,” Gross said in a Dec. 10 interview with Bloomberg Television."

While Mr. Gross is a man of Keynes to the core, he still has more foresight than most of his brethren.

Ron Paul : The Auto Bail Out : Nationalization and our Liberties

2008-12-13T20:15:00.001-08:00

Jim Rogers calls most big U.S. banks bankrupt | Reuters

2008-12-13T20:02:00.000-08:00

Jim Rogers calls most big U.S. banks bankrupt | Reuters: "'What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent,' he said. 'What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics.'"

And as Mr. Rogers has also pointed out repeatedly, it is bad morality.

Bailouts and Bankruptcy - Walter E. Williams

2008-12-11T05:59:00.000-08:00

Bailouts and Bankruptcy: "Two vital marketplace signals are the profits that come with success and the losses that come with failure. When these two signals are not allowed to freely function, markets operate less efficiently. To be successful a business must take in enough revenue not only to cover wages, rents and interest but profits as well. In order to accomplish that feat executives must not only satisfy customers but they must do it in a manner that efficiently utilizes all of their resources. If they fail to cover costs, it means that resources are not being used efficiently and/or consumers don't value the good being produced relative to some other alternative. When a firm routinely fails to turn a profit, there are bankruptcy pressures. The firm's resources, workers, building and capital become available to someone else who might put them to better use. When government steps in with a bailout, it enables executives to continue mismanaging resources."

Now we will have congress and its auto czar overseeing day to day operations for members of the big three that will participate in the bail out. Congress has created a current national debt of $10.6 Trillion and has made promises of an additional $54.5 Trillion for which there is no tax revenue.

Whiskey Tango Foxtrot leads these arrogant pricks to believe they could have any positive impact on the U.S. auto industry other than handing over tax money (and printed money) that they take from others by the threat of force?

Ex-Executive Faults Fannie and Freddie for Nonprime Loans - NYTimes.com

2008-12-11T04:27:00.000-08:00

Ex-Executive Faults Fannie and Freddie for Nonprime Loans - NYTimes.com: "The former executive, Edward J. Pinto, who was chief credit officer at Fannie Mae, told the House Oversight and Government Reform Committee that the mortgage giants now guarantee or hold 10.5 million nonprime loans worth $1.6 trillion — one in three of all subprime loans, and nearly two in three of all so-called Alt-A loans, often called “liar loans.”"

A good friend of mine has repeatedly made the claim that these two components of the mortgage business (subprime and liar loans) were done completely outside the realm of Freddie and Fannie. That claim was held up as an example of how the GSEs had little or nothing to do with this crisis and was additionally used to support his theory that this was a case of simple greed, an example of failure in the free market. "This was pure free market man."

Of course my response was that when the GSEs are involved with implicit (now explicit) government backing and a line of credit from the Fed (via Treasury) and the Fed has a policy of creating massive amounts of new credit, there really is no free market.

While I don't argue that greed is definitely a component of our current circumstances, what enabled it to overwhelm the instincts of self preservation for so many? Again, an increasingly favorite quote of a quote :

"What did Rothbard say about the miscalculations that suddenly - and for inexplicable reasons - occur at one point in time; did such errors in judgment more likely result from tens of thousands of people independently making the same, poor decisions, or were they more likely misled by a common signal emanating from the state?" Via LewRockwell.com

That signal would be artificially low interest rates from the Fed and the history of embracing moral hazard by bailing out those "too big to fail".

Op-Ed Columnist - The Brightest Are Not Always the Best - NYTimes.com

2008-12-08T06:08:00.000-08:00

Op-Ed Columnist - The Brightest Are Not Always the Best - NYTimes.com: "Somehow the all-seeing Rubin didn’t notice the toxic mortgage-derivatives on Citi’s books until it was too late. The Citi may never sleep, but he snored."

This has to be one of my all time favorite quotes from the NY Times. Ok, well maybe the second favorite.

Dodd: No choice on auto bailout - Dec. 8, 2008

2008-12-08T05:07:00.000-08:00

Dodd: No choice on auto bailout - Dec. 8, 2008: "Dodd said on ABC's 'Good Morning America' show that with more and more people losing their jobs, Washington has no choice but to intervene to keep the Big Three auto makers from collapsing."

The big three have already failed. Now the stooges come to the government to ask them to misuse their power to prop up their failing companies.

Just to make it official, let us call this what it is. It is corporate welfare and a personal welfare in the form of a government jobs program. Mr. Dodd, central planner, will decide what entities survive and what entities fail under the New New Deal. Only those that seek to kiss the ring of the central planning committee will find favor and a teet to suckle on.

I tire of the scare tactics coming from those who seek to preserve union labor contracts. Hell, we have to pay $75 an hour (including benefits) for manual union labor, this is America dammit. Why don't they put up the union pension funds and health care funds as collateral for the loans to these failures? If they truly believe these failures deserve to be saved, that they are competitive, and that this truly is an 'investment' let the union bosses put their money where their mouth is.

Looters. Oh boy was Ayn Rand right on the money.

There will be no net creation of jobs from these actions. In the end, there will be no net preservation of jobs from these actions. Throwing more government debt at failing companies only puts our children further into indentured servitude. If there was any hope for job creation in the private sector, this siphoning of capital will be sure to kill it.

By the way, I thought Chrysler was a German company for the last ten of the past eleven years? Why support them over Honda or Toyota, who arguably build more cars in the United States than Chrysler does?

Foreclosures soar 76% to record 1.35 million - Dec. 5, 2008

2008-12-05T13:10:00.000-08:00

Foreclosures soar 76% to record 1.35 million - Dec. 5, 2008: "'We have not gone into past recessions with the housing market as weak as it is now, so it is likely that a much higher percentage of delinquencies caused by job losses will go to foreclosure than we have seen in the past,' said Jay Brinkmann, MBA's chief economist."

Also from the article, "Nearly 3% of homes were in foreclosure in the third quarter, up 76% from a year ago."

Fed Signals More Action as Slump Drags On - WSJ.com

2008-12-02T13:19:00.000-08:00

Fed Signals More Action as Slump Drags On - WSJ.com: "It could bring down long-term rates now by purchasing Treasury bonds itself. A central bank has the capacity to effectively print money by injecting reserves into the banking system and could use the funds to buy securities like bonds. In normal times, this would be highly inflationary. But Mr. Bernanke noted that the recession is putting downward pressure on inflation now, which gives him flexibility to keep pressing with new measures to battle the recession. He also said the Fed would unwind its programs when the economy stabilizes, to help guard against inflation."

In principle, those who have been prudent and have capital should benefit and acquire assets and market share during these times. Not if our central planners have anything to do with it. They will support those who have failed and those who have been irresponsible at the expense of those who have not. This is the glory of socialism.

At least Mr. Bernanke pays lip service to the idea of "unwind"ing all of the programs he has created, when the economy stabilizes. If he doesn't, we will face the destruction of our currency.