Keynes and Marx

Many today call Keynes a socialist, probably because he is popular with "liberal" thinkers ("Liberal" now has a new meaning, thereby tricking everyone.) However, categorizing people is a subjective thing, it depends on where you are and how you define others. For example, I see him as a dead limey.

We can see Keynes as a socialist, but Marxists, per this article, see him as a confused capitalist, a Fabian.  Americans think his notions are "socialist," but that may be an imprecise term to wield in a higher-level conversation.

Below is the beginning of an article (I hope I can call it an article) from 1973 which was dedicated to proving Keynes was wrong under Marxist theory. I am going to sift through this, but I thought it was worth sending along to those who want to sort out the minds behind the hysteria in the "markets." It is of interest, as I am reading, of late, that his current economic condition should put an end to Keynes' death grip on economic theory and the end of fiat money.

The article is an interesting insight into why a handful of people pull the levers that they pull, affecting all of us. The real problem is most Americans are devoid of any understanding of economics/money theory, just as long as they got  flat screens.  The saying is if you don't study history, you will relive it. I don't think that applies. Here, we should adopt:  History will happen to those who are sure it is irrelevant.

I guess in a sense, there is no history. Like there is no democracy or baseball.  These are concepts, collections of philosophy, laws, and lessons. So, except for baseball, people don't seem to be interested in all that fluffy abstract stuff. 

Sorry about the typography.  You may want to just hit the headline and go to the article. 

Socialist Education Bulletin, Nº 1, July 1973

MARX VERSUS KEYNES

The failure of government-controlled capitalism

Introduction

The material in this bulletin has been taken, with minor changes, from articles which originally appeared in the Socialist Standard during the past five years. They bring together in one document a criticism of .Keynesian economics from a Marxian point of view. 

As the first article says, Keynsism is now the dominant economic orthodoxy, taught in schools and universities as a supposedly accurate description of how capitalism works or can be made to work. It is also the implicit theory behind the reformist practice of both the Labour and Conservative parties. For Keynsism holds that capitalism can be controlled by governments so as to function in the interest of all. A knowledge of Marxian economics shows this Keynesian – and indeed general 

reformist – claim to be false. For capitalism is a class system, based on the 

exploitation of the majority, which can only function by putting profits before human needs. Practice – the failure of all post-war governments to redeem their election promises about full employment, stable prices, steady and continuous growth – has also confirmed that capitalism is governed by economic laws which government intervention cannot overcome, despite what Keynes taught. 

The Marxian criticism of Keynes must be distinguished from that of those who argue that what is wrong with Keynsism is that it advocates only government intervention in an essentially private-enterprise economy, not government ownership of industry. 

That a state capitalist economy could function in the interest of all is equally illusory, but we cannot go into this here. The Marxian alternative to both Keynsism and state capitalism is Socialism, a non-market, non-monetary society based on the common ownership and democratic control of the means of production by and in the interest of the whole community. 

Only on this basis can production be democratically planned to provide what human beings need, both as individuals and as a community. 

Education Committee, 

The Socialist Party of Great Britain, 52 Clapham High Street, London, S.W,4 7UN. 

_____________________________________________________________________

THE KEYNSINAN MYTH

Socialists have always held that the boom-slump cycle and periodic unemployment 

are inherent features of the system of production for the market with a view to profit i.e., capitalism. But, say the critics, there has been full employment in Britain for over twenty years; there has been no slump on the scale of the 1930’s. Marx, they say, has been proved wrong. Capitalism has changed, thanks to the theories and policies of John Maynard Keynes.

Keynes was a British economist who died just after the last war. He wrote a number of widely-read books on economic and political matters and held various government posts. His theories on how to get full employment and avoid slumps are to be found in his General Theory of Employment, Interest and Money which appeared in 1936. 

The economic doctrines Keynes attacked in this book taught that capitalism automatically led to the full and most efficient use of productive resources. These doctrines said that unemployment was to be explained either by over-population or by restrictions on production and trade, such as monopolies and trade unions, State interference and tariffs. Overproduction was impossible because “supply creates its own demand”. This last dogma was known as Say’s Law after a French economist of the early 19th century. Say argued that as every sale was a purchase and vice versa a shortage of purchasing power was impossible. 

Keynes denied that laissez-faire capitalism automatically led to full employment and went on to show how over-production and unemployment could occur: since all that was produced in a given period wasn’t all consumed in that period there was a gap between productive capacity and what Keynes called consumption. This gap could be filled by the making of means of production, or investment. However as investment depends on what businessmen think are the chances of making profits there is no guarantee that this gap will be filled. And if it is not filled then there will be idle resources and unemployment. Keynes suggested ways of overcoming this condition. The State should first try to encourage consumption and investment. 

As the poor tend to spend a larger proportion of their income than the rich, one way of encouraging spending, Keynes suggested, was to redistribute some of the income of the rich to the poor. Low interest rates might encourage businessmen to invest so a policy of reducing the price of money by increasing its supply was called for. Keynes believed that although these measures were useful they would not be enough. In the end the State itself would have to 

increase its own spending and even take steps to control investment directly. In overthrowing Say’s Lawn Keynes was doing nothing new (though he thought he 

was). Marx had done this before when he pointed out that, although Say was right 

about every sale being a purchase, because the buyer and seller were different people 

the seller could interrupt circulation if for any reason he didn’t re-spend the money 

immediately. Thus both Marx and Keynes showed how overproduction was possible 

under capitalism. Marx went further and showed how it was also inescapable from 

time to time. The basic proposition of the Keynsians comes to this: steady growth at full employment level can be kept if the State controls spending and investment so that when a boom is developing its cuts down, and when a slump threatens it increases, its spending.  [Gene = This starts us down the road of controlling money, bail outs, etc. Sound familiar?]

Keynes had been a critic of laissez-faire for a long time before he wrote his General 

Theory. He was a member of the Liberal Party and sympathetic to the kind of state 

capitalist schemes the Fabians pushed. When he wrote this book he already had an 

international reputation as a leading economist. His book was given wide publicity 

because in it a well-known economist provided a theoretical justification for policies already being tried in the 1930ts. 

Keynes’ theories and policies – equalizing taxation, cheap money, State control – were eagerly spread by the Labour Party and “progressives” generally. After all, this was what they – and Keynes himself, for that matter – had long been advocating. Helped by these partisans Keynesian economics has become the dominant economic theory. In Britain it completely conquered the universities and government departments. In America some conservative ’economists are still fighting a rearguard action on behalf of laissez-faire against Keynes’ theories which they see as state capitalism (to them “socialism”) . 

It is true that Keynesian economics is a theory of state capitalism. It is a theory that capitalism can be managed by professional economists from government departments. [The rearguard is correct...]

It is Fabianism in new guise: capitalism run by “experts” . In Britain the first Keynesian budget was that of 1940 so the “experts” have been in 

charge for over thirty years. How have they fared? Have they been able to control 

capitalism?

ETC ETC

--

Lies, damned lies, and statistics

Some light reading from icecap.us. On the right is the earth's temperature vis a vis CO2, as best it can be determined. Temperature is down as CO2 is up. As noted several times below, CO2 has been much higher in the past.

Watch as the noise becomes louder against "warming" until, suddenly, the topic changes. People will look at you like you are discussing mini dresses. No one is ever wrong, anymore. They just move on.

The investment banker, Al Gore, won't care. He's already set. I wish I didn't have a moral center.

First, I didn't think this had a name:

The Gore Effect (The phenomenon that leads to unseasonably cold temperatures, driving rain, hail, or snow whenever Al Gore visits an area to discuss global warming) remains in full effect. Planet Gore reader Rosa e-mails from Milan:

As you perhaps know, Mr Gore visited Italy last week, precisely Milan (Nothern Italy). He gave a speech on his usual theme: the globe is warming, there’s a lot of warning signs, we shouldn’t be so foolish to dismiss them, we must act now, etc. Outside the hall, it was snowing and snowing. Well, perhaps you think it’s usual in a northern Italian city to have three snow spells within two weeks. In fact, it’s quite rare....

Some articles, you can read full texts at the site.

Dec 19, 2008

Reply to RealClimate’s Attacks on the NIPCC Climate Report

By: Joseph L. Bast and James M. Taylor, Heartland Institiute

On November 28, the global warming alarmist Web site “RealClimate” posted a ridiculously lame attack by Michael Mann and Gavin Schmidt against ”Nature, Not Human Activity, Rules the Climate,” the summary for policymakers of the 2008 report of the Nongovernmental International Panel on Climate Change (NIPCC).

The NIPCC report was written by S. Fred Singer, Ph.D. and an additional 23 contributors, including some of the most accomplished atmospheric scientists in the world. The paper references approximately 200 published papers and scientific reports in support of its conclusions. It provides strong evidence that human activity is not causing a global warming crisis.

Mann and Schmidt call the NIPCC report “dishonest” and “nonsense,” a document “served up” by “S. Fred Singer and his merry band of contrarian luminaries financed by the notorious ‘Heartland Institute’. But instead of critiquing the scientific arguments presented in the NIPCC report, Mann and Schmidt simply dismiss and belittle them and refer readers mostly to their own past blog comments. Time spent following those links reveals a hodgepodge of opinions and superficial comments, a boatload of rhetoric, and very little science--an entirely unsatisfactory way to support such serious charges.

In case your forgot, Mann is the guy whose hockey stick graph is the key to the recent outcry. As I mentioned, previously, it was wrong, but who cares about math when the future is at stake.

I think the next guy, Happer, is the former college teacher of Mr. Gore, who got a C+, but zeroed in on global warming as a good pennant. The words below echo what happened to the teacher, if it is not he. (Somewhere in the archives you can find who it was). As I reall, now, Mr. Gore went out of his way to discredit Happer and was rebuffed by the TV news folks. That late night guy with the funny hair. (Below is a redo of a prior set of information)

Dec 22, 2008

‘Prominent Scientist Fired By Gore Says Warming Alarm ‘Mistaken’

EPW Minority Blog

Joins Senate Report of More Than 650 Dissenting Scientists. Award winning Princeton University Physicist Dr. Will Happer, who was reportedly fired by former Vice President Al Gore in 1993 for failing to adhere to Gore's scientific views, has now declared man-made global warming fears “mistaken.”

“I am convinced that the current alarm over carbon dioxide is mistaken,” Happer, who has published over 200 scientific papers, told EPW on December 22, 2008...

...“I had the privilege of being fired by Al Gore, since I refused to go along with his alarmism. I did not need the job that badly,” Happer said this week. Happer is a Professor at the Department of Physics at Princeton University and former Director of Energy Research at the Department of Energy from 1990 to 1993, has published over 200 scientific papers, and is a fellow of the American Physical Society, The American Association for the Advancement of Science, and the National Academy of Sciences....

...“I was told that science was not going to intrude on policy,” Happer explained in 1993.

“I have spent a long research career studying physics that is closely related to the greenhouse effect, for example, absorption and emission of visible and infrared radiation, and fluid flow,” Happer said this week. “Fears about man-made global warming are unwarranted and are not based on good science. The earth’s climate is changing now, as it always has. There is no evidence that the changes differ in any qualitative way from those of the past,” he added.

“Over the past 500 million years since the Cambrian, when fossils of multicellular life first became abundant, the levels of carbon dioxide in the atmosphere have been much higher than current levels, about 3 times higher on average. Life on earth flourished with these higher levels of carbon dioxide,” he explained. “Computer models used to generate frightening scenarios from increasing levels of carbon dioxide have scant credibility,” Happer added.

More below with a look at the Heartland Institute, thus, apparently filled with lies, which did not fund the report as was the sweeping defense. Shooting the messenger is a flag of weakness.

Dec 21, 2008

Global Cooling Brings Early White Christmas

By Deroy Murdock

Winter officially arrives with Sunday’s solstice. But for many Americans, autumn 2008’s final days already feel like deepest, coldest January. New Englanders still lack electricity after a Dec. 11 ice storm snapped power lines. Up to 8 inches of snow struck New Orleans and southern Louisiana that day and didn’t melt for 48 hours in some neighborhoods.

In Southern California this week, a half-inch of snow brightened Malibu’s hills while a half-foot barricaded highways and marooned commuters in desert towns east of Los Angeles. Three inches of the white stuff shuttered Las Vegas’ McCarren Airport that day and dusted the Strip’s hotels and casinos.
What are the odds of that? Actually, the odds are rising that snow, ice and cold will grow increasingly common. As serious scientists repeatedly explain, global cooling is here. It is chilling temperatures and so-called “global-warming.”

According to the National Climatic Data Center, 2008 will be America’s coldest year since 1997, thanks to La Nina and precipitation in the central and eastern states. Solar quietude also may underlie global cooling. [I told you so] This year’s sunspots and solar radiation approach the minimum in the sun’s cycle, corresponding with lower Earth temperatures. This echoes Harvard-Smithsonian astrophysicist Dr. Sallie Baliunas’ belief that solar variability, much more than CO2, sways global temperatures.

Meanwhile, the National Weather Service reports that last summer was Anchorage’s third-coldest on record. “Not since 1980 has there been a summer less reflective of global warming,” Craig Medred wrote in the Anchorage Daily News. Consequently, Alaska’s glaciers are thickening in the middle. “It’s been a long time on most glaciers where they’ve actually had positive mass balance,” U.S. Geological Survey glaciologist Bruce Molnia told Medred October 13.

The reference to financing seems intended to imply that the authors of the NIPCC report were paid by The Heartland Institute, which is not true. RealClimate has been informed of this, but hasn’t corrected its false claim. To go on implying it anyway tells you all you need to know about the integrity of the RealClimate authors.

And what about “the notorious ‘Heartland Institute’”? It's a 24-year-old national nonprofit organization that gets 95 percent of its funding from non-energy-related donors and 84 percent of its funding from non-corporate sources (in 2007). It has a long history of publishing reliable scientific and economic analysis of global warming. Heartland’s credibility is certainly less questionable than that of RealClimate, a front group created specifically to attack global warming skeptics by Fenton Communications, a truly “notorious” PR agency.

Mann and Schmidt’s assault on Fred Singer reminds us of Canadian environmentalist Lawrence Solomon’s observation, in his book The Deniers, that the qualifications of most alarmists in the global warming debate fall short of those of the skeptics. Now consider Mann’s and Schmidt’s qualifications. Mann is the author of the “hockey stick” temperature graph that did so much to fuel global warming hysteria when it was featured in an IPCC report, but which a Congressionally appointed panel of experts found was not supported by scientific data. Gavin Schmidt is a climate modeler at the Goddard Institute for Space Studies and in recent weeks has been

frantically trying to explain why his organization falsely reported that October 2008 was the warmest October in recorded history. Many climate researchers believe Mann and Schmidt are deliberately falsifying temperature data to keep their global warming scare going a few more years.

With no apparent sense of irony or shame, these two discredited authors call one of the world’s leading scientists “dishonest.”

Mann and Schmidt pretend to be engaged in a scientific debate over global warming, but they are not. They have banned global warming “skeptics” from posting on their blog, resort to ad hominem attacks against anyone who dissents, and have repeatedly declined invitations to appear in public forums to debate their critics. They are what the history of their organization says they are: A PR shop for discredited global warming alarmism.

Dec 23, 2008

Minus 60 (deg C)

By Steve McIntyre, Climate Audit

Climate Audit, December 18, 2008

One of the interesting by-products of the GISS screw-up in October was that we learned the names and locations of quite a few Siberian weather stations - that are glaring “hot spots” on temperature anomaly maps. However, most of these places are among the coldest places on earth.

One of them was Verhojansk, about which Anthony Watts had an interesting post last week; it was one of the screwed up NOAA-Hansen sites. It vies for the title of coldest place (in the Northern Hemisphere) with nearby Ojmjakon. (the place where the lowest-ever temperature in the Northern hemisphere was recorded - Verkhoyansk with a record of minus 67.8 degrees Celsius (minus 90 degrees Fahrenheit) and Oymyakon with a minimum of minus 67.7 degrees Celsius (minus 89.9 degrees Fahrenheit).

Dec 22, 2008

Scientist Adjusts Data—Presto, Antarctic Cooling Disappears

Posted by JBlethen, Heliogenic Climate Change

"New research presented at the AGU today suggests that the entire Antarctic continent may have warmed significantly over the past 50 years. The study calls into question existing lines of evidence that show the region has mostly cooled over the past half-century.

Using an iterative process to analyse the data, they found warming over the entire Antarctic continent for the period 1957-2006. Restricting their analysis to 1969 to 2000, a period for which other studies have found a net cooling trend, Steig's study found slight cooling in east Antarctica, but net warming over west Antarctica.” “Evidence that Antarctica has warmed significantly over past 50 years”

Abstract excerpt: “We use statistical climate field reconstruction techniques to determine monthly temperature anomalies for the near-surface of the Antarctic ice sheet since 1957. Two independent data sets are used to provide estimates of the spatial covariance patterns of temperature: automatic weather stations and thermal infrared satellite observations. Quality-controlled data from occupied instrumental weather stations are used to determine the amplitude of changes in those covariance patterns through time. We use a modified principal component analysis technique (Steig et al., in review, Nature) to optimize the combination of spatial and temporal information. Verification statistics obtained from subsets of the data demonstrate the resulting reconstructions represent improvements relative to climatological mean values.”

Mann’s not the only one inventing his own “modified” PCA. Looks like Steig “got rid of” antarctic cooling the same way Mann got rid of medieval warming. Why not just look at the station data instead of “adjusting” it (graph above and linked here)? It shows a 50-year cooling trend. Read post here.

“There are three kinds of lies: lies, damned lies, and statistics.”—Disraeli

Do old rules of economic analysis apply

Below is a reply to an inquiry concerning an analyst's projection that we are at an investment buying opportunity.

Richard,

Regarding the note and graphs you sent:

I have trouble when someone says there is a definite trend (70%). He is 20% from being wrong, or does some other scale apply?

All this analysis is nice and probably useful in the past, but we are not in a normal market. In a normal market, we would be in a unique buying opportunity and timing is de minimus. Just start buying. If anyone hesitates, that is an action louder than words. Why talk about timing if it is the best period to buy? The writer of the email is looking for emotional support that things will be just like last year, not trying to maximize a timing strike If a candy bar is 6 cents, you don't waste time wondering if you can get it for 5.

However, things are unique because we are so low and biasing down that the market, which, of course, does not really exist, defies prior logic. If prior logic does not work, then why apply it?

You have to be in the normal paradigm or out, not applying "normal" technical analysis when it says what you want. One has to step back and think about such reflections as the discovery of a 50 billion dollar Ponzi scheme did not crash the market, so things look good. Capitulization is good at washing out Joe Six Dollar to find a bottom, the theory goes. A theory is not a law. Failing to collapse by digging a hole through the floor is not exactly the same. At some point, people have no where to go and just sit and hope things get better.

We are at a primal decision point. If things are not so bad, that everything is being overblown, then one should not hesitate to buy. It is the best buying opportunity you will ever see. Me, I put Beth in some GE in case things sort out, but that is about as normal as I would go.

If things are really unique and we have gained a disregard for the value of money by, essentially, Marxist politicians is pushing us over the edge, then one should probably be thinking more carefully. We have just created more money than can be imagined to save our foundational companies. We have made ourselves insolvent, but for what we can still borrow as others are worse off.

Maxine Waters' slip made it clear the Feds are designing to take over the banking system. Will there be a move to nationalize retirement funds? We just bailed out the auto unions by continuing the pain of car companies that can't quite compete, Obama says he is against nuclear power and will cripple coal (after saying he was for it), and, finally, people are becoming stupid beyond redemption. Some sort of medical insurance nighmare is months away. There is talk of saving the newspapers, another arm of the "progressives" that can't compete in an open market. These are not the part of the backdrop of normal times.

So, are we in normal times? Is this the 87 crash? Nice to think so, but as the writer said, almost dismissively, the hit to Main Street is coming and will last two years. This is two years to highly-leveraged economic dodos who have not heard of bad times. We haven't even started to feel the pain. Of course, Congress is delighted with the melt down they helped create, as they will find years of support for socialization and expensive green bills designed to centralize power. Congress can now promise people money if they just keep voting for socialism.

The dollar is becoming meaningless, other than what a seller would take for a sale. It is becoming Weimar money. It has not crashed as other countries were dependent on us. This dependency is what makes us a safe harbor, but for how long? Why attach yourself to a falling star? The USD has been dropping fast as the currency of world trade. There is just no replacement, as yet, as the EU relied on our buying their stuff. Gold may come back.

Stocks could go up to reflect the decreasing value of the USD. Would you rather have the equivalent of a 1950 $1 or 2008 $3? Imagine the market becomes stagnant or mild while the dollar decreases in value.

This devaluing will to come, as it is how Congress and the President will pay for all the money we borrowed. An old trick that won't last too much longer. One has to decide whether we can get away with this trick one more time.

I should think after a deflationary period, coming soon to a home near yours, there will be inflation. If an investor thinks it is good to buy into inflation than we approaching that time. If you think the inflation will defeat the USD, it is a good time to get out of the USD and into real estate, gold, and peanut butter. Not sure, do both.

I guess, my thoughts are that it would be great if old school analysis applied, but I think (60% to adopt a motif) that we are no longer the US of old and old rules are dangerous. The brilliant analysis of old certainly did not help the smart people of Wall Street.

Once Main Street starts to get crushed and people see their money (savings and retirement) is watered down, no one can say what will happen. It may be Bush stopped the complete melt-down, but the cost and precedents set may just make the suffering worse, later on. The decision point is whether one wants to stay in this board game even though they keep changing the rules inside the box cover.

Three years ago, I noticed an article that mentioned, in passing, how both Gates and Buffet had been buying large positions in gold. That stuck with me. What were they seeing?

Gene

Eve of Destruction: Age of Insomnia

I was perusing sites talking about the middle east, B.H. Obama, and the economy. Normal stuff. I was interested to see how our friends' economies were doing. Apparently, the Arabs were less immune than they thought.

I read Soros' people have the king's ear and we will see a U.S. movement toward conciliatory action with Hamas against the bad Israel. This is pretty good hustling for a guy whose traditional hedge fund has lost money three years in a row.

Then, I read of an ad stating how happy a reader would be buying in Abu Dabi, the fantasy place, only three days before articles and columns finally understood the financial crises and attacked the United States as leading the world into hell. The good news is they will start retracting investments. Let us hope the do so in the next year, so they can take a big hit. Those who just have money givern to them, don't usually have the brains to understand it.

Anyway, here is the tempering article, just in case you thought you were dealing with rational people.

Tuesday, October 7, 2008

Hamas: Jews caused financial crisis

According to a Ha'aretz headline: Hamas: Jewish Lobby in U.S. to blame for global financial crisis.

The Hamas financial expert explained it all:

The Hamas militant group on Tuesday accused the United States Jewish Lobby for fomenting the global financial crisis.

The crisis was the result of "bad administrative and financial management and a bad banking system put into place and controlled by the Jewish lobby," Hamas spokesman Fawzi Barhum said in a statement.

Barhum said that despite approving a bailout plan of $700 billion dollars, the U.S. government was ignoring the role of "the Jewish lobby that put the U.S. banking and financial sector into place."

This lobby, said Barhum, "controls the U.S. elections and defines the foreign policy of any new administration in a manner that allows it to retain control of the American government and economy."

If only the US had stuck to Sharia financing, this would never have happened, and the US would have a nice flourishing economy like that of Sudan or Yemen. There! We knew it was the fault of the Jews, right? And Snoopy the Goon exposed the Jewish - Iranian conspiracy, which is the real reason for the crash.

Bravo for the moderate Hamas.

Ami Isseroff
-----

Of course, Sharia financing would have avoided the recent crises, especially after all the famines and plagues that killed off the people in America who were living in tents. I see it is the U.S. that is not following Sharia financing and is evil, not those Arab businesses now screaming holy hell. I guess they are true believers of Sharia.

I wonder how Osama's holdings are doing. It may be this collapse may knock down funding quite a bit. Silver lining?

So, we should all thank Chuck Schumer for starting the entire chain reaction with an intentional run on IndyMac Bank. I think the economic surprise did elect Obama by creating an economic crises, taking terrorists off the front page, and gave him an opportunity to reign in hell.

Lest you think I make things up, LA Times blog:

An important angle in the IndyMac failure that may get lost in ominous headlines tonight and tomorrow: federal regulators pointedly cited U.S. Sen. Charles Schumer, D-N.Y., in explaining the bank's failure. In simple language, federal regulators blamed Schumer for a run on the bank.

So, we have Schumer and Kennedy-Shlossberg representing us. Tell me we are not on the eve of destruction.

Ms. K-S:

While Kennedy hasn't strongly voiced her opinions on the day's major issues, she has said her ideologies fit perfectly with the Democratic party.

"I feel I like I am a Kennedy Democrat, a Clinton Democrat," she said recently. "Chuck Schumer, Barack Obama: these are leaders whose values I share."

OK. She is more perfect than Obama, a pure tabula rasa: no track record, no job, no books or articles, no interest in voting, no speeches. She is an unknown Kennedy, Clinton, Schumer, Obama democrat, which permits her to raise taxes, lower taxes, promote business and commerce, or crash banks, all with an engaging smile.

Perfect choice in the Age of Insomnia.

Sorry. Can't hit tab twice, apparently

Sorry, about that. Who knew? I was reflexively hit tab and the html monster took over.

Some year end stocking stuffers.


1. A recent article I put together: How the Economy Began I have no idea why clothes is underlined or a preposition is missing.... Could be me, but there is an editor.

2. FairTax.org believes in eliminating all taxes except for a sales tax. Some of their comments:

1. The federal sales tax would be 30%, the amount of all taxes put together. This will be a reduction for the normal, frugal family. I am not sure of the use of math, here, but I like the idea of honesty in taxation. Also, there would be smart shopping and a new interest in saving.
2. Lobbyists make 53% of their income working on the IRS Code.
3. The Fair Tax people figure the equivalent of 3% of our current revenue would appear from those who are underground, etc. I think it is more.

For my part, I always thought is was a waste that several million of the smartest people our culture ever developed are dedicated to tax and tax accounting. Really, they have incredible memories and sneakiness. What a waste of talent.

3. Thanks to Greg, The Liberal Mind. Much of the book is actually online. This is offered to annoy people, but it will let you see the confusion of the other side, the rational people. It leads us to Hayek.

4. For my part, also thanks to Greg, one of the more important books in recent history, no exaggeration, again much of it is online: The Road To Serfdom by Hayek. I find it hard to believe we are reliving history. This is the benefit of our schools which don't teach history, not that the teachers actually know it. Anyway, it is just a bunch of dead white people.

5. Finally,

A Visit from St. Nicholas

Twas the night before Christmas, when all through the house
Not a creature was stirring, not even a mouse.
The stockings were hung by the chimney with care,
In hopes that St Nicholas soon would be there.

The children were nestled all snug in their beds,
While visions of sugar-plums danced in their heads.
And mamma in her ‘kerchief, and I in my cap,
Had just settled our brains for a long winter’s nap.

When out on the lawn there arose such a clatter,
I sprang from the bed to see what was the matter.
Away to the window I flew like a flash,
Tore open the shutters and threw up the sash.

The moon on the breast of the new-fallen snow
Gave the lustre of mid-day to objects below.
When, what to my wondering eyes should appear,
But a miniature sleigh, and eight tinny reindeer.

With a little old driver, so lively and quick,
I knew in a moment it must be St Nick.
More rapid than eagles his coursers they came,
And he whistled, and shouted, and called them by name!

"Now Dasher! now, Dancer! now, Prancer and Vixen!
On, Comet! On, Cupid! on, on Donner and Blitzen!
To the top of the porch! to the top of the wall!
Now dash away! Dash away! Dash away all!"

As dry leaves that before the wild hurricane fly,
When they meet with an obstacle, mount to the sky.
So up to the house-top the coursers they flew,
With the sleigh full of Toys, and St Nicholas too.

And then, in a twinkling, I heard on the roof
The prancing and pawing of each little hoof.
As I drew in my head, and was turning around,
Down the chimney St Nicholas came with a bound.

He was dressed all in fur, from his head to his foot,
And his clothes were all tarnished with ashes and soot.
A bundle of Toys he had flung on his back,
And he looked like a peddler, just opening his pack.

His eyes-how they twinkled! his dimples how merry!
His cheeks were like roses, his nose like a cherry!
His droll little mouth was drawn up like a bow,
And the beard of his chin was as white as the snow.

The stump of a pipe he held tight in his teeth,
And the smoke it encircled his head like a wreath.
He had a broad face and a little round belly,
That shook when he laughed, like a bowlful of jelly!

He was chubby and plump, a right jolly old elf,
And I laughed when I saw him, in spite of myself!
A wink of his eye and a twist of his head,
Soon gave me to know I had nothing to dread.

He spoke not a word, but went straight to his work,
And filled all the stockings, then turned with a jerk.
And laying his finger aside of his nose,
And giving a nod, up the chimney he rose!

He sprang to his sleigh, to his team gave a whistle,
And away they all flew like the down of a thistle.
But I heard him exclaim, ‘ere he drove out of sight,
"Happy Christmas to all, and to all a good-night!"

Clement Clarke Moore, a dead white person, (1779 - 1863) - with the name he used, not the politically cleansed: Twas the Night Before Christmas.

Merry Christmas and all those other holidays I can't spell.

The Avalanche Begins

You can't be surprised.  

Below is an excerpt of an article you could read over in 20 seconds, as you have heard it all before, here.  If you want the Senate minority report.  Hit Here.   Thanks Rod.

I explained long, long ago that scientists careers depend on credibility. As the preposterous "warming" assumptions are revealed to the common person to be silly, reputable scientists will have to jump to pointing out the Emperor is not wearing clothing, even in the face of University or government threats. 

The left had its government-university-media complex at work funding the fear of the end of the world, as a political tactic to gain control and money, but they had to know its life span was limited, so look for the next crises, or are we in it? Wasn't it Saul Alinski, the Columbia radical whose group hired a young Obama, who said you can take control by creating constant turmoil, i.e. fear? 

On the other hand, our dull grammar and high school teachers will be repeating their unions' mantra even after their deaths. So, a new generation of non-critical, scientific illiterates will cause problems for decades. Really, all you have to do to destroy the United States is get control of the public school machine. How can a parent express doubt about a law of nature espoused by the "teacher?"  Most parents were produced by those same "teachers."

The scientists who were highly dedicated and actually studying subjects related to the planet never signed on to the hysteria and a few were adamant that they never agreed with our mysterious UN "scientists" who voted on a principle of nature, even though the UN reports named them as signing on.

Anyway, the arctic will be gone in four years, the Gore warning being issued a year ago.  So, there will be a reduction in global shipping, especially if we use sails. I sure hope the warming doesn't continue to heat Mars.

Today's fact:  Henry Paulson (Goldman Sachs) helped Gore start the carbon credit business. 

I think I am too late to sell credits in wind turbines.  I hope not, what a brilliant scam.  The wind turbine project lost its three funding institutions, so only the Farm bureau still has funds to lose, er disperse.  Failing that, I will be soliciting credit investment from you. After all, we will need wind power, once the nuclear plants and coal mines are shut down by the elected out patients.

Things are not looking good, so don't feel smart. The crowd has formed, extinguishing individual thought and work, so put peanut butter in the basement and gold in the yard. It is that bad. 

When I lived in Canada, not so long ago, a popular book came out that I may replicate here: Take The Money and Run

- - - - - - - - - - - - 

UN Blowback: More Than 650 International Scientists Dissent Over Man-Made Global Warming Claims
December 10, 2008

Posted by Marc Morano – 9:36 AM ET - Marc_Morano@EPW.Senate.GOV
UN Blowback: More Than 650 International Scientists Dissent Over Man-Made Global Warming Claims

Study: Half of warming due to Sun! –Sea Levels Fail to Rise? - Warming Fears in 'Dustbin of History'

'No evidence for accelerated sea-level rise'

POZNAN, Poland - The UN global warming conference currently underway in Poland is about to face a serious challenge from over 650 dissenting scientists from around the globe who are criticizing the climate claims made by the UN IPCC and former Vice President Al Gore. Set for release this week, a newly updated U.S. Senate Minority Report features the dissenting voices of over 650 international scientists, many current and former UN IPCC scientists, who have now turned against the UN. The report has added about 250 scientists (and growing) in 2008 to the over 400 scientists who spoke out in 2007. The over 650 dissenting scientists are more than 12 times the number of UN scientists (52) who authored the media hyped IPCC 2007 Summary for Policymakers.

The U.S. Senate report is the latest evidence of the growing groundswell of scientific opposition rising to challenge the UN and Gore. Scientific meetings are now being dominated by a growing number of skeptical scientists. The prestigious International Geological Congress, dubbed the geologists' equivalent of the Olympic Games, was held in Norway in August 2008 and prominently featured the voices and views of scientists skeptical of man-made global warming fears. [See Full report Here: & See: Skeptical scientists overwhelm conference: '2/3 of presenters and question-askers were hostile to, even dismissive of, the UN IPCC' ]

Full Senate Report Set To Be Released in the Next 24 Hours – Stay Tuned…

A hint of what the upcoming report contains:

“I am a skeptic…Global warming has become a new religion.” - Nobel Prize Winner for Physics, Ivar Giaever.

“Since I am no longer affiliated with any organization nor receiving any funding, I can speak quite frankly….As a scientist I remain skeptical.” - Atmospheric Scientist Dr. Joanne Simpson, the first woman in the world to receive a PhD in meteorology and formerly of NASA who has authored more than 190 studies and has been called “among the most preeminent scientists of the last 100 years.”

Warming fears are the “worst scientific scandal in the history…When people come to know what the truth is, they will feel deceived by science and scientists.” - UN IPCC Japanese Scientist Dr. Kiminori Itoh, an award-winning PhD environmental physical chemist.

“The IPCC has actually become a closed circuit; it doesn’t listen to others. It doesn’t have open minds… I am really amazed that the Nobel Peace Prize has been given on scientifically incorrect conclusions by people who are not geologists,” - Indian geologist Dr. Arun D. Ahluwalia at Punjab University and a board member of the UN-supported International Year of the Planet.

“The models and forecasts of the UN IPCC "are incorrect because they only are based on mathematical models and presented results at scenarios that do not include, for example, solar activity.” - Victor Manuel Velasco Herrera, a researcher at the Institute of Geophysics of the National Autonomous University of Mexico....

Gee, we forgot to include the sun in those really clever miscalculations.

Redux

OK here is a basic cut and paste of TWO articles!

Former Fed governor hints at big upward revaluation of gold

Submitted by cpowell on 06:25PM ET Friday, December 12, 2008. Section: Daily Dispatches
9:21p ET Friday, December 12, 2008

Dear Friend of GATA and Gold:

Interviewed Monday this week on the "Trading Day" program of Business News Network in Canada, former Federal Reserve Governor Lyle Gramley hinted that a big upward revaluation of gold may figure heavily in the Fed's attempt to rescue the U.S. economy.

The program's guest host, Niall Ferguson, an author and history professor at Harvard, asked Gramley, now senior adviser at Stanford Group in Houston, about the seemingly grotesque expansion of the Fed's balance sheet in recent months.

Ferguson asked: "I've heard it said that the Fed has turned into a government-owned hedge fund, leveraged at 50 to 1. Do you feel nervous about what this might actually do to the Fed's reputation?"

Gramley replied: "I think you have to reckon with the fact that one of the Fed's assets is gold certificates, which are priced, as I remember, at $42 an ounce, and if we were to price them at market prices, the Fed's leverage would look a lot less than it is now."

While valuing the U.S. government's claimed gold reserves at today's Comex closing price of around $822 per ounce instead of the government antique bookkeeping entry of $42.22 per ounce would indeed vastly expand the government's monetary assets, it might not be enough to offset the liabilities and guarantees the government lately has taken on. But the job might be done by revaluing the gold to $5,000 or $10,000 per ounce, as the British economist Peter Millar speculated two years ago might be necessary to prevent debt deflation:

http://www.gata.org/node/4843

You can watch BNN's interview with Gramley here:

http://watch.bnn.ca/trading-day/december-2008/trading-day-december-8-200...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *-------------------------------------------
From "Midas" Commentary
by Bill Murphy
LeMetropoleCafe.com
Friday, December 12, 2008

I received a call this morning from a commodities broker who told me that the Comex is alerting various futures firms about the potential of a squeeze on the December contract and is advising the $840 December shorts to exit their positions. That is the remaining open position.

There have been 12,636 notices of delivery. The shorts have until December 31 to make delivery. Normally they deliver early to take in cash and earn the interest. They must be delaying. As I understand the situation, that represents about 40 percent of the gold available at the Comex, and of course someone could enter the scene late, buy February gold, and then spread into December, which would stun the shorts.

My broker friend said his back office said this sort of alert is highly unusual and that the concern is real, not only for gold, but for other commodities too, like copper and palladium, as there is a good deal of talk of taking deliveries there too. But gold is the one for which the advice to cover went out.

This is an extremely productive development and could spur the price of gold up quickly as word spreads. As we all know, buying Comex gold and silver (the cheapest way to buy precious metals) makes all the sense in the world in this financial environment.

* * *

Help Keep GATA Going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at http://www.gata.org/.

Gold news

fyi

Let me know if the article is not below.  I am in Safari and it works differently.

Gene

Money and Serfdom

Interesting article

Below is an excerpt. The cart analogy is clear. He suggests either local money or go bankrupt and move to Mexico. This is a British article.

What Is Money?

Jon Ronnquist – Information Clearing House Dec 13, 2008

The problem with money is essentially a question of faith. Money is a promise represented in paper, metal and digits and is as valuable as it is trustworthy. And because trust is a volatile and abstract thing at best, so is money a risky business. Its usefulness is of course undeniable. In a world as complex and multifaceted as this one, barter becomes increasingly limited as a practical means of exchange. And yet we should do well to remember that for all its practicality, money posses a very real danger, the obvious one being devaluation. But that is by no means the only or the most serious threat posed by money. As in all matters of faith, manipulation is the far greater evil.

The gold standard against which currency was once levelled is now the distant memory of a bygone age. Whatever value is represented by your Dollars, Pounds and Euros is now set solely against the trust of the user, which is to say what buyers and sellers believe it to be worth. And so it should be and must be. No man would take money for his livestock or labour if he did not believe it would be accepted in kind by the purveyors of his own needs. This is basic economics and I see no reason to bore anybody with such things. The point is that money, as a concept, is sound and necessary. But what happens when it falls into the hands of those who see money as something more than a simple mechanism of trade? Those who see in it also an opportunity to consolidate power. Then we are in trouble...

Fourth and last, money must be introduced into circulation as payment, not debt. To make money available on the condition that it must be taken back out of circulation in equal or greater measure is a violation of its purpose and leads to all manner of problems. Earth in the twenty-first century being the most obvious one.

As populations rise, production increases and trade expands, more money must be made available to facilitate it. The question of how this is done fairly is simple but requires first and foremost a sound government. Money must be introduced through payment for goods and services of universal benefit to the population. This means direct investment into public infrastructure, services and institutions. Healthcare, roads, bridges, libraries, parks, highways, schools, research and science, welfare institutions, water and power infrastructure, the maintenance of public parks and wildlife reserves and public transport to name a few. ...

What we live today is a twist on that reality and one that we better star seeing for what it is. Contrary to popular belief, the great failed Marxist experiments of the age are not failures of those philosophies so much as proof that there is no room left in the order of things to even try them.

...And where the common man agrees, it is only on the understanding that modern government are not really governments at all, but representatives of private power. A government run by and for the people is an absolute must if society is to progress at all.

...Another thing that should not be allowed to happen to money is it's pining against the value of other currencies. When it is, it immediately becomes a commodity in its own right, traded like goods with the aim of increasing wealth. This is an essential violation of the axioms which govern money and a gateway to extensive abuse...

Before the post office, the water works, the phone companies and the coal mines were auctioned out of the hands of the people and into those of for-profit private enterprise, another public service was sold to the private sector, the money works. In an age none are old enough to remember, and a frighteningly small percentage of us even know about, the production, supply and regulation of national currencies was surrender by government after government. ...

THIS IS GREAT:

... Think of it this way. A trader does business between two markets several miles apart. To move his products back and forth between them he needs carts. But carts cannot be made or owned, they can only be borrowed. And for every cart that is borrowed two must be returned in due course. So he borrows ten carts on the understanding that he must return twenty by year's end. Only by year's end he not only has but ten carts, he needs another ten to keep up with his expanding business. His only choice is two borrow forty new carts. Twenty to return as payment for the first ten and twenty for use. And now he owes eighty carts by year's end. And the better things get, the deeper in debt he is. And the circle can never be broken. So why doesn't he just make his own carts? It would be easy enough. Only by the time he comes to this simple conclusion, the law, the courts and the police are all in the cart borrowing enforcement business.

And so it is with the money supply today. All the money, the land and the commodities on earth could not pay all the debt. And as interest is ever due and mounting, borrowing must grow to keep up. Where does the cycle end? By all appearances, it's ending now...Your willingness to work hasn't changed and nor has your desire for the things you would buy with your earnings. Everything is in place to allow life to go on, bar one thing. The worthless paper and coinage that serve as nothing but a tool of interaction. If everyone simply agreed, we could start printing our own money at home and use it to go on as we did. Provided it didn't get out of hand...

...Delegate your divine right of money creation for interest to commercial banks and watch the population strangle itself with unmanageable debt. Allow Wall Street to create value out of thin air by turning confidence into price tags which soon have no comparable relation to the things they are attached to, as banks increase lending to make them affordable to you and me. Wait for the population to buckle under under the strain of unmanageable debt, then lend more to their governments. Watch wars begin and lend to each side. Every time the cycle comes full circle, the concentration of power is a little less diluted and a lot more frightening...

One means of circumventing a crash created by a lack of national currency is the creation of a local currency. This has been done throughout history on many occasions to counter the collapse of national banks. It's a shame to think that the ingenuity such a bold plan would require is fatally lacking in most modern communities, who have become so dependant on the vicious circle of big banks, big employers and big chain stores for their survival that such a radical departure from the comfort of the status quo would almost certainly be beyond the imagination. Saying that, pressure can have a miraculous effect on the mindset.

I don't know if things are too far gone to allow for hope of real change, but I think we are about to find out one way or the other.
www.informationclearinghouse.info/article21451.htm

He also said one could just stop paying debts, declare bankruptcy and move to Mexico. The creditors don't really like you anyway.

Gold Bug Infestation

FYI

Antal E. Fekete

Gold Standard University Live

Here is an update on the backwardation in gold that started on December 2 at an annualized discount rate of 1.98% and 0.14% to spot in the December and February contracts. It continued and worsened on December 8, 9, and 10 as shown by the corresponding rates widening to 3.5% and 0.65%. It is nothing short of awesome. This is a premonition of a coming gold fever of unprecedented dimensions that will overwhelm the world as soon as its significance is fully digested by the doubting Thomases. The worsening of backwardation must be viewed in the context of the gold price bouncing back from the lows of last week. It shows that the ‘gold bashing’ on Friday was done in the December contract. It is quite revealing that the spot price bounced back more than the futures price. The bulls are on the warpath. They have unearthed the hatchet. They have stopped eating from the hands of the clearing members....

The rest HERE

He distinguishes gold from other commodities. It is a currency item, not just a commodity. If he is right, then gold takes off, very soon. He also point out

Anyone who reads the written works of our Fed Chairman will know that Bernanke’s long term plan involves devaluing the dollar against gold. This is the exact opposite of the position of most prior chairmen. He has overtly stated his intentions toward gold, many times, in various articles, speeches and treatises written before he became Fed Chairman. He often extols the virtues of F. D. Roosevelt’s gold revaluation/dollar devaluation back in 1934, and credits it with saving the nation from the Great Depression. According to Bernanke, devaluation of the dollar against gold was so effective in stimulating economic activity that the stock market rose sharply in 1934, immediately thereafter. That is something that the Fed wants to see happen again.

Gold seems to be ready to take a vicious jump. This is good if you have gold, not if you have dollars.

I suggest doing something. Maybe buy a gold mining stock, if you can't get silver or gold.

Backwardization May Be Here

A perhaps rough report, but one I had to get out:

_____

Well, the rug may have been pulled out from all of us. Even the evil bad guys. For a depressing, must-read click on the title, I hope, as I am in another browser and don't like what I am seeing. 

I sent you Warren's take. Pretty sensible, if the game stays operative. However, if you missed it, Buffet and Gates were huge buyers of gold three years ago, or so. Sometimes, you do as they do, not as they say, even if they are serious. Gold is an insurance policy.

I have come to this point in my late-term studies as I have been looking at alternative currencies, which do exist.  I got side-lined at e-gold, temporarily shut down to register with the states as a money store, by articles expressing noting but panic.  No happy feelings about the coming gold boom, as they see it. This was an interesting mood. No smugness, no up-beat "we told you so" by gold bugs, only the gnashing of teeth. This was sobering.

The article presents another view from this part of the world, the gold standard crowd, few will listen to. Fekete has waived a red flag, so to speak, to anyone paying attention, that gold went into "backwardization."  If it stays there, there is no longer any game in town. There may be no town. He is more than serious. He calls it a 10 on the Richter scale. Please, take the time to digest what he is saying. 

I haven't done any research on the guy, as my goal in this blog is to look at what people say, not who they are or what party they belong to. Put aside researching the messenger for a minute, as that seems a popular way to deal with bad news, and consider his research and expertise. Few of us really understand currency.  I had only heard of backwardization one time and it still makes my head hurt. Examine his words.  For my part, I see clear thinking, not a gold nut.

What backwardization means is there is no premium for future metal because no one will take paper. Think of trying to buy peanut butter with Monopoly money. 

Indeed, if those with gold could sell it, now, and jcould buy a thirty day futures contract for much less, locking in an instant, secure profit, while getting the gold back. Right?

They don't think so because they don't trust the paper.  Don't gloss over this. They are walking away from seemingly riskless profit!  The only explanation is they see massive risk. These are the pros and they have picked up their marbles and have gone home.

COMEX may be ground zero. They do not want to be holding a COMEX promise to deliver gold. OK, let us be clear - they do not trust the metals market is solvent. They do not believe in the promises behind the market, that gold can be delivered. 

Never in history (well 1972 when this stuf started) has there been a backwardization trend or even a hiccup of more than a few hours as contracts came due at the triple witching hour. Sort of an arbitrage opportunity that is rapidly filled. 

Goldman Sacks is the big player here. It is an owner of the Fed.  It is alleged that they are keeping gold's price artificially down, with all manner of tricks, because if (when?) it takes off the fiat currency will be seen for what it is - little. The currency, Sacks, and the rest of the game will collapse. GAME OVER.  So, making believe gold is cheap, may get us over the quiet panic, they hope. Banks won't admit it, but they were dumping gold to hold down gold prices in order to save the system.  I would do the same, if I were there.

If they are, indeed, depressing the market, this is a huge red flag. It is a siren and flashing lights, as well. The metals market is not acting naturally. This begs inspection. The dollar is not collapsing, so gas is coming down, which would be great, if it were not an artificial blip. The average person knows we are in the handbasket, so why is the currency holding up?  You are right, it does not make sense.  It smells, actually, of holding back the dike while you move your family elsewhere. 

All the other crises, the real estate bubble, the derivatives, etc., vanished car financing, are part of a mindset built upon happy money.  Like all pyramid scams, the happy money scam may be at an end. Those out at the end, win. In the end, its the happy money that could get us all. 

The author sees a spiraling inflation, perhaps after a deflation. He says we finally have come to understand, too late, that fiat currency has no value. He says  it is dead, but I guess we have to deal with the rotting. If he is correct, trade comes to an end, as we know it. 

Of note, he points out that today every country is off the gold standard.  That is, every country is about to have the rugged pulled hard. 

If he is correct, the sucking sound is very soon.  Months, maybe.  So, you will know if things aren't so bad next July 4th. 

The answer to the crises is get metals and peanut butter. Do whatever you can to maximize paper money, now, before it becomes much less valuable, the point being when the music stops, you don't want to be holding paper.  The trick is, then, to peg when there will be inflation, when deflation.  This is good advice, even if you are not a gold bug.

I mentioned the government is planning on a deflation. The author stated that, as well, but said a rapid inflation will follow. This is a game of timing, for those who know what is going on. If there is a deflation, and gold has vanished, the prices taking off, prepare for inflation. Liquidate the paper and buy real stuff while people think it is good to hold. There are many paths to follow, but the one to avoid is holding paper money, paper debt. 

Be aware, though, those holding your mortgage and loans, will want their contract paid in dollars as agreed. This is a big timing problem. In a time of rapid inflation, then you want the dollars around to pay off the loans, even though the dollar is devalued.  The Congress has been doing this for years, so why not you? Its a tough timing call:  get peanut butter, get some gold/silver that can be converted into more cash later to pay off loans with cheap cash.  

Don't bank on the old inflation, happy money game. You may not be able to sell your home, at all, let alone for what you bought it. If you like your house, dig in and prepare to keep it. Don't bank on a job.

Realize gold (and gas) isn't really moving around in price so much, these days.  That is an illusion.  You are used to a stable dollar where price changes mean something happened in the market. Today, oil, for example, is not rising or crashing in price - the dollar is.  Gas is gas, how much the seller thinks it is worth in dollars is what matters.

The allegation is the dollar is being propted up as a last stand.  For now, other countries are with us as we are the "stable" one of the crowd.

If inflation takes hold, then all prices will sky rocket. So, you want gas in tanks and silver in the basement before then, after prices lift off, convert the items to paper money, stocks, and pay off debts in cheap paper money.

Of interest, the author says if backwardization occurs in any commodity other than gold, that will cause a rush of mining activity to maximize profit.  The shortage is the key to a growth spurt. Gold is the one thing that doesn't follow this. Gold is what you keep in chaos, not what you sell. There is not a gold sparcity, as I thought, there is a refusal to part with it.

Have you seen the signs on the side of the road, written in crude paint:  WE BUY GOLD.  ANY TYPE?  There is a reason. 

Common experience tells us this is a crock. However, it was not crock in the 1930s that the system went boom. Gee, it was housing financing and bank manipulation that caused that.  How familiar.  I hear a collapse is every 80 years, right on target. We have not eliminated human nature and great grandchildren forget the experience of their elders. People care about iPods, not financial stability. Indeed, we have become the ultimate bubble.

Forewarned is forearmed.  Like I say, the only downside to working on this logic is you paid some bills, have many cans of beans, and lightened up on costly Christmas gifts. If you take this very seriously, and the collapse comes, then you may be the richest people in town. 

Sorry if this prose is a bit rough.  Just wanted to get it out.  If there is any confusion, I am sure I will hear about it.  Time for a beer

Warren and Charlie

I often tell friends to put peanut butter in the basement, which I stand by, as a safeguard for normal people, but here is Warren Buffet on Charlie Rose with a macro view. As usual he speaks in everyday terms. Indeed, he says be afraid of geeks and formulas. You can click on the title.

From my perspective, I agree with views on causes, events, remedies and human nature, but the key thing to see is his positive (make more money) view of investment in the best economic machine there is, with the exception fanning the real estate bubble (Fannie and Fredie craziness.) For example, our exports are up to 12 percent from five, just a few years ago. He says we are doing a good job.

He projects a likely inflation down the road because of the decisions being made now to deal with the problems at hand. He says this is a later pain for today's injury. So, adjust to that. On the other hand, he is confident things will be dealt with and the government will actually make money.

You can tell he is an Obama fan as he never mentioned the "B" word for an hour, though he loves Paulson and the people working at Treasury (he'd like to hire whoever got the terms in the plan) and was satisfied that Congress will do something that is better than nothing (tape is from last month). The plan is Congress' to him. I miss how they have a plan, especially if he wants to hire people in the Treasury. I recall Harry Reid saying, when the plan was presented, he didn't know what to do.

I do recall McCain and the B administration went to this Congress 17 times to try to reel in Fannie Mae, as it was a time bomb. I do recall the Democratic banking leaders in 2005 ridiculing concerns over the housing monsters. To this day, I don't understand why McCain didn't play the tape of his appeal in 2005 every day, all day, not that he would be much good, either.

One must agree with Buffet's notion that first you get the athlete off the ground, then find who is at fault. Sadly, those at fault are the ones in charge of the search and they will be appointing the investigators who report to the press. Last week there was an AP story how the Bush administration was too lax. One hopes there is a hell.

Re the insertion of socialism in return for federal assistance [if you don't get it, you may want to consider the "auto czar," the promotion of unions by bailing out car companies and eliminating the secret ballot at union elections, and the announced need for a national medical system to help the burdened car companies], he said, first, get the athlete off the ground, later we can deal with who did what and what has happened.

You have to love his long, tempered view. I draw some solace there, in the midst of people being idiots. I just hope we don't lose, or sell off, our way. The drumbeat of fear can lead us all to doing even more idiotic things.

Part of the problem is, he can take the high road. So, it is easy to be detached if you are in the Krupp family.

Update

From something called "Tulsa Today," thanks to Irene

...As I’ve written in five articles (which can be read on my website: http://www.joanswirsky.com/), the most crucial issue is the fact that Obama’s eligibility to be president is being seriously challenged by about 20 lawsuits, many of them waged by Democrats and Independents. Several of these suits have now reached the Supreme Court. They all claim that Obama does not meet one of the three criteria that the U.S. Constitution requires of anyone who runs for the presidency of the United States of America. That criterion is that he or she be a “natural born citizen” of the United States.

December 1, writes attorney Thomas J. Latino, was “the deadline for the Obama legal team to file their response to the Berg Petition for a Writ of Certiorari. There was nothing. Mr. Obama has done what hasn't been done before…he] has blatantly ignored a request from the Supreme Court of the United States – our highest and most revered legal institution. Mr. Obama, quite frankly, has thumbed his nose at the highest court in our land.”

On December 5, Leo Donofrio, a plaintiff in Donofrio v. Wells, is scheduled to have his case heard by the nine Justices of the Supreme Court, who have agreed to hold a “Rule of Four” Conference. This means If four of the nine Justices agree that Donofrio’s case has merit, there is the potential for the Justices to issue a “stay” of the Electoral College vote on December 15, which would prevent the Electoral College members from casting their votes until this explosive issue has been resolved.

A writ of certiorari can be ignored by the Supreme Court. I think, last I looked, only 2-3% of them were even heard. You don't default by not responding. However, it is curious that a claim this serious is not even met. That is, Mr. Obama is relying on the lower court's standing decision without any interest in bolstering any position. All I can say, its not something ordinarily done, even when you are sure of yourself, not if you don't want to be sued.

Frankly, I do not know if the Supreme Court will be able to say there is standing, then decide the matter. They might decide to do so, gather up all claims, as this issue is creating a mess of cases. If Mr. Obama is OK in this area, we should all hope it is cleared up. We can worry whether he is the Manchurian Candidate another day. Talk about a millstone.

I talked with Ray about Birth Certificates and Certificates of Birth, if you are interested. He had looked at his kids papers.

One point he made was the original is always kept by the State. Sounds sensible, but I recall seeing an old birth certificate that sure looked like an original, footprint and all. My current certificate does not have any of that.

Second, he says you don't register the hospital. There is an issue of fact, as lawyers call it. Someone else will look at that, I am sure.

Third, of interest, he say the mother's address is used to identify the person born. That makes sense.

We agree that one can get a passport even if not born here. So, that is of no help.

You may recall two State Dept. workers were fired for breaching Obama's passport file. Of interest is the Obama reply: denounced the accessing as "an outrageous breach of security and privacy, even from an Administration that has shown little regard for either over the last eight years." So, they accuse the administration of the breach. Little touchy, no?

To confuse matters, here is a photo of Obama (Soetero's) Indonesian school form

Translation:



Who knows what all this means. I suppose his mom could lie to get him into school. However, this is a problem.

There is a controversy about Obama getting his first passport in 2005 (James Buchanan). Also, in the PA lawsuit it is alleged that one could not get into Pakistan with a U.S. passport at the time Obama went. etc etc. Further, he didn't tell anyone about his three week trip until it was discovered in the campaign and he had to reply to questions.

The problem is, if he had an Indonesian passport, he was Indonesian. Period. He was allowed, I think, to repatriate, but, then, he would not be a naturalized citizenship. There is no proof of repatriation, which is understandable if that is what he did.

Anyway, just some observations. It looks as though the Court will look at this. I don't think it is wise, on a political level, to avoid the issue by claiming "standing" problems. This issue will just grow and over-shadow things. Eventually, too, some document from somewhere will surface.

So, the Rule of Four goes online on 12/5, so we will see what happens. Even if conspiracy people are nuts and there is no clamping down on discussing this case (they say conservatives clammed up on the same day and nuke strikes are threatened if Obama is found not eligible), I don't think the Court will be swayed by direct threats, though they are sensitive to the big picture. (Dred Scot is an example of a sensitive screw up.)

Since there are four-five traditionalist judges, then the initial review should be fair, a positive finding meaning only further examination is approved. If that happens, you just may find the news covering this storm instead of the hurricane party. At that point, you will be the center of conversation at the party, having been informed herein.

Behind the Curtain

PHOTO: see article below. Active US combat troops stationed in U.S. for the first time, at least since the Civil War.

The quiet coup, while America slept.

Click on the title for an article regarding off balance sheet money organized to stop "conservatives," who are a "threat" to America, so the wealthy club says. Colorado is said to have been their first target.

Read the link over to the white paper on the various foundations. This is a long analysis pdf of state-based organizations, purposely separate from the Dems and Obama so their is no funding limitation. This is basic reading for an informed American, which means few will read it. At least, we can ignore McCain, now. The genius.

Note one of the "club's" first victories in an assault on Secretaries of State is the guy in Minnesota who is supervising the recount at this time. A month after the election, they still find uncounted votes, or so they say. Our politics, unlike the economy, is already third world.

Its not a conspiracy when an assault is organized. admitted, and funded.

My main complaint is not people disagree with me, or millions of citizens dead and alive, on a substantive level, it is that they work behind the scenes to cripple opponents without ever surfacing in a face-to-face discourse. This says to me, "I am wealthy and don't like it when people disagree, so I will trick them and get control." The Hyadek prognostication is correct that socialism and democracy cannot co-exist in one place and the democratic people stupidly permit their own imprisonment. The French say one can be too civilized.

Also, it is easy to trick people locked into a downward economic whirlpool. Americans are ensnared in government regulation and taxes. Their is no way out once we started down the cliff. Our friend, Obama's No. 1, said recently this is the time is ripe to make radical changes. People are distracted and open to the arrival of a messiah. However, you can't fool all the people all the time and things change. Let us hope people wise up before the brown shirts are formed. (Yes, Obama said he was going to set up an armed national, civilian force. I am surprised by those who voted for him - never heard that. Fancy that.)

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By the way, still no one has ruled on where Obama was born. Courts are avoiding the issue claiming a "standing" bar to Plaintiffs. So, is McCain the only person who can sue?

Obama only produced the certificate of live birth, dated after his supposed birth day, on his web site and doesn't show up in court. Interesting coup.

Again, the argument is not that it is a forgery. That is a media straw dog, they are not that stupid. The argument is that it is not a birth certificate. A birth certificate is tricky. It says: BIRTH CERTIFICATE. People don't want to see the difference. Bottom line: no one knows what hospital he was born in or has seen a birth certificate, which will have the hospital, child's name, parents names and address. You know this "conspiracy theory" is not going away.)

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Honest people cannot think in terms of a secret enemy plotting a take over, so they miss it, if not support the talking heads. This is world history 101. However, if they catch on, before it is too late, then a reaction in the U.S. is swift and brutal. We go after liars, if we catch them, because we generally run on trust.

Trust me, the clowns in Congress are clowns, to be sure, but they are only useful clowns.
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See "Salon" re the stationing of U.S. troops in the U.S. The number was to be 4,500 combat troops (which would have been stunning before 9/11) but, oh my, they saw it was 20,000. Right wing people say it is moving to 250,000. Then there are NATO troops and, now, 10,000 Chinese communists here to defend their assets as the nation crumbles. I seem to recall we didn't permit our own soldiers stationed here and there was a traditional fear of standing armies; its a law or something archaic, like that. Must be old school. At least far left and far right agree on a troubling event.

A final observation from a right wing "nut:" You know the end is coming when a round of ammunition is taxed so that it costs $1 each

This was said five years ago.. Watch for the tax. ("Sure, you can have a gun, as long as we say-so, control registration, and ammunition is too expensive to buy." I bet ammunition will be registered too.) Of course, this may be an innocent activity based on the philosophies of prior advocates like Hitler and Stalin, who obviously rejected Jefferson's foolish observations of how America is kept secure. Don't forget, all these laws are for our benefit.

A few years ago, I talked with a vet of Somalia and the brilliant use of UN organization, and he told me two interesting things. First, when you join you swear allegiance to the UN (which has a camp like in Vermont, or is it NATO). Later, he practiced occupation of American cities, saying the greatest fear was Vermont because of presence of guns and people who will use them. I recall him saying, "New York City is easy."

Yeah, I am just making all this up. More nut stuff.

----Article:

...The article notes that the deployment “marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.”

The purpose of the unit’s patrols includes helping “with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack.”

The unit will be on homeland patrol for at least 20 months before returning to Iraq or Afghanistan in early 2010, according to the report.

Training for homeland operations has already begun at Fort Stewart and at Peterson Air Force Base in Colorado Springs.

Ominously, the report states that, “The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them....

So, Merry Christmas, etc.