PANIC CENTRAL: Swine Scurvy, Heat Wave, Real Estate Collapse

Quick News:

1. SWINE FLU: The government and industry are finally happy that some sort of flu finally arrived. This time it from pigs not birds and is coming from our new South, Mexico. So, if you track the flu, you will find the path of illegal aliens. Nopalitano left Arizona just in time.

The entrenched powers can now scream crisis and spend billions more on a vaccine that won't work and a treatment that gives you the flu. (Just watch). After wall to wall pointless panicspeak this weekend (my God, 11 Catholic boys with sniffles are killing NYC) I will repeat an earlier blog and article (Page 2) - influenza is the flu, not ebola. My God, yes, you may get sick!

This flu is different than most because it rapidly depletes your Vitamin C. People die BECAUSE of a sudden vitamin C depletion. It is the same scurvy that caused English seamen to eat limes, only this fulminate scurvy is an acute attack. So, go buy a good supply of vitamin C and keep it handy. If you get sick take as much as you can until you have diarrhea, then back off. This is in the 6,000 mg/d area - spread out the intake, too. Really sick people can have C intravenously. Just don't fall for the panic. You could keep the kids home from the disease pool.

By accident, if things get bad, this information may break through the drug companies and CDC's wall of sound, so buy some C now. I recommend EmergenC from Walmart, which has an amazingly low price. It is in a box that contains packets of multi-vitamins. I am not up on C types, but I hear liquid is the way to go, especially as one ages.

2. Global Warming has finally returned. The highs will be above average for days! The snow west of Glens Falls will be GONE by May! Melting snow will cause mud, slow down hiking and wash away dirt, exposing rocks to the atmosphere. This will be followed by plant and tree growth, which is a problem because when they die, the give off CO2 as they rot (feeding bugs) and heat the earth.As we now know, having been recently informed, CO2 is a toxic gas dangerous to all of us except those damn trees. (Reagan was right.)

3. NY North: Existing home sales fell 26 percent in March, and the median sale price fell 6 percent, to $170,000. Actually, this is good sign, but it is nice to scream panic.

Why good? Nationally, existing home sales fell 7 percent in March, and the median price fell 12.4 percent, to $175,200, according to the National Association of Realtors. This means the collapse is now in this part of the world where things happen last. So, nationally, we are skating in the valley, no longer skiing the mountains. By the way, I am serious, here.

Don't get taken in by the brokers who are incapable of saying anything that has a negative in it. You will see things like: the decline in home prices is up from last quarters' numbers. This means, things are less horrible. This is governmentspeak, like a reduction in spending rate of increase is "cutting."

Also, much of the home buying is by speculators and others taking advantage of the absurdly low prices and mortgages. This is real spending, sure, but it is not the drones getting back in.

If anyone is thinking about a purchase, don't hesitate. Go out today. We need drones.

Simon Johnson on the US Oligarchy

"If a company is too big to fail, it is too big to exist:"

Leading Economist Decries Power of Wall Street "Oligarchs"

Posted Apr 21, 2009 07:30am EDT by Henry Blodget in Investing, Recession, Banking

Related: ^DJI, ^GSPC, xlf

In a fascinating piece in the latest issue of The Atlantic, Simon Johnson, former chief economist at the International Monetary Fund, outlines what he sees as the alarming influence of Wall Street firms over the American economy. He expounds on his thesis in our interview, making several points:

America’s Crisis Resembles that of Emerging Markets: While at the IMF, Johnson saw so many financial crises that the core problem became old hat: In the free-wheeling growth years of an economic boom, the politicians and oligarchs of an emerging market like Russia or Argentina would get so close that eventually they would meld into a politico-industrial complex. As long as the boom lasted, this cozy relationship never bothered anyone--because everyone was getting rich. Fast forward to the latest market crisis--the one in the United States. The pattern is exactly the same, Simon Johnson says, with a mutually beneficial money-and-power corridor now running between Washington and the modern oligarchs Wall Street.

But There Are Key Differences: In the emerging markets, eventually, the bubble would burst. The banks and corporations would collapse, and suddenly it would be up to the government to seize and restructure the insolvent banks. In America, though, there will be no such defining collapse, nor a quick recovery, he argues. Instead, we face a “painful” L-shaped recovery, drawn out over 3-5 years.

Wall Street: “It’s Too Big, Too Powerful. It’s Dangerous.” Simon argues that the U.S. should invoke anti-trust laws to break up Wall Street, whose power poses a material threat to the American economy.

Simon Johnson is a senior fellow at the Peterson Institute and a professor at MIT’s Sloan School of Management. He is a co-founder of the popular economics blog, BaselineScenario.

Deja Vieux

From Rod,

1934 Chicago Tribune ------------

I can't seem to get a sharper quality image, so if you need more detail, HERE It is a pretty clear cartoon, as well as currently apt.

I guess this may help the unbelievers that I am not making up stuff; this is just another round of the same old extraction of wealth. Back in FDR's time, the courts eventually declared much of the spending to be unconstitutional. May not be so, today.

US joins Hitler and Stalin

The first step is to take away the guns from the citizens so they cannot defend themselves.

Below is long blog, but it is better kept together. I am sad that people don't read, but I don't have the time to make a snappy blog or, better, an award winning movie. Even if you just scan it, you will realize, many of you who don't see it now, that there is something going on.

Pending is HR 45 submitted by, surprise, a Chicago radical. Years ago, Bobby Rush started the Chapter Black Panther chapter, a community organizer to the heart. You know the communist organization sworn to kill pigs. He was jailed in 1972 for a weapons conviction. Lest you leftists try to think up an argument that he is OK and just a poor, misunderstood dropout Congressman, he said this about Mr. Obama, lifted from Wikki:

...Rush said: "Barack Obama went to Harvard and became an educated fool. Barack is a person who read about the civil-rights protests and thinks he knows all about it."^[3]

So, our Marx and Lenin are bringing along the Bolsheviks who will wait for the right time to knock them off. That Obama is too lame for Bobby.

We will go through the amnesia again: half the country will smile or sleep while being stripped, oh, changed.

Of course there is great logic: Let us stop the crazy man from shooting innocent people; lets make sure that only the government can have guns, as there are no crazy men there. Lets ignore the Constitution, as it is inconvenient and not relevant.

What part of the word "infringe" am I missing.

No one seems to recall the Jews did not have any guns in Poland, nor did anyone in Stalin's Russia, or Cambodia, or.... oh, never mind. Those who are stupid will relive history, or something like that. They think tyranny will not happen here as Americans are better than everyone; oh, wait, they always say we are not and are arrogant. Or, was it only Chaney who was evil. Its hard watching the bouncing ball.

...The Night of the Broken Glass (Kristallnacht) the infamous Nazi rampage against Germany's Jews, took place in November 1938. It was preceded by the confiscation of firearms from the Jewish victims. On Nov. 8, The New York Times reported from Berlin, "Berlin Police Head Announces 'Disarming' of Jews," explaining...

"The Berlin Police President, Count Wolf Heinrich von Helldorf, announced that as a result of a police activity in the last few weeks the entire Jewish population of Berlin had been 'disarmed' with the confiscation of 2,569 hand weapons, 1,702 firearms and 20,000 rounds of ammunition. Any Jews still found in possession of weapons without valid licenses are threatened with the severest punishment."2

On the evening of Nov. 9...Orders went out to Nazi security forces: "All Jewish stores are to be destroyed immediately . Jewish synagogues are to be set on fire . The Führer wishes that the police does not intervene. All Jews are to be disarmed. In the event of resistance they are to be shot immediately."3

..."One of the first legal measures issued was an order by Heinrich Himmler, commander of all German police, forbidding Jews to possess any weapons whatever and imposing a penalty of twenty years confinement in a concentration camp upon every Jew found in possession of a weapon hereafter."4 Thousands of Jews were taken away...

Finding out which Jews had firearms was not too difficult. The liberal Weimar Republic passed a Firearm Law in 1928 requiring extensive police records on gun owners. Hitler signed a further gun control law in early 1938.

...When the Nazis took over Czechoslovakia and Poland in 1939, it was a simple matter to identify gun owners [from lists.] Many of them disappeared in the middle of the night along with political opponents

For the rest of us, a word to the wise - and advice to vote against everyone.

"None but an armed nation can dispense with a standing army. To keep ours armed and disciplined is therefore at all times important, but especially so at a moment when rights the most essential to our welfare have been violated." --Thomas Jefferson to -----, 1803. ME 10:365

"A bill of rights is what the people are entitled to against every government on earth, general or particular; and what no just government should refuse, or rest on inferences." --Thomas Jefferson to James Madison, 1787. ME 6:388, Papers 12:440

Below is the Second Amendment, read it with an eye toward English grammar, something we are avoiding these days. It is important to recall our ancestors actually followed rules about structure. The Amendment does not say the "regulated" militia will be protected, the existence of the militia was assumed a priori; the Amendment says in order to keep the militia in good shape, gun ownership shall not be infringed. Without a people bearing arms, there is no militia. To Jefferson, then, there is no defense for liberty without an armed and trained citizenry.

Those who feel this Amendment is no longer relevant and dangerous - too bad. Go change it the way the Constitution provides. Without a respect for the RULES we are a mob in search of a tyrant. Why would anyone respect a government who subverts the rules by which is was created?

We are heading down the path where the soft-headed will wake up one day and realize what they have done. Some will stick to their heroes and hopes, unable to permit self criticism; others will back into the shadows and hope those crazy right wing people can restore a semblance of the former America. They view the middle or anyone who is concerned about due process as right wing.

As was said, you may not be interested in politics (which is more than idol worship), but politics is interested in you.

I guess we can make an exception for illegal aliens. They should be exempted from any laws.

Didn't we go through this with the poll tax and tests? Didn't the Court decide that fees and regulation are not permitted regarding a reserved right of the individual?

HR 45 to impose federal gun control

April 17, 12:04 PM · Add a Comment

ShareThis Feed

Ap photo" src="http://image.examiner.com/images/blog/wysiwyg/image/GunsFeds.jpg" style="padding-bottom: 5px;" height="267" width="350">
AP

"A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed." ~ Second Amendment - The Bill of Rights

Well, one cannot be surprised to see this Bill come to the House of Representatives. When Democrats took control of congress in 2006 and began setting up their plans, waiting for a Democrat in the White House who would sign their legislation, those who were watching knew gun control would not be far behind any socialist spending spree they got away with. Now here it is: HR 45 Blair Holt Firearm Licensing & Record of Sales Act of 2009. So far, this legislation is flying under the radar, and Democrats in Congress are hoping that it remains that way.

This bill is an underhanded attempt [Gene: why is this underhanded? It is overt.] to eliminate the constitutional right to ownership of Firearms. It would require that all gun owners be licensed. It requires a thumb print, a universal background check, a Passport quality photo. But wait, there’s more: “any firearm owned by the applicant safely stored and out of the possession of persons who have not attained 18 years of age”, in other words, a gun safe.

Wait, we're not done yet, you must pass a written firearms exam, you must release any and all mental health examinations and records. Firearms must be purchased from a licensed dealer, licensing to sell is of course at the discretion of the Attorney General and the seller must be licensed as well. Then there is the 25$ fee, and then you can get your license to own a firearm. Fail to do any of these things and you can not own a gun. You will have to renew your license as well. When you can finally exercise your constitutional right to buy a gun, the gun dealer or seller must provide the following:

(1) the manufacturer of the firearm;

(2) the model name or number of the firearm;

(3) the serial number of the firearm;

(4) the date on which the firearm was received by the transferee;

(5) the number of a valid firearm license issued to the transferee under title I of this Act; and

(6) the name and address of the individual who transferred the firearm to the transferee.

It gets better yet; the United States Attorney General has 9 months after this act passes to create the Federal Record of Sale System. This is the juicy part: SEC. 202. FIREARM RECORDS (c) Elimination of Prohibition on Establishment of System of Registration- Section 926(a) of title 18, United States Code, is amended by striking the second sentence. You see, right now, this act is Illegal in the United States, so they have to repeal that part of the US code.

The Federal Government has absolutely no Constitutional authority to regulate fire arms, or their sale. The Second Amendment states that the people have the right to bear arms, mostly so they could overthrow an oppressive government such as the British in the 1770’s. An unarmed population is at the utter mercy of an armed population. That is a simple truth. If any Government has the authority to regulate Firearms it is the individual states, not the federal government.

This brings us to a discussion once again of an out of control federal government stomping all over the constitution and our civil rights. If we the people allow this bill to become law…. We will have lost just about every protection we as citizens have against an oppressive country, and the last vestiges of our freedom will truly be gone. You won’t even be able to go elk hunting, or skeet shooting, or chucker hunting without the OK from the Federal Government.

The full text of this bill can be found here: OpenCongress.org

Oh, one last little fact to make us all feel warm and fuzzy: SEC. 801. INAPPLICABILITY TO GOVERNMENTAL AUTHORITIES. This Act and the amendments made by this Act shall not apply to any department or agency of the United States, of a State, or of a political subdivision of a State, or to any official conduct of any officer or employee of such a department or agency.

The only entity that will be allowed to own firearms without licensing or registration, will be the Government.

Do not for an instant think this is about lowering crime, its about making it as difficult as possible to own or purchase a firearm. It is about making it a criminal offense, punishable by law, to own a firearm in the United States with out an OK from the Federal Government.

Bills like these in a Democrat Congress should concern everyone. Though it is not scheduled to get a hearing in the House Judiciary Committee the Bill's Author Rep. Bobby Rush from Chicago Il. 1st. District reintroduced the bill Jan 6, 2009. As of 2/9/2009 the bill was Referred to House Subcommittee on Crime, Terrorism, and Homeland Security.

To contact your Represenative in the House on this or any other matter:

List Of State Represenatives http://www.house.gov/house/MemberWWW_by_State.shtml#or

Now, it could be said Rush is not very smart, being a dropout and convict and all, so it is understandable that he is anti-Constitution and pro Marxist. That is true, that is a reason to be Marxist, being stupid and all, but that is no reason to elect him to the House or for peers or journalists to not mention his radical bill. My take is the left is watching to see the reaction before moving ahead, one way or the other. The notion of rights is irrelevant.

A poster to occupied France:

Ordinance Concerning the Possession of Arms and Radio Transmitters in the Occupied Territories

1) All firearms and all sorts of munitions, hand grenades, explosives and other war materials must be surrendered immediately.
Delivery must take place within 24 hours to the closest Kommandantur [German commander's office] unless other arrangements have been made. Mayors will be held strictly responsible for the execution of this order. The [German] troop commanders may allow exceptions.
2) Anyone found in possession of firearms, munitions, hand grenades or other war materials will be sentenced to death or forced labor or in lesser cases prison.
3) Anyone in possession of a radio or a radio transmitter must surrender it to the closest German military authority.
4) All those who would disobey this order or would commit any act of violence in the occupied lands against the German army or against any of its troops will be condemned to death.

The Commander in Chief of the Army

Lets see, HR 45 and the Fairness Doctrine....

Hyper-inflation projection

Below is an FYI article. 

My REIT is up 87% in the past three weeks and pays some 15% in a dividend. If I had more money I would be prospecting more, so what I can do is suggest you carefully look into REITs. Carefully. If you guess right, it is the best of times; if you guess incorrectly, well...

Think of it this way, some day real estate stabilizes. (Indeed, in the Northeast, it is merely bad, if you stay away from Long Island.) REIT's, Real Estate Investment Trusts, are required by law to return 90% of their profit to shareholders. If a company is still alive, now, and still paying dividend's, which are double digit these days, then it may well be the buy of the decade. One's 15% dividend to could become 30% or more. Its a great way to get into real estate without actually doing anything or attempting to get a mortgage.

I have found "investment grade speculation." You rarely see that.

====
Here is an echo of my weeping and gnashing, which I hope helps spreads the message:

Brace For Hyper-Inflation

Posted Apr 15, 2009 02:30pm EDT by Henry Blodget in Investing, Recession

Related: DIA, SPY, ^GSPC

From The Business Insider, April 15, 2009:

The economy is cratering, so the Fed is printing money. When the Fed prints money, this eventually produces inflation (more dollars, same amount of goods).  Ben Bernanke assured us yesterday that, this time, the Fed's money-printing won't eventually lead to inflation because the moment the economy begins to recover, the Fed will stop printing money and start burning it. Specifically, the Fed will start selling assets instead of buying them and thus shrink the money supply. Unfortunately, Ben is unlikely to keep this promise. Why? Several reasons:

• First, it will be hard to confidently assert that the economy in full recovery. Remember, in 2007, Ben (and most other people) thought the economy was in great shape as far as the eye could see. He and most other observers missed that disastrous turning point. So why do we think he'll correctly spot the next one? Especially because, if he blows it by jacking up rates too early, he'll kill the recovery.
• Second, there will be intense political pressure to MAKE SURE that the economy is in rip-roaring health before hammering consumers and businesses by raising interest rates. Everyone loves low interest rates. And they'll only stop screaming about your taking them away when they're fat and happy (which will be long after inflation really gets going).
• Third, the US government desperately needs low interest rates to fund its soon-to-be-monstrous debt load, so there will be another source of pressure on Ben to keep rates low. When we finish with all this stimulus, we're going to owe a boatload of money. We're really going to allow our Fed chief to send interest rates to the moon and jack up our refinancing costs?
• Fourth, many of the assets that Bernanke has been buying to print money won't be easy to sell. This time around, the Fed isn't just buying easy-to-sell Treasuries. It's buying trash mortgage assets, et al. To reduce the money supply, it will need to sell them to someone. But who?

In the latest issue of the Institutional Risk Analyst, Chris Whalen hammers this last point home. Chris thinks we're now officially addicted to low interest rates and that Bernanke will be both unwilling and unable to raise them significantly when the time comes. And the failure to raise, them, of course, will lead to hyper-inflation.

The better answer? Stop denying reality and force the country to take its losses. Restructure existing debts, instead of encouraging people to borrow more. That, after all, is what got us into this mess in the first place.

I can add those trash mortgages have never been properly priced, so it is likely they are being bought at a stupid price.

Assumptions and Reality

Thanks, Richard

Richard sent me a short clip. It is more than enjoyable. There are times when the human spirit reveals itself to the harshest among us. Click HERE

Susan Boyle appeared before those who prejudged, assumed, and knew she was an inferior.

Ayn Rand could not have created a better, as well as more enjoyable, depiction of the great individual standing against the tide of  "second-handers," as Rand put it,  those who live off others, those who gel into the condescending mob of venial ability and dull comprehension; it is always a mistake to judge others by one's own failing. 

It is always a mistake to judge others, as it is the judge who becomes revealed. 

There is the old advice: hate the sin, but never the sinner. Though we may detest actions, trappings, and words, we have no right to judge another's worth. Though we love to pretend, we are not gods and not the judges of all. This call to judgment is our millstone.

To differ with Susan's song, some dreams can withstand the ravages of time and circumstance, if they are held close to the heart. They only die when let go. So, we must each stand firm and not let the dreams fall, for it is our failing they die.  Dreams are nothing but the hopes of our spirits. If a dream dies, it is merely the final throes of the defeated spirit. 

Freeman Dyson agrees with me

Ray mentioned the recent NYT article and backlash about Freeman Dyson. I wasn't even going to mention it, as the exercise of attempting to bring reason to the discussion is pointless. However, there is another reason to mention the recent reactions. The article is here.

(Oh, Ray, the film Knowing was excellent.)

Below is the introduction to the article. I just add it here as imbeciles have taken to attacking him. The article quotes a lawyer making fun of him. What the hell do lawyers know?

You see, he committed a religious taboo by dis'ng global warming. Obviously, off with his head.

“lousy science” for “distracting public attention” from “more serious and more immediate dangers to the planet.”

In his 20's, he unified quantum and electrodynamic theory. He hung out with, oh, Einstein, Bohr, Fermi, Feynman (whose NY accent is hysterical to listen to), Teller, Oppenheimer and Witten. To this day, he still lives on Princeton's campus. Off with his head! In the vein of disclosure, I recently sent him an email fan letter.

The TIMES:

FOR MORE THAN HALF A CENTURY the eminent physicist Freeman Dyson has quietly resided in Prince­ton, N.J., on the wooded former farmland that is home to his employer, the Institute for Advanced Study, this country’s most rarefied community of scholars. Lately, however, since coming “out of the closet as far as global warming is concerned,” as Dyson sometimes puts it, there has been noise all around him. Chat rooms, Web threads, editors’ letter boxes and Dyson’s own e-mail queue resonate with a thermal current of invective in which Dyson has discovered himself variously described as “a pompous twit,” “a blowhard,” “a cesspool of misinformation,” “an old coot riding into the sunset” and, perhaps inevitably, “a mad scientist.”

Dyson had proposed that whatever inflammations the climate was experiencing might be a good thing because carbon dioxide helps plants of all kinds grow. Then he added the caveat that if CO2 levels soared too high, they could be soothed by the mass cultivation of specially bred “carbon-eating trees,” whereupon the University of Chicago law professor Eric Posner looked through the thick grove of honorary degrees Dyson has been awarded — there are 21 from universities like Georgetown, Princeton and Oxford — and suggested that “perhaps trees can also be designed so that they can give directions to lost hikers....”

But in the considered opinion of the neurologist Oliver Sacks, Dyson’s friend and fellow English expatriate, this is far from the case. “His mind is still so open and flexible,” Sacks says. Which makes Dyson something far more formidable than just the latest peevish right-wing climate-change denier. Dyson is a scientist whose intelligence is revered by other scientists — William Press, former deputy director of the Los Alamos National Laboratory and now a professor of computer science at the University of Texas, calls him “infinitely smart....”

So, none of this matters where the party is concerned. The life of the individual is dead, only the party matters. (Dr. Zhivago) So, we will remove Mr. Dyson from history (1984). A few clever articles and he will be doubleplus bad. HATE HATE HATE (1984)

From later in the article:

Dyson may be an Obama-loving, Bush-loathing liberal who has spent his life opposing American wars and fighting for the protection of natural resources, but he brooks no ideology and has a withering aversion to scientific consensus....

This open-minded approach is what morons call genius, only because they do not understand it. Einstein wrote he would drill on the thick part of the board while others occupt themselves with the thin part. You can't teach intellectual honesty, especially when it gets in the way of state control.

OK, a little more since he also dis's Gore, Hansen

Speaking at ...Boston University, Dyson announced that “all the fuss about global warming is grossly exaggerated.” Since then he has only heated up his misgivings, declaring in a 2007 interview with Salon.com that “the fact that the climate is getting warmer doesn’t scare me at all” and writing in an essay for The New York Review of Books, the left-leaning publication that is to gravitas what the Beagle was to Darwin, that climate change has become an “obsession” — the primary article of faith for “a worldwide secular religion” known as environmentalism. Among those he considers true believers, Dyson has been particularly dismissive of Al Gore, whom Dyson calls climate change’s “chief propagandist,” and James Hansen, the head of the NASA Goddard Institute for Space Studies in New York and an adviser to Gore’s film, “An Inconvenient Truth.” Dyson accuses them of relying too heavily on computer-generated climate models that foresee a Grand Guignol of imminent world devastation as icecaps melt, oceans rise and storms and plagues sweep the earth, and he blames the pair’s “lousy science” for “distracting public attention” from “more serious and more immediate dangers to the planet.”

Like I say, it is already boring talking about "global warming," but we cannot forget those who use mass propaganda for making money and securing state control of everyone for fun and profit. The green movement has long been the new face, coming from Europe, of the communist movement.

The White House Blog for March 10, 2009, states:

The White House Council on Environmental Quality (CEQ) Chair Nancy Sutley announced yesterday that Van Jones – an early green jobs visionary — will start Monday as Special Advisor for Green Jobs, Enterprise and Innovation at CEQ: Van Jones has been a strong voice for green jobs and we look forward to having him work with departments and agencies to advance the President’s agenda of creating 21st century jobs that improve energy efficiency and utilize renewable resources

Who is this guy:

A few short years ago Anthony (Van) Jones (left) was a San Francisco Bay Area radical agitator–a committed Marxist-Leninist-Maoist, waging war on the police and capitalist system.

Today Van Jones holds a key position in the US government and has the ear of President Barack Obama.

I don't know what else it takes to wake the sleeping. Its is like the film I mentioned, Knowing, to be afflicted by the Cassandra effect - knowing what is happening and not being able to do a thing about it.

Those gold bugs are everywhere

From the Financial Times in Canada, a paper you may as well make yours. As I have mentioned, people in Canada still read and, hence, there are people who have to write. Oh, another article says look carefully and you will see silver is the place to be.

The piece  give an account of the recent European happening where one of the events was a discussion of a return to something like the gold standard, which discussion was taken seriously: 

...Hence the chatter about a gold standard. Indeed, as the debate bubbles up, some financiers are now even emailing each other an extraordinary little essay that Alan Greenspan himself wrote in support of a gold standard back in the 1960s, called “Gold and Economic Freedom”*.

In the years since he penned this essay, Greenspan has partly backed away from those ideas (and he blatantly ignored their implications when he was at the Fed.) But now they look prescient.

“Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets . . . [but] in the absence of the gold standard . . . there is no safe store of value,” Greenspan wrote back then, pointing out that without a gold standard in place, there is little to prevent governments indulging in wild credit creation.

“Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

Of course, for the moment all this muttering about gold is simply wild speculation. Even if western leaders suddenly were to decide they wished to turn back the clock, the logistics of embracing a new gold standard would be mind-boggling. UBS, for example, calculates that the US reserve of gold are so small, relative to its monetary base, that a price above $6,000 an ounce would be needed to reintroduce a gold standard. To implement that standard in Japan, China and the US, the price would be more than $9,000. Moreover, right now few western governments have any motive to even entertain the debate, given that inflation may soon seem the least bad way to tackle the current overhang of debt.

But what this debate does show is just how much cognitive dissonance – and utter uncertainty – continues to stalk the markets. It might seem almost unthinkable to propose a return to a gold standard, in other words. However, the key point is that the last 18 months have already produced a stream of once unimaginable events.

Given that, shell-shocked investors are increasingly reluctant to rule anything out, as they stare at such uncharted waters. So while I would not bet today on a gold standard returning any time soon, I would also not bet that the debate dies away. Nor would I bet that the gold price crashes too far from its current rate of $900, while so much fear continues to stalk the world.

Getting ready

Seeking Alpha has pieces to explain the "bail out," another Orwellian use of language. It is a spending spree, not a bail out. In other articles, they recommend SLV, a proxy for silver, a display of the plunging dollar against other currencies (only the beginning), and an argument for long positions in SKF.

SKF is interesting in that it is around 50 and has been  250.  Get this, it is designed to be the double inverse of the financial stocks.  If you think banks are still in trouble (and big ones are being propped up with mirrors), then this is a good play. As Soros said yesterday the financial system crashed in October. The Bush bailout was designed to stop the massive collapse and runs on the bank, but since then, we are just propping up the old houses. [Of course, he is probably shorting the U.S. dollar.]

Anyway, get out of the dollar or into something that will ride inflation.

The conclusion from the selection below:  This also means that the asset side of the balance sheet is potentially "inflated" by almost 75% and the net result could be the most dramatic collapse in a banking system's assets in record history as over $8 trillion in "assets" are reevaluated.

The Core Of The Problem

As the table below tries to capture, the core of the Bail Out problem is reconciling the balance sheet of the banking and thrift system. The biggest concern is the roughly $8.1 trillion in loans currently on the asset side of the equation. The other assets, however, which include $2.8 trillion in securities and $2.5 trillion in other assets, should not be ignored. I point out the loans as this is where the vast majority of the "toxic assets" reside. The real question mark is what is the true value of this $8.1 trillion number as the financial system contracts massively. As has been pointed out, banks have taken only about $1.2 trillion in write downs against these assets.

Is that amount of write downs enough?

Not by a long shot, if one considers the various guarantee and support programs enacted by the Federal Reserve and the Treasury. In a normal world, the Assets, by definition, should equal the Liabilities plus Shareholder Equity. As nobody knows what the true value of the assets really is, the Bail Out support programs are designed to provide the backing to make it seem like the almost $8 trillion in deposits, the core of bank and thrift liabilities, are not "supported" by toxic assets, or "hot air" to use popular jargon.

As presented, the various Bail Out programs now support over 72% of the total liabilities on the balance sheet. The implications of this are staggering: Roubini anticipates the total amount of write downs (in the US) will reach $3.6 trillion, or another $2.4 trillion to go. The revised IMF estimate (which is not the final one by a long shot) estimates $3.1 trillion in total US losses, or another roughly $2 trillion to go. These provisions are optimistic. Why? Because through its various implicit and explicit guarantees the administration is saying the total pain could potentially reach $8.8 trillion. The Fed and Treasury are also providing support for up to 20% of the bank system shareholder equity through TARP preferred stock. As the government has the best information about the true sad state of affairs, it is likely that as more and more information about the weakness of the financial system comes to light, more of these support guarantees will become utilized to their full extent.

This also means that the asset side of the balance sheet is potentially "inflated" by almost 75% and the net result could be the most dramatic collapse in a banking system's assets in record history as over $8 trillion in "assets" are reevaluated.

Fannie and Freddie Retention Bonuses > AIG, Media Mute

Just a quickie.

An updated Reagan: If it moves, tax and regulate it, if it continues to move crush it and buy stock, if it stop moving, subsidize it and install friends.

Before looking at bonuses, a crisis-global-warming update that does not include the snow the other day or an unusually warm October:

Albany

Seasonal Heating Degree Day

Period:	Current Year:	Last Year:	Normal:
07/01/08 - 03/28/09	5833	5447	5577

SmarTrend News Watch - 4/3/2009

Trend® News Watch: Fannie and Freddie To Pay Out More Than $210 Million In Bonuses

ShareThis Twitter
A letter released Friday by Sen. Charles Grassley of Iowa showed that Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) plans to pay more than $210 million in bonuses through next year in an effort to give employees the incentive to stay in their jobs. The retention awards would go to more then 7,600 workers, many of whom lost years of savings when the companies' stocks fell to $1 per share from their $60 highs in the fall of 2007.

[What is this - a justification for a big bonus?]

According to the letter, $146 million worth of payments out of the $210 million will be made this year.

Tolerance: the fools last prayer

Irene sure can ruin a nice day.  It is much more pleasant to sleep away the day.

Below is a link to a very nice, chuckling arab leader who wants to kill you. Is that scarf the sign of a Hamas or just a general kill-the-other's sign? I was never sure. It is good to know your enemy or, at least, come to realize you are a target.

He is, however, gracious in wishing luck to the "rednecks" in the U.S. who wish to attack Washington, D.C. or Michigan's nuclear plant.

http://www.tangle.com/view_video.php?viewkey=0861ff3eabea1ceb73e4

Thomas Paine and fiat money

Some more common sense from Thomas Paine,  below.  I like Tom's smile; not typical of the somber style of the era. 

I think we are in the frog experiment where the water slowly increases in temperature resulting in the death of the frog because it kept adjusting to the heat. If we jumped into the current dollar suddenly, we would understand the whimsical nature of our "money."

Our ancestors knew exactly what they were talking about but since, oh, the 1920s, then 1972, we have come to believe the dollar bill actually had a value. It is just paper, no, paper and digits, nothing more.

Thomas Paine's "Dissertations on Government."

When an assembly undertakes to issue paper as money, the whole system of safety and certainty is overturned, and property set afloat. Paper notes given and taken between individuals as a promise of payment is one thing, but paper issued by an assembly as money is another thing. It is like putting an apparition in the place of a man; it vanishes with looking at it, and nothing remains but the air.

I picked this up from a discussion by Jake Towne of the curiously long-lived silver backwardization.

I wanted to get a feel for what is going on in the gold and silver bug side. Specifically, I figured that investing in gold mines does not link one to the movement in gold, anymore, and one should look at, for example, GLD or CEF as inflation hedges. Buying real gold doesn't make sense for me as it would be so little and I would lose it.

The above referenced article repeats the notion that the fiat money we use is dead, he was referring specifically to the pound, only few know it yet, and it will take time for people to realize they should have been in gold or silver. He quote Anatal Feteke, whom I discussed a few months ago. He linked to a pdf in the article, toward the end, if you want to keep up. I will get to it.

I did buy 5,000 shares of Brigadier Gold, however. That was so I could have a beer with Ken Wolfson, the CFO, and talk about our mining business. I envision chats like at the end of Boston Legal. Oh, I got shares for .0176 cents, so don't be impressed. My biggest concern was making sure the broker's fee was less than the purchase.

In fact, I made the market for two days. I drove the price down 12% all by myself. (Sorry Ken) I can tell because no other trades seem to have hit the markets. This is blatant specultation based upon fair news. Also, Ken would be incapable of working with crooks. So, its an arrow into the night, a pleasant night.

The metals and monetary areas of thought require time and a clear head, so most of us can't sit around and work through it. So...

Bottom line, as he points out, is get your family protected during the calm. This is the peanut butter and gold speech, I frequently give.

------------------------

On the other hand, Mr. Obama reports, with a happy face, from Europe that everyone just worked so hard during their 11 minute meeting. He also noted, indirectly, that GM's bankruptcy would be a clean affair and screw Chrysler. (I thought we invested in these companies) Directly, he promises to save the companies. I guess the government could buy a million cars and give them to Acorn.

Five banks gave back their TARP money today. Signature Bank's president said it all: When the program began, under Bush, it was designed for banks to busy themselves making loans and buy weak banks. He didn't want the money, but the FDIC is always honored and the bank took some 120 million.

Then, everything changed, guess what else changed, and now having TARP money means you are a troubled financial institution and the the government is delivering instructions and regulations. 

He didn't sign on for that, so he is giving the money back. Of note, Signature's stock took a dive after taking the money. People assumed it was a troubled company, one of those evil companies being slammed by Washington. The stock was up on the recent news. Do you get the picture, yet?

Other news, Hank Greenberg, the founder of AIG pushed out two years ago by Spitzer's threats, said in an interview the government screwed up the company. Surprise.

He didn't care much for his successors.  We can thank Spitzer for the AIG chaos, the poor millionaire, dilettante victim.

From Richard Corvetti

I don't care, so what, what's in it for me. Congressman Alfred E. Neuman.

If you don't read the newspaper you are uninformed; if you do read the newspaper you are misinformed. Mark Twain

I don't make jokes. I just watch the government and report the facts. Will Rogers

Government's view of the economy could be summed up in a few short
phrases: If it moves, tax it. If it keeps moving, regulate it. And if
it stops moving, subsidize it. Ronald Reagan (1986)

Just because you do not take an interest in politics doesn't mean
politics won't take an interest in you! Pericles (430 B.C.)

A government big enough to give you everything you want, is strong
enough to take everything you have. Thomas Jefferson

FDIC, Krugman, Emanuel

Bob was telling me, after putting away SODUKO, that the FDIC insurance policy premiums of the banks jumped in multiples. He resented the good banks, the conservative ones, are having to pay for the bad banks, the idiots.

It seems as though the FIDC premium jump may just be starting.

Paul Krugman, an avowed liberal, Keynesian economist who writes for the devil, the New York Times, won a Nobel, whatever that is, and seems oddly in communication with the world. He has at least two blogs, as I see it. He is a happy Keynesian, sure of his belief.

In "Self Evident" he describes the "Geithner Put," the toxic asset auction. I recommend you visit the site and I won't try to recount the discussion; however, it is clear that in the coming auctions of toxic debts, those who will be happy are: banks, treasury, and private investors. Using a real world approach, he then says, so who will be unhappy: FDIC.

The plan gives the exposure to the FDIC. Nice to be able to just tell someone they will be your insurance company. So, the idiot banks will be relieved of their obligations and the good banks, who never engaged in idiot behavior, will be made to take on the idiocy cost.

This means, you and I will be taxed via our banking relationships to cover Citi etc. We are again the pawn of chess players who control all sides of any game. So, do not think this plan solves anything, it is just another tax on you and a free ride for the idiots, again. It is hidden tax on banks who will turn around and extract it from you mother, as best they can.

Krugman is not liked by the Obama people, by the way, as he wanders from the line. Rahm Emanuel, the Richelieu of Obama, publically cursed him out. This is not good for Krugman as Emanuel is a vicous, vindictive lad who studied dance at Sara Lawrence, which makes him fully qualified to tell Obama what to do.

Oh, I don't think I ever published this. At the time of the debate with McCain, when Bush was moving his bill to stabilize the financial system, McCain made a big show of going to D.C. and not being able to go to a debate. Obama didn't bite and said he would debate. Anyway, in the midst of all this, Obama's financial team met with him, including Buffet as I recall, and Obama said - Tell me the right thing to do, I can sell it.

Be very afraid.