Send along: James Madison

“Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes. And armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few.

 In war, too, the discretionary power of the Executive is extended. Its influence in dealing out offices, honors, and emoluments is multiplied; and all the means of seducing the minds, are added to those of subduing the force of the people.

The same malignant aspect in republicanism may be traced in the inequality of fortunes,  and the opportunities of fraud, growing out of a constant state of war . . . and in the degeneracy of manners and morals, engendered by both. No nation could preserve its freedom in the midst of continual warfare.”

- James Madison, April 20, 1795

Graphs: debt and unemploymenet

I was listening to the WSJ radio show this morning and the twenty-somethings, who are reporters, were giving updates to their work as found in the Journal.  I was reminded of the BS people in college who gave reports as though they knew what they were talking about. They had affected speech and a flair for obvious dramatics.  Little did I know they would run things.  The normal people didn't pay attention to the affected ones; we went about our lives not worrying about organizing others.

The tone of the reporting was: why worry about this 90 billion dollar in contention, the debt ceiling, etc. when it looks like debt is going down. Things look up.  There are a few "yuks," at this point.

First, there appears no understanding that an exploding debt is an exploding debt, that a minute reduction in the  growth of exploding debt is not proof that we are recovering,

Then, there is no connection, apparently, between imperceptibly better numbers and the war in Congress over spending.  I could be precise and say some Republicans were being niggardly, but some child would think that I was quoting a rodeo clown.

The profundity of the ignorance of common economics is so deep there is no reason to discuss it. You get down in the road with twits, you stand up with fleas, or some such thing. Normal people know how the world works; normal being people who have had real jobs outside the government and education.   Unfortunately, they are presented with useful news, they get opinions from twits; some watch stand-up comics sitting down to discuss current events and think that must be getting the hip opinion.

The aura of "Wall Street Journal" makes one think the reporters are grownups. Facade is a dangerous thing.  So, let me just add this plain graph, the only reason I wrote this blog. No buzz, no spin, just "official" projections. You make of it what you can.

Note, this is a government produced chart.  For serious numbers go to Shadow Stats

Then, I heard three minutes of NPR, that is about my limit of listening to people talking there, and hear how great the housing market it.  As I pretend to be a broker, these days, that struck me as odd.
Seems the valley girl reporter (you can tell when sentences end with an uptick, especially when  the person is attempting to show he or she is stating a fACT!) knew someone who sold a condo in Chelsea that they couldn't sell last year. Now, that is reporting. Yuk, yuk.

Oh, there is no inflation, too.  Yes sir, there is a domino effect in place and the housing market is fine.

This reportage is nothing more than a reprinting of PR from the government, large groups, or from the stock exchange press offices. I have seen this brain dead parroting, personally. In fact, I have issued PR releases. No one called me to verify anything. This is modern journalism in America.

You can see why every so often some NYT reporter is caught having fabricated a big story. No one manages and no one cares. Reporters are frustrated fiction writers, anyway.

The problem with all this white noise is that is creates an unexamined tapestry.  I hear perfectly nice and bright people say the darndest things. Things so insensible that you just stare at them, which they probably take as tacit agreement.

For the hell of it, here is a Shadow Stat for you:

Consider passimg this graph around.  The absurd unemployment rate for black is much higher.  It is terrifying. One would think it is purposely kept high to create racial turmoil. Actually, one should think that,.

You can read up on shadow stats background and you will be more comfortable with their numbers, if you are aware of the open alteration of government numbers to fit an agenda.

Money: Nature and Value for Americans

If you look at a dollar bill, what do you see?

This is a serious question.  Those who understand it, may chuckle and change the channel.  Those who do not will chuckle and change the channel. Perhaps, you should read on as you may not know known unknowns.

So, here is Money 101:

Here is a quick explanation: 

I go to the Coffee Planet in Glens Falls.  Here is a frequent customer card with two cups of value.  That is two out of ten.  It is 20% backed by a coffee, say a value of $2.50 U.S.

This is better than our U.S. dollar because it has a real backing.  Here is a full debt of one coffee:

 I could use this card to buy something from someone who likes coffee, say a pen.  This is great money!  The problem is the Coffee Planet could close.  In theory, I should be able to track down the company and demand my two dollars, but its value as money was at an end when it could no longer be redeemed.  Also, this money was very local.

The U.S.D. cannot be redeemed!  So, what is a dollar?  It is a wish and a prayer based upon a holy paper.  The government "backs" it, but what does that mean?  Nothing.  Further, the government is destroying its coffee cards by handing them out all over the place. The Coffee Planet will not honor more cards than coffees in the world.  So, narrow-minded people just enjoy collecting pieces of paper, thinking each one buys a coffee: " ...it ain't nessisarily so...."

That is a great way to think about money.  Mull it over at the  cafe.  Here is a more detailed view:

1.  I have a banana and trade it for an orange - there is no money, here, move along.

2.  I write you an IOU, check, note. At that point - no money exists. However, there is an obligation.

3.  Now, it gets interesting. In the past, before we were so smart as to pray to cotton paper, a person could take an IOU, endorse it to a third person as payment for a boatload of bananas. NOW, we have the arrival of money or commercial paper. Understand what just happened:  a debt was conveyed in lieu of a boatload of apples.  This is important to grok.  It is the origin of money.

Our dollars are, in fact, a debt. We pass debt obligations around.  They are not endorsed, but that is OK as they are on magic paper that provides authenticity that it is from the federal reserve.

4.  The U.S. debt was backed by gold and silver, at the outset. Thus, our dollar had real value and buying power.  It was beloved by the world.

5.  In the 1960s, even a semblance of backing of our debt was removed as very few people even paid attention.  Therefore, the value of the dollar is "floating."  On what?  Nothing. On opinion. There is a market of speculators who guess. The dollar is the same as tulips during the tulip mania of the early 17th Century. Indeed, the tulips were better as one could eat them. So, we are pretending tulip leaves are money, now. Back, then, tulip obligations passed through financial circles several times a day.  Sound familiar?

6.  Following mentally defective logic and/or avarice, our government purposely devalues our currency by creating more tulips.  In this way, each leaf is worth less, so the profligate Marxists and oligarchs can pay past debts with well-watered tulips.  This is the  governmental idea of sound finance: make your money worth less. (Note, in this way your income taxes went up invisibly, as you moved into a higher bracket via inflation.)

7.  Gee, lately, things seem to get worse every recession, so the government/Federal Reserve issues more tulip obligations to pay debts, as well as "create" benefits and  jobs that produce no tulips.  This is called Keynesian logic by Harvard. We used to get away with this because the rest of the world agreed, back when we were a sane country, to use our silver and gold backed debts as "money." Those days are long gone. The world uses U.S.D., for now, to buy and sell oil, so as we devalue the money our gasoline prices rise. However, some of the world remember the tulips.

8.  Gee, the world see that the U.S. is  the mother of all tulip farms. Government, now, are figuring out how to stop using tulips, so the end of the mania is just down the road.  These days, there is no straong, backed currency, so world investors remain in the ponzi game.

On February 3, 1637, the buyers disappeared from the tulip contract market and the music stopped.  The ponzi scheme ended. See, the diagram, below, and remember today we communicate in seconds.  You will not have a month to prepare for the collapse.

So, if you disagree, send along a rationale.  The question is: how does creating trillions of dollars of debt prevent a collapse? Don't tell me you can hire TSA agents and buy GM for the unions. That is a short term political bribe; we are talking about our currency.

I recall hearing a joke when I was banker.  I think it was a joke.  A lady was cofused when talking to her local banker:  I could not have bounced a check; look, I have a whole book of blank checks.

I am going for a coffee, now.

The Eve of De$truction

If you happen to believe news reports, all is well  Inflation is under control, so those Social Security benefits do not go up, and the jobless rate is just great, if you are still in the job market in North Dakota. Below is useful bit of news from Porter Stanserry's recent appearance:

...In December 2008, I began warning about the risk that the U.S. could lose its "world reserve currency status," something I termed the "End of America." It's worth looking at what I wrote almost five years ago because so much of what I feared would happen has come true... you should go read that essay.  

...The Fed went on to print and spend more than $3 trillion. The prices of stocks and commodities soared. The dollar fell versus sound currencies around the world. And the prices of U.S. goods and services, even domestically made products, soared.
Now, some folks who have followed my research from the beginning might point out that I predicted the U.S. would begin suffering from severe inflation as early as 2009. With the consumer price index hovering around 1%, isn't that inflation overdue?

That is the set up, continue on:

If you look beyond the government's manipulated numbers and focus on the real prices people are paying… you'll see price inflation is here and getting worse… 

As I've written extensively… inflation is found everywhere in our economy, except in the government's statistics. Corn, the most important food crop in America, is up 75% since 2008. Gasoline is up from $2.25 a gallon to more than $3 a gallon – an increase of more than 30%. The nationwide minimum wage is up by 40%. Rents are up by 25% nationwide and up 40% in most urban markets. 

And my favorite example, the base price of a Ford F-150, the best-selling passenger vehicle in America, has gone from $18,225 to $23,670 – a 30% increase. That's a domestically sourced and manufactured product… its price is completely dominated by the value of the U.S. dollar. 

Meanwhile… the government says there is no inflation… and that continuing to print $85 billion to buy government and mortgage debt is merely "interest-rate policy by other means." What could go wrong?

Buffett:

Billionaire investor Warren Buffett has sagely warned that buying all of those bonds and manipulating interest rates to stupidly low levels will prove to be much easier than selling them. The fact is, the moment our central bank begins to sell U.S. Treasury bonds, the whole world will follow. After all, our dollars aren't needed in trade for most of the big commodity countries. So the free ride will be over. All the traders ...will surely change course the moment it starts to sell.

The New America = The Old Europe

And what, you might wonder, have our noble leaders done with all the money and credit they've created? 

Mostly, they have expanded the welfare state at the fastest pace in history, creating more dependency in your fellow citizens than has ever existed before in the history of our country. There are now almost 100 million people collecting food stamps, disability, or long-term unemployment. Barely 60% of the adult population of America bothers to go to work, even on a part-time basis. 

On the backs of the poor schleps in America who paid their mortgages and still go to work, a gargantuan pile of debts and obligations have been piled higher and higher over the last five years. Total debt now approaches $60 trillion. Federal debt has nearly doubled in the last five years, from $9 trillion to $17 trillion. And our governments (state, local, and federal) continue to take up more and more of our economy – comprising more than 40% of our roughly $15 trillion gross domestic product (GDP) today....

I have long argued that the collapse of the currency and economy is a planned event.  It is supported by the childlike minds of those who confuse academic hopiness with reality.  The tsunami is not a projection, it is only far off shore.  You cannot stop a tsunami, you can only protect yourself and get away from the all the excitement of the beach.  Most people understand there is something seriously wrong:

Gun ownership in America now stands at 47% of all adults – that's near the highest percentage ever recorded by Gallup...The percentage of self-described liberals who own guns has grown from 30% to 40% in that period. So even folks who don't believe you should own a gun have been buying them... 

....And that's why… despite the central banks' efforts to manipulate the paper price of gold down… there are never any gold coins left to buy. That's why the price of farmland has soared (as I predicted it would). That's why more and more wealthy people are leaving America. And that's why… I firmly believe… this ongoing bull market will end very, very badly.

*   so far this year, more than 40% of the exchanges involved the euro. Only 33% involved the dollar.


If you This is the key: there are not many places to put money for safte keeping.  The US Dollar has been OK because Europe is on the front line of collapse. Our system is based upon banking logic, not a real economy. One day traders will wake up and see others selling off out Treasury debt because it is a bad investement. Why?  Because the Fed has been creating money to buy the debt and has decided it better start selling off trillions of dollars of debt

The market becomes flooded and an old fashion run accelerates causing the wave of panic to back upon itself. The film Margin Call gives you a good idea how this works.  Or, Its a Wonderful Life.

Don't be on the beach.

Don't Bother Closing the Door on the Way Out

I seem to be laying off the sky falling hysteria, these days.  Either people get it or not.  I have been going on about if for six years. Those who do not pay any attention are really going to "get it." Perhaps, this is some sort of natural selection, the weaning of the terminally stupid.

Nonetheless, below is a graph from President Obama's own projections, those which accompanied the submitted (this is new) budget plan"

Sort of a hockey stick, no?

As you know, we are at the end of America as we knew it. We are broke, unrest and poverty are coming along with the militarization of the nation, as is planned. All this is so as of 2013.  There is no point even arguing with leftist with the cognitive dissonance disease.

Above, check out the public debt projection of the President.  One cannot use the terms insanity or stupidity for the current charge into hell; it cannot be not seen as baseball has started. We are long past stupidity as a possibility and mental illness on this scale is not possible. We are witnessing the intentional destruction of the our nation. There are many forces at work and have been for decades going back to Marxists, socialists, Progressives, the KGB, the 1 per centers, and so on. They will fight things out among themselves, later, and the winner will tax us and keep us in pens.

There is a smattering of marginalized "Republicans" who are objecting to what is happening, but I think we have lost the ability to save ourselves. Ron Paul could have stemmed the flood, but the GOP made sure he could not beat Romney by having six pseudo conservatives running against him.

Now, as you look at the hockey stick realize that our great leaders assume that the U.S. dollar will remain the world's currency and that we can devalue it as a way out of the bizarre debt.  This will not happen, now, nations are withdrawing from the USD. It is happening all over the world. Thus, there will be little need to buy dollars and put up with the offense of its intentional devaluation.

Once the rest of the world catches on, interest rates will make Greece look attractive. So, get out of dollars.

Even today, if we taxed everyone at 100% we could not balance a yearly budget.  Like I say, we are past insane.

To repeat myself, get peanut butter, coffee, and silver, and a place to go for protection; thanks to Obamacare, begin working on improving your health as there will be no care.