HIGHLY RECOMMENDED STEPS FOR THE U.S. TO TAKE TO AVOID BANKRUPTCY...
...STEPS THE COUNTRY IS CERTAIN TO AVOID!
Chalmers Johnson: Three Good Reasons To Liquidate Our EmpireAnd Ten Steps to Take to Do So
The failure to begin to deal with our bloated military establishment and the profligate use of it in missions for which it is hopelessly inappropriate will, sooner rather than later, condemn the United States to a devastating trio of consequences: imperial overstretch, perpetual war, and insolvency, leading to a likely collapse similar to that of the former Soviet Union.
According to the 2008 official Pentagon inventory of our military bases around the world, our empire consists of 865 facilities in more than 40 countries and overseas U.S. territories. We deploy over 190,000 troops in 46 countries and territories. In just one such country, Japan, at the end of March 2008, we still had 99,295 people connected to U.S. military forces living and working there — 49,364 members of our armed services, 45,753 dependent family members, and 4,178 civilian employees. Some 13,975 of these were crowded into the small island of Okinawa, the largest concentration of foreign troops anywhere in Japan.
We are like the British at the end of World War II: desperately trying to shore up an empire that we never needed and can no longer afford, using methods that often resemble those of failed empires of the past — including the Axis powers of World War II and the former Soviet Union.
"A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects." -- Robert A. Heinlein
BRITISH GOVERNMENT TO INVESTIGATE ITSELF FOR PHONEY WAR...
OOOOPS! BUSTED!
First plan, to hold hearings in secret and not to find blame causes public outcry!
LONDON A long-awaited and potentially explosive inquiry into Britain’s role in the Iraq war and its aftermath, finally got underway in London yesterday.
When the British prime minister, Gordon Brown, announced the inquiry in June after months of growing political pressure, he declared that the hearings would be held in private and “would not apportion blame”.
In the outcry that followed, Mr Brown was forced into an embarrassing u-turn, conceding that most of the hearings would, in fact, be in public and would only be held in camera when national security was at stake.
Concerns remain, however, over how much the excuse of national security will be used to hold the inquiry’s hearings in private.
Sir Menzies Campbell, the former leader of the Liberal Democrats – the only one of the three main political parties to oppose the war – told the BBC that it was essential that the public were not “denied essential information”. He added: “It is important that national security should not be regarded as a synonym for government embarrassment.
In an America in which a Republican administration has nationalized the financial sector and both Left and Right call on the government to save them, the authentic conservative is a stranger in his own country. The old signposts are missing, and he travels on roads he’s never seen.
Conservatives looking for direction, for some clue as to how to get out of their present conundrum had best look to where they’ve been. One who has traveled that way before can tell them what lies ahead and how best to face it. In the case of the road we are now traveling, there was a wayfarer who knew this trail by heart: his name was Garet Garrett.
One of the first financial journalists in the country, a writer of nonfiction and sometime novelist, a polemicist and prose stylist without equal, Garrett was born on a farm in the Midwest in 1878, the year Edison patented the gramophone. Apprenticed at 16 to a printer, he fell into the business of journalism and made his way to the big cities, winding up in New York. There he joined the staff of Adolph Ochs’s New York Times, where he served on the editorial board. He specialized in business and became the chronicler of the Roaring Twenties. In the heyday of untrammeled individualism and capitalism untamed, he was the chief celebrant of the New Era of prosperity and seemingly unlimited economic ascent. Later he became the historian of its betrayal and decline at the hands of its own defenders.
The stock market Crash of 1929 augured the end of the world he had known and the beginning of something new in American history: what Garrett called “a revolution within the form.” Reading of his agony at the victory of Franklin Delano Roosevelt, a chill of déjà vu crawls up the spine of today’s conservative: “Our fighting base is gone. Formerly we could say the people had voted for the New Deal. Now they have voted for it in a positive, overwhelming manner. Then what? … Where is the new base? I don’t see it. Where is the fighting position? I haven’t any. No one else seems to have one. Hearst and [Al] Smith and Rockefeller embrace it. The Republicans are saying they must reorganize the party on a liberal platform.”
Garrett, then at the height of his journalistic prominence and influence as chief editorial writer for the Saturday Evening Post—America’s premier weekly magazine—reached the nadir of despair. The Republicans had come to him for advice, but as Garrett said of the hapless Alf Landon, “it is like dropping it down a well. There is no splash.” Read the rest... Raimondo TAC
As Dr. Arthur Robinson, writer of the "Pro-Science, Pro-Technology, Pro-Free Enterprise Monthly Newsletter" Access to Energy describes it, the American national railroad train is heading toward a fatal intersection. He writes, "There is a switch at that intersection. One direction leads to a wonderful valley of lower taxation, lower regulation, lower litigation, and less government – a valley labelled ‘freedom’ and ‘technology prosperity.’ The other direction leads to a destroyed bridge over a very deep canyon. The rocks at the bottom of the canyon are littered with the remains of many earlier civilizations. They are labelled ‘statism,’ ‘totalitarianism,’ ‘Marxism,’ ‘fascism,’ and ‘the tyranny of democratic socialism.’"
Now operating as a free agent in the Lower 48 (states), Sarah Palin is likely to play a critical role in helping to turn the switch that turns America’s train in the direction towards less government.
When she came on the national stage as the Republican vice-presidential candidate, LRC’s Walter Block wrote: "Here is a rifle toting, moose killing, basketball playing, beauty contest winning, charismatic and eloquent long happily married conservative hockey mom who has made something of herself in a very competitive field, who has not gone to finishing school at Harvard, Yale or Princeton... She is a breath of fresh air blowing in from our northernmost state."
This is how Lew Rockwell viewed her arrival on the national scene:
"The frenzied reaction of the middle class all over the country toward Sarah Palin has no real precedent that I can remember. Indeed, the reaction especially among women is completely understandable. She provides a much welcome cultural break from the chip-on-the-shoulder, grudge-against-the-world model of public women that have been held up to us for years, embodied in the belligerent and insufferable person of Hillary Clinton.
"Sarah, on the other hand, is both beautiful and professionally accomplished, a wife and mother and a natural politician, both religious and secular, both feminine and fears no tasks such as hunting that are usually associated with men. She offers a different model of a woman who has excelled not through intimidation and aggressive demands for reparation, but through her own efforts, charms, and intelligence."
Jack Wheeler points out (in his To The Point News) this special quality that Palin has: "A lower-middle-class woman who speaks the language of the country’s ordinary voters and has a profound personal understanding of the hopes and worries of a vast swath of the public." Read the rest... Donald Miller at LRC
Statistical Deceptions: How Fake is the "Recovery"?
Paul Craig Roberts, Counterpunch.org: The size of the US deficit exceeds in these troubled times the supply of world savings available to fund the US government’s wars, bailouts and stimulus plans. If the Federal Reserve has to monetize the Treasury’s new borrowings by creating demand deposits for the Treasury (printing money), America’s foreign creditors might flee the dollar.
... One looks in vain to the US financial media for accurate economic information. Currently, Wall Street, the White House, and the media are hyping a new sign of economic recovery--”surging” June home sales. John Williams at shadowstats.com predicted this latest reporting deception.
Here is the way Williams explains how statistics can produce false signs of recovery. The economy has been contracting for so long that a plateauing of the falloff in home sales compared to the previous time period’s more rapid contraction can appear like a gain.
The Census Bureau itself notes that the reported 11 per cent increase in June home sales might be illusory. The reporting agency says that the gain is not statistically meaningful at a 90 per cent confidence interval and that “the Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.”
There would be very stiff competition indeed for the literary award of "Most Absurd Lies and Myths About Lincoln." In the running would be almost all of Harry Jaffa’s writing, including the statement in his latest Lincoln book that "Lincoln opposed making voters or jurors of Negroes in the 1850s so that they could be voters and jurors today." Or Gabor Borit’s statement that Lincoln’s lifelong advocacy of "colonization," or deportation of black people from America, is an example of "how honest people lie."
But there is a new entry to the field: an article from the February 9, 2009 issue of Newsmax.com by Newt Gingrich and William Forstchen entitled "What Would He Say to Us Today?" It seems as though every time Newt Gingrich, who never served in the military himself, begins making the case for sending other peoples’ children off to die in another unnecessary war, he starts quoting Lincoln. A couple of years ago Gingrich wrote an article for the Wall Street Journal in which he advocated a military invasion and occupation of Iran, Syria, Lebanon, Saudi Arabia, and North Korea. The title of the article was "Lincoln and Bush." President Bush should "be like Lincoln," he said, and initiate five more wars simultaneously. More recently, Gingrich has been calling for the nuking of North Korea, so it is not surprising to me that he is once again waxing eloquently about Dishonest Abe.
It is well known that the founding fathers feared democracy. Indeed, in Federalist #10 James Madison explained that the sole purpose of the Constitution was to create a constitutional republic that would hopefully "restrain the violence of faction," by which he meant democracy. Gingrich and Forstchen unwittingly admit that their hero literally destroyed the constitution of the founding fathers by describing the Lincoln Memorial as "his [Lincoln’s] throne" that is "Modeled after Grecian temples" and is "our American temple to democracy . . ." Read the rest... DiLorenzo on LewRockwell.com
Thanks to Gerry Smedinghoff for the missive "Hell Freezes Over! Noted Politician Cuts Government Services And Cries Out "Taxpayers Are Hurting ..."
Daley orders furloughs: 'taxpayers are hurting'
Chicago Sun-Times: Two thousand non-union employees at six government agencies under Mayor Daley’s control will be ordered to take furlough days and forfeit 2009 pay raises to save $18.8 million and keep their hands out of taxpayers’ pockets.
With layoffs mounting, nest eggs shrinking and voter anger off the charts about the steep schedule of rate hikes tied to the $1.15 billion parking meter deal, Daley is bending over backwards to demonstrate to struggling Chicagoans that he feels their pain.
“Taxpayers out there are hurting. People are getting laid off. They can’t get overtime. ... They can’t get other jobs. It’s much more serious than people think it is,” Daley said.
Referring to the furlough frenzy sweeping the public and private sectors, he said, “Everybody should do it. It’s incumbent on government because taxpayers pay for your salary, pension and health care. They pay a lot. ... They’re saying, ‘You don’t pay anything for your health care? I have to pay for your pension?’ People are really focussing on this — more so in government than anything else.”
QUESTION FOUND WHILE READING THE FINANCIAL TIMES...
It is an enduring mystery why US pundits should see a difference between the philosophy of Democrats (who stand for spending more than you raise) and the Republicans (who stand for raising less than you spend).
(Bloomberg) -- The Queen of England recently heard from her nation’s economic experts, who wrote to apologize for their profession’s inability to predict the financial crisis.
It’s different in the U.S. Here, economists don’t apologize to the throne. They sit on it.
The throne in the U.S. is the post of chairman at the Federal Reserve.
... In 2002, when Bernanke was still a mere count in the Fed court, he spoke at an event honoring his fellow economist, Milton Friedman. Bernanke recited the errors of the Depression- era monetary authorities, errors Friedman himself had first pointed out: they forced an epic deflation and banking credit crisis on Americans.
Bernanke then promised that he and his Fed colleagues “won’t do it again.”
Fast forward to Sunday in Kansas City, where Bernanke, now chairman, said the current crisis might already be worse than the Great Depression. In other words, the Fed policy of the current decade has worked insufficiently, or hasn’t worked, or has made matters worse. Hardly the festive results both Bernanke and the late Friedman hoped for. Yet the more trouble their arbitrary policy causes, the more ennobled our central bankers seem.
Fascism will come at the hands of perfectly authentic Americans who have been working to commit this country to the rule of the bureaucratic state; interfering in the affairs of the states and cities; taking part in the management of industry and finance and agriculture; assuming the role of great national banker and investor, borrowing billions every year and spending them on all sorts of projects through which such a government can paralyse opposition and command public support; marshalling great armies and navies at crushing costs to support the industry of war and preparation for war which will become our nation’s greatest industry; and adding to all this the most romantic adventures in global planning, regeneration, and domination – all to be done under the authority of a powerfully centralised government in which the executive will hold in effect all the powers, with Congress reduced to the role of a debating society.
MISH: Bernanke is mindful of the fact that he has done a horrible job. In an attempt to change perceptions, Bernanke has gone on a media blitz attempting to whitewash the Fed's failures, while seeking still more power for the Fed.
Bernanke stepped up his advertising campaign this weekend in a town hall meeting on public TV. The show will air this week in three installments on PBS' "The NewsHour with Jim Lehrer."
Jim Lehrer invited questions and comments in advance. Here is the question/comment that I submitted.
Hello Ben
Given that you failed miserably to see what was coming, how can giving the Fed more regulatory power possibly fix anything? I have a better idea, let’s get rid of the Fed totally along with its micro-mismanagement of interest rates that repetitively blows bubbles of increasing amplitude. Face the facts Ben, you no more know where interest rates should be than you know where the price of orange juice should be. The housing bubble and subsequent collapse that you failed to see coming is proof enough of your ineptitude. Only the free market knows what the price of money should be at any given time. Regardless, you sure don’t know. How about coming up with a 5 year plan to abolish the Fed?
BBC: A system that can deliver power to devices without the need for wires has been shown off at a hi-tech conference.
The technique exploits simple physics and can be used to charge a range of electronic devices over many metres.
Eric Giler, chief executive of US firm Witricity, showed mobile phones and televisions charging wirelessly at the TED Global conference in Oxford.
He said the system could replace the miles of expensive power cables and billions of disposable batteries.
"There is something like 40 billion disposable batteries built every year for power that, generally speaking, is used within a few inches or feet of where there is very inexpensive power," he said.
The system is based on work by physicist Marin Soljacic at the Massachusetts Institute of Technology (MIT).
It exploits "resonance", whereby energy transfer is markedly more efficient when a certain frequency is applied.
When two objects have the same resonant frequency, they exchange energy strongly without having an effect on other, surrounding objects.
For example, it is resonance that can cause a wine glass to explode when a singer hits exactly the right tone.
But instead of using acoustic resonance, Witricity's approach exploits the resonance of low frequency electromagnetic waves.
A debate was held on the usefulness of the Federal Reserve. Participating in the debate were Warren Coats and John Fund vs. Gene Epstein and Thomas Woods. Joe Bradley moderated the debate "Fed Up with the Fed: Should We Abolish?". Check it out HERE.
Great article by Erik Voorhees at LewRockwell.com spells it all out:
...the value of the dollar remained extremely stable for 150 years, then The Fed was created in order to "stabilize the value of the dollar" and the result has been a 95% devaluation of the dollar in less than 100 years following its creation.
From 1776 to 1912 (136 years), the value of the dollar, relative to the Consumer Price Index, increased by 11%. A dollar could buy 11% more goods in 1912 than in 1776. Thus, if in 1776, you sat on your savings pile of $1,000,000 for 136 years, it would then be worth $1,110,000 in purchasing power (it will have appreciated in value by 11%).
A loaf of bread for Thomas Jefferson cost the same as a loaf of bread for Lincoln 50 years later and again the same for J.P. Morgan 50 years after that.
... after The Fed’s creation, from 1913 to 2008 (95 years), the value of the dollar, relative to the Consumer Price Index, decreased by 95%. A dollar could buy 95% fewer goods in 2008 than in 1913. Thus, if in 1913, you sat on your savings pile of $1,000,000 for 95 years, it would then be worth only $50,000 in purchasing power (it will have depreciated in value by 95%).
One would now need to pay about 20 times more than J.P. Morgan for one’s bread.
MONEY PRINTING, DEBT GROWTH AND DEFICITS DON'T CREATE PROSPERITY
Marc Faber the Swiss fund manager and Gloom Boom & Doom editor said the US Federal Reserve managed, through stimulus, to do something that had never before been done - create a worldwide bubble in just about everything -stocks, bonds , housing and art.
The only thing that didn't go up was the dollar, according to Faber.
Speaking to the 10th Annual Agora Financial Investment Symposium in Vancouver this week, Faber said: “You cannot create prosperity through money printing and debt growth.”
Faber preached an idea that became the theme of the event: Government fiscal and monetary intervention, “can postpone, but not prevent crisis.
“I believe next year’s economy will face even larger deficits. Their deficit is attempting to stimulate credit growth. Unless real credit growth returns, they will have to put more and more money into the system to maintain the status quo. All polices target consumption. That is a mistake,” Faber said.
So what’s this mean for the market? “The S&P 500 will not recover to 2007 highs. At the peak, 44% of the S&P was the financial sector. That is gone… not coming back.”
"In the period, 2001 -2007, the Fed managed to do something that had never before been done - create a worldwide bubble in just about everything. Stocks, bonds, art, oil, housing - you name it; it went up. The only thing that didn't go up was the dollar," Faber said.
All this was achieved through stimulus, Faber said.
After a half a century of stimulus - with credit, inflation and the money supply growing faster and faster - the Fed put the pedal to the metal following the nano-recession of 2001. It dropped interest rates to just 1% - well below the rate of consumer price inflation - and kept them there until an expansion had been going on for three years.
Instead of increasing real output in the US, it lured Americans to spend and speculate...and drove Chinese entrepreneurs to put up new factories in order to give them something to buy. In America, debt grew 5 times faster than GDP; for each dollar of extra income, Americans added US$5.50 to their debt. In China, manufacturing capacity grew faster than ever.
"Bubbles had been localized in the past," Faber explained. "A bubble in one area drew investment from another area. In one market, prices soared. In another they slumped. Overall, things didn't change much."
But a worldwide bubble in everything is something new. And it caused something else that is new - a worldwide crash. We have been ducking explosions and stepping over the debris for the last two years. www.bi-me.com
Stock market investors shrug off a disaster in our midst: mass layoffs. Investors act as though it will soon be business as usual. Companies cut costs by firing employees that have been with them for decades. Then the companies can report higher earnings from cost-cutting measures. The media then proclaim an increase in earnings. But how will these increases be sustained? How will an unemployment rate of 11% help get the economy back on its feet?
Companies do have to cut costs. Consumers are telling them this is no uncertain terms. But it is not a time for rejoicing when people are laid off. They trusted senior management. They trusted the economic system. They have never heard of the Federal Reserve System. They know nothing about derivatives. All they know is that the Federal government bailed out the big banks in 2008, while they have lost their jobs. In this report, I will consider the question of mass layoffs. This topic does not get much attention by the financial press. It should.
Instead, we are told about three statistics: the unemployment rate, initial requests for unemployment insurance benefits, and total unemployment. Read the rest... Gary North, LewRockwell.com
WANT TO UNDERSTAND THE DOLLAR CRISIS? THIS WILL HELP
The Dollar Crisis
Quick Synopsis:
* Abandoning the gold standard in 1971 has resulted in large global trade imbalances and a massive buildup of foreign currency reserves * These trade imbalances and buildup of foreign reserves have resulted in frequent booms and busts since 1971 * The Japanese bust of 1989, the Asian economic crisis of 1997, and the current US credit market collapse have resulted from the post-1971 paper money monetary system * Abandoning the gold standard has gradually resulted in a very overvalued US dollar, and that the dollar is headed for disaster * “The dollar standard is inherently flawed and increasingly unstable. Its collapse will be the most important economic event of the 21st century.”
This week, I’m doing another book review, this time on “The Dollar Crisis” by Richard Duncan. Before I begin, I’ll make a prediction, since I’m an investor and my job is to predict. I increasingly believe that the dollar will collapse, and its ramifications could be as violent as when the credit markets cracked in July 2007. Currency collapses are nothing new, just as the bursting of a credit market bubble was nothing new. A dollar collapse could very well lead to carnage in domestic asset markets, whether it be the stock market, bond market, etc. Also, US imports and the overvalued dollar are fueling many of the export-oriented economies abroad, so a dollar collapse could wreak havoc on foreign asset markets as well. And once it happens, we’re going to view the collapse of the dollar as an obvious event that we should have long seen coming. Just as we now view the subprime wreckage and bursting of the real estate bubble as an event we should have easily predicted.
The problem is timing. Does the dollar collapse in 2009, or 2015? And is it a slow depreciation, or a sudden 50% fall? Those are tougher questions. Richard Duncan predicted the dollar’s demise in 2002. His error of timing discredited an otherwise brilliant book. Read the rest! Businessinsider.com
C-SPAN2 will air a fascinating debate on the Fed: Tom Woods and Gene Epstein vs. John Fund and Warren Coats, this Saturday at 12:30pm ET and this Sunday at 9:00am ET. Need I say who wipes the Las Vegas floor with whom, to the great delight of the audience?
I sure HOPE I don't have to CHANGE the way things are done in Oz.
'The person who may be responsible for more food-related illness and death than anyone in history has just been made the US food safety czar. This is no joke.
Here's the back story.
When FDA scientists were asked to weigh in on what was to become the most radical and potentially dangerous change in our food supply -- the introduction of genetically modified (GM) foods -- secret documents now reveal that the experts were very concerned. Memo after memo described toxins, new diseases, nutritional deficiencies, and hard-to-detect allergens. They were adamant that the technology carried "serious health hazards," and required careful, long-term research, including human studies, before any genetically modified organisms (GMOs) could be safely released into the food supply.
But the biotech industry had rigged the game so that neither science nor scientists would stand in their way. They had placed their own man in charge of FDA policy and he wasn't going to be swayed by feeble arguments related to food safety. No, he was going to do what corporations [and governments] had done for decades to get past these types of pesky concerns. He was going to lie." Read the rest... Jeffery Smith Huffington Post
The Effects of Government Spending in a Village By Edward Gonzalez
I spent seven months as an advisor to the Iraqi Army in the Al Anbar Province of Iraq from July of 2007 to January of 2008. The nature of my particular mission placed me inside Iraqi farming and fishing villages along the Euphrates River. Within the villages there were the farmers, fisherman and their families, the local sheiks and village elders, an Iraqi Army Company, and an Iraqi Police Station.
Each village had different amounts of insurgent activity and attacks. The two villages that I spent the majority of my time in were not in good shape. As a result of the war and attacks by insurgent groups, the market places had minimal business and farmers and fisherman had very few people to trade with.
My first month in one of these villages was a wake up call. Americans and Iraqis were attacked by insurgent cells operating in the area. Most villagers were scared to speak with us for fear of reprisal. The insurgents that we did capture resembled nothing like I was told to expect in a religious zealot willing to die for a cause. While I knew the religious extremists were the ones organizing the insurgency, the insurgents I captured were all young men, angry, out of work, and uneducated. When questioned they certainly spouted a lot of jihad jargon, but when questioned further, most were recruited with promises of pay and better quality of life once the Americans were thrown out. I came to the realization that I could go on fighting insurgent cells forever and never accomplish anything as long as they were able to recruit. It was not until the economy was functioning that insurgent groups would no longer be able to attract young men as their foot soldiers.
I also found that the majority of Iraqis did not care about American or Al Quaeda ideals. They wanted a functioning society where they could have a job and their children would be safe and have a better life than they themselves have had. The most telling quote was from an Iraqi farmer. When asked what he needed he replied, “I want a safe place for my children to go to school, a good price for my crops, and for the government to leave me alone.” Read the rest... Bob Murphy's blog
"The Fed Has Changed Enormously in the Past Nine Months!"
The FED used to manage monetary policy, and that was about all. Today it’s engaged in fiscal actions that have to do with the government’s debts.
Michael S. Rozeff, LewRockwell.com: The two main ones are that it is buying $300 billion of U.S. Treasuries and it is buying $1.25 trillion of mortgage-backed and agency debts.
The FED traditionally bought U.S. debt, but never in such volume. The government deficits are so large that the FED will probably eventually announce one or more new programs to buy U.S. debt. At a minimum, these deficits ensure that the FED will not be soon selling what it now is in the midst of buying. No exit here.
The FED never bought mortgage-backed securities as part of its permanent portfolio. Now it is. It is buying these securities from housing-related government-sponsored enterprises (GSEs) such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.
A new AP-GfK poll released today shows a majority of Americans opposed to the wars in both Afghanistan and Iraq. The numbers also reveal growing concern that the president will be able to meet his goals, particularly in Iraq.
The Iraq War was opposed 63-34, while the slightly more popular Afghan War was opposed 53-44. Both numbers split strongly along party lines, with roughly two thirds of Republican supporting each war.
WOULD YOU TAKE A VACCINE FROM A MANUFACTURER THAT WAS UNWILLIING TO BE HELD LIABLE FOR ITS CONSEQUENCES?
Government promises to shield makers of swine flu vaccine from liability for their effects. This is a big, red flag! They are unwilling to let the market assess the risks and the likely costs of those risks.
Do you think that means the risks are high or low?
AP: ATLANTA — The last time the government embarked on a major vaccine campaign against a new swine flu, thousands of people filed claims contending they suffered side effects from the shots. This time, the government has already taken steps to prevent that.
Vaccine makers and federal officials will be immune from lawsuits that result from any new swine flu vaccine, under a document signed by Secretary of Health and Human Services Kathleen Sebelius, government health officials said Friday.
The last time the government faced a new swine flu virus was in 1976. Cases of swine flu in soldiers at Fort Dix, N.J., including one death, made health officials worried they might be facing a deadly pandemic like the one that killed millions around the world in 1918 and 1919.
Federal officials vaccinated 40 million Americans during a national campaign. A pandemic never materialized, but thousands who got the shots filed injury claims, saying they suffered a paralyzing condition called Guillain-Barre Syndrome or other side effects.
I guess you should get while the getting is good, but this is going totally parabolic. That money has to come out of somewhere, by the way, in order for the sale to succeed, which is going to get rather interesting at some point - but exactly where it matters is impossible to know.
I expected that when we crossed the $100 billion threshold in a week the market would throw up all over it, but it didn't. Now we've got the government trying to sell a quarter of a trillion dollars in debt over the next week, the announcement is out there, and while the bond market is selling off to a material degree equities could care less!
This is flat-out insane. At this run rate we would be trying to sell twelve trillion dollars over one year's time, an obviously ridiculous and impossible-to-peddle amount of debt at any price.
When does the rest of the world wake up (not to mention the primary dealers) and say "NO!"? Never? Is there a truly insatiable demand for our government's debt, despite the fact that President Obama got up on the national stage last night and promised to spend another trillion dollars we don't have?
FED MEMO URGES NEGATIVE FIVE PERCENT FED FUNDS RATE!
"It's hard to imagine that the monetary policy talk can get any nuttier, but we've likely only just begun!"
Read You Can't Print Production and Prosperity by Doug French, Mises Daily, HERE
"Now the word is that zero-percent interest rates are just too darn high. That's why we haven't seen a reinflation of bubble America. The Financial Times reports the existence of a Federal Reserve staff memorandum that makes the case for a negative-five-percent federal-funds rate. Meanwhile, Japanese authorities are toying with the idea of outlawing cash in their country. Despite using every fiscal trick in the book and keeping interest rates at zero percent for a decade, that economy has been mired in a postbubble depression. So the current theory "would suggest that nominal interest rates of [negative four] percent might be closer to what is required to rescue the economy from another deflationary spiral," reported the Times Online."
* A bunch of Ron Paul fans have been griping about this WSJ article on the Fed, and I assumed they were just being touchy. But seriously just read the first three paragraphs. That might as well have titled it, "Give me a B! Give me an E! Give me an N!..."
In case you don't see the big deal, consider this excerpt:
"Rallying one charge is Ron Paul, an iconoclastic Texas Republican who wants to abolish the central bank entirely. Mr. Paul's economic ideas sometimes make him the target of ridicule -- in the new film "Bruno," shock comedian Sacha Baron Cohen tries to seduce the startled congressman in a hidden-camera scene while discussing economic theory.
Still, Mr. Paul has persuaded nearly two-thirds of the House to co-sponsor a bill requiring far-reaching congressional audits of the Fed."
So my question is, what the heck is that "Still" doing? Are these clowns really suggesting that other Congressmen shouldn't have supported Ron Paul's bill, since he suffered ridicule at the hands of a comedian? How about this, "President Barack Obama is meeting with fierce criticism, with some commentators--such as Ann Coulter--suggesting he remove his temple from his anus. Still, Obama enjoys strong support from the Congressional Black Caucus.
Gary North deconstructs Bernanke's options with the chairman's own words on LewRockwell.com:
He promised an exit strategy from monetary expansion. He always does. He does not say how or what. With the monetary base doubled, the FED now has to cut it by 50%. How? Silence.
"Accordingly, as I mentioned earlier, the FOMC believes that a highly accommodative stance of monetary policy will be appropriate for an extended period. However, we also believe that it is important to assure the public and the markets that the extraordinary policy measures we have taken in response to the financial crisis and the recession can be withdrawn in a smooth and timely manner as needed, thereby avoiding the risk that policy stimulus could lead to a future rise in inflation. The FOMC has been devoting considerable attention to issues relating to its exit strategy, and we are confident that we have the necessary tools to implement that strategy when appropriate."
Sure the FOMC has the tools. The question is this: How to use them without bringing economy to the edge of another collapse?
... The FED doesn't know what to do next.
Congress cannot see this. The stock market ignores this. No one cares.
SCIENTISTS STUDY VISIBLE LIGHT EMITTED BY THE HUMAN BODY!
The human body literally glows, emitting a visible light in extremely small quantities at levels that rise and fall with the day, scientists now reveal.
Past research has shown that the body emits visible light, 1,000 times less intense than the levels to which our naked eyes are sensitive. In fact, virtually all living creatures emit very weak light, which is thought to be a byproduct of biochemical reactions involving free radicals.
(This visible light differs from the infrared radiation - an invisible form of light - that comes from body heat.)
The researchers found the body glow rose and fell over the day, with its lowest point at 10 a.m. and its peak at 4 p.m., dropping gradually after that. These findings suggest there is light emission linked to our body clocks, most likely due to how our metabolic rhythms fluctuate over the course of the day.
Back in 1960, the CIA hatched a plan to kill Patrice Lumumba by infecting his toothbrush with a deadly disease. The Congolese leader would brush his teeth and, presto, in a few days or weeks he would be gone.
Around the same time, the CIA's Health Alteration Committee -- who thought that name up? -- sent a monogrammed, poisoned handkerchief to Gen. Abdul Karim Kassem, the leader of Iraq.
And the CIA's "executive action" unit plotted for years to murder Fidel Castro. It hired the Mafia to poison his food and tried to give him a diving suit contaminated with Madura foot, a rare tropical disease that starts in the foot and moves upward, slowly destroying the body. The CIA also considered offing the Cuban leader with an exploding cigar, a poison pen and a seashell that would blow up underwater when he touched it.
Not one of the plots was successful. Lumumba and Kassem were executed by their foes, and Castro is still alive. But the plots make clear that the CIA has been licensed to kill for decades.
... The problem with assassination, morality aside, is that the U.S. is not very good at it, as the CIA's farcical efforts to murder Castro demonstrate. It seems unlikely that the CIA will kill Bin Laden with a baseball bat. And there is the real possibility of retaliation for a state-sponsored assassination. President Kennedy was quoted as saying, "We can't get into that kind of thing or we would all be targets."
It's pretty well-known that Hitler and his propaganda minister, Paul Joseph Goebbels, looked to American advertising for inspiration. What I didn't realize was how proud the advertising industry was about it. In its July 20, 1933, issue, Printers' Ink, one of the lead advertising trade journals of its time, speaks approvingly of Hitler's methods:
[Hitler] has depended almost entirely upon slogans made effective by reiteration, made general by American advertising methods...[S]logans on billboards and newspapers and in publications of national circulation have made a new Germany which has raised much excitement, made many changes.
Many changes, indeed. And many more to come!
It continues:
"As is well known, the word propaganda in Germany is used synonymously with the word advertising. Although in this country and in Great Britain propaganda has the unfortunate connotation of being free instead of being paid for, this distinction does not exist in Germany."
Ah, yes, that unfortunate connotation of freedom! Interesting that this is the only negative connotation of "propaganda" at this time. In fact, the (American) author makes sure to point out that in the Hitler speech that follows the word "propaganda" should be read as "advertising." Apparently, the trade mag wants credit for schooling the Führer.
The article then goes on to quote Hitler at length talking about something that Americans who worked in advertising at the time already believed: that the masses are morons who respond only to simple messages repeated thousands of times (a perspective I discuss at length in my book).
Seventy-some years later, this belief is as popular with the powers that be as it was in 1933. Which, if nothing else, provides a shred of evidence connecting the makers of the Head-On commercial to the Nazis. Boingboing.net
A top investment advisor, Harry Schultz - who was MarketWatch's Peter Brimelow pick for financial newsletter of the Year in 2008 - is now claiming:
Some U.S. embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of U.S. cash to purchase currencies from those governments, quietly. But not pound sterling. Inside the State Dept., there is a sense of sadness and foreboding that 'something' is about to happen ... within 180 days, but could be 120-150 days.
Investment advisor and former Army Counterintelligence officer Bob Chapman is saying the same thing, reporting on the possibility of a so-called “bank holiday” planned for late August or early September. According to Chapman’s sources, U.S. embassies around the world are selling dollars and stockpiling money from respective countries where they operate.
Leading trend forecaster Gerald Calente has also repeatedly predicted a "bank holiday".
But the rumors of embassies being advised to stockpile local currency is stunning and - if true - point to a possible huge devaluation in the dollar. Washington's Blog
THE BREATHTAKING NUMBER FOR THE BACKSTOPS, BAILOUTS, AND BOONDOGGLES!
In March, Bloomberg estimated the bailout amounted to $12.8 trillion. The new number is more than double the entire national debt!
Clusterstock: The total amount of US backstops and bailouts has reached a staggering $23.7 trillion!
How do we know? Because TARP watchdog Neil Barofsky is going to say so in his fresh report, and that report was leaked to many top media outlets, like WaPo and Dow Jones.
"A passel of bigwig economists has signed a petition urging Congress and the executive branch “to reaffirm their support for and defend the independence of the Federal Reserve System as a foundation of U.S. economic stability.” In support of this defense of the Fed against those now challenging the secrecy of its undertakings and, in some cases, its very existence, these economists offer three arguments. First, “central bank independence has been shown to be essential for controlling inflation...” ."Robert Higgs
So I invite you over to my house for a backyard barbecue. We're drinking cokes-- spiked with RonRico 151. After 5 or 6 of these little Molotov cocktails I lean over and say "Hey, want to see my newest invention?". You say "Sure." and I lead you to my garage.
Inside is an odd contraption.
"What is it?"
"A time machine."
"Does it work?"
"Of course. Go inside and take a look."
You step inside and look around. After looking it over for a few minutes you come back to the door. As you're about to step out I stuff a thousand dollars in your pocket and push you back in. I close the door and run to the control panel. I set the controls to send you back to 1913, right before the Fed, our current (and third) Central bank was instituted. I push the send button and off you go, twirling through time and space.
The machine finally comes to a rest and you open the door and step out onto a wood platform that existed at that place and time. It's a beautiful day. People are milling about- happy, but dressed somewhat strangely.
Off to your left you see an elderly gentleman who seems to be watching you. He approaches slowly, smiles benignly and says "I'm the currency adjuster. You give me the currency you have on you and I will give you an equivalent amount of purchasing power for the year in which you have landed, in your case 1913".
You hand him the thousand bucks I stuffed in your pocket, and he gives you back............ What?
About 43 bucks. Thank God for an inflation fighting Fed!
A passel of bigwig economists has signed a petition urging Congress and the executive branch “to reaffirm their support for and defend the independence of the Federal Reserve System as a foundation of U.S. economic stability.” In support of this defense of the Fed against those now challenging the secrecy of its undertakings and, in some cases, its very existence, these economists offer three arguments.
First, “central bank independence has been shown to be essential for controlling inflation.” A little difficulty for this claim, however, resides in the undeniable fact that for more than a century before the Fed’s establishment, the purchasing power of the dollar fluctuated around an approximately horizontal trend line—that is, despite inflations and deflations usually associated with the wartime issuance of fiat money and the postwar return to specie-backed currency, the dollar more or less retained its exchange value against goods and services over the long run, whereas since the Fed’s establishment the dollar has lost more than 95 percent of its purchasing power. If this post-1913 experience is what these economists consider “controlling inflation,” I would not want to see what happens to a currency’s purchasing power when inflation is not controlled! It seems that the petitioning economists have placed the performance bar absurdly low in their judgment of the Fed’s containment of inflation. Evidently, barring a Weimar-Germany-style hyperinflation, they suppose that everything is hunky-dory on the monetary front. Read the rest...Bob Higgs The Independent Institute
So the "stimulus" package, a dagger through the heart of the economy, has passed. The geniuses who govern us, who insist that seizing the produce of the voluntary economy and devoting it to arbitrary projects will make us wealthy, have had their victory.
Much of the debate turned, unfortunately, on how much "pork" was in the bill. This or that spending program was silly or an obvious waste of money, critics said. All too true, of course, but unless we're looking to be hired by the Titanic's Department of Deck Chair Rearrangement, we're missing the point with arguments like this.
The primary fallacy of the tooth-fairy economics at the heart of the stimulus is the very idea that economic health is the product of government spending, which is financed either by borrowing (which leaves private businesses with a smaller share of the pool of savings for them to borrow from), printing money out of thin air, or direct seizure from the population. Whatever government spends the money on is necessarily arbitrary -- government lacks the profit-and-loss feedback mechanism that keeps the private sector from squandering resources and employing factors of production in ways that do not cater to consumer wants. It can seize its resources from the people without their consent, and it makes no difference to government whether or not people actually want or wind up using the things it produces. Meanwhile, the economy loses the goods that would have been produced by the voluntary sector had the government not seized these resources for its own use.
The more sophisticated Keynesians, if that isn't an oxymoron, will come back with the argument that while they really do agree with you in cases when the economy is experiencing "full employment," your point doesn't apply when there are "idle resources." In that case, we can "stimulate" those idle resources into action without drawing resources out of alternative employments. These resources currently have no alternative employments.
Nice try. But whatever projects our wise planners come up with to put these "idle resources" to work will inevitably draw complementary resources away from alternative employments that are more urgently desired than what the government intends to use them for. Resources will unavoidably be drawn from current employments in the attempt to kick-start "idle resources." So the "idle resources" argument doesn't really manage to evade the opportunity-cost problem. Read the rest... Tom Woods 02/18/09 Campaign for Liberty
"Equity underwriting boomed during the period as dozens of banks raised money to strengthen capital and repay Troubled Asset Relief Program funds. The business reported record revenue of $736 million." via Article – WSJ.com.
So what's wrong with Goldman posting $3.44 billion in second-quarter profits, what's wrong with the company so far earmarking $11.4 billion in compensation for its employees? What's wrong is that this is not free-market earnings but an almost pure state subsidy.
Last year, when Hank Paulson told us all that the planet would explode if we didn't fork over a gazillion dollars to Wall Street immediately, the entire rationale not only for TARP but for the whole galaxy of lesser-known state crutches and safety nets quietly ushered in later on was that Wall Street, once rescued, would pump money back into the economy, create jobs, and initiate a widespread recovery. This, we were told, was the reason we needed to pilfer massive amounts of middle-class tax revenue and hand it over to the same guys who had just blown up the financial world. We'd save their asses, they'd save ours. That was the deal.
It turned out not to happen that way. We constructed this massive bailout infrastructure, and instead of pumping that free money back into the economy, the banks instead simply hoarded it and ate it on the spot, converting it into bonuses. So what does this Goldman profit number mean? This is the final evidence that the bailouts were a political decision to use the power of the state to redirect society's resources upward, on a grand scale. It was a selective rescue of a small group of chortling jerks who must be laughing all the way to the Hamptons every weekend about how they fleeced all of us at the very moment the game should have been up for all of them. Read the rest... Matt Taibbi LRC
17 July 2009 Editor, Washington Post 1150 15th St., NW Washington, DC 20071
Dear Editor:
While I share Charles Krauthammer's admiration for the scientific brilliance that put men on the moon and returned them safely to the earth, I disagree that "the wonder and glory" of manned lunar exploration is a sufficient reason for Uncle Sam to again undertake such missions ("The Moon We Left Behind," July 17).
Such "wonder and glory" is funded with money forcibly taken from taxpayers. This process inspires no awe and is decidedly inglorious. Moreover, achievements even more wondrous and glorious than moon shots surround us daily - for example, New York City is fed day in, day out, without fail. Millions of people from around the world work to grow, process, warehouse, deliver, cook, and serve food so that eight million New Yorkers eat well every day. No one plans this wondrous achievement, and no one is forced to contribute toward its realization. It's the happy result of countless persons pursuing their own self-interests within markets.
Is a moon shot really as wondrous as the intricate coordination of the plans and actions of these countless suppliers and consumers? Is putting a human being on the moon really as glorious as the fact that hunger has been all but eliminated everywhere that markets operate?
Sincerely, Donald J. Boudreaux Chairman, Department of Economics George Mason University Fairfax, VA 22030
Justin Raimondo, AntiWar.com, considers the evidence that President Obama is lining up the United States for war with Iran. This sounds like something President Bush would do, which makes the case (which should not need to be continually restated) that there is only one party:
THE WASHINGTON PARTY
The evidence that Obama is ramping up the US effort to encircle and eventually strike at Iran is building: added deployments to Afghanistan and our increasing intervention in Pakistan can always be attributed to the vagaries of the Af-pak front, but one can’t blame the Iranians from looking at it differently. The US military presence, to the south and the east, is looming larger. This, in tandem with an apparent hardening of the US stance – e.g. the "muscularity" of Hillary Clinton’s most recent peroration – can only be seen by Tehran as prefiguring war.
The spin prior to delivering her speech to the Council on Foreign Relations was that this was going to be a "muscular" speech, and indeed it was: threatening to use the military to "defend our interests, our allies, and our people" when it comes to Iran’s alleged nuclear weapons program, she declared, with typical Clintonian glibness: "this is not an option we seek nor is it a threat; it is a promise."
... You thought you were safe, now that George W. Bush is out of the White House, and the neoconservatives have gone back to their well-subsidized holes – but you were wrong. I would not be at all surprised if the Iranian "crisis" – and it will be declared a "crisis," complete with ticking clocks and lines in the sand, of that you can be sure – required a "delay" in our plans to withdraw from Iraq. At that point, the American people will either rise up and put an end to the nonsense – or else they’ll acquiesce, without much protest, to what seems like the inevitable.
The way Ron Paul tells it, his more than 30 years of speaking and writing about money, inflation, and the Federal Reserve System attracted only limited interest outside libertarian and constitutionalist circles. The subject, and Paul as its spokesman, were scarcely to be found in the media, even—or perhaps especially—on the business networks.
But Paul’s 2008 presidential bid changed that. Suddenly the Fed was on the table for discussion for the first time since Congress established it in 1913. With Paul making the evils of central banking and fiat money a theme of his campaign, the issue took on a vigor that few expected. Even calling for the Fed’s outright abolition was longer unheard of on the television news networks.
When Paul first raised the issue in his campaign, he had no idea what he was tapping into. “I didn’t realize people your age knew so much about money and inflation,” he told a rally at the University of Pittsburgh last year. “But it gets the largest applause at college campuses. I figured the first time it happened [at the University of Southern California] it was an accident. … But then at the University of Michigan, they started to burn Federal Reserve Notes.”
To Paul’s surprise, some of his loudest applause lines involved salvos against the Fed. Chants of “End the Fed!” greeted his denunciations of the economic damage the central bank was unleashing. An underappreciated reason for Paul’s fundraising prowess was his outspoken opposition to the Fed, a subject that had long been off limits in American politics. Eventually, a national organization called End the Fed, with local chapters around the country, gave institutional expression to the issue, sponsoring a series of demonstrations against the central bank in 39 cities last November.
This is a new phenomenon on the Right. The libertarian and conservative think tanks that liberally invoke the names of Austrian School economists like F.A. Hayek have tended to ignore these men’s opposition to central banking, a position too politically incorrect even for those who pride themselves on their willingness to defend unpopular positions. The Ludwig von Mises Institute and the Foundation for Economic Education have been among the handful of exceptions to this rule, providing the scholarly infrastructure to convert what was sometimes an inchoate unease about the Fed among Paul supporters into well-honed arguments. Tom Woods TAC
We who are advocates of sound, free-market money need to get our story straight. Are we predicting hyperinflation or massive deflation? Personally, I am much more worried about the former problem. Using a recent article by Mish, I hope to show that no one has made a convincing case for falling prices.
Mish's Argument for Deflation
"Mish" is a very popular blogger on financial and economic affairs. His nickname is a melding of the first two letters of his two real names, Mike Shedlock. (My own friends called me "Romu" for a brief spell, but it didn't catch on.) For some time Mish has been criticizing those warning about impending inflation, and in a recent post he summed up his position quite well.
Mish was responding to Gary North, who had written, "The Federal Reserve can re-ignite monetary inflation at any time by charging banks a fee to keep excess reserves with the FED."...
Is Credit Part of the Money Supply?
Although every writer has his or her own nuances, I think it's safe to generalize and say that the people calling for a "debt deflation" are assuming that the availability of credit acts as "virtual money," and causes prices to be higher than they otherwise would be. Some writers in this camp seem to think that we should just lump someone's credit line in with his bank balance and currency on hand, in order to come up with how much "purchasing power" he has at his command.
Strictly speaking, that isn't correct. For simplicity, picture an economy that has no credit system, and where physical gold serves as the commodity money. We start out in an initial equilibrium where the public collectively holds, say, 100 million ounces of gold as cash holdings. Prices of goods and services are quoted in weights of gold, and this vector of prices determines the "purchasing power" of an ounce of gold. Because we're in equilibrium, everyone is happy holding his portion of the 100 million ounces.
Now suppose in this scenario, a budding entrepreneur gets the bright idea to form Rothbard Express, the first-ever credit card company. That is, Rothbard hands out plastic cards with his logo on them, and merchants agree to accept payment with use of such a card, rather than with actual gold coins. What will be the effect on prices?...
Are supporters of the free market engaged in special pleading when they identify the federal government and its central bank, the Federal Reserve, as the most significant factors behind the financial crisis? Absolutely, says Bruce Ramsey in the August issue of Liberty magazine.
How, according to Ramsey, is a good book written? "You immerse yourself in the facts, see what the connections are, and let the story itself tell you what the explanation is. This is what Muolo and Padilla try to do. It is what many libertarians ought to learn how to do."
Consider yourselves rebuked, all you libertarian propagandists out there.
Ludwig von Mises had another view. "History," he wrote, "cannot be imagined without theory. The naïve belief that, unprejudiced by any theory, one can derive history directly from the sources is quite untenable…. No explanations reveal themselves directly from the facts." "Historical experience," he wrote elsewhere, "is always the experience of complex phenomena, of the joint effects brought about by the operation of a multiplicity of elements…. The ‘pure fact’…is open to different interpretations. These interpretations require elucidation by theoretical insight."...
It is true, though, that I am more interested in getting to the root causes of the crisis than I am in dwelling lovingly on story after story of foolish loan origination. Maybe stories like that are interesting to someone, but they sure aren’t to me. I am not seeking to excuse people who did stupid things. I’m trying instead to show that the regulatory and banking regimes that exist in the U.S. provide ample incentives for financial institutions to behave as they did. Therefore, any attempt to prevent future crises by focusing on micro-level regulation instead of systemic reform is bound to fail. It is the system itself, which departs radically from the free market, that gives rise to these violent swings and encourages riskier behavior than would exist otherwise...
Ramsey makes much of the "private lenders" supposedly at the heart of the crisis. But once central banking and irredeemable paper money are introduced into the picture, it is only in the most trivial sense that we can refer to a "private" banking system. What we have now is a kind of corporatist system that has never in history emerged spontaneously within the peaceful nexus of social cooperation, and has always been imposed by force. It is a system shot through with moral hazard, artificially elevated risk tolerance, bailout expectations, artificially cheap credit, and special protections against failure. There is nothing laissez faire about it...
When "Silent Cal" Coolidge went home in 1929, the U.S. government was spending 3 percent of gross domestic product.
And today? Obama's first budget will consume 28 percent of the entire GDP; state and local governments another 15 percent. While there is some overlap, in 2009, government will consume 40 percent of GDP, approaching the peak of World War II.
The deficit for 2009 is $1.8 trillion, 13 percent of the whole economy. Obama is pushing a cap-and-trade bill to cut carbon emissions that will impose huge costs on energy production, spike consumer prices and drive production offshore to China, which is opting out of Kyoto II. The Chinese are not fools.
China saves, invests and grows at 8 percent. America, awash in debt, has a shrinking economy, a huge trade deficit, a gutted industrial base, an unemployment rate surging toward 10 percent and a money supply that's swollen to double its size in a year. The 20th century may have been the American Century. The 21st shows another pattern.
"The United States is declining as a nation and a world power with mostly sighs and shrugs to mark this seismic event," writes Les Gelb, president emeritus of the Council on Foreign Relations, in CFR's Foreign Affairs magazine. "Astonishingly, some people do not appear to realize that the situation is all that serious."
Even the establishment is starting to get the message.
In what some on Wall Street are calling the biggest blockbuster deal in the history of the financial sector, Goldman Sachs confirmed today that it was in talks to acquire the U.S. Department of the Treasury.
According to Goldman spokesperson Jonathan Hestron, the merger between Goldman and the Treasury Department is "a good fit" because "they're in the business of printing money and so are we."
The Goldman spokesman said that the merger would create efficiencies for both entities: "We already have so many employees and so much money flowing back and forth, this would just streamline things."
Mr. Hestron said the only challenge facing Goldman in completing the merger "is trying to figure out which parts of the Treasury Dept. we don't already own."
Goldman recently celebrated record earnings by roasting a suckling pig over a bonfire of hundred-dollar bills.
Analysis from Cary Lockwood, Your Auto Network:The major winner in this program seems to be the car manufacturers benefiting by a 2.5% increase in sales....
This analysis indicates that this bill’s original intention of achieving a meaningful positive impact on the environment is the Clunker!
After all of this research, I wish that I could say that I’m happy knowing where the billion dollars is going, but I keep remembering what some wise statesman once said … “a billion here, a billion there and sooner or later it’s a lot of money.”
JOE BIDEN HAS IMBIBED DEEPLY FROM KEYNESIAN WATERS...
And now the madness is out there for all to see!
Vice President Joe Biden told people attending an AARP town hall meeting that unless the Democrat-supported health care plan becomes law the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money.
“We’re going to go bankrupt as a nation,” Biden said.
“Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that's what I’m telling you.”
Bob Murphy, LewRockwell.com: "If I were extremely rich and powerful, and had absolutely no conscience, this is what I might do:
I'd have a very popular and trusted Fed chair all of a sudden prime a massive bubble in the world economy. Then, just as it was about to crash, I'd make him take the fall and install a new chair.
The qualities I would seek in the new Fed chair would be threefold. First, he'd have to be a complete tool. Second, he'd have to be a very competent economist. And third, he'd have to be an expert on how to turn a huge financial crash into a worldwide economic depression.
Now the fun stuff. When everyone started flipping out, I'd use the crisis to bail out my associates at the big banks and investment firms who had had to go along with my reckless plan. Obviously I would zap anybody who hadn't been playing ball with me, and give trillions to those who had the foresight to tell I was the coach of the winning team.
For some time I would have known that the US government was getting too big for its britches. As its global supremacy grew, there would be a greater and greater chance that the American presidents and senators I installed might decide they didn't like my plan after all (even though that was the deal when I hired them). So I would gradually shift my power base elsewhere, and I would leave the US government in such a mess that it would take decades to recover... " Read the rest... LRC
If you haven't seen it: four pics of various editions of Newsweek that go to newstands around the world. The American edition is special-- after all, we don't want to upset the suckers (taxpayers), or offend the tender sensibilities of those in the Oprah Cult.
"I cannot conceive of lending money to the US government for 30 years in US dollars for 3, 4, 5 or 6% interest. It's just inconceivable to me that I would let them have my money for 30 years and they would pay me back someday in US dollars at such a low rate of interest. I expect problems in the bond market. I don't know when. I am not sure about the bond market. I was short in the bond market, but I got out. I expect to see serious problems in the bond market down the road. "
Hanging onto our military empire will ultimately spell the end of the United States as we know it!
Chalmers Johnson, NYTimes: The U.S. “Empire of Bases” — at $102 billion a year already the world's costliest military enterprise — just got a good deal more expensive.
As a start, on May 27, we learned that the State Department will build a new “embassy” in Islamabad, Pakistan, which at $736 million will be the second priciest ever constructed — only $4 million less, before cost overruns, than the Vatican City-sized one the Bush administration put up in Baghdad.
Whatever the costs turn out to be, they will not be included in the already bloated U.S. military budget, even though none of these structures is designed to be a true embassy — a place, that is, where local people come for visas and American officials represent the commercial and diplomatic interests of their country.
Instead these so-called embassies are actually walled compounds, akin to medieval fortresses, where American spies, soldiers, intelligence officials and diplomats try to keep an eye on hostile populations in a region at war. One can predict with certainty that they will house a large contingent of Marines and include roof-top helicopter pads for quick getaways.
A lot of people seem to believe that although the market economy is a swell system, it requires the equivalent of a Soviet commissar to be in charge of money and interest rates. This belief is altogether misplaced. The Federal Reserve System, or simply "the Fed," is both harmful and unnecessary.
Since the Fed was created in 1913 the dollar has lost at least 95 percent of its value. If the much-maligned gold standard had produced such a result we’d never hear the end of it, but in our system the Fed is, for whatever reason, curiously exempt from criticism. Under the Fed, therefore, people have lost an option they once had: accumulating savings in cash. Under a commodity standard, people could save for the future simply by accumulating precious-metal coins – which, back when they functioned as money, held or even increased their value. No one has that option any longer. In other words, only a fool would try to save by piling up dollar bills. Instead, everyone is forced to become a speculator, and to invest in securities markets they know little about and that can wipe them out entirely if times turn bad.
As early as the eighteenth century, Richard Cantillon identified distribution effects as another way inflation harmed the general public. The newly created money is injected at particular points. Whoever receives it first – that is, people who happen to be politically well connected – get to spend it before prices have commensurately risen, and these fortunate few thereby receive a windfall. By the time it trickles through to ordinary people, on the other hand, the general public has in the meantime been forced to pay the higher prices to which the new money gives rise.
Private and public debt have exploded under this system, especially since the collapse of Bretton Woods in 1971. No one has a right to be surprised when indebtedness skyrockets under a system in which credit can be created out of thin air... Tom Woods LRC
* Here is my talk [.mp3] to Christ Presbyterian Church (in New Braunfels, TX). The topic was the Great Depression, then and now. I think this was the biggest crowd I have given a talk to, except for my high school graduation. There were more than 250 people at this thing, I believe. Also, hands down this was the best reaction I have received. People weren't just saying, "Hey I liked your talk," they were saying things like, "You are a great teacher. I have never heard economics explained like that before." So anyway, if you haven't yet listened to one of these things, this particular example is probably the best sample so far.
* Here is the link to listen to Scott Horton's recent interview with Daniel Ellsberg, the guy who leaked the Pentagon Papers. (Ellsberg is also an accomplished game theorist.) Even though I read Ellsberg's book Secrets, I had forgotten just how much the government lied about the Gulf of Tonkin and other matters regarding Vietnam. Also, if you do decide to follow the link and listen, pay attention near the end of the interview. I swear Ellsberg comes right up to saying, "The Vietnam hawks took out JFK," but he stops just short. See if you agree. Bob Murphy's blog
U.S. BUDGET DEFICIT BLOWS RIGHT PAST $1 TRILLION FOR THE YEAR...
... AND KEEPS ON CHOOGIN'!
July 13 (Bloomberg) -- "The U.S. budget deficit topped $1 trillion for the first nine months of the fiscal year and broke a monthly record for June as the recession subtracted from revenue and the government spent to rejuvenate the economy.
The shortfall for the fiscal year that began Oct. 1 totaled $1.1 trillion, the first time that the gap for the period surpassed $1 trillion, Treasury figures showed today in Washington. The excess of spending over revenue for June was $94.3 billion, the first deficit for that month since 1991, according to data compiled by Bloomberg.
Individual and corporate tax receipts are sliding even as the worst recession in five decades shows signs of easing because the jobless rate continues to rise -- reaching a 26-year high in June -- and companies have yet to see a sustained increase in demand. The shortfall is also widening as the government ramps up spending from the $787 billion stimulus program President Barack Obama signed into law in February."
HOW ABOUT A LOOK AT JUST HOW MUCH ONE TRILLION DOLLARS IS...
Dave Lindorff at Counterpunch.org says that if this were the government the founding fathers thought they were creating, Congress would be in a state of rebellion over being lied to repeatedly:
"Now, given what we do know about the Bush/Cheney administration—that it initiated a massive campaign of spying on Americans by the Defense Department, the FBI, and the National Security Agency, as well as other intelligence agencies, that it initiated a campaign of torture of captives, including American citizens, while asserting that the President didn’t even need to notify the courts or the public about the arrest, detention, torture or even execution of an American citizen if he, acting on his own, deemed that person to be an “enemy combatant,” and given that we also know that Bush and Cheney lied repeatedly about the justification for their invasion of Iraq, and refused to be put under oath in their “interviews” by the 9-11 Commission, you would think the members of Congress, which was railroaded into supporting everything from the USA PATRIOT Act to the Iraq War invasion based on all these lies and deceptions, would be demanding answers regarding this mysterious program.
Instead, we get vague expressions of concern, and promises of reform by congressional leaders like Rep. Steny Hoyer and House Speaker Nancy Pelosi, and by CIA Director Panetta."
LEAHY WANTS TRUTH COMMISSION FOR CHENEY/CIA WHOPPERS!
RawStory.com: Sen. Patrick Leahy (D-VT) says that — rather than a criminal prosecution — he would prefer to see a commission of inquiry into the growing controversy over the CIA misleading Congress and allegations that then-Vice President Dick Cheney ordered the CIA to withhold crucial information.
The New York Times reported Sunday that unnamed sources say Cheney himself gave the order to the CIA not to tell Congress about a certain CIA counter-terrorism program. If the allegations against Cheney are true, then he would have violated the National Security Act, which mandates Congressional oversight of the CIA.
Also on Sunday the Washington Post Co. reported that Attorney General Eric Holder is considering appointing a special prosecutor to look into the allegations of misconduct by Cheney and the CIA.
Leahy told CBS’s Face the Nation that a commission of inquiry is preferable to criminal prosecution because “an inquiry would go into everything; a special prosecutor would be very narrowly focused.
“I just don’t want to see an instance where if the higher-ups gave the order to break the law, that the ones who are punished are the lower-level front-line troops,” Leahy said.
NY TIMES REPORTS THAT CHENEY ORDERED CIA TO WITHHOLD THE TRUTH FROM THE PEOPLE'S ELECTED REPRESENTATIVES
(Reuters) - The CIA withheld information about a secret counter-terrorism program from Congress for eight years on orders from former U.S. Vice President Dick Cheney, the New York Times said on Saturday.
Citing two unidentified sources, the newspaper said Central Intelligence Agency Director Leon Panetta disclosed Cheney's involvement in closed briefings to congressional intelligence committees late last month.
The newspaper said its efforts to reach Cheney through relatives and associates were unsuccessful.
The Federal Reserve is lying about the nation's money supply (M1). The current figure for money supply is being given as $1.6 trillion. The actual number is $2.34 trillion. The reported number is equivalent to an increase of 16% over the past year. The actual number is equivalent to an increase of 70% over the past year. This compares with the nation's high money-supply increase of 16.9% in 1986.
Astute observers of the Federal Reserve have noticed that, since the large infusion of money of last autumn, the monetary base has exceeded the money supply:
Figure 1
reported monetary base ($1.8 trillion)
Figure 2
reported money supply ($1.6 trillion)
These figures are from Federal Reserve releases H-6 and H-3.
Government greed and avarice destroys everything. Sometimes it drains the lifeblood of prosperity drop by drop, sometimes it severs whole limbs as with a meat ax.
Here's one case, a microcosm of the nation, from the City of Angels:
This city is fast becoming a job-killing machine. It's no accident the unemployment rate is a frightening 11.4% and climbing.
I never could have imagined that, after living here for more than three decades, I would be filing a lawsuit against my beloved Los Angeles and making plans for my company, Creators Syndicate, to move elsewhere.
But we have no choice. The city's bureaucrats rival Stalin's apparatchiks in issuing decrees, rescinding them, and then punishing citizens for having followed them in the first place.
HOW THE DESTRUCTICON PLIED HIS TRADE AT THE WORLD BANK...
Because he was the the very incarnation of the quantophrenic manager-statist, it's still too soon to let the life of Robert Strange McNamara be forgotten.
Our friend Jim Bovard has a quick review (HERE) of McNamara's brutal World Bank legacy in Tanzania, Indonesia, and, yes, even in Vietnam. Bovard concludes:
Even after laying wreckage to much of the globe, Robert McNamara was still treated by much of the mainstream media as the “best and the brightest.” (The Washington Post appointed him to its board of directors). Citizens should be wary of those who would place halos over humanity’s brutal oppressors.
Gold prices are poised for a “spectacular” and prolonged rally as the recession deepens and investors finally become disillusioned with the U.S. dollar.
So says renowned Wall Street financial forecaster and economist Peter Schiff, who loudly warned of the October 2008 stock market crash and accompanying recession as far back as 2006.
Since the global economic meltdown, the president of the Connecticut-based investment firm Euro Pacific Capital has struck a chord with rattled investors who have lost faith in America’s bedrock financial institutions. Hence, his well-received television media blitz in recent months has focused on extolling the virtues of owning gold bullion or gold equities, as well as urging Americans to get out of U.S. denominated investment assets.
In a recent on-camera interview with BNW Business News Wire, Schiff suggests that the looming prospect of a hyper-inflationary environment in the U.S. will severely debase the greenback over the next few years. And the global investment community will realize that gold represents the ultimate “store of value” as a safe haven replacement for a discredited U.S. dollar.
Hence, gold bullion and gold-related investments, such as gold equities, will prove to be the best way to shield one’s money from the ravages of a protracted and severe inflationary environment, Schiff says.
“If you really want to grow your wealth, you should own gold in the mining sector,” he adds, while also suggesting that gold equities (companies that are already in production) offer the greatest leverage to rising gold prices... Marc Davis, BNW News Wire
McNAMARA: FROM THE TOKYO FIRESTORM TO THE WORLD BANK
Listeners will remember that I often referred to Bush's Defense Secretary as "Donald Rumsnamara" to evoke his predecessor in the post, Robert Strange McNamara, with whom he shared a calculating obsession with metrics that came at the cost of a reckless indifference to the slaughter of innocent human beings.
Much of McNamara's past, from war crimes, to the myths that enabled the Cold War, to the quite daft policy of "mutual assured destruction" is captured it this piece by Alexander Cockburn at Counterpunch.org
McNamara tugged his forelock and said “Aye, aye, Sir” when Kennedy, campaigning against Nxon in the late 1950s attacked the Eisenhower/Nixon administration for having allowed a “missile gap” to develop that had now delivered America naked and helpless into the grip of the Soviet Union.
This was the biggest lie in the history of threat inflation and remains so to this day. At the moment when Kennedy, McNamara at his elbow, was flaying the Eisenhower administration for the infamous “gap”, the U.S. government from its spy planes that the Soviet Union had precisely one missile silo with an untested missile in it. The Russians knew that the US knew this, because they were fully primed about about the U-2 spy-plane overflights, most dramatically when U-2 pilot Gary Powers crashed near Sverdlovsk and told all to his captors.
So when President Kennedy and Defense Secretary McNamara, took power in 1961, became privy to all intelligence from the spy flights, and announced that the U.S. was going to build 1000 ICBMs the Russians concluded that the US planned to wipe out the Soviet Union and immediately began a missile-building program of their own. So McNamara played a crucial, enabling role in the arms race in nuclear missiles.
I also recommend this piece by Gareth Porter on McNamara's deceiving LBJ on the Gulf of Tonkin non-incident:
Documents which have been available for decades in the LBJ Library show clearly that McNamara failed to inform Johnson that the U.S. naval task group commander in the Tonkin Gulf, Captain John J. Herrick, had changed his mind about the alleged North Vietnamese torpedo attack on U.S. warships he had reported earlier that day.
YOU'VE HEARD OF SON OF FRANKENSTEIN, SON OF SAM, AND SON OF A...
... now get ready for:
SON OF STIMULUS!
It's like a horrow show, as the monster rises from the dead again and again. Mish has the details as they line up to throw more money down the rathole. CLICK HERE
Literature can exert a powerful influence on our ideological views.
Ayn Rand, after all, was primarily a novelist. Many people were converted to liberalism (or at least some variety of it) after experiencing in person her unquestionable charisma and magnetism, but the significance of her novels, most notably Atlas Shrugged, can hardly be overlooked...
Another novelist who also managed to gain an exceptionally wide circle of readers and admirers was John Ronald Reuel Tolkien, the author of a worldwide bestseller The Lord of the Rings.[4] Even though Tolkien's style of writing was much less obtrusive than Rand's — he never forced upon his readers any particular reading of his book, and he overtly disliked conscious and intentional allegories — the English novelist never denied that his work concerns something more than just elves or dwarves, or that it deals with certain ideas. As he wrote to Michael Straight, the editor of New Republic, The Lord of the Rings was meant to succeed first of all as an exciting and moving tale — but a tale addressed primarily to adults, involving something more than mere chase and escape, namely some reflection of the writer's own views and values...
The real message from this old AIG commercial, as we discovered $130 billion later, is that little children were doing the only thinking at America's largest insurance company!
"If you’re not located somewhere along that fantastic spectrum of genius that ranges from Chuck Schumer to Arlen Specter, Wonkette will expose you to the world as the misanthropic imbecile you obviously are."
.... but back to Rep. Bachmann. One reason Wonkette doesn’t like her is that she once asked Treasury secretary Timothy Geithner where he got the constitutional authority to do the things he’s doing. You might think so-called “progressives” would be interested in that question. Once upon a time, progressives grew suspicious when government officials shoveled money to the richest people in the country, and had enough common sense not to accept the official rationales at face value. Surely this is an area in which the real left and the real right might join in happy concord, no? I mean, the left coined the phrase question authority, right?
As it turns out, they really meant question authority except the Treasury secretary in a Democratic administration, or the Fed chairman, or the Washington Post, or the bipartisan foreign-policy consensus, or the regulatory establishment, or Paul Krugman, or the SEC, or the medical establishment, or the central bank, or the Officially Approved Version of American History you were taught in fourth grade. These are wonderful people and institutions, citizen. They exist to protect you. Yes, yes, question authority and all that, but none of that applies to people and institutions that exist for your own good. You would have to be deranged and anti-social to oppose them.
Why, you’re not deranged and anti-social, are you?
Lilburne: As most readers will know, a collection of damning quotes has surfaced recently, exposing Paul Krugman, the doyen of the economic Left, as having been completely backward on the most material economic event in our generation: the housing bubble. My recent article on the subject, "Krugman's Intellectual Waterloo," has elicited some pretty heated rearguard apologetics, which, in the present article, I'd like to sum up and knock down.
The first quotes that surfaced are from a 2002 editorial by Krugman. This was followed by a cluster of even more damning 2001 quotes collected by Mark Thornton. The first editorial could be twisted, if one was inclined to twist, into something seemingly benign. The second wave of quotes is much harder to mischaracterize (which is not to say that the most unquestioning of Krugman's devotees don't try). The laziest tactic of the Krugman apologists is to only address the more stretchable 2002 editorial, and completely ignore the 2001 quotes. But not even that approach, if accepted, helps Krugman's case, since the 2002 editorial is damning enough on its own, once the benign interpretations of Krugman's apologists are shown to be nonsense...
JIM ROGERS PLANS TO “SHORT U.S. GOVERNMENT BONDS SOMEDAY.”
(Bloomberg) -- The dollar and U.S. Treasuries are both likely to slide as soaring government debt in the world’s biggest economy undermines confidence in its assets, according to Jim Rogers, chairman of Rogers Holdings.
“The government is printing lots of money and borrowing even more; that’s not the basis for a sound currency,” he said in a telephone interview today from Singapore. “The idea that anybody would lend money to the U.S. government for 30 years at 3 or 4 or 5 or 6 percent interest is mind-boggling to me.”
Jim Rogers is the author of bestsellers including Investment Biker and Adventure Capitalist. His latest book is A Gift to to My Children - A Father's Lessons for Life and Investing.
A little while ago, the Senate voted to pass HR 2918, the Legislative Branch Appropriations Act. This $3 billion bill contains, among many other things, provisions for GAO audits on certain agencies.
Seizing on a chance to take quick action to bring Audit the Fed up for a vote, and with the GAO provisions in mind, Senator DeMint attached the full text of S 604, the Senate version of Ron Paul's Audit the Fed bill, to HR 2918 as Senate Amendment 1367 before it was considered for final passage.
However, Senate Democrats refused to even allow a vote on the amendment! That's right. The internationalist, Fed-loving elite in the Senate used a parliamentary tactic to shut down DeMint's amendment.
After Senator DeMint brought Audit the Fed to the floor, Senator Ben Nelson of Nebraska raised a "point of order" to prevent a vote, claiming that the amendment violated Senate Rule 16 by "legislating" on an appropriations bill. The Senate president agreed, and the amendment was shot down.
Senator DeMint did not back down, though, and directly challenged Senate leadership by pointing out the other GAO audits contained in the bill. As Senator DeMint listed them off, the Senate president was forced to agree with Senator DeMint that each one he described, all of which would be left in for final passage, also violated Senate Rule 16.
Which tells us at least one thing: the problem wasn't with "legislating" on the bill or violating Senate Rules (which is commonly done). Shooting down the amendment was about preventing a thorough audit of the Federal Reserve for the first time in its history!
BUT ALOT OF US KNEW IT... BECAUSE WE DON'T BELIEVE IN THE TOOTH FAIRY AND MAGIC GOVERNMENT MONEY!
Here's MISH: "There is a price to be paid for reckless expansion of credit and we are paying the price now. All artificial stimulus does is prolong the agony. The greater the stimulus, the greater the period of future agony, just as happened in Japan. Ironically Keynesian and Monetarist clowns shouted for more stimulus all the way, and they are doing so again now."
"Michael Jackson’s fortunes got an earnings bump from his death. The same fate does not await our national Treasury."
With the sad passing of Michael Jackson, the King of Pop, at age 50 on June 25, another fiction of America’s mega wealth was laid to rest: even those living in gated mansions in LA are dying a little each day from debt stress.
From the U.S. Government to the Queen of England to the state house of California, to the millions of homes on both sides of the Atlantic with foreclosure notices nailed to the front door, a good chunk of the globe shares Michael Jackson’s lifestyle: too much spending, too little income, too much stress from worrying about it.
Three days after Michael Jackson died with over $400 million in debts in a California mansion rented for $100,000 per month, British papers announced that Queen Elizabeth II will likely run out of funds by 2012 if she isn’t given an increase to run her three palaces. The royal family’s expenses for the past year include the following items: $10.76 million for travel; $661,302 for a remake of the royal family’s website; $496,000 for cleaning the royal homes; $827,209 for food; and over $600,000 for garden parties.
Ambrose Evans-Pritchard, Telegraph.co.uk. One dog has yet to bark in this long winding crisis!
The shocker last week was not just that the US lost 467,000 jobs in May, but also that time worked fell 6.9pc from a year earlier, dropping to 33 hours a week. "At no time in the 1990 or 2001 recessions did we ever come close to seeing such a detonating jobs figure," said David Rosenberg from Glukin Sheff. "We have lost a record nine million full-time jobs this cycle."
Some of the US pay cuts are disguised. Over 238,000 state workers in California have been working two days less a month without pay since February. Variants of this are happening in 22 states.
Some 342,000 homes were foreclosed in April, pushing a small army of children into a network of charity shelters. This compares to 273,000 homes lost in the entire year of 1932.
What is so disturbing is that governments have not even begun the spending squeeze that must come to stop their countries spiralling into a debt compound trap.
As we celebrate our own Independence Day, we would be wise to realize the concept doesn’t only apply to us: every nation on earth makes a very big deal out of one day in the year, set aside for touting the virtues of their particular land, its history, its heroes, and its subtle beauties. Each time Washington announces this or that nation has violated “international norms,” and threatens to exercise its imperial prerogatives, the world’s hackles rise. Every presumption of our own superior ability to decide what is best for the world at large — no matter how “enlightened” and representative of “modernity” — is deeply resented by the targets of our self-righteousness.
Had the regime underststood what the internet would mean– the destructon of official media and the proliferation of unofficial thinking, booming web commerce instead of brick and mortar stores, etc.–it never would have allowed it to come into existence. Given their typical mistake–they are always trying to catch up to the market–surely the smartest minds in the state stay up late thinking of how to wreck the internet in ways that will not undermine the state through public anger. Here is the latest scheme from beloved neocon Richard Posner. This government judge proposes outlawing linking without prior permission, to destroy Google news and other aggregators that necessarily have no government-approved gatekeepers, and all unapproved web media. In particular, Posner–a crazed IPnik as well–also wants to protect government’s beloved newspapers, as if any young person would then pick up one of these expensive, hand-staining pieces of federal propaganda. So what would happen if Posner got his way (impossible, I guess, given all the great hackers, etc.)? We’d all link to foreign sites only, which would then cover US goings-on even more fully, because they would want the traffic. The Washington Post, the New York Times, and all the rest of the CIA’s house organs would continue to decline until they are bailed out by some Obama stimulus, thus making clear what has long been the case, that they serve the state.
Ron Paul's legislative history is a lesson in principled failure. Among the bills he has co-sponsored: ending U.S. cooperation with the United Nations, a repeal of antitrust law "to restore the inherent benefits of the market economy," and stripping the government of the right to set a minimum wage. Just last week, he again introduced a bill "to repeal the Gun-Free School Zones Act of 1990," which would presumably make schools less safe but which would reinforce our right to bear arms. For Paul, ideology almost always trumps politics.
None of these bills, I should note, have picked up much support. And Paul's track record with economic legislation isn't any better. His perennial efforts – shifting the country back toward a gold standard, abolishing the personal income tax, and dismantling the Federal Reserve – are nonstarters. They so change the very fabric of this country that Paul can't marshal his colleagues to his side.
Which is why Paul's most recent legislative accomplishment is so impressive. He has rallied the majority of the House to support his new cause: an audit of the Federal Reserve. Legislators are sick of not knowing what's going on inside Bernanke's fortress, especially as the Fed becomes further enmeshed in the nation's fiscal policy. Paul's little bill has become emblematic of a larger movement, one that could spell trouble for Obama's troubled regulatory plan. Ron Paul – always an enemy of regulation – is now an enemy of Obama. And a mighty powerful one at that.
The Mercatus Working Paper series now includes the following, co-authored with Gene Callahan: "The Role of Ideal Types in Austrian Business Cycle Theory." An earlier version was presented at the SEA meetings last November, as well as at the Wirth Institute Conference in October. Gene and I thank a number of commenters at both events as well as referees at Advances in Austrian Economics, where the paper will appear next year, for their suggestions.
... IS IT OKAY TO SPEAK CANDIDLY ABOUT WHAT IS REALLY GOING ON IN THE STOCK MARKETS?
"There is a problem structurally in the equity markets that nobody wants to talk about. There is intervention. There is manipulation going on. No one has exact proof of what's going on. But it's out there."
The lions of Wall Street - who couldn't manage their own affairs - are put in charge of ours!
"Robert Hormats, Vice Chairman of Goldman Sachs, is to be installed as Under Secretary of Economics, Business, and Agricultural Affairs. This comes as one more, probably unnecessary reminder of the total control exercised by Wall Street over the Obama administration’s economic and financial policy....
Among the familiar Wall Street faces that Hormats will encounter in his new post will that of Deputy Secretary of State Jacob Lew, lately Chief Financial Officer of Citigroup Alternative Investments Group which lost $509 million in the first quarter of 2008 alone."
The interrogation booth is a six-by-six room with plywood walls, plastic chairs, and a table. Today, my fourth day in the country, my partner is Bobby, a corn-fed boy from Nebraska.
I sit beside him in front of a human skeleton. Abu Ali, a Sunni. Bitterness leeches out of him. Our interpreter, Hadir, stands in the far corner. The ’terp looks reluctant to speak.
Bobby glances at Hadir, though we’re supposed to maintain eye contact with our detainee.
“What did he say?”
Hadir frowns. Then, in a perfect mimic of Abu Ali’s tone, says, “You came to my country. You Americans ruined our lives and now you want to help me?”
Bobby nods, “Yes, we can help you. Don’t you want to see your family again? Help us help you.”
He does not reply. Bobby had warned me beforehand that Abu Ali is a hard case. He hasn’t given anything up, despite numerous interrogations.
“Abu Ali, what would you do if I gave you a knife?”
“I would slit your throat and watch you die.” His gaze on me is even.
“Just because I’m an American? Even though I mean you no harm?”
Hadir translates, “You created this hell we are living in.”
Bobby changes the subject. “Abu Ali, why don’t you tell Matthew why you joined al-Qaeda?”
“It goes back to when you Americans first invaded,” he begins. “Sunni and Shia lived as neighbors. My mother is Shia. She converted to Sunni when she married my father. There was harmony. But you Americans removed Saddam. We lost our protection. America doesn’t care about Sunnis. You let the Shia militias kill my people.”
“What do they want?”
“Power. Dominance. I owned a clothing store. One day, I came to the store and found a note. ‘Pack your things and leave. You have 48 hours or you will die.’ The bottom of the page had the symbol of the Badr Corps.”
He lets that sink in. We stare at each other.
“What did you do?”
“I did what I had to do to save my family. I lost my shop. My livelihood. I returned to the mosque of my childhood. It was there I met fellow Sunni willing to fight for our people.”
I lean forward in my chair. I try to act earnest and sympathetic. “Abu Ali, why al-Qaeda? Why not one of the Sunni groups like Ansar al Sunna?”
“You Americans had wiped them out. Without al-Qaeda, we had nothing.”
“So do you believe in al-Qaeda’s goals?”
Abu Ali sizes me up. “No, I am Iraqi. I only want back my home.”
WHY THE GROWTH IN THE MONETARY BASE ASSURES INFLATION...
EVEN IN ADVANCE OF FRACTIONAL RESERVE BANKS LENDING...
"At the end of August 2008, the monetary base began its record-setting expansion from the $842 billion level to its $1.8 trillion peak in May of 2009. In fact, by January 2009 the base had already made the majority of its move, as it exploded to $1.7 trillion. "
QUESTION ONE:
How did the price of gold react to this monetary expansion?
"The dollar price of gold increased from just under $840 an ounce to $980 from the end of August 2008 thru the end of May 2009 time frame. That means gold rose over 16% while the US dollar declined just over 14% against the yellow metal.
An increase in the monetary base is much the same as a huge discovery in a commodity. Let's say there was a major oil discovery in the Gulf of Mexico that was very easily accessible and doubled the existing proven reserves. No one would argue that the price of oil would not react negatively. The price would drop instantly upon the announcement as traders and investors began to factor in the imminent increased supply. The majority of the price decline may not occur until all the oil was drilled and available for consumption. But as long as there was a high probability that the discovered oil would soon hit the market, the price should drop.
It's the same with a buildup in the monetary base. The increased bank reserves account for a latent huge increase in monetary velocity and inflation. Although a huge increase in inflation levels should not occur until the base money was loaned into existence and pervaded through the economy, the value of the dollar would drop in anticipation of that fact. The Fed has now availed banks of a doubling in high powered money and until it is removed the potential for massive inflation exists. In light of that fact, investors have taken down the value of the dollar against gold and most hard assets."
QUESTION TWO:
Is it reasonable to believe that Bernanke and the Fed can unwind this increase in the monetary base before it has done its inflationary harm?
No.
"...it would be politically and economically devastating for the Fed to dump $800 billion of Treasuries in addition to the $3.25 trillion they must sell in fiscal 2009."
"SPECTACULAR VIEWS" OF THE INTERNATIONAL SPACE STATION THIS WEEKEND!
Over the 4th of July weekend, Americans will have "spectacular views" of the International Space Station as it makes several passes over the country, NASA said Tuesday. The space station orbits Earth every 90 minutes in a constantly changing pattern. It is brighter than any stars in the sky right now, typically visible near dawn and just after dusk, weather permitting.
It will be almost directly over head during some passes this weekend, according to a NASA statement.
The trick is knowing when and where to look. SPACE.com's Satellite Spotting Guide has full details.
Telescopes are not useful, because the station moves across the sky too quickly, appearing much like other satellites but brighter, sometimes seeming like an airplane on approach to landing. Binoculars, however, can prove useful and might allow a glimpse of some of the station's structure.
The orbiting outpost is visible because it reflects sunlight. It is 357 feet long, about the length of a football field including the end zones, and 45 feet tall. Its reflective solar arrays are 240 feet wide, a wingspan greater than that of a jumbo jet, and have a total surface area of more than 38,000 square feet.An international crew of six astronauts, including American flight engineer Michael Barratt, is aboard the complex conducting research and continuing its assembly. Other crew members are from Russia, Europe, Canada and Japan.
The political establishment’s response to the global warming doubts raised by EPA researcher, Alan Carlin, is remarkable. The mantra chanted by one EPA official - and dutifully echoed across the media - is that Mr. Carlin “is not a scientist.” This fact, of course, has not kept Al Gore from becoming the patron saint of the environmental religion. (Gore received his PhD in which of the recognized sciences?)
An assertion of this sort is evidence of the anti-intellectualism that has metastasized across academia and spread to other venues of expression. Universities have become so dominated by an insistence upon the inviolability of the “turfs” of various disciplines as to make one unworthy to speak on matters of which he or she has not been certified to utter opinions by fellow academics. There was once a time - many decades ago - when a “liberal arts” education was regarded as a means of introducing people to a wide range of subject areas that would permit them to think and speak intelligently on various matters affecting their lives. Collective thinking - which now permeates college campuses - rejects such an idea, conferring subject matter monopolies according to one’s acknowledged “expertise.”
When my “In Restraint of Trade” book was first published twelve years ago, an academic reviewer from a respected history department spent most of his time acquainting his readers with the fact that I taught in a law school and not a history department. The review ended up being little more than a strident defense of turf, and a condemnation of my efforts to focus attention on matters unfamiliar to historians.
I enjoy watching Jonathan Hoenig every Saturday morning on Fox News’ “Cashin’ In” program on investment analysis. He is a consistent advocate of free-markets, individual liberty, and private property. He recently stated that humans “must think in order to survive,” but that we have recently been “outsourcing” this function to others. Such a practice now prevails on university campuses, and helps to explain why academia is a source of so little original and meaningful thinking. Don’t wonder about what anything means: the “experts” whose jobs are dependent upon advancing the agendas of the political establishment will explain it all to you!
Read Karl Denninger at Market-Ticker.org on a changing reporting requirement.
... the ability of people (like you and I) to see the fact that a handful of banks, most specifically Goldman Sachs, constitute the majority of NYSE trading volume - and they're trading for their own book, not for customers, will no longer be disclosed.
This "back and forth trade" between a handful of institutions is nothing more than the old "pump and dump" game that has been played in the OTC market forever - and almost always screws the individual investor.
This is no different than you and I selling a house back and forth between us repeatedly, each time at a higher price. We both appear to be geniuses as we're both making a "profit", right? Well, no. One of us is destined to take a horrifying loss if we do not find a sucker to make the final transaction with.
The embedded scam is that real gains require real parties at interest and not a closed system of a couple of guys passing an asset back and forth in a transparent attempt to "bait" someone else into becoming the sucker to offload that asset to.
The parallels to the housing bubble are not coincidence. There is no "value" being created nor is there any actual value appreciation taking place when people pass an asset back and forth at ever-higher prices. Only when there are lots of parties participating on their own, organically, does a market truly exist and does value align with price. Otherwise the so-called "price" is nothing other than a cheap parlor trick.
Obama is expanding the homeowner bailout so that underwater homeowners with a 125% LTV ratio can refi more easily through Fannie and Freddie.
Before your LTV ratio could only be 105%, because, well, as we've learned, fat loans relative to value are more likely to go bad.
As many have described it, Obama's solution to the housing crisis is: more subprime loans. Like the original subprime loans, they're really only going to work out of home prices grow rapidly over the next few years, otherwise you're looking at the perpetuation of people living underwater in their homes.
United States to a devastating trio of consequences: imperial overstretch, perpetual war, and insolvency, leading to a likely collapse similar to that of the former Soviet Union. 
