S&P 500 Is A Paper Bull!

I think the graph below speaks for itself.  But in case it's not clear, the graph compares the "Monetary Base" which is the narrowest definition of money supply vs the S&P 500 weekly closes since 1/1/09.  The conclusion I draw is that the "recovery", at least as it is defined by the stock market, is illusory and 83% a function of the PRINTING PRESS!

Krugman and his Phlogistonomics

Peter Schiff drills the Keynesian...

http://www.youtube.com/watch?v=11WlFlO_mDg&feature=player_embedded

Keynesianomics explained:

consumption creates profit
profit creates production
production creates income
income creates consumption

Any physicist would instantly recognize this goofy-ass theory as "perpetual motion machine" nonsense

The real way economics works...

CONSUMPTION comes from CAPITAL
CAPITAL comes from INVESTMENT
INVESTMENT comes from SAVINGS
SAVINGS comes from DEFERRED CONSUMPTION

Try this on the next Keynesian clown you come across and watch them flop around trying to make sense of it.

Response to Neocon Denver Post Harsanyi's Smear Piece on Ron Paul

Re: Article Discussion: Harsanyi: The Ron Paul delusion


by troyjgrice on February 24th, 2010, 11:18 pm

Harsanyi = Neocon

Typical Anti Ron Paul Arguments:

1) Smear Ron Paul as anti-semetic because he wants to end welfare for the Israeli apartheid state

2) Smear Ron Paul as hating the troops because he wants to bring the troops home

3) Smear Ron Paul as an isolationist because he wants to end "nation building"

4) Smear Ron Paul as a nut because he wants to end the Federal Reserve and fiat money which funds the welfare/warfare state, enables endless deficits, and impoverishes the middle class

5) Smear Ron Paul as a kook because he believes we should respect and follow the Constitution as it is the only check on the expansion if Federal tyranny

6) Smear Ron Paul as an idiot because he PREDICTED THE GREAT RECESSION AND THE KEYNESIAN ERRORS THAT ARE BEING MADE IN THE NAME OF FIXING IT.

The problem is that Ron Paul is RIGHT. We are bankrupt. Our empire is ending. Our dollar will crash. No one will lend us money anymore so we have to print it. Our deficits are unsolvable and will lead to punishing budget cuts. Our institutions are rotten, corrupt and collapsing. Our welfare state is unsustainable. We cannot afford to babysit Germany, Japan, South Korea, and the Middle East. The Empire is FINISHED.

Neocons like Harsanyi offer nothing, no solutions except more war, more deficits, more welfare, more erosion of civil liberties, and more dropping bombs on little brown people.

Irving Kristol's disciples are fools.

The GOP is rotten. Republicans are frauds. They are NOT conservatives. They are progressives. They seek only more power to kill and loot control and care nothing for liberty and individualism.

The Purity Test For Republicans

1. Do ‘terrists’ hate our freedoms? (T/F)


2. Is waterboarding really torture or just an enhanced, bathing technique? (torture/bathing)

3. Would we still have freedom without Dick Cheney?” (Y/N)

4. The Bill Of Rights are actually a Bill of Suggestions? (T/F)

5. Is it true that inside every little third world brown person is an American yearning to be free? (T/F)

6. Explain the difference between evil Keynesian fiscal stimulus and enlightened supply-side economic stimulus.

7. Should refusal to say the pledge be grounds for caning in public schools?

8. Was John McCain a great fighter pilot (5 crashes aside)?

9. If the USA was in a full scale nuclear war with the rest of the world, who would win?

10. What can we make illegal so as to justify incarcerating the other 80% of black males in America?

11. How many times should one invoke “Reagan” during a political speech?

12. On a scale of 1-10, how nutty is that Ronpaul guy?

13. Which of the Bill of Rights would you suspend in order to protect us from the underpants/firecracker bomber?

14. Can you recite the words to Lee Greenwood’s “Proud to be an American”?

Guy gets Amerikan sheeple to sign a petition to repeal the first amendment.

http://www.youtube.com/watch?v=tznR4wPeS4M&feature=player_embedded#

TSA Scanner Fails Test

Funny, it takes German tv to teach Amerikans about thw false choice between liberty and security. 

http://www.youtube.com/watch?v=nrKvweNugnQ

Comment on Denver Post Blog About Obama and Deficit

Delusion runs rampant here.

"Working together" is exactly how they got to a $56Trillion debt. Democrats increased government spending 8% per year and republicans raised it 5%. They are the same party.

There is no political will in EITHER party to balance the budget. There never will be. If they tell you they want to do it they are lying. If you believe them you are hopelessly naive.

A balanced budget requires Republicans ending their pointless, exorbitant international wars, occupations and winding down the US corporate welfare state. A balanced budget requires Democrats to surrender their entitlement and welfare programs that they use to mobilize their serf voters.

It is impossible to pay off the debt. They know it and have no intention of doing it.

The Federal Reserve enabled this looming insolvency by keeping borrowing costs low with the monetary printing press. That racket is coming to an end.

$1 Trillion in newly printed money sits on deposit with the Fed. Heres the Fed's own site. Check out the "Monetary base". That is the money that they printed. Look at Oct 2008. That should startle you.

http://www.federalreserve.gov/releases/ ... 3hist1.txt

Obama wants banks to lend it? If they did, gasoline would be $7 a gallon.

We are heading for a train wreck of a magnitude never experienced in US history. IT will change America more than the Great Depression. A collapse in Treasuries will result in parabolic interest rates and will bankrupt the government. An interest rate like Volcker's 21% would add $2.5Trillion to the ANNUAL DEFICIT. But printing money will lead to hyperinflation and destruction of the economy.

Japan is the lynch pin of this coming calamity. They are teetering on the brink and they hold $750B in US Treasuries that will be liquidated at firesale prices.

http://www.telegraph.co.uk/finance/comm ... ieces.html

Republocrats did this. They were asleep at the wheel for the past 4 deacdes. This bed was made by NIXON, REAGAN, BUSH, CLINTON, W. AND OBAMA and all the Ted Kennedys and John McCains, too with their profligate spending and accounting tricks. They kicked the debt can down the road for 37 years. Now they are kicking it into a wall.

There is still time to avert a hyperinflationary catastrophe or a USSR style breakup but deep, DEEP cuts need to be made. Federal spending needs to be reduced by half and those parasitical government functions cannot just be pushed onto the states. The states need to slim down as well. You will not close the budget gap by taxing and sucking every last drop of blood out of the middle class. Tax hikes will scuttle a recovery and further deplete tax revenues. You will not close the gap by "nationalizing" everyone's 401k.


It is going to be a wild ride. Get ready for inflation. It is the easiest political way out but it won't work. I myself do not have any "hope" and do not expect any "change" from our Washington plutarchs, and media enablers. The serfs like their welfare too much and the Lee Greenwood crowd enjoys their illusory wars, dropping bombs and getting strip-searched at airports.

If you want to see what America will look like in 25 years, read my book.

http://goldsteinrepublic.com/

Deflation? Don't Be Ridiculous.

Not in any significant sense. There will be inflation. Why?

1) The Dollar is a bill of credit- a debt instrument. It is a note paying 0% interest, collateralized mostly by Treasuries. To the Fed, an FRN (a dollar) is a liability backed on the accounting ledger by Treasury "assets". Treasuries are going down. This is a certainty. It may be slowly over 5 years or it may be rapidly over 5 hours. I'm guessing sooner rather than later. As dollars are backed by Treasuries, as Treasuries go, so will go the dollar. It will start with Japan selling off.

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/...

2) Inflation is a function of M1 growth or Monetary Base (less reserves on deposit) growth. It has not grown recently, hence, no inflation. Freshly printed dollars have been deposited with the Fed (for now). They will leak out. The Fed will have to raise rates to keep those dollars out of the economy. A special "Fed Deposit Rate" higher than the market rate and only for Wall Street Banks may be tried. It will fail. It is politically untenable.

http://www.lewrockwell.com/north/north798.html

"Reverse Repos" are the new Fed scam...er....tool to remove excess liquidity. It goes like this: The Fed prints $1 Trillion, gives it to Citi for mortgages at $1 for $1 even thought the mortgages are worth $.67. Then Citi turns around and uses those dollars to buy Treasuries back from the Fed with a guarantee byt the Fed to buy them back at a higher rate (thus guaranteeing a higher interest rate). It's just a shell game and addresses corpulent money supply by obfuscating a rate hike.

3) The Fed is the banker's bank. They will not let all the big banks fail. They will print $50 Quadrillion dollars if necessary. If the Fed tries to tighten aka Volcker, they will bankrupt the US Government. A 21% interest rate = $2.4 Trillion interest expense ALONE for big Brother. There will be no Volcker 2.0 because a 21% interest rate = the government takes over the Central Bank and revs up the digital analogues (printing presses).

3.1) If the Fed raises rates any significant amount they will scuttle the recent "carry trade" stock market rally. Stocks are priced today as net future cash flows discounted to present value by (1+cost of capital)^n. Cost of capital ~ 0% for banks today making even the puniest of dividends valuable. Jack that cost of capital rate to 4% and the NPV sinks like a stone. The Fed cannot raise rates without scuttling the market. The S&P is priced at something like 75Xs trailing earnings. 80% of Goldman Sach's income comes from this 0% carry trade. Raising rates will destroy this income stream. The Banks own the Fed. They will not like this.

4) The US owes $75 Trillion. Will they tax it? Impossible. Will they borrow it? Impossible. There are only 2 solutions: 1) monetize it and 2) repudiate it. Repudiation is politically impossible but practically likely. Monetizing it is a disaster but politically practical.

Past Deflations:

But what about the 1930s you ask?

What about them? The US had a gold standard then. It took 5 years to double the monetary base. It took Bernanke 5 months! Ponzi-banks were allowed to collapse in the 1930s taking their fractionally multiplied Madoff dollars down to the never-after with them. That will not happen today. We have FDIC and Helicopter Ben with an infinite supply of dollars to ride in to save them.

But what about Japan in the 1990s?

There was no serious deflation in consumer prices in Japan. One must not confuse a collapse of a speculative bubble in real estate (or tech stocks, or South Sea Trading Companies or tulip bulbs) with skyrocketing consumer staples prices.

http://www.safehaven.com/article-15478.htm

We are going into mass-inflation. You can try to play technical trades, consult astrologers, and read goat entrails all you like. Time your "key reversals" and consult your trailing 100 day moving averages and your "Bollinger Bands" as well. Good luck. There may even be some merit in reading tarot cards...er...uh...technical charts. But I am prepping for the next decade, not the next week.

Finance yourself with fixed rate debt, wind down cash positions, invest in tangible things, stay away from bonds, liquidate (take a loan) on you 401k before Obama nationalizes it.

http://www.sharedprosperity.org/bp204/bp204.pdf

Hold on tight. It's gonna be a wild ride.

"Papers Please"

Posted on Denver Post Website

I find it odd that democrats, who were (many decades ago) pro-civil liberties, support these invasive, demeaning, and pointless strip searches at airports. The grainy pictures TSA shows you are the over-exposed versions. The REAL pictures show you utterly unclothed in full detail for TSA goons to peruse.

If one thinks about it, the options for a suicide hijacker are already very limited. The vigilance of a Dutch passenger, AND NOT POLICE STATE MEASURES, thwarted the recent attack.
I think the bottom line is Americans are being sold an illusion- the illusion is "security". The notion that we must give up liberty and $40B for security is a false choice. In this exchange, we merely enrich politically connected corps that build strip search machines, bureaucrats who can look like they are "doing something", and create a welfare-jobs program for 40,000 unskilled TSA agents. AND YET, THE UNDERPANTS BOMBER STILL GOT THROUGH!

Wake up sheeple. The USA is becoming a police state.