Dear Senator Bennett,
The notion that government can put the economy back on track by pumping liquidity in begs the question: where will the money come from?
If it is borrowed then it must a) be paid back with interest extracted from taxes and b)that borrowing will crowd out private sector borrowers.
If it is borrowed from the Fed it is "printed" and the result will eventually be higher consumer prices which act much like a tax.
The only responsible and sustainable method for you clowns in government to put the economy back on track is to dramatically reduce taxes AND spending, deregulate, and drastically cut the number of parasites you employ in government jobs that are a drain on the economy.
Remember, it was regulation, fiscal deficits, and credit expansion by the Fed that caused this mess. Stop trying to cure the illness with the smae things that caused it.
But that would mean relinquishing your power and you will certainly not do that voluntarily.
Read Frederic Bastiat's "What is Seen and What is Not Seen" when you get a chance.
Regards,
Troy Grice
Monday, March 23, 2009
Monday, March 16, 2009
Sucker's Rally
Don't get in yet! Manufacturing is still plummeting. Earnings are shriveling up. Alt A and commercial real estate crash is coming. All paper currencies are inflating. It is a race to the bottom. DOW ain't bottoming until 2010. (Unless a cup of coffee costs $20, that is). Hahaha!
Friday, February 27, 2009
It's coming
I called for hyperinflation last summer. It didn't pan out. Just as commodity prices were rocketing through the stratosphere, the great deleveraging began. Holders of real estate and stocks sold off and held cash. This is deflationary. I am certain it is temporary.
When the deleveraging ends (DOW at 4500, median home price at 2.5 xs median income) and we are on our 5th or 6th round of bailouts and stimulus, things will begin to creep up.
I'm watching the 10 year Treasury yield. The Treasury is having some trouble selling it's $2.5 trillion shit sandwhich in $33 Billion dollar bites. This means they have to offer it at a discount. When the price of bonds fall, the difference between their purchase and par value increases. This translates into higher yield. When the yield gets above 3%, I am treating it as a signal to buy gold coins (on the downtick).
So what's so bad about high inflation?
Here's how it goes down:
1) Prices, probably commodity and agricultural goods end their see-saw and start reflecting a permanent upward trend.
2) Within6-12 months, commodities double.
3) In the mean time, the economy worsens due to the interventions of the Keynesians.
4) With staggering unemployment 12-15%, there will be HUGE political pressure to end the "price gouging".
5) Government will insitute price controls on gasoline and certain foods.
6) Price controls will eradicate the profits in these industries.
7) There will be shortages. Shortages will lead to civil unrest. Government will blame "hoarding".
8) Businesses will lobby congress to enact wage controls to keep their costs down. Some businesses will get what they want, others (who have no political clout) will be nationalized.
9) A black market will evolve, rendering the price control mechanism meaningless.
10) With its prestige at stake, government will launch an assault on the illegal underground market.
11) We will devolve into a surveillance state. Prison populations will swell. There will be more unrest. More arrests. More unrest. More arrests. etc, etc.
Get ready. It could be a WILD RIDE ahead.
When the deleveraging ends (DOW at 4500, median home price at 2.5 xs median income) and we are on our 5th or 6th round of bailouts and stimulus, things will begin to creep up.
I'm watching the 10 year Treasury yield. The Treasury is having some trouble selling it's $2.5 trillion shit sandwhich in $33 Billion dollar bites. This means they have to offer it at a discount. When the price of bonds fall, the difference between their purchase and par value increases. This translates into higher yield. When the yield gets above 3%, I am treating it as a signal to buy gold coins (on the downtick).
So what's so bad about high inflation?
Here's how it goes down:
1) Prices, probably commodity and agricultural goods end their see-saw and start reflecting a permanent upward trend.
2) Within6-12 months, commodities double.
3) In the mean time, the economy worsens due to the interventions of the Keynesians.
4) With staggering unemployment 12-15%, there will be HUGE political pressure to end the "price gouging".
5) Government will insitute price controls on gasoline and certain foods.
6) Price controls will eradicate the profits in these industries.
7) There will be shortages. Shortages will lead to civil unrest. Government will blame "hoarding".
8) Businesses will lobby congress to enact wage controls to keep their costs down. Some businesses will get what they want, others (who have no political clout) will be nationalized.
9) A black market will evolve, rendering the price control mechanism meaningless.
10) With its prestige at stake, government will launch an assault on the illegal underground market.
11) We will devolve into a surveillance state. Prison populations will swell. There will be more unrest. More arrests. More unrest. More arrests. etc, etc.
Get ready. It could be a WILD RIDE ahead.
Saturday, November 22, 2008
Daily Rant
http://bailoutsleuth.com/
This is Mark Cuban's website. It is designed to track the greatest heist in the history of the world known as the $700 Billion TARP program. This scheme was devised by the Fed (the banker's bank) to extract money from you and I in the form of taxes and higher prices, and redistribute it to thieves on Wall Street and the Chinese who gambled and lost in the Real Estate market.
The total theft now stands at $2.5 Trillion. Is it any surprise that the Feds are now trying to trump up charges on Mr. Cuban for "insider trading"?
It is important to realize that these bailout billions do not come from a benevolent rich uncle. The money comes from you and I. If we spend $50 billion saving the sloppily run, sclerotic GM we can only do so by destroying $50 billion of business in the productive sector. In order to "save" GM by giving them money, government must destroy family practices, farms, and small businesses by robbing income from them.
Government cannot "save" or "produce" or "invest" anything. It can only take wealth from one person and give it to another. When Obama/Pelosi/Reid/McCain/Dodd/Bush/Bernanke/Frank/Paulson tell you they can fix the crisis they are LYING! They are money-changers and thieves- that's all.
These bailouts ARE MAKING IT WORSE! This is exactly what Hoover and FDR did in the 1930s. Bailouts, price controls, public works, unionization, cartels, interest rate cuts all made the Great Depression FAR WORSE than it would have been and now we are doing it all over again.
Don't trust the politicians. They will take EVERYTHING! Guard your 401k. Withdraw it if necessary. Save money- don't spend. Pay down debt. Stay out of the stock market. Things are going to get much worse as earning reports come in in 2009. The country needs savings and investment right now, not consumption. We need higher interest rates, not lower. We need falling prices, not inflation. Yet they keep telling us the opposite. They are wrong. Do not trust the politicians or the ignorant clowns on TV or the Ivy League faux-economists. They are delusional with fantasies of "saving the world" by exerting their power. They will lead you to ruin.
Have a nice day!
Troy
This is Mark Cuban's website. It is designed to track the greatest heist in the history of the world known as the $700 Billion TARP program. This scheme was devised by the Fed (the banker's bank) to extract money from you and I in the form of taxes and higher prices, and redistribute it to thieves on Wall Street and the Chinese who gambled and lost in the Real Estate market.
The total theft now stands at $2.5 Trillion. Is it any surprise that the Feds are now trying to trump up charges on Mr. Cuban for "insider trading"?
It is important to realize that these bailout billions do not come from a benevolent rich uncle. The money comes from you and I. If we spend $50 billion saving the sloppily run, sclerotic GM we can only do so by destroying $50 billion of business in the productive sector. In order to "save" GM by giving them money, government must destroy family practices, farms, and small businesses by robbing income from them.
Government cannot "save" or "produce" or "invest" anything. It can only take wealth from one person and give it to another. When Obama/Pelosi/Reid/McCain/Dodd/Bush/Bernanke/Frank/Paulson tell you they can fix the crisis they are LYING! They are money-changers and thieves- that's all.
These bailouts ARE MAKING IT WORSE! This is exactly what Hoover and FDR did in the 1930s. Bailouts, price controls, public works, unionization, cartels, interest rate cuts all made the Great Depression FAR WORSE than it would have been and now we are doing it all over again.
Don't trust the politicians. They will take EVERYTHING! Guard your 401k. Withdraw it if necessary. Save money- don't spend. Pay down debt. Stay out of the stock market. Things are going to get much worse as earning reports come in in 2009. The country needs savings and investment right now, not consumption. We need higher interest rates, not lower. We need falling prices, not inflation. Yet they keep telling us the opposite. They are wrong. Do not trust the politicians or the ignorant clowns on TV or the Ivy League faux-economists. They are delusional with fantasies of "saving the world" by exerting their power. They will lead you to ruin.
Have a nice day!
Troy
Monday, October 13, 2008
Al Gore Won a Nobel too!
So Paul Krugman won a Nobel prize.
Mr. Krugman subscribes to the Keynesian notion that consumption determines output. He posits that classical and Austrian Economics, which essentially state that capital investment determines output, are flawed in that they cannot explain why there would be unemployment as a result of malinvestment. He argues that it should not matter whether income is spent on consumption goods or capital goods, that a dollar spent is a dollar earned.
Now I'm obviously no Nobel Laureate, but here's my explanation:
1) Consumption goods are created with factors of production. Namely, labor and capital stock (factories, equipment and infrastructure).
2) Creating capital requires foregoing consumption, otherwise known as "saving".
3) Capital depreciates, and therefore must be replaced with an investment of savings.
4) If incomes are diverted from savings to consumption or speculative activities, capital investment will not replace the capital stock and the capital stock will shrink.
5) Shrinking capital stock must, at some point, cause falling output.
6) Falling output must manifest itself in one of two ways: 1) falling real wages or 2) unemployment.
Krugman seems to believe that either a) capital does not depreciate or b) consumption need not equate to output. Are either of these assumptions realistic? I suppose if you relaxe the notion of diminishing marginal returns and infinite inventories.
Is there another explanation?
Mr. Krugman subscribes to the Keynesian notion that consumption determines output. He posits that classical and Austrian Economics, which essentially state that capital investment determines output, are flawed in that they cannot explain why there would be unemployment as a result of malinvestment. He argues that it should not matter whether income is spent on consumption goods or capital goods, that a dollar spent is a dollar earned.
Now I'm obviously no Nobel Laureate, but here's my explanation:
1) Consumption goods are created with factors of production. Namely, labor and capital stock (factories, equipment and infrastructure).
2) Creating capital requires foregoing consumption, otherwise known as "saving".
3) Capital depreciates, and therefore must be replaced with an investment of savings.
4) If incomes are diverted from savings to consumption or speculative activities, capital investment will not replace the capital stock and the capital stock will shrink.
5) Shrinking capital stock must, at some point, cause falling output.
6) Falling output must manifest itself in one of two ways: 1) falling real wages or 2) unemployment.
Krugman seems to believe that either a) capital does not depreciate or b) consumption need not equate to output. Are either of these assumptions realistic? I suppose if you relaxe the notion of diminishing marginal returns and infinite inventories.
Is there another explanation?
Saturday, October 4, 2008
Capitalism is Dead
Congress is a group of criminal thieves. Pelosi, Reid and Boehner, along with Bernanke and Paulson are Sovietizing our financial sector.
We have learned nothing about economics in the last 95 years.
Prices are trying to fall. Bad assets need to be liquidated. Reckless and in competent investors need to be wiped out. A crash is a healing, cathartic process. None of this will be allowed to happen. The cancer will live on, fed and nurtured by "easy money" from the Fed's digital printing press. Instead, real wealth will be siphoned off from the middle class and redistributed by congressional gangsters to their criminal donors on Wall Street. And the sheeple stand by and do nothing.
The lesson of the Great Depression was cronyism and price fixing will not solve the crisis- it only deepens and prolongs it. No serious economist disputes that.
This bailout forestalls the inevitable price correction. It will not stop it It will merely change it's form into something more sinister. Political thievery has now supplanted the honesty of economic Darwinism and the elegance of spontaneous order. Welcome to National Socialism! Where are my jack boots?
In the words of George Carlin, "They won't stop until they take it all!".
We have learned nothing about economics in the last 95 years.
Prices are trying to fall. Bad assets need to be liquidated. Reckless and in competent investors need to be wiped out. A crash is a healing, cathartic process. None of this will be allowed to happen. The cancer will live on, fed and nurtured by "easy money" from the Fed's digital printing press. Instead, real wealth will be siphoned off from the middle class and redistributed by congressional gangsters to their criminal donors on Wall Street. And the sheeple stand by and do nothing.
The lesson of the Great Depression was cronyism and price fixing will not solve the crisis- it only deepens and prolongs it. No serious economist disputes that.
This bailout forestalls the inevitable price correction. It will not stop it It will merely change it's form into something more sinister. Political thievery has now supplanted the honesty of economic Darwinism and the elegance of spontaneous order. Welcome to National Socialism! Where are my jack boots?
In the words of George Carlin, "They won't stop until they take it all!".
Blog Response to Robert Samuelson's Column
Mr. Samuelson should be advised that there is one economic school of thought that has been consistently sounding the alarm on the credit bubble for quite some time- The Austrian School.
See: Mises, Hayek, Rothbard, and even, yes, Ron Paul.
What we don't need is a bailout that attempts to create value using a government redistribution scheme where there is no value. This bailout is a welfare giveaway that will divert real wealth from the middle class into the bank accounts of reckless and incompetent institutions. And it will PROLONG the recession. NO BAILOUT!
See: Mises, Hayek, Rothbard, and even, yes, Ron Paul.
What we don't need is a bailout that attempts to create value using a government redistribution scheme where there is no value. This bailout is a welfare giveaway that will divert real wealth from the middle class into the bank accounts of reckless and incompetent institutions. And it will PROLONG the recession. NO BAILOUT!
Friday, September 19, 2008
Letter to RMN
9/17/08
Dear Editor,
Two absurdly ignorant assessments of the current financial crisis are being made by our two Presidential candidates. Obama identifies under-regulation and McCain blames Wall Street greed for the ongoing financial collapse. Both of these comments are so spectacularly ignorant of economics that they should both be banned from speaking on the subject altogether.
The housing bubble that preceded today’s inevitable crash was a function of regulation- namely the Federal Reserve’s interest rate policy and pro home-ownership subsidies by Congress facilitated through Fannie and Freddie. This governmental tinkering and redirecting of real resources created the real estate mania. Unless they lived in an illusory, Keynesian fantasyland, each new investor knew the crash was looming but hoped that he could sell out to a ‘greater fool’ before the day of reckoning.
Neither Obama’s Newer Deal nor McCain’s assault on the human condition (which he calls greed) will have any impact on the occurrence of future bubbles or their subsequent crashes. The key solution resides in reassessing the role and accountability we have assigned to the Federal Reserve.
Do we really want to continue to enable an un-beholden banker’s bank (The Fed), with unlimited access to money creation, the ability to enable a corporatist system that privatizes profits for Wall Street and socializes losses for you and me?
That is the discussion our economically illiterate candidates should be having.
Troy Grice
Dear Editor,
Two absurdly ignorant assessments of the current financial crisis are being made by our two Presidential candidates. Obama identifies under-regulation and McCain blames Wall Street greed for the ongoing financial collapse. Both of these comments are so spectacularly ignorant of economics that they should both be banned from speaking on the subject altogether.
The housing bubble that preceded today’s inevitable crash was a function of regulation- namely the Federal Reserve’s interest rate policy and pro home-ownership subsidies by Congress facilitated through Fannie and Freddie. This governmental tinkering and redirecting of real resources created the real estate mania. Unless they lived in an illusory, Keynesian fantasyland, each new investor knew the crash was looming but hoped that he could sell out to a ‘greater fool’ before the day of reckoning.
Neither Obama’s Newer Deal nor McCain’s assault on the human condition (which he calls greed) will have any impact on the occurrence of future bubbles or their subsequent crashes. The key solution resides in reassessing the role and accountability we have assigned to the Federal Reserve.
Do we really want to continue to enable an un-beholden banker’s bank (The Fed), with unlimited access to money creation, the ability to enable a corporatist system that privatizes profits for Wall Street and socializes losses for you and me?
That is the discussion our economically illiterate candidates should be having.
Troy Grice
Friday, June 27, 2008
The Beginning of the End
I think the time has come. Forget stagflation, now we're talking HYPERINFLATION. Hyperinflation is the situation like in the Weimar Republic and in present day Zimbabwe where it takes a wheelbarrow of money to buy a loaf of bread.
Stagflation is the process whereby pumping cash into the economy in an attempt to boost demand and thus push output (which creates jobs) fails because supply is inelastic. Instead of an increase in output, all you get is higher prices. Staglfation exhibited in the 1970s destroyed the theory of using monetary and fiscal policy to inflate our way out of recessions. Stagflation destroyed the theories of John Maynard Keynes and knocked the monetarists woosy but Keynesianism still reigns supreme in places like the Fed and the Wall Street Journal. Google "P*" or read any WSJ article and look for the explanation the "consumption drives the economy". It's complete bullshit.
The Fed has been keystroking credit, bailing out multi-billionaires on Wall Street, and swapping worthless mortgage debt for YOUR Treasuries in an attempt to juice output by boosting demand. Its measures have failed. The market is down to its lowest level in 21 months. Instead of putting factories back into production, all that counterfitted liquidity has been parked in OIL and COMMODOTIES driving up their price.
Stagflation is no longer a worry, it is a reality. We are living it. The Fed says that inflation is 4.3% and 2.3% not counting food and fuel- as if none of us buys food and fuel. Set yourself up an algebraic equation. Even if you went to a public school you should be able to do this.
Let's call Inflation "I", Fuel and Food inflation "F" and Core inflation "C". Now lets assume that 25% of your expenditures goes to food and fuel leaving 75% for core items.
This leaves the following inflation calculation:
I = .25 * F + .75 *C.
Let's plug in what we know:
I = 4.3 and C = 2.3.
The now equation looks like this:
4.3 = .25 * F + .75 * 2.3
4.3 = .25F + 1.725
4.3 - 1.725 = .25F
2.575 = .25F
10.3 = F
So therefore, based on the BLS cpi #, fuel and food has increased only 10.3% in the last year. This should make your bulshit detector go off! This number is an absolute lie. It doesn't stand up to simple mathematical scrutiny. THEY ARE LYING TO YOU! THEY ARE LYING! THEY ARE LYING!
If you plug in a more realistic food and fuel inflation of 40% the equation results in an 11.725% rate of inflation! That is double digits, people.
Think of your grandmother who is on fixed income. The cpi determines her cost of living increase as a means of keeping her purchasing power "whole". The BLS says she gets a 4.3% increase but here costs are going up 11.725%. That means that her social security check, in real terms WAS CUT 7.4%!
This is the mechanism by which we are being robbed by the bankers and the Fed to line the pockets of the criminals on Wall Street.
But wait, it can get worse.
All fiat currencies fall victim to inflation- that is to say, politicians, finding direct taxation politically untenable, resort to counterfitting in order to make budgetary ends meet. The hope is that productivity growth (deflationary pressure) can eventually overcome their seignorage.
But what if the productivity does not catch up? What if, instead of buying new factories and infrastructure in recent years, liquidity was pumped into asset bubbles like dot coms and real estate for, oh, 15 years or so and now those bubbles have collapsed? Then what?
You are now inflating your phony money while simultaneously contracting output. The inflation pushes into interest rates because people don't like to get a negative return when they loan money. Interest rates sky-rocket. Investment hurdles become impossible to attain. Investment stops. New factories and roads and machines stop getting built. Capital flees the country. The economy shrinks. Profits evaporate. There are massive layoffs. Tax returns shrink. Governments can't borrow because they would have to pay 15, 20, 30% rates of interest. They can't raise taxes, no one has jobs (see Michigan)
So what do they do? THEY PRINT MONEY AND THEY PRINT AND PRINT AND PRINT! The word gets out. The gig is up. People know that their future money will be worthless so they start spending everything they have as soon as possible. Prices take off. 15% inflation, 30% inflation, 100% inflation. Then prices start increasing DAILY, then HOURLY!
Think I'm making this up? Google the Weimar republic or Zimbabwe inflation. We almost had this once in the early 1980s but Paul Volcker stepped in and squashed it by jacking up interest rates to the onscene levels necessary to restore confidence in the dollar. The result were two very bad recessions in the early 1980s. It resulted in capital flight oversees. Our maufacuring base left the country. That sector never fully recovered.
Since WWII we have benefited from the world using our fiat money as a defacto international currency. We buy goodies from the world in exchange for dollars. Instead of sending those dollars back here, they held on to them or spent them with other foreign nations. That meant that we got something for nothing. Well, that game is up. Our dollar is rapidly losing value and no one wants our crap dollars anymore. They are making their way back here, thus increasing their supply and driving down their value.
We will end up spending $3.5 Trillion fighting two wars in the Middle East that will accomplish NOTHING! That money came not from taxes but from the Chinese who lent it to us. How much more will they lend us? Our dollar is depreciating at a far greater pace then our 4% Treasury yield pays out. How stupid are the Chinese? I bet they won't be stupid for much longer.
We have a welfare statist or a warfare statist who will take office. One will flush billions down the welfare rathole and the other will flush billions down the warfare rathole. One subsidizes sloth and dependancy the other subsidizes corporate bomb peddlers. Either way, you pay.
With no place left to borrow and tax receipts drying up, the only recourse will be to counterfit. When this genie gets out of the bottle it may very well unleash another Weimar Republic here in America. Don't forget what that economic calamity led to.
P.S. I'm predicting DOW 9,000 by October. If you stick it out in your 401k you are a sucker. Take a max loan against it and pay down your HELOC in order to protect your asset.
Stagflation is the process whereby pumping cash into the economy in an attempt to boost demand and thus push output (which creates jobs) fails because supply is inelastic. Instead of an increase in output, all you get is higher prices. Staglfation exhibited in the 1970s destroyed the theory of using monetary and fiscal policy to inflate our way out of recessions. Stagflation destroyed the theories of John Maynard Keynes and knocked the monetarists woosy but Keynesianism still reigns supreme in places like the Fed and the Wall Street Journal. Google "P*" or read any WSJ article and look for the explanation the "consumption drives the economy". It's complete bullshit.
The Fed has been keystroking credit, bailing out multi-billionaires on Wall Street, and swapping worthless mortgage debt for YOUR Treasuries in an attempt to juice output by boosting demand. Its measures have failed. The market is down to its lowest level in 21 months. Instead of putting factories back into production, all that counterfitted liquidity has been parked in OIL and COMMODOTIES driving up their price.
Stagflation is no longer a worry, it is a reality. We are living it. The Fed says that inflation is 4.3% and 2.3% not counting food and fuel- as if none of us buys food and fuel. Set yourself up an algebraic equation. Even if you went to a public school you should be able to do this.
Let's call Inflation "I", Fuel and Food inflation "F" and Core inflation "C". Now lets assume that 25% of your expenditures goes to food and fuel leaving 75% for core items.
This leaves the following inflation calculation:
I = .25 * F + .75 *C.
Let's plug in what we know:
I = 4.3 and C = 2.3.
The now equation looks like this:
4.3 = .25 * F + .75 * 2.3
4.3 = .25F + 1.725
4.3 - 1.725 = .25F
2.575 = .25F
10.3 = F
So therefore, based on the BLS cpi #, fuel and food has increased only 10.3% in the last year. This should make your bulshit detector go off! This number is an absolute lie. It doesn't stand up to simple mathematical scrutiny. THEY ARE LYING TO YOU! THEY ARE LYING! THEY ARE LYING!
If you plug in a more realistic food and fuel inflation of 40% the equation results in an 11.725% rate of inflation! That is double digits, people.
Think of your grandmother who is on fixed income. The cpi determines her cost of living increase as a means of keeping her purchasing power "whole". The BLS says she gets a 4.3% increase but here costs are going up 11.725%. That means that her social security check, in real terms WAS CUT 7.4%!
This is the mechanism by which we are being robbed by the bankers and the Fed to line the pockets of the criminals on Wall Street.
But wait, it can get worse.
All fiat currencies fall victim to inflation- that is to say, politicians, finding direct taxation politically untenable, resort to counterfitting in order to make budgetary ends meet. The hope is that productivity growth (deflationary pressure) can eventually overcome their seignorage.
But what if the productivity does not catch up? What if, instead of buying new factories and infrastructure in recent years, liquidity was pumped into asset bubbles like dot coms and real estate for, oh, 15 years or so and now those bubbles have collapsed? Then what?
You are now inflating your phony money while simultaneously contracting output. The inflation pushes into interest rates because people don't like to get a negative return when they loan money. Interest rates sky-rocket. Investment hurdles become impossible to attain. Investment stops. New factories and roads and machines stop getting built. Capital flees the country. The economy shrinks. Profits evaporate. There are massive layoffs. Tax returns shrink. Governments can't borrow because they would have to pay 15, 20, 30% rates of interest. They can't raise taxes, no one has jobs (see Michigan)
So what do they do? THEY PRINT MONEY AND THEY PRINT AND PRINT AND PRINT! The word gets out. The gig is up. People know that their future money will be worthless so they start spending everything they have as soon as possible. Prices take off. 15% inflation, 30% inflation, 100% inflation. Then prices start increasing DAILY, then HOURLY!
Think I'm making this up? Google the Weimar republic or Zimbabwe inflation. We almost had this once in the early 1980s but Paul Volcker stepped in and squashed it by jacking up interest rates to the onscene levels necessary to restore confidence in the dollar. The result were two very bad recessions in the early 1980s. It resulted in capital flight oversees. Our maufacuring base left the country. That sector never fully recovered.
Since WWII we have benefited from the world using our fiat money as a defacto international currency. We buy goodies from the world in exchange for dollars. Instead of sending those dollars back here, they held on to them or spent them with other foreign nations. That meant that we got something for nothing. Well, that game is up. Our dollar is rapidly losing value and no one wants our crap dollars anymore. They are making their way back here, thus increasing their supply and driving down their value.
We will end up spending $3.5 Trillion fighting two wars in the Middle East that will accomplish NOTHING! That money came not from taxes but from the Chinese who lent it to us. How much more will they lend us? Our dollar is depreciating at a far greater pace then our 4% Treasury yield pays out. How stupid are the Chinese? I bet they won't be stupid for much longer.
We have a welfare statist or a warfare statist who will take office. One will flush billions down the welfare rathole and the other will flush billions down the warfare rathole. One subsidizes sloth and dependancy the other subsidizes corporate bomb peddlers. Either way, you pay.
With no place left to borrow and tax receipts drying up, the only recourse will be to counterfit. When this genie gets out of the bottle it may very well unleash another Weimar Republic here in America. Don't forget what that economic calamity led to.
P.S. I'm predicting DOW 9,000 by October. If you stick it out in your 401k you are a sucker. Take a max loan against it and pay down your HELOC in order to protect your asset.
Wednesday, June 25, 2008
Bin Laden is Dead
I've been saying this for 2 years now. He was buried under a hundred million tons of rock somewhere in Tora Bora. If he was alive he would be on Al Jazeera at least once a week rattling sabres and quoting the Quran. Instead, we get these grainy pictures and poor quality audio recordings.
So why won't anyone say it? I have a two word explanation: Emmanuel Goldstein. Emmanuel who, you ask? Emmanuel Goldstein was the antagonistic icon in the book 1984 that inspired the "two minutes hate". This was a daily period set aside for people to vent their nationalism, focus their hatred and reaffirm their love of the embodiement of the state- Big Brother.
Bin Laden = Emmanuel Goldstein.
Our current warfare state has a huge interest in having a living Bin Laden. It keeps the war fires burning hot. It keeps the American 'sheeple' in a jingoistic fervor. It keeps republicans voting for necons.
The funny thing is that the Islamofascists need him to be alive as well. He is a lightening rod for their movement- they don't call them fascists for nothing. They'll keep releasing doctored clips purported to be "proof of life" for as long as they can.
The bottom line is he is dead, people. There will be no show trial. There will be no symbolic revenge for 9-11. It's time to move on.
So why won't anyone say it? I have a two word explanation: Emmanuel Goldstein. Emmanuel who, you ask? Emmanuel Goldstein was the antagonistic icon in the book 1984 that inspired the "two minutes hate". This was a daily period set aside for people to vent their nationalism, focus their hatred and reaffirm their love of the embodiement of the state- Big Brother.
Bin Laden = Emmanuel Goldstein.
Our current warfare state has a huge interest in having a living Bin Laden. It keeps the war fires burning hot. It keeps the American 'sheeple' in a jingoistic fervor. It keeps republicans voting for necons.
The funny thing is that the Islamofascists need him to be alive as well. He is a lightening rod for their movement- they don't call them fascists for nothing. They'll keep releasing doctored clips purported to be "proof of life" for as long as they can.
The bottom line is he is dead, people. There will be no show trial. There will be no symbolic revenge for 9-11. It's time to move on.
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