America’s Great Divide… The Wealthy and Everybody Else

Is America still the “Land of Opportunity” or is it quickly becoming the land of the Super Wealthy and everyone else?  The statistics quoted in this article argue for the former.

Big government and big business are not our friends.  Read the article below.

30 Statistics That Prove The Elite Are Getting Richer, The Poor Are Getting Poorer And The Middle Class Is Being Destroyed.

War, War, and More War a.k.a. A Crumbling America

As our recent and continuing “too big to fail” crisis continues, many in the financial industry are recording record profits while twenty-plus percent of Americans are out of work, and our infrastructure crumbles.

The American Society of Civil Engineers figures that about 1.6 Trillion dollars is needed to repair our long ignored bridges and roads. Without roads and bridges, our economy suffers.

Meanwhile our Men and Women of Power, the Republicrats in Washington DC, spend our blood and treasure on far shores, following “our interests” and “spreading democracy” to the tribal societies of Afghanistan.   Our “Defense Budget”  (read Offense Budget) is over one trillion dollars a year.  Our wars are both impoverishing us  and increasing the stranglehold of the Government/Big Business axis over our lives.

Come November, I would ask that all Americans follow the sage advice of the great American humorist, Will Rogers, and “Kick the bums out!

There is Hope for America!

Browsing the Mises website, there was an brief article on Hayek’s Road to Serfdom. I have slowly been working my way through a mountain of Libertarian books, and just happen to currently be reading this classic work, so I took a look at the article.

Having lived nearly six decades, I admit to seldom being surprised, but by golly a single sentence in this piece astonished me.  After getting a plug on the Glenn Beck Show, The Road to Serfdom is currently the number one selling book on Amazon.com.

There is little doubt that this book is a very worthy read, but the fact that it is the highest selling book on Amazon was, well, shocking to me.  This one sentence gives me more hope for my country than I have had in years.

For those of you that don’t know, this book is perhaps the greatest defense for classical liberalism (the political philosophy of our founding fathers), and argument against socialism that has ever been written, and along with Glenn Beck, I encourage you to read it.

The  Road to Serfdom: Despotism Then and Now – Thomas J. DiLorenzo – Mises Daily.

America Loves War or Where Have all the Doves Gone?

When the New York Times, one of the more liberal newspapers in the country, seems to have little more to say about our war in Afghanistan than “General McChrystal is going to have to do a much better job in Kandahar,” then the end of the world must certainly be near.

When I was a young man  in the US Navy (1970-1974), there was a movement called the “Peace Movement”.  What the hell happened?  Has America Entire (that means everybody) bought into the idea of US Global Military Hegemony preached and supported  by the Republicrats in DC?  This much to the Economic detriment of our country.

As a  serviceman during the last “necessary war” that proved so unnecessary, I watched in dismay as helicopters removed the last of our people from the roof of our embassy in Saigon.

I’m wondering if this is the same exit strategy we have for Afghanistan.

Editorial – Taking Stock in Afghanistan – NYTimes.com.

The U.S. Is Not Too Big To Fail

If you were to ask most any of the big government hacks (republicrats) in Washington the definition of “Fiscal Responsibility”, I am quite certain that all you would get would be a vacuous stare.  For decades, politicians have been assured by our central bank that it doesn’t matter how much money they spend, the bank can handle it…  Right…  They create paper to pay off the debts that they created with other paper, to pay off the debts that they created with other paper to pay off the debts…  ad infinitum.  This is a very sophisticated ponzi scheme that doesn’t even require other investors to pay off previous investors.  They just create more digital dollars…  a house of cards, and trust me folks, eventually it will fall.

The U.S. Is Not Too Big To Fail | The New Republic.

Danger in Numbers: The Decline of Paper Currency by Richard Daughty

Ahh, the Mogambu Guru!  No one says it with more panache tucked between the tongue and cheek.  As the European Central bank creates a trillion bucks out of thin air, and the Federal Reserve offers to back these notes…  Tell me is that not backing paper with paper?  Am I clueless here, or was this not sort of what happened when all those mortgage backed securities started toppling?  The government ponzi scheme goes on, and indeed I continue to see the end of the world as we know it.

Danger in Numbers: The Decline of Paper Currency by Richard Daughty.

What’s Wrong with a Free Lunch?

My father was one cranky old sob, but he certainly was no fool.  One thing he taught me was that “life ain’t fair and nothing in it is free.”

Apparently, the Greek government never met my father, or they would not be in the mess they are currently in.    The Greek Government thought that it could borrow to finance its own growth, and then borrow the money to pay that back.   The Greek government thought that it could finance its social welfare programs with borrowed money, and then borrow money to pay it back.   Sound familiar?

In 1920, an enterprising Italian immigrant by the name of Charles Ponzi (that’s him to the right.  Notice the numbers he’s holding up?) came up with an idea to put a few dollars in his pocket.   He would offer a high yielding investment (50% within 40 days, or 100% within 90 days).

I think the people who bought these “investments” never met my Father either, or they would have known that “If it sounds too good to be true… It probably is, but anyway,   people bought the product he offered, and as he brought in new investors, he would pay off the original investors with the new investors money.  Ponzi  took this idea and ran with it, and that’s why he has those numbers across his chest in the photo.  In the end, he bilked people out of over $2,000,000, and using the Coke Index (the price of a coke when I was a kid, versus the price of a coke today) that’s at least $40,000,000 in today’s dollars.   Ponzi is well remembered however…  they named a scheme after him.  Yep, you guessed it, “The Ponzi Scheme”.  He went to jail for it.

Well the Greeks are finding out that pyramid schemes, whether run by a little italian immigrant by the name of Ponzi, or a Government run amok,  are simply just that…  pyramid schemes.  Now,  just as my cranky old man told me, they’re about to find out that “life ain’t fair, and nothing in it is free.”  Just like in Hamelin, they are going to have to pay the piper, and they are angry, just as the burning policeman at the left suggests.

Livid pensioners,  wild haired socialists, students with a communist bent,  and government workers are very upset that the dole-ist policies of their government are going to have to be reined in.

Well, folks, it’s not just Greece that has involved itself in a Ponzi Scheme.   The federal government never spoke to my father either, and here at home, with our paternalistic government being all things to all people,  borrowing from Peter to pay Paul, one has to wonder what will happen here when the piper’s pay is due.

Americans  accustomed to the Free Lunch that is Our Government (FLTIOG) will certainly not behave like those nasty Greeks… right?….. Right.

Economic Implosion? or Go Long on Gold and Silver

As the sovereign debt crisis unravels in Europe, the dollar has seen a resurgence against foreign currencies.  Long perceived as a safe haven, the United States profits from European economic uncertainty, but how long can this last?

You’ve heard of Black Friday… Well now you’ve seen Souvlaki Thursday (the Greek Debt Crisis is making its presence felt in the international markets) With a drop in the Dow this past Thursday of almost 9.2% (though it did rebound to a 3.4% loss) the market has shown its fragility. 9.2% is not small potatoes folks, and I can assure you that the big boys in DC are running scared.

As previously mentioned, however, the dollar is remaining strong against other currencies, but not against gold and silver. These two metals continue to rise, or rather hold their own against an inflating currency.

Throughout the history of mankind, no (that means not one) fiat (by order of government) currency has survived. Why is this? Well, the reason is that governments who have the power to “make” (in our case print) money have never been able to restrain themselves. When they need more money for their wars or their social programs… well they just crank up the printing press. And by the way, the constitution gives the Federal Government the responsibility of coining money… not printing it.

Since the federal government went off the gold standard (starting first with the Breton Woods agreement in 1945 and ending in 1973 with Nixon’s repudiation of the gold standard) we have had a fiat system. In the past several years, the money supply has nearly doubled courtesy of Mr. Ben Bernake. This causes inflation.

Inflation is a concept that exists primarily in fiat money systems (and baloons, tires, etc.) Essentially this means more money chasing fewer goods. As a simple guy, I like to think of it using the Coke Index. When I was a child in the late fifties, I could buy a Coca Cola for 5 cents… That same Coke today costs me 20 times that much. This is not due to scarcity of Coca Cola… They make lots more than they did when I was a child. This is not due to increasing corporate profits. If you look at those in inflation adjusted dollars, it’s about the same. Nope, it’s due to the decreasing value of our fiat dollar caused by the rolling presses in DC. Rolling to fund their wars (spreading freedom? what hogwash), rolling to fund their social programs (helping to fund the needy? more hogwash… funding votes).

I am getting away from the thrust of this blog, though. What you saw thursday is a shift along the seismic crack that is the world economy.  When the fault line opens?…   All these riches based on a house of cards. What happens when one of the bottom cards is pulled out?

Gold and silver can help to protect you, my friends, from the economic unravelling that is currently in progress, and will continue to progress. I urge you to have a garage sale, get rid of the stuff that’s filling your basement… buy silver coins. The cash that’s in the bank… buy silver coins with it. Load up… protect your wealth… you’ll be glad you did.

IMF Survey: Government Borrowing Is Rising Risk to World Financial System

The IMF notes that though the most recent economic crisis has been averted by massive inflows of money from governments across the world, a sovereign debt crisis is currently looming.

Is the house of cards going to fall?  Hold on to your hats, folks.

IMF Survey: Government Borrowing Is Rising Risk to World Financial System.

RealClearPolitics – Tax Hikes Forever

We are not going to get out of our fiscal mess (read extraordinarily massive debt) by raising taxes on the wealthy.  Our progressive tax system already takes from  Americans making over $250,000/year  almost 90% of our federal taxes.

I have commented on this blog about the inherent tendency of government to grow, our current fiscal problem is a result of this.  More taxes are not the answer, smaller government is.

One of, I believe, the least painful ways of doing this is by cutting our military expenditures, which are huge.  Our military currently consumes by GAO numbers,  about 20 percent of our budget.  The real numbers however are much higher, and are achieved by special appropriations outside the budgetary process.  The Iraq War is an example of this.  The real numbers are, by some counts,  somewhere between 30 and 40 percent according to some estimates.

Continuing to raise taxes for our government’s profligacies on the military and social programs  simply cannot continue… As Margaret Thatcher remarked:  “The problem with socialism is that eventually you run out of other people’s money.

Read the article below.

RealClearPolitics – Tax Hikes Forever.