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!

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.

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.

The ObamaCare Writedowns

The problem with socialism is that eventually you run out of other people’s money.

Margaret Thatcher

One of the simplest facts of  life is  “You don’t get something for nothing,” yet  the Democratic congress has assured us that with the new health care bill, we can insure 33 million Americans and not only will it not cost us anything, we  can actually save money in doing so.   Apparently the business sector does not believe this.

Just days after passage of Obamacare, some of the largest companies in the US are taking writedowns on their profit and loss statements.  In other words, they expect this bill to cost them lots of money.

Well, heck, you might say, the big companies make millions, even billions of dollars, right?  Who cares?  You should care.  When AT&T takes a writedown of one billion dollars, that’s a billion dollars they don’t have to invest in research and development, upgrading equipment, or expansion of their business.  That means jobs, baby, and because these companies are suddenly less profitable, they are less highly valued by the investing community, the result being a lower stock price.  If you are lucky enough to have a 401k plan, I hope you’re not holding them.

It has been said that “He governs best, who governs least.”  Our  federal government has lost sight of this.  The Republican form of government exemplified at this nation’s founding with a limited central government and strong states rights has been dying, at least since the end of the Civil War, and we need desperately to resuscitate it.  I believe the chance will come as our economic plight over the next ten years continues to worsen.  The failures of our mismanaged, over-bloated central government will become apparent, even to the most die-hard liberal wacko.

Read the article below, see what the business world thinks of Obamacare.

The ObamaCare Writedowns – WSJ.com.

Six Reasons Barack Obama is Still the Odds-on Favorite in 2012 — Politics Daily

Our nation has always been polarized… even in the era of “Good Feelings”, conflict over the institution of slavery was in its nascent beginnings, but times were good…  In good economic times, serious political issues can be swept under the rug…  I mean, everybody’s happy and well fed, right?

Today, the Tea Parties are the head of the boil that lies just under the surface of America’s skin.  The boil, I believe, is created by the proflgacies of the Republicrats in Washington, DC, by their inability to control the debt that has not only led to our current economic crisis, but threatens the the very economic, political, and social solvency of this nation

I don’t believe that President Obama is the man to lance that boil, yet neither do I see a republican contender with the hair or the principles to lance it either.

This article suggests that we may see Obama for another four years.  I hope not.

Six Reasons Barack Obama is Still the Odds-on Favorite in 2012 — Politics Daily.

Garet Garrett’s Invaluable Lesson – Jonathan M. Finegold Catalan – Mises Institute

The problem with socialism is that eventually, you run out of other people’s money.

Margaret Thatcher

The potential for sovereign default of debt is very concerning to each and every one of us… What would happen if the dollar was suddenly worth… ZERO?

Portugal, Italy, Spain and Greece (PIGS) are reaching a fiscal tipping point.  Could this happen to the US?

This article discusses debt, its relationship to the great depression, and its potential for harm in our current economic crisis.

Garet Garrett’s Invaluable Lesson – Jonathan M. Finegold Catalan – Mises Institute.

It’s Not About Political Parties. It’s About Liberty by Michael Boldin

Many Americans believe that the constitution is a living document, that it changes with the times, or at least does its interpretation.  When this happens, tyrrany is just around the corner.

If you doubt this, consider the the supreme court case discussed briefly in this article,  Wickard vs. Filburn.

“During the Great Depression, while millions of people were out of work or starving, the FDR administration required American farmers to restrict production of wheat in order to raise prices.

As a farmer, Roscoe Filburn was told he could plant a little over 10 acres of wheat, which he did grow and sell on the market. He also decided that it was in his best interest – possibly because he had less revenue due to the production limitations – to plant another 10 or so acres. But, the “excess” wheat grown was used at home to feed his livestock, among other things. He never sold it, so he saw this as being outside the scope of Congressional power to regulate “interstate commerce.”

What did the federal government do? The expected – they ordered Roscoe to destroy his crops and pay a fine. Think about that for a moment and you’ll really understand the evil of having too much power in too few hands. At a time when large numbers of people were starving, these thugs in government forced people to reduce production for the sake of raising prices. From this, it seems clear to me that corporate bailouts have been going on a long, long time in America.

Roscoe sued, and the case went all the way to the Supreme Court. In Wickard v Filburn, the Court ruled against him and the result was that the Federal Government assumed a power that was new in the history of this country. It now had the power to control the growing and consuming of something that never left one’s back yard.

Now this from the most esteemed and highest court in the land.  What can one say to this except WTF?

Read this article.  Recognize that the federal government is not our friend.

It’s Not About Political Parties. It’s About Liberty by Michael Boldin.

Peggy Noonan: Can Washington Meet the Demand to Cut Spending? – WSJ.com

Peggy Noonan is a shrewd woman whose views,  on the issue of government spending, are coincidental with mine.  Our current deficit, and national debt will not be “fixed” by increasing taxes… we must finally address the spending side of the equation.

Peggy Noonan: Can Washington Meet the Demand to Cut Spending? – WSJ.com.