Hey All,
If you want to see some interesting charts that show "official" government reporting superimposed on the "real" numbers, go to this link:
http://www.shadowstats.com/alternate_data
John Williams' site ShadowStats.com shows what I think is the real reason why Americans are so down on the economy -- the fact that our government is lying to us every day with these bogus "reports' on the state of inflation, unemployment, you name it...
If you read some of the captions accompanying the charts, you will come to realize that the government has constantly been changing the way it calculates these "facts and figures" so that today's published inflation index cannot even be compared to that of 10 years ago, which in turn cannot be compared to that of ten years prior, etc., etc. It is the same across the board for all the officially reported government statistics.
Many of us have been following these developments for years, but there may be some who aren't aware of this yet...
Also, check out www.chrismartenson.com and look through his "Crash Course on Economics." It is outstanding.
Tuesday, August 26, 2008
Intelligent? Conservative? In the Same Sentence?
Would anyone recognize one if they read it? (An intelligent conservative post, that is.)
Just wondering...
I mean, after all, the word "conservative" seems to have taken on a lot of meanings lately, as has "liberal."
For example, I don't believe that any of the top three presidential candidates are "conservative," including McCain.
I think that the most conservative of any of the candidates still in the running is Ron Paul, who does not seem to have much of a chance of winning, AND even he would not call himself a conservative -- I'd bet he'd rather be known as a libertarian...
So I think an "intelligent conservative post" would go something like this:
"Reduce taxes, reduce spending, shrink the government, (get it to) quit spying on Americans, stop printing money, re-define (downsize) the responsibility of the Fed, stop beating other countries over the head, start acting like a business partner as opposed to a bully, stop spending money persecuting and prosecuting drug-users, promote the free market and the free exchange of ideas and commerce, promote a strong (self) defense, institute individual retirement savings accounts and phase out social security, eliminate all government subsidies to corporations (including Medicare), enforce term limits on all politicians and encourage gun ownership among law-abiding citizens."
Just a thought...
Just wondering...
I mean, after all, the word "conservative" seems to have taken on a lot of meanings lately, as has "liberal."
For example, I don't believe that any of the top three presidential candidates are "conservative," including McCain.
I think that the most conservative of any of the candidates still in the running is Ron Paul, who does not seem to have much of a chance of winning, AND even he would not call himself a conservative -- I'd bet he'd rather be known as a libertarian...
So I think an "intelligent conservative post" would go something like this:
"Reduce taxes, reduce spending, shrink the government, (get it to) quit spying on Americans, stop printing money, re-define (downsize) the responsibility of the Fed, stop beating other countries over the head, start acting like a business partner as opposed to a bully, stop spending money persecuting and prosecuting drug-users, promote the free market and the free exchange of ideas and commerce, promote a strong (self) defense, institute individual retirement savings accounts and phase out social security, eliminate all government subsidies to corporations (including Medicare), enforce term limits on all politicians and encourage gun ownership among law-abiding citizens."
Just a thought...
Wednesday, August 20, 2008
What's the Alternative to the Money We Have Today?
It's hard to blame the American people for their complacency about the economy, when up until now it has been well-rewarded.
I have a STACK of auto-reply letters on fancy letterhead from my Representatives and Senators in Washington. They all say the same thing -- nothing.
I feel like a smart, motivated American who is ready, willing and able to help guide this country in the right direction, willing to help educate my friends and family as to the truth about the American economy, ready to deal with the harsh consequences of our leaders' bad decision making.
But, it doesn't matter. We can talk or write until we are blue in the face about the coming financial meltdown, and none of it will matter to, or motivate any of, the vast majority of Americans to DO something about it.
I think it will take a total collapse of the financial system, along with all the pain and suffering that will accompany it, in order to convince the American public that we need to do things differently.
Our fractional reserve central banking system must change. Radically. We must put ourselves back on a gold standard, and we must enforce the discipline of maintaining some very high proportion of deposits on reserve throughout our congress-controlled national banking system (if we even have one).
One of the questions we face (more of an unknown) is this: How much gold to we have? There are credible analysts who believe we (the United States) have sold ALL our gold to other countries and sovereign wealth funds. If we are truly out of gold, or have very little, starting over again with a our currency backed by gold will be very difficult if not impossible.
How to get it back? Good question.
The answer: BE PRODUCTIVE.
Let banks earn interest and income the old-fashioned way. Allow credit only to the extent that it is covered by collateral assets. In other words, lend only to those who don't need to borrow...
Where will the money come from to pay interest on loans if all the money on "day zero" is accounted for and backed by gold? It will come from productive borrowers earning more money than they owe, and paying a portion of their earnings to the lender as interest.
In a gold-backed financial system with very high fractional reserve requirements (such as 50% or 75% of deposits in physical possession in the banks) credit will be harder to get, borrowers will be far more qualified, and lenders will "create" far less money-from-nothing through the liquidity of credit.
Not all money will be "loaned into existence," as it has been from 1913 until now. Loans will have to be repaid with real money and real interest, effectively canceling the money created when the loan was originated. This will help immensely with the control of inflation, if not entirely eliminate it.
Wouldn't it be a great world if we could live without inflation? Our American ancestors did, for more than 300 years from prior to 1670 until 1970. The ONLY inflation during this entire span of history occurred during times of war, when the government printed money to finance their adventures. After the hostilities, the fiat currency was always rejected by the American people and withdrawn from circulation by the government. That choice between two forms of money was fundamental and key to the re-establishment of stable money after bouts of fiat-inspired inflation.
When allowed to freely choose among gold, currency backed by gold and currency backed by a "promise to pay," people invariably choose gold or the gold-backed currency.
In 1971 Nixon de-coupled the Dollar from gold, and starting at that moment, our economic fate was sealed. People no longer had a choice between fiat money and gold-backed currency.
Paper money began to inflate, and with every entitlement, defaulted loan, corporate bailout and FDIC-rescue of a failed bank, the future debt of this country continued to grow unchecked, placed squarely on the back of US taxpayers and continuously deferred ad infinitum.
It's going to be ugly.
But from out of the chaos that seems inevitable, we will hopefully be able to create a sane and stable money system, backed by gold.
I have a STACK of auto-reply letters on fancy letterhead from my Representatives and Senators in Washington. They all say the same thing -- nothing.
I feel like a smart, motivated American who is ready, willing and able to help guide this country in the right direction, willing to help educate my friends and family as to the truth about the American economy, ready to deal with the harsh consequences of our leaders' bad decision making.
But, it doesn't matter. We can talk or write until we are blue in the face about the coming financial meltdown, and none of it will matter to, or motivate any of, the vast majority of Americans to DO something about it.
I think it will take a total collapse of the financial system, along with all the pain and suffering that will accompany it, in order to convince the American public that we need to do things differently.
Our fractional reserve central banking system must change. Radically. We must put ourselves back on a gold standard, and we must enforce the discipline of maintaining some very high proportion of deposits on reserve throughout our congress-controlled national banking system (if we even have one).
One of the questions we face (more of an unknown) is this: How much gold to we have? There are credible analysts who believe we (the United States) have sold ALL our gold to other countries and sovereign wealth funds. If we are truly out of gold, or have very little, starting over again with a our currency backed by gold will be very difficult if not impossible.
How to get it back? Good question.
The answer: BE PRODUCTIVE.
Let banks earn interest and income the old-fashioned way. Allow credit only to the extent that it is covered by collateral assets. In other words, lend only to those who don't need to borrow...
Where will the money come from to pay interest on loans if all the money on "day zero" is accounted for and backed by gold? It will come from productive borrowers earning more money than they owe, and paying a portion of their earnings to the lender as interest.
In a gold-backed financial system with very high fractional reserve requirements (such as 50% or 75% of deposits in physical possession in the banks) credit will be harder to get, borrowers will be far more qualified, and lenders will "create" far less money-from-nothing through the liquidity of credit.
Not all money will be "loaned into existence," as it has been from 1913 until now. Loans will have to be repaid with real money and real interest, effectively canceling the money created when the loan was originated. This will help immensely with the control of inflation, if not entirely eliminate it.
Wouldn't it be a great world if we could live without inflation? Our American ancestors did, for more than 300 years from prior to 1670 until 1970. The ONLY inflation during this entire span of history occurred during times of war, when the government printed money to finance their adventures. After the hostilities, the fiat currency was always rejected by the American people and withdrawn from circulation by the government. That choice between two forms of money was fundamental and key to the re-establishment of stable money after bouts of fiat-inspired inflation.
When allowed to freely choose among gold, currency backed by gold and currency backed by a "promise to pay," people invariably choose gold or the gold-backed currency.
In 1971 Nixon de-coupled the Dollar from gold, and starting at that moment, our economic fate was sealed. People no longer had a choice between fiat money and gold-backed currency.
Paper money began to inflate, and with every entitlement, defaulted loan, corporate bailout and FDIC-rescue of a failed bank, the future debt of this country continued to grow unchecked, placed squarely on the back of US taxpayers and continuously deferred ad infinitum.
It's going to be ugly.
But from out of the chaos that seems inevitable, we will hopefully be able to create a sane and stable money system, backed by gold.
Saturday, August 16, 2008
Government Stats on Economy Are A Lie...
...and the question we should all be asking is, "WHY?"
Here is a GREAT piece of information I cannot recommend highly enough:
http://www.chrismartenson.com/fuzzy_numbers
This is just one chapter of a multi-part presentation that is free, concise, and clearly explains how our government is systematically destroying our dollars and lying to us about it.
No big deal...
Here is a GREAT piece of information I cannot recommend highly enough:
http://www.chrismartenson.com/fuzzy_numbers
This is just one chapter of a multi-part presentation that is free, concise, and clearly explains how our government is systematically destroying our dollars and lying to us about it.
No big deal...
Spanish Holiday Cut a Tad Short... It's Only Total Financial Collapse
The Prime Minister of Spain called an emergency session of the Parliament Friday (Aug 15th) in order to deal with the collapsing economy there:
http://tiny.cc/jT0qc
I hope the Spanish people get through this with a minimum of disruption and economic pain.
http://tiny.cc/jT0qc
I hope the Spanish people get through this with a minimum of disruption and economic pain.
Tuesday, August 12, 2008
And Another Thing!
Our current financial morass has roots in President Nixon's disconnection of the dollar from a peg to gold in August of 1971. President Peanut's (er, Carter's) Community Reinvestment Act of 1977 and its revisions in 1995 (under Clinton) allowed lending institutions extreme (and unregulated) latitude in creating and valuing their portfolios of questionable debt (not yet called sub-prime mortgages at that time).
Things got worse under Reagan, during which time the very first Credit Default Swap instruments were created -- these simply ballooned under Bush I and Clinton.
The Savings & Loan fiasco of the late eighties and early nineties added a trillion dollars to the national debt through accounting gimmicks and congressional bailouts of their buddies, placing this future debt directly onto the backs of American taxpayers.
W (Bush II) and his administration has done nothing more nor less than any of his predecessors about our growing problems such as the inflating money supply, the massive increase in national debt, not holding Congress to its responsibilities for oversight of the financial industry, waging war against other nations to further "American interests," using fear-mongering to advance government control and invasion of our privacy on a massive scale, or promising far more than it can deliver.
So while I don't disagree that Bush has not been a stellar leader of our nation, I just want to point out that for what it's worth, We the People have allowed our leaders to pull this c*r*a*p on us for many, many decades. We have not found an effective way -- the political voice -- to "throw the bums out."
Americans are afraid to "throw the baby out with the bathwater" -- even though there's ample evidence that the "baby" is going to grow up and kill us all. I think Americans are afraid to $hit-can all their leaders, because "the devil you know is better than the devil you don't."
People reading and writing about this stuff within the various Internet communities are not the problem. We've got to help the rest of the 98% of Americans "grow a pair" and not be afraid to effectively excise the heart and soul of our biggest problem -- our non-leaders -- our endemic and all-pervasive lack of ethical leadership in the executive and legislative branches.
We need to encourage new leaders, ethical leaders, to step forward.
Support Ron Paul. Get him "written in" at the Republican convention. Throw out every incumbent, every time. Destroy the "continuity of corruption."
Things got worse under Reagan, during which time the very first Credit Default Swap instruments were created -- these simply ballooned under Bush I and Clinton.
The Savings & Loan fiasco of the late eighties and early nineties added a trillion dollars to the national debt through accounting gimmicks and congressional bailouts of their buddies, placing this future debt directly onto the backs of American taxpayers.
W (Bush II) and his administration has done nothing more nor less than any of his predecessors about our growing problems such as the inflating money supply, the massive increase in national debt, not holding Congress to its responsibilities for oversight of the financial industry, waging war against other nations to further "American interests," using fear-mongering to advance government control and invasion of our privacy on a massive scale, or promising far more than it can deliver.
So while I don't disagree that Bush has not been a stellar leader of our nation, I just want to point out that for what it's worth, We the People have allowed our leaders to pull this c*r*a*p on us for many, many decades. We have not found an effective way -- the political voice -- to "throw the bums out."
Americans are afraid to "throw the baby out with the bathwater" -- even though there's ample evidence that the "baby" is going to grow up and kill us all. I think Americans are afraid to $hit-can all their leaders, because "the devil you know is better than the devil you don't."
People reading and writing about this stuff within the various Internet communities are not the problem. We've got to help the rest of the 98% of Americans "grow a pair" and not be afraid to effectively excise the heart and soul of our biggest problem -- our non-leaders -- our endemic and all-pervasive lack of ethical leadership in the executive and legislative branches.
We need to encourage new leaders, ethical leaders, to step forward.
Support Ron Paul. Get him "written in" at the Republican convention. Throw out every incumbent, every time. Destroy the "continuity of corruption."
Harrrumphing About Environmental Politics
This whole corn-ethanol morass we find ourselves in got a huge kick-start with agribusiness lobbyists and all-too-willing congress-critters co-opting a bad environmentalist idea and making the result even worse.
There is an unending litany of "unintended consequences" -- nice-sounding government programs that begat Frankenstein Monsters of financial waste, fraud and abuse. For example how government subsidies of corn-for-ethanol has directly caused the price of milk to double, wheat to triple, and rice to quadruple in the past year.
Global Warming (Climate Change, whatever), is another such Frankenstein. Al Gore has been all too happy to use (and be used by) his fellow power-hungry environmentalists to seek another foothold in the political power-structure. If not Global Warming, then it would be Nuclear Power, or the Murder of Endangered Snail Darters, or the flushing of pharmaceuticals destroying the planet, or the inclusion of phthalate esters in plastics leading to worldwide destruction, or Nigerian Delta Oil Flares... pick your poison.
(Oooops! Turns out there are A HUNDRED times more endangered lowland gorillas than the experts had previously thought...)
I wonder why people fail to see what is really going on? It's all power politics, with enviro-lobbyists squaring off against corporate-lobbyists to see who can buy more congressional juice, and has little to do with the environment.
There is an unending litany of "unintended consequences" -- nice-sounding government programs that begat Frankenstein Monsters of financial waste, fraud and abuse. For example how government subsidies of corn-for-ethanol has directly caused the price of milk to double, wheat to triple, and rice to quadruple in the past year.
Global Warming (Climate Change, whatever), is another such Frankenstein. Al Gore has been all too happy to use (and be used by) his fellow power-hungry environmentalists to seek another foothold in the political power-structure. If not Global Warming, then it would be Nuclear Power, or the Murder of Endangered Snail Darters, or the flushing of pharmaceuticals destroying the planet, or the inclusion of phthalate esters in plastics leading to worldwide destruction, or Nigerian Delta Oil Flares... pick your poison.
(Oooops! Turns out there are A HUNDRED times more endangered lowland gorillas than the experts had previously thought...)
I wonder why people fail to see what is really going on? It's all power politics, with enviro-lobbyists squaring off against corporate-lobbyists to see who can buy more congressional juice, and has little to do with the environment.
How To Fix Everything
Conservatives have been giving themselves a bad name lately (OK, forever). Classical Liberal politics is closer to what modern conservatism should be -- fiscally conservative and socially liberal. I think an "intelligent conservative post" should read something like this:
"Reduce taxes, reduce spending, shrink the government, (get it to) quit spying on Americans, stop printing fiat money, re-define (eliminate?) the Fed, link our currency to gold, stop beating other countries over the head, start acting like a business partner instead of a bully, stop spending money persecuting and prosecuting drug-users, promote the free market and the free exchange of ideas and commerce, promote a strong (self) defense, institute individual savings accounts and individual medical savings accounts, phase out social security, eliminate all government subsidies to corporations (including Medicare), eliminate all government subsidies to education, to housing and to illegal immigrants, enforce term limits on all politicians and encourage gun ownership among law-abiding citizens."
This would be a good start.
"Reduce taxes, reduce spending, shrink the government, (get it to) quit spying on Americans, stop printing fiat money, re-define (eliminate?) the Fed, link our currency to gold, stop beating other countries over the head, start acting like a business partner instead of a bully, stop spending money persecuting and prosecuting drug-users, promote the free market and the free exchange of ideas and commerce, promote a strong (self) defense, institute individual savings accounts and individual medical savings accounts, phase out social security, eliminate all government subsidies to corporations (including Medicare), eliminate all government subsidies to education, to housing and to illegal immigrants, enforce term limits on all politicians and encourage gun ownership among law-abiding citizens."
This would be a good start.
Go Get Yours Now
Best guesstimates show that the FED is printing about 15% MORE paper money each year (right now) than they are retiring. (See www.shadowstats.com)
Add to that the fact that hundreds of BILLIONS of dollars in value have just been erased in the on-going sub-prime mortgage fiasco, and are soon to be erased in the upcoming Alt-A mortgage meltdown, and now you have A WHOLE LOT of physical paper dollars out there, "describing the value of" far fewer remaining hard assets (goods and services) that still exist.
This is a perfect storm of inflation and devaluation (wealth destruction). In years past, the FED would respond to detractors by saying essentially, "Hey don't worry about it -- we're just going to grow the economy so fast that the extra dollars will be used to value (compete for) the rapidly-increasing goods and services, and no one will feel the effects of all our excess paper money."
Right now, all (well, most) of the oil traded on the world markets has to be bought and sold using US Dollars. This has the effect of keeping the value of the paper money much higher than it normally would be, because everyone needs dollars to use for oil transactions. Some countries are actively seeking ways to use Euros for oil transactions, and if that ever becomes a widespread practice (wars will be fought over this) the value of the US Dollar will suffer further.
Then there's the Credit Default Swap (CDS) marketplace, (a risk-sharing mechanism) which is in jeopardy of melting-down, to the tune of over 40-Trillion Dollars, so look for additional excitement later on this year or next.
A sack of "junk silver" (pre-1965) dimes or quarters, or a cache of 1/10th-ounce gold maple-leafs could be regarded as insurance against the loss of faith in the US Dollar. If the Dollar ever collapses, people will likely take silver coins (or reeeeally small gold coins), in exchange for essentials.
Even if the Dollar never collapses (weirder things have happened), the gold and silver coins will still be worth something (and more likely than not, worth a lot), so you're not really risking too much by acquiring some.
Lately the prices of gold and silver have been plummeting -- so it's an even better time to buy.
Add to that the fact that hundreds of BILLIONS of dollars in value have just been erased in the on-going sub-prime mortgage fiasco, and are soon to be erased in the upcoming Alt-A mortgage meltdown, and now you have A WHOLE LOT of physical paper dollars out there, "describing the value of" far fewer remaining hard assets (goods and services) that still exist.
This is a perfect storm of inflation and devaluation (wealth destruction). In years past, the FED would respond to detractors by saying essentially, "Hey don't worry about it -- we're just going to grow the economy so fast that the extra dollars will be used to value (compete for) the rapidly-increasing goods and services, and no one will feel the effects of all our excess paper money."
Right now, all (well, most) of the oil traded on the world markets has to be bought and sold using US Dollars. This has the effect of keeping the value of the paper money much higher than it normally would be, because everyone needs dollars to use for oil transactions. Some countries are actively seeking ways to use Euros for oil transactions, and if that ever becomes a widespread practice (wars will be fought over this) the value of the US Dollar will suffer further.
Then there's the Credit Default Swap (CDS) marketplace, (a risk-sharing mechanism) which is in jeopardy of melting-down, to the tune of over 40-Trillion Dollars, so look for additional excitement later on this year or next.
A sack of "junk silver" (pre-1965) dimes or quarters, or a cache of 1/10th-ounce gold maple-leafs could be regarded as insurance against the loss of faith in the US Dollar. If the Dollar ever collapses, people will likely take silver coins (or reeeeally small gold coins), in exchange for essentials.
Even if the Dollar never collapses (weirder things have happened), the gold and silver coins will still be worth something (and more likely than not, worth a lot), so you're not really risking too much by acquiring some.
Lately the prices of gold and silver have been plummeting -- so it's an even better time to buy.
Thoughts on Self-Sufficiency
Yeah, I'm one of those weird scholar/athlete types who played football all through high school and some college, yet I actually like to read and think about things like women, guns, wine, airplanes, economics and the future (aka science fiction). Nothing like hiking into the backwoods and enjoying a nice campfire and keeping an eye on the dope-growers... man, those guys are everywhere. I could go on and on about the "war on drugs," but suffice it to say, if the government would just get a clue and legalize them, the whole drug underworld would vanish overnight, and the feds could have a nice little taxation revenue-stream to boot...
Of course, this assumes the feds don't already have an even better revenue stream from illegal drug traffic already.
Of course, this assumes the feds don't already have an even better revenue stream from illegal drug traffic already.
At the risk of providing more fuel to the crowd who believe goldbugs are raving lunatics, I'd like to add my own observations to the discussion of personal responsibility and self-sufficiency:
I'm going to grow a nice big healthy garden with lots of tomatoes, beans, corn, squash and other goodies, and learn to can things too.
Having a couple of 55-gal barrels of drinking water in a cool, dark place is not a bad idea.
A little spare gasoline and a Honda generator are nice-to-haves, and a motorcycle or two will provide cheap transportation when infrastructure breaks down.
I also like (and own) the Glock Model 22 semi-auto in .40 cal., mainly because it has nearly the same kinetic energy as the .45 cal, but will hold 15 rounds in the double-stacked magazine, vs 9 in the single-stacked .45. I have a Browning Buckmark semi-auto in .22 for cheap target practice. I like the Remington 700 series of bolt-action rifles, and mine is the short-action bull-barrel in .308 caliber, with a Leupold Vari-X III scope on top. It will put 10 shots through a quarter at 100 yards. The good old Remington Express 870 pump-action shotgun with Premier AccuTip Bonded Sabot Slugs alternated with double-ought shells is also good to have close by if bad people with bad intent come into your home.
As far as what to use for money when the "fecal matter whacks the rapidly-rotating air movement device" and all ATMs are boat-anchors, my first choice is a $1000 face-value sack of "junk silver," either 4000 quarters or 10,000 dimes. All the coins are pre-1965 with 90% pure silver content, and my guess is that when dollars are worth less than toilet paper, people will gladly accept silver dimes and/or quarters in exchange for food, water, medicine and good red wine or single-malt scotch.
That's my story and I'm stickin' to it!
Consequences of Fed Policy and Lack of Congressional Oversight
The dollar is really just an "idea" in the minds of people the world over who are familiar with it. Dollars are a "promise to pay" and are freely exchangeable for goods and services. They used to represent fixed amounts of gold or silver, but no longer, and as a result, their value fluctuates (while the value of gold and silver -- expressed in how much gold or silver one needs to "buy something" -- has remained pretty much the same).
If lots of people familiar with the dollar begin to think that it might become worth less in the future, then one could say they have less faith in the "promise to pay" and will probably demand more dollars for their goods and services. This can make the dollar "drop like a rock."
At the same time, there are monumental efforts afoot to "prop up" the dollar at home and abroad, not the least of which are vast sales of gold and silver futures and leases by the central banks of the world. These send the dollar-price of precious metals plunging and raise the value of each paper dollar.
It's hard to imagine that there is enough gold and silver in the world to counterbalance the immense debt levels that have been generated in the past 20 years, however. Something has to give, and pretty soon.
The FED is creating more dollars than are being retired, at an annual rate of somewhere around eight to eighteen percent more (we can't be sure because the FED no longer will say how many dollars it's printing), and this alone causes the value of each dollar issued to decline. They HAVE to do this however, in order for there to be enough extra money each year to pay the interest on the ever-increasing numbers of outstanding debts we owe to the world...
Large financial institutions create investments out of "packages of loans" of which the value can no longer be determined, and this has destroyed the value of the dollars used to purchase those investments (to the tune of billions of dollars ). This has also caused the dollar to "drop like a rock" through the devaluation that destruction of wealth causes.
Lately, several large investment banks have begun "voluntarily" spending billions of dollars to buy back the "auction-rate securities" they've sold to unwitting municipalities and retirement funds. This is no doubt to stave off what would surely become an orgy of congressional finger-pointing and public wrath when it is determined that these investments are worthless...
There are a lot of other currencies in the world, most of which are also based on "promises to pay," and so depending on how people feel about the relative strength of one country's economy vs another's, the dollar will decline or rise relative to that currency. Really, even "the experts" find all this too complex to understand or predict, due to the high number of variables. There really is no one in control of the economic situation -- they're all just hanging on to the steering wheel for dear life...
For an excellent explanation of how the economy works (or not) take Chris Martenson's "Crash Course" in economics at www.chrismartenson.com/crashcourse .
The one main thing to keep in mind as we think about a currency that is not based on precious metal (say, like... the dollar for example) -- the more of them we print and put out in the world, the less each one is worth. When we do this on an exponential basis, and we've reached the "point of verticality" in the chart of the numbers of dollars in the world, look out!
Hope for the best, but prepare for the worst...
If lots of people familiar with the dollar begin to think that it might become worth less in the future, then one could say they have less faith in the "promise to pay" and will probably demand more dollars for their goods and services. This can make the dollar "drop like a rock."
At the same time, there are monumental efforts afoot to "prop up" the dollar at home and abroad, not the least of which are vast sales of gold and silver futures and leases by the central banks of the world. These send the dollar-price of precious metals plunging and raise the value of each paper dollar.
It's hard to imagine that there is enough gold and silver in the world to counterbalance the immense debt levels that have been generated in the past 20 years, however. Something has to give, and pretty soon.
The FED is creating more dollars than are being retired, at an annual rate of somewhere around eight to eighteen percent more (we can't be sure because the FED no longer will say how many dollars it's printing), and this alone causes the value of each dollar issued to decline. They HAVE to do this however, in order for there to be enough extra money each year to pay the interest on the ever-increasing numbers of outstanding debts we owe to the world...
Large financial institutions create investments out of "packages of loans" of which the value can no longer be determined, and this has destroyed the value of the dollars used to purchase those investments (to the tune of billions of dollars ). This has also caused the dollar to "drop like a rock" through the devaluation that destruction of wealth causes.
Lately, several large investment banks have begun "voluntarily" spending billions of dollars to buy back the "auction-rate securities" they've sold to unwitting municipalities and retirement funds. This is no doubt to stave off what would surely become an orgy of congressional finger-pointing and public wrath when it is determined that these investments are worthless...
There are a lot of other currencies in the world, most of which are also based on "promises to pay," and so depending on how people feel about the relative strength of one country's economy vs another's, the dollar will decline or rise relative to that currency. Really, even "the experts" find all this too complex to understand or predict, due to the high number of variables. There really is no one in control of the economic situation -- they're all just hanging on to the steering wheel for dear life...
For an excellent explanation of how the economy works (or not) take Chris Martenson's "Crash Course" in economics at www.chrismartenson.com/crashcourse .
The one main thing to keep in mind as we think about a currency that is not based on precious metal (say, like... the dollar for example) -- the more of them we print and put out in the world, the less each one is worth. When we do this on an exponential basis, and we've reached the "point of verticality" in the chart of the numbers of dollars in the world, look out!
Hope for the best, but prepare for the worst...
Ron Paul -- Bushwhacking McCain at the Convention
As a lifelong Libertarian I've followed Dr. Ron Paul's candidacy and I support his campaign. I had to change party affiliation to vote for him in my state's primary. Not a problem really, since I always vote the candidate and not the party.
But that brings up an interesting point: Is it because Ron Paul is a Republican candidate that he's been effective at all? I can't help thinking he would have had even less Main Stream Media (MSM) coverage as a Libertarian candidate. Yet he really is a Libertarian.
Can anyone here name the Libertarian presidential candidate? I love that Ron Paul's influence is within a major party, where he is somewhat more effective and cannot be completely ignored.
This is a valuable lesson for all future Libertarian candidates. Since we have been almost completely ineffectual in past campaigns, perhaps the paradigm must now shift to working within one of the two major parties. It may be time for a full-time Libertarian Caucus within the Republican Party.
And... Who's to say that there couldn't be a groundswell of disaffection "coming out of nowhere," and suddenly the MSM (along with McCain) finds itself "blindsided" by an actual FIGHT in the Republican convention between supporters of the status-quo and Ron Paul. If enough people got active between now and the convention, it could happen.
Naysayers will declare these ideas ridiculous and tantamount to "handing the election to Obama" or whatever, but the process is designed to allow this to happen if enough people act. Always act and VOTE YOUR PRINCIPLES, even if it seems hopeless.
It doesn't matter if our candidate has fewer "leadership qualities" than the charismatic opponent. We can wish all day long that Ron Paul was taller, that he didn't sound so whiny, that he wasn't treated so outrageously unfairly in the debates, etc., etc.
He is the one ethical candidate. He is the one supporter of Constitutional ideas, behavior and values. He is the only acceptable alternative.
But that brings up an interesting point: Is it because Ron Paul is a Republican candidate that he's been effective at all? I can't help thinking he would have had even less Main Stream Media (MSM) coverage as a Libertarian candidate. Yet he really is a Libertarian.
Can anyone here name the Libertarian presidential candidate? I love that Ron Paul's influence is within a major party, where he is somewhat more effective and cannot be completely ignored.
This is a valuable lesson for all future Libertarian candidates. Since we have been almost completely ineffectual in past campaigns, perhaps the paradigm must now shift to working within one of the two major parties. It may be time for a full-time Libertarian Caucus within the Republican Party.
And... Who's to say that there couldn't be a groundswell of disaffection "coming out of nowhere," and suddenly the MSM (along with McCain) finds itself "blindsided" by an actual FIGHT in the Republican convention between supporters of the status-quo and Ron Paul. If enough people got active between now and the convention, it could happen.
Naysayers will declare these ideas ridiculous and tantamount to "handing the election to Obama" or whatever, but the process is designed to allow this to happen if enough people act. Always act and VOTE YOUR PRINCIPLES, even if it seems hopeless.
It doesn't matter if our candidate has fewer "leadership qualities" than the charismatic opponent. We can wish all day long that Ron Paul was taller, that he didn't sound so whiny, that he wasn't treated so outrageously unfairly in the debates, etc., etc.
He is the one ethical candidate. He is the one supporter of Constitutional ideas, behavior and values. He is the only acceptable alternative.
Credit Default Swaps -- "So What?" You Ask...
Here's a pretty decent primer about Credit Default Swaps:
http://www.moneymorning.com/2008/04/02/credit-default-swaps-a-50-trillion-problem/
If the premise is true, then I'm not sure I fully understand the argument that there is always a winner and a loser in a CDS transaction and thus no net gain or loss of wealth.
http://www.moneymorning.com/2008/04/02/credit-default-swaps-a-50-trillion-problem/
If the premise is true, then I'm not sure I fully understand the argument that there is always a winner and a loser in a CDS transaction and thus no net gain or loss of wealth.
Put the Blame Where It Belongs...
THE reason why all the banks and financial institutions have gone on a wild rampage of free-credit and gorging on billions of dollars in tier-three debt is precisely because our government leaders allowed them to do it. Congress abdicated its authority and responsibility for oversight.
Our senators and congressional reps repeatedly signed the legislation that the financials wrote (via their lobbyists) and THAT, plus the unbridled creation of billions in funny-money by the Fed have put us into this situation. We complain about the government because THAT's where the blame lies. A free market with simple rule of law would quickly bring alleged perpetrators to justice via lawsuit and the courts would determine if anyone was harmed. Don't blame free markets for our current predicament, for heaven's sake!
Truly free markets haven't existed for a long time, and if they did, things would certainly "work better."
Our senators and congressional reps repeatedly signed the legislation that the financials wrote (via their lobbyists) and THAT, plus the unbridled creation of billions in funny-money by the Fed have put us into this situation. We complain about the government because THAT's where the blame lies. A free market with simple rule of law would quickly bring alleged perpetrators to justice via lawsuit and the courts would determine if anyone was harmed. Don't blame free markets for our current predicament, for heaven's sake!
Truly free markets haven't existed for a long time, and if they did, things would certainly "work better."
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