Featured Post

The Science of Getting Rich: CHAPTER VII [excerpt] by Wallace D. Wattles #Gratitude

--- Gratitude THE ILLUSTRATIONS GIVEN IN THE LAST CHAPTER will have conveyed to the reader the fact that the first step toward getting ...

Friday, October 29, 2010

Here's Your Talking Points For The Anti-Bank #Bailout #Revolution

As you find yourself rooting against the banks, be prepared when the too-big-to-fails come begging for taxpayer help, because as we've been warning, a hastened request for TARP v. 2.0 is on the way. So let's see if we can get everyone following the same playbook before it happens.

Read the full article here on Business Insider < Well worth the read IMO

#Fed Responds To Allegations Of POMO-based Stock #Market #Manipulation

Thank God for Zero Hedge..

Tyler Durden
Zero Hedge
Tuesday, September 21, 2010

It is no secret that the Federal Reserve, and its now semi-daily interventions in market liquidity via ever increasing Permanent Open Market Operations (aka POMOs, next on deck – Wednesday and Friday for a total of about $7-8 billion), is rather hell bent on creating the impression that the economy is alive and well courtesy of a ramping stock market (when the causal relationship is always the other way around, but who cares). A reader got so disgusted by the POMO ramp game, he sent in an angry letter to Brian Sack’s henchmen. Here is the Fed’s response.

Dear Mr. (removed to maintain privacy):

Thank you for your recent correspondence in which you expressed your concerns about the Federal Reserve’s influence on the stock market.

The Federal Reserve monitors all sectors of the economy, so that we can be prepared when crises arise. It is within this context that the Chairman is often called by Congress to offer his views on many issues that may or may not be directly related to monetary policy. I want to assure you that the Federal Reserve’s monetary policy actions are not aimed at correcting or influencing any particular market. As you know, the goal of monetary policy is to foster conditions conducive to sustaining sound, noninflationary economic growth over time and policymakers must make decisions that provide the greatest benefit overall.

Again, thank you for writing.


Board Staff

So if “the Federal Reserve’s monetary policy actions are not aimed at correcting or influencing any particular market” is it safe to assume that actions are aimed at “correcting and influencing” all markets in general? Well, the Fed is already rampaging in USTs, Agency securities and FX, would it be too naive to assume equities are for some reason excluded…

Wednesday, October 27, 2010

#FED 'Terrified' of #Deflation: El-Erian

WHY is the FED terrified of deflation? Because they can't prevent it and they know it.. Because of the incredible debt load on everything American.. Including government, business, corporations and consumers..

When this 'thing' we call our economy breaks it's going to be a very ugly thing..

You may click here for the source post on CNBC.com if you prefer..

Published: Tuesday, 26 Oct 2010 | 3:53 PM ET

By: Jodi Gralnick
Economics Producer, CNBC

The Federal Reserve will announce a new round of easing next week because it is “terrified” of deflation, said Mohamed El-Erian, chief executive officer of Pimco.

But he doesn't believe a restart of the Fed's "quantitative easing" program at its Nov. 2 and 3 meeting will be very effective in delivering high growth or low unemployment. Quantitative easing is a term used to refer to the Federal Reserve injecting more money into the economy.

"QE is meant to drive down the price of safe assets so much that we are all pushed into doing something risky," El-Erian said in an interview Monday at a gathering of the Financial Women’s Association of New York.

Since the Fed first hinted at a new quantitative easing program in August, the dollar has weakened and risk assets, like stocks and commodities, have raced higher. El-Erian did not make a specific forecast on the amount of Treasurys the Fed would purchase, but he did say he will be looking for some "constructive ambiguity" in the Fed's statement, which would give it options.

El-Erian said the auction Monday of 5-year Treasury Inflation Protected Securities (TIPS) at a yield of -0.55 percent shows the economy is not gaining traction.

“I think it’s an indication that the unthinkable and the improbable, or at least what used to be unthinkable and what used to be improbable, is not only possible but is the reality,” he said.

El-Erian also said policy makers have done a very good job winning the war against a second depression, but pointed out that in every war, securing the peace is complicated.


So what would he do if he could design a policy response? El-Erian said he would offer a plan that would include structural reforms to make the United States more competitive and the economy more flexible. He also said the U.S. needs a better social safety net and “a bit of QE.”

El-Erian does not believe QE on its own will help very much, and that with QE alone, the same issues will persist in six to nine months, while the rest of the world will be inflated. But he points out that the market has priced in additional asset purchases, so there is a high risk of disappointing investors if the Fed does not act.

As far as the upcoming elections, El-Erian told CNBC that he worries about gridlock.

“Anybody who expects gridlock to be good doesn't understand that we need to achieve escape velocity. We need to go fast enough to start overcoming the debt overhang and we’re not gonna do that unless some pretty hard decisions are taken,” he said.

Globally, El-Erian reiterated that he personally believes Greece will need to restructure its debt within three years “because the alternative is much worse.”

But he said Greece is luckier than Argentina, because it is “in a better neighborhood,” and its rich neighbors will likely help mitigate some of its problems.

If Greece does default, the impact will be containable, El-Erian, a former IMF official, noted.

El-Erian also explained PIMCO’s significant reduction in a key fund's gold position from 10 percent to 3 percent. He said investing the precious metal “doesn’t make as much sense as it used to.” Because the price has moved so much and the trade is so crowded, he sees potential for a large technical retracement.

—CNBC Anchor Michelle Caruso-Cabrera contributed to this report.

Tuesday, October 26, 2010

THIS is our #Monetary #Policy

The following excerpt is from the book 'Secrets of the Temple -- How the Federal Reserve runs the country by William Greider

Now I know some of my good friends already know all this stuff.. But I still think it's a good read for everyone.. It's just so well written LMAO

To me it shows the complete desperation of the government and the Federal Reserve no matter how they may have tried to hide the panic from the general public.

During the war, as the federal government borrowed hundreds of billions, the Federal Reserve explicitly supported the Treasury debt financing with its monetary policy, pumping more liquidity into the banking system so that private buyers would be able to absorb the new government securities. The FED followed Treasury's instructions, yielding any pretense to independence. The central banks money-supply management was "pegged" to one purpose--low interest rates. The interest rate on the longest-term government bonds was held at a steady 2.5 percent throughout the war and short-term rates were correspondingly lower (ninety-day T-bills paid less than .5 percent).

If market pressures threatened to push rates higher, the central bank simply bought more Treasury issues itself, thus adding more money to the financial system and preventing the price of money from rising. In effect, the FED guaranteed that if there was any Treasury paper that the private market would not buy, then the FED itself would buy it. In 1933, when FDR took office, the national debt was $22 billion. When Pearl Harbor was attacked in 1941, it was $48 billion. By V-J Day, when the war ended in 1945, the national debt was $280 billion.

Paul Volcker, the economics major, concluded that the Federal Reserve must stop "pegging" interest rates at a fixed level and allow rates to rise to reflect market pressures "in order to have an anti-inflationary policy worthy of the name." Inside the government, Marriner Eccles was making the identical argument--and becoming increasingly unpopular for it. "I regret that the Federal Reserve did not take a more independent position despite Treasury resistance," Eccles wrote in his memoirs. "There was no justification for our continued support of the Treasury's war time cheap-money policy."

During the war itself, Eccles quarreled regularly with Treasury on how to finance the mobilization, but he was compelled to acquiesce. The Federal Reserve had played a similar role in supporting the government's borrowing for World War I. Lincoln had printed "green-backs" to pay for the civil war. History and politics argued that a nation at war, threatened with survival, will do what ever it needs to do in order to win and worry later about the financial consequences.

Eccles did not disagree with that general proposition, but he objected in particular to the financing methods. The periodic Victory bond drives staged by Treasury, he said, meant "outrageous profits" for banks and large investors because the arrangement allowed a daisy-chain exploitation of the the FEDs money creation. to insure a successful bond sale and stable interest rates, the FED expanded bank reserves by buying up outstanding government securities. The commercial banks lent the expanded money supply to private customers who would in turn lend it to the government by buying the new Treasury issues. The customers then sold their new government securities to the commercial banks--and they eventually sold them back to the FED when the central bank was again required to expand the money supply. in a roundabout way, the government was borrowing it's own money--and paying a fixed fee to middlemen for the privileged.

The bankers, of course, were delighted with most aspects of Treasury financing, as were government bond dealers and the brokers [Eccles complained]. The practices followed insured them a windfall of profits, as they did to countless corporations and insurance companies. A substantial part of the buying did not come from genuine savings; it came from money created by the banking system through the very process of buying the securities held by nonbank investors.


[a government] "will do what ever it needs to do in order to win and worry later about the financial consequences"

As *I* have been saying for a very long time now.. I feel a bit vindicated in my own beliefs after having found this.. Bernanke is stuck in the 1930's enjoying a lifelong dream of his, battling the ghost of the great depression.. there is nothing they can do to manipulate things this time.. it simply WILL NOT WORK.

the New Paradigm continues.. please stay tuned..

Sunday, October 24, 2010

*My* Top #Secret Undercover #TeaParty Infiltration & Investigation

Took place on October 23rd in Branson MO..

I tweeted about this surprise @Ancient_Warrior visit to a somewhat local TeaParty event on Friday..

I was warned, by one of my more 'progressive' Twitter followers, not to attend such a heinous event because it would, no doubt, be an extremely dangerous adventure due to the fact that all of the participants were, most likely, likely Nazi racists..

However, my friend likely does not understand that you NEVER challenge an Ancient Warrior to face down death itself in an effort to rid the world of evil..

So.. I cleverly prepared for my careful, undercover, infiltration.. while, at the same time, experiencing a great deal of trepidation and anxiety at the thought of also putting my family in such grave danger..

You see my family, Mrs Warrior and our son anyway, were a very important part of my 'cover'..

In order to further conceal and obfuscate my intentions I also included my sister and brother-in-law in the secret operation, at first without their knowledge..

My somewhat ambitious 'goal' was to identify, document and, if possible, eliminate as many Nazis, racists, or preferably Nazis who were ALSO racists (2 for 1 deal..) as humanly possible..

We arrived, the 5 of us, at about 10:20 AM Saturday morning.. And.. well.. parked our car..

Myself, Mrs Warrior and our son soon went undercover and mingled with a group of 'protesters' who lined the edge of highway 248, attempting to blend in by displaying signs we ourselves had crafted into the wee hours of the night..

Here, for your enlightenment, are just a few of the OUTRAGEOUS 'signs' we saw soon after arriving..

One read 'END DEBT SLAVERY' and I swear it WAS in all caps just like that!

*I* suspected, though would have a difficult time proving, that the use of the word 'slavery' on anything had to somehow be related to racism..

It turns out this whiner was, supposedly, referring to the fact that BIG banks, corporations, retailers and even government itself to some degree (think nationalization of student loans) are intentionally enslaving millions of Americans with usurious interest rates on borrowed money.. Interest rates as high as 30% in many cases.. One of their secret tactics seems to be to entice as many Americans as possible into a lifestyle of buying everything that you could possibly ever want in your entire lifetime at least three times on credit over the course of 3 to 5 years.. And that by employing such tactics they are able to effectively bury millions of American citizens under such a huge amount of debt that it swiftly becomes next to impossible for them to free themselves.. Hence the use of the term 'slavery'..

To me it still sounds suspiciously 'insensitive'..

Another read 'NATIONAL USURY LAW NOW".. Obviously related to the sign above, it shows somewhat of a lack of creativity, don't you think? At any rate it's OBVIOUSLY a bad idea.. Who would want to prevent banks, corporations and retailers from reaping ever higher profits and paying ever higher bonus' to their top executives?! That's simply NOT how 'consumerism' works.. DUH!

As long as there continues to be enough f'ing idiots out there willing to pay 1,000% interest we should be fine! Just leave well enough alone!

Another was the TIRED same old 'END THE FED'.. Hell.. the Federal Reserve Bank obviously does a fantastic job of managing, controlling, influencing and manipulating our economy. I mean.. we're still here aren't we?!

To reduce the value of the fiat currency of the United states from 100% to 5% in less than 100 years time is no easy feat! Those people at the Federal Reserve Bank obviously work VERY HARD and they get SO LITTLE credit for the difficult job of consistently inflating away Americas wealth..

Oh.. never mind I said that..

Just forget the damn 'signs' ok..

We were there to flush out and, if possible, eliminate extremist Nazi racists anyway..

So we carefully proceeded into the 'Convention Center' What respectable 'progressive' organization would ever hold a protest / rally in a convention center anyway?! How could you possibly have an effective protest with restrooms and a concession stand distracting people? Brother..

While I didn't really locate any Nazis or racists on the picket line (everyone I spoke to was actually very nice) I concluded that it was likely the Tea Partiers were keeping the Nazis and racists out of the limelight.. Likely, I figured, hiding them somewhere in this huge convention center..

So.. I went on high alert as we entered the facility, our cover still completely intact..

The first 'booth' we encountered was promoting something called The Well-Fed Neighbor Alliance And, to my amazement, there was my OWN sister manning the booth!!!

I pulled this information from the extremist website..
The Well-Fed Neighbor Alliance, LTD is an alliance of individuals dedicated to the re-localization of our food supply, our fuel supply and our economy. The Well-Fed Neighbor Alliance, LTD, represents an unavoidable vision, plan and timetable for local sustainability. The Alliance owes no allegiance to any political party, religion, or belief system. Rather, the Alliance is open to all as long as their vision, mission and actions are peaceful, non-violent and aligned with that of the Alliance.

Grow Local! Buy Local! Eat Local!

This is most likely a bigoted endeavor.. I mean why should people in some some region of Missouri be able able to survive, prosper and.. well.. eat.. while other people who made no such advanced plans.. well.. not do as well..

At any rate.. the search for Nazis, or at least racists.. continues..

I KNEW they were there SOMEWHERE! And I was there also, an Ancient Warrior with a blood lust in search of a battle.. Looking for the opportunity to gracefully separate any Nazi or racist's head from their body..

WOOHOO! That's what we Ancient Warrior's are about you know? LMAO

So my search continued.. In fact it intensified..

I carefully weaved my way through throngs of of (mostly polite elderly Branson citizens) in search of the 'evil' I knew lurked among them..

i was terrified.. knowing that they could be on me in an instant! My life hanging in the balance.. I worked my way past some other booths where they were selling some t-shirts and constitution posters and things (in fact I ended up buying a constitution poster myself.. I thought they were kinda cool..).. I worked my way into the crowded concession area, into the very heart of the thick crowd of.. well.. pretty much people I guess..

Then, unexpectedly, I was distracted by a couple of people who seemed to stand out in the crowd.. at least to me anyway..

One had a cool really large anti-FED sign the text of which was attributed to someone named Andrew Jackson commenting on the Federal Reserve Banking system of the day..

---Reads like an invitation to anarchy to me..

"You are a den of vipers. I intend to rout you out and by the Eternal God I will rout you out. If the people only understood the rank injustice of our money and banking system, there would be a revolution before morning." --Andrew Jackson, 1828 (to a group of investment bankers trying to persuade him to renew their central bank charter)


So I exchange contact information with the guy so I can keep an eye on him in the future.. I did discover at least one shadowy source of information used by this character.. True World History

The other was some kid with an accomplice who were passing out, for FREE!, some anti-government Video on DVD called 'Fall of the Republic' Again with the anarchy! Boy were they lucky I wasn't searching for anarchists that day.. Anyway I got there info and gave them mine also.. So I could keep an eye on them as well.. They hide out at We Are Change Branson

I was so distracted by these, likely, plants that when I looked up from my conversations the crowd was gone! The distractions had worked perfectly!

But.. I'm not an Ancient Warrior for nothing..

I found them, they had all congregated in a large room.. Which I figured would make my search even easier..

I sat in the very back, alone, to observe the proceeding and keep a sharp eye out of Nazi racist child predators and whatnot.. It was pretty boring actually.. And not a SINGLE word about government, the Federal Reserve, banks, corporations or retailers stealing from the American people.. I was a bit disappointed..

I decided I could probably spot and behead the Nazi racist bastards as exited their evil meeting.. So, being much smarter than they, I exited a few minutes early to 'lie in wait'..

But.. alas.. when they came out it was STILL mainly a bunch of f'ing OLD people.. Maybe one or two of them MIGHT have been a racist but I could not be sure enough just by LOOKING at them to lop off their heads.. (I like to be really sure BEFORE I lop off someone's head.. For obvious reasons..)

Then.. the whole damn thing was kinda over..

I figure that maybe someone let the cat out of the bag that an Ancient Warrior could possibly be at the meeting.. So the Nazis and racists were likely hiding.. trembling.. In fear of losing their heads, their life, or perhaps even both..

In any event it was a great weekend adventure into the very teeth of danger and possible bodily injury or even death..

And I met a couple of really cool people..

And some of us got together after it was over and had dinner to help Branson's economy a little..

And, thank God, no one lost their head..

Don't worry, I've got your back. This Ancient Warrior will continue attending Tea Party events to protect you from the evil that lurks hiding somewhere just below the surface..

Greg aka @Ancient_Warrior

Friday, October 22, 2010


I don't and won't ever ask anyone to believe everything they hear or even see.. However I DO hope people will expose themselves to as much information as possible so as to be able to make up their own minds as far as what they do and don't believe..

that said.. please click the link provided below to see a discussion of the New World Order.. The video runs 2 hours and 14 minutes..

Invisible Empire A New World Order Defined Full (Order it at Infowars.com)

Have a GREAT weekend everyone!


Wednesday, October 20, 2010

Could #Civil #War be next? Don't scoff..

Below is a tiny excerpt from a very important, serious article.. Please read it by clicking the link provided below..

“In a very real sense, Bernanke is throwing Granny and Grandpa down the stairs – on purpose. He is literally threatening those at the lower end of the economic strata, along with all who are retired, with starvation and death, and in a just nation where the rule of law controlled instead of being abused by the kleptocrats he would be facing charges of Seditious Conspiracy, as his policies will inevitably lead to the destruction of our republic.”

Time Magazine: Prospect Of Civil War In U.S. “Doesn’t Seem That Far Fetched”


#Bernanke Denies Stock #Market #Manipulation by #FED

Source Men With Foil Hats

Tyler Durden|Zerohedge.com post

Link below is the story of interest.. enjoy..

Here is the reason we need to KEEP Alan Grayson around!


#Market #Manipulation Explained

The article below does a great job of explaining this constant market manipulation, IMO

The Catastrophic End of Market Manipulation

There is much more than just this one article.. You just have to figure out where to look..

try this google search..

primary dealer market manipulation


Monday, October 18, 2010

#God on #Greed, Sinful Wealth & #Corruption


James 5 (New International Version)

James 5

Warning to Rich Oppressors

1 Now listen, you rich people, weep and wail because of the misery that is coming upon you. 2 Your wealth has rotted, and moths have eaten your clothes. 3 Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days. 4 Look! The wages you failed to pay the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty. 5 You have lived on earth in luxury and self-indulgence. You have fattened yourselves in the day of slaughter.[a] 6 You have condemned and murdered innocent men, who were not opposing you.

Thanks God ;)

Link to full text

---Further discussion

In light of James's teaching, how far shall Christians go in opposing the evils of wealth? The church needs to be instructed and led regarding four possible levels of action for the reformation of society: intercession, proclamation, resistance and revolution. First, the church should be stirred to intercessory prayer for its society. We have a biblical calling to pray for our society (Is 62:6-7), and prayer will be James's primary focus in the conclusion to his letter (5:13-18). Second, proclamation through clear prophetic warning is certainly proper, by the example of James's own letter. One of the ministries of the church today must be the prophetic sharing of truth. The world needs the church to address personal and societal abuses of wealth with James's twin messages of encouragement toward righteousness and warning against wickedness. Third, active resistance to injustice can be practiced through civil disobedience. Christians need to be given biblical instruction in the proper motives, methods and contexts for civil disobedience, so that this alternative can be practiced in righteousness. For the fourth possible level of action--armed revolution--James does not give any support. That will become clear as James develops the next stage of his message.

Link to this entire text [James 5 - IVP New Testament Commentaries]


Demystifying #Deflation By Mark W. Hendrickson - American Thinker

In my opinion this is a very important article.. We have our own government and the Federal Reserve Bank constantly screaming in horror about how terrible deflation is.. It is mainly terrible for THEIR debt based ponzi of an economy and THEIR grip on power as politicians.. That is why THEY are continually concerned about deflation, out of their OWN selfishness, not out of concern over you or any f*cking sheeple..

Here, for my readers, is an adult discussion about deflation.. what it is and why it happens from time to time and why it NEEDS to happen from time to time..

If you prefer you may click here for the source post..

To the powers-that-be in Washington, deflation is Public Enemy No. 1.

Why is deflation -- in layman's terms, "widespread declining prices" -- so feared? First, we must distinguish between benign deflation and traumatic deflation.

In a truly free market with a monetary gold standard, a benign deflation would be the norm. Human productivity, unfettered by government intervention, typically increases total wealth by several percent per year. By contrast, it is geologically impossible for the supply of gold (money) to increase that much, except in the rare years when there is a freakishly massive new gold discovery. As the supply of goods increases more rapidly than the stock of money, the natural outcome is a general downward adjustment in prices.

This type of deflation prevailed during the last quarter of the 19th century in the U.S. Although wages trended downward, consumer prices fell more rapidly; thus, workers' standards of living rose. That compares favorably to the plight of many workers in the late 1970s (I was one of them) whose nominal wages rose, but not as rapidly as consumer prices, resulting in falling standards of living. Unfortunately, the natural, gentle kind of deflation is impossible today, given government's ubiquitous interventions and our easily inflatable fiat currency.

The deflation that is feared today (and which does, indeed, hover over us as a very real possibility) is deflation of the traumatic variety. Such a deflation involves a rapid decline in prices and spending. These would trigger an accelerating, self-reinforcing cycle of widespread bankruptcies (both personal and business) and soaring unemployment. Mountains of debt would be vaporized by a chain reaction of defaults.

Make no mistake about it: We are talking here about very hard times. You can see why policymakers in Washington are scared to death of this kind of deflation. No politician wants to face the wrath of the voters by having such a devastating deflationary cycle happen on his or her watch; on the contrary, he or she will support the efforts of Bernanke and the Fed to pull out all the inflationary stops to avert a traumatic deflation.

Before you hail the Fed and Uncle Sam as our economic saviors, there are two things you should understand about the wrenching deflation we face: 1) The conditions which make us ripe for a severe deflation were caused by the very institutions that now propose to save us from it, and 2) it is the lesser of two evils.

Wrenching deflation is the inevitable aftermath of prior massive inflationary bubbles. A bubble can't burst if a bubble doesn't exist. The sole cause of economic bubbles is government. Inflationary monetary policies by the central bank -- such as the Fed holding interest rates artificially low, thereby overstimulating fundamentally uneconomic investments -- are the primary cause of bubbles.

Government's fiscal policies of tax and spend also distort production into unnatural, uneconomic patterns. The inherent flaw in using government spending to guide and shape production is the same one that plagues socialist economies -- namely, that the government cannot know what the people want as clearly as the people themselves know. Inevitably, government overstimulates production of things that people wouldn't freely choose while depressing production of what the people do want; hence, government makes society poorer than it otherwise would be.

In short, we wouldn't be faced with a potentially cataclysmic deflation today had it not been for decades of foolish government policies that created bubbles.

Economically speaking, inflation is like heroin addiction. We enjoy the "highs" when the bubble inflates and the good times roll, but underneath the surface, our health is eroding. The addict needs to suffer the wrenching pains of withdrawal in order to recover his health. Similarly, in order to get reestablished on a sound economic footing, our society needs to endure the short-term pain that accompanies absurdly overpriced assets crashing back to earth, while the economy is purged of decades' worth of malinvestments, uneconomic patterns of production, and unfathomably massive amounts of unpayable debts.

Another apt analogy is the catastrophic fire that burned half of Yellowstone National Park in 1988. Forests periodically need fires to clear out rotten, moribund growth to make way for vibrant, vigorous growth. Decades of intervention, during which government officials intervened repeatedly to suppress relatively small fires, created the conditions that led to the massive 1988 conflagration. Likewise, government intervention repeatedly has prevented necessary deflationary adjustments from taking their course over recent decades. This has set the stage for a much more severe and widespread deflation.

Right now, the U.S. economy is a dead man walking. If we don't bite the proverbial bullet and go through a painful, cleansing, economically healing period of deflation, the ultimate price we pay will be even worse. Like the heroin addict who can't kick his habit and eventually ODs, someday, the Fed will go too far in its inflationary policies, igniting a hyperinflation -- thereby annihilating the dollar, wiping out the middle class, and totally collapsing the economy. A deflationary correction is the painful but necessary process that would restore our economy to a healthy, sound condition.

Look, I don't relish going through the deflationary ringer. I'm not a sadist cheering for economic hard times. I'm simply reporting the sad economic truth that the longer we postpone paying the piper for past government follies, the higher the price we will have to pay in the future.

The Federal Reserve is committed to unlimited Quantitative Easing. Congress and the White House will continue to spend hundreds of billions of dollars of money in a desperate attempt to preserve the moribund, brittle superstructure of debt and malinvestments-the twin dead-weights that are stifling economic growth. Those debts and malinvestments must be liquidated in order for a solid economic recovery to happen. However, instead of letting the debt to be purged and the malinvestments to be liquidated through painful but rational market readjustments, Bernanke & Co. will try to prop them up with a flood of newly created money.

The powers-that-be in Washington will continue to apply the same quack policies that have brought us to our present parlous predicament. They will thwart the market's natural healing process -- deflation -- and instead unnecessarily prolong economic misery by steering us into an inflationary depression. They are committed to devaluing, and perhaps destroying, the dollar in a futile attempt to avoid the inevitable consequences of excess debt and the uneconomic misallocation of the factors of production (misallocations caused by their own prior interferences with markets). This is the path to economic ruin.

Got gold?

Mark W. Hendrickson, Ph.D. teaches at Grove City College.

Saturday, October 16, 2010

#Fed plan for short-term fix has long-term #risks

I normally provide a link here to the source post but this 'source' says "All rights reserved. This material may not be published, broadcast, rewritten or redistributed." so I'm not crediting them with jack.. ;)

I felt like this was the most important story of the day so wanted to post it here along with some of my own comments..

This article seems, to me, to be more open and honest about our current economic situation than most..

WASHINGTON, D.C. -- Federal Reserve Chairman Ben Bernanke is balancing a short-term fix for the economy with a long-term gamble: His plan to buy Treasury bonds to fight high unemployment and super-low inflation now could ignite inflation later.

I found it interesting to see the word 'gamble' in this AP story.. I have said since the fall of 2008 that what the FED and government are doing is an 'all in' gamble and that if they are wrong our economy is certainly doomed to crash and crash hard.. Of course they know this also..

But Bernanke is signaling that doing nothing would pose the biggest risk of all.

The Fed chief on Friday made his strongest case yet for injecting billions more dollars into the economy. Purchasing the bonds could further drive down rates on mortgages, corporate debt and other loans.

Lower rates could lead people and companies to borrow and spend. And higher spending might help ease unemployment and invigorate the economy.

Most rates are already as low as they have ever been.. Low borrowing rates has not worked to help the economy and, in my opinion, they will never work until consumer debt is under control.

Please see

Should We Be Restarting the Consumer Debt Machine?
By Heidi N. Moore
Posted Friday, April 30, 2010 - 10:59am

for an interesting discussion about consumer debt on thebigmoney.com

The Treasury purchases would have another aim, too: to dispel any notion that consumer prices will stay flat and might even fall. In his speech Friday in Boston, Bernanke indicated that Fed policymakers favor raising inflation, which has all but vanished.

And more inflation could help the economy. Here's how:

Companies would feel more inclined to increase prices. And shoppers who thought prices were headed up would be more likely to buy now rather than wait. Their higher spending could embolden employers to step up hiring. It would also help lift inflation.

No! In my opinion this thinking is completely wrong-headed! This idea is based on the economics of the late 1970's / early 1980's. A period in American history in which the higher prices went the more consumers borrowed and spent. A time when inflation was raging through the economy. The government and the federal reserve would love to duplicate this runaway borrowing and spending of the past. However, see above link, the PROBLEM is consumer debt! Intentionally CAUSING inflation and higher prices will kill the economy not help it! Especially when it comes to anyone and every who is trying to live on a fixed income! In my opinion this crazy attempt to CREATE runaway inflation is insanity! American consumers are already stuggling with too much debt and the government and federal reserve are attempting to create much more debt! As I said, insanity in my opinion..

In the end, as many already know, the REAL GOAL is to reduce the value of our currency, consumers, savers, and those trying to get by on a fixed income be damned, in order for the U.S. government to repaid debt with devalued currency thereby, hopefully, staving off insolvency.

But overhanging the Fed's plan is the risk that it would trigger runaway inflation months or years from now.

Once investors began to fear approaching inflation, they would demand higher rates on bonds. Banks, too, would raise loan rates to compensate for the higher inflation they expect. Workers would demand higher pay. Any strength the economy had managed to gather could dissolve.

Bernanke made clear he's mindful of the gamble. But he also indicated he feels that short-term needs take priority.

There is THAT word yet again.. 'GAMBLE' Is that what we want to DO with our children's future? Gamble..

"There would appear -- all else being equal -- to be a case for further action," Bernanke said, building on the case he first laid out in an August speech in Jackson Hole, Wyo.

The Fed is returning to unorthodox steps like buying government bonds to aid the economy because it's already sliced its key interest rate to a record low near zero.

Here is the unfortunate truth in a nut shell...

Some economists say the Treasury purchases might not work because interest rates already are so low that the benefit of driving them lower would be scant. And lower rates won't help if [businesses and individuals can't afford to borrow, don't want to borrow or cannot qualify for loans.]

To buy Treasury debt, the Fed in effect prints money. As the Fed snaps up Treasury bonds, the rates on those bonds will fall. Rates on mortgages, corporate debt and other loans pegged to Treasury securities will drop, too.

The fed continues to print money, otherwise known as monetizing the debt of the United states government, which Ben Bernanke and the FED previously said they would NOT do. This is an act of TRUE DESPERATION! Pay attention please..

It comes down to supply and demand: Higher demand for bonds lowers their rates, or yields. And it drives up their prices.

Fed policymakers are expected to announce their Treasury buying program at their next meeting Nov. 2-3. Bernanke indicated that a big issue remains unresolved: How big should the Treasury purchases be and how fast should they be carried out?

During the recession, the Fed launched a $1.7 trillion program of buying mortgage securities and government debt. That effort was credited with forcing down mortgages rates, which helped prop up the housing market. The Fed's new program is likely to be much smaller. One Fed official has suggested a $500 billion program. Another has hinted it be $100 billion or less.

Another word/phrase *I* don't care for at all personally above.. "which helped prop up the housing market". That's all the U.S. government and FED have done FOR TWO YEARS NOW! Is to prop up a still FAILING economy!

Still, even purchases of that size risk feeding inflation and, most dangerously, setting off a wave of speculative buying that could inflate the prices of stocks, bonds or other assets. Low mortgage rates after the 2001 recession were blamed for the housing bubble that burst and led to a severe recession starting in late 2007.

Yet another worry: The extra dollars flowing from the Fed's Treasury purchases might send the dollar's falling value even lower and incite a panic. If China and other investors dumped dollar-denominated assets, for instance, interest rates would soar.

And if tougher economic conditions forced the Treasury to sell more bonds to raise money, the national debt, already at $14 trillion, would swell.

The economy is growing at a pace "less vigorous than we would like," Bernanke acknowledged. And inflation is running too low for a healthy economy, he said.

Here we clearly see that even if the federal reserve thieves succeed in creating inflation it could very easily DOOM the economy just the same..

Unemployment, now at 9.6 percent, has been stuck near double digits for more than a year. Bernanke indicated concern that economic growth will remain lackluster and that unemployment will decline only slowly next year. High unemployment would keep consumers cautious in their spending, Bernanke said.

Retail sales did rise in September for a third straight month, the government said Friday. But spending remains too weak to strengthen the economy and lower unemployment. That helps explain why the Fed wants to guard against falling prices.

Because the economy is still so sluggish, "the risk of deflation is higher than desirable," Bernanke said. Deflation is a widespread drop in prices, wages and the values of stocks and homes.

Deflation is dangerous for individuals, companies and the economy overall. Workers suffer pay cuts. Corporate profits decline. Stock values fall. People, businesses and the government find it costlier to pare debt. Foreclosures and bankruptcies rise.

And people spend less, convinced that prices will fall even further if they just wait. That trend is already evident in the housing market. Many would-be buyers are idling on the sidelines, expecting home prices to keep dropping.

As Bernanke spoke, the government issued a report that pointed to why a new Treasury-buying program may be necessary to ward off deflation. Consumer prices excluding the volatile categories of food and energy were flat for a second straight month in August.

This gauge, called "core" inflation, has ticked up just 0.8 percent over the past 12 months. That's the smallest annual gain in nearly a half-century. The Fed's inflation comfort zone is for such prices to hover between 1.5 percent and 2 percent.

And the text above points out what the entire 'game' is all about.. Avoiding the boogy man of deflation..

Here is an excerpt that contains REAL TRUTH about deflation.. Also provided below it is a link to the entire article which, in my opinion, is a MUST read..
Government's fiscal policies of tax and spend also distort production into unnatural, uneconomic patterns. The inherent flaw in using government spending to guide and shape production is the same one that plagues socialist economies -- namely, that the government cannot know what the people want as clearly as the people themselves know. Inevitably, government overstimulates production of things that people wouldn't freely choose while depressing production of what the people do want; hence, government makes society poorer than it otherwise would be.

In short, we wouldn't be faced with a potentially cataclysmic deflation today had it not been for decades of foolish government policies that created bubbles.

Economically speaking, inflation is like heroin addiction. We enjoy the "highs" when the bubble inflates and the good times roll, but underneath the surface, our health is eroding. The addict needs to suffer the wrenching pains of withdrawal in order to recover his health. Similarly, in order to get reestablished on a sound economic footing, our society needs to endure the short-term pain that accompanies absurdly overpriced assets crashing back to earth, while the economy is purged of decades' worth of malinvestments, uneconomic patterns of production, and unfathomably massive amounts of unpayable debts.

Another apt analogy is the catastrophic fire that burned half of Yellowstone National Park in 1988. Forests periodically need fires to clear out rotten, moribund growth to make way for vibrant, vigorous growth. Decades of intervention, during which government officials intervened repeatedly to suppress relatively small fires, created the conditions that led to the massive 1988 conflagration. Likewise, government intervention repeatedly has prevented necessary deflationary adjustments from taking their course over recent decades. This has set the stage for a much more severe and widespread deflation.

Right now, the U.S. economy is a dead man walking. If we don't bite the proverbial bullet and go through a painful, cleansing, economically healing period of deflation, the ultimate price we pay will be even worse. Like the heroin addict who can't kick his habit and eventually ODs, someday, the Fed will go too far in its inflationary policies, igniting a hyperinflation -- thereby annihilating the dollar, wiping out the middle class, and totally collapsing the economy. A deflationary correction is the painful but necessary process that would restore our economy to a healthy, sound condition.
And here is the link to the full article on American Thinker

We MUST STOP the monetary madness emanating from Washington soon before they destroy all of us along with our beloved country..


Thursday, October 14, 2010

The Origins of #Debt #Slavery? -Marriner Eccles

The following excerpt is from the book 'Secrets of the Temple -- How the Federal Reserve runs the country by William Greider

Around 1932..

Marriner Eccles also helped launch the era of liberal credit, the easier terms for borrowers that became standard for American consumers. As a banker who understood leverage, Eccles argued that the government could have more impact on housing through mortgage guarantees and interest-rate subsidies than through direct spending. The funding for public housing, he said, "was just a drop in the bucket as far as need went." But Washington could stimulate millions of housing starts by leveraging the credit market -- knock a percentage point off mortgage interest rates with a direct subsidy and provide government guarantees to induce lenders to make long-term mortgages available, loans running for an unheard-of 20 years. Home mortgages had typically been limited to 7 or 10 years -- which meant prohibitive monthly payments. The New Deal changes in mortgage finance laid the basis for delivering the "American dream" to millions of ordinary families -- a home of their own, purchased with long-term mortgages and payments they could afford.


Just interesting to note that, to me anyway, this guy, Marriner Eccles, seems to be THE guy who started us down the path of ruin that we now find ourselves on..

Most of us have heard "the path to hell is paved with good intentions"..

Was Marriner Eccles an evil guy? No, I don't think so..

However, he DOES appear to be THE guy who, even though he lacked much formal education, helped form the New Deal. And, more importantly to me, he appears to be THE guy who first realized that consumer behavior could be easily manipulated by government action..

Marriner Eccles appears to be THE father of easy credit for Americans. THE guy who first proposed the mortgage market could be manipulated for financial gain through government meddling..

I'm sure he was well intentioned.. However, over time his ideas have become the monster [easy credit and the intentionally evil manipulation of consumer spending] that threatens still to destroy our economy and society..

Was it the very beginning of the sub-prime mortgage mess? The inception of the idea that government could manipulate the economy through housing, mortgages, the expansion of easy credit, even the blatant manipulation of economic data that we see now, for decades to come? The very groundwork that today's consumer debt slavery was built upon?

I'll leave that up to you to decide..


Wednesday, October 13, 2010

#QE Questions

Saw this on the net today.. Very sensible stuff IMO..

You can click here for the source post if you prefer..

by John Rubino on October 13, 2010

It’s been a while since US monetary policy was run with anything approaching a long-term strategy. For the past decade especially the goal has been to get through the week without a global financial collapse. So it’s probably asking too much to expect the Fed to have thought through the implications of another round of quantitative easing. Consider:

If the Fed dumps another trillion dollars into a market where the prices of gold, oil and food are already surging, how will it keep asset inflation from accelerating?

If the Fed accepts soaring asset prices as the cost of staving off a deflationary crash, how will it keep either interest rates from spiking or the dollar from tanking?

If it chooses to suppress interest rates by buying long-term Treasuries and allows the dollar to fall, how will it stop America’s trading partners from retaliating and pushing down the value of their own currencies?

If all the major economies are competitively devaluing their currencies, how will they prevent asset prices and/or interest rates from going parabolic, leading to energy shortages and food riots in the first case and a collapse of the housing/consumer finance sector in the second?

The answer to the last question is that governments can bend economic laws for a time but can’t suspend them forever. So in the long run they can’t control both asset prices and interest rates. When the supply of something — in this case pieces of colored paper or computer bits called “dollars,” “euros” and “yen” — soars, its price plunges. And one way or another, markets react to restore equilibrium.

My Little Town & Sales Taxes

Is Joplin, MO

Today's local newspaper (the Joplin Globe) has the following front page headline above the fold..

Joplin's Sales Tax Revenue Declines

Oddly, as I have noticed is often the case, I don't SEE this headline on the on-line edition of the paper.. It 'seems' as if much of the time stories which point out economic difficulties in the hard copy of the paper DO NOT make the on-line version.. Strange, IMO..

At any rate this story points out the following facts..

Joplin's sales tax receipts were down 2% for the city's fiscal year..

That's down 2% from 2009 proceeds..

And the total is down about 5% from 2008 proceeds..

Our city's finance director said.. "It's [sales tax] not supposed to peak; it's supposed to keep going higher."

She continues..

"It's based on the theory that taxes will go up as prices go up. If people are buying the same amount, sales tax should go up if prices are going up. 2008 was definitely our largest year. If you look historically, we're almost back to the 2005 levels."

Here's what Newton County Commissioner Jerry Carter had to say about sales tax revenue..

"There is no rhyme or reason for the way this sales tax comes in. It is so inconsistent. My guess is that people pay late and that things get bogged down. We've tried to track it (from month to month), and it's almost impossible. You have to look at it on a three-month basis or a year." To see the trends.

What jumps out at me in this story is the statement "If people are buying the same amount, sales tax should go up if prices are going up."

To me this is ponzi thinking.. again.. To think that the taxes needed to support towns, cities, states across the country are based on ever increasing inflation is scary..

This is WHY the government and the Federal Reserve Bank are so afraid of the boogy man.. deflation.. IF it shows up, and, IMO, economic conditions say it NEEDS to, then EVERYONE is doomed as prices fall and an economy, based entirely on the accumulation of debt and ever increasing inflation, collapses..


The actual article itself is no where to be found on-line.. Odd, to me, how this happens.. try searching for a national story out of your local paper on-line.. It 'appears', to me anyway, that the same story is rehashed, reworded, changed around, for many different regions of the country.. Surely not..

Monday, October 11, 2010

#America on the brink of a Second #Revolution By Paul B. Farrell, MarketWatch

you may click here for the source post if you prefer

By Paul B. Farrell, MarketWatch

ARROYO GRANDE, Calif. (MarketWatch) -- “What’s distinctive about the Tea Party is its anarchist streak -- its antagonism toward any authority, its belligerent self-expression, and its lack of any coherent program or alternative to the policies it condemns,” warns Jacob Weisberg in Newsweek. But why not three cheers for the Tea Party Express?

Admit it, something historic is brewing. And yes, it’s good for America, even the anarchy. Revolution is renewal. Tea-baggers want to take on both parties, “restore honor” and “take back the country.” Bring it on, the feeling’s mutual.
Obama: GOP pledge a disastrous plan

President Barack Obama used his weekly radio address Saturday to accuse Republicans of overlooking the middle class by creating policies that would benefit only the rich while making a pledge of his own to continue supporting the national economy.

OK, maybe most Americans just silently mimic the words, “we’re mad as hell, won’t take it any more.” But watch out: After November the campaign’s shrill rhetoric explodes into action.

Tea-baggers are kicking the revolution into high gear. Debt is sinking America. Both parties are to blame. So vote out incumbents. Spare no one. We need new leadership, another Reagan or Truman. Congress better get the message: Cut that budget, or they’ll dump the rest of you in the coming Great Purge of 2012.

Unfortunately they’re tone deaf. Congress cannot see past the election. All that changes in November.

So thanks Tea Party, Vegas odds must favor a Second American Revolution. Actually, the revolution is already roaring, hot, it’s about time. The GOP and the Dems had more than a decade. But America’s worse off. We need a real revolution to restore sanity … or we can kiss democracy and capitalism good-bye, permanently.
Warning: Another revolution will cost investors 20% more losses

Yes, big warning, the Second American Revolution will extract painful austerity, not the “happy days are here again” future touted by tea-baggers. For years it’ll be impossible for most of America’s 95 million investors to develop a successful investment or logical retirement strategy.

Why? Political chaos will translate into extreme volatility and a highly unpredictable stock market. Result: Wall Street will lose another 20% of the value of your retirement portfolio in the next decade, just as Wall Street did the last decade. So if you think you’re “mad as hell” now, “you ain’t seen nuthin’ yet!”

Here’s the timeline:

Stage 1: The Dems just put the nail in their coffin by confirming they are wimps, refusing to force the GOP to filibuster the Bush tax cuts for America’s richest.

Stage 2: The GOP takes over the House, expanding its war to destroy Obama with its new policy of “complete gridlock,” even “shutting down government.”

Stage 3: Obama goes lame-duck.

Stage 4: The GOP wins back the White House and Senate in 2012. Health care returns to insurers. Free market financial deregulation returns.

Stage 5: Under the new president, Wall Street’s insatiable greed triggers the catastrophic third meltdown of the 21st century Shiller predicted, with defaults on dollar-denominated debt.

Stage 6: The Second American Revolution explodes into a brutal full-scale class war rebelling against the out-of-touch, out-of-control greedy conspiracy-of-the-rich now running America.

Stage 7: Domestic class warfare is compounded by Pentagon’s prediction that by 2020 “an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge” worldwide and “warfare is defining human life.”

What’s behind our 2010-2020 countdown? It became obvious after reading the brilliant but bleak “Decadence of Election 2010” report by Prof. Peter Morici, former chief economist at the International Trade Commission. He sees no hope from America’s political parties, just a dark scenario ahead.

Here are the 10 points we see in his message:

1. Expect nothing positive from Dems, the GOP or Tea Party

Yes, we’re all “justifiably ticked off.” But “Democrats, Republicans, and yes the Tea Party offer little that is encouraging.” Earlier Morici warned: “Democratic capitalism is in eclipse. … Politicians have deceived voters,” and are “suffering from delusions of grandeur, self deception and good old-fashioned abuse.”
2. Democracy has become too-big-to-govern … by anyone

“The current economic quagmire is a bipartisan creation.” Bush failures led to a “Great Recession … reckless Wall Street pay and fraud, a breakdown in sound lending standards by Fannie Mae, Freddie Mac … Countrywide, and a huge trade deficit with China and on oil” leaving “Beijing and Middle East royals with trillions of U.S. dollars that they invested foolishly” in bonds “financing the housing and commercial real estate bubbles.”
3. Clinton, Bush, Obama policies all feeding revolutionary flames

Even before Bush, “all was set in motion by bank deregulation engineered by Clinton … Secretaries Robert Rubin and Lawrence Summers … Clinton’s deal to admit China into the World Trade Organization” handed “China free access to U.S. markets” while blocking exports. Earlier Dems blocked “domestic oil and gas development” and froze “auto mileage standards.” Obama “finally imposed higher mileage requirements,” but after pushing offshore drilling, he “punished the entire petroleum industry” for the BP disaster.
Will Pelosi allow tax vote?

Indiana Republican Congressman Mike Pence and Stephen Moore discuss taxes.
4. Bush’s biggest mistake: Goldman CEO Hank Paulson

Morici admits: If Bush is “culpable for anything, it was to not see the gathering storm on Wall Street.” Worse, his Treasury picks were disasters: [John] Snow was clueless, Paulson devious. He conned a clueless Congress into bailout trillions, “believing banks could borrow at 3% and lend at 5 and pay MBAs three years out of school five-million-dollar bonuses to create mortgage backed securities.” Greed drove the Bush Treasury.
5. All partisan political leaders are destined to sabotage America

One thing is clear to Morici: Not only were America’s leaders a “bunch of second-rate incompetents” on both the Clinton and Bush teams, “Obama’s ratcheting up government spending and taxes won’t fix what’s broke, and neither will the GOP prescription of tax cuts and deregulation.” Get it? Democracy is in a classic double-bind, no-win scenario.
6. America’s democratic capitalism trapped in systemic failure

Morici simply dismisses “Obama’s two signature initiatives -- health-care reform and financial services reregulation.” They “simply don’t work.” Why? Politicians “failed to address the root problem, Americans pay 50% more for doctors, hospitals and drugs, than subscribers to national health plans in Germany, France and other decadent socialist European countries.” Yet, insurers hate reform, will self-destruct America first.
7. Wall Street’s insatiable greed is a virus that never sleeps

Wall Street banks are “back to their old tricks,” warns Morici, “hustling municipal governments into the kind of quick-fix budget schemes, like selling parking meters and airport fees.” Why? Wall Street’s “hustling shoddy corporate bonds that lack adequate collateral and may never be repaid” to justify their absurd mega-bonuses. And they’ll keep doing it till the revolution creates a new non-capitalist banking system.
8. New political leaders offer no hope -- Wall Street rules America

GOP’s next leaders will fail: “Cutting taxes and mindless deregulation are not the answer.” We need the revenue. They have no real plan to trim “$1 trillion from federal spending … few believe deregulation will fix health care or Wall Street.” The GOP has no “effective government solutions to health care, Wall Street, fixing trade with China, and dependence on foreign oil.” And the Tea Party “only offers a purer form of failed Republicanism. Tax and spend less, and turn the country over to the robber barons.”
9. Praying for a messiah, we’re sleepwalking till the revolution

Morici’s solution: America “needs a prophet, another Harry Truman or Ronald Reagan.” But we’ll never get one, until a catastrophe hits. Wall Street’s so greedy, so corrupt, so untouchable, so much in control, they will bankroll and control all future “prophets.”
10. The Second American Revolution coming

Yes, extreme austerity: “Americans must accept fewer government-paid benefits -- for the rich, the poor and those in between -- and must acknowledge the market works best most of the time, but it is not working in health care, banking, China, and oil.” Huh? Sounds like classic economist’s double-speak: “The market works most of the time” … except the market doesn’t work at all in the four biggest economic sectors? Fuzzy thinking?

Morici warns, we need “new approaches to regulating, yes regulating, what the medical industry charges, bankers pay themselves, what Americans tolerate and buy” and “guiding big oil and car companies to sustainable solutions.”

Holy cow, he suddenly sounds more like a liberal politician than conservative economist. Yes, he’s reflecting the total chaos coming on the short road to the Second American Revolution.

In the end, however, you have to admit the good professor does make a lot of sense: “Sounds radical but running the world has never been a choice between statism and anarchy,” says Morici.

Choice? Unfortunately, he offers a false choice: Running America effectively means accepting “that the private sector is not the enemy and government is not evil, but neither can serve the other, and us, if value is not seen in each.”

Laudable, but impossible because once the GOP Tea Party of No-No is back in power, compromising is not on their agenda, “gridlock” is. So anarchy is the only choice -- they will never, never work with Democrats … until forced by the Second America Revolution when the middle class finally rises up and overthrows the greedy wealth conspiracy of Wall Street, Washington, CEOs and the Forbes 400.

Till then, anarchy rules as the conspiracy keeps looting Treasury, stealing from taxpayers, conning us all.

#QE II: How to #Invest in #Manipulated #Markets

You may click here for the source post on Real Clear Markets if you prefer..

By John DeFeo

NEW YORK (TheStreet) -- On paper, the recent rally in U.S. equities may seem impressive -- but priced in gold (a representation of the U.S. dollar's diminished purchasing power), U.S. stocks have ridden a downward trajectory for months.

Blame the Federal Reserve.

The Federal Open Market Committee, through its purchases of dollar-denominated assets, has been steadily injecting liquidity into the U.S. economy. The process (known as quantitative easing) increases the U.S. money supply, allowing financial institutions to boost reserves and the U.S. government to borrow (and repay external debts) in a debased currency. In essence, the U.S. economy is "lending" itself money by creating more.

Earlier this year, famed value-investor Seth Klarman made a disturbing statement: "There is nothing natural in the markets. Everything is being manipulated by the government."

Today, the situation has worsened, as most asset classes have lost historical correlations and speculators prepare for continued intervention by the U.S. central bank.

IMF Advises Continued Welfare -- for the Rich

The International Monetary Fund's October 2010 Global Financial Stability Report warns that additional trillions in taxpayer support may be necessary to shore up the balance sheet of our financial system. This is a tough pill to swallow considering that Wall Street paid out record bonuses in 2009 -- with many of the largest bonuses issued within firms that received taxpayer support.

The U.S. financial system has become sickeningly anti-capitalistic -- rewarding the most productive members of institutions that produce negative economic utility. In other words, we continually reward the most destructive members of our society.

During the height of the U.S. property/equity bubble, honest bankers may have knowingly issued bad loans as a last-ditch effort to stay competitive in an irresponsible business environment.

Today, consider America the world's most irresponsible bank.

The U.S. policy of quantitative easing is being adopted by foreign countries, desperate to lower the relative value of their currency, with the hope of increasing exports. The Bank of Japan has recently upped the ante with a $60 billion asset-purchase program, leaving open the possibility of purchasing ETFs and REITs (a new tactic in currency warfare).

Of course, as more countries engage in this "competitive devaluation," the less (intended) impact it will have (with greater potential for unforeseen consequences and societal costs).

Investment Policy in a Manipulated Market

Determining an intelligent investment policy in a manipulated market is a challenging, if not impossible task. Nevertheless, let us attempt to construct a policy with consideration of the following points:

- On a relative basis, U.S. stocks are far more attractive than U.S. bonds. The earnings yield of the S&P 500 (using 10-year trailing data), stands at 4.73%. Comparing this to the 2.40% yield on a 10-year U.S. Treasury note and the 3.71% yield on a 30-year U.S. Treasury bond -- equities possess a comfortable margin of safety in the medium and long term. While stocks may outperform on a nominal basis, this outperformance may not exceed the rate of devaluation in the U.S. dollar (resulting in paper gains, with an actual loss of purchasing power).

-Fear of an increased money supply has driven gold to record prices (priced in U.S. dollars). Other precious metals, and their respective ETFs, have followed a similar trajectory.

-The Federal Reserve has not published M3 data since 2006, obfuscating the true picture of U.S. money supply. Similarly, there is little transparency as to the gold supply held by central banks and governments.

-An increase in M3 (the broadest measure of money supply) will not immediately increase consumer price inflation.

-Global equity markets remain susceptible to manipulation and volatility, as a result of algorithmic trading.

Considering the near-2:1 yield differential between U.S. equities and medium-term debt, investors may wish to allocate their portfolios in a similar proportion. Perhaps 50% stocks and 25% bonds. Holding cash during a period of currency debasement may seem counterintuitive, but an allocation of 15% cash may offer opportunities to capitalize on market volatility and mispricings. Lastly, investors may wish to hold 10% of their portfolio in a hard asset, such as gold, as a form of "insurance" policy against a prolonged debasement of paper currencies. Now, let us expand our conclusions:

1. Stocks should be purchased only on the basis of attractive absolute valuations. The investor may wish to focus on large corporations with diverse global sales (in essence, diversifying the investor against specific currency risk). Exxon Mobil(XOM), Coca-Cola(KO), and Johnson & Johnson(JNJ) fit these criteria.

2. Bonds should be purchased directly -- whenever possible -- to avoid the risks associated with bond ETFs and mutual funds. If the investor must purchase bonds through an associated fund, he or she must be certain that the underlying holdings are guaranteed by the U.S. government. Corporate bonds should be avoided, unless they can be purchased at a distressed valuation and have a sufficient revenue-to-debt coverage ratio. The current yield differential between corporate debt and U.S. does not compensate for the fact that governments can print money; corporations cannot.

3. Gold -- if purchased for protection (as opposed to speculation) -- should be held in physical form. That's because precious metal ETFs such as SPDR Gold Shares(GLD) and iShares Silver Trust ETF(SLV) offer investors no legal claim against the underlying asset, they should be viewed as speculative instruments.

Final Thoughts

The individual American taxpayer proportionally owes $1.2 million in U.S. debt and unfunded liabilities -- a situation that is likely to worsen, if not become an unsolvable problem.

Americans may be best served by investing time in understanding the economic realities of our country and supporting leaders that campaign on tough, unpopular choices -- while actively working to restoring fairness to our markets and the capitalist system.

As a final thought, perhaps we should reconsider why a Congress member is elected every two years, our president is elected every four, a senator is elected every six years -- but a Federal Reserve governor is appointed every 14 years.

-- Written by John DeFeo in New York.

Saturday, October 9, 2010


You may click here for the source post if you prefer..
8 October 2010 by Comstock

By Comstock Partners

On Tuesday the market soared on the grounds that global efforts to engage in another round of monetary ease and devalue currencies would boost economies around the world. We think that the market’s initial reaction is a wrong-footed move that will soon be reversed upon further reflection. What we are actually facing is an all-out global currency war and old-fashioned “beggar-thy-neighbor” policies where every nation tries to devalue its currency to create more exports in order to boost its economy at the expense of every other nation.

It is obvious, however, that it is impossible for all currencies to decline in relation to each other. The failure then leads to other desperate measures to increase protectionist barriers such as higher tariffs, quotas and various restrictions on international capital flows. The result is a collapse of world trade leading to depression and the dreaded deflation that nations are trying to avoid in the first place. (Please see attachment). As such, the recent actions of Japan, the anticipated start of QE2 by the U.S. and general global currency devaluation moves are something to be feared rather than celebrated. We know because we’ve been there before and know how it all ends. (See the Great Depression, completive devaluations and Smoot-Hawley tariffs.)

The currency wars started slowly, but have recently been stepped up. Don’t be fooled into thinking that this is merely further monetary easing. The world has already undergone the most massive round of easing in history and we are facing a liquidity trap where further easing will have minimal effect. The real goal of various nations is to devalue. The Fed has indicated its intention to institute QE2, and, in anticipation, Japan has announced its own quantitative easing program to protect any additional rise in the Yen. The U.S. has stepped up its pressure on China to let the Yuan rise by a significant amount. The House has passed legislation allowing economic sanctions on China and other countries that are manipulating their currencies to gain trade advantages. China is vigorously resisting the pressure out of fear that a substantially higher Yuan would slash exports, leading to domestic unemployment and social unrest that would threaten the regime.

Other nations that have engaged in various forms of quantitative easing are Brazil, South Korea, Taiwan, Peru, Argentina and Switzerland. The Brazilian Real has already appreciated 25% against the dollar this year, and the Brazilian Finance Minister has stated his willingness to buy unlimited amounts of Dollars. In just a small sign of what’s to come, Brazil has also implemented a 2% tax on financial transactions to slow down the amount of “hot” money coming into the country. Meanwhile the ECB is one of the few areas trying to actually withdraw its post-crisis support of the banking system, and also has no plans to reduce its 1% refinancing rate any further. However, the Euro has increased 17% against the Dollar and 7% against an average of its major trading partners. This could impact EU growth rates in the period ahead and also put even more pressure on the already fragile economies of their peripheral nations such as Greece, Portugal, Ireland and Spain.

The IMF and World Bank are meeting this weekend, and these issues are obviously on the agenda. Leaders of both organizations have warned that a currency war could destabilize global financial markets. World Bank President Robert Zoelick stated that tensions over currencies could undermine investor confidence at a time when the world needs the private sector to boost growth. We doubt, though, that anything of real significance will come out of the meeting other than a general statement of good intentions. What we fear is that every nation will be bound so much by its own domestic political considerations that compromise will prove to be too difficult. What we hope is that we are not on the same path that led to the Great Depression.

#Financial #Warfare and the #Failure of US #Military Leadership

Couldn't have said this stuff any better myself..

You may click here for the source post if you prefer

by Damon Vrabel

The "War on Terror" has become the most successful military diversion in history, having lasted twice as long as WWII so far. While the US and other countries are under severe attack by financial powers through the corporate system and the currency and bond markets, the US military is convinced that people living in remote deserts are the threat. So they’re busy killing some of the poorest people in the world while the country is being attacked by the richest. On the one hand, this is a more impressive Machiavellian chess move than the Calais diversion in WWII that opened up the Normandy attack that would seal Germany’s fate. On the other, it’s just embarrassing to see how easily millions of grown adults can be fooled in the face of the obvious.

What’s obvious? Debt

Germany’s foreign debt which led to WWII and its eventual death: $31.4 billion ($400 billion in 2010 dollars).

US’ foreign debt which could lead to WWIII and its eventual death: $4 trillion.

While necessary in WWII to destroy Germany’s productive core, a military component to WWIII though possible is not necessary since the US’ productive core has already been destroyed.

The United States has a foreign debt obligation exponentially larger than Germany’s, which was universally recognized as extreme and unpayable. So what adjectives should be used to describe the US’ debt? Everyone also recognizes that Germany’s debt led to its dictatorship, which in turn led to WWII and its eventual foreclosure by foreign powers to collect for the creditors and force it under a new central banking establishment. So what future is the US moving toward?

As John Adams warned long ago, debt is a great way to enslave countries.

Maintaining Clarity

Knowing it was under attack but unclear of the real enemy, the German population was stirred into a paranoid fear of itself, its Jewish members in particular. The same thing is happening in the US as the left vs. right civil war has never been so extreme. And the corporate class, who in 08/09 received the biggest welfare program in history, is now blaming unions and the lower class for the pennies in welfare they receive. The media is also stoking the Christian vs. Muslim fight to keep the masses distracted. And now there are glimpses of a movement to stir opinion against the Jews – the scapegoat the multi-national banking elite has always hidden behind.

The answer is very simple. Thomas Jefferson explained it over 200 years ago. The problem is not Muslims, Jews, unions, the left, or the right. That’s all a distraction. The problem is the aristocracy controlling and restructuring the masses through banks, corporations, and other financial institutions. Jefferson said they’re more dangerous than standing armies. To bring his accurate metaphor up to date, big armies like JPM Chase, Goldman Sachs, and the IMF fight the main battle, hedge funds like Soros stand ready to run bombing raids, and the Banks of China and Japan control the WMDs. The US is getting a taste of the neoliberalism it has forced on other countries for decades, and if it steps out of line, a financial version of payback for Hiroshima may be on the horizon.

Message to my old military colleagues: the US has been blatantly attacked by the most powerful weapon in history – leveraged finance – and rather than defending the country, you’re exacerbating it by killing poor people in deserts for the military-industrial-CIA complex to bring them under the rule of the global banking system and secure their resources. Despite the propaganda, there is no honor in being an assassin for corporate empire. Prove Kissinger wrong, the guy who according to Bob Woodward called you "stupid animals" to be used as pawns. This is what civilian strategists think of you, so stop being suckered by them into killing the weak on the orders of the strong.

You must think critically and wake up to the real threat facing the US. The old "we just do what we’re told" mentality doesn’t fly anymore as you carry out unconstitutional, immoral orders based on fake intelligence. All your civilian leaders are compromised and co-opted by their membership in the CFR – the rich kid Wall Street club fueling the globalized empire. So are the top generals and a few dweeb colonels from places like Princeton’s Woodrow Wilson School who get a rush out of planning empire. They violate their oaths daily simply by being members of this group. So you in turn violate your oaths by carrying out their orders.

Stop participating in the efforts that are bringing this country, and much of the world, to its knees. Being a mercenary for corporate powers is not honorable – it’s disgraceful. Stand down. Then focus on the real threat and help the people restore the country while saving the rest of the world from the raging last gasps of a dying empire.

October 4, 2010

Damon Vrabel [send him mail] is the founder of the Council on Renewal, having recovered from his indoctrination at Harvard Business School and the US Military Academy. See his Renaissance 2.0 video class and follow his blog.

Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

Friday, October 8, 2010

#Obama the master spy --- of us By Nat Hentoff

Click here for the source post if you prefer..

Before his forced resignation, President Richard Nixon declared, "When the president does it, that means it is not illegal." Our current chief executive, however, speaking this year at the Pentagon on Sept. 11, said of our terrorist enemies: "They may seek to exploit our freedoms, but we will not sacrifice the liberties we cherish or hunker down behind walls of suspicion and distrust."

By contrast, on Sept. 27, Pulitzer Prize-winning reporter Charlie Savage, the press's Paul Revere guardian of those cherished liberties, broke a story in The New York Times that next year President Obama will send Congress "sweeping new regulations for the Internet, arguing that their ability to wiretap criminal and terrorism suspects is 'going dark' as people increasingly communicate online instead of by telephone."

And this is how our individual privacy, already on life support, is going to be further violated, not only on the Internet, as former constitutional lawyer Glenn Greenwald reports (salon.com, Sept. 27), relying on Savage's disclosure:

Commander Obama "would require all communications, including ones over the Internet, to be built so as to enable the U.S. government to intercept and monitor them at any time when the law permits."

Keep in mind that next year after the midterm elections, it will be that Congress determining what the law is.

If Obama's lockstep Democrats are still in control next year, Glenn Greenwald continues, "Internet services could legally exist only insofar as there would be no such thing as truly private communications; all must contain a 'back door' to enable government officials to eavesdrop."

Would this still be America?

There's more to Obama's euthanizing of the Fourth Amendment in Charlie Savage's reporting: "Essentially, officials want Congress to require all services (ALL services) that enable communications -- including encrypted e-mail transmitters like Blackberry, social-networking sites like Facebook, and software that allows direct 'peer-to-peer' messaging like Skype -- to be technically capable of complying if served with a wiretap. The mandate would include (the government) being able to intercept and unscramble encrypted messages."

As Sen. Frank Church said long ago when he was the first to discover the omnipresent spying on us of the National Security Agency (NSA), eventually, "no American would have any privacy left, such is the capability to monitor everything. … There would be no place to hide."

Not at all surprisingly, President Obama has extended the reach -- and just about total lack of accountability -- of the NSA.

But if the Republicans take control of Congress after the midterm elections -- and then under a new Republican president in 2012 -- is there any certainty that we may begin to be under the protection of the Fourth Amendment again?

Insofar as the tea partiers will continue to be an influence on the Republicans -- having already been instrumental this year in re-electing some -- I have not, as I've reported, seen much concern among them about our vanishing privacy (though I admire the tea partiers declared devotion to the Constitution).

As of this writing, I have no idea who will be the Republican presidential candidate in 2012, but I'm not aware that any of the potential leading Republican candidates are impassioned about the Fourth Amendment.

Even if she's not a candidate, the perennial newsmaker Sarah Palin will be an influence on the 2012 elections. She probably doesn't remember, but I was the first national columnist to recommend to John McCain that she be on his ticket, having read of her independence of party orthodoxy in Michael Barone's invaluable "Almanac of American Politics," as governor of Alaska. Anyway, I strongly recommend to firebrand Palin what Justice Louis Brandeis wrote in his dissent in the first Supreme Court wiretapping case, Olmstead vs. United States (1928):

"Discovery and invention have made it possible for the Government, with means far more effective than stretching upon the rack, to obtain disclosure in court of what is whispered in the closet. … The progress of science in furnishing the Government with means of espionage (on American citizens) is not likely to stop with wiretapping." Was he ever right!

"Ways may some day be developed," Brandeis continued, "by which the Government, without removing papers from secret drawers, can reproduce them in court." (He didn't foresee the Patriot Act's giving the FBI permission to sneak into our homes when we aren't there and photograph those papers.)

The time did come, as Brandeis prophesied, when the Government "will be enabled to expose to a jury the intimate occurrences of the home" -- and any of our communications in almost any form, if this Obama legislation becomes and remains law.

What Brandeis also warned -- and this should be remembered during the midterm and 2012 elections: "The makers of our Constitution undertook to secure conditions favorable to the pursuit of happiness. They recognized the significance of man's spiritual nature, of his feelings, and of his intellect. … They sought to protect Americans in their beliefs, their thoughts, their emotions and their sensations. They conferred, as against the Government, the right to be let alone -- the most comprehensive of rights, and the right most valued by civilized men. To protect that right, every unjustifiable intrusion by the Government upon the privacy of the individual, whatever the means employed, must be deemed a violation of the Fourth Amendment."

And must be deemed as being at the core of what Barack Obama continuously subverts in "the liberties we cherish."

I deeply hope the tea partiers will add Justice Louis Brandeis to their reading as they work to restore the Constitution's separation of powers. Consider the effect on new generations growing up under government insisting on back doors into what we say, feel and think. Sending Obama -- and any Democrat or Republican who supports his "big brother" mentality -- back into private life is the change we must believe in to get our basic freedoms back.

Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.

Nat Hentoff is a nationally renowned authority on the First Amendment and the Bill of Rights and author of several books, including his current work, "The War on the Bill of Rights and the Gathering Resistance".

Thursday, October 7, 2010

KNOW your #Enemy part II #Trading #Markets

I often talk about how complexity is a powerful force that is intentionally used AGAINST human beings by governments and financial elites around the world.. Unfortunately these entities can DEPEND on the majority of human beings acting irrationally when/if presented with certain stimuli as determined by scientific discovery..

Who controls the scientific field(s) of study in the United States and every other developed nation on the planet?

The very same people who control global finance, the government, central banks and here, their Primary Dealer cohorts..

Science is a fantastic field, undertaken for the most part by seriously intelligent people seeking the BETTERMENT of mankind.

However, that is NOT always the case..

For, just like nuclear technology, science of all sorts can be used either for the good of mankind, or, for evil..

--- From Wikipedia on the funding of science
The ancient foundations of the sciences were driven by practical and religious concerns and or the pursuit of philosophy more generally. From the Middle Ages until the Age of Enlightenment, scholars sought various forms of noble and religious patronage or funded their own work through medical practice. In the 18th and 19th centuries, many disciplines began to professionalize, and both government-sponsored "prizes" and the first research professorships at universities drove scientific investigation. In the 20th century, a variety of sources, including government organizations, military funding, patent profits, corporate sponsorship, and private philanthropies, have shaped scientific research.

And from the same source

Big Science is a term used by scientists and historians of science to describe a series of changes in science which occurred in industrial nations during and after World War II, as scientific progress increasingly came to rely on large-scale projects usually funded by national governments or groups of governments.

It IS my suggestion that it IS Big Science that we all (peons of the world) struggle/jihad against.. And complexity is one of the major tools used by elites to convince peons/sheeple that the 'things' that go on in our world are far to complex for us to ever hope to understand.. Best to leave ALL decisions of any import to "professionals" to "managers" to "specialists" to "scientists"

Then our own governments, central banks, Primary Dealers, corporations USE all this scientific study/research by professionals, managers, specialists, scientists AGAINST us! EVERY F*CKING TIME THEY CAN! IN EVERY F*CKING WAY THEY CAN!

But I digress.. Today is supposed to be about trading markets.. Any market.. equities, commodities, foreign exchange, it does not matter..

Here (same link as above) is what *I* chose to read this morning.. My ONLY hope is that it will help someone, anyone, better understand the predicament all peoples of the world find themselves trapped within..

Here is just a tiny sample of some of the things gleaned from reading this ONE page of information.. This is what YOU are up against friend.. Be careful for God's sake..

"Behavioral #economics and finance theories developed almost exclusively from experimental observations and survey responses"

"(fMRI) allows determination of which brain areas are active during #economic decision making"

"Experiments simulating #markets such as #stock #trading and auctions can isolate the effect of a particular bias upon behavior"

"Heuristics: People often make decisions based on approximate rules of thumb, not strict logic."

"Framing: Collection of anecdotes & stereotypes that make up mental emotional filters individuals rely on 2 understand & respond 2 events"

"#Market inefficiencies: These include mis-pricings, non-rational decision making, and return anomalies."

"built models based on extrapolation (seeing patterns N random sequences) & overconfidence 2 explain security #market under & overreaction"

"Behavioral #finance and #economics rests as much on social psychology within large groups as on individual psychology" #WeaponsTheyUse

"behavioral economists are actively investigating neuroeconomics, which is entirely experimental and cannot be verified in the field."

"The central issue in behavioral finance is explaining why #market participants make systematic errors" < SO they can B taken advantage of!

"Technical analysts consider behavioral #economics' academic cousin, behavioral finance, 2 be the theoretical basis for technical analysis"

"Other key observations include asymmetry between decisions 2 acquire or keep resources known as "bird in the bush" paradox & loss aversion"

"Loss aversion appears 2 manifest itself N investor behavior as reluctance 2 sell shares or equity if doing so would result N nominal loss"

"Experimental finance creates an artificial #market through simulation 2 study ppls decision-making process & behavior N financial markets"

"overreaction occurs if the #market reacts too strongly or for too long to #news, thus requiring adjustment in the opposite direction"

"for an anomaly to violate #market efficiency, an investor must be able to #trade against it and earn abnormal #profits"

"professional investors and fund managers seem to hold more #bonds than one would expect given return differentials"

"Modeling using the concepts of behavioral effects together with the non-classical assumption of the finiteness of #assets"

These Primary Dealers, central banks, banks and indeed even the Federal Reserve itself USE this scientific information to trade against you every moment of every day.. The responsibility of due diligence is squarely upon YOUR shoulders alone..

#Trading is a #game of psychological #warfare.. U must learn 2 enter @ the point of maximum #pain The instant U R proven wrong U R right

U R NOT N a #fair #game when U #trade #markets.. U R battling the best scientists #money can buy.. They know much more abt U than U do!

The #trick is 2 stay extremely small so U can experience/feel the #pain w/out be destroyed BY it.. Buy/sell maximum pain #Trading

Please note this is one TINY little piece of scientific endeavor in dealing ONLY with Behavioral economics

People.. namely governments, military, central banks, Primary Dealers, banks, mega corporations both FUND and USE science not for the betterment of mankind but as a way to better control humanity itself.. For with control comes power and wealth.. This has always been so..

So PLEASE, if you wish to risk your hard earned money in the rigged markets we are forced to work in do your homework! Study thoroughly the link above.. Understand WHO your enemy IS and how they seek to not understand you.. but use that information to control and, if necessary, destroy you..

If U R going 2 #risk your #money N #markets U NEED 2 understand that it IS a rigged #game! Primary Dealers use EVERYTHING they can against U

Don't live in a bubble defined by what night American Idle is on TV and shopping on-line at work..

I received a few DMs today (private messages on twitter for those who do not know) that I would like to share with you.. They are from a good friend of mine who 'gets it'.. You can follow him as @mika2k1 on twitter if you like ;)

"You don't beat them. You refuse to play. Without you they don't exist. That's what you need to understand."

"It's a question of awareness. People are fed poison and are propagandized to like it, while they die a quiet death of depression."

"People are not as aware of what's ailing them because they are deliberately distracted and many are outright medicated w anti-depressants."

"The fight is not to fight. If you ignore them completely, you will win. Fighting them only plays into their hands."

"If everyone stops buying CocaCola, there will be no CocaCola. Same applies to everything they constructed. Stop using it and they will die."

"Don't underestimate the power of the individual. You ARE creating ripples in space-time. These things take time to work themselves out."

Me again..

WE, the people, have the power.. WE control the money.. 'They' ALLOWED us to have it.. the number of true elites is TINY.. WE can take it ALL back from them merely by REFUSING to participate in their silly manipulative GAMES! Lets DO IT!

NOT participating IS the solution 2 ALL of our problems HOW do WE make it happen? STOP buying worthless #plastic CRAP! STOP #borrowing their WORTHLESS #fiat #money!

STOP eating their #food! It is poisoning U! When/if UR #sick WHO gets the #money?! Is it good, or bad, 4 our #healthcare system 4 MORE ppl 2B sick?!


Additional reading

behavioral science finance

Behavioural sciences

Social Sciences