Currency Destruction
By Mr Practical Jan 28, 2009 11:15 am
Creating money robs it -- and us -- of its value.
A government given the power to create money (debt) out of nothing, as our current financial system has been allowed to do since the creation of the Federal Reserve (particularly after Bretton Woods) results in the destruction of the value of the currency. Thomas Jefferson would label our current system unconstitutional.
The plan is a derivation of all the previous plans, with a new name and a new sponsor - the FDIC. Does anyone believe the FDIC can manage bad assets any better than the private market did? What the FDIC can do, with the help of the government, is create money (debt) to buy bad debt (I'm not going to call them “assets”). But what price do they pay the banks for it?
If a bad loan has a 50% chance of being paid back, perhaps its market value is $0.60 on the dollar. If the government pays $0.40 on the dollar for it they have a reasonable chance of getting the value back (as long as the situation does not deteriorate further).
But if the government buys the bad debts at $0.40 from banks, banks will have to take huge losses and possible go bankrupt. This is because they have no capital left to absorb those losses. I would guess the government would have to pay $0.75 on the dollar for banks to be able to transfer/break-even. This is probably what the government is thinking. So the chances of getting that money back for taxpayers is very poor.
To increase those odds, the government will then transfer wealth from the productive ones among you to those who have to pay back that debt. They will pay the healthcare and education and give poor jobs to people in debt. They will borrow the money to do this from our children. Essentially they will create money today and worry about paying it back later. When you create money, you devalue the money.
This is what the government plan is: To further destroy the value of the currency to try to help people and the economy. But remember: An economy is based on production, not the ability to borrow. The standard of living is based on wealth, which is created by production or income generation, not the ability to borrow that wealth from someone else.
We were borrowing from the rest of the world to keep our standard of living high. Now we're increasingly borrowing from our children, who will eventually experience either much higher taxes or a much lower dollar; either will lower their standard of living.
But my words will fall on deaf ears. Policy is settling in. We just confirmed a Secretary of the Treasury who was directly responsible, as head of the New York Federal Reserve, for monitoring proper capital at all of our money center banks. They failed, because they didn't have enough capital to support the vast lending they were doing. Geithner isn't going to change his tune.
The one thing we can be sure of: The more government says these plans will “get us back on track to long-term 'healthy' economic growth," the less that will be true. We're only sustaining a too-high standard of living at the expense of our children.
The more the government pays over the real price for bad loans, the less deflation there will be (debt destruction) and the quicker hyper-inflation (currency destruction) will ensue.
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2009-01-28 11:54:35
Shallow and long versus deep and short?
Great article.
Regarding: "This is what the government plan is: To further destroy the value of the currency to try to help people and the economy."
I think they are trying to prevent an implosion and the deflationary spiral. Excess debt in the economy will be destroyed, it is a question of how quickly. No matter what they do the net will be deflation. They just can't print fast enough.
I think they are targeting a Japan like outcome (slow).
But I can't pretend to know what would happen if you let the markets quickly correct. It could be such a deep hole that the systemic shock takes the whole system under? Instead of a slow correction, there could be a fast over-correction?
Regarding: "This is what the government plan is: To further destroy the value of the currency to try to help people and the economy."
I think they are trying to prevent an implosion and the deflationary spiral. Excess debt in the economy will be destroyed, it is a question of how quickly. No matter what they do the net will be deflation. They just can't print fast enough.
I think they are targeting a Japan like outcome (slow).
But I can't pretend to know what would happen if you let the markets quickly correct. It could be such a deep hole that the systemic shock takes the whole system under? Instead of a slow correction, there could be a fast over-correction?
2009-01-28 12:03:59
The Way Forward
You could almost think that the powers that be are trying to weaken and/or destroy the world's economy based upon what has happened and what appears to be happening. So here's a radical thought.
Maybe they are.
After all, you can't build a new world order until you have destroyed the one in place. And you can't get people to buy into the new world order until they are ready to let go of the old one.
In fact, this is the one thing all governments (or the real power behind governments) do very well. The create a problem and then offer you "the" solution to that problem.
Once you begin to look at the world through this lens, many things begin to make more sense.
Try it. Expand your mind. Think the unthinkable. Give up your absolutes for a day or so and consider all the possiblilties that are left. Stop giving the powers that be the benefit of the doubt and consider the impossible.
Maybe they are.
After all, you can't build a new world order until you have destroyed the one in place. And you can't get people to buy into the new world order until they are ready to let go of the old one.
In fact, this is the one thing all governments (or the real power behind governments) do very well. The create a problem and then offer you "the" solution to that problem.
Once you begin to look at the world through this lens, many things begin to make more sense.
Try it. Expand your mind. Think the unthinkable. Give up your absolutes for a day or so and consider all the possiblilties that are left. Stop giving the powers that be the benefit of the doubt and consider the impossible.
2009-01-28 12:15:49
Borrowing from our children
It is no coincidence that almost exactly one generation after we started heavily down this path with Tricky Rick Nixon took us off the gold standard those bills (350% of GDP) are coming due and causing things to implode.
2009-01-28 12:29:58
The Way Forward
That's quite an interesting take Michael. Often the actions of our govt are interpreted as "incompetence", when in reality it is simply actions that are self serving (i.e. the Iraq War, which came about for reasons that have absolutely nothing to do with incompetence). You do have to wonder sometimes... I mean, I know there is hubris and ignorance throughout our government, but it is also not like the collective body of financial insiders is comprised of complete idiots. I have often wondered if these toxic assets were spread around the world with the intent that the U.S. would not "finish last" due to the housing bubble. The end result for the world though appears to be so devastating and tragic that I cannot imagine even the most insane idealogues envisioning what is happening now as part of their "plan". Perhaps in principle they hoped to mute the isolated effect of the housing bubble on the U.S. but the completely disastrous outcome is largely unintended consequences. I don't know what to believe anymore, other than it is incredibly important for everybody to wake up and think for themselves, and understand that it has been a very long time since the United States has been a true democracy in the sense that our founding fathers had envisioned. To paraphrase something else I read recently, we don't live in a two party political system, we live in a one party system. The government and policy makers are going to serve the interests of the wealthy and powerful first, even if that means creating poverty for half the country over the next decade. I'm beginning to think that a viable third party candidate in 2012 will become possible if things get bad enough. I have nothing against Obama per se, yet would be willing to bet that based on clueless expectations of the media propagandized public (a survey was referenced that suggested 70 percent of the American public expects the ecoomy to improve after Obama's first year) that he will wind up being the most hated president we've ever had, even more so than Bush, when this all plays out as painfully for the masses as seems likely. The situation is outrageous and tragic, and shows clearly how deeply flawed and corrupted our system of government and finance has become. Watching what has been happening with our contry the last 8 years makes things seem like our world is a version of the Sopranos on a grand scale.
2009-01-28 12:49:56
Shallow and long versus deep and short?
agree. but we can do some things much smarter. for example, why bail out bank equity? let them go to zero by circling deposits/savings only.
2009-01-28 12:50:23
Wealth creation
I think these analyses often suffer from what I consider a confusion between money and wealth. Wealth in my view -- and I hope I'm not alone -- is created by combining human vision, energy, and the earth to create physical assets. There is no inherent reason a government cannot do this which is why I support infrastructure policy and hope there's a follow through on that front. Hoover Dam is certainly an asset, certainly wealth, as are many of the technological products that owe their development to the space program. The trick to creating wealth by my definition is intention.
The problem we are in grew from equating making money with creating wealth. They are not the same. When money is created without the creation of physical assets -- whether that creation is done by government or leveraging acrobatics by financial institutions -- the effect has to be inflationary. The bad bank scheme is indeed inflationary by that standard. I assume the hope is that once the good banks are free of toxic assets they will also be free to facilitate the creation of new wealth. My problem is that so far nothing the government has done to prop up banks necessarily leads to that new investment in new physical assets. Borrowing has to lead to the creation of something that can be purchased. The fact that we are undertaking these policies without the explicit intent -- as opposed to the hope -- that new money equal new production is the Achilles heel in these plans.
The problem we are in grew from equating making money with creating wealth. They are not the same. When money is created without the creation of physical assets -- whether that creation is done by government or leveraging acrobatics by financial institutions -- the effect has to be inflationary. The bad bank scheme is indeed inflationary by that standard. I assume the hope is that once the good banks are free of toxic assets they will also be free to facilitate the creation of new wealth. My problem is that so far nothing the government has done to prop up banks necessarily leads to that new investment in new physical assets. Borrowing has to lead to the creation of something that can be purchased. The fact that we are undertaking these policies without the explicit intent -- as opposed to the hope -- that new money equal new production is the Achilles heel in these plans.
2009-01-28 13:03:51
Everything is going to workout because of this:
"The government can't create wealth/productivity; it can only transfer wealth from one entity to another."
What OTHER purpose of government has EVER existed? And what other purpose of a politician has EVER existed than to distribute this wealth to their buddies?
The system is working perfectly. The connected people will make-out. ALL that's needed is a good story for the peasantry to believe. It could be anything: "evil-doers" under the bed (or in Canada - all that water controlled by those socialist Canadians - YOU figure it out...), a fabulously new "technology" (meaning bubble), beating "them Chinese" to the moon, ANYTHING!. The next "hero of the capitalist revolution" is the scammer that (right NOW) is dreaming of the next (currently unbelievable) story the "peasants" are going to buy, hook-line-and-sinker. THAT is the HISTORY of humanity.
All we've got do is survive until the next scam gets rolling. Stop trying to change reality by imposing "morals". Economics is supposed to be about explaning reality AND making money in the process.
What OTHER purpose of government has EVER existed? And what other purpose of a politician has EVER existed than to distribute this wealth to their buddies?
The system is working perfectly. The connected people will make-out. ALL that's needed is a good story for the peasantry to believe. It could be anything: "evil-doers" under the bed (or in Canada - all that water controlled by those socialist Canadians - YOU figure it out...), a fabulously new "technology" (meaning bubble), beating "them Chinese" to the moon, ANYTHING!. The next "hero of the capitalist revolution" is the scammer that (right NOW) is dreaming of the next (currently unbelievable) story the "peasants" are going to buy, hook-line-and-sinker. THAT is the HISTORY of humanity.
All we've got do is survive until the next scam gets rolling. Stop trying to change reality by imposing "morals". Economics is supposed to be about explaning reality AND making money in the process.
2009-01-28 13:06:26
Wealth creation
right. i would go one step further to say the creation of those physical assets must produce more than they cost. Hoover Dam would be a waste and decrease the standard of living if it cost $100 trillion to build. Lending is important to get resources (money) to productive endeavors to build productive assets. we got into trouble because lenders could just create money without risk (bailout out by govenrments), so lent resources for unproductive assets. A savings pool created over time through production does much better at allocating resources at positive internal rates of returns for productive assets.
2009-01-28 13:13:47
Doesn't it just come down to what we finally end up paying for these toxic assets? Everyone agrees that face value is too high, and I've heard compelling arguments that mark-to-market is too low (especially if held to security). So the gov't has come up with a middle-ground, a mark-to-made-up-number that is somewhere in between. If that made-up-number ends up being less than what the asset is finally worth, the gov't makes money. If that made-up-number is less than what the asset is finally worth, we get f'ed. It's an interesting idea, as the US Gov't is the only source of capital at this moment, and if they can get some of this junk off of the balance sheets (and demand the writedown for the rest from the banks), it could loosen lending and allow capital to flow again. Right now the only way to "produce" is to borrow the money to get the raw materials, pay the workers, or import the goods, and then that is paid back when the goods are ultimately sold. High borrowing costs (or lack of credit period) slows that down and hurts everyone.
So I guess I'm saying that we are left to the resourcefulness of the government to not screw us. D@mn, we're screwed...
So I guess I'm saying that we are left to the resourcefulness of the government to not screw us. D@mn, we're screwed...
2009-01-28 13:14:34
Thnx for checking in Mr. P
--The standard of living is based on wealth, which is created by production or income generation, not the ability to borrow that wealth from someone else.
We were borrowing from the rest of the world to keep our standard of living high-
Nowhere like the financial sector and those that have gamed it has that standard of living been more apparent. The production of feather-headed debt is the conclusion.
If the only way forward is destroy said debt, when and where will income producing jobs come from or create livable compensation? In the "new order" should backs and brains" have such a disparity? The fine line of talent may reside closer to trustworthy rather than treachery. All to often exclusive expertise provide the blueprint for decadence and collapse.
You suggest circle the savers. I am amongst a group that have been one of those and the safest place offered is mbcp...how special is that?
We were borrowing from the rest of the world to keep our standard of living high-
Nowhere like the financial sector and those that have gamed it has that standard of living been more apparent. The production of feather-headed debt is the conclusion.
If the only way forward is destroy said debt, when and where will income producing jobs come from or create livable compensation? In the "new order" should backs and brains" have such a disparity? The fine line of talent may reside closer to trustworthy rather than treachery. All to often exclusive expertise provide the blueprint for decadence and collapse.
You suggest circle the savers. I am amongst a group that have been one of those and the safest place offered is mbcp...how special is that?
2009-01-28 13:29:20
Fret not, deflation still cant be stopped because ...
the stupid govt may buy commercial paper of corporations but what happens when their long term debt comes due later this year and over the next several years? Will they buy that up too? I cannot imagine this. Debt destruction is inevitable. Worry about hyperinflation in several years time. Inflation rate is not going up anytime soon but tax rates just might. If you have profits, take them now or try to get long term reduced rate.
2009-01-28 13:39:13
Shallow and long versus deep and short?
I agree with what you say. They do things out of politics, ignorance, and saving "friends". "Berries" I think you like to call them.
"we got into trouble because lenders could just create money without risk (bailout out by govenrments), so lent resources for unproductive assets. "
-Excellent. Seems to me that now we have passed the point of reflation. The Boomers have already seen too much damage to their nest eggs.
Also, a few years from now when the debt is $12-15T (my estimate), I don't see any way out other than inflation (one would have to have sustained growth (for inflation to feed off of=weak net growth) for decades to trim the value of this down to size). Otherwise, can you declare a country bankrupt?
"we got into trouble because lenders could just create money without risk (bailout out by govenrments), so lent resources for unproductive assets. "
-Excellent. Seems to me that now we have passed the point of reflation. The Boomers have already seen too much damage to their nest eggs.
Also, a few years from now when the debt is $12-15T (my estimate), I don't see any way out other than inflation (one would have to have sustained growth (for inflation to feed off of=weak net growth) for decades to trim the value of this down to size). Otherwise, can you declare a country bankrupt?
2009-01-28 14:07:08
Fret not, deflation still cant be stopped because ...
agree in general but don't know timing. really the only tool left for fed is more and more monetization and that is spurred by higher and higher rates. so again, foreign lenders (central banks) will tell that story.
2009-01-28 14:12:03
Wealth creation
Hey Stephen,
While I agree with your point about money, I would argue that not all wealth is physically tangible.
I also agree with Mr. Practical, "...we can do some things much smarter. for example, why bail out bank equity? let them go to zero by circling deposits/savings only."
Yeah, what the heck?
Mr. Practical says, "A savings pool created over time through production does much better at allocating resources at positive internal rates of returns for productive assets."
I'm no economist, and I'm not sure what all gets lumped under the category of 'productive assets,' or even how inclusive the terms economic productivity and wealth are. I do know that I'm inclined to think that through all this - if we're going to weather all this - a lot of assumptions about the relationship between material production and value added will need to be rethought. Production for its own sake, by my understanding, does not jibe well with our inability to continue using the planet principally as raw material for consumption.
The history of debt/production/consumption presents us and future generations with a real predicament, I think.
I return to Michael Taillon's point - "Try it. Expand your mind. Think the unthinkable. Give up your absolutes for a day or so and consider all the possiblilties that are left. Stop giving the powers that be the benefit of the doubt and consider the impossible."
We do need to challenge the powers that be, and I do not give them the benefit of the doubt. However, I'm not so much suggesting we need to think the unthinkable. Rather, I believe we need to think the not-yet-thought...
I see violent change ahead. But my hope, only an incipient idea, is that a new order of productivity will be entirely more focused on the wealth of social relationships, less prone to subjugating the masses, and more committed to sustaining a livable world. What kind of economic arrangements produce that?
Some say I'm a dreamer...
And I do defer if I'm using technical terms too loosely.
While I agree with your point about money, I would argue that not all wealth is physically tangible.
I also agree with Mr. Practical, "...we can do some things much smarter. for example, why bail out bank equity? let them go to zero by circling deposits/savings only."
Yeah, what the heck?
Mr. Practical says, "A savings pool created over time through production does much better at allocating resources at positive internal rates of returns for productive assets."
I'm no economist, and I'm not sure what all gets lumped under the category of 'productive assets,' or even how inclusive the terms economic productivity and wealth are. I do know that I'm inclined to think that through all this - if we're going to weather all this - a lot of assumptions about the relationship between material production and value added will need to be rethought. Production for its own sake, by my understanding, does not jibe well with our inability to continue using the planet principally as raw material for consumption.
The history of debt/production/consumption presents us and future generations with a real predicament, I think.
I return to Michael Taillon's point - "Try it. Expand your mind. Think the unthinkable. Give up your absolutes for a day or so and consider all the possiblilties that are left. Stop giving the powers that be the benefit of the doubt and consider the impossible."
We do need to challenge the powers that be, and I do not give them the benefit of the doubt. However, I'm not so much suggesting we need to think the unthinkable. Rather, I believe we need to think the not-yet-thought...
I see violent change ahead. But my hope, only an incipient idea, is that a new order of productivity will be entirely more focused on the wealth of social relationships, less prone to subjugating the masses, and more committed to sustaining a livable world. What kind of economic arrangements produce that?
Some say I'm a dreamer...
And I do defer if I'm using technical terms too loosely.
2009-01-28 14:18:23
Fall on Deaf Ears
Assuming you were alluding to the govt -- those folks have no ears, just mouths -- as Reagan said, a big appetite at one end and no sense of responsibility at the other.
People are more educated and information travels faster than in Reagan's (and Carter's) era. I suspect inflation fears will gain traction even in the deflationary spiral. This stagflation period may manifest itself with deflated prices in things we don't need and inflated prices of things we do need. The exception will be gold - a commodity we don't need (living will eventually be considered a luxury).
People are more educated and information travels faster than in Reagan's (and Carter's) era. I suspect inflation fears will gain traction even in the deflationary spiral. This stagflation period may manifest itself with deflated prices in things we don't need and inflated prices of things we do need. The exception will be gold - a commodity we don't need (living will eventually be considered a luxury).
2009-01-28 14:25:48
Fret not, deflation still cant be stopped because ...
My best guess:
1. One more year to several years of bad recession, [key factor: debt destruction]
2. Then some growth with muddle-through [key factor: Eventual work-out of systemic debt] (John Mauldin)
3. Then growth (and by this time strong World growth), but oil
prices rise, forcing inflation which can't be stopped. If oil prices rise too fast, then inflation-recession-inflation cycles. Moderate oil price rise (likely with muddle-through=sustained inflation) [Key factors: Oil, plus Boomer promises+National debt] (Steven Leeb+others)
All just a big guess, as no one can predict the future.
1. One more year to several years of bad recession, [key factor: debt destruction]
2. Then some growth with muddle-through [key factor: Eventual work-out of systemic debt] (John Mauldin)
3. Then growth (and by this time strong World growth), but oil
prices rise, forcing inflation which can't be stopped. If oil prices rise too fast, then inflation-recession-inflation cycles. Moderate oil price rise (likely with muddle-through=sustained inflation) [Key factors: Oil, plus Boomer promises+National debt] (Steven Leeb+others)
All just a big guess, as no one can predict the future.
2009-01-28 14:58:45
Trading vs Trends
Great article. It's the difference between trading next week's news and Investing the true trend. It's the difference between trying to figure out how to squeeze a nickel out of the next Fed announcement and positioning Investments for the next 20 years.
"Look at last month's CPI" 'they' say. "How will this $100 billion or that $100 billion be spent?" they ask. When it's only relevant for Traders, not for Investors.
Want Investment News? The US government is going to spend 10-15% of GDP over the next 3 years to make it look like we've done 5-6% better than we would have done otherwise. And they're borrowing all the money to do it. THAT'S what's Actually happening. That's investment news, not trading news. (But what the hell do I know.)
"Look at last month's CPI" 'they' say. "How will this $100 billion or that $100 billion be spent?" they ask. When it's only relevant for Traders, not for Investors.
Want Investment News? The US government is going to spend 10-15% of GDP over the next 3 years to make it look like we've done 5-6% better than we would have done otherwise. And they're borrowing all the money to do it. THAT'S what's Actually happening. That's investment news, not trading news. (But what the hell do I know.)
2009-01-28 17:41:55
The Way Forward
One other thought Michael: in '05 all 50 AG's signed a letter begging Bush/Cheney to help pass legislation to help them reign in predatory lenders. The result was Bush/Cheney passed legislation stripping them of most of what little power they had over this soon to blow up financial mess. Free market capitalist on the way up but pure socialists on the way down....
2009-01-28 18:05:51
The Way Forward
The more this thing moves forward, the more I am convinced that those paranoid voices in the back of my mind that have the same ideas as the ones you expressed are true. I am just wondering what the objectives is--ie what the world is supposed to look like at the end of this road.
2009-01-28 18:09:04
The Way Forward
Don't forget that Wall St. showered the Obama campaign with millions more than they gave to McCain. In fact, I believe, Goldman Sachs was one of, if not THE, biggest provider of funds to Obama's campaign efforts.
2009-01-28 19:27:37
The Way Forward
Elliot Spitzer placed an op-ed in the Washington Post 3 weeks before he was chopped off at the knees. The op-ed explained how the Bush/Cheney Admin had obstructed the 50 state AG's efforts to rein in this disaster before it got totally out of hand.
Bet you didn't know that.
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html
Bet you didn't know that.
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html
2009-01-28 19:43:12
The Way Forward
The goal is the further concentration of power and transfer of wealth into the hands of the top 1%. It's that simple.
This financial crisis will eventually result in large amounts of real wealth being sold for pennies on the dollar by distressed individuals who can hang on no longer. Why do you think money was given to the banks (with more to come) with no strings attached and no need to lend?
When the distressed selling begins, the banks will be ready to take advantage, with the top 1% using them as cover to their own advantage.
I explain it this way. If I were to knock on your door and offer you $50,000 for your home, you would laugh in my face. But engineer a financial crisis and stress you or others like you (the so called middle class) for a few years and you will eventually beg me to purchase your home for $40,000.
This was the aim of the people behind the engineered Great Depression and that's what's going on now. Follow the money and the people behind the money. The key is to follow the rabbit down the rabbit hole.
Most people poke their head in a foot or so and become very uncomfortable with what they're seeing because it challenges everything they thought they knew about their country, their leaders and themselves.
The most powerful religion is America is nationalism. It blinds us to the simple reasons why things are the way they are.
This financial crisis will eventually result in large amounts of real wealth being sold for pennies on the dollar by distressed individuals who can hang on no longer. Why do you think money was given to the banks (with more to come) with no strings attached and no need to lend?
When the distressed selling begins, the banks will be ready to take advantage, with the top 1% using them as cover to their own advantage.
I explain it this way. If I were to knock on your door and offer you $50,000 for your home, you would laugh in my face. But engineer a financial crisis and stress you or others like you (the so called middle class) for a few years and you will eventually beg me to purchase your home for $40,000.
This was the aim of the people behind the engineered Great Depression and that's what's going on now. Follow the money and the people behind the money. The key is to follow the rabbit down the rabbit hole.
Most people poke their head in a foot or so and become very uncomfortable with what they're seeing because it challenges everything they thought they knew about their country, their leaders and themselves.
The most powerful religion is America is nationalism. It blinds us to the simple reasons why things are the way they are.
2009-01-28 19:51:47
The Way Forward
A small news story a few weeks ago that I found way in the back of the WSJ mentioned that upon further review, Obama really didn't receive massive amounts of "small donations" from the little people as was reported endlessly for 2 years. His so called "small donation" percentage was only a few percent more than McCain.
Anyone who wishes to run for national office must bow to the monied power base of both America and Europe.
To believe anything else is to be dangerously niave. People are beginning to smell a skunk in the wood pile.
Anyone who wishes to run for national office must bow to the monied power base of both America and Europe.
To believe anything else is to be dangerously niave. People are beginning to smell a skunk in the wood pile.
2009-01-28 21:34:55
The Way Forward
Have you ever wondered what the real reason for gun control was? (I am speaking here to those that just recently took the "red" pill.)
Are you ready to believe that power corrupts and absolute power corrupts absolutely? Is that starting to mean something?
Is there any substantial difference between the British and the American government?
Are we smarter than the enemy? Are we as committed?
How can we reconcile our support for our troops with this crushing sadness?
Link for gun control advocates.
http://www.youtube.com/watch?v=yTq2NEUlhDE
Love you Minyans
Are you ready to believe that power corrupts and absolute power corrupts absolutely? Is that starting to mean something?
Is there any substantial difference between the British and the American government?
Are we smarter than the enemy? Are we as committed?
How can we reconcile our support for our troops with this crushing sadness?
Link for gun control advocates.
http://www.youtube.com/watch?v=yTq2NEUlhDE
Love you Minyans
2009-01-28 21:38:12
The Way Forward
While that theory sounds great, it is absolutely unnecessary. The top 1% get richer each and every day anyway because, as long as there is some positive return to be had, compounding makes it that way. Causing a massive global Depression to steal pennies from the billions of regular joes is not only inefficient, it's downright dangerous unless they plan to never leave the comfort of their 100,000 acre estates. But then where's the fun and purpose in life in doing that?
2009-01-28 21:42:14
The Way Forward
Choosing our own guns and supporting the military is a very interestin dichotomy considering the conflict that can eventually result from that. One interesting thing to watch for is for a military leader that would side with the people against the corrupt governing class, even for the sake of becoming the first US autocrat, much in the likes of Caesar or Napolean. To me, it seems we are getting ripe for such a scenario.
2009-01-28 22:17:40
The Way Forward
Consider this statement:
"If you (soldier) could be convinced to occupy Iraq, you could be convinced to occupy America."
True or False?
The true meaning of "patriotism" is one of those casualties (of war) that must be recognized before we can begin to heal.
"If you (soldier) could be convinced to occupy Iraq, you could be convinced to occupy America."
True or False?
The true meaning of "patriotism" is one of those casualties (of war) that must be recognized before we can begin to heal.
2009-01-28 22:38:50
I believe Mr. P has solved the Financial Crisis
Like you said, we borrowed from the world and it wasn't enough to keep the Ponzi scheme going. And it's looking a lot like borrowing from our children won't be enough, either. The answer is clear: We need to figure out how to borrow from the world's children. That ought to buy us another decade and a few more bubbles.
2009-01-28 22:50:29
Infrastructure spending
A new cluster of wind turbines on cape cod? A new nuclear power plant or new hydroelectric dam where the snail darters roam? An oil platform in view of those California surfers? No, what we will end up with will be a lot of line items added (to get the necessary votes), a lot of lawyers and financial experts hired, and a lot of environmental studies done. Can you imagine the Hoover dam every being built today? Remember we are service economy now, those manual jobs that produce things are jobs no one wants anyway or anymore!! Knowing what per cent will actually be used to produce infrastructure would be like trying to put a value on a SIV, CDS, or even a MadeOff fund of funds.
2009-01-29 06:57:40
The Way Forward
Sir,
It's first and foremost all about power and control. Becoming even more rich is simply an extention of and a tool used for gaining more power and control.
I've always found it interesting how history books focus on leaders and rarely on the power and money behind them, supporting those leaders.
Besides, regardless of how much money someone has, they always want more. They never have enough. Again, just read history.
For some reason, we Americans want to believe that this doesn't happen in America, that we are somehow more pure that the rest of the world, that simply because we were born in America, that human greed and the lust for power doesn't affect us the same way.
Denial isn't just a river in Egypt.
It's first and foremost all about power and control. Becoming even more rich is simply an extention of and a tool used for gaining more power and control.
I've always found it interesting how history books focus on leaders and rarely on the power and money behind them, supporting those leaders.
Besides, regardless of how much money someone has, they always want more. They never have enough. Again, just read history.
For some reason, we Americans want to believe that this doesn't happen in America, that we are somehow more pure that the rest of the world, that simply because we were born in America, that human greed and the lust for power doesn't affect us the same way.
Denial isn't just a river in Egypt.
2009-01-29 10:44:21
The Way Forward
It is my understanding that the Obama administration intends to maintain a new standing army in the US homeland. It is my opinion that this version of "national service" amounts to nothing more than a version of slavery for these conscripts. I suspect that the rulers of our empire know that "peacetime" can no longer be applicable, due to their planned financial/economic collapse of the US & future necessity for imposition of martial law. I believe that our Federal Govt is a nightmarishly-failed "experiment in democracy" and should begin permanent shut-down of most of itself...with power & remaining resources turned over to the individual state governments AS PER THE US CONSTITUTION. The current illuminati plan has laid all of the groundwork for US merger into North American regional govt--a clear power grab it believes we little people will swallow, once we experience the economic collapse they've worked for. Given all of the traitors currently running state & local governments, we little people should consider electing some genuine patriots before it is too late.
2009-01-29 14:03:04
Time for honest and sanity
Great article.
In my humble opinion: There are only 3 ways to pay off debt: 1) from income, 2) through bankruptcy, and 3) through hyper-inflation. For over 10 years I have tried to get people interested in #1. Now, it is too late and debt destruction will occur through #2 or #3. My own suggestion: the government of the US should guarantee that for 2 yeas every human being and every family unit inside our borders will have the minimum to live: a safe and secure tent or room, heat, food, security and a free education. The government should then cut off all bail-out money and subsidized loans, and liquidate all insolvent banks. A wave of bankruptcies will quickly follow. The strong companies will survive and in a few years economic life will stir again. This way people can have hope and less fear, and we can get through this as quickly as possible without any further illusions. The idea that the governments can prevent the debt and asset destruction that must occur is false and destroys hope when plans fail to restore the economy. This program would cost a few hundred billion but would require more honesty and sanity that we have heard in a long time. Thank you. Bill
In my humble opinion: There are only 3 ways to pay off debt: 1) from income, 2) through bankruptcy, and 3) through hyper-inflation. For over 10 years I have tried to get people interested in #1. Now, it is too late and debt destruction will occur through #2 or #3. My own suggestion: the government of the US should guarantee that for 2 yeas every human being and every family unit inside our borders will have the minimum to live: a safe and secure tent or room, heat, food, security and a free education. The government should then cut off all bail-out money and subsidized loans, and liquidate all insolvent banks. A wave of bankruptcies will quickly follow. The strong companies will survive and in a few years economic life will stir again. This way people can have hope and less fear, and we can get through this as quickly as possible without any further illusions. The idea that the governments can prevent the debt and asset destruction that must occur is false and destroys hope when plans fail to restore the economy. This program would cost a few hundred billion but would require more honesty and sanity that we have heard in a long time. Thank you. Bill
2009-01-29 14:07:30
I believe Mr. P has solved the Financial Crisis
How about student loans to the Chinese? We've already ripped-off the last few generations of US kids with useless "education loans". If we can front load enough debt from the Chinese children we can have Hummers forever.
2009-02-03 14:45:34
The Way Forward
I just got finished watching General Motors (for twenty six years) die from the inside. A most discouraging and sad experience.
About five years ago it became clear that true reform would come too little and too late for GM, just as it had for the previous two decades.
An exactly analogous situation exists for the United States generally. There are "true patriots" in politics, but they are few, and weak, and not increasing in number and power rapidly enough to save the day.
There are rays of hope, but the road will be hard. We will be lucky to get a General Francisco Franco at the end of it instead of gangs of murderous thugs. In any case, "E pluribus unum" will prove most elusive, shall we say.
About five years ago it became clear that true reform would come too little and too late for GM, just as it had for the previous two decades.
An exactly analogous situation exists for the United States generally. There are "true patriots" in politics, but they are few, and weak, and not increasing in number and power rapidly enough to save the day.
There are rays of hope, but the road will be hard. We will be lucky to get a General Francisco Franco at the end of it instead of gangs of murderous thugs. In any case, "E pluribus unum" will prove most elusive, shall we say.
2009-02-19 09:44:17
Beg to Differ, Mr P
MR PRACTICAL WRITES: ... the good bank/ bad bank plan [has] yet to be revealed, but it's important to remember one important point: Any program initiated by the government is a zero sum game, at best.
?? Resolution Trust Corporation. Certainly was "initiated by the government" and during its term was subject to federal supervision.
Yet they ran a big basket of small banks until they were able to run themselves again and turned a profit.
Sweden took its insolvent banks, replaced management and put the healthy assets and liabilities into gov-created entities that ran them for a profit.
It seems you might have benefitted from an editor here, in that the Universal proposition with which you lead this piece has no chance in a material world of being true.
MR PRACTICAL WRITES: We were borrowing from the rest of the world to keep our standard of living high.
Yet mid-to-late 90s we managed to stop doing that. I guess you're talking Bush-Cheney, who roughly tripled the national debt with tax cuts off the top and the costs of world war.
But it puzzles that you refer to all that with "our standard of living."
I was living a lot better in all respects when we had a more or less balanced federal budget.
The standard of living in the US is not anywhere near the top among industrialized states. Surely you've lived in Europe for a while. Surely you've been to Candada.
Have you noticed how well bred and educated ever your run-of-the-mill Canadian tends to be? Evidence of a relatively elevated tandard of living.
And yet their fiscal picture is relatively humble. They've not saddled themselves with empire, and their owner-operators think a lot more like same in Europe, where millenia of strife and tight geography have left behind wisdom -- have bred statesman of businessmen.
In contrast, we're still something of a Disney Frontierland. Our owner-operators unreconstructed.
The notion that the US is a pampered nation is false, and propagated in service of the pampered few who own and operate its capital.
We are more like a bananna republic than we're supposed to think. More like neighbors to the south than north.
Anyway -- let's just seize the Zombies, cut off their heads, purge their sickly innards and then return them to the private sector where opportunities to lend long and prosper abound.
?? Resolution Trust Corporation. Certainly was "initiated by the government" and during its term was subject to federal supervision.
Yet they ran a big basket of small banks until they were able to run themselves again and turned a profit.
Sweden took its insolvent banks, replaced management and put the healthy assets and liabilities into gov-created entities that ran them for a profit.
It seems you might have benefitted from an editor here, in that the Universal proposition with which you lead this piece has no chance in a material world of being true.
MR PRACTICAL WRITES: We were borrowing from the rest of the world to keep our standard of living high.
Yet mid-to-late 90s we managed to stop doing that. I guess you're talking Bush-Cheney, who roughly tripled the national debt with tax cuts off the top and the costs of world war.
But it puzzles that you refer to all that with "our standard of living."
I was living a lot better in all respects when we had a more or less balanced federal budget.
The standard of living in the US is not anywhere near the top among industrialized states. Surely you've lived in Europe for a while. Surely you've been to Candada.
Have you noticed how well bred and educated ever your run-of-the-mill Canadian tends to be? Evidence of a relatively elevated tandard of living.
And yet their fiscal picture is relatively humble. They've not saddled themselves with empire, and their owner-operators think a lot more like same in Europe, where millenia of strife and tight geography have left behind wisdom -- have bred statesman of businessmen.
In contrast, we're still something of a Disney Frontierland. Our owner-operators unreconstructed.
The notion that the US is a pampered nation is false, and propagated in service of the pampered few who own and operate its capital.
We are more like a bananna republic than we're supposed to think. More like neighbors to the south than north.
Anyway -- let's just seize the Zombies, cut off their heads, purge their sickly innards and then return them to the private sector where opportunities to lend long and prosper abound.
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