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The Global Revolution Is Accelerating - Mike Krieger Explains

Tyler Durden's picture




 

Submitted by Mike Krieger of KAM LP

Terrorism is the best political weapon for nothing drives people harder than a fear of sudden death.
- Adolf Hitler

Sometime around the year 2005, perhaps a few years before or after, America will enter the Fourth Turning. A spark will ignite a new mood. It will catalyze a Crisis. In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. It could be a rapid succession of small events in which the ominous, the ordinary, and the trivial are commingled.

Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression

-  Strauss & Howe in “The Fourth Turning” written in 1997

All people who try to get elected to government are in love with government, it’s just that the Democrats are in love with one kind of government and the Republicans are in love with another kind of government, and government is going to continue to grow until there is revulsion for government.

-  Jared Dillian (he puts out a great daily piece I would look into it at http://www.dailydirtnap.com/)

The Global Revolution:  Welcome to Phase Two

When first I mentioned the food riots in Tunisia and Algeria in my note two weeks ago the former authoritarian leader Zine al-Abidine Ben Ali had yet to flee to Saudi Arabia with much of his nation’s gold.  What I find so amazing about this whole situation is why someone in their right mind would take the time to take some shiny little element that is in a bubble and that you can’t eat in the chaos surrounding one’s escape to another nation.  Surely he has hidden foreign bank accounts and since gold is just another “fiat” currency according to a Wall Street strategist, why bother?  He must be some right-wing radical that likes the Constitution and is therefore anti-American.  Isn’t that right Mr. Potok?

So back to the food situation.  When I say that we are in Phase Two I am actually not referring to the simple fact that a leader with a 23 year rule under his belt was deposed in weeks seemingly out of nowhere, I am referring to the actions that are being taken and will be taken all over the world in response.  As I have said time and time again, government’s today throughout the world could care less about their citizens.  When they show signs of caring it is merely to satiate the people back to sleep so that they can stay in control.  The leaders of governments throughout the world today consist of the worst humanity has to offer.  The most egomaniacal, narcissistic specimens on the planet (with some exceptions of course, Ron Paul for one).  They care about power and maintaining it.  So what does this have to do with food?  A lot.  I have stated in the past that we are in revolutionary times.  The system that has existed for most of our lives (all of my life) is crumbling under its own weight of insanity, immorality and fraud.  The last ditch effort by the global elites has been to flood the world with money and make sure nothing they are invested in ever fails or defaults.  This bought them a little time and their hope was that rising asset prices would boost confidence and lead to a recovery that could maybe keep this scam monetary system running for another decade or two.  The problem with this strategy is that we are in the Fourth Turning.  My generation is coming into its own and we don’t buy the bull shit of our parents’ generation.  We don’t believe in Democrat or Republican.  We don’t believe in the system itself.  We will be the ones making the decisions going forward.  We will default on the astronomic promises our parents made to themselves.  We will create an entirely new monetary and financial system.  Real free-market capitalism will flourish, not this socialism for the rich garbage Obama loves so much.   We will focus on doing good while doing well.  Not because the government forces us to, rather because we are witness to and victims of this sick, twisted creation of our parents generation that celebrates total greed without the slightest concern of the consequences to others.

With this as a backdrop, the leaders of all nations are scrambling to somehow survive in their positions through this time period.  What is happening across the emerging world now is countries that had increased prices for food and energy are reversing policy.  Countries such as Saudi Arabia are bidding for world grain supplies.  Think about this for a minute.  What this means is that what is being employed around the world at a time of global crop failures is essentially price controls.  What happens when you have price controls?  No elasticity of demand.  What does that lead to?  Even worse supply/demand imbalances and ultimately food shortages and everything goes to the black market and farmers stop planting as much.  So what we now have is the very beginning of a food price spiral that will lead to prices in dollars at unimaginable heights.  I would start to be very careful of the quality of food you buy and where it comes from.  I assume companies will start mixing in all sort of fillers and garbage into their foods.  Especially in emerging markets looks for increases in tainted or corrupt food supplies.

This will also affect oil prices and they should move substantially higher.  While people still quote WTI as the oil price and claim it is down, this is total and complete nonsense.  Nobody pays WTI prices.  Brent is $98/b and Asia Tapis is $101.50/b.  Anyone that is telling you oil prices are moving lower are either lying or don’t know what they are talking about.  For example while WTI is down 7% from recent highs, gasoline is down only 4% and heating oil is at the highs.  Do you pay WTI or do you buy gasoline?  There is also this idea that OPEC is going to come out and save the world by boosting production.  Good luck with that.  First of all, OPEC’s true spare capacity number is highly debatable and I am in the camp of those that thinks  they do not have control over the market at this point.  Banana Ben Bernanke does.  Secondly and most importantly these Arab nations are short food and we are in a food crisis.  They are also amongst the most vulnerable governments to overthrow.  You think for a second that they will crash oil as food prices are soaring?  Oil is their currency.  For what it is worth I think many of these regimes will be history within a year.  Then the Western governments will fall one by one.  This is the Fourth Turning.  There is no point trying to stop it, the only thing you can do is prepare.  There is precious little time left for that.

U.S. Treasury Bond Holders Will Never Be Paid

Remember the old saying, “if you don’t know who the sucker is in the market, you are the sucker.”  Well ladies and gentlemen if you own U.S. treasury bond you are the sucker.  There is one way these things will be paid back.  With completely worthless pieces of paper, OR not paid back at all.  The one thing linearly thinking investors are not appreciating right now is that there is a gigantic awakening occurring in the United States that will develop into a successful and peaceful revolution.  The new leaders that will emerge will consider this debt illegitimate as I do personally.  It will not be paid.  Think it can’t happen?  Watch. 

Meanwhile, looking at the chart of long term treasury yields what we see is a coiled pattern where rates have been in a tight range ever since breaking to the upside in early December.  I think these rates are about to break hard in one direction and I think that direction is higher.  When I looked at the commentary from the Fed yesterday and I saw this line “expectations have remained stable, and measures of underlying inflation have been trending downward,” all I could think was if I was a bond investor I would just say “alright I have had ENOUGH.”  I think that some of the biggest moves ever in the history of financial markets could be coming within the next 1-2 months.  I would focus on treasuries and precious metals.

Silver Disobedience

While the 20th century was a brutal and violent one, some amazing things happened.  Two prophets, Martin Luther King Jr. and Mohandas Gandhi we able to usher in a period of tremendous social justice for their respective causes through non-violent means.  We are now entering a time where the people (completely and totally sold out by their leaders and masters at the banks) must exercise civil disobedience and non compliance with an evil system.  Fortunately for us, the most effective and powerful means of this I can think of is completely legal and consists of buying physical silver and taking possession.  Although the comex paper silver price is showing a drop, this is not reflected in the physical market which is tight as a drum.  Many major dealers are sold out of product all over the world and the U.S. Mint recently stated that they sold 4.7 million silver eagles in January alone, a new record and the month isn’t even over.  If you do not like the way the banks and politicians are robbing you blind in broad daylight buy physical silver and take delivery.  I think it is abundantly clear that the raid on the comex silver market is a desperate attempt to shake out some supplies since the actually physical market is being depleted rapidly.

One of the irrational “fears” out there is that the Fed will somehow tighten rates.  Get out of the emotional brain for a second and into the logical one.  The Fed funds rate is 0-25 basis points.  The two year treasury yields 0.60%.  If the Fed raised rates even to 0.50% with the two year note at 0.60% total and complete chaos would ensue and the government wouldn’t be able to deal with the rising costs of debt service.  It is just not going to happen.  They will print and print until the whole corrupt house of cards crumbles to dust. 

V for Victory

We are in revolutionary times.  The new generation will not accept the Federal Reserve.  We will not accept feudalism by an oligarchy of banking criminals.  We will not forget the Constitution.   We will not accept SDRs or any global fiat currency.  We will not accept global government or “governance” (sounds so much better doesn’t it). 

As I went to grab dinner last night, I noticed V for victory posters plastered all around downtown (http://www.youtube.com/watch?v=s5GlOeEUyQ4&feature=related).  Go Boulder we are winning the infowar!

Turn off the tv and think for yourself,

Mike

 

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Thu, 01/27/2011 - 14:42 | 909985 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Before I read this I have to say, I hope you explained your quotes this time.  You must explain your quotes for them to make sense or else you are merely putting words on a page.

Buy silver.

Thu, 01/27/2011 - 14:47 | 910003 monkeys.pick.bottoms
monkeys.pick.bottoms's picture

The intro quotes are a foreplay between the writer and the reader. No need to explain too much. Bought silver (i like to have reality on my side).

Thu, 01/27/2011 - 15:00 | 910036 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I see quotes at the top, I see who said them.  Then I skim the piece looking for a reference to Hitler/Fourth Turning/Dillon.  I find Fourth Turning.  Do you think I am going back to the top to read the Hitler quote?  I have no reference point for it, and could care less what Hitler thinks.  Maybe if I had a reference point I would.  It is better to work the quote into the article itself.

How to work a quote into a story, example:  Many quote George Soros as saying that, "Gold is the ultimate bubble."  Is he simply saying, it is in or will be in a bubble, or is there a direct implication behind his words?  The word "ultimate" can mean final, and that is what I believe he is saying.  'Gold is the final bubble.'

Do you see how I explained the quote?  Mike writes great pieces but he puts quotes up top that look like lonely girls waiting for a dance.  Mike has to ask his quotes to dance or they will wait there all night.

I am glad you bought silver.  Now go buy more.

Thu, 01/27/2011 - 15:31 | 910177 More Critical T...
More Critical Thinking Wanted's picture

 

U.S. Treasury Bond Holders Will Never Be Paid

*Chuckle* :-)

Because it's really that hard to pay back $12 trillion in net public debt in a country that is producing $15 trillion per year and has natural reserves worth god knows how many hundreds of trillions of dollars.

Like it's difficult for a person making $50k a year to pay back a $40K mortgage who is living on an estate worth millions of dollars.

Right! Right?

Has ZH now morphed into a parody site making fun of GOP/libertarian paranoia and cluelessness, or is this still the real thing?

If this is a 'real' prediction I'm sure this will surprise Ron Paul, Paul Ryan and other GOP/libertarian dignitaries who are holding good chunks of their liquid wealth in treasuries :-)

 

Thu, 01/27/2011 - 15:40 | 910220 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And in the meantime pay banksters a 30% usury fee?  No thanks.  Take your fascism elsewhere, I would rather not pay to have my economy strangled.

Thu, 01/27/2011 - 15:49 | 910264 More Critical T...
More Critical Thinking Wanted's picture

 

Well, you have not managed to reply even remotely on-topic, so I'm not sure you have replied to the right comment. Care to clarify what your point was intended to be and how it relates to the nonsensical claim in this article, which was:

U.S. Treasury Bond Holders Will Never Be Paid

and whch claim I criticised in my reply?

Thanks.

 

Thu, 01/27/2011 - 16:01 | 910304 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I see, you need me to answer your questions for you...

America can not pay its debt while the bansters are sitting on their (America's) face.

Thu, 01/27/2011 - 16:38 | 910463 More Critical T...
More Critical Thinking Wanted's picture

 

Just to clarify - do you suggest that banksters were not sitting on America's face when this 1995-2000 period of paying back the federal debt occurred:

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

?

 

Thu, 01/27/2011 - 17:02 | 910567 thetruth
thetruth's picture

The author did mention that if the debt is paid back, it will be with dollars.  He presumes they will be of relatively value but you believe that prices will still be low.  That is the only difference.

Thu, 01/27/2011 - 17:12 | 910619 More Critical T...
More Critical Thinking Wanted's picture

(quoting from an earlier discussion today, which posting went unopposed:)

Regarding high prices, prices in modern economies are predominantly coupled to demand, not to supply.

Just perform this quick thought experiment: what is easier today or was easier in the past 50 years, to sell a product or to buy it? Furthermore, if you bought an item could you have bought 10 more?

If your answer is: 'selling is much harder' and 'I could have been sold 10 more' then almost by definition it's a buyer's market, i.e. it is demand is that is dominating and demand is what is setting the biggest portion of prices.

And guess what happens to "high prices" if few are able to pay for those items? Right, they are coming down. [*]

And yes, I realize that this short description is in stark contrast to the supply-side, neoclassical or even austrian monetarist dogma preached here on ZH. Sorry about that and welcome to the real world of keynesian economics, which is being crucified here because unlike its counterparts it actually works in practice :-)

[*] With the exception of monopolistic prices, which are more resilient to the lack of demand. How the libertarian and neo-GOP "get rid of anti-trust laws and let the big fish eat the small fish freely!" teachings are supposed to solve that particular problem of large companies cornering markets is a mystery though :-)

Thu, 01/27/2011 - 17:55 | 910846 Goldilocks
Goldilocks's picture

Regarding high prices, prices in modern economies are predominantly coupled to demand, not to supply.

... until that fails (due to the overwhelming demands from the population). Supply is part of the end game (as I see it).

Thu, 01/27/2011 - 19:48 | 911298 XitSam
XitSam's picture

Just because a post went "unopposed", does not make it true (or false).  I think everyone should stop feeding the troll, there's more important things to do.  Like maybe buy some silver.

Fri, 01/28/2011 - 05:19 | 912266 More Critical T...
More Critical Thinking Wanted's picture

 

As a longer-timeframe speculation silver definitely makes more sense than say gold - because silver has significant industrial uses.

Price is still a bit high for me - I hate buying at the top a lot more than I hate missing a good deal - YMMV.

 

Thu, 01/27/2011 - 17:13 | 910611 Bay of Pigs
Bay of Pigs's picture

Let me try to clarify it for you. The debt was NOT being paid back. It was still growing. Your charts (from the Fed itself) and thinking are simply dishonest. More like delusional.

FYI, that was also the time Greenspan, Rubin, Summers, etc..were dumping huge amounts of gold into the physical market and getting the derivatives machine going for their Wall St banking friends/crooks. They also got rid of Brooksley Born at the CFTC, who knew what the scam was all about and tried to stop it. USD up, stocks up, housing up, gold/silver down, no inflation. All good, right?

Not exactly.

Current USG debt is like the Space Shuttle lifting off, and the Fed's balance sheet has been utterly destroyed. This debt will never be paid back. What part of that don't you get?

 

Thu, 01/27/2011 - 17:37 | 910667 More Critical T...
More Critical Thinking Wanted's picture

 

Your charts (from the Fed itself) and thinking are simply dishonest.

Nobody even on the right-wing has suggested that the Fed data is falsified. (It would be silly to do so even for them: balance of payments stats are public data and falsifying them would be a scandal of Watergate magnitude.)

Also, despite the White House (issuer of this data) and the Fed (maintainer of this time series data) being run by Republicans for 8 years, that 1995-2000 data has not been "corrected" - why not?

Reality is much simpler than a vast conspiracy to falsify key economic data: the deficit reduction and the surplus was small but real and all the "SS accounting gimmick" PR was just a clever Republican slur on the Clinton administration's economic record.

I also find it pretty likely that you never questioned the veracity of those claims yourself and you fell for that bogus claim hook, line, and sinker.

FYI, here's the absolute public debt level for that period (I clipped it right before it started growing again during the Bush presidency):

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

See the gradual 'bending' of the curve: that's when the deficit reduction was started. It needed a couple of years to result in an absolute-value reduction of the federal debt - but it occured. (The curve then flattened when the 1999-2000 dotcom bubble burst.)

So if you look at historic precedents you will see it's possible to reduce the federal debt, given the political will.

 

Thu, 01/27/2011 - 20:54 | 911527 Hephasteus
Hephasteus's picture

Go suck a rock.

Thu, 01/27/2011 - 17:11 | 910614 Sean7k
Sean7k's picture

Why must you lie so often? The debt was never paid back. Clinton merely stopped creating new debt on current budgets. There is a huge difference. The principle was never reduced.

Thu, 01/27/2011 - 17:30 | 910728 More Critical T...
More Critical Thinking Wanted's picture

 

No, you are factually wrong (again).

The effect of the surplus I cited was that even the absolute public debt (principal amount) started going down by the end of the Clinton administration (muted by the 1999-2000 dotcom bust recession but not reversed):

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

Unless you claim that the official time series is manipulated by some vast data falsification conspiracy spanning two republican terms and two democratic terms and 8 years of Republican run Fed?

So yes, this is one of those right-wing zombie lies again. Given the political will it is possible to reduce the federal debt and it has been done before.

 

Thu, 01/27/2011 - 22:03 | 911707 Sean7k
Sean7k's picture

You lying sack of crap. 

http://en.wikipedia.org/wiki/History_of_the_U.S._public_debt

The debt never falls. Read the figures liar.

Thu, 01/27/2011 - 23:01 | 911857 thedrickster
thedrickster's picture

Hard to argue with numbers. Note total debt flattens out in 2000 following a once in a generation leap in productivity, technological advancement, a stock market bubble and the resulting spike in tax reciepts.

The pigs remained at the trough, period.

Fri, 01/28/2011 - 07:06 | 912277 More Critical T...
More Critical Thinking Wanted's picture

 

Yeah, he told a bold-faced lie (again): quoting coarse annual data on Wikipedia while I showed the original data source, which is a more finegrained quarterly series :-)

Ironically, he is (unknowingly) contradicting his earlier claim as well that the data I used is fabricated: if you check the numbers you'll see that the Wikipedia article uses the exact same source of data as I did :-)

 

Fri, 01/28/2011 - 00:53 | 912081 UGrev
UGrev's picture

You've been math fucked. How's it feel to have numbers shoved up your ass sideways and coming out of your ears. Math doesn't lie, people like you do. 

Thu, 01/27/2011 - 17:27 | 910720 KickIce
KickIce's picture

or will be paid in worthless fiat.

Quit cherry picking.  Seeing that the fed/treasury is already purchasing much of it's own debt we are already in the early stages of default.

Thu, 01/27/2011 - 17:39 | 910780 More Critical T...
More Critical Thinking Wanted's picture

 

Please outline the mechanism through which QE will lead to a default in your opinion.

(I have strong doubts in advance, but cannot judge your arguments without having heard them first.)

 

Thu, 01/27/2011 - 18:04 | 910894 KickIce
KickIce's picture

Easy money, the more money you print (and we are printing money) the less value it has. All one has to do is study the dollar index from the creation of the Fed and in particular since we left the gold standard. 

The fact is we are purchaing much of our own debt.  It's very much like writing myself a check for my house and then claiming I'm debt free.

Question for you, Mr. Keynes, name one empire that has been able to print it's way to prosperity.  At least we can come up with concrete examples, ie Weimer, Zimbabwe where this practice has failed miserably.  But then the latest group to try it so much smarter and more sophisticated than the last, isn't that right?

The only reason QE appears to be working at this point is because most of the other world currencies suck more than ours.  When it comes to currency we are in a tallest midget contest.

Short term, you never bet against the man with the printing press, so you will be right until you are wrong - and it will be horribly wrong when it does happen.

Fri, 01/28/2011 - 07:07 | 912282 More Critical T...
More Critical Thinking Wanted's picture

 

Easy money, the more money you print (and we are printing money) the less value it has.

That's the simple-minded monetarist/Austrian view.

Problem is that it does not jibe with reality even remotely accurately. There's multiple problems with that view:

  • Ask the Japanese how they like their hyperinflation :-)
  • Money printing only creates less value if it results in a reduction in real wages (wages divided by price level / cost of living). As Germany and China has proven it after 2008 spending 2x and 4x of the (relative) size of the US stimulus they have helped their economies. Hard to argue against facts.

No doubt too much money printing can cause problems - but so can too little money printing cause problems. It's a balancing act.

 

Thu, 01/27/2011 - 20:01 | 911360 LowProfile
LowProfile's picture

So if there's no downside to a country buying it's own debt, then why haven't all of them been doing it all along?

You are such a perfect fucking douchebag.  I hope all of your assets are in treasuries, small caps and Vegas condos.

Thu, 01/27/2011 - 21:58 | 911690 NuckingFuts
NuckingFuts's picture

Lots of downsides, agreed.

But what I see (and am not the first to post on ZH) is that we are in a race to the bottom.  The winner hits bottom last and therefore "wins" as their economy is less shitty then all the others....but still sucking.

Is it wise?  I think not, but that seem IMO to be where we are headed.  A world were our economy sucks the least.  As has been quoted over and over "our system is the worst, except for all the others".

Good Luck everyone.

Fri, 01/28/2011 - 05:42 | 912285 More Critical T...
More Critical Thinking Wanted's picture

 

So if there's no downside to a country buying it's own debt, then why haven't all of them been doing it all along?

Simple: because there's a natural balance between printing yourself out of debt and having a well functioning economy that keeps those policymakers elected. The balance is not in any of the extreme solutions of "never print money" or "print up to the Mount Everest" but somewhere inbetween.

What no country will do though is the stupidity suggested in this article: to not pay out bond holders in the currency they are printing :-)

 

Fri, 01/28/2011 - 06:26 | 912313 nuinut
nuinut's picture

Please define "the bottom".

I wasn't aware a bottomless pit had one. Just downsides.

Thu, 01/27/2011 - 15:40 | 910231 AnAnonymous
AnAnonymous's picture

Looking at the past indicates that paying back the debt, other than by rolling the debt, has not been on the table.

The question is not to assess whether or not it will be easy to repay the debt but whether or not the ponzi can be kept up.

Thu, 01/27/2011 - 15:56 | 910252 More Critical T...
More Critical Thinking Wanted's picture

Looking at the past indicates that paying back the debt, other than by rolling the debt, has not been on the table.

Actually, if you check the record you'll see that the Clinton administration managed to reduce the deficit gradually and produced an actual surplus quarter for the first time in 20+ years:

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

Of course Bush quickly turned that into a deficit again. If you look at the end of the graph, Obama is starting to turn it around again.

But you can see the surplus section in the late 90s and in 00 so it's possible, given enough political will.

As I said the US is a rich country and a good debtor.

 

Thu, 01/27/2011 - 16:10 | 910336 Bay of Pigs
Bay of Pigs's picture

LMAO. That's the funniest and yet the dumbest fuckan thing I've ever read here.

Nice try.

Thu, 01/27/2011 - 16:35 | 910453 More Critical T...
More Critical Thinking Wanted's picture

 

Yeah, indeed, Republicans are pretty dumb to claim that the USG will go 'bankrupt'.

It is pretty hard to go bankrupt if you are indebted in the currency you print :-)

 

Thu, 01/27/2011 - 17:18 | 910654 tmosley
tmosley's picture

Zimbabwe superpower.

Thu, 01/27/2011 - 17:37 | 910770 AndrewWJewell
AndrewWJewell's picture

bet your ass, "Zimbabwe Superpowers" activate .... by the time Zimbabwe Ben is done 14 trillion will be the yearly operating budget of the United States government

 

Thu, 01/27/2011 - 17:42 | 910792 More Critical T...
More Critical Thinking Wanted's picture

 

So for the past 80 years of economic history the only example you can come up with when inflation turned into hyperinflation was an authoritarian dictatorship run by an 80 years old madman, indebted in foreign currency and mis-managed into the ground by utter, sheer incompetence?

Not a single developed economy?

Wow!

Can I cite Somalia and Afghanistan as shining examples of libertarian 'zero tax', 'no government, 'private law', 'gold standard' policies then? :-)

 

 

Thu, 01/27/2011 - 18:01 | 910824 AndrewWJewell
AndrewWJewell's picture

as applicable to United States foreign policy, the Libertarian suggestion I believe is for the U.S. government to acquire Hallmark. Then all foreign policy cables will read as the following “sucks to be you, good luck with that”.

 

Then following whatever [bahh who cares], we can extract whatever from the ground with our guys wearing radiation suits

 


Progressive Libertarian Party

 

http://www.facebook.com/pages/Progressive-Libertarian-Party/183444998335344

 

Thu, 01/27/2011 - 18:20 | 910941 KickIce
KickIce's picture

That's one more example than you have.

and isn't is interesting there have been reports that the German people have safety deposit boxes full of gold and silver?

Fri, 01/28/2011 - 05:46 | 912287 More Critical T...
More Critical Thinking Wanted's picture

 

Have you checked the GLD/EUR charts lately?

If you have then you'll see that those german safety boxes full of gold were potentially a similarly stupid investment decision to those scared US pensioners in 1980 who bought an ounce of gold for $7150 (inflation-adjusted) and are still waiting for their original investment to break even, 30 years and counting ... [many of them are dead now, sadly. It's a bitch if you go for the austrian long run.]

 

Thu, 01/27/2011 - 19:28 | 911224 tmosley
tmosley's picture

I love how you turn an offhanded comment into the world's only example of hyperinflation.

I guess you never heard of a little industrial powerhouse called Israel? http://www.jstor.org/pss/4532401

Also, I love how you think Afghanistan is somehow libertarian.  There are at least three governments in Afghanistan, all of which are fighting each other.  Somalia is actually the most developed nation among those in its region, despite being a dumping ground for the world's radioactive waste.  http://mises.org/daily/2066

Not only is more critical thinking needed on your part, but some basic understanding of the world, preferably not based on racism.  Also, I like how you very specifically picked your timescale in order to keep the classical example of western hyperinflation out of the picture.  Your intellectual dishonesty will take you far on your journey through the dark side.

Fri, 01/28/2011 - 05:55 | 912294 More Critical T...
More Critical Thinking Wanted's picture

 

Erm, Israel was at perpetual war against its oil producing neighbors who embargoed it, it was not a stable developed economy by any means.

Look how quickly Israel managed to control inflation after 1985:

http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?Symbol=ILS

Even such serious runaway inflation is trivial to handle policy-wise, compared to deflation which is very sticky.

Yet GOP/libertarians are suggesting to hard-code deflation via the gold standard and hard-code wealth inequalities once and forever. Clever! :-)

 

Thu, 01/27/2011 - 22:25 | 911753 Sean7k
Sean7k's picture

How about these liar:

The performance of fiat currencies in the past century has been dreadful. But what has changed? If anything, the monetary setting of today is much worse than that of the 20th century, for at least in the earlier part of that century there was still a gold standard. Up until 1971, there was some semblance, however weak, of an international gold standard. The monetary shackles on today's central bankers are, much more lenient. Hence, the threat of inflation is far more lethal. As horrid a performance as the dollar turned in for the 20th century, the 21st might make it look pretty good in comparison. Paper monetary systems have a tendency to blow up, in what is commonly called a hyperinflation. They are really not so rare. looking back at the 20th-century experience, has heard of the famous German hyperinflation of 1922-23, where price inflation was 3,422% in 1922 alone (and where, in January 1923, one could buy a dollar for 20,000 marks - but by early November it took 630 billion marks to buy that same dollar). The numbers are simply staggering and hard to comprehend. Yet, Hungary's hyperinflation of 1945-46 was even more spectacular, with price inflation of 19,800% per month. Phillip Cagan wrote, in the 1950s, what many consider to be a classic study of hyperinflation, in which he set the definition of the term hyperinflation at an arbitrary inflation rate exceeding 50% per month. Even so, Cagan still manages to find seven hyperinflations meeting his definition, the limiting factor being that these seven were the only ones where monthly price data was available. They include the great German hyperinflation, two in Hungary and also hyperinflations in Austria, Greece, Poland and Russia. These all occurred between 1921 and 1946. Witness, then, that the phenomenon was not a rare thing. To update Cagan, the more recent hyperinflations were mostly in emerging markets. According to "The Realities of Modern Hyperinflation") some of the more recent ones occurred in places like Argentina, Bolivia, Brazil, Peru and the Ukraine and that doesn't cover them all. Further searching provided examples of devastating hyperinflations in Zimbabwe, Zaire, Georgia and Nicaragua. Large inflations but not quite Hyperinflations occurred since 1998 in Malaysia and other far east emerging countries as well as Russia and I suspect there are many more but they did not keep records.


Fri, 01/28/2011 - 07:04 | 912299 More Critical T...
More Critical Thinking Wanted's picture

 

The performance of fiat currencies in the past century has been dreadful.

Your whole premise is wrong - you are still stuck in the 19th century, thinking in terms of absolute numbers printed on green-tinted pieces of paper ...

It's as if you defined the quality of your car by the model number it carries. That Ford model "40" must be way better than this BMW-Z "4", right? :-)

Instead how about thinking of the last 200 years as continuous progress and improvement in the quality of life that brought you:

  • The ability to communicate with friends and loved ones possibly hundreds or thousands of miles away. Send pictures, share stories, talk to them instantly. Experience loving personal life in a way that was never possible before.
  • Living in a city that actually has breathable air, clean running water, clean rivers, lights, etc.
  • The ability to travel anywhere in the country pretty much anytime in the year. The ability to live anywhere in the country you like and still be connected to civilization.
  • Having modern medical facilities and treatments that can cure so many things that nature throws at us.
  • Travel to many other, weird, strange, exciting places on the planet and see how people are living there. Heck, be able to travel farther than 100 miles away than where you were born ...
  • Instead of having to carry lumps of gold or green paper, you can carry a small piece of plastic and pay with it. Lose it and get a replacement. If it gets stolen you get a replacement and any fraudulent transactions are rolled back.
  • The country is 10 times larger, the economy is 100 times more interconnected and the likelyhood that you can find a suitable activity that you enjoy and which also allows you to make money has increased perhaps 1000 fold. You are no longer born as a farmer and die as a farmer - only if you want to.
  • Not seeing every second child of yous die before the age of 5, due to a preventable illness. Not seeing mothers die so often, giving birth to children.
  • Also, even in real terms, the average wage today will buy you so much more than the average wage bought you 200 years ago - and comparatively much less work effort is asked for it. Whatever you are doing for a living, your great-grandfather would quite likely not recognize that as 'working' - it would be a form of idle leisure to him!

etc. etc.

You seem so bitter. Take it easy ...

 

Fri, 01/28/2011 - 11:36 | 912940 Sean7k
Sean7k's picture

You're a liar. You always lie- every post, then try to argue around it. 

Just as your list is a series of subjective statements that are in conflict with reality. 

It would be just as easy to argue that technology has caused more personal dislocation, shallowness in relationships and broken down traditional family values- note the rise in psychological and behavior problems for a larger segment of society.

Rivers and city water are more polluted than ever- now, it is toxic chemicals (flouride and cchlorine), gas additives, prescription drugs and chemical hormones. These are causing cancers and hormone changes. Poisoning fish, animal and man, concentrating in the apex predator when he eats the others.

Medical treatments are incapable of "curing" the common cold, much less anything else. Instead, it merely treats and then steals your earnings through a lifetime regimen of drugs.

Travel has been a benefit, but it has also allowed the introduction of invasive species and the movement of diseases that can have pandemic results.

I prefer the gold relic for money, then I wouldn't be forced to use a paper one that has lost 97% of it's value in the last 100 years. Further, that card is an invasion of privacy, recording my movements, susceptible to theft that can threaten all my accounts and credit ratings for months on end.

The country is the same size it was, less Hawaii and Alaska. Ten times? Your usual math skills at work here. Funny, as I look at the 19% U-6 number, I'm not sure those people would agree with your assumptions.

Our birth/death model is a disgrace. We are starting to approach third world status as it increases each year.

People are now required to have two incomes today to have any chance at a decent living standard. In the 1960's, you could live just as well with one parent working. 

I am not bitter, but I will continue to oppose and expose your lies. Your miserable attempts at propaganda are laughable.

Fri, 01/28/2011 - 15:49 | 914069 More Critical T...
More Critical Thinking Wanted's picture

 

Medical treatments are incapable of "curing" the common cold, much less anything else. Instead, it merely treats and then steals your earnings through a lifetime regimen of drugs.

Wow, you really are bitter! You really are living in the past and you hate the present. Up to now you were just someone I thought was somewhat confused about how the world works, but today I started sincerely feeling sorry for you.

You should know that part of your problem is that you are fantastically out of touch with reality. Here's a quick list of major modern medical advances. They have saved the lives of millions and have improved the quality of life of hundreds of millions of people:

  • 1900’s
    • First electrocardiograph machine

  • 1920’s
    • First modern respirator

  • 1930’s
    • Artificial pacemaker invented
    • Kouwenhoven cardiovascular research

  • 1940’s
    • First kidney dialysis machine
    • Plastic contact lens created

  • 1950’s
    • First artificial hip replacement
    • Artificial heart valve developed
    • First cardiac pacemaker
    • First successful open-heart bypass surgery
    • First human kidney transplant

  • 1960’s
    • First totally internal pacemaker
    • Laser treatments made available for optic purposes
    • ICU was administered
    • Nuclear machine

  • 1970’s
    • Soft contact lens
    • Physical therapy
    • CT scan introduced
    • First cochlear implant surgery

  • 1980’s
    • MRI scanners
    • First permanent artificial heart implant
    • Deep-brain electrical stimulation system
    • First laser surgery on human cornea

  • 1990’s
    • Human Genome Project
    • Radiosurgery created
    • Brachytherapy Remote Afterloader used to dissolve tumors inside-out
    • Stereotactic Needle Biopsy System to diagnose breast cancer

Fri, 01/28/2011 - 15:53 | 914081 More Critical T...
More Critical Thinking Wanted's picture

The country is the same size it was, less Hawaii and Alaska. Ten times?

Population, Sean, population.

You are thinking in way too materialistic terms. You are ignoring the people and you are missing 90% of the fun in the world. Let me guess, you are alone most of the day?

Dude, you seriously need professional help - there's not much I can do for you.

 

Fri, 01/28/2011 - 15:58 | 914096 More Critical T...
More Critical Thinking Wanted's picture

I prefer the gold relic for money, then I wouldn't be forced to use a paper one that has lost 97% of it's value in the last 100 years.

Again you are mistaken - it has not. Even if you ignore all the advances a modern society gives today you can buy the same things with one day of (average) work performed today than you could have bought 100 years ago - in fact you can buy more today.

Life was a lot harder in 1910, both objectively and subjectively.

 

Thu, 01/27/2011 - 17:34 | 910759 AndrewWJewell
AndrewWJewell's picture

this is actually an absolutely great point, I personally dont see why anyone flagged him as "junk"

Thu, 01/27/2011 - 17:35 | 910762 tmosley
tmosley's picture

Must be a citizen of Harare.

Thu, 01/27/2011 - 17:45 | 910802 More Critical T...
More Critical Thinking Wanted's picture

 

Well, I noticed that a post gets junked the moment it's not in the approved list of republican/libertarian talking points, or not being a direct quote of Ron Paul speeches.

Being true and short (read: hard to argue against) gives it extra junks.

Being obviously, glaringly true gets out the junks by the dozen :-)

 

Thu, 01/27/2011 - 17:51 | 910833 AndrewWJewell
AndrewWJewell's picture

standing ovation, me applauds

Thu, 01/27/2011 - 18:34 | 911000 Mark McGoldrick
Mark McGoldrick's picture

Indeed, a standing ovation.

No one can dismantle this guy.

<<standing, and applauding>>

Over the past six months, somehow ZeroHedge morphed into a goofy libertarian echo-chamber where "pump n dump" cartoons and deliberately manufactured conspiracy theories trumped all rational thought. 

This place reminds me of a Glenn Beck episode:  arguments that begin with threads of truth are quickly dipped in poison and woven together into pure lunacy.  

I find "More Critical Thinking" a breath of fresh air and much needed balance to a forum driven into the ditch.  

 

Thu, 01/27/2011 - 19:54 | 911285 Bay of Pigs
Bay of Pigs's picture

Echo chamber? Glenn Beck? WTF are you talking about? MCT is spreading "threads of truth"? Please. It helps to get your facts straight. He didn't. And if your view of ZH is so dim, why not leave? 

Thu, 01/27/2011 - 20:56 | 911532 Hephasteus
Hephasteus's picture

Because it's his fucking government job to persuade us into something that's not good for us.

Thu, 01/27/2011 - 18:38 | 911012 KickIce
KickIce's picture

Obama got about 15 of them last night, but he's still full of shit.

Thu, 01/27/2011 - 19:36 | 911267 tmosley
tmosley's picture

No, actually you are just so long winded and dense that most people don't want to have to deal with you.  

You are more republican than most people here.  Did you vote for Obama?  He's a republican in all but name.  Everything he has done has been Bush, but bigger and "better".  Bush bailed out the banks, Obama boosted their bonuses.

Idiots like you just don't understand that Republicans and Democrats are all exactly the same.  The second they get into office, they drop whatever ideology they espoused while out of power (always libertarian ideology, I might add--this includes the Dems, who rallied for an end to US aggression and to stop torture, but were immediately silenced on the subject as soon as they took command), and instead adopt fascist ideology.

Fri, 01/28/2011 - 06:50 | 912330 More Critical T...
More Critical Thinking Wanted's picture

 

Idiots like you just don't understand that Republicans and Democrats are all exactly the same. [...]

Well, I said it numerous times that most Republican and Democratic politicians are pretty much the same: dishonest, arrogant egocentric douchebags.

The reason: if they are not such then they do not get elected, or if they get elected they do not stay elected.

The reason for that is complex and I've explained it in past postings: politicians are pretty much the mirror images of our own worst qualities, magnified ('our nice local politician who represents my interests so nicely' versus 'that other guy's nasty corrupt politician' - mixed together and magnified by the Washington machinery) - we just do not realize them as such - and do not want to recognize them as our own doing.

Did you never find it weird that despite there being 100+ years of tradition of re-electing representatives every 2-4 years in hotly contested elections, still only douchebags make it to Washington? (Please explain it without invoking black helicopters, manipulated voting machines or various forms of mind control.)

People on the other hand are in my experience only 'Republicans' or 'Democrats' the way they are 'Ravens' or 'Steelers' - they pick a team early in their life and bond with that team and root for them. The herding instinct of the homo sapiens is strong, very strong.

People are just people, and I know at least as many nice people who voted Republican as I know idiots who voted Democrats. There's no clear correlation, other than more education tends to make people more accepting and less paranoid - but even the most paranoid borderline nazi gun-toting, bible-thumping right-wing guy can be an absolutely fantastic friend. Political views rarely impact personal relationships (unless you let them impact friendship) - they are group attributes are typically applied against other tribes of humans.

All that does not validate the right-wing lies that I have to debunk here so often. I'll debunk liberal lies too once I see them.

 

Thu, 01/27/2011 - 22:26 | 911758 Sean7k
Sean7k's picture

Or when you lie- which is your modus operandi.

Fri, 01/28/2011 - 07:14 | 912346 More Critical T...
More Critical Thinking Wanted's picture

 

Note, if facts are inconvenient to you personally then that does not automatically mean that they are lies.

For the record, so far you've not managed to identify a single factually wrong claim of mine so far, let alone a 'lie'. (Feel free to paste links here of past such incidents if you think you did.)

If you prove some claim of mine to be factually wrong then I'll concede that and correct my point or retract my position.

 

Thu, 01/27/2011 - 16:12 | 910347 watchingdogma
watchingdogma's picture

I'm so sick of people like you...

You mean when Clinton had the benefit of all of those capital gains based on the bubble economy built by Mr. Magoo?  Or when he was able to do some accounting tricks with SS?

If any equation has any degree of complexity - people like you just pick the parts that thye like and say "See - my guy was right - your guy was wrong"

Look MCT - you're part of the problem with your mis-information feeding crap to the other people just like you.  Why don't you grow a pair and do a little research and look at the who situation - Clinton was no better than Bush 1 or 2, Or Carter or Obama for that matter.  Thay all spout the same poison, and people like you (PLY) - whether a Red one or a Blue one, pick the pieces they like and shout from the mountain top about how right they are.

Let's see how you like it when they steal your 401K so they can "show" a "budget" "surplus"

Pathetic.

</rant>

 

Thu, 01/27/2011 - 16:23 | 910395 More Critical T...
More Critical Thinking Wanted's picture

 

Oh, it's pretty hard to understand the right-wing's obsession with SS accounting.

Do you realize that its a bold-faced zombie lie, that social programmes are entirely discretionary so they are not actually hard debt going forward? If a country does well then pensions and social programmes get more generous. If a country does not so well they face cuts. SS is not 'debt' in the US Treasury sense still the right so often pretends they are ...

To compound the double talk, the same right-wing that is accounting it as hard debt is suggesting cuts to Social Security! They probably do not even notice the deep intellectual dishonesty in that position :-)

 

Thu, 01/27/2011 - 16:47 | 910446 wisefool
wisefool's picture

My name is john edwards and I think you are my handler. Can we shut an airport down for a few minutes so I can understand your internal japanese debt vibe for the purpose of a nationalistic haircut? Putin says if I dont look good he'll steal my mistress.

EDIT:sarc

Thu, 01/27/2011 - 16:36 | 910456 watchingdogma
watchingdogma's picture

More left versus right versus left bullshit.  Grow a pair and stop thinking like a zombie.  Do some research, don't be afraid to come to the conclusion that you've wasted your intellect because you've chosen to believe the propoganda.

Or not.

Thu, 01/27/2011 - 22:01 | 911694 tellsometruth
tellsometruth's picture

correctomundo my friends!... who could (honestly) say that they think the problem or soultions have/will come from one side or the other current entrenched core?  Critically think about it and leave your preconsieved notions and bias and look at facts... either party for the most part are turncoats to their responsibilities...

 

Thu, 01/27/2011 - 16:37 | 910459 Sophist Economicus
Sophist Economicus's picture

"Do you realize that its a bold-faced zombie lie, that social programmes are entirely discretionary so they are not actually hard debt going forward?"

REALLY???   Wow!   Does that mean that I can get the MANDATORY deductions back for these 'social programs'....Hmmmm???

Can I stop paying them?   Hmmmm....OH, NO, wait I HAVE to pay them but its nice to know that the government can just change their minds and not give what they PROMISED -- all the while extorting from their citizens

I FEEL BETTER now

Thu, 01/27/2011 - 16:44 | 910479 More Critical T...
More Critical Thinking Wanted's picture

 

No. What your employer deducts from your paycheck is compulsory, so it's hard revenue for the government here and now.

The actual benefits paid back are discretionary and are not 'hard debt'.

Blame Roosevelt. (and blame pretty much every other developed nation that runs public insurance systems.)

Oh, and private pension schemes are similar as well, just riskier and more expensive - ask Enron pensioners or 404k holders how they like those payments.

 

Thu, 01/27/2011 - 20:56 | 911536 tmosley
tmosley's picture

Ah, canceling payouts on social security.  You SURE you aren't a Republican?

Thu, 01/27/2011 - 22:28 | 911765 Sean7k
Sean7k's picture

If Social Security is not debt in the "US treasuries" sense, then why does the US treasury have to issue bonds to Social Security for the money it has borrowed? Moron.

Fri, 01/28/2011 - 07:29 | 912353 More Critical T...
More Critical Thinking Wanted's picture

 

You do not seem to realize the difference between social security revenue (a hard source of revenue,  a form of payroll tax), and future 'soft' benefits obligations this may or may not result in.

To quote the Bush administration:

These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government’s ability to pay benefits. (from FY 2000 Budget, Analytical Perspectives, p. 337)

Or to quote Bush himself:

Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust.

One of the rare moments of him being honest :-)

Just ask the people of Ireland, Hungary or Greece whether pension benefits and other social benefits are guaranteed or not in times of grave economic distress ...

Ask Enron 404k holders and pensioners as well.

 

Thu, 01/27/2011 - 16:19 | 910353 CrockettAlmanac.com
CrockettAlmanac.com's picture

.

Thu, 01/27/2011 - 16:30 | 910423 More Critical T...
More Critical Thinking Wanted's picture

 

How did someone who claims to be a recently disaffected Republican turn into an ultra-liberal Obama cheerleader so quickly and completely?

Huh? While you clearly seem to have trouble formulating thoughts in a logical, coherent fashion but fabricating outright lies about me should be beyond even you, at least because it's so easily caught.

Care to quote me ever saying that I am a "recently disaffected Republican"?

Also, I have written comment after comment criticising the size of the Obama stimulus as inadequate (and other criticisms of Obama policies), which is hardly "cheer-leading".

 

Thu, 01/27/2011 - 17:22 | 910681 CrockettAlmanac.com
CrockettAlmanac.com's picture

While you clearly seem to have trouble formulating thoughts in a logical, coherent fashion but fabricating outright lies about me...

 

I had momentarily confused you with the other big liberal cheerleader on ZH, Red Neck Republicant. I realized my mistake and that's why I deleted my post. Not so much an act of pure evil as merely the forgetfulness of middle age.

But as long as you've drawn me back into the discussion would you care to back up the following statement with some evidence that Ron Paul is holding Treasuries? Surely you wouldn't fabricate outright lies about the good doctor?

 

You said: If this is a 'real' prediction I'm sure this will surprise Ron Paul, Paul Ryan and other GOP/libertarian dignitaries who are holding good chunks of their liquid wealth in treasuries :-)

Thu, 01/27/2011 - 16:32 | 910437 Simon Endean
Simon Endean's picture

Of course, that was with a Republican Congress, and the surplus was created by taking money from Social Security, but hey...

Thu, 01/27/2011 - 16:51 | 910522 More Critical T...
More Critical Thinking Wanted's picture

 

Do you realize that pretty much every developed nation on this planet mixes up social security deductions with other government revenues? The actual payout of SS is discretionary and can be adjusted to the general state of the economy. When the economy does well, SS programmes are more generous. When the economy is in trouble, SS programmes get cut.

That is in fact the point of many right-wing politicians right now, to cut Social Security. How can they claim it's a "hard debt" if it can be cut like that? :-)

 

Thu, 01/27/2011 - 17:00 | 910558 watchingdogma
watchingdogma's picture

Which doesn't have anything to do with Clinton "creating" a "budget" "surplus".  Accounting tricks and luck does not a great president make - try staying on topic for a change.

Thu, 01/27/2011 - 17:50 | 910830 More Critical T...
More Critical Thinking Wanted's picture

 

To the contrary, being honest about social security has everything to do with reducing the federal debt in real hard dollars:

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

Once republicans stop pretending that SS is 'hard debt' they will realize that the 'cut SS spending' promises they made are actually a real threat.

 

Thu, 01/27/2011 - 18:19 | 910955 philgramm
philgramm's picture

since you are clearly into the whole left/right paradigm would you please tell us the answers of these questions:

1) Jen or Angelina?

2) Coke or Pepsi?

1) CNN or Fox?

Thu, 01/27/2011 - 20:53 | 911522 snowball777
snowball777's picture

Nina, Vernors, BBC

Fri, 01/28/2011 - 07:30 | 912357 More Critical T...
More Critical Thinking Wanted's picture

 

Ok, was this a trick question whether I'd notice that you are not capable of counting to 3? :-)

 

Thu, 01/27/2011 - 17:58 | 910863 Things that go bump
Things that go bump's picture

That is a very un-American spelling of programs, there MCT.  It occurs to me that you're not from around here.

Fri, 01/28/2011 - 02:15 | 912167 younkint
younkint's picture

There's quite a bit more that's "un-American" about him.  Brit, I'm guessing...

Thu, 01/27/2011 - 18:44 | 911033 Paul E. Math
Paul E. Math's picture

"That is in fact the point of many right-wing politicians right now, to cut Social Security. How can they claim it's a "hard debt" if it can be cut like that? :-)"

Unbelievable.  I'm sorry, but this is utter and complete bullshit.  I'm trying not to get angry and flame you for your dishonesty.

What happens if they don't cut the SS debt?  They have to pay it, right?

So unless and until they cut the SS debt it should be accounted for as debt.

Hard debt, soft debt, I don't care just don't pretend it doesn't exist at all.  Which is what some politicians and some blog commenters would dishonestly have us believe.

David Walker was the Comptroller General of this country, a brilliant accountant and an honest one to boot.  He says SS is debt.  So who the fuck are you but a relentless windbag of sophistry?

Thu, 01/27/2011 - 20:51 | 911516 Herd Redirectio...
Herd Redirection Committee's picture

David Walker quit his f***ing job as Comptroller because he couldn't take it any more.  He didn't want to see the country go down the tubes on his watch, they wouldn't listen to him, he couldn't exert any REAL power as Comptroller General, so he quit, so that he could tell the world how TERRIBLE the US Gov't's accounting is.

 

The bottom line with SS and any benefits is this.  People have been PROMISED the benefits.  So say what you will about it being 'discretionary' spending.  People have paid in, thinking the money is being kept for them (most people have NO CLUE how SS works, let alone the worlds biggest Ponzi).  So the point is not so much how much SS will the US pay, and how much debt will have to be monetized, but how many promises will be broken?  How much trust will be lost?  And will there still be any faith in the US dollar as a world reserve currency when it is all said and done? 

I believe the answer is no.

Fri, 01/28/2011 - 07:39 | 912362 More Critical T...
More Critical Thinking Wanted's picture

 

To quote the Bush administration about the Social Security Trust:

These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government’s ability to pay benefits. (from FY 2000 Budget, Analytical Perspectives, p. 337)

And to quote Bush himself:

Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust.

And I don't quote him all that often :-)

Fact is, current revenue is financing current benefits: Medicare, SS (much of SS is care for the Medicare elderly as well).

There are no real SS assets and there's no real SS debt either. The SS bonds are just virtual gimmicks not part of any free market flow of capital: they cannot be sold on the open market ...

If the economy does well, benefits for the elderly improve. If an economy does not so well, benefits get frozen or get cut.

The takeaway: help build a robust economy in which your children can produce enough revenue as well, so that your retirement years are golden. Or take care of your own retirement, if you can.

 

Thu, 01/27/2011 - 17:16 | 910644 HoofHearted
HoofHearted's picture

Actually, if you look at the stats, Clinton was still digging the hole, he was just doing so at a lower pace. His "surplus" came while still robbing from the Social Security Trust Fund. Hence, the fiscal debt of the US continued to grow.

 

Yes, everyone can get paid. Remember that Benny and the Inkjets control the flow of cash, and they can just print more up to pay everyone off.

Thu, 01/27/2011 - 17:52 | 910838 More Critical T...
More Critical Thinking Wanted's picture

 

Yes, you are right that for most of his two terms the Clinton administration was indeed just "digging the hole slower", but if you check the absolute debt level data as well:

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

You will see that he actually started getting out of the hole as well. So it's possible, given the political will.

 

Fri, 01/28/2011 - 09:14 | 912473 Calmyourself
Calmyourself's picture

"So it's possible, given the political will."  whose political will would that be, why Gingrich and the R controlled House and Senate.  No doubt oth parties are corrupt and have allowed regulatory capture of the FIRE economy but the same lol, intellectually lazy analysis at best

Fri, 01/28/2011 - 11:01 | 912752 More Critical T...
More Critical Thinking Wanted's picture

 

Well, you have to consider the original argument I made, I ridiculed the notion presented in this article, that it is impossible to pay back the federal debt:

U.S. Treasury Bond Holders Will Never Be Paid

Whether it will be someone like Gingrich, trying to starve a democratic administration of federal resources (which the following Bush administration did and some more), or someone truly worried about the deficit, or some external necessity, does not really matter to my argument (I'm not able to predict the future) - my point is that there are obviously many angles through which such level of debt can be financed.


Thu, 01/27/2011 - 17:32 | 910745 Blindweb
Blindweb's picture

I was actually interested in your argument with Mr Lennon Hendrix until I saw you reduce the economy to Clinton vs. Bush. And, "Obama is starting to turn it around again." 

Wikipedia: The "dot-com bubble" (or sometimes "IT bubble"[1] or "TMT bubble") was a speculative bubble covering roughly 1995–2000 (with a climax on March 10, 2000 with the NASDAQ peaking at 5132.52 in intraday trading before closing at 5048.62) during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more recent Internet sector and related fields.

 

 

Thu, 01/27/2011 - 17:56 | 910851 More Critical T...
More Critical Thinking Wanted's picture

 

You have to admit that the federal deficit reduction was pretty much the Clinton administration's political line.

But yes, I agree that reducing it to "Clinton versus Bush" simplifies it way too much. It makes for a convenient shortcut though, as the fiscal policies were so starkly different.

Looking at the fiscal policies and data alone you could think that Clinton was an honest Republican president while Bush was an honest Democratic president :-)

 

Thu, 01/27/2011 - 19:08 | 911151 Arkadaba
Arkadaba's picture

+ exactly what I was thinking Blindweb

Thu, 01/27/2011 - 19:08 | 911150 Ride30B430
Ride30B430's picture

Clinton had massive tax rev generated from cap gains during dot com boom,  when it ended so did the surplus.  It really is that simple. 

Fri, 01/28/2011 - 07:49 | 912366 More Critical T...
More Critical Thinking Wanted's picture

 

Not primarily. Check corporate profits in that timeframe:

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

Yes, 2000 (and 2001) caused a recession, but not a very deep one. The amount of profit produced is the 'area' of the graph, and you can judge lost productivity near 2000 by taking off that small dip.

The dotcom bust was 'big' for you and me because we were online then and experienced it first-hand. In terms of the entire US economy, not so much.

So yes, the USG has the ability to pay back debt  (and that was my point - not to defend or hide the dotcom bomb - why would I?) - and has demonstrated that ability in the past.

That ability is mainly dependent on political will - the economic ability is very much there.

 

Thu, 01/27/2011 - 23:04 | 911865 thedrickster
thedrickster's picture

Are you really that obtuse to think that the emperor alone is responsible for the short term returns on the largest multi generational ponzi'esque , transfer of wealth the world has ever seen?

Political will is the disease, not the cure.

 

Thu, 01/27/2011 - 15:54 | 910278 AnAnonymous
AnAnonymous's picture

Comparison to an individual situation drown in millions of other situations is irrelevant. The US size is on the world scale and the physical debt is to be compare to directly to the Earth's capacities.

Besides, the US economy also works through stuff like QE, which does not exist at individual level.

The US internal resources are also allocated to support the US standard of life in the future. Trading them is very secondary.

Thu, 01/27/2011 - 16:06 | 910321 goldsaver
goldsaver's picture

You are assuming 14 trilllion in tax receipts and no additional or new expenditures.

The federal government has about $2.1 Trillion in annual tax receipts with an outlay of 3.5 trillion (2009 numbers). http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

Based on that data the real comparison is a 200k mortgage for a man making 20k a year that spends 30K a year just to keep up. We are Stanley Johnson

http://www.youtube.com/watch?v=hn5EP9StlVA

 

Thu, 01/27/2011 - 16:17 | 910369 More Critical T...
More Critical Thinking Wanted's picture

 

Erm, do you mean to suggest that this turnaround of the deficit spending up to 2000 did not happen:

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

?

And yes, Clinton raised taxes. Taxes on the rich need to be raised, the 15% rate on capital gains is ridiculously low (even the 35% top rate for regular income is too low) and I'd agree with you that such a low level of taxation is likely not sustainable in the long run - civilization is expensive, if the super-rich wants a cheap to run country they can move their business to Somalia or Afghanistan.

Also, your calculation does not account that the US population and GDP is growing, hence tax revenue is growing as well. As long as tax revenues grow at least as much as the short-term interest paid on debt the situation seems entirely sustainable even without raising taxes for the rich.

 

Thu, 01/27/2011 - 16:40 | 910468 DoChenRollingBearing
DoChenRollingBearing's picture

Or move their business to Peru.

Those of us with capital do not have to take extreme taxes.

The solution is to cut spending.  That means military and "entitlements" as well.  Tax me too high, and I am out of here.  Look at what is beginning to happen in CA, NY and IL.  They are moving to FL and TX.

Thu, 01/27/2011 - 16:57 | 910544 More Critical T...
More Critical Thinking Wanted's picture

Or move their business to Peru.

Or 'move' it to the Cayman Islands, in cooperation with a few holdings in Ireland and the Netherlands.

Eventually tax cheats get caught and slowly but surely you will be able to move your tax obligations to Peru if you are actually living in Peru.

 

Fri, 01/28/2011 - 00:37 | 912060 RockyRacoon
RockyRacoon's picture

Tax cheats, yes.  But this is legal.  How to counteract that in the currently bought-and -paid-for economic climate?

Fri, 01/28/2011 - 11:14 | 912800 More Critical T...
More Critical Thinking Wanted's picture

 

Well, if all production, employment is done in Peru then sure, more power to them. Then it's not an US business anymore - it's a Peruvian business with US owners - importing goods into the US. The US and Peru will keep their trade balanced in the long run to make it fair to both sides.

That is how the EU and US is balancing trade, and I'm not aware of US corporations moving to the EU for tax purposes and vice versa - they prefer to stay close to their natural true home of production. (lets ignore the double Irish tax cheating scheme for a moment - that is used to cheat on both US and EU taxes :-) )

Eventually levels of taxation balance out globally, just like trade is balancing out. This might take a century though ...

Alas if much of the real productive activity is happening with the US, with Peru just being a mail-box address, it's a form of cheating taxes. (regardless of whether there's a loophole for it or not)

Consumption taxes (VAT) can take care of the income being taxed where the final recipient of the income truly prefers to live.

 

Thu, 01/27/2011 - 16:49 | 910506 goldsaver
goldsaver's picture

Clinton did not raise taxes since he could not, congress did. The more you raise taxes on the rich, the more rich move away from your jurisdiction. Ask NY, NJ, etc. The "Clinton boom" came from two sources. One, cuts in spending by the Gingrich house and two the .dot com bubble (mainly the bubble). 

If 35% is too low, what would be fair? 55%? 75%? 100%?

Whose money is it anyway? Ben's? MaObama's?

Who are the rich? Any one who makes more than your parents?

And population growth also means growth of Federal expenditures in entitlement programs (SNAP Cards anyone?)

You really need to read more than the Huffington post.

Thu, 01/27/2011 - 17:09 | 910589 More Critical T...
More Critical Thinking Wanted's picture

 

The more you raise taxes on the rich, the more rich move away from your jurisdiction.

They are certainly free to live elsewhere.

If 35% is too low, what would be fair? 55%? 75%? 100%?

That's a difficult question but according to studies to humans 50% seems to be the 'threshold of fairness'. Many European countries have settled at 48% or so.

Whose money is it anyway? Ben's? MaObama's?

The hundreds of millions who live in the country in question, who provides for its infrastructure and general business and market environment that those who make money utilize. Those people generally elect representation for themselves - dumbly or smartly but it's their right nevertheless.

Just like you pay a rent to the mall owner, if you rent a shop there. Infrastructure and civilization is not cheap to provide and freeloaders are not welcome.

Who are the rich? Any one who makes more than your parents?

Generally those who were lucky to pick the right location to get born in, who picked the right parents, who got the right education, who were lucky enough in the marketplace and who were lucky enough with their selection of genes.

A certain level of self-acquired ability is involved as well, but at least as far as 'social mobility' stats go, in the US you generally have to pick the right parents to be successful. There are plenty of exceptions, but that's the general trend: if you get born in the right circumstances then you can be successful even if you are a moron otherwise - while even with the best of abilities if you get born in the wrong place you are often simply out of luck.

Naturally, the other 300 million people, who are working to provide you with security, infrastructure and a highly developed market have a say in the matter as well - you do not get to declare the money you make in the mall as 'your income alone'. The democratically elected solution to infrastructure costs and other services is "pay taxes, do not freeload".

There are other options as well, such as Somalia, with a zero percent income tax - a perfect place for libertarians.

 

Thu, 01/27/2011 - 17:44 | 910801 Bay of Pigs
Bay of Pigs's picture

"There are other options as well, such as Somalia, with a zero percent income tax - a perfect place for libertarians".

Just when I think I've heard your most ridiculous comment yet, you surprise me and say something even more off the wall.

Nice work Lack of Critical Thinking. 

Thu, 01/27/2011 - 17:59 | 910867 More Critical T...
More Critical Thinking Wanted's picture

 

Shees, you are not telling me that libertarians actually want a Government and want to pay Taxes??

 

Thu, 01/27/2011 - 19:44 | 911289 Bay of Pigs
Bay of Pigs's picture

No, but your appalling ignorance of "Libertarian" is astonishing.

Fri, 01/28/2011 - 09:17 | 912476 More Critical T...
More Critical Thinking Wanted's picture

 

So explain the difference between libertarian "lack of taxes and lack of government" and Somali "lack of taxes and lack of government"?

Maybe it's just me but it seems quite similar to me.

 

Fri, 01/28/2011 - 09:20 | 912482 Calmyourself
Calmyourself's picture

"Generally those who were lucky to pick the right location to get born in, who picked the right parents, who got the right education, who were lucky enough in the marketplace and who were lucky enough with their selection of genes."

Leftism boiled to one of its primary beliefs; wealth is luck, wealth is the winning lottery ticket.  The slothful or indolent own the wealth you worked your ass off for just as much as you or at least 50% of it..

 

I will not engage in useless debate with a thief, who believes what I produce is subject to redistribution over and above a fair contribution to fund infrastructure, defense and limited bootstrap social welfare.  Europe is calling your name, if your there, stay there this country is about to change.

Thu, 01/27/2011 - 17:21 | 910677 Commander Cody
Commander Cody's picture

Its really pretty simple - spending more than is collected will increase the deficit.  Ignore this until it is unsustainable and there is a big problem.  See any solutions that the government is working on?

Thu, 01/27/2011 - 22:33 | 911780 Sean7k
Sean7k's picture

GDP from private sources is falling. All GDP "growth" has been from government spending. Since government spending is consumption, the economy is shrinking. Government spending should never be included in GDP- it is consumption only. 

 

Thu, 01/27/2011 - 16:35 | 910450 assumptionblindness
assumptionblindness's picture

Great post. 

I would only add that a 7% yield on our 10-year treasury bonds will be just slightly damaging to those tax recepit and outlay figures. 

Thu, 01/27/2011 - 16:11 | 910343 SDRII
SDRII's picture

a country that is producing $15 trillion per year

First GDP isnt "produced" other than as some accoutning fiction like the "saving" rate

As to GDP: ~$3T of the $15T is Gov which is counterporductive. The other $9T or so is PCE, which is based on inflated balance sheets and sinking wages. Ignoring of course all the adjustments.

Selling assets would be the final nail in the coffin of the post industrial revolution and the destroy the last remining hopium of "future" value creation

Epic Fail

 

 

Thu, 01/27/2011 - 16:17 | 910368 Yen Cross
Yen Cross's picture

I believe that number is 16T+. Nice post though!

Thu, 01/27/2011 - 16:33 | 910440 More Critical T...
More Critical Thinking Wanted's picture

 

Beyond the factual inaccuracy, any claim that the debt is not serviceable would also have to explain away the inconvenient truth that it was very much serviceable not so long as a decade ago:

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

 

Thu, 01/27/2011 - 17:00 | 910560 goldsaver
goldsaver's picture

What factual inaccuracy? And is your chart that points to a short lived 200B surplus between 1998 and 2000 caused by the .dot com bubble is proof that the rest of the chart is invalid?

Please point to your chart and explain how in hades can you continue that degree of debt spending and claim solvency?

Of course the original argument was not if we can service the debt but can we pay the bonds. servicing the debt, which now requires Zimbabwe style monetizing, does not pay the debt, it only delays principal payments by paying higher and higher interest. Using Visa to make minimum payments on your Master Card is not a viable financial model.

Thu, 01/27/2011 - 18:02 | 910886 More Critical T...
More Critical Thinking Wanted's picture

 

I was addressing clearly false claims that the federal debt was not reduced.

The moment you realize that despite the claims here a short 10 years ago not only was the deficit turned around but federal debt was actually shrinking, you realize that all those "end of the world, run!" prophecies here are similarly based on false premises.

Beyond the somewhat obviously ridiculous notion that a government will be unable to pay bonds denominated in its own currency, for which it ... only has to print money :-)

 

Thu, 01/27/2011 - 22:35 | 911784 Sean7k
Sean7k's picture

You just love that lie. It never went down YOY.

Fri, 01/28/2011 - 09:21 | 912480 More Critical T...
More Critical Thinking Wanted's picture

 

LOL, the twisted, forked right-wing tongue, denying quarterly data and other inconvenient facts when it does not support their political agenda ...

Are you a flat earth and global cooling proponent by any chance?

 

Thu, 01/27/2011 - 17:31 | 910741 Calmyourself
Calmyourself's picture

Your right, all these other guys are fools.. Of course every dime of the $15T in GDP can be used to pay debt if we want too, no other use for it cannot eat it..  We can service this debt just fine Bernanke is printing and buying all the crap because he loves the smell of ink,, mmm ink in the morning smells like U.S. victory, thats all carry on.. Odomba is paying down the debt as we speak. You going all in on Tbills then?

Thu, 01/27/2011 - 23:05 | 911870 thedrickster
thedrickster's picture

"factual" is newspeak for obfuscation.

Thu, 01/27/2011 - 17:16 | 910642 DosZap
DosZap's picture

Yen,

With over 800b a year in interest alone, you think we are going to GET FISCAL?, and take care of that debt???

LOL

MY ASS.

No way these Ckskrs do not know whats coming, and its not an accident, and its been pre-planned for generations.

Thu, 01/27/2011 - 16:46 | 910502 tmosley
tmosley's picture

You do know that GDP is the total income of the whole nation, and not that of the government, right?  The government's income is only $2 trillion per year.  So it's more like a guy with a $50K/year pay paying off a $300K mortgage while spending $75K/year.  Pointing at the GDP and noting that the debt is less than it is like saying that our $50K/year wage earner is fine because his company brings in $300K/year.

More critical thinking needed.

Thu, 01/27/2011 - 17:29 | 910733 ConfusedIdiot
ConfusedIdiot's picture

I didn't realize that 27% of the earth's coal reserves are in the US, though China is the largest "producer" (using theirs up faster and faster) The Mesabi iron ore range is only one of four in the same basic geographic area of the US. There is enough hematite and taconite to provide the enitre planet's need for iron and steel longer than the species will survive. China eats iron ore for dinner and is still hungry.  Coal and ore for debts. Not to difficult to see a good trade here. Maybe the mortgage is disproportionate to the home value but the mineral rights -- ovayyy!!!!! Experimenting with critical thinking instruction guide : www.critthink.gov

CI

Thu, 01/27/2011 - 17:12 | 910623 DosZap
DosZap's picture

If this is a 'real' prediction I'm sure this will surprise Ron Paul, Paul Ryan and other GOP/libertarian dignitaries who are holding good chunks of their liquid wealth in treasuries :-)

 

I'll take you money on that one.

If Ron,Rand, and Ryan are holding fiat, its damn shure not US, nor in this country.

Thu, 01/27/2011 - 18:13 | 910931 traderjoe
traderjoe's picture

@ More Critical T

I know you're just trolling or maybe just stirring the pot. Maybe you even believe the drivel you send out. You frequently accuse people of use selective evidence/facts. Your post failed in this regard as well.

Just like there is not necessarily a relationship between revenues and net profits, it is a fallacy to compare net public debt to the size of an economy: (1) net debt should be compared to the size of government to compare apples to apples; and (2) even better it should be compared to the net 'profits' of a government to consider ability to not only pay current payments but also principal payments. So, in this regard, you have a government borrowing $1 for every $1 it receives in taxes. Therefore, it would have to cut expenditures by 50% to even break-even for a year. In order to begin reducing debt, it would have to cut expenditures even further.

Secondly, you mention vast natural resource wealth. Again, you can't just look at that as an aggregate/currency in order to pay debts. Who owns the resources? What are their extraction costs? What is the net profit that would be available to make debt payments?

Oh, and while we are at it, let's discuss unfunded liabilities. The US uses the cash basis of accounting, which even the IRS forbids corporations from doing at some small level of size. In that context, there are many trillions of dollars of unfunded liabilities. Could we default on these? Yes. Are the projections somewhat meaningless, yes, but for a lot of reasons - one of which is that all of the projections actually lower the unfunded liabilities using the infinite growth paradigms of economics. 

 

Thu, 01/27/2011 - 22:36 | 911786 Sean7k
Sean7k's picture

Nice job, Traderjoe.

Fri, 01/28/2011 - 09:33 | 912498 Calmyourself
Calmyourself's picture

As soon as I read Critical t's post I thought the same thing, it is full or more holes than swiss cheese.. But the effort of chasing down and documenting each of his half truths, logical fallacies and accounting bull%^#@ is too much effort to engage a redistributionist thief. 

Vast natural resources, apparently there is gold in them thar hills and you just drive by and it jumps in the truck. 

Thank you for going as far as you did, I try to  reserve my energy for those with true thinking skills and the inherent ability to be persuaded and awoken.  Ciritical above has ingested far too many steroids for that to happen imo.

Thu, 01/27/2011 - 19:09 | 911133 Ride30B430
Ride30B430's picture

M C T,

$14T is not income (taxes + fees - spending) it is GDP, which can not be used to pay off debt.  We run a deficit Rev-Exp and make up the difference with borrowing.  Did you take an econ class back in day?

I think what you meant to say, "If a person makes $50K per year and has debt service + expenses of $70K can easily pay off a $40K mortgage?"  I don't think so.

Please post real facts or people reading this site will become dumber.  That is not the point of this great site.

Ride30, short UST 30yr.

 

Thu, 01/27/2011 - 20:44 | 911493 Top_Kill
Top_Kill's picture

Like it's difficult for a person making $50k a year to pay back a $40K mortgage who is living on an estate worth millions of dollars.

Right! Right?

Your point is worthless when examined in an intelectually honest manner. Producing 15 Trillion in GDP while having 14 Trillion in debt is like saying the company I work for generates 1 million in revenue so I can afford a $900,000 house. The US generates revenue of about 2 trillion in taxes, spends that 2 trillion, and plus another 2 trillion. Your point should have been:

"Like it's difficult for a person making $50k a year to pay back a $350k mortgage while racking up another $50k per year in credit card debt...er...ugh...oh shit, we really are fucked!"

 

Thu, 01/27/2011 - 20:54 | 911531 Top_Kill
Top_Kill's picture

Like it's difficult for a person making $50k a year to pay back a $40K mortgage who is living on an estate worth millions of dollars.

Right! Right?

Your point is worthless when examined in an intelectually honest manner. Producing 15 Trillion in GDP while having 14 Trillion in debt is like saying the company I work for generates 1 million in revenue so I can afford a $900,000 house. The US generates revenue of about 2 trillion in taxes, spends that 2 trillion, and plus another 2 trillion. Your point should have been:

"Like it's difficult for a person making $50k a year to pay back a $350k mortgage while racking up another $50k per year in credit card debt...er...ugh...oh shit, we really are fucked!"

Fri, 01/28/2011 - 15:06 | 913933 downrodeo
downrodeo's picture

What you seem to be saying is that we could easliy pay off the debt if all GDP was directed to that end. That seems obvious. I could buy a new mustang on my meager wage, if I didn't have to eat or pay rent. I could also buy one if I sold everything that I own, which seems to be your second point.

Thu, 01/27/2011 - 20:11 | 911394 Windemup
Windemup's picture

You might not know the intent of the author of a quote. Leave it as it is. Your explanations will only muddy the water.

Thu, 01/27/2011 - 15:07 | 910090 Let them all fail
Let them all fail's picture

Where are good places to buy from?

Thu, 01/27/2011 - 15:12 | 910113 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Coin shops.

Thu, 01/27/2011 - 15:39 | 910222 hedgeless_horseman
hedgeless_horseman's picture

BTFD?

Thu, 01/27/2011 - 15:45 | 910245 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Even with the rest of the world fannning the flames, Bernanke is going to blowtorch all fiat by monetizing the debt.  He can not blowtorch gold except to change its shape.  He does so and leasees it away.  But those contracts on the Fed's books, is it for gold or tungsten?  The longer this continues the more PM we get.  I will not call the clock on Bernanke as he sits with a stupid poker face.  Go ahead and bluff Bernanke, we got the nuts!

Thu, 01/27/2011 - 15:18 | 910128 TruthInSunshine
TruthInSunshine's picture


When you cast your eyes upon the skylines
Of this once proud nation
Can you sense the fear and the hatred
Growing in the hearts of its population

And our youth, oh youth, are being seduced
by the greedy hands of politics and half truths

The beaten generation, the beaten generation
Reared on a diet of prejudice and mis-information
The beaten generation, the beaten generation
Open your eyes, open your imagination

We're being sedated by the gasoline fumes
and hypnotised by the satellites
Into believing what is good and what is right

You may be worshipping the temples of mammon
Or lost in the prisons of religion
But can you still walk back to happiness
When you've nowhere left to run?

And if they send in the special police
To deliver us from liberty and keep us from peace

Then won't the words sit ill upon their tongues
when they tell us justice is being done
and that freedom lives in the barrels of a warm gun

Thu, 01/27/2011 - 14:49 | 910013 Herd Redirectio...
Herd Redirection Committee's picture

Indeed, buy silver.  You get the feeling that looking back in two or three years there could be a few disgruntled people wondering how their paper money ever got quite so useless!  Thats why it is so important to educate people now, so that only the MOST ignorant or most crooked are not made aware of the current (currency) issues.

Check out the new blog the Web of International Finance, by the Capital Research Institute.

http://www.capitalresearchinstitute.org

Who is to blame when food riots come home to North America?

We have all heard about the riots.  Its not even necessary to specify WHICH riots, because they have been so widespread.  But the reasons for the riots are quite uniform.  Food prices have spiked, and employment opportunities remain scarce.  People are fed up with the politicians, and rightly so.  Why are food prices up?  Has supply decreased significantly, has demand increased greatly?  No.  While there have been bad wheat harvests which have led to cuts in exports from Russia and India the primary reason for food prices exploding higher is the printing of money by central banks, the Federal Reserve specifically.

Thu, 01/27/2011 - 17:20 | 910664 DosZap
DosZap's picture

And do not forget USING it for Fuel.

CORN anyone?.

Thu, 01/27/2011 - 14:52 | 910023 Azannoth
Azannoth's picture

“History is a set of lies agreed upon.”
- Napoleon Bonaparte

Probably more true of the 20th Century than any other

Thu, 01/27/2011 - 15:08 | 910093 Mrmojorisin515
Mrmojorisin515's picture

nah, you never heard of when the church would forgive your sins for nice lump sum?

Thu, 01/27/2011 - 15:13 | 910115 Azannoth
Azannoth's picture

Yes I did, have you ever heard of the "Leuchter Report"

Thu, 01/27/2011 - 15:49 | 910266 DaveyJones
DaveyJones's picture

their own workers got a discount

Thu, 01/27/2011 - 17:21 | 910678 DosZap
DosZap's picture

Yeah, but those where the times the SO called Church did not allow commoners to own Bibles.

Books can say anything, as long as ONE person reads them.

Thu, 01/27/2011 - 14:54 | 910031 Cleanclog
Cleanclog's picture

Gotta add that I am a bit surprised that the activities in Egypt, Yemen, Algeria, Indonesia (and Bangkok - but different genesis there), and Japanese bond downgrade, didn't put a floor under gold.  Maybe silver is where to go for next bump.  Practicalities?

Thu, 01/27/2011 - 14:56 | 910043 Azannoth
Azannoth's picture

You're still thinking in terms of Fundamentals, didn't you learn anything on ZH ? ;)

Thu, 01/27/2011 - 15:06 | 910084 bunkermeatheadp...
bunkermeatheadprogeny's picture

Gold stolen by despots and put on the market sells at a discount.

Thu, 01/27/2011 - 15:15 | 910122 HarryWanger
HarryWanger's picture

Somewhat surprising indeed. I am buying oil here though.

Thu, 01/27/2011 - 15:25 | 910153 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

i just made french toast with cayenne instead of cinnamon.  Want to talk about it?

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