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Guest Post: You Want Inflation? Here's How To Get It
Submitted by Charles Hugh Smith from Of Two Minds
You Want Inflation? Here's How To Get It
Rising prices driven by speculation is not the same as organic inflation, and diverting national income to the banks will not create organic inflation.
The Federal Reserve's stated goal is to create modest inflation. Unfortunately they don't grasp the difference between speculative inflation and organic inflation. The Fed's official goals are to stabilize prices and maintain employment, and its de facto policy to achieve these lofty, high-minded goals is to divert huge sums of the national income to the insolvent banking sector.
The Fed also seeks to bail out the insolvent debt machine by generating some nice solid inflation, to boost the impaired assets held by banks. In other words, the Fed is specifically seeking to create asset inflation, which will eventually enable the banks to appear marginally solvent as their real estate and other assets rise in value.
Let's turn to the origins of the Fed inflation policy, as stated by Chairman Ben Bernanke in his various papers and speeches: deflation VS inflation: an Austrian Analysis:
In a paper from which he earned the sobriquet "Helicopter Ben," Chairman Bernanke provided a thought experiment to demonstrate that any deflation could be defeated: most economists would agree that a large enough helicopter drop [of newly created money] must raise the price level...at some point the public would attempt to convert its increased real wealth into goods and services, spending that would increase aggregate demand and prices.
In a speech a few years later, Bernanke detailed the policy mechanism by which the circulation of dollars might be increased at will: If the Treasury issued debt to purchase private assets and the Fed then purchased an equal amount of Treasury debt with newly created money, the whole operation would be the economic equivalent of direct open-market operations in private assets. "We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."
Here's the problem with Bernanke's "solution:" the assets he's goosed ever higher (stocks and bonds) are only held indirectly via pension funds for the bottom 80% of the populace. Only the top 10% of the citizenry own enough stocks and bonds directly to experience the "increased real wealth."
As a result, there's no follow-through of higher spending. Bernanke's policies have failed to generate higher spending for a number of fundamental reasons.
The distinction between housing assets and equity assets is absolutely critical, but it's completely lost on the Fed. We can see Bernanke's game plan in action in the most recent Fed Flow of Funds.
Housing equity has plummeted roughly $6 trillion from the bubble peak to Q3 2010 (and it has slipped further since): $22.6 trillion to $16.5 trillion.
Stocks and bonds, meanwhile, have gained $6 trillion--a nice symmetry. In Q1 2009, corporate equities ($5 T), mutual funds ($3.1 T) and pension fund reserves ($10.4 T) added up to $18.5 trillion. By Q3 2010, these had risen smartly to $24.4 trillion (corporate equities $7.8 T, mutual funds $4.4 T and pension fund reserves $12.2 T)
Housing is the primary household asset for roughly 2/3 of U.S. households, while stocks and bonds are the primary asset for only the top 5%. So what Bernanke has effectively overseen is a massive transfer of private wealth.
He's also accomplished a stupendous transfer of national income to the financial Elites in the banking sector by lowering interest rates to zero (ZIRP). Back in the low inflation 1960s, banks and savings and loans were required to pay 5.25% on all savings. Cash, in other words, generated substantial income for ordinary savers.
The idea with ZIRP is to loan the banks essentially free money, which they can lend out at between 5% and 12% (or higher), generating "free" profits. The Fed's plan is to sluice these gigantic profits to banks so they can recapitalize their insolvent balance sheets without any direct handouts. But ZIRP is nothing but an indirect transfer of wealth from the private sector (now completely deprived of any interest income) to the banks.
The Fed's policies allow for only two ways to access this newly created "increase in real wealth" for the top 10%: sell the assets or borrow money from the banks. If people cash out their stock gains, then that would automatically push stocks lower, bollixing the game plan. The Fed's intention is to "nudge" the populace into borrowing more money from the banks at nominally high rates of interest (anythijng above 0% is pure profit for the banks).
Unfortunately for the Fed, those with rising assets are no longer hankering for higher debt levels, and the bottom 80% are no longer qualified to borrow. So what we have is a speculative asset inflation which is spilling over into commodities as hot money borrowed for next to nothing seeks higher returns anywhere on the planet.
Contrast this with organic inflation, in which people with lots of free cash are chasing limited goods and services.
Inflation itself is a transfer of wealth. As noted in the paper linked above:
In short, the true crux of deflation is that it does not hide the redistribution going hand in hand with changes in the quantity of money. It entails visible misery for many people, to the benefit of equally visible winners. This starkly contrasts with inflation, which creates anonymous winners at the expense of anonymous losers.
Inflation is a secret rip-off and thus the perfect vehicle for the exploitation of a population through its (false) elites, whereas deflation means open redistribution through bankruptcy according to the law.
The reason that public sentiment has always been biased against monetary deflation can be found in the manner in which wealth transfer occurs under inflationary and deflationary environments. During an inflationary credit expansion, wealth is transferred from the public in general to the earliest recipients of the newly created credit money. In practice the earliest recipients are interest groups with the strongest political connections to the State and, in particular, the State institutions that control monetary policy (i.e., the Federal Reserve in the United States).
Importantly, the wealth transfer that takes place during an inflation is hidden and largely unrecognized by the majority of the population. The population is unaware that the supply of money is increasing and the attendant rise in prices, ostensibly beneficial to business, initially produces [a] general state of euphoria, a false sense of well-being, in which everybody seems to prosper.
Those who without inflation would have made high profits make still higher ones. Those who would have made normal profits make unusually high ones. And not only businesses which were near failure but even some which ought to fail are kept above water by the unexpected boom. There is a general excess of demand over supply--all is saleable and everybody can continue what he had been doing.
And here precisely lies the answer to why the State prefers a policy of controlled inflation. Only in an inflationary environment can State largesse be conferred to the politically well-connected without raising public ire. The widespread and visible transfers of property through bankruptcy that must take place during a deflation are often politically destabilizing and thus highly unappealing to any regime. A sense of injustice grows within the population as banks are saved from the folly of their misguided investments with taxpayer-funded bailouts, while debtors with no political clout have property seized in bankruptcy.
Here is where we are in a nutshell. The general populace has seen its income decline as the Fed's ZIRP policy has channeled their interest income directly into the banks, and as their wages stagnate.
Yet thanks to the speculative inflation engineered by the Fed, prices are rising. In an organic inflation, wages and interest income would both be rising along with prices. So the direct result of the Fed's policies is higher costs and the transfer of national income to the banks.
The average household has seen its income and its asset base (housing) stagnate or decline. Meanwhile, the equities market, which directly "increases real wealth" in only the top 10%, has risen over 80% from the Q1 2009 low.
If the bottom 80% are seeing income and assets stagnate or decline, how can you possibly get organic inflation? Answer: you can't. And speculative inflation only benefits the top financial players, not the general populace.
If we combine this chart and the Fed Flow of Funds data, we find that mortgages total $10.1 trillion and other consumer debt is about $3 trillion.
You want to create organic inflation, driven by consumers with plenty of cash chasing goods and services? Here's how:
1. Reinstate the policy of paying 5.25% on all savings, effectively transferring wealth back from banks to citizens. If the banks can't manage to do so and remain solvent, then close them down and liquidiate their assets and liabilities. Others will rise to take their places.
2. Print $5 trillion in cash, not credit, and liquidate all consumer debt and a couple trillion in mortgage debt for those who are not hopelessly underwater.
3. Aggressively cram down underwater mortgages onto the banks, forcing them to liquidate all their bad debt. Yes, this will reveal them as insolvent, but the goal here is not to save the financial Elites' impaired assets, it's to reset the housing market by clearing off all the impaired debt in the system.
By resetting the consumer balance sheet and paying interest, then you would be putting cash into households which could be spent in the real economy.
Is this a wise or prudent policy? I don't know. The goal here was not to assess that question, it was simply to follow up on the goal of creating inflation. If you want organic inflation, you have to divert the national income from the banks to the citizenry, and you have to reset the housing market.
The Fed's policies cannot create organic inflation, because all the Fed is doing is transferring wealth to the nation's Elites. Their spending on luxuries and fine dining are not broadbased enough to generate organic inflation in the entire economy.
Borrowing money does not drive organic inflation: higher incomes and free cash drive organic inflation. If you want inflation, then you have to increase the incomes and assets of 60% of the households, not just the top sliver who own most of the financial assets.
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The fed's plan is to give insiders so gawd damn much money that they'll hire servants for their many palacial estates.
Gonzalo Lira showed persuasively that inflation/hyperinflation does not raise real estate prices, it in fact causes them to crash eventually. Thus the fundamental underpinning of the Fed's plan is fatally flawed.
that is exactly what Ferfal said happened in Argentina
Housing prices are linked to income and spendable income after fixed costs (housing, transportation and food).
Transport is up, Food is up, Wages are down. And keep doing so = Real estate will keep going down.
agreed, you need to focus on real income to get real asset growth.
they should start a liquidation process like they had after the S&L crisis.....remember the boom that happened after that? This web site may not be here if they had not freed capital for investment.
C'mon Obama and Democrats your days are numbered anyway, take one for the team and do what is right. Or else the only job growth will be wiping baby boomers asses for silver dollars.
My Pakistani acquaintances point out life is much harder for the middle class in the USA. Of course I had to take the bait and ask how. They pointed out that the middle class in Pakistan all have servants. You have the Nanny, the cook, and the driver/gardener. In South America even the smallest middle class apartment has a room off the kitchen for the maid.
We are the only country that routinely puts its servant class on disability and welfare.
Our day care provider from 20 years ago, an Indian from Hyderabad, said the same thing. The mothers-in-law would come to visit and stay for months, but would complain about how much work they had to do in America.
It's the cursed minimum wage! If we would just give these people the truly moral choice--starve or work for $0.50per hour--they would know what to do real quick.
Now there's an America we could all get behind.
Everybody who is a real producer could have the servants to which, in a sane world, they are entitled. Those parasites aren't really disabled . . . they just don't know the creative ways I would put them to good use. What they need is a firm hand . . . met my whims or hit the street!
Love that entitlement thing.
Yours is a great post, not least because I can't tell how much sarcasm, if any, it exudes. But you are basically correct.
About one hundred years ago the most common occupation in America was live-in help. Even my grandparents in a tiny rural town in the Nebraska had a live-in girl helper in the early 1900's.
The minimum wage is a job killer that really should be done away with, or perhaps only be applied to out-of-home employment.
It's the same in India. I went over there to set up a project and one of the mid level project managers invited us for dinner at his house.
I wondered why he was treating his daughter like crap until my colleague pointed out it was actually his servant. Totally blew my mind that somebody that earns far less than me in dollar terms could afford a live in maid.
Damn, it would be nice to not fight with my own teenage daughter (ahhhhh!). We could both beat up on the servant instead: Pure domestic harmony. Priceless.
But, better yet, for only a dollar a day!
And the wife's sex drive just ain't what it used to be . . .
Definitely no sarcasm detected in that post. Thanks for clearing up that issue....
Now you got me wondering if you're kidding, lol.
IMO you are both kind of right, step the social safety net up, not down, maybe a national dividend of 5-10k a year, but STOP MAKING IT CONDITIONAL on NOT working. Then with fewer people desperately poor, abolish the minimum wage and let price be a factor of supply and demand. Price controls are just almost always garbage policy. And socialize/subsidize health care in such a way that it doesn't screw over poor people or crippled people or crazy people and costs less (which sounds hard but basically every developed nation in the world does a better job than we do, perfect is hard but a 12 year old could design a better system than ours). Our current system is almost intentionally perverse.
Exactly. I live in a small Mexican community. My muchacha comes 5 days a week, cleans three level home top to bottom, pays all bills, cooks meals, runs errands, manages household including 3 cats and 1 dog. Pay is $13/day. Regards CI
THAT
IS
SO
COOL!!
13$... damn, I would gladdly pay double for al that.
You could get "full service" for that, no doubt. The poor here just don't know how to give back in return for what they get. No appreciation.
Illegal servants at that
great ideas, but good luck with it all.
it depends on Bennie Boy admitting he's made a catastrophic error.
this is a guy who can't even admit he "misspoke".
so chances of any change in policy before this country is doing a complete Mad Max are almost nil.
Way too radical Tyler, but I like it. All the same, I am properly hedged.
All I have to say is:
Suck my debt!
how does CDS figure into it? btw, great post.we are toast.
just raise the fed funds rate and the return on our savings deposits will rise accordingly, after all, the Fed rate is nothing like a market rate.
http://www.economypolitics.com/2011/01/how-fed-kills-credit-markets-with-low.html
better yet, end the fed.
Blaming the FED for inflation will be irrelevant if a war in the ME breaks out and the resulting oil shocks, hyper inflation, liquidity crisis and global insecurity blamed on this crisis is sufficient enough to warrant an incipient global currency administered by a new larger global fiat central bank.
Problem solved.
They have many flavors of fire at their disposal. The article is correct and I like the proposed solutions but it is all about wealth transfer but to an infinitesimally small elite. The interesting question is if things really heat up, who is going to get burned?
Depends on where the heat is applied, and who is doing the applying.
So true.
http://alpha.zimage.com/~ant/antfarm/ants/FarSide-AntHill-MangifyGlass.jpg
As they said in the civil war: "It's a rich mans war and a poor mans fight."
True. Stock speculation by banks is malinvestment. Only savings loaned out to the private sector to create production is good investment. Banks should only be allowed to loan money and never speculate. Once that bridge is crossed, especially in a fiat fractional reserve system with TBTF banks, it is only a matter of time before the real economy withers and dies. There is no fast money in loans. Loans will not be made.
If Ben wants some advice on how to really stoke inflation he should speak to Governor King of the Bank of England who has been doing a sterling job in this regard..As pointed out here.
Well stated. Bravo.
Here is the Kyle Bass video from CNBS (until ZH posts it) ;)
http://www.fundmymutualfund.com/2011/02/video-kyle-bass-heads-to-cnbcs-s...
Bernanke's owners have no intention whatsoever of spreading the wealth. They extract wealth and place it in their own pockets.
Well, everybody knows that "spreading the wealth" is bad. There's a name for that . . . so we know it's bad.
"So what we have is a speculative asset inflation which is spilling over into commodities as hot money borrowed for next to nothing seeks higher returns anywhere on the planet."
Yup. Been saying it for a while now. Unfortunately the ponzi needs to lever to really make a big bubble, and the levers keep breaking.
Eventually the unwashed masses across the world will be insolvent and unable to buy the commodities. What are the speculators going to do then?
Nice slide show, and on CNBC's site! Note the reasons for each one, sounds like us doesn't it?
http://www.cnbc.com/id/41532451/?slide=1
just raise the fed funds rate and the return on our savings deposits will rise accordingly, after all, the Fed rate is nothing like a market rate.
http://www.economypolitics.com/2011/01/how-fed-kills-credit-markets-with-low.html
Dream on....just who finances our politicians' re-election campaigns?
The same ones gaining the most from Ben's money dump. And you think something is going to change?
If you want to find out who is running the country, just follow the $$$$.
To bring things up to date, it was said "What is good for GM is good for America"....fast forward to 2011: "What is good for GS is good for America."
...the problem being that GS does not actually make anything or create economic wealth....except for the chosen few.
All prices are speculative.
Prove me wrong.
Only prices on the margin are speculative.
Buying a sandwich when you are hungry will make you better off than the $2.50 in your pocket...oh what, my bad, bad decimal placement. S/B $250.00...
Nope. You buy the sandwich now because you think it is the cheapest you can get it for between the time you buy it and the time you find a cheaper one. If two vendors sold the exact same sandwich across the street from one another, you would go to the one with the cheaper sandwich.
Further, the vendor that sets the price does so speculatively, wagering that he can get that amount while still maintaining enough volume to maximize his profits. There is speculation on both sides.
To claim inflation is either "speculative" or "organic" is BS. You don't get inflation when you have a constant money supply. All inflation is due to prices being set by sellers and accepted by buyers, with speculation occurring on both sides of the transaction. Throw in the monkey wrench of an "elastic" money supply, and you get inflation. Period.
Maybe it is more like a mental association of values in trade, we humans have the unique ability to immediately place a value on something. So by knowing values in our minds we can decide at a moment if that sandwich is worth $5.00 or not.
Or if we are out at a nice restaurant and while we're perusing the menu we see a steak that looks damn yummy but it is $18.52, we mentally confirm that is too much for the steak even though it sure looks tasty. but that association of value is different based on the individual.
tm, your assertion is obviously looking for argument, this isn't it.
a real question: there's utility pricing and discretionary pricing -
even if *all* pricing is speculative, aren't the dynamics different between the two kinds?
(and not to imply that they're distinct, as naturally a housing speculator affects the prices of the guy who just wants a roof...)
I would argue that the price only comes into existence once the deal has been agreed. Therefore, all prices are not speculative.
I think the "organic" versus "monetary" inflation argument is merely mental masturbation. Because at this point, after 40+ years of US trade deficits and fiscal deficits and a global tsunami of expansionary monetary policy (read printing) since 07 the two are totally indistinguishable.
Here's a good reason why: for 4+ decades China and other export driven developing and emerging economies have accumulated $s from import-dependent developed nations. They are right now switching from savers to spenders. In a big way (look at crazy China building and Indian consumerism). As more money keeps getting printed to support US (and European) import-dependency it just adds fuel to the fire. Not just because they have more dollars to spend, but just now because faith in the future value of those dollars is waning by the day.
Call it will what you will: it's demand-driven, it's monetary expansion-driven, it's driven by competition for diminishing supplies and availability of natural resources while big nations expand, it's dollar as reserve currency-driven, its greed driven and it's psychological and all in our heads. That last point is critical: why doesn't everyone in the world turn out their lights, shut off their flat screens, their air conditioners, sell the car buy a bike, consume dandelion leaves and crab apples, stay home on weekends and read a book.......Because everyone wants 'The Good Life", especially people who've never had it but also people addicted to it. Here then is the latest version of global warfare.
"The Fed's policies cannot create organic inflation, because all the Fed is doing is transferring wealth to the nation's Elites."
Probably that is what Fed wants. Organic inflation is the decoy.
One thing is for sure. Fed is sure of pulling it off as it knows that Americans ARE FOOLS!
If quantity theory explains prices, then an application of it also explains price inflation. If what has been said is correct, then the sole root cause of price inflation is monetary inflation. In its simplest form, this is to say that if the money supply increases by 10 percent while the supply of values and velocity of money remain constant, the general price level must rise by 10 percent. It is far too simple, however, to define monetary inflation as merely an increase in the supply of money. There are three variables at work on prices, not one; they are not only money supply but also money velocity and the supply of real values. An increase of 10 percent in the money supply is not inflationary if there is also a 10 percent increase in the supply of real values, or if there is a 10 percent decrease in velocity. By the same token, no increase at all in the money supply would still be inflationary if there has been a 10 percent increase in the velocity of money but no increase in the supply of real values. Any one of the three variables can move prices in either direction, but only one of the three — money supply — is subject to the control of the government. To prevent inflation and achieve price stability, this one controllable variable must be changed to offset changes in either of the other two. Monetary inflation can be defined as allowing to exist any money supply which is greater than the quantity which exactly does this. An inflated money supply might actually be a money supply which is decreased, but not decreased enough. Monetary inflation defined in this way is in fact the sole root cause of price inflation…. Modern conventional economics classifies causes of inflation as "cost-push" or "demand-pull" forces. This distinction is purely descriptive and not analytical. It merely states which of the two parties to an inflation, sellers or buyers, is pushing or pulling the harder to get their mutual prices up to their preordained equilibrium. If sellers are the more eager to claim the full prices which aggregate available money would justify, the inflation will be "cost-push"; if buyers are the more eager to reduce their cash balances and bid up the prices of available output, the inflation will be "demand-pull." As a means of analyzing the basic causes of inflation, the distinction is utterly useless.
From the Dying of Money.
"The Fed's policies cannot create organic inflation, because all the Fed is doing is transferring wealth to the nation's Elites."
Probably that is what Fed wants. Organic inflation is the decoy.
One thing is for sure. Fed is sure of pulling it off as it knows that Americans ARE FOOLS!
Bernanke has repeatedly discounted commodity inflation as something he has no control over. He has also forcefully stated that they will act to prevent inflation. So what inflation is he talking about? Wage inflation.
So - the Fed's main job as explicitly stated by Bernanke is to prvent the poor middle class worker bees from getting wage increases. he will indeed act forcefully if , my some miracle, that were ever to happen.
"So what inflation is he talking about? Wage inflation."
A look at edible and wearable commodity price action suggests waiste inflation.
I think you nailed it PF. What the hell else could ChairSatan be talking about?
Thank for the outstanding article which came from
http://www.oftwominds.com/blog.html .
Where doing something like what the blogger recommends favors 80% of us instead of the current policy actions which favor less than 20% of us, it is surprising that we are essentially not getting any viable candidates for national office proposing it. I suppose a major part of the problem is the concentration of media ownership. Is there anything we can effectively do to change the monopoly of power by the people favoring this transfer of wealth to the small minority or do we have to wait for something closer to a major collapse of the economy?
But Diane Sawyer on CBS nightly news told us last night that food prices are going up due to bad weather all over the globe. No mention of Bennie and the Inkjets. She made it sound pretty organic. Of course, the script was written for her to read on the NWO's teleprompter provided to the network at no cost.
heh
I think there is a very very wide gap between Bernanke's "stated" goals and his "actual" goals. And to that end...I do believe he is achieving his 'actual" goals.
I honestly do believe that the goal has been and continues to be to transfer as much wealth as possible from the bottom to the top as fast as possible. The reason I believe this to be the case is that all evidence points in that direction. When viewed in that context...you will cease to be mystified by the contradiction between his "stated" policies and his actions.
Forget what he says, look at what he does for an answer about what he is trying to do.
Occams Razor: One should not increase, beyond what is necessary, the number of entities required to explain anything.
Insightful article. Thanks for a pathbreaking perspective on inflation. I walked away with a new view on the subject.
Solving two at once. Stop FICA/SS in its tracks. Bernanke prints/monetizes $2.5 trillion in US T's currently held in social security and the cash is distributed directly $ for $ to everyone who has and is currently paying into the system. End of SS, end of the SS future problem, start of organic inflation. Regards CI
I'm going to require interest on my money for the last 40 years . . . just like the supreme holders of Treasuries do. Better go with a $20T Treasury issue.
Hey, let's close the banks and their Fed mothership when the money is in our hands and then default on the debt.
Now I'm thinkin' like a bankster. Hot damn!
I thought this was a very solid and well thought out article. Likely valuable to many people in understanding the distinctions between various froms of inflation and what we are witnessing. Kudos to the author for writing it and Zero hedge for publishing it.
Ostensibly the Fed wants to (re)inflate the prices of real-estate and other assets, but the reckless money printing and spending is, predictably, producing other results. To some extent, the commodity price inflation is counter-productive to this goal - the cost of living increases and consumers have less money to spend on debt service (thus further depressing the prices of things purchased with debt, such as real estate). Two years ago I was not considering walking away from my mortgage, despite being signficantly underwater. Now, with my cost of living increasing rapidly (having a fixed mortgage, I don't benefit from the ficticious deflation) I am starting to seriously consider default. Millions of ther people must be making similar calculations. If the Fed really wanted to inflate housing prices, they should have simply bought up the inventory overhang and bulldozed it. In the end, it would have been much cheaper to do so, and there would not have been the commodity inflation we're seeing now.
We're talking class war mutherfuckers!
Good post. I had similar thoughts in "Devaluation is the only way out."
They should have given the printed money to the people, not the dirty banksters.
http://www.wcvarones.com/2010/07/devaluation-is-only-way-out.html
>"organic inflation"
The word "organic" suggests something healthy and natural.
But inflation of fiat currency is neither healthy, nor natural. There is no "correct" or "optimum" supply of money. Units of fiat currency are merely tokens of exchange and decreasing or increasing the total number of exchange tokens add no value to society. To increase the supply of fiat currency is an artificial intervention, it is theft, and it triggers the harmful boom-bust cycle.
It is different with gold, where newly mined gold can yield various goods such as adornments, teeth fillings, and electronics. The mining of gold can provide social value.
Also, "price inflation" is not natural. Ceteris paribus, as process efficiency improves, manufactured goods should decrease in price, not increase. This is clearly seen in the field of electronics.
Yes. I'm officially sick of Charles Hugh Smith and his attempts to centrally plan complex systems. The guys a philosphical neophyte.
hello, aint rocket science I have been saying this for about two years. the policy will in fact cause the next recession, but if the elites are OK the fed doesn't care. you can short consumer discretionary the more food and fuel rise. That why jan numbers were so bad.
My own view is that the fed and bernanke understand exactly what they are doing. YOu'd have to be an idiot not to get it. But these guys work for the banks, not americans. It's the main reason we have to get rid of the fed.
I cannot believe they still let us have guns. I want to organize an oppositionist rally outside every federal reserve building. I would also like to invite everybody's guns (the people can come too but there will probably be people with no weapons so we'll need extra). We have Facebook, Twitter, weapons and full stomachs. Why haven't we ousted this tyrant yet?
Might work. Leave out the "outsting the tyrant" part, though. It sounds like you're planning to break the law.
Um,
the middle class in ETHIOPIA all have live-in servants!
Room, board, and $20/month. And, they are happy to have the work!
Nice.
If we play our cards right, we can bring happiness to America!
Please, for fuck's sake, stop posting shit from Charles Hugh Smith.
going for the "useful comment of the day" prize?
How about these steps for a pre-crisis workout? (1) the US Treasury takes over the Fed, drops all non-national park or water asset real estate and gold into the balance sheet, (2) opens the discount window for every American to exchange all their existing price debt for 1%, 10 year notes with some level of dramatic amortization (3) the Treasury redeems all of the notes/obligations with banks & financial institutions discounted by all direct & indirect support from the bailouts & fed, (4) force repayment of all debt held by foreigners in collateralized currency discounted by the value of any hopefully vacant military bases & support we have given them, (5) force a balanced budget amendment for fiscal affairs, deeming treasuries a thing of the past , (6) force a real discussion on the true role & scope of government.
dream on dreamer....
see you in the FEMA camps....
narnia,
i like the general themes there.
don't see it happening. those that are smart enough to manage such a task are working hard to feed their kids and the welfare folk down the street. certainly no time to fix the system...
And the Rothschild,inbreds,smile :)
We are all pawns
Overheard a random conversation yesterday. One person asked how some mutual acquaintance was. That acquaintance is just off the 99 weeks of unemployment and has no money left and no job prospects.
Millions of 99ers are going to feel that "low inflation" pretty damned quickly.
The Fed will always take care of its own...what is the source for all the Fed governors???...other Fed Reserve banks or national banks.....
They will feed, scare away predators, house, you name it for their family.
Where are those damn handcuffs..........
Field Trip: I spent all day painting a fence around an older house, in an older neighborhood, maybe six blocks from good beach, which has seen home prices drop 40% since 2007. There's a lot of dead grass. Some missing mailboxes. A rumor of squatters. Prices are still falling. Pretty much swing a cat and you'll hit a couple of foreclosures.
Most of the people still there - and most of the people are still there - are people who were there before 2000. Maybe half of them were there before 1990.
A passerby who called himself Swede told me that, in the beginning, all of the empty houses had been those bought in the previous few years by "house flippers". But by now, a quarter of the empties had housed people who had been in residence since 2000 and had moved, for one reason or another - often related to the general situation.
Swede speculated to the effect that a general mellowing of the situation would occur at point in the future, but that was about all he had to say about it.
Feds plan not bad if it's Their game. Just like your neighbor's plan to build a ten foot fence isn't a bad plan if he doesn't want to look at you. Sure, kills your view and boxes you in but you don't matter.
Plan. Inflate and destroy at all costs. Profits first.
What do we do about it?