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Why The Fourth Branch Of The US Government Needs To Be Abolished, And Why "Authority" Should Never Be Trusted

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Yesterday we presented Dylan Grice's thoughts on why economists and their opinions should be summarily dismissed as nothing but mere noise on the steep downward slope of a series of failed "authoritarian" policy decisions, which seek to validate one false choice after another, by presenting a hypothetical and fallacious counter-outcome as a certain reality (just consider the "apocalypse" we would be living in if Goldman had failed: of course, there is no justification for this except for what Bernanke et al claim is the one true alternative reality based on nothing but their own conflicted interests), which does nothing but discredit the "science" of economics more and more with each passing day. Yet in the grand scheme of things economists are merely pawns in the hands of the landed elite: the financial system set only on perpetuating the status quo of capital and wealth reallocation from the lower classes onto itself (until there is eventually nothing left), and a government whose only prerogative is to usurp ever more control and authority, until the entire system is one of central planning in economics, social affairs, religion, and every aspect of people's daily lives, all the while pretending to operate under the guise of a democracy, which, at least in America, died long ago. Today, we present the observations of Bill Buckler from his Privateer report, which picks up where Grice left off and demonstrates why one must not only never rely on economists but on form of "authority" in general. Putting it all together is Buckler's close analysis at the glue that makes it all possible: the Federal Reserve, also known as the fourth branch of government, and the entity that provides the endless funding for all of the system's failed policies. As Buckler points out, any reversion to a system that follows the constitutional precepts of the founding fathers will need to do away with the Fed first and foremost, as "the issue is not the political will of the US government to go on spending beyond its means, it is the political will of the rest of the world to go on accepting the unworkable global system indefinitely. They will not do it." In other words, in the step leading up to the last and most important defection in the global prisoner's dilemma, it is up to the American people to take the necessary step to restore the systemic balance (which will happen regardless eventually, only in a far more violent fashion). Everything else that happens on a day to day basis is completely irrelevant.

From Bill Buckler's The Privateer report, Number 661.

NEVER RELY ON “AUTHORITIES”

On the evening of November 23, 1942, Adolf Hitler was deep in “consultation” with the chief of staff of the Luftwaffe (the German air force) on the possibility of supplying the surrounded German 6th army in Stalingrad by air. On hearing of this consultation, Reichsmarschall Goering, the head of the Luftwaffe, promptly contacted Hitler and assured him that the air force could maintain the 6th army for as long as necessary.

All of Goering’s officers on the spot near Stalingrad knew that this was absolutely impossible. So did Goering’s chief of staff. So did Goering. And so did Hitler. Goering had already been proven wrong a little over a year earlier when he insisted that his Luftwaffe could clear the way for an
invasion of Britain. That was not even considered. What WAS considered was that no matter how fanciful or how contradictory to the FACTS on the ground, a method had been found to prolong the illusion that the war could still be won. And besides, how would any of them know that it could not and would not work if they didn’t try it?

They did try it. It didn’t work. The fate of the 6th army in Stalingrad is history. So is the fate of the Nazi regime.

The March Of Folly:

The American historian Barbara Tuchman published a book with that title in 1984. She lists four kinds of what she calls “misgovernment”. There is misgovernment by tyranny or oppression, by excessive ambition, by incompetence or decadence or both, and finally by folly or perversity. The author concentrates on government policies afflicted by folly or perversity, a rich field of enquiry stretching back to the dawn of history. Mrs Tuchman makes the point that folly is “independent of era or locality, is timeless and universal ...and is unrelated to type of regime. Monarchy, oligarchy or democracy produce it equally.”

She has one further principle for the study of government folly. “...The policy in question should be that of a group, not an individual ruler, and should persist beyond any one political lifetime.” That brings us into the realm of political economy, more precisely the dogged clinging to the central role of government in the economy, and particularly in the financial system upon which the economy rests. That policy has been clung to for far more than a political lifetime. It has been clung to at the highest levels of government for almost a century.

The Fed’s March Of Folly:

This road has been taken ever since the Fed was created in 1913. Specifically, the “final frontier” was entered with the FOMC’s decision on August 10. It’s all downhill from there.

Politics and Economics:

The present global monetary system (on life support as it is) remains the one that was hammered out in Bretton Woods in 1944 with the US Dollar as the world’s SOLE reserve currency. As long as this remains the case, the follies of the US government will remain the most important in  the world and the follies of their central bank - the Federal Reserve - will remain paramount. By Barbara Tuchman’s criteria, a folly worth examining must “persist beyond any one political lifetime”. In June this year, Senator Robert Byrd, the longest serving politician in US history, passed away at the age of 92. Senator Byrd entered the Congress in 1953. Bretton Woods was in 1944. The Fed was created in 1913.

The other point which needs to be made concerns what could be called the dynastic nature of the Fed. Mr Bernanke is the fourteenth Chairman since the creation of the Fed almost 97 years ago. That’s not many - over the same period there have been seventeen US Presidents. Here we get down to the divide between the political and the economic aspect of political governance.

The Politics Of It All:

There was a time when a president and his party could be and were voted out of office because the people preferred the policies offered by the opposition. That ended in the 1930s, when the “criteria” became which party could almost literally “buy” the majority of votes by directing the  redistribution of funds where it would do them the most good. That became entrenched by the late 1960s. Since then, the “platforms” of the major contending parties have been all but indistinguishable. Most US elections have been decided either on the “lesser of two evils” principle or on disgust with the incumbents.

Both sides of US politics have been equally assiduous in their major task as they see it. That task is to safeguard and increase (as far as they are able) the involvement of government in as many aspects of the lives of the people as possible. That is why the euphemism for modern  politicians, especially those in the US Congress, is “lawmakers”. It is only VERY recently that politicians from either party have given serious consideration to the problem of paying for it all or whether they CAN pay for it all. For most of the past century, they have not concerned themselves with that. That is what the Federal Reserve is for.

The Economics Of It All:

In essence, the Fed (like any central bank) is the “fourth arm of government”. The executive branch makes policy. The legislative branch translates it into legislation. The judicial branch is supposed to ensure that legislation is permissible under the Constitution - the law which GOVERNMENT must obey. Originally, the system was set up to ensure a division of power between the branches. A “government bank” or “central bank” was not deemed necessary because the powers of government were thought to be limited by the Constitution to the extent where “financing” these operations would not be necessary. They weren’t (except for the post Revolutionary and Civil War periods) for well over a century. But by the turn of the twentieth century, the US government, like so many governments before them, decided that their reach should extend beyond the borders of the nation they governed. This promised to be expensive.

The Fed was initially set up under the pretense that an institution was necessary to provide an “elastic currency” to meet the needs of business. An elastic currency was deemed necessary alright. But it wasn’t to meet the needs of business, it was to meet the needs of government. And that is what the Fed has been doing ever since. As the powers of government expanded and as the COST of government soared, the Fed was always there, the banker of last resort, the branch of government which would “pay” for whatever government chose to do. The government needs the Fed as a guaranteed buyer of its debt.

It is obvious to anyone who takes the time to EXAMINE the situation that the Fed is the fourth and specifically, the economic/financial branch of the US government. It should be equally obvious that this marriage of convenience has been progressively impoverishing the American people. Apparently, it isn’t.

When A Folly Comes Out Of The Closet:

For many decades, the “co-operation” between the US government with their Treasury requirements and the Fed has been taken for granted. Whole systems of “economics” (notably the one popularised by J.M. Keynes in the mid 1930s) have grown up around the practices of “financing” the ever increasing “needs” of government. The terms “inflation” and “deflation” have been moved from defining movements in the amount of money being created to movements in the prices influenced by this manipulation. A vast pile of books has been written and post-graduate university courses designed around the alleged difference between debt incurred by government and debt incurred by the dwindling “private sector”.

Through it all, the quality of the money has declined in lock step with the increase in the amount of money (of all descriptions) in circulation. There have been two defining moments in the entire process. The first came in 1933-34 when Americans were prohibited by law from owning Gold. The second came in 1971 when the final constraints on government fiscal discipline were removed as the final promise to redeem the US Dollar in Gold was jettisoned. On August 15, 1971, the folly came out of the closet. That lasted a decade, during which funded government debt rose by 150 percent. Then came a quarter century of “serial” debt bubbles which lasted until 2007. Over that period,  government debt grew by 1000 percent. With the onset of the GFC in 2007 and the near death financial experience of 2008, the closet door opened again. And this time, in stark contrast to the end of the 1970s, it CANNOT be closed.

Shutting The Door On An Empty Room:

In the era of “stagflation” (the 1970s), there was actually an extensive debate about the nature of the money which was fuelling an obviously dysfunctional system. The main reason for this was that the concept of “risk” was still one which was current in investment markets. The steady increase of interest rates, which accelerated as the 1970s were coming to a close, was a contributing factor. So was the cost of living - which was accelerating along with interest rates. So was the “price” of Gold, which now had a “price” since it was no longer “fixed” to the US Dollar. As the 1970s ended, the price of Gold in US Dollars accelerated along with US interest rates. This was not and is not supposed to happen. High interest rates are said to be “bad” for Gold. They certainly weren’t in the last three years of the 1970s.

The door was slammed shut by Chairman Volcker in late 1979 when he took his hands off the Fed’s interest rate controlling mechanisms. US rates skyrocketed, “stagflation” turned into (deep) “recession”, Gold soared and then slumped. And, finally, the world was lured back into the paper US Dollar.

The US government had jettisoned the concept of “risk” as far as their borrowing “requirements” were concerned in the aftermath of the 1929 stock market crash. They did so just as the ensuing depression elevated risk aversion in the private US economy to a level it had never seen before and has not (yet) seen since. It took 50 years, the abandonment of Gold and an attempt to combine a welfare state with a war for the fear of “risk” to resurface - in the 1970s. It took interest rates which reflected that fear of risk in the MARKET to get it to subside. It did, in the early 1980s. Then came the era of serial credit “bubbles”.

Blowing The Door Off Its Hinges:

The Global Financial Crisis (GFC), and particularly the “authorities’” reaction to it, has done more than just open the door again to the money machinations which are built into the foundation of modern government. It has laid that entire mechanism bare for anyone to see. But look at what has happened during most of the three decades since the beginning of the “Reagan Bull” in 1982. Twenty-five years of recurrent market booms anaesthetised an entire generation. In the process, the obvious truths that savings must precede investment and that wealth is not a function of the creation of money were buried beneath an avalanche of transfer payments and “bull” (in BOTH senses of the word) markets.

It is hard to awaken from such a long period under the influence of “authorities”. These things take time.

The Mechanism Itself:

To illustrate how pervasive the mechanism is and how it has long since been taken for granted, only one fact is necessary. Since 1931, there have been a grand total of SIX financial years when the funded debt of the US Treasury did not increase. These were fiscal 1947, 1948, 1951, 1956, 1957 and 1960. The US federal government has not run a budget surplus for 50 years. Under the original theory concocted by the “authorities” and elevated to economic holy writ by Mr Keynes, governments can compensate for any slowdown in the economy by spending more than they tax. Then, when the magic bullet of government “stimulus” has done its work, they can pull in their horns and diminish their debt. Governments “can” do that, but the US government hasn’t actually done it for 50 years. The Clinton “surpluses” of the late 1990s are a myth, of course, concocted by applying the “surplus” generated by social security funds to the government’s bottom line. There are no social security “funds”, the entire pile is composed of non-marketable Treasury IOUs which can only be serviced and/or repaid by the productive capacity of this and future generations.

For many years, we here at The Privateer (and many others) have been explaining the mechanism by which the production of real wealth has progressively been taken over by the production of “purchasing power”. The onset of the GFC exposed these mechanisms to public scrutiny to an extent not seen since the 1970s, or before that, the 1930s. The GFC itself, especially in nations (such as the US) where its impact has been most sorely felt, has greatly increased two things so far. One is the ever growing unease and indignation of the public. The other is the lengths to which the “authorities” will go to keep the REAL reasons for the present malaise away from pubic view and, above all, from public understanding.

Now What?:

The first answer to that question was given on August 10 when the FOMC announced that the Fed would NOT be shrinking its balance sheet as it has promised to do ever since it massively expanded it almost two years ago. On top of that, the FOMC let it be known that the Fed would resuscitate its quantitative easing QE) program of directly monetising Treasury debt.

On August 27, Ben Bernanke expanded on the Fed’s future plans at his Fed symposium speech at Jackson Hole, Wyoming. Mr Bernanke began by startling his listeners, telling them that the Fed would do “all that it can” to rekindle confidence in the “mechanism” (financial system). His listeners, both inside and outside the conference room, had long since assumed that there is nothing that the Fed can’t do. The Fed’s “omnipotence” is a foundation stone in the entire edifice of trust in the “authorities”. Nothing would rock this more than a revelation that there ARE things the Fed can’t do.

To stave this off, Mr Bernanke listed three things that the Fed can still do. It can buy “more” long-term securities. It can reduce the interest rate it charges on excess reserves to get the banks to lend them instead of storing them with the Fed. And finally, it can “modify the Committee’s (the  FOMCs) communication”. Let’s take the first two. When the FOMC announced that the Fed WAS going to buy more long-term securities on August 10, they admitted that the first foray into QE hadn’t worked. When Mr Bernanke talked about reducing rates charged on Fed reserves, he neglected to mention that existing rates have been at 0.25 percent ever since the Lehman scare of 2008.

The third future task for the Fed , “modifying communication”, is one known by “authorities” in all ages and times. Today, when they speak about doing it themselves they call it “public relations” or, less politely, “spin”. When they speak about other authorities doing it, they call it  “propaganda”, or more impolitely “disinformation” or still more impolitely “lies”.

The Fed’s real message was delivered on September 1 by departing White House chief economist Christina Romer. She said that the US needed to find the “political will” for more economic stimulus.

The Only “Solution” Left?:

For months now, Nobel prize winning economists, eminent educators, individuals in charge of $US TRILLIONS of investment “capital”, and political “authorities” of all sizes, shapes and descriptions have been unanimous in one message. The “system” can be fixed easily. We have discovered that we didn’t print enough money. No problem. Just print more, preferably MUCH more!

Here’s how Christina Romer put it during her speech to the National Press Club: “The only sure-fire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less. ...I desperately hope that policymakers on both sides of the aisle will find a way to finish the job of economic recovery”.

Ms Romer, one of the chief architects of President Obama’s 2009 stimulus package, has resigned her position as the chair of the President’s Council of Economic Advisors, effective on September 3. Once an “authority”, always an “authority” - she is returning to “academe” by returning to her old job as an economics professor at the University of California, Berkeley. While she was there, she was engaged in research on fiscal and monetary policy from the 1930s to the present. Mr Bernanke would approve.

The Political Will:

Yahoo in the US described the speech as a plea that the US find the “political will” for further stimulus. This is in itself very revealing indeed, especially given Ms Romer’s contention that the only way to “fix” the problem is for the US to “spend more and tax less”. Politically, this has been the only solution resorted to in the US for at least half a century. What is never mentioned by all those who so glibly push this solution to the problem is the reason why the US has been able to get away with it for so long.

To do so would risk moving the debate to the area where the “authorities” dare not go. That is the area of the nature of the global financial system and, even more fundamentally, the nature of the “money” which underpins it. When a government spends more and taxes less, they go ever more heavily into debt. For a “normal” government, this process can only continue until the obvious risk factor shows up in the interest rates they have to pay on their borrowings. At that point, they have no choice but to pull in their horns.

The US government is different because the US Dollar is the world’s reserve. Because it is the world’s reserve, it has a global demand as the underpinning for financial systems everywhere. Yes, it is true that non US central banks are holding increasing amounts of other currencies in their reserves. But the basic system as hammered out at Bretton Woods in 1944 has NOT been altered. The US Dollar remains the world’s only official reserve currency. That means that the US is the only country that can buy goods with debt paper created by their Treasury and payable in “money” created by their central bank.

You have likely read this before - in The Privateer and in many other places. No matter how many times it is repeated, this remains the most important FACT which is never discussed by “authorities”. The issue is not the political will of the US government to go on spending beyond its means, it is the political will of the rest of the world to go on accepting the unworkable global system indefinitely. They will not do it.

A Vested Interest In AUTHORITY:

From time immemorial, the “authorities” in charge of political and economic policy in a nation have clung to “remedies” that would not work - even though they KNEW they would not work. We started this essay with one example. There are countless more. Once you understand this, you will know that “authority” is NEVER to be trusted, no matter how many adhere to it or how long it seems to have “worked”. The only viable alternative to more authority is LESS authority, and therefore more freedom.

Today, no “authority” in the world wants to discuss that. Least of all the ones in the USA.

h/t Robert

 

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Sun, 09/05/2010 - 11:13 | 564573 hedgeless_horseman
hedgeless_horseman's picture

Stick it to the man, bitches!!!!!!!!!!!!!!!

Sun, 09/05/2010 - 12:41 | 564644 Gully Foyle
Gully Foyle's picture

Shut the fuck up, Donnie.

Sun, 09/05/2010 - 17:13 | 565020 hedgeless_horseman
hedgeless_horseman's picture

Political will?  Ha!  Mark it infinity, Dude.

Mon, 09/06/2010 - 17:03 | 566241 MsCreant
MsCreant's picture

Sorry Hedgeless,


OT

Jim Rickards says the Fed has a golden bullet. Gradually let the price of gold go up to $2,000 or more, sell the gold out of Fort Knox, and instantly get inflation as people jump out of dollars and buy stuff.

Starts at 15:40.

OMFG!

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/9/4_Jim_Rickards.html

Mon, 09/06/2010 - 17:56 | 566292 Kali
Kali's picture

Wow!  Thanks MsCreant.  I step out into the garden for a couple of hours and look what happens.  Very interesting indeed!

Sun, 09/05/2010 - 11:14 | 564577 lynnybee
lynnybee's picture

I really enjoyed this posting. I liked the use of the word, "folly" . It reminds me of HUGH HENDRY'S words :  "The banks have been involved in gross folly.   Let them go to the wall.   Let them fail."     Well, if the banks were involved in "gross folly", why are my dear children & grandchildren going to suffer ?     It's time to take back our country for the sake of the younger generation.   VIVA ICELAND !

Mon, 09/06/2010 - 11:45 | 565784 shortus cynicus
shortus cynicus's picture

Iceland will not pay banksters debt, and they has geothermal energy.

I suppose, in some years we will se peace keeping troops in Iceland. Let them learn democracy.

Oh, do you know, some say they have seen Bin Laden hiding in Icelandic saunas.

So, what are we waiting for?

Sun, 09/05/2010 - 11:18 | 564582 Hall 9000
Hall 9000's picture

"Herodotus writes that when Dienekes, a Spartan soldier, was informed that Persian arrows would be so numerous as "to block out the sun", he retorted, unconcerned; "So much the better...then we shall fight our battle in the shade."[141]

Sun, 09/05/2010 - 11:26 | 564585 Monkey Craig
Monkey Craig's picture

I'm not following. Are you suggesting we need armed revolution?

Sun, 09/05/2010 - 11:40 | 564593 Hall 9000
Hall 9000's picture

 

It's a metaphor.

"To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy's resistance without fighting."

Sun-Tzu (~400 BC)

 

 

 

 

 

Sun, 09/05/2010 - 12:11 | 564613 Johnny Bravo
Johnny Bravo's picture

So you use a Greek quote about "fighting in the shade" and then explain it with a Sun Tzu quote that says that fighting to overcome is less important than persuasion.

I think that you're just putting up the two quotes you know, hoping to sound intelligent.

Sun, 09/05/2010 - 12:29 | 564626 Gully Foyle
Gully Foyle's picture

Johnny Bravo

Batiatus: That shit fuck! Beckons me to the city only to sperm me like a thin wasted? whore. Once again the gods spread the cheeks and ram cock in fucking ass!

Sun, 09/05/2010 - 12:41 | 564647 Hall 9000
Hall 9000's picture

I concede I am no match for such  clever sallies of wit.....

"That shit fuck! Beckons me to the city only to sperm me like a thin wasted? whore. Once again the gods spread the cheeks and ram cock in fucking ass!"

Sun, 09/05/2010 - 12:54 | 564660 Gully Foyle
Gully Foyle's picture

Hall 9000

Spartacus Blood and Sand, modern American mythology at it's best, just like Deadwood.

Sun, 09/05/2010 - 14:41 | 564853 AssFire
AssFire's picture

HAL,

Your data bank of cheesy quotes does not compute.

Using relevance and pertinence might help you look smarter the next time you paste someone's quotes.

Oh, original thought is also appreciated.

Sun, 09/05/2010 - 14:47 | 564865 Gully Foyle
Gully Foyle's picture

AssFire

To each his own. I'm sure people have said worse about you, both behind your back and too your face.

That thought gives me comfort.

Sun, 09/05/2010 - 14:56 | 564883 AssFire
AssFire's picture

I'm sure someone has blown a load in your face.

That thought gives me laughter.

Sun, 09/05/2010 - 13:14 | 564694 traderjoe
traderjoe's picture

If you can't say anything nice, why say it at all? Do personal attacks really add any value to the conversation?

Sun, 09/05/2010 - 13:52 | 564755 Johnny Bravo
Johnny Bravo's picture

Do two quotes that have no relation whatsoever to one another add anything relevant to the conversation?

I'm just saying.. 

Sun, 09/05/2010 - 14:09 | 564787 LMAO
LMAO's picture

 

Does asking us if two quotes that have no relation whatsoever to one another add anything relevant to the conversation, add anything relevant to the conversation?

And YES!!! I am just saying that I'm adding to the conversation that I'm not adding anything relevant to the conversation .

 

LMAO

Sun, 09/05/2010 - 14:18 | 564805 thesapein
thesapein's picture

No comment.

Sun, 09/05/2010 - 14:49 | 564867 Gully Foyle
Gully Foyle's picture

LMAO

The real problem is because one does not perceive a link between two quotes or how they relate to the conversation does not mean that others suffer from the same fault.

Some people are far too linear for their own good.

Sun, 09/05/2010 - 15:39 | 564940 A Nanny Moose
A Nanny Moose's picture

+1

Sun, 09/05/2010 - 17:36 | 565044 Johnny Bravo
Johnny Bravo's picture

Maybe it's because one quote talks about fighting as much as you can, despite overwhelming odds, and the other quote talks about avoiding fighting altogether if you can.

In fact, nothing in Sun Tzu's philosophy even remotely relates to the first quote about fighting in the shade.
He would avoid war altogether, and win instead by persuasion or sabotage.

It's not another example of the first quote.

The person that wrote this has no understanding of the true meaning of the Art of War.

Sun, 09/05/2010 - 14:34 | 564839 Maniac Researcher
Maniac Researcher's picture

I found the reference to the Nazis out of place as well. But then again, the Third Reich is used arrogantly quite often these days. I'm sure these untrained historians think they are doing a great service by making such hamhanded comparisons.

Or perhaps maybe it was bone being thrown to all the Stormfront trolls that have been popping up like mushrooms here lately. Got to play to your audience, eh?

Sun, 09/05/2010 - 16:00 | 564960 Uncle Remus
Uncle Remus's picture

Then again, the more things change...

Sun, 09/05/2010 - 17:50 | 565064 puckles
puckles's picture

MR, I believe that the point being made re the Nazis is that their supreme folly of lying to one another to the point that they all, somewhat, believed it, led to their downfall via Stalingrad, which was doubtless the turning point of the war (with no decisive assistance from the Allies at that point).  Indeed, it could be argued that had the Allies simply stood aside and allowed the Germans to fully engulf themselves in the maw of the Soviet meat grinder, we might never have needed to proceed to the Normandy landings.  But that would have led to a very different postwar world, in all likelihood.

Tue, 09/07/2010 - 05:19 | 566791 i.knoknot
i.knoknot's picture

tnx, puckles - that's how i read it as well, and the relevance and parallels to today struck me as quite sobering.

but i'm not as bright as many in here clearly are... sheeeeesss

Wed, 09/08/2010 - 02:17 | 568929 Maniac Researcher
Maniac Researcher's picture

..and I believe you missed my point that the Nazis are brought up ad nauseum by you and your cohorts.

Sun, 09/05/2010 - 17:19 | 565025 robobbob
robobbob's picture

enemy propagandist: "Our force of arms is vastly superior and overwhelming, you cannot win, you should quit now"

response: our training, dedication, and ability to create historically memorable quotes is superior, so, no

Sun Tsu: Possessing superior overwhelming force is good, being more intelligent, clever, and dedicated is better

conclusion: possession of intelligence is superior to perceived strength. The Fed and CB's of the world possess superior and overwhelming force, but as a group, are an integral part of supporting a charade and propagating a terminally ill, and ultimately unsustainable system. Superior force, but subjugated to supporting an inferior idea. Hence, a folly, and the tie in with the examples from the article.

Sun, 09/05/2010 - 18:11 | 565094 Hall 9000
Hall 9000's picture

"Polybius made a case that Scipio's successes resulted from good planning, rational thinking and intelligence, which he said was a higher sign of the Gods favour than prophetic dreams."

http://en.wikipedia.org/wiki/Scipio_Africanus

Sun, 09/05/2010 - 17:58 | 565074 Hall 9000
Hall 9000's picture

Johnny Bravo wrote:

putting up the two quotes you know....hoping to sound intelligent."

Yes I did spake with the black dodge.

Breakout the popcorn Bitchzz!!!.


Sun, 09/05/2010 - 12:18 | 564616 masterinchancery
masterinchancery's picture

+100

Sun, 09/05/2010 - 16:11 | 564968 Rollerball
Sun, 09/05/2010 - 16:21 | 564975 deathwing
deathwing's picture

exactly... the use violence is the residue of strategic FAILURE in any medium. The case through history it is best described as the failure of old men to realize they can't hold their cushy positions of power and are more than happy to expend the lives of their own young to as useless resources.

We are rapidly approaching the point of total failure. Not so import will be why you "fight" but whom and how (objectives).

 

Sun, 09/05/2010 - 16:47 | 565002 RockyRacoon
RockyRacoon's picture

I quote from the Progressive platform: 'Behind the ostensible Government sits enthroned an invisible Government, owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible Government, to dissolve the unholy alliance between corrupt business and corrupt politics, is the first task of the statesmanship of the day.... This country belongs to the people. Its resources, its business, its laws, its institutions, should be utilized, maintained, or altered in whatever manner will best promote the general interest.' This assertion is explicit. We say directly that 'the people' are absolutely to control in any way they see fit, the 'business' of the country. - Theodore Roosevelt, 1913

Mon, 09/06/2010 - 03:35 | 565530 AnAnonymous
AnAnonymous's picture

exactly... the use violence is the residue of strategic FAILURE in any medium.

 

 

Does not seem to fit when you market your capability to violence. Exerting violence is such not a failure but a sucess in proving your actions can match your words.

It is very important as the US has proven over this last crisis that they do market violence as one of their primary export goods. This is how the USD currency is backed.

--------------------------------------------------------------------------------------

Point: the economists are certainly not the only ones to test a reality against a hypothetical alternative. It is a large trend in the West to explain how the rule of the West is the best and should absolutely not threatened or questioned fundamentally.

Economists are no special here. In the West, we no longer discuss reality but hypothetical alternatives that only exist to depict our ways of doing as the only ones.

A very common in the West behaviour.

Sun, 09/05/2010 - 14:53 | 564874 AssFire
AssFire's picture

these quotes make perfect sense if you know the wisdom of Mike Tyson:"I want to rip out his heart and feed it to Lennox Lewis. I want to kill people. I want to rip their stomachs out and eat their children."

 

Sun, 09/05/2010 - 16:33 | 564985 Bam_Man
Bam_Man's picture

Sorry, but the only Mike Tyson quote worth repeating is "Everyone has a plan, until they get hit."

Sun, 09/05/2010 - 11:32 | 564589 snowball777
snowball777's picture

Mofos never had to deal with a predator drone.

Sun, 09/05/2010 - 13:39 | 564733 MsCreant
MsCreant's picture

I think this makes for a whole new ballgame in "enforcement" as well.

Sun, 09/05/2010 - 15:55 | 564958 A Nanny Moose
A Nanny Moose's picture

Whenever I hear the "modern" excuse, it makes me think of the Fisher Space Pen vs. the Russian Pencil legend. Sure, the USSR is no more, but the lesson is still valid.

Since the pen is mightier than the sword, we should consider that ultimately, all conflict begins and ends at the negotiating table. Let's skip the nonsense in between shall we?

Sun, 09/05/2010 - 16:04 | 564964 Uncle Remus
Uncle Remus's picture

What are you going to negotiate?

Sun, 09/05/2010 - 18:31 | 565127 MsCreant
MsCreant's picture

Nanny,

Our own government WILL use the drones against us. Count on it. Surveillance, chase, and probably they will be armed. I do not doubt this. We need to get a grip on things before the rest of the population passively accepts them as just how things are. Immigration is the issue that they will use to break us in and get us used to it. It is not fiction. It will be a disaster and worse than science fiction ever could hope to be. 

Sun, 09/05/2010 - 21:53 | 565315 StychoKiller
StychoKiller's picture

Apparently, my tin-foil beanie is nowhere near as tight as yours!  A simple belt clamp ain't cuttin' it.

Mon, 09/06/2010 - 08:43 | 565606 MsCreant
MsCreant's picture

They are using drones in Pakistan and Afghanistan against civilians and other targets.

http://news.xinhuanet.com/english2010/world/2010-09/05/c_13478717.htm

Over in Europe, surveillance is exceedingly common, and New York is looking to immulate it. So is Huston and Chicago has it.

http://dnainfo.com/20100511/manhattan/mayor-michael-bloomberg-looks-bring-londons-ring-of-steel-midtown

http://www.dnainfo.com/20100831/manhattan/new-nyc-subway-cars-get-security-cameras

http://www.newsnet14.com/2010/08/27/homeland-security-thanks-chicago-for-10000-public-and-private-surveillance-cameras-to-beat-crime/

They are starting to use drones as a way to patrol the borders.

http://www.google.com/hostednews/afp/article/ALeqM5i62b7VF4r3TUnsAGAvBsYHkGof0w

Now let me ask you something, if they are willing to lie, cheat, and steal from us, fabricate and manipulate data, why is my conclusion, that they WILL use drones against us, far fetched? Get it, please, these people have NO CONSCIENCE.

Tue, 09/07/2010 - 05:37 | 566801 i.knoknot
i.knoknot's picture

+++ and to help confirm your fine point, MS, let's suggest the inverse logic:

pray tell, why would the US *not* use drones against its own?

ironically noting that this very holiday was created to quiet a ruffled US populace after US troops killed striking union workers in 1894...

we've gladly encamped/killed our own, based on race (japanese, germans, etc.), when we fought their homelands, etc.

what make you think in this world of black/white populistic MSM-driven sheeple, that this could not happen today?

add to that thought, the reality that those sheeple's opinions on things related policy amounts to a hill of beans these days (health-care reform, fin-reg, etc.).

there's what folks wish to see, and there's what really is.

never say never...

FYI, just plated my tin-foil with 300 micron gold. much cooler now.

Mon, 09/06/2010 - 09:54 | 565651 Max Hunter
Max Hunter's picture

Since the pen is mightier than the sword, we should consider that ultimately, all conflict begins and ends at the negotiating table. Let's skip the nonsense in between shall we?

Although I consider this idea to be profound, I wonder if it is our choice to change things without a violent revolt. The control mechanisms in place now are as strong as they are pervasive.  How I hope your idea can be the choice of our generation for change.

I remember an old saying when I was a kid, it went like this: Hope in one hand and shit in the other, see which one fills up quicker..

Sun, 09/05/2010 - 11:30 | 564588 Hansel
Hansel's picture

Gold is decentralized money, the central bank abolisher.

Sun, 09/05/2010 - 12:24 | 564621 thesapein
thesapein's picture

Often, just looking for the post with a single junk reveals the best comments. Kudos!

Sun, 09/05/2010 - 14:41 | 564856 Quinvarius
Quinvarius's picture

I almost junked that to add emphasis to it's factual nature.

Sun, 09/05/2010 - 14:07 | 564785 DoChenRollingBearing
DoChenRollingBearing's picture

I second thesapein!  Concise & excellent point.

Sun, 09/05/2010 - 14:21 | 564814 thesapein
thesapein's picture

I so badly wanted to sneak in something regarding the silver bullet that can kill the beast, but... oh, wait. I just did. Imagine that. Ooops.

Sun, 09/05/2010 - 14:41 | 564855 Oracle of Kypseli
Oracle of Kypseli's picture

Clever.

Private equity redemptions have been accelerating.

Starve the beast first, then use your silver bullets. 

Sun, 09/05/2010 - 23:56 | 565409 Cistercian
Cistercian's picture

+1000++++

Sun, 09/05/2010 - 23:56 | 565412 Cistercian
Cistercian's picture

+1000++++

Sun, 09/05/2010 - 11:35 | 564591 lynnybee
lynnybee's picture

I have a new best friend. ..... . the COIN GUY.   Come Tuesday morning I'll be @ his store buying what little I can afford.    A few silver coins are better than no silver coins !   How I wish I'd known about this years ago.    

Sun, 09/05/2010 - 14:08 | 564736 DoChenRollingBearing
DoChenRollingBearing's picture

I saw your post in another thread lynnybee.

Your grandchildren will benefit mightily from your foresight and action.

EDIT:

Perhaps better stated:

+ $19.60 and rising!

Sun, 09/05/2010 - 11:50 | 564600 Everyman
Everyman's picture

This is one of those posts I enjoyed reading, but feel awful after reading it.

 

Armed revolution, maybe not, but sporadic "attacks" possible against political elitist "authorities" that ended up being wrong.

Sun, 09/05/2010 - 12:10 | 564612 1fortheroad
1fortheroad's picture

Interesting group of people working behind the scenes.

http://republicoftheunitedstates.org/

Sun, 09/05/2010 - 12:49 | 564655 thesapein
thesapein's picture

intriguing 

Sun, 09/05/2010 - 13:50 | 564753 DoChenRollingBearing
DoChenRollingBearing's picture

That is an interesting site.  I will have to give it the time necessary to see if these are my kind of guys.  Thanks for sharing.

Sun, 09/05/2010 - 14:23 | 564819 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Went to the link you provided and it was interesting. Their ultimate goal is achievable in a generation or two. The NEA and the DNC have worked overtime, at time and half, removing honest discussion about the Revolution and what the framers created for us.

Thanks for the link.

 

Tue, 09/07/2010 - 05:45 | 566803 i.knoknot
i.knoknot's picture

tnx. saved and forwarded as appropriate.

add to this for any military/law-enforcement folks you know:

  http://oathkeepers.org/oath/2009/03/03/declaration-of-orders-we-will-not-obey/

(i think this is a more immediate issue to compliment your link)

cheers.

Sun, 09/05/2010 - 11:56 | 564603 ChiefElf
ChiefElf's picture

From my perspective, wise people keep stating the obvious presumably hoping superman or something will reverse our course.  The problem is not continually identifying the set of problems but instead, identifying how America rids itself of compromised, corrupt, self-serving lawmakers, poliicians and bureaucrates.  We are all still waitng for less dialog and more action.

Sun, 09/05/2010 - 12:51 | 564657 thesapein
thesapein's picture

more dialog will lead to more action

Sun, 09/05/2010 - 13:06 | 564681 RockyRacoon
RockyRacoon's picture

People need to coalesce their amorphous thoughts and put words to the feelings they are having.  Only published discourse can accomplish that.  People need the words to express the feelings of anguish, dread, impending doom, even jubilation.  Without some brave souls giving word to thought we cannot proceed with purpose.

Sun, 09/05/2010 - 13:49 | 564750 MsCreant
MsCreant's picture

Rock on, RockyRacoon.

 

Sun, 09/05/2010 - 14:27 | 564827 thesapein
thesapein's picture

Nice words!

Isn't the root for 'prophet' the same as 'poet'? You can almost see our destiny in our words...

Sun, 09/05/2010 - 15:59 | 564959 A Nanny Moose
A Nanny Moose's picture

+1. Inspiring.

Mon, 09/06/2010 - 15:00 | 566110 RockyRacoon
RockyRacoon's picture

Inspire up on this:

Afghanistan has no deposit insurance system. Its government has no financial responsibility for bailing out Kabul Bank’s depositors. Nevertheless, Afghanistan’s government has announced it will bail out the depositors. The funds to bail out the depositors will come – indirectly, but surely – largely from the United States Treasury. The New York Times’ initial article correctly stated that the U.S. will bail out Kabul Bank’s depositors. Someone obviously demanded a “correction.” Whoever that person was lied to the New York Times with the goal of getting the newspaper to lie to its readers. That lie succeeded. It is time for the New York Times to correct its correction and defeat this effort to mislead the public. The U.S. taxpayers are about to bail out the depositors of a fraudulent Afghan bank.

Bill Black: “Control Fraud” Crushes Kabul, And the New York Times Needs to Correct its Correction

 

Mon, 09/06/2010 - 00:45 | 565457 deathwing
deathwing's picture

committees of correspondence...

Sun, 09/05/2010 - 15:23 | 564923 Laura Ingalls
Laura Ingalls's picture

I would like to spend more time talking about that, unfortunately I don't see how we can fix the system. How can we bring down the fed without bringing down our economic system? [more quickly]

Maybe in the past we could have done it but our civilization is now so delicate that if the wheels stop turning unstoppable chaos will follow. How long is it that it's suppose to be before the big cities are completely out of food if our food transportation system breaks down?

Of course, our economy will collapse anyway, even if we do nothing. I just don't want to be the one to trigger it.

Sun, 09/05/2010 - 15:35 | 564936 MsCreant
MsCreant's picture

"I just don't want to be the one to trigger it."

I do.

Why not you? I would consider it a profound honor. 

Sun, 09/05/2010 - 15:40 | 564941 Laura Ingalls
Laura Ingalls's picture

I'm eager to see a new system, I'm just not eager to see the suffering that's going to happen. There are going to be so many people who are going to die. At least that's my analysis.

Sun, 09/05/2010 - 16:17 | 564966 A Nanny Moose
A Nanny Moose's picture

Have you read the ZH tagline in the upper right? Life is terminal dear.

Millions haven't died needlessly under the present system? People die, shit happens. Nature demands it.

Sun, 09/05/2010 - 17:04 | 565015 nuinut
nuinut's picture

The new system will be one in which freedom is restored. I, for one, welcome it. 

For a monetary system to work, anyone, anywhere, must be able to exchange the currency for gold at a floating rate. We call this FREEDOM.

I'm not eager to see the existing suffering continue indefinitely so those who currently live at the expense of others can continue to do so.

Open your eyes, Laura Ingalls, the majority of the world have been getting screwed for most of the last century. The rest of the world will break free from the USD whether you like it or not. If you want to cushion the blow to you and yours, get yourself some physical gold before they do. Don't concern yourself with the "price", as The Price of Gold is Arbitrary. It is the relative buying power of your dollars that should be your immediate concern.

Mon, 09/06/2010 - 00:22 | 565441 DoChenRollingBearing
DoChenRollingBearing's picture

+ $1248

Mon, 09/06/2010 - 14:00 | 565745 RockyRacoon
RockyRacoon's picture

GO-FO!  Maybe we'll have to move along to FO3A now?

Sun, 09/05/2010 - 17:31 | 565038 Conrad Murray
Conrad Murray's picture

"The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself." - John Stuart  Mill

Sun, 09/05/2010 - 18:13 | 565096 nuinut
nuinut's picture

Exactly.

Sun, 09/05/2010 - 19:37 | 565194 Laura Ingalls
Laura Ingalls's picture

It's not that I'm trying to avoid fighting, I'm just following Hypocrites' Maxim..."First do no harm."  I can't see how we can fix the system without causing the break-down that's coming to happen that much quicker.

If you have any ideas on how to fix it without crashing the system, I'm willing to listen.

Mon, 09/06/2010 - 11:18 | 565748 RockyRacoon
RockyRacoon's picture

You have to break eggs to make an omelet.

Mon, 09/06/2010 - 21:11 | 566440 Hulk
Hulk's picture

Hmm....


  • Get someone else to break them.
  • Use eggs that have already been broken.
  • Use powdered eggs.
  • Play with chicken DNA.
  • Redefine 'omelette'.
  • Redefine 'breaking'.
  • Teach your Grandma how to suck eggs.
  • Make something useful from the shell, that way it's not reasonable to say it is broken.
  • Use a very big egg, any hole you make will be negligible.
  • Use a syringe
  • Dissolve the shell using vinegar (not sure this will taste as good).

Mon, 09/06/2010 - 22:15 | 566476 MsCreant
MsCreant's picture

You are officially qualified to be fed chairman.

I hope you are not offended, I understand that is quite insulting.

Tue, 09/07/2010 - 00:04 | 566638 RockyRacoon
RockyRacoon's picture

I'm for throwing the eggs against the wall and scrape up what's left.

Tue, 09/07/2010 - 06:01 | 566807 jm
jm's picture

This is exactly what Stalin said before spent a decade killing his millions.  This is a breathtaking example of what happens when foolishness replaces reason.

 

Wed, 09/08/2010 - 10:35 | 569372 RockyRacoon
RockyRacoon's picture

My reply was to Laura Ingalls who wants to fix all this mess with no damage.

Ain't gonna happen.   Somebody will suffer.  I'm not for Stalinesque mass extinctions.

Mon, 09/06/2010 - 15:04 | 566106 cranky-old-geezer
cranky-old-geezer's picture

How can we bring down the fed without bringing down our economic system? [more quickly]

Three words:  Collapse of confidence.

The Fed and it's FRN currency runs on confidence.  Just like any other scam, it collapses when confidence collapses. 

Fed knows it's a scam.  As they grow the scam to unprecedented levels they know confidence will collapse at some point, and they likely know approximately when confidence will collapse.

Sadly it won't collapse the Fed.  It just collapses the FRN and everything denominated in FRNs.

So the real answer is still three words:  A foreign power.

How unruly regimes have always been taken down.

Sun, 09/05/2010 - 11:56 | 564604 lynnybee
lynnybee's picture

tell me about it !   TALK ABOUT FEELING AWFUL !!!   Since learning the TRUTH regarding this mess I'm sick in my heart, sick about my elder years, sick about my children & grandchildren.   People are leaving the country; but, when you're a 60-year-old female, where the hell are you going to go !    The UNITED STATES of AMERICA HAS BEEN LOOTED .  Revolution is the only answer.   We are going back to colonial times, one way or the other.

Sun, 09/05/2010 - 12:40 | 564642 Ahmeexnal
Ahmeexnal's picture

"and it's all the illegal immigrants fault, they ruined the US economy, let's kick them out and everything will be back to how it used to be, if someone comes along that promises to kick them all out vote for him, for he shall be your saviour"

*sarcasm off*

 

and yet, even if you explain to people the root of the problem, they will always prefer to look the other way and blame someone else, to find an "easy target"

 

monday night football....hate week

same thing

Sun, 09/05/2010 - 12:57 | 564666 thesapein
thesapein's picture

Or, you explain it to someone, wait a month, and find out they've been reprogrammed again! Damn, tv.

Sun, 09/05/2010 - 15:27 | 564926 Laura Ingalls
Laura Ingalls's picture

lol, too true.

Sun, 09/05/2010 - 12:48 | 564652 silvertrain
silvertrain's picture

 "were going back to colonial times"

 

 I've been saying the same thing.We are going back, thats a FACT..How far back is up in the air..Im thinking 1850 ish...

Sun, 09/05/2010 - 13:02 | 564674 thesapein
thesapein's picture

I'm kind of hoping for a return to the dark ages, which I've so romanticized in my mind, a time of warming in Europe, wine grapes growing in London, amazing architecture, gold and silver trade... can I keep dreaming...

Sun, 09/05/2010 - 13:08 | 564683 RockyRacoon
RockyRacoon's picture

I kinda like chicks with hairy pits and legs....  not so bad really.

Now the lack of bathing not so much.

Sun, 09/05/2010 - 14:02 | 564768 Hulk
Hulk's picture

dental hygiene weren't too good either...not a lot of tonsil checking going on due to atrocious breath..

Sun, 09/05/2010 - 14:12 | 564792 DoChenRollingBearing
DoChenRollingBearing's picture

Ahh, my great friends Rocky & Hulk.

I prefer 2010.  If we go back to the Middle Ages, I think I would rather be in Peru, where we would be among the Royalty.  I'll bring dental floss just in case...

Sun, 09/05/2010 - 14:26 | 564826 Hulk
Hulk's picture

I had to buy a wheel bearing yesterday DCRB, if only I had your number!

(and boy are those fuckers expensive!)

Sun, 09/05/2010 - 15:26 | 564924 DoChenRollingBearing
DoChenRollingBearing's picture

For what vehicle pray tell?

The shipping charges of getting one of ours to you would be prohibitive.  If you had to buy Timken or one of the hub unit type of bearing that would explain why it cost so much.

Or if you own a Mercedes, then ALL of those parts are a rip-off (at the Dealer).  That's where Daimler (and Cat) make their real money, in the replacement parts.

Sun, 09/05/2010 - 15:32 | 564932 Hulk
Hulk's picture

Ford Explorer. 175 bucks + 95 to install. Its a hub unit....

Sun, 09/05/2010 - 17:53 | 565070 Hang The Fed
Hang The Fed's picture

Those are a real bitch.

Mon, 09/06/2010 - 00:27 | 565447 DoChenRollingBearing
DoChenRollingBearing's picture

.

.

Hulk, amigo!  Iljin of Korea makes a number of hub units for Ford Explorer, would depend on the year of course.  If it is a recent model (say last 5 years) we probably have that and sell that to the public (highest price) in Peru for about $70.  Installing it (not us though) would be $15....

"Mano de obra" (Labor) is really cheap down there.

Mon, 09/06/2010 - 13:31 | 565959 Hulk
Hulk's picture

Thanks DCRB!

Sun, 09/05/2010 - 14:38 | 564846 thesapein
thesapein's picture

I was kind of picturing a futurized version. Notice how every depiction of the future draws on some period in history. I'm already over it though. That was so me this morning, almost yesterday.

Why do we think their dental hygiene was any worse than ours today? Really. 

Sun, 09/05/2010 - 14:41 | 564857 RockyRacoon
RockyRacoon's picture

The Chinese were believed to create the first real toothbrush, or a device that was used to clean teeth, but it was much different than the ones that we are used to today. These first toothbrushes, crafted in the 1400s, did not use nylon for bristles, or plastic for the handles. They were crafted from bamboo, one of the most common plants from that area. The bamboo formed the handle for people to hold on to. Attached to this handle was a set of bristles, which were crafted from the tough hair of the Siberian wild boar. The hairs used came from the back of the neck of this animal. This is the toothbrush associated with having been the ancestor of the one that we use today.

http://ezinearticles.com/?Dental-Hygiene,-an-Ancient-Practice---The-Hist...

Sun, 09/05/2010 - 16:38 | 564990 thesapein
thesapein's picture

You knew I would like the Chinese reference because of my national inferiority complex, playing on my handicap for others...

Sun, 09/05/2010 - 23:28 | 565389 Real Estate Geek
Real Estate Geek's picture

Invented in China?  Not true!  The toothbrush was obviously invented in Alabama.  If it was invented anywhere else, it would have been called the TEETHbrush!  Q.E.D.

[Rimshot]

Thank you, thank you!  I'll be here all week.  And folks, remember to tip your waitress.

Mon, 09/06/2010 - 06:53 | 565571 bronzie
bronzie's picture

+1

Tue, 09/07/2010 - 05:51 | 566804 i.knoknot
i.knoknot's picture

ba-dump ...

:^)

Mon, 09/06/2010 - 10:43 | 565698 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

i love you guyz. i really do.

Sun, 09/05/2010 - 14:56 | 564881 Oracle of Kypseli
Oracle of Kypseli's picture

Don't dismiss the latter.

Napoleon's messengers had been intercepted numerous times only to find messeges addressed to female lovers such as: "Do not bathe, I will be in town in three days" 

  

Sun, 09/05/2010 - 14:58 | 564887 Oracle of Kypseli
Oracle of Kypseli's picture

BTW: When Josephine found out, she took his Bon-a-part

Sun, 09/05/2010 - 15:28 | 564930 DoChenRollingBearing
DoChenRollingBearing's picture

Hola Oracle!  Buen chiste pues...

Sun, 09/05/2010 - 16:40 | 564993 thesapein
thesapein's picture

thus my fear to reply directly...

Mon, 09/06/2010 - 11:12 | 565738 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

oh la is right. i step away for a while and calm myself down.

bon-a-part, bitches.

Sun, 09/05/2010 - 15:09 | 564905 Hulk
Hulk's picture

Some of us like our women a little "ripe"

Mon, 09/06/2010 - 11:13 | 565740 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

like fruit      's

Mon, 09/06/2010 - 13:34 | 565962 Hulk
Hulk's picture

pheromones, don't want to wash those buggers away..

Sun, 09/05/2010 - 14:06 | 564781 Uncle Remus
Uncle Remus's picture

We ARE in the dark ages. The relative illiteracy and lack of knowledge of those billions not ordained in the Church of the Almighty Fiat Currency and New World Order is no different than those poor bastards in the time before Gutenberg press. The "American Way of Life" is nothing more than a sick liturgy.

Sun, 09/05/2010 - 14:26 | 564825 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Never forget the benefits of the bubonic plague.

Sun, 09/05/2010 - 14:53 | 564876 Uncle Remus
Uncle Remus's picture

alzo sprach dave "pray for plague"

Sun, 09/05/2010 - 15:34 | 564937 boooyaaaah
boooyaaaah's picture

See nvax

Sun, 09/05/2010 - 18:35 | 565137 merehuman
merehuman's picture

Back to a simpler life of neccessity and hopefully love as well

Mon, 09/06/2010 - 10:39 | 565693 kathy.chamberli...
kathy.chamberlin@gmail.com's picture

People are leaving the country; but, when you're a 60-year-old female, where the hell are you going to go !

soon to be 61 mind you! probably, just guessing.

Sun, 09/05/2010 - 11:59 | 564605 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Some of the most entertaining commentary comes from gold bugs. Buy gold, shiny, shiny gold. Better buy an AK and practice a lot, because if you trust no authority you had better bury that gold close at hand and be able to defend it yourself. An AK is good because you can also hunt deer with the old soviet round and you could drop your sandwich inside the rifle and it would still fire.

Gold and an AK ... or is this jumping the gun?

Better buy that gold quickly (would this be the gold bug talking his book?) :

Aprox: 165,000 tons of gold in world @ $1250 and ounce = $6.6 Tn

(20 % in Bank Reserves)

US GDP $14.5 Tn, therefore ALL THE GOLD IN THE WORLD = 46% of US GDP

Global GDP (not PPP but $) aprox. $ 55 Tn, therefore ALL THE GOLD IN THE WORLD = 12% of Global GDP.

IS THERE REALLY ENOUGH GOLD to serve as currency for the global economy?

Or, what global economy as you sit in the bushes w / face paint, camo and your trusty AK, waiting for your neighbor to come along and try and take your gold ...

 

 

 

 

 

Sun, 09/05/2010 - 12:06 | 564610 Goldenballs
Goldenballs's picture

It won,t be your neighbour who takes your Gold it will be the Government.You may earn cash,trouble is the Government has already spent it long ago and they,ll keep knocking on your door asking for more and more.Also Gold is hard for the Government to track,a free currency if you like,truly universal,easily off the allseeing radar,no wonder politicians hate Gold,unless they are buying it themselves because they don,t trust their own policies,no that wouldn,t happen in a democracy would it ?

Sun, 09/05/2010 - 12:13 | 564615 Johnny Bravo
Johnny Bravo's picture

No, there isn't enough gold to serve as currency for the global economy.

This is why the gold standard was abolished in the first place, and why there will never be a new gold standard.

Sun, 09/05/2010 - 12:32 | 564633 DoChenRollingBearing
DoChenRollingBearing's picture

There is plenty of Gold.  At the right price.

But, I agree that there will be no Gold Standard.  Even ALL Gold Standards were abused and died.

Sun, 09/05/2010 - 13:05 | 564680 thesapein
thesapein's picture

Gold doesn't need a standard.

Sun, 09/05/2010 - 14:16 | 564797 Caviar Emptor
Caviar Emptor's picture

Gold Standard for Dummies:

Nation prints currency at a fixed ratio to its gold reserves (used to settle trade imbalances). Anytime people complain there's "Not Enough Currency", no problem. Issue 1/10, 1/100, 1/10,000th of unit currency and remove equivalent amount of full value. Prices will adjust accordingly. Let me repeat: print infinitely SMALLER denominations, not larger, preserving the same ratio to gold reserves. 

Result? Prices can actually go down. Yes, down. You read it right, down. As efficiency and productivity gains kick in, as long as nation is not diluting the currency then lower prices will result...ie higher buying power (as opposed to chronically lower buying power which is the net result of fiat currency). Then citizens can enjoy the fruits of their labor instead of being on a fruitless hamster wheel forever. 

Continue adjusting currency supply to growing needs and population WITHOUT diluting. Trade balances get settled in gold so no governments can cheat and print. Trade imbalances quickly get redressed as prices, supply and demand for goods equilibrate. 

Sun, 09/05/2010 - 15:43 | 564944 boooyaaaah
boooyaaaah's picture

If future value is not higher than present value
No one will invest

Eventhough

There should be a bizzarro kensian that would get us out of this mess
U

Sun, 09/05/2010 - 17:37 | 565045 Johnny Bravo
Johnny Bravo's picture

And that, in a nutshell, is why inflation is so important to growth.

Sun, 09/05/2010 - 19:37 | 565196 1984
1984's picture

What growth and why do you need it?

Sun, 09/05/2010 - 20:06 | 565230 tmosley
tmosley's picture

You think that an increase in prices is growth.  I think that rising production is growth.  In your world, money can be printed, even as production falls, or is driven abroad, and we still have "growth".  You get lots of inflation, but you have negative real growth.  People don't starve for a while, as foreigners are still stupid enough to think that the dollars they are buying with their production are wealth.  They don't realize that the goods they are giving away are wealth.  Eventually, they will realize this.

Growth in the money supply does not mean growth in production.  Most of the time, it means just the opposite.  An unstable money supply destroys industry through destruction of capital.  It punishes savers.  Savers are people who have given their productive capacity to the world in exchange for a promise that they can buy goods later.  When they are paid in fiat dollars, they are forced to speculate.  The people are not seasoned investors, so they tend to lose money, meaning that the promise they were given was a lie.  If they had been paid in gold, and kept it, the effect would have been that society took thier capital and automatically allocated it in the most efficient manner possible.  If they made bread, that bread would be used to feed workers who would be able to spend their time increasing the rate of production.  If the baker demanded settlement in terms of goods immediately (ie he spent the money rather than saving it), the worker would be forced to use current levels of production to repay him, and society would have slower advancement because of it.

Your thinking is backwards, Johnny Bravo.  Inflation destroys growth because it forces an increase in consumer spending directly by funding the government, which is not a productive entity, and participates in very nearly 100% consumer spending.

Also note that when you say that there is not enough gold for a gold standard, you are saying that gold only goes up in value, which negates your anti-goldbug stance.

Sun, 09/05/2010 - 22:55 | 565374 Johnny Bravo
Johnny Bravo's picture

Inflation comes from rising interest rates, which encourages people to save, which provides capital to invest.

You can't have growth in production without investment.

You can't spur investment without returns on capital.

You can't have large returns on capital without high interest rates.

You can't have high interest rates without inflation, because there would be no increases in revenues to pay for said high interest rates.

Sun, 09/05/2010 - 23:54 | 565406 tmosley
tmosley's picture

Interest rates != inflation rates

Try again.

Mon, 09/06/2010 - 09:16 | 565624 reading
reading's picture

You need to study that a bit further...

A growth in production would help moderate inflation by increasing supply to balance out the too much money chasing too few goods.

You can have a growth in production without direct investment through increases in productivity.

I think you can probably find room in an Econ 101 class for the fall semester if you try...

Sun, 09/05/2010 - 17:55 | 565071 CrockettAlmanac.com
CrockettAlmanac.com's picture

If future value is not higher than present value
No one will invest

When deflation causes folks to save rather than spend they usually bank their funds and these funds are then loaned out by the bank. Prudent bankers will seek the highest reward and lowest risk which is a win for the borrower who grows his business, the depositor who earns interest and the banker who rightfully takes his cut.

In the 19th century the ability to save and grow one's money in a deflationary environment lead to something called "The Miracle of Compound Interest." This miracle was a boon to owners, managers and workers alike until it was destroyed by the Federal Reserve and replaced with The Rat Race.

Individuals could also chose to invest their savings directly. Their willingness to invest would depend on the rate of deflation and the expected rate of return on a given investment.

Sun, 09/05/2010 - 18:18 | 565103 Johnny Bravo
Johnny Bravo's picture

You need inflation, or higher rates of return than investment, to convince savers to invest their savings instead of holding on to them.

Sun, 09/05/2010 - 18:33 | 565132 MichaelG
MichaelG's picture

But where that isn't occurring naturally, is it sufficient to fake it, by printing more fiat currency (particularly when that's also the global reserve)?  I'm thinking particularly of this:

The issue is not the political will of the US government to go on spending beyond its means, it is the political will of the rest of the world to go on accepting the unworkable global system indefinitely. They will not do it.

Sun, 09/05/2010 - 19:37 | 565195 CrockettAlmanac.com
CrockettAlmanac.com's picture

You need ... higher rates of return than investment, to convince savers to invest their savings instead of holding on to them.

That's what I said. It's a good thing because it means that people will only chose to risk their savings in investments with a high probability of success. In this way the malivestments which lead to bubbles and recessions and depressions have little chance of coming into existence.

You need inflation...to convince savers to invest their savings instead of holding on to them.

People who are forced to invest out of desperation and fear of debasement rarely have the knowledge or the luck to make profitable calls in the stock market. Why should working people be forced to risk their life savings to the twin dangers of monetary inflation and high risk speculation?

Sun, 09/05/2010 - 19:39 | 565199 1984
1984's picture

+1

Well put.

Sun, 09/05/2010 - 22:24 | 565347 Johnny Bravo
Johnny Bravo's picture

Even a savings account with a 5% interest rate requires inflation.

That money is then wagered by money managers.  The "average" person does not need to invest in risky instruments, but they still are encouraged to save and benefit society from high interest rates, which are the same as inflation.

Mon, 09/06/2010 - 00:14 | 565435 tmosley
tmosley's picture

Right, because the only way to get a return on investment is for people to print more money, am I right?

There is no return on investment, there is only QE (aka ZUUL).

Mon, 09/06/2010 - 03:21 | 565490 CrockettAlmanac.com
CrockettAlmanac.com's picture

high interest rates, which are the same as inflation.

In a fiat currency system higher interest rates create a disinflationary environment. That's basic. Everybody knows that. That one goes into the JB quotable quotes file.

When the creation of "new money" parallels the expansion in GDP there is no price inflation. This makes interest payments possible while maintaining the purchasing power of money. Monetary expansion of a currency redeemable in gold will in the long run tend to mimic overall economic expansion as the productivity enhancements which grow the economy at large grow the money supply at a similar rate. Even in a deflationary environment the addition of any new gold whatsoever makes interest payments possible as the increased value of the gold offsets any nominal reduction of the interest rate.

Mon, 09/06/2010 - 11:08 | 565725 Caviar Emptor
Caviar Emptor's picture

Ok. This is going to shock some people like the day you learned how to divide (and you were convinced multiplication was the highest order of thought). 

Future value may be higher than present value and the investor still registers a LOSS. 

That's because you failed to mention the word REAL. Real future value may be lower than real present value if the rate of inflation exceeds the differential. 

In a world of infinite money (which the Fed has the power to produce), the real value of money becomes infinitely small. The closer a Snickers bar gets to $35,000, the less real your profit becomes unless that is taken into account. 

With a Gold Standard smart people will very quickly adjust to the notion of profiting in real terms, where supply really does push the price of goods down and capacity utilization adjusts accordingly. 

Some of the largest public companies ever were created during the days of the gold standard. Investors sought profit then as now.

Sun, 09/05/2010 - 20:40 | 565193 1984
1984's picture

+1

But Caviar, I'm afraid you're just talking to a bunch of cattle.

It's amazing how all these idiots dismissing gold have no clue how gold works.

They all equate the gold standard to using gold as a transactional medium rather than as an absolute unit of value.  Of course the use of gold as a transactional medium is obsolete, especially in the age of digital transaction.

The argument against gold because it has no real use is equaly stupid.  Gold certainy has industrial uses as it is an excellent conductor and catalyst for chemical reactions, but is too dear for such use.  In fact, as an absolute unit of value, the fewer industrial uses the better so it's quantity is not subject to the vagaries of industrial demand.  The real "use" of gold is as a hedge against paper/electronic money debasement.  As long as such risk exists, gold has value. 

Let me just add that a gold standard merely means direct convertibility between the gold and paper/electronic money so that the latter can be trusted as the transactional proxy.  If the gov't/central bank debases the paper/electronic money, you can ask for the metal and they would quickly run out of the metal.  Just like what happened in in GD1 until FDR devalued the dollar to stanch the hemorhage.  The confiscation (exec order 6102) is a necessary condition for the gov't/central bank to build back up their inventory.  Otherwise merely changing the conversion ratio does not change the distribution of gold.  Nixon didn't even bother and defaulted altogether.

So, having a gold standard doesn't mean you're safe from the gov't/central bank taking your money.  It just makes it harder.  When push comes to shove, they can always rob you at gun point instead of merely stealing, especially when it's a minority of the population that owns any gold.  It wouldn't take much political will by then.

So what I'm really saying?  As long as you have gov't that are willing to use any means to rob/steal from its citizens, there is really no safe store of value, gold or no gold.  I think that is the only real argument against gold.

 

Mon, 09/06/2010 - 11:27 | 565758 RockyRacoon
RockyRacoon's picture

You are right about the cattle part.  Sheesh.

Gold holds its unique position because it is pretty much used for nothing else. It has an extremely high stock to flow ratio. "Stock" means those who are sitting tight on their physical gold, letting it lie still for the future, and "flow" means those who are presently trading their gold.

http://fofoa.blogspot.com/2010/06/how-can-we-possibly-calculate-future.html

So little is understood about how gold functions as a store of wealth.  The misconceptions are rampant, and sadder still, investment decisions are made on the basis of flawed theory.  Perhaps we should thank Johnny Bravo for exposing the myths?  Even ignorance can be educational.

Mon, 09/06/2010 - 13:47 | 565984 Hulk
Hulk's picture

" Even ignorance can be educational"  Awesome statement RR. I can assure Caviar that the "cattle" are learning and that we appreciate his posts. Always have.

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