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Occam's Gold vs Rube Goldberg's Fiat

Tyler Durden's picture





 

From the 'simplicity' of a Gold Standard to the 'complexity' of our current fiat system, Santiago Capital draws a handy analogy between the over-complicated machines of 'Rube Goldberg' that represents the interactions between the various actors affecting the size and velocity of our monetary base and the 'simplest possible, but no simpler' world of 'Occam's Razor'-prone gold. In two brief presentations, Brent Johnson introduces the two systems and explains that in order to keep the shark of our economy alive, one of two things must happen: monetary velocity must be maintained or the monetary base must rise. Obviously both are inflationary. From how the system is designed to its drastic implications, simple, brief, concise, and what to do about it.

 

Presentation 1: How The System Is Designed... Introducing Occam's Gold Standard and Goldberg's Fiat system, and the enormity of our credit-based fiat system's liabilities... and how new money enters the system.

 

 

 

Presentation 2: The Reality And Its Implications... What happened after the dot-com bust til now... the Fed plugging the hole... the monetary base has only contracted 8 times YoY in the last 93 years with the last significant contraction occurring 60 years ago... the Fed will not let it fall (or the shark is dead)... from the ramifications of false CPI to the ignorance of facts in the CBO projections, from "it just doesn't happen" to the marginal utility of new debt, there is only one way out for the Fed (and they need to keep it quiet from the masses)...

 

 

Simply put (by Stein) "If something cannot go on forever, it will stop"... whether we decide to do it ourselves or the market does it for us, our over complicated system of money is going to stop...

 

and as such - buy protection against this absolutely certain eventuality.

 


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Mon, 02/11/2013 - 22:46 | Link to Comment willwork4food
willwork4food's picture

Do I have to always the first one to open this? I feel like a virgin..

Mon, 02/11/2013 - 22:56 | Link to Comment SafelyGraze
SafelyGraze's picture

clearly the equity dump is because of the papal announcement

"wants to spend more time with his family"

Mon, 02/11/2013 - 23:32 | Link to Comment SafelyGraze
SafelyGraze's picture

fwiw .. at about 6:30 into video 2, the narrator talks about "the fed raising interest rates on itself" 

comparing it to a person who borrows money and asks the bank to increase the interest on the loan

note to narrator: the fed is the one *issuing* the loan. not *assuming* the loan.

hello? santiago capital? could you borrow me some of my funds to you please? you can pay me back last year.

Mon, 02/11/2013 - 23:50 | Link to Comment Pinto Currency
Pinto Currency's picture

"The recent strong increases in money supply raise the likelihood of acceleration in the rate of growth of prices of goods and services in the months ahead. The effect of these increases cannot be neutralized by the fact that the so-called velocity of money is declining.

Contrary to popular thinking, the velocity of money doesn't have a life of its own. It is not an independent entity, and hence it can't cause anything, let alone offset the effect of an explosion in the supply of money on prices of goods and services."

http://mises.org/daily/918

 

Velocity does not cause inflation.  It is an indication of the preference to hold cash.  Only the quantity of money can determine consumer goods price inflation.

Tue, 02/12/2013 - 00:41 | Link to Comment Pinto Currency
Pinto Currency's picture

And from Henry Hazlitt

http://mises.org/daily/2916

"...What is most striking, when we examine the figures, is first of all the wide discrepancy that we find between the rate of turnover of demand deposits in the big cities, especially New York, and the rate that we find in 218 other reporting centers. In August of 1966, the annual rate of turnover of demand deposits in these 218 small centers was 34.1. In six large reporting centers outside of New York City, it was 52.2.When we come to New York City itself, the rate of turnover was 112.7. In other words, the rate of turnover of demand deposits in New York City was more than three times as great as it was in small towns and country districts.

This does not mean that people in New York City were furiously spending their money at three times the rate of people in the small centers. (We must always remember that each individual can spend his dollar income only once.) The difference is accounted for by the fact that New York, with the New York Stock Exchange, the American Stock Exchange, the stock brokers and bond houses, and a myriad of speculative markets for commodities, is the great center of speculation in the United States. This fact is further emphasized by comparisons over a period of years. For example, in 1943, the turnover of demand deposits in New York was only a little greater than in other reporting centers. But it has kept increasing since then, in relation to other centers. This increase had corresponded broadly with the measurable increase in speculation during the same period.

Though the velocity of circulation of money increases with speculation, speculation itself does not indefinitely increase. In order for speculation to increase, willingness to part with commodities must increase just as fast as eagerness to buy them. It is rapidly changing ideas of commodity values — not only differences of opinion between buyer and seller, but fluctuating opinions on the part of individual speculators — that are necessary to increase volume of speculation. But an increase of V does not necessarily mean increased commodity prices, let alone proportionately increased commodity prices. There may be violently active falling markets as well as violently active rising markets. ..."

Tue, 02/12/2013 - 01:16 | Link to Comment fasTTcar
fasTTcar's picture

"Velocity does not cause inflation.  It is an indication of the preference to hold cash.  Only the quantity of money can determine consumer goods price inflation."

Or the quality of it - http://en.wikipedia.org/wiki/Gresham%27s_law

Tue, 02/12/2013 - 02:11 | Link to Comment Pinto Currency
Pinto Currency's picture

 

Perhaps there is some inextricable link between the increase of quantity and the quality of money.

 

Tue, 02/12/2013 - 07:27 | Link to Comment tradewithdave
tradewithdave's picture

In a 2-dimensional framework, it is true that Velocity didn't have a life of it's own, however within a 3-dimensional framework it would... and it does.  

http://tradewithdave.com/?p=12776

http://tradewithdave.com/?p=13631

http://tradewithdave.com/?p=14493

Tue, 02/12/2013 - 13:21 | Link to Comment dmger14
dmger14's picture

When rates go up, treasury borrowing costs go up.  So the fed's control over interest rates impacts the interest rate on treasuries and I believe that is his point.  Where I go nuts is when people assume that if interest rates go up 1%, our debt service on the $16.5 trillion debt goes up commensurately, which is NOT the case.  Only as old debt is rolled over and new debt issued does that portion of debt get attached to higher debt service payments.  If the treasury has a 10 year outstanding at 1.7%, debt service will be 1.7% for that principal for 10 years regardless of changes in interest rates over that time.  The point is still valid, but not acknowledging the locked in nature of much of our debt makes an automatic assumption that all of our debt is floating rate debt, which is misleading.

Mon, 02/11/2013 - 23:44 | Link to Comment Pinto Currency
Pinto Currency's picture

 

dbl post. pardon me.

Mon, 02/11/2013 - 23:01 | Link to Comment DavidPierre
DavidPierre's picture

The impossibility of economic calculation in a fiat world 

The purpose of keeping accurate accounts is to quantify net worth at any given point in time – as well as the change from a prior date. It goes without saying that the measure used, money, should be constant if comparisons over time are to mean anything. Only then do prices of capital goods, consumer goods and services truly reflect their changing values, giving important signals to businessmen. With unstable fiat money market signals lose much of their meaning.

It is not normal for businessmen to fret over this. They tend to work from management accounts which are usually prepared monthly, and over that time-scale a depreciating currency is unnoticed – except in the case of monetary extremes. However, businessmen should pay attention to the problem, because the accumulation of entrepreneurial wealth is achieved over many years; its productive value can be significantly altered by fluctuations in the purchasing power of unstable money.

Governments in countries like the United Kingdom have destroyed much of their manufacturing industry through currency depreciation, while Germany contrasts with a history of engineering excellence and a firm currency. The German business owner in the post-war years had relative certainty of economic calculation, allowing him to build up his productive wealth; while the British business lobby resorted to encouraging successive governments to keep costs down by devaluing the pound, rather than investing their own resources in more efficient production.

Reducing costs by managing the currency is, to put it less politely, all about robbing the workforce of the purchasing power of its wages. But the workforce is, in economic terms, made up of individual entrepreneurs selling their skills and labour to employers. They are the unconscious victims of devaluation as indeed are small businesses, but at least in the short-term the central planners manipulating fiat money congratulate themselves that jobs have been saved.

The cost comes later, as consumers – who in turn are also entrepreneurs and savers – pay the bill through higher prices and lose on their savings through lower interest rates and monetary value. So where’s the benefit?

None. The history of nations whose governments respect sound money, such as Germany and Japan in the post-war years, has been one of persistent economic progress, despite otherwise economically incompetent governments. This is in contrast with the UK and some European countries, whose continual devaluations were always accompanied by economic underperformance. Since then all governments have increased their currency debasement efforts. Nevertheless, it is striking that businesses do better with a stable currency in the long run than with the supposed benefits of these continual devaluations.

This lesson is not so clear to today’s economists, because Japan blew up over 20 years ago; Germany ditched her currency for the euro; and now we have a worse set of problems. But those of us who understand that currency devaluation only serves to defraud the majority of society must be alarmed that the governments of nearly all the advanced economies are racing each other to rob their citizens in this way.

Instead of bringing about a Lazarene recovery in the economy, this approach is already failing, because the very basis of economic calculation is being destroyed. Who knows the value of anything anymore? We do however know the inevitable outcome of this lunacy, and it is not good.

http://www.goldmoney.com/gold-research/alasdair-macleod/the-impossibility-of-economic-calculation-in-a-fiat-world.html

 

Mon, 02/11/2013 - 23:36 | Link to Comment SillySalesmanQu...
SillySalesmanQuestion's picture

Go back to stalking Jim Quinn after he posts here....at least we can laugh at those posts and Jim's replies to them.

<Sarc Off>

Mon, 02/11/2013 - 23:54 | Link to Comment the misanthrope
the misanthrope's picture

this was on the hedge yesterday --->  http://www.zerohedge.com/news/2013-02-10/impossibility-economic-calculat...

 

you were on here yesterday, why not just link to the article ?

Tue, 02/12/2013 - 04:44 | Link to Comment dunce
dunce's picture

All true,very clear, good job, Thanks.

Tue, 02/12/2013 - 00:42 | Link to Comment H E D G E H O G
H E D G E H O G's picture

CNBC just announced that Gietner is up for the Pope Position. They're going to waive the Jew thingy. (take it away WB7)........................

Mon, 02/11/2013 - 22:46 | Link to Comment Silver Garbage Man
Silver Garbage Man's picture

All in. Just waiting for the big bang.

Mon, 02/11/2013 - 22:49 | Link to Comment DirkDiggler11
DirkDiggler11's picture

Did I miss the part concerning "what to do about it" ? Outside of stacking more gold and silver coins and adding a few more ammo boxes full of lead filled treats waiting to go down-range I am certainly open to new ideas ???

Mon, 02/11/2013 - 22:53 | Link to Comment CheapBastard
CheapBastard's picture

what happens when that there velocity reverts to the norm?

Mon, 02/11/2013 - 22:58 | Link to Comment Yen Cross
Yen Cross's picture

 Velocity is shitty domestically, and all the monetary base is flowing to Europe and Asia.

Mon, 02/11/2013 - 23:00 | Link to Comment chubbar
chubbar's picture

Can we start being a little less cryptic in these fucking posts?????? I know you are talking about stacking Gold & Silver, I'd just like to fucking read it! Then I don't feel like I'm reading between the lines here. Is it that freaking hard to just spell it out??

Mon, 02/11/2013 - 23:04 | Link to Comment Dr. Engali
Dr. Engali's picture

G-O-L-D B-I-T-C-H-E-Z!!!

Tue, 02/12/2013 - 00:11 | Link to Comment W74
W74's picture

Which is an Anagram for: DEBT GO ZILCH.

I think I'm reading between the lines here.  You guys can be cryptic but you can't fool me.

Mon, 02/11/2013 - 23:07 | Link to Comment Redhotfill
Redhotfill's picture

So after 20 minutes of video ....   GOLD BITCHEZ!

Mon, 02/11/2013 - 23:12 | Link to Comment Piranhanoia
Piranhanoia's picture

They shouldn't have blamed Rube Goldberg,  the things he made worked just fine.  

Mon, 02/11/2013 - 23:16 | Link to Comment icm63
icm63's picture

Protection, like what?

Gold, silver, land, shot gun, farm land or GS shares !

Tue, 02/12/2013 - 01:59 | Link to Comment enloe creek
enloe creek's picture

beans

Mon, 02/11/2013 - 23:25 | Link to Comment chindit13
chindit13's picture

It's a conspiracy, I tell ya! A conspiracy!

Does Blythe's evil know no bounds?

Look where gold is trading.  It's hovering around 1644.  Yes, 1644!  And right in the heart of Chinese New Year.  Blythe is sticking a big Gong Xi Fa Cai right up the collective Han arse.

Mere coincidence?  I think not.  It MUST be MANIPULATION!  At the peak gold-gifting time of year, Blythe has engineered the price to the absolute worse possible number for the Chinese world, 1644.

All the way to double death!  Turbo death.  However one wants to translate it, there could not possibly be a worst price for gold to be at, at any time, but certainly not during the Lunar New Year.  Blythe, that Snake!  Don't let it be her year.

One has to ask, why isn't Alex Jones or David Icke all over this?  Too busy with this Pope thing?  Doesn't that even suggest this whole Pope thing is just a ruse to take everyone's attention off Blythe and 1644?

And look where gold just traded at 22:22 East Coast time....1644!  The evil!

It's insidious!

Mon, 02/11/2013 - 23:57 | Link to Comment Quinvarius
Quinvarius's picture

It will go back to 1666 this week again because the bankers love that number.  I am personally tired of looking at it.

I think gold is going to get back up to $1800 pretty quickly.  The market is what it is.  There is just too much money flowing and no where else to put it.

Tue, 02/12/2013 - 13:03 | Link to Comment FeralSerf
FeralSerf's picture

"Does Blythe's evil know no bounds?"

Her job is to shear sheep.  She's clearly doing very well at it too.

Baa!

 

Mon, 02/11/2013 - 23:57 | Link to Comment balz
balz's picture

Step by step, oh ba-by, gonna get to you gold...

Tue, 02/12/2013 - 00:19 | Link to Comment savant
savant's picture

COUNTDOWN TO ONE WORLD CURRENCY ...and it will not be gold backed

Tue, 02/12/2013 - 02:13 | Link to Comment Bay of Pigs
Bay of Pigs's picture

What will back it then? Moar faith?

Tue, 02/12/2013 - 04:20 | Link to Comment Sudden Debt
Sudden Debt's picture

well... the plan was to back it with Twinkies.... but that plan also torpedoed itself...

 

Tue, 02/12/2013 - 00:22 | Link to Comment Jungle Jim
Jungle Jim's picture

I already stacked all I could. Every pitiful remnant of the family fortune that the nursing home didn't take, I already put into PMs.

Now that's all there is, all that's left. And it just keeps getting to be worth less and less by the day, by the hour. I have NO other assets or income now. Just my Incredible Depreciating Stacks.

I have nothing else to sell to raise the greenbacks/FRNs which my landlord and the power company and the phone company and all my other creditors insist on being paid with. They don't want Mercury dimes or even Gold Eagles. They all want that folding paper money.

 I'm tired of hearing about what's going to happen with PMs "someday," "eventually," "ultimately," "finally," "in the future," "in time," "sometime between now and forever," "somewhere over the rainbow," and "tomorrow, and tomorrow and tomorrow, until the last syllable of recorded time." I don't have that kind of time. I'm living entirely on my credit cards now. They will soon run out and be declined. Very soon. In weeks, maybe days.

Tue, 02/12/2013 - 00:33 | Link to Comment GrinandBearit
GrinandBearit's picture

Sounds like a plan!

Tue, 02/12/2013 - 03:04 | Link to Comment jimmyjames
jimmyjames's picture

JJ--i feel for you-

Selling while it's down-locks in losses-if you're a new buyer-

***********

 

Something interesting is happening in gold lately – namely, the action in it has become totally uninteresting. Daily trading ranges are becoming ever smaller, as the price is pinched between the declining 50 day moving average and the flat 200 day moving average. In the process, another small triangle has been built, so to speak a triangle within the triangle. Below is a weekly chart that shows the big 18 month long triangular consolidation with the most important lateral support and resistance levels drawn in, followed by a daily chart that shows the smaller triangle.

http://www.acting-man.com/?p=21678

Tue, 02/12/2013 - 04:55 | Link to Comment olto
olto's picture

JJ,

Hold your PMs, charge up your battery, and only pay your friends; these other dudes you owe are all receiving year-end bonuses, so they can use your 'charge-off' to save on taxes---you will be doing these companies a big favor.

This seems, to me, a better decision than having remorse over a better decision that has been screwed up by a bunch of assholes who love to read stories like yours----laughing at and ridiculing you all the way to their bank.

I say, fuck 'em-----at least it is an honest and honorable statement of dignity and independence-----and you will love yourself in the morning!

Tue, 02/12/2013 - 06:44 | Link to Comment darteaus
darteaus's picture

Tell ya what I'll do: I'll cash you out for $1500/ounce.

Better hurry.

- Ben

Tue, 02/12/2013 - 07:19 | Link to Comment Whiner
Whiner's picture

"I feel your pain." These long stretches are depressing. Can the Banksters hammer PMs until the end of our lives? Maybe. We've never been here before. We only have history on our side, and the long correlation of gold moving up as interest rate trend down and as debt levels increase by the trillions. In Vegas you get your result fast. Don't put it all in PMs unless you can roll for five years without looking at the price action every day. My PMs are a hedge against Armageddon. Always have a worst case scenario planned out. May God give you the Midas Touch without war and total collapse!

Tue, 02/12/2013 - 11:57 | Link to Comment FeralSerf
FeralSerf's picture

Buy high and sell low -- it's a dirty job but someone's got to do it!

Sheep are allowed to breed so there will be wool suits for bankers to wear.

When the CIA confiscated the Yamashita gold, they became "The House".  They, and the banks they control, became the price control mechanism.  We stackers are just cannon fodder.

Tue, 02/12/2013 - 00:59 | Link to Comment Fishhawk
Fishhawk's picture

@JungleJim:  what you are experiencing is the deflationary crush, designed to drop asset values while squeezing cash flows.  The result will be foreclosures and bankruptcies, which the banks stand ready (note the $1.3trillion in excess reserves parked at the Fed) to buy for pennies on the dollar.  Only after the banks and crony capitalists have scarfed up all the available assets from this debt cycle (they call it 'harvesting') will the inflation kick in, and gold will then rise to match the outstanding debt.  The suppression of gold price is just part of the financial repression being practiced by the banks, led by the Fed, Chairsatan as the public front man for the crushing impoverishment of the middle class (read as all the unconnected).  Our plan must be to scrape up more income and/or hunker down with austerity measures, which translated means living small.  To get a clear look at how this plays out, note what is happening in Argentina and Venezuala...

Fishhawk

Tue, 02/12/2013 - 12:58 | Link to Comment FeralSerf
FeralSerf's picture

Our plan must be to scrape up more income and/or hunker down with austerity measures, which translated means "living small. To get a clear look at how this plays out, note what is happening in"  Greece.

Tue, 02/12/2013 - 04:22 | Link to Comment olto
olto's picture

None of this is meaningful as long as the bot is on both sides of the trade. It is not ony a 'manipulated market', it is, also, an artificial market----the bot just makes it up as it goes along it's merry way. I say 'bot' rather than 'bots' beause it seems, to me, that all the 'HFTs', probaby, feed into a 'master machine'.

Why do I watch this gold market every night?

BECAUSE---------

I'M STUPID!!!!!!!

Tue, 02/12/2013 - 04:50 | Link to Comment dunce
dunce's picture

Putin bought 600 tons of gold and may buy more. Khrushchev said we will bury you, after the crash Putin may just buy us.

Tue, 02/12/2013 - 06:20 | Link to Comment jubber
jubber's picture

Gold & Silver getting slaughtered again this morning

Tue, 02/12/2013 - 06:29 | Link to Comment e-recep
e-recep's picture

good news, now we can buy more of the real deal for less green paper.

Tue, 02/12/2013 - 07:21 | Link to Comment tradewithdave
tradewithdave's picture

I guess this gentleman is not familiar with the emerging trend of triple entry accounting and how velocity can be accurately measured via the block chain in all-electronic forms of money.  He recognizes the credit and the debit, however the "prebit" seems to have escaped him, but it escaped Irving Fisher too, so you can hardly blame him. 

It goes by a lot of different names, but the result is the same: 

triple entry accounting

momentum accounting

spherical accounting

3-D accounting

semantic web

linked data

web 3.0

and

"the receipt is the transaction"

 

You can measure velocity in a triple entry accounting system:  http://tradewithdave.com/?p=12776

The Chicago Plan and triple entry accounting:  http://tradewithdave.com/?p=13631

How prepaid and the introduction of the prebit dimension facilitates the Occidental to Oriental wealth transfer:  http://tradewithdave.com/?p=14493

 

 

 

Tue, 02/12/2013 - 12:42 | Link to Comment Thisson
Thisson's picture

I'm assuming you have done a lot of drugs.

Tue, 02/12/2013 - 07:31 | Link to Comment andrewp111
andrewp111's picture

If the US system does change, it won't go to gold. Far more likely is a transition to a straight MMT system, where the Federal Govt has no debt, and new money comes into existence through the simple act of deficit spending. It will be the ultimate big government system. Financing the deficit with trillion dollar coins is the first step toward a straight MMT system.

Tue, 02/12/2013 - 08:27 | Link to Comment CDNX fan
CDNX fan's picture

Massive hoarding of precious metals by the global CB's and consumers is seen as "deflationary" and "anti-velocity" since gold purchases put cash into the hands of the extractors and outside of the banking system. Velocity will expand once the manufacturing sector is repatriated to the U.S. from Asia and the Developing Nations where slave labour comes very, very cheaply.

I believe that gold and silver are completing their corrections where sentiment is now black-bearish and perfectly polar-opposite to sentiment for stocks which is "white-bullish". However, the expanding monetary base is BULLISH for everything EXCEPT cash/currency. Now, for those that believe that gold is a currency, they have just reasoned their way into a corner (for obvious reasons).

And there is nothing more pathetic than a bunch of whiny "stackers" angry and upset that the world has not yet come to an end. They would not be whining if they had hedged their "stack" with a few shares of JPM now up over 50% since the London Whale incident.

Tue, 02/12/2013 - 10:10 | Link to Comment PMakoi
PMakoi's picture

Good video information, but the narrator talks too fast. 

Tue, 02/12/2013 - 11:08 | Link to Comment AlphaHunter001
AlphaHunter001's picture

 

The funny thing is everyone on this site is crazy about gold, yet from the adjusted monetary base, there has been no increase over the past couple of years.

 

With no growth in the adjusted monetary base and velocity not increasing, there's no reason for gold to go up.

 

Velocity will increase when there are multiple places for businesses to invest. At this point, all businesses are extremely cautious, which means they are running extremely lean and thus very strong balance sheets. When velocity is expanding like crazy, this is a time when everyone is trying to invest in everything, believing the future is extremely strong.

 

At this point, any slight improvement in the economy can have a massively bullish result, as the pent up trillions of dollars sitting idle can flow into the economy. This of course is about businesses, not the government.

 

At this point, the adjusted monetary base is clearly not going to rise substantially, since there is no shortage of capital. There is in fact an excess of business capital. That's why the natural investment at this point is to be long stocks and short gold, since without an increase in the adjusted monetary base, gold won't go up - unless you think Apple will start buying gold LOL

Tue, 02/12/2013 - 11:28 | Link to Comment tradewithdave
tradewithdave's picture

Alpha Hunter, I agree if gold is priced in dollars that you are correct.  However, if dollars are priced in gold, then good luck.  (dollars defined as U.S. full faith and credit or military-industrial complex or both).  

Tue, 02/12/2013 - 13:40 | Link to Comment Thisson
Thisson's picture

Gold has a relationship with interest rates, not merely to money supply.

Tue, 02/12/2013 - 12:45 | Link to Comment Herdee
Herdee's picture

We always end up with Kyle Bass and his position on Japan.This means that the size of the debt is so large now that if inflation rises and interest rates start increasing then the government runs out of its tax base money in order to service the debt.Demographics being the huge factor because the cost of services provided to an ever increasing older population outway declining incoming revenues in a slowing global marketplace.Remember that rising interest rates make it more expensive to operate so it eventually kills jobs.Can slowly bringing back inflation be controlled better and data manipulated in such a way to control the situation?That's what governments are hoping but they don't want to confront the issue of paying more for their gigantic debts (tax increases then come for working people).The same applies to the United States.Where's the tax base going to come from then?It is slowly eroding and only cheaper paying jobs are the future of the workforce?The reason why the stock market is high and corporate profits look good is that U.S. firms make everything in China for almost nothing and make gigantic profits on the mark-up by ripping everyone off.Tyler mentioned that the next time someone points the finger at only defence spending as being a culprit in the deficit then look at the graphs.The point being that indirect subsidies to defence contractors and related business suppliers is not included in the defence number and neither is the unknown secret amount of hundreds of billions that the CIA gets.(which you'll never know as a taxpayer).So,the defence graph is skewed,meaning that the way defence is calculated the entire U.S. economy is around 50% dependant on the defence industry for jobs.Ya,the worlds policeman is dead broke.

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