"First they ignore you, then they ridicule you, then they fight you, and then you win." Mahatma Gandhi
"It is no crime to be ignorant of economics... but it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance." - Murray Rothbard
In the mid-sixties at the height of the “social revolution” the line between democratic benevolence and outright communism became rather blurry. The Democratic Party, which controlled the presidency and both houses of Congress, was used as the springboard by social engineers to introduce a new era of welfare initiatives enacted in the name of “defending the poor”, also known as the “Great Society Programs”. These initiatives, however, were driven by far more subversive and extreme motivations, and have been expanded on by every presidency since, Republican and Democrat alike.At Columbia University, sociologist professors Richard Cloward and Francis Fox Piven introduced a political strategy in 1966 that they believed would eventually lead to the total transmutation of America into a full-fledged centralized welfare state (in other words, a collectivist enclave). The spearpoint of the Cloward-Piven strategy involved nothing less than economic sabotage against the U.S..
Last week, Nick Hanauer explained how the pitchforks were out for him and his 'zillionaire' friends' he was right; but his 'solution' is far from correct..."If Hanauer really wants to test out his theory, I propose this to him: shed your billions of dollars and give the money directly to your employees. Drain your bank accounts and give the proceeds to the spend-happy middle class. If consumer demand truly grows the economy, then the profits will come roaring back. Hanauer is right that economic inequality can create resentment. But he doesn’t see the real culprit: a government that insists in meddling in the marketplace. His solutions don’t fix the problem; only exacerbate it."
In Reality, War Will Bring An End to the Petrodollar, and Impose Hardship on the Average American ...
Some basic suggestions for those who are seeking shelter from the coming storms of global financial crisis and recession.
The government now has another measure which under-reports inflation by accounting chicanery...
Gold has surged over $41 and silver over 70 cents to over $1,314 and $20.46 per ounce or 3% and 4.2% respectively as oil ticks higher on the tinder box that is Iraq ... Faber recently said how he will “never sell his gold”, he buys “more every month” and believes storing gold in Singapore is "safest”.
As he said all along "investors should have some exposure to gold" and Marc Faber has been adding recently as gold (and gold stocks) are so much cheaper than over-inflated stocks. Faber holds around 25% of his assets in gold becaquse he believes eventually the monetary policies of central banks will lead to a further loss of purchasing power in the value of paper money. The CNBC anchor is perturbed as the market is selling gold and buying stocks; to which Faber rebuffs; investors are shunning gold "because the media doesn't like gold, nobody at CNBC owns gold. Nobody at Bloomberg owns gold. Gold is being constantly talked down by the media, and Fed officials, and economists, who also don't own any gold. They're all stocked up in equities." "When people talk about people who are optimistic about gold, they call them 'gold bugs.' A bug is an insect. I don't call equity bulls 'cockroaches.' Do you understand? There is already a negative connotation with the expression of 'gold bug.'"
The Fed is now pre-occupied with an unanswerable and fanciful question, according to Jon Hilsenrath’s pre-meeting missive on the Fed’s current monetary policy “debate”. Figuratively estimating the number of angels which can dance on the head of a pin, Fed officials and economists suppose they can specify the the appropriate money market rate down to the decimal place for virtually all time to come... Of course, every one of these three magic numbers are perfectly arbitrary, academic and silly. Due to the structural failures of the US economy owing to decades of destructive Washington policies, the “unemployment rate” today is not remotely comparable to what was being measured in the 1950s and 1960s when today’s Keynesian theology with respect to the Phillips Curve, Okun’s Law and full-employment policy was being formulated.
Today's financial markets make a mockery out of sanity and logic. The difference between what SHOULD happen and what IS happening is perhaps the greatest it has been in our investing lifetimes. If you're perplexed, flummoxed, frustrated, stymied, enraged, bored, irritated, insulted, discouraged -- any or all of these -- by the ever-higher blind grinding of asset prices over the past several years, despite so many structural reasons for concern, you have good reason to be.
“Excessively low interest rates are inflationary because they mean that bonds, stocks, real estate and unincorporated businesses are capitalized at excessively high rates, and will fall in value even though the annual income they pay remains the same, if interest rates rise.” If interest rates were artificially low, it would follow that prevailing investment values are artificially high. I contend that they are, and you may or may not agree. Natural interest rates — free-range, organic, sustainable — are what we need. Hot-house interest rates — the government’s puny, genetically modified kind — are the ones we have.
As we pondered the new normal and the disappointed anchors on CNBC this evening noting that we did not hit S&P 2,000 or Dow 17,000 (but there's always tomorrow); two headlines crept across the Bloomberg feed that could not have been more perfectly timed representatives of the new normal record highs in stocks:
- *COVANTA CUTTING JOBS
- *COVANTA TO BOOST CASH DIV TO 25C-SHR FROM 18C, EST. 18C
Here's a tip for management: as a cost-cutting initiative, maybe don't spend 'cash' on buybacks at record highs and invest in productive assets, instead. Of course, that's silly-talk in the world where work is punished; as CVA's stock is jumping after-hours.
What if all the low-hanging fruit of outsourcing jobs and financialization have already been plucked by Corporate America?