Thursday, August 30, 2012

Fools Rush In and Vote Romney-Obama

Fools rush in and vote for Mitt Romney:

What a whore

Fools rush in and vote for Barack Obama-Soetoro-Davis-Durham (if that is his real name):

What a whore

I don’t have to really say much in this post.  Both candidates are liars, which is what flip-flopping really is.  How can you trust either of them to effectively rule this nation when both of them are the biggest tool-bags in politics today?

Why, Clover, Why?

The freedom philosophy is an outgrowth of empathy. Of a gut awareness of the other as a mirror image of oneself. It therefore deeply troubles the Libertarian and the anarchist to think about someone else, anyone else, being bullied – a more honest term than merely controlling someone else. It is literally nauseating to contemplate. It makes one physically ill – then angry – to witness blue-shirted TSA goons degrading old ladies and children (and adult males, too). It is enraging to hear about people who are harming no one being thrown into cages as a result of having offended against some manufactured statute. It is depressing to look about one and see a world in which men feed on men – via the ballot box, via the bureaucracy. In which all it takes to take your neighbor's property – perhaps even his life – is a voting majority in the next election.-Why Won’t They Leave Us Alone?

Next up, the Stalin Styling Salon and the Mussolini Music Center

Those crazy Indians, you gotta love 'em!

'Hitler' clothing store stirs anger in India

This is all we got after all that?

The 0% Fed interest rate policy and suppression game may be great for home buyers, but it is a total rip-off for savers. People trying to get a return on their hard earned money are being robbed of hundreds of billions of dollars a year because of artificially suppressed interest rates. CD’s are paying a fraction of a percent for locking up money for years!-Real Estate Turnaround?

George Carlin - Dealing With Homelessness

This was 1992. Nothing has changed. At the start of the video he speaks about the warfare state.

Aren't we about due to start bombing some small country that only has a marginally affective air force? Seems to me we're a couple of weeks overdue to drop high explosives on helpless civilians, people who have no argument with us whatsoever.

Yes, I'm Crazy

From the earliest years of my childhood I was different than the others. I saw them as sheep heading for the slaughter. Why did they go along, do what they were told, conform like little fools (well, they were little fools, so I should have expected it, but what did I know at that age about how dumb most people are by nature).

So, I'll admit I'm not "normal" if you'll admit you're a fool. But you won't, you can't in your blindness. Truth is too bright for your cockroach inner being. You scurry from it before you have to face reality. You go back to the dark corner of your inane celebrity gossip, your sports and fantasy football, your loud, obnoxious "music", your idiotic "reality" TV shows, your sick pursuit of sex. You will die a blind old fool, too, and you'll deserve to go that way.

Happiness Gene Found In Women

Maybe this is why all those women I know (most of them, anyway) seem quite happy with life, even when they're single and alone. Most men can't stand being alone, or need some kind of a relationship with a women (I don't care about gay men, so I didn't include you guys) to be "happy". That's their advantage over the weaker, male sex.

Even when we fall in love, men usually fall first and more desperately. He would get married on the spot to that woman of his dreams if she'd go along, because he knows she is his happiness and he can't lose her. She doesn't seem to care in quite the same way, however, even if he's lucky enough and she begins to fall too. She's content with her circumstances, and it's a mighty effort to move her. A woman can be widowed at forty and enjoy the rest of her life without ever remarrying. A man can be eighty and have his wife pass after 50 years of marriage, and he in many cases will need to go out and find a replacement for her. That, or he'll be dead in a couple of years from loneliness.

The sexes are different. There is and can be no equality.

What Happened?

Or, where have I been. Well, unlike some bloggers, I don't have all day to sit around blogging in my underwear while my wife goes off to work to bring home the bacon. I didn't have wealthy parents and they didn't leave me anything, not even one lonely house to inherit. I have only my job and its wage slave income to support me, and currently I'm in training for a new position that pays me one more worthless dollar an hour than I was making in my other department.

So, I haven't thought about blogging or updating Skeptical Eye with even a video or two in the last few days. It's not that I've ceased caring (though I doubt anyone else does, even the few who do stop by regularly) but that I just don't need to do it anymore. I'm free, because, simply speaking, I don't have to do anything. I don't even have to get up and go to work, though I do because it's still the easiest way to live for now, and I'm one lazy son of a bitch. There are other options, like going to live with Mom, or begging on the street and making $30,000 a year or more tax free, or even jumping off a bridge.

But for now I'm content to merely treat this place (my blog) as a hobby which is all it really was from nearly the beginning (and I say nearly because at first I had delusions of grandeur) and which is all I want it to be now. I post what I like or find interesting or unusual. I post to have a record of all the great pro-freedom stuff I come across online. There is so much libertarian and anarchist thought out there. Even some of the more traditional conservative individuals and groups have begun the move to liberate themselves from William F. Buckley Police State, Warfare State, Big Government Welfare and Tax State is HERE TO STAY so Let's Just Make It Less Obnoxious and MORE Conservative, thinking.

So, Skeptical Eye is here to stay, I suppose, and expansion plans are in the works. I wish I could make my usual jokes about my waist expanding, but it's been shrinking. Blogging makes me hungry, you see.

Sunday, August 26, 2012

RNC Shuns Ron Paul, Supporters Root For Romney Defeat

"I want to make sure that when the Republican Party loses, terribly to, in my opinion, the worst president in history, I want [them to know] it's because they systematically shut out the most intelligent, most youthful and active voting bloc in American history," said Ron Paul voter Mike Timoney.

Timoney's statement accurately reflected the mood at PAULfest, a celebration held by Congressman Ron Paul's supporters at the Tampa Fairgrounds on the weekend before the 2012 Republican National Convention.-

To the Republican party Establishment — and much of the rank-and-file activists — political debate is a “distraction” from what really matters in politics, which is seizing power. As for the rules governing the political process — they can be changed at a moment’s notice, and bent any which way, in order to facilitate this seizure. Ron Paul’s supporters in the GOP learned that the hard way, as the Romneyites used their control of the party bureaucracy at the state and national levels to retroactively change the rules in order to unseat duly elected Paul delegates. In Maine, Massachusetts, Louisiana, Oregon, Oklahoma, and elsewhere, the party bosses have disenfranchised Paul voters — closing down party caucuses, rejecting as delegates anyone under 50, and calling the cops when all else failed. And while Ryder’s rule change failed — thanks to RNC’er Morton Blackwell — the Romney people did sneak in an amendment that would require delegates to state in writing who they intend to vote for on the convention floor at least one hour before the vote.

This is something not even the Communist Party of the Soviet Union required, and is unheard of even in Red China. The reason for the new rule is obvious: to alert the Romneyites to impending displays of public dissent. This will give them time to isolate the dissenters, strip them of their delegate credentials, and unceremoniously haul them out of the convention, preferably in handcuffs, while the cameras roll.-The Iron Fist in Tampa

Behind The Pen: Reading, Writing and Robbery

Rothbard is Conquering! -- Lew Rockwell on The Robert Wenzel Show

Topics include:

The Republican National Convention

Romney / Ryan

Where the Ron Paul movement goes from here

The nature of politics

Brandon Raub

A fantastic tribute to Murray Rothbard

Tom Woods Speaks At PAUL Fest

Finance Will Not Be Fixed w Solutions Approach

The smallest corrective action taken to reform finance will be met with major disruptions to the currently rigged wealth allocation system. We need to soften the blow of change towards a qualitative model closer to reality. A realistic social model needs to recognize human value by redefining wealth whereby things that are needed for life-support are cheap and things which are resource-intense luxuries are expensive. Our economic models need to include a survey of the physical world, justice filled law, free communication, utility finance, and the application of technology.-

Gun Control...Chicago Style


Christian Girl Faces Death Penalty For 'Blasphemy' In Pakistan

"Last weekend's arrest and imprisonment of Rimsha Masih, an 11-year old Christian girl, by Pakistani authorities in the nation's capital, Islamabad, on charges of blasphemy, is deeply alarming. The girl, whose mental stability is doubtful, will certainly face death sentence according to the Pakistani law if she is found guilty of disrespecting or burning Islamic text. While the poor terrified girl awaits appearance before a court by the end of this month, President Asif Ali Zardari has ordered an immediate inquiry into this perturbing episode. The president's intervention is not likely to serve as a breakthrough nor is it going to lead to the swift release of the girl..."

According to the Associated Press, a group of 500 to 600 people had surrounded her house in Islamabad seeking action against the alleged blasphemer. "They were very emotional, angry," AP quoted a local police officer saying, "and they might have harmed her if we had not quickly reacted." It is unfortunate that the Pakistani law and officials have also turned against Ms. Masih by imprisoning her instead of protecting her from extremists. The little girl, who barely understands the dirty politics of religion and communalism, must be undergoing immeasurable distress and trauma. Media reports say hundreds of Christian families who lived in Ms. Masih's town have also fled their homes fearing assaults by Muslim mobs. They have not agreed to return since they left some days ago as they still feel insecure. Even President Zardari cannot do much against the country's infamous blasphemy law.-Who Benefits From Pakistan's Blasphemy Law?

The Two Armies—Socialism and Anarchism

The following article was written by Benjamin R. Tucker and published in (PDF) Liberty, March 8, 1890.
Of late the Twentieth Century has been doing a good deal in the way of definition. Now, definition is very particular business, and it seems to me that it is not always performed with due care in the Twentieth Centuryoffice.
Take this, for instance: A Socialist is “one who believes that each industry should be co-ordinated for the mutual benefit of all concerned under a government by physical force.”
It is true that writers of reputation have given definitions of Socialism not differing in any essential from the foregoing,—among others, General Walker. But it has been elaborately proven in these columns that General Walker is utterly at sea when he talks about either Socialism or Anarchism. As a matter of fact this definition is fundamentally faulty, and correctly defines only State Socialism.
An analogous definition in another sphere would be this: Religion is belief in the Messiahship of Jesus. Supposing this to be a correct definition of the Christian religion, none the less it is manifestly incorrect as a definition of religion itself. The fact that Christianity has overshadowed all other forms of religion in this part of the world gives it no right to a monopoly of the religious idea. Similarly, the fact that State Socialism during the last decade or two has overshadowed other forms of Socialism gives it no right to a monopoly of the Socialistic idea.
Socialism, as such, implies neither liberty nor authority. The word itself implies nothing more than harmonious relationship. In fact, it is so broad a term that it is difficult of definition. I certainly lay claim to no special authority or competence in the matter. I simply maintain that the word Socialism having been applied for years, by common usage and consent, as a generic term to various schools of thought and opinion, those who try to define it are bound to seek the common element of all these schools and make it stand for that, and have no business to make it represent the specific nature of any one of them. The Twentieth Century definition will not stand this test at all.
Perhaps here is one that satisfies it: Socialism is the belief that progress is mainly to be effected by acting upon man through his environment rather than through man upon his environemnt.
I fancy that this will be criticised as too general, and I am inclined to accept the criticism. It manifestly includes all who have any title to be called Socialists, but possibly it does not exclude all who have no such title.
Let us narrow it a little: Socialism is the belief that the next important step in progress is a change in man’s environment of an economic character that shall include the abolition of every privilege whereby the holder of wealth acquires an anti-social power to compel tribute.
I doubt not that this definition can be much improved, and suggestions looking to that end will be interesting; but it is at least an attempt to cover all the forms of protest against the existing usurious economic system. I have always considered myself a member of the great body of Socialists, and I object to being read out of it or defined out of it by General Walker, Mr. Pentecost, or anybody else, simply because I am not a follower of Karl Marx.
Take now another Twentieth Century definition,—that of Anarchism. I have not the number of the paper in which it was given, and cannot quote it exactly. But it certainly made belief in co-operation an essential of Anarchism. This is as erroneous as the definition of Socialism. Co-operation is no more an essential of Anarchism than force is of Socialism. The fact that the majority of Anarchists believe in co-operation is not what makes them Anarchists, just as the fact that the majority of Socialists believe in force is not what makes them Socialists. Socialism is neither for nor against liberty; Anarchism is for liberty, and neither for nor against anything else. Anarchy is the mother of co-operation,—yes, just as liberty is the mother of order; but, as a matter of definition, liberty is not order nor is Anarchism co-operation.
I define Anarchism as the belief in the greatest amount of liberty compatible with equality of liberty; or, in other words, as the belief in every liberty except the liberty to invade.
It will be observed that, according to the Twentieth Century definitions, Socialism excludes Anarchists, while, according to Liberty’s definitions, a Socialist may or may not be an Anarchist, and an Anarchist may or may not be a Socialist. Relaxing scientific exactness, it may be said, briefly and broadly, that Socialism is a battle with usury and that Anarchism is a battle with authority. The two armies—Socialism and Anarchism—are neither coextensive nor exclusive; but they overlap. The right wing of one is the left wing of the other. The virtue and superiority of the Anarchistic Socialist—or Socialistic Anarchist, as he may prefer to call himself—lies in the fact that he fights in the wing that is common to both. Of course there is a sense in which every Anarchist may be said to be a Socialist virtually, inasmuch as usury rests on authority, and to destroy the latter is to destroy the former. But it scarcely seems proper to give the name Socialist to one who is such unconsciously, neither desiring, intending, nor knowing it.

Western Society Lives for Its Kids? Really?

Freedomain Radio

Adam can't get over the fact that Ron Paul is not going to be President

Why We Can't Ignore the Assassinations of Abdulrahman Al-awlaki and Anwar Al-awlaki

The assassinations of Abdulrahman Al-awlaki and Anwar Al-awlaki, two U.S. citizens killed by U.S. drone strikes in Yemen, carry extremely dangerous implications for individual liberty, due process, and severe abuse of government power. We cannot let these incidents slip through the cracks.

Barack Obama’s Nobel Peace Prize is drenched in blood. Has Obama so much as issued an apology for killing an innocent American teenager and his friends? Nope. Nada.

This is an American teenage kid that we’re talking about, just three years younger than me. He had a Facebook profile. He listened to Akon, Eminem, 50 Cent, and Snoop Dogg. His favorite books were Harry Potter and Twilight. He loved Spongebob Squarepants, Prison Break, Lost, The Simpsons, and the BBC “Planet Earth” series. His favorite movies were Harry Potter, Braveheart, Troy, and Gladiator. In other words, he was a human being.

Have our minds been so numbed by war that we casually brush off the deaths of innocent lives, even an American teenager, taken by the U.S.? Will people continue to defend these political psychopaths who ignore the destruction of innocent life the U.S. has caused around the world? I pray not.-Read more: The Assassination of an American Teenager

Gary Johnson's Speech At PAUL Fest


Trends in the News Video - A Closer Look At Inside (and outside) The Trends Institute

There Can't Be A Recovery...Thanks to the Fed

Correction: The official price of gold was $35 per ounce in 1968, not $32. Roosevelt devalued the dollar from 1/20th of an once to 1/35the in 1932. Nixon devalued it two more times, leaving the current "official" price at $42 per ounce. I guess that is why the "2" was stick in my head.-Peter Schiff

As Schiff points out, there was no good reason to go off the gold standard. America became rich under the gold standard (and, as Schiff further points out, it's still in the Constitution, there has been no amendment allowing the unconstitutional monetary system we have now) prospering at an incredible pace during the 1800s, while today America has become the world's largest debtor nation.

The Republicans have included in their party platform this year a call for a commission to look at once again linking the US dollar to gold. This is certainly all for the good, however, nothing serious may come of it. At least they are willing to talk about it. Is it just (like their urging of an audit of the Federal Reserve) a blatant attempt to appeal to Ron Paul's supporters in the party? In any case, it certainly proves the power of Ron Paul's ideas and the value of his liberty-oriented campaign for president.

The gold standard has returned to mainstream U.S. politics for the first time in 30 years, with a “gold commission” set to become part of official Republican party policy.


The move shows how five years of easy monetary policy — and the efforts of congressman Ron Paul — have made the once-fringe idea of returning to gold-as-money a legitimate part of Republican debate.-Republicans Eye Return to Gold Standard

Aside from the ridiculous CNBC take on the story (they say that inflation is "under control" while gold is "highly volatile" and then make that point by telling us that gold is up 500% in dollar terms during the last decade!, and that a return to gold would limit the power of the Fed, which of course it would, which is the point, but as statist welfare/warfare lovers, CNBC can't stand the thought) the funniest stuff at the link comes in the comments from some obvious losers and CNBC fans (or am I being redundant there?).

The idiots don't realize that here isn't enough gold in the world to do this, but that's ok because they are idiots.

They say ignorance is bliss, but please don't show it off in public, fool, because you just embarrass yourself. A gold standard doesn't require any particular amount of gold to exist. When you stop sounding like Bret Alan, someone may once again pay attention to what you have to say.

And here's another idiot:

Gold has no value. replulicans are clue less. Completely wrong thing to base Gold as standard.

Gold has no value? To paraphrase Schiff, gold was money for thousands of years, it took government to declare paper to be money and force it on the world (with disastrous results).

Saturday, August 25, 2012


Part of me thinks the very idea is a crock of shit, but the other part  knows there is a loving being who cares. Logic, reason, leads me to atheism, but hope pulls me nearer to  belief.

The CIA and Narcotics Trafficking

The Central Intelligence Agency’s involvement in drug trafficking is back in the media spotlight after a spokesman for the violence-plagued Mexican state of Chihuahua became the latest high-profile individual to accuse the CIA, which has been linked to narcotics trafficking for decades, of ongoing efforts to “manage the drug trade.” The infamous American spy agency refused to comment.
In a recent interview, Chihuahua state spokesman Guillermo Terrazas Villanueva told Al Jazeera that the CIA and other international “security” outfits “don’t fight drug traffickers.” Instead, Villanueva argued, they try to control and manage the illegal drug market for their own benefit.

Friday, August 24, 2012


Peter Schiff reacts to the breakout rally of gold and silver in the wake of Federal Reserve meeting notes suggesting more money-printing on the way.

Keynesian Sorcery

The three Federal Reserve presidents of the Federal Reserve Banks of Boston, Chicago and San Francisco want the Federal Open Market Committee (FOMC) to start a new round of security purchases by the Federal Reserve. Eric S. Rosengren in an interview with CNBC called for
"a quantitative easing program and one of sufficient magnitude that it has an impact."
He said it should have no stated limit:
"...But what I would argue for, actually, is to have it open ended."
He said that the FED should buy more mortgage securities:
" I would focus on the mortgage-backed securities."
His is a program of unlimited inflation. His is a program of overpricing long-term securities. His is a program of a bloated central bank. His is a program that inflates the housing sector and starves other sectors.
The results of Rosengren’s recommendations are bubble prices in asset markets, low returns to savers, increased uncertainty, low investment in capital goods, and stagnant economic activity. The result is economic activity too heavily focused on housing and not enough on technical and industrial growth. The result is a movement away from investment in securities and into assets that hold their value against the inroads of inflation. The result is a slower recovery. The result is to hinder price changes and movements of people to new lines of work. His is a program that thwarts a healthy, natural and broad-based economic recovery from the recent real estate and financial intermediary fiasco.
John C. Williams has nearly the same position as Rosengren, as shown in a recent interview summarized in the San Francisco Chronicle. Charles L. Evans of the Chicago Fed also wants the FED to start buying more securities again, until consumer prices start rising by 3 percent a year and unemployment falls to 7 percent. These are numbers. Manipulating the economic activities of 300 million Americans to achieve numbers is like trying to get into heaven via sorcery.
These admirers of inflation hold to the wrong economic model. The FED never should have bought its current portfolio of mortgage securities in the first place. It should sell these securities now. For the FED to start a new round of security purchases is a terrible, terrible idea.
These three men are Keynesians and/or new Keynesians. The difference between an old and a new Keynesian is their models. This is a technical difference, not a matter of substance. The latter use models that explicitly incorporate such features as maximizing behavior, sticky prices, expectations, and new methods of estimation. What’s far more important than these technical bells and whistles is that Keynesians of all stripes share common assumptions and views. All of the following bullet points that they believe in should be rejected:
  • Free financial and credit markets are inherently defective and prone to fall apart (called "instability" or "volatility" or some other fancy language like "limits to private market financial intermediation")
  • Nevertheless, banks and the financial system are all we have and should be saved by wise regulation, oversight, government guarantees, and central bank bailouts (called "credit easing")
  • Economic shocks either emanate from markets or out of the blue but not as a rule from the U.S. government or, perish the thought, the Federal Reserve
  • Centralized economic controls (called "policy" as in "fiscal policy" and "monetary policy") can rectify the errors of markets and bring full employment with price stability
  • Analysis should be focused on the short term and long term effects ignored
  • Always assume that governments and central bankers are uniquely qualified to man the centralized economic controls and right the sinking economic ship
  • Never assume that governments and central bankers have done anything to sink the economic ship
  • Pay lip service to the inability to measure welfare, but always act as if governments, central bankers and their economists know what’s best for everyone
  • Do not question the powers of government and central banks, except to find ways to augment them
  • Rely heavily on oversimplified mathematical models of the economy both for understanding an economy and then controlling it
  • Act as if economists can find economic constants
  • Treat diverse economic activities of diverse and heterogeneous people as if they were governed by a system of equations subject to statistical estimation and control
  • Believe that manipulations of estimated parameters in models give results that are what happen in reality, while paying lip service to model limitations
  • Pay lip service to "microfoundations", but continue to think in terms of broad aggregates
  • As much as possible, ignore land as a factor, ignore heterogeneous capital goods, ignore intermediate business production, and instead emphasize "consumer spending"
  • Portray yourselves as modern and cutting edge, throwing off the outmoded theories of the past
  • Ignore Austrian economics, classical economics, and land economics, or if they cannot be ignored treat them as the old-fashioned musings of mistaken kooks and gold bugs
  • Ignore gold or disparage gold
  • Ignore anyone who has qualitative insights about the economy or who doesn’t possess a doctorate or who doesn’t gin up a mathematical model or who has not been anointed as a member of the club
  • Ignore history, or else misinterpret it to suit your case
There is no reason even to list these lunatic beliefs and behaviors except that the lunatics are running the asylum. Take the opposite of each bullet point to get nearer to truth. Bear in mind that economics can state truths and some of these can be stated mathematically, but yet economics is not an exact science in the sense of routinely coming up with algebraic constants or numbers that explain the economic activities of many millions of people. People are not like molecules in a gas whose activities can be explained by Boyle’s Law. There are not economic constants like the gravitational constant.or Planck’s constant. Most economists pretend to the exactness of physics by ignoring and oversimplifying reality to the point of misunderstanding economic behavior.
Let’s get some context on the trio’s proposal that the FED start a new round of mortgage bond purchases by looking at the history of the FED with respect to mortgage-related securities (MRS). The FED on November 25, 2008 announced that it would buy $600 billion of such securities:
"The Federal Reserve announced on Tuesday that it will initiate a program to purchase the direct obligations of housing-related government-sponsored enterprises (GSEs) – Fannie Mae, Freddie Mac, and the Federal Home Loan Banks – and mortgage-backed securities (MBS) backed by Fannie Mae, Freddie Mac, and Ginnie Mae. Spreads of rates on GSE debt and on GSE-guaranteed mortgages have widened appreciably of late. This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally.
"Purchases of up to $100 billion in GSE direct obligations under the program will be conducted with the Federal Reserve's primary dealers through a series of competitive auctions and will begin next week. Purchases of up to $500 billion in MBS will be conducted by asset managers selected via a competitive process with a goal of beginning these purchases before year-end."
This was a huge innovation. The FED, which began in 1913, had never ever bought any MRS before. The amount it would buy was immense compared to its usual credit. On November 21, 2007, prior to any of its several credit-extending measures, its total credit was $868.136 billion. This step alone meant a 69 percent jump in its balance sheet. This was unheard of.
If it’s so unusual, why did the FED do this? The FOMC tells us in that quote that it was "to reduce the cost and increase the availability of credit for the purchase of houses." It was for the housing market. Why was that called for? Was the cost of mortgage credit too high? NOT AT ALL. The government had had its hands on the housing market since the 1930s. The government had seen to it that housing got overbuilt. It had made the credit flow extremely easily. Americans had just been through an orgy of home buying on very easy terms. The FED had its hands on credit markets since 1913. It had helped make credit easy for decades. Here are the undeniable facts. The 30-year conventional mortgage rate was 7.3 percent in early 1971. Before that, people were used to 5-6 percent. The 70s had so much inflation (due to the government and the central bank) that the mortgage rate went up to a peak of 18.45 percent in October of 1981. Then it fell, and it fell for decades. In early 2008, it was back under six percent. When the FED made its first announcement bemoaning the cost of mortgage credit in November of 2008, the rate was 6.09 percent.
The FOMC’s housing justification was misleading. The bolstering of financial markets was one of their real reasons, because in the aftermath of some major failures of financial companies in September of 2008, the stock market had dropped severely. This "bolstering" is, however, sorcery. The FED cannot make stock prices rise in real terms. The FED’s ability to manufacture high-powered money (electronic digits) can cause prices to rise, but it cannot produce more goods. The real value of a stock depends on its real cash flows, and they depend on real profits based on the hiring of real factors of production and sales of real goods. Real values do not depend on cash flows expressed in inflated prices. More FED-printed money doesn’t make Amazon or any other company a more productive company. It may cause one company to produce more, but it will be at the expense of some other companies producing less. The aggregate economy cannot be made more productive by printing money. More production of goods that people want takes land, labor and capital goods in combinations that produce the desired goods. This is the work of a free market economy, not a central bank or a government. Keynesians not only fail to acknowledge this truth, they deny it.
As evidence, note that in the year following the FED’s announcement, the stock market (the S&P 500) rose by 33.4 percent, but gold rose by 44.2 percent. Gold is a real asset that is sensitive to the inflation in fiat money that the FED possesses as one of its major tools. In the following two years after the FED’s announcement (through Nov. 25, 2011), gold rose 65.9 percent and stocks rose 46.2 percent. After three years, stocks were up 44.3 percent and gold up 102 percent. And through the current date, gold is up 93.8 percent compared to a stock market rise of 79.2 percent.
In real gold terms, the stock market has not advanced in almost 4 years, despite the FED’s enormous money printing. It has not kept up with gold. It will catch up and outperform gold under two conditions. The first is that the FED does not start inflating again. The second is that the government does not produce negative shocks to the economy. Without FED and government negatives, natural economic recoveries occur.
The FED’s other reason for QE1 was to bail out the government-sponsored housing agencies: Fannie Mae and Freddie Mac. It was to bail out the institutional investors in the MRS securities, rather than let them realize their losses. It was to prop up the prices of MBS, rather than let investors take their losses. It was to keep the existing institutional structure intact as far as possible.
The FED did a joint venture. It joined the central bank to the housing agencies, which are already merged with the government. It did fiscal policy through its power to buy securities. It did this without the necessity of Congressional debate and approval, and Congress didn’t object. The FED also made itself the main customer of financial intermediaries who originate and hold the securities that the FED has purchased and may purchase in the future. The FED integrated backwards to the government and forwards to the financial markets. The FED spread.
Although some members of the FED have no qualms about exercising its power in this way, it radically transforms the central bank into an arm of the government that supports a targeted sector (the housing sector) by subsidizing its cost of finance. If the FED targeted the defense sector or the drug sector or the agricultural sector for such preferential financing, the inherently fascist and inflationary nature of what it is doing would be more evident. But since the government has been monkeying around with housing for so long, there has been no widespread or general opposition to the FED’s expansion. There has hardly even been recognition of its nature or of the huge power that has lain dormant in the FED’s charter and now has come out into the open (excepting various critics among whom Ron Paul and his followers are prominent).
Let’s look at the size of the FED’s interventions.
The first $600 billion buying program that we’ve been discussing is part of what is commonly called QE1. That program also included $300 billion of U.S. Treasury securities. QE1 later was expanded. On March 18, 2009, the FED added $850 billion to the buying of MRS:
"To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion.
For completeness, I note that QE2 began on November 3, 2010 when the FOMC announced an additional $600 billion purchase of U.S. Treasury securities.
In sum, the FED said it would buy $900 billion of U.S. Treasury securities and $1.45 trillion of MRS. The latter included $1.25 trillion of MBS and $200 billion of GSE or agency debt.
At the present time, the FED has $946.373 billion of MRS. The FED has reduced its holdings from their peak levels. The peak in MBS was $1,128.661 billion on June 23, 2010. The FED sold off or let run off (through maturation) enough securities to reduce this to a local low of $827.052 billion on November 30, 2011. The MBS account is currently $856.997 billion. The GSE hit a high of $169.011 billion on March 10, 2010 and has since been reduced by the FED to $89.376 billion.
A footnote to the FED’s balance sheet says of the MBS "Guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Current face value of the securities, which is the remaining principal balance of the underlying mortgages." The FED accounts for these securities at face value, not market value. What’s of prime importance here is the link between the FED and these government agencies, which in turn are linked to the mortgage markets and the housing markets.
Fannie Mae and Freddie Mac went bankrupt. The federal government placed them into a "conservatorship". They have not been liquidated. They are still operating. The federal government has the legal authority to advance funds to these entities, limited only by the ceiling on the national debt. The FED accomplished the other part of the bailout by keeping the MBS market going.
The FED’s purchases of MBS accounted for 32 percent of the total amount of MBS outstanding at the end of 2009: "In short order, the Federal Reserve became the dominant player in the secondary mortgage market."
At the present time the mortgage rate is 3.55 percent. In view of this, what is now going through the minds of the Keynesians at the FED? As the conventional thinking goes, they want to "stimulate the economy". How? By lowering yields still further. Their position is incredible. They would totally distort the housing market and the economy in order to get to a number (7 percent unemployment rate). This is like getting a patient to have a temperature of 98.6 by injecting some drug while ignoring its destruction of the patient’s organs.
One of the effects of the FED’s buying was to raise MBS prices and force yields lower. Several research papers estimate that during the FED’s buying, mortgage rates fell by 0.3 percent to 1 percent due to its buying. Mortgage rates fell after the FED stopped its buying and if that drop is attributed to the FED, and not to a soft housing market, then the estimate becomes 1 to 1.5 percent.
The FED’s balance sheet expansion has had two focal points: the U.S. government itself (U.S. Treasury securities) and Fannie and Freddie (the MRS). Now we have three FED presidents who want more buying of the MRS (and perhaps Treasuries too). This time around the reason is not to bail out the housing agencies and keep them going, although any such buying will have that effect. They justify their proposals under the mandate from Congress to seek full employment consistent with price stability. They would expand the buying based, of course, on their belief that the result of the FED’s buying will be full employment and price stability (the fourth tenet listed above).
"John Williams, president of the San Francisco Federal Reserve Bank, said this week that the lack of progress on reducing the unemployment rate and the slow economic recovery have convinced him it's time for the Fed to move ahead with a third round of stimulus known as quantitative easing, or QE3."
Rosengren says
"So we've only been treading water in the labor markets and, as you just highlighted, the GDP reports have been disappointing. First quarter was 2%. Second quarter was 1.5%. My expectation is the second half of the year won't be much better. So given that we're only treading water, that's the reason why I would advocate for a more accommodative monetary policy."
Yikes! More accommodative? How accommodative can you get? Go ahead, buy every security in sight until their yields are zero. Only you’ll never get there. Long before zero happens, people will be taking the electronic digits you are paying them with and converting them into real assets. Don’t these inflationists realize that expectations can suddenly change, like a dam bursting? This is not in their models. They are the sorcerer’s apprentices. If they go too far in expanding the FED’s balance sheet, people are going to stop believing that they will ever exit. They will begin to expect endless inflation. The dam will break and a severe inflation will occur.
And whom are they "accommodating" anyway and why? Beware of sorcerers who use cant and ritual. When they intone magic words like "accommodation", "overcome frictions", "instability", and ‘stimulate spending", they are repeating the rituals they learned in their colleges and universities. It is not as if there is a shortage of money. Our Keynesian central bankers think that America is not at full employment because people cannot get loans at reasonable rates. Yet the banks are loaded with reserves. Corporations are highly liquid. Interest rates are low. The reasons for unemployment must be sought other than in a lack of funds to lend. For an Austrian economics primer on unemployment, see here.
Our inflationist trio is not thinking in terms of financial distress as did the FOMC in 2008. They are thinking that the FED can and should bring about full employment by bringing down mortgage interest rates.
The FED can bring about full employment. It can buy MBS extensively, reduce the yield drastically, and induce people to borrow money to build and buy homes. Since the government guarantees these securities, any losses will be shifted to the government and taxpayers. Alternatively, by cutting the rate it pays on reserves, it can induce banks to lend money to currently sub-marginal borrowers. As they spend, employment will rise for awhile. The FED can create an inflationary bubble economy. It has done this before. The government can also bring about full employment. It can start public works programs. It can borrow money from the FED and spend it, again creating an inflationary bubble economy.
The sorcerers on the FOMC can heat up the cauldron and create a brew. But should these bubble economies be created by central authorities? Should America in the 21st century be subjected to 20th century policies of central control that in various forms failed after being put into practice by fascist and communist dictatorships? Bubble economies crash. The employment they create is unsustainable. People waste time and resources in production that other people do not want. A bubble in housing means that too many houses are being built and not enough of other goods that people want. A bubble in consumption means that people are not saving enough to finance capital goods. Economic growth then slows down. A bubble induces speculation in land and stocks. Their overpricing leads to wealth redistributions and resource mis-allocations.
America and other countries are now experiencing the consequences of a severe housing bubble. Does it make sense to reinflate a housing bubble or inflate other new bubbles as this trio of incompetent Keynesian economists recommends?
If and when the FED draws people and resources into the production of houses by subsidizing the cost of capital in the housing sector, they will be drawing people and resources away from other sectors and industries. Why should the FED have the say on what gets produced and what doesn’t? Obviously, there is no place for such a privilege in a free society.
Did the people make the FED its economic czar? Never. People are just beginning to learn what it is.
How can the FED possibly know what goods should be produced so as to enhance the general welfare? It cannot. Economists know this, but ignore it. A favorite phrase of economists who write articles is "We will ignore..."
The FED is looking only at unemployment rates. Unemployment is not the general welfare, not by a long shot.
How can the economy ever adjust if the FED is interfering with credit and manipulating it in certain directions and not others? It can’t. How can it adjust if the FED manipulates the overall cost of credit? It can’t. What we have now with FED-directed monetary policy is a continual manipulation of the economy because each such a manipulation is the excuse for a subsequent intervention. This roller coaster is not at all distasteful to the FED or the government. They batten on it.
It would take a separate article for me fully to convey to the reader the actual degree of ignorance among economists, including those on the FED and FED presidents. Just think of mediums or sorcerers with a distorted understanding of the spiritual and you will be close. But I will give you the flavor of what I have in mind.
To the layman their articles seem sophisticated due to their mathematics and specialized vocabulary and techniques. But the fact is that most all models are tentative tries at understanding. As an example, the FED is supposedly trying to enhance welfare by its policy measures. The FED has objectives. They are full employment and stability of consumer good prices. In meeting these, it is supposedly making people better off. But a major review article in a top economics journal titled "The Science of Monetary Policy: A New Keynesian Perspective" co-authored by Mark Gertler, who has been a close associate of Ben Bernanke for 30 years, says in 1999 that economists don’t know how to give good reasons for the FED’s policies:
"While there has been considerable progress in motivating behavioral macroeconomic models from first principles, until very recently, the same has not been true about rationalizing the objectives of policy."
It adds that "there have been a number of attempts to be completely coherent in formulating the policy problem by taking as the welfare criterion the utility of a representative agent within the model." In other words, economists have tried to rationalize policy measures by assuming that one person (a representative agent) stood in for everyone in the economy.
These are mathematical-minded economists admitting in veiled language that they cannot devise a model that supports the idea that the FED’s policies enhance the general welfare. They then become more explicit:
"Another issue is that, while the widely used representative agent approach may be a reasonable way to motivate behavioral relationships, it could be highly misleading as a guide to welfare analysis. If some groups suffer more in recessions than others (e.g. steel workers versus professors) and there are incomplete insurance and credit markets, then the utility of a hypothetical representative agent might not provide an accurate barometer of cyclical fluctuations in welfare."
The words highly misleading give away the game. Modelers have tried a single-agent approach to justify monetary policy, but it doesn’t work. Why not? Well, obviously there are actually very large numbers of distinctive persons and groups whose welfare varies with many factors that no one-agent model can capture. Does this deter the model-builders? Heck, no, they simply assume a mathematically tractable objective function:
"...much of the literature takes a pragmatic approach to this issue by simply assuming that the objective of monetary policy is to minimize the squared deviations of output and inflation from their respective target levels."
Then the cleverest among them finds some rationale for making that simplifying assumption. Furthermore, the FED itself and its economists are just as much in the dark as these economists who are trying to rationalize monetary policy:
"Judging by the number of papers written by Federal Reserve economists that follow this lead, this formulation does not seem out of sync with the way monetary policy operates in practice (at least implicitly)."
In another part of the same article, we are told
"In the wake of the October 1987 stock market crash, for example, most economists supported the decision of the Federal Reserve Board to reduce interest rates. This support was based largely on instinct, however, since there is virtually no formal theoretical work that rationalizes this kind of intervention."
That’s an open admission that the FED does not know what it is doing.
Here is an example of that word "ignore":
"Finally, with few exceptions, virtually all the literature ignores the issue of transition to a new policy regime. In particular, the rational expectations assumption is typically employed."
Centrally-controlled money has all the defects of any centrally-controlled (socialistic or fascistic) sector of an economy. The controllers disturb equilibrating market processes. They distort incentives. They cannot gather dispersed information and ever do justice to the decisions of individual companies. They cannot fathom the considerations that go into an individual’s welfare-enhancing decisions. There is no way for a central bank committee to mimic the latter with some aggregate quadratic or other loss function. They are bound to use limited models of an economy. Most often, the models will simply be wrong. They will always be inadequate. These statements and others appear via the Austrian (or any sensible) economic analysis. They are confirmed by the 100-year record of the FED in action.
Some deluded people have the idea that 12 FED sorcerers (the number on the FOMC) know enough to be able to turn the money faucets on and off at the right times so as to make the economy work. They have never known enough before and they will never know. That’s because an economy is not like a flow of water that’s controlled by turning faucets on and off. Every model the FED has ever had, from its simplest old Keynesian model up to its most detailed new Keynesian models, has grave defects.
Now, for those who do not accept these conclusions and who think that the 12 Keynesian sorcerers on the FOMC are the answer to whatever is causing repeated banking crises, it needs to be said openly, loudly and clearly. No, absolutely not. These twelve people, whatever their virtues, are, in the face of a complex economy, stupid and ignorant people. So are we all. What do I mean? I mean that no matter how good they (or any of us) are in mathematics, model-building, and getting the computer to solve log-linear equations numerically; no matter how many degrees they have, no matter what their IQs are, and no matter how many journal articles they have published; no matter how much they try to maximize some objective function that supposedly mimics the general welfare, they will fail miserably. I would too if I sat on the board.
The FOMC should be dissolved. It should be replaced by free markets. They work. Mistaken Marxist sorcery on labor, profit, capital, and markets needs to be buried and buried deeply.
Up to this point, I have written as if the FED had a legal warrant for inflicting monetary policy on the populace. Now I switch trains. I attack the FED on constitutional grounds.
It’s clear that the powers of the FOMC are enormous. The FOMC members are in a privileged position. Should the members of the FOMC have these powers? Absolutely not. Even for those who accept the U.S. government and the U.S. constitution, the Federal Reserve (FED) is unconstitutional (see chapter XII of The U.S. Constitution and Money). There are basically seven reasons why the FED is unconstitutional:
1. The constitution allows only gold and silver coins to be the government’s money, but the U.S. government has made Federal Reserve notes into legal tender.
2. Federal Reserve notes are bills of credit, and the constitution forbids the issuance of bills of credit by the state governments and the federal government.
3. Even if the constitution were stretched to find some power under which the federal government were able to issue bills of credit legally, they would have to be redeemable in gold and silver coin. Federal Reserve notes are not redeemable in anything.
The above three arguments apply equally well to greenbacks or any other paper money directly issued by the U.S. Treasury.
4. If Congress actually had the money powers that the FED now exercises, and if these were constitutional legislative powers, they’d be vested in Congress. Congress could not constitutionally delegate them to an agency like the FED.
Congress is supposed to be a branch of government directly responsible to the People. The vesting clause of the constitution disallows setting up agencies like the FED that are not directly responsible to the People. Imagine, if you will, several analogues. Suppose that Congress turned over its power to regulate commerce to a Board of Governors of the United States Chamber of Commerce or to the Conference Board. Or imagine that Congress turned over its power to provide for the common defense to a Board of Governors of the National Defense Industrial Association. These would be in your face violations of the constitution. In the case of money, the U.S. government has totally abandoned its constitutional money powers and replaced them with fabrications. It has then built upon this already unconstitutional foundation by creating the Federal Reserve System and the Board of Governors of this system and unconstitutionally vesting it with its supposed money powers.
As a matter of fact, Congress already has moved considerably in these and other directions. They are all unconstitutional. They all subvert the constitution. They all separate the government from the People.
5. The FED draws money from the U.S. Treasury without a Congressional appropriations process. This is unconstitutional.
6. Even if the power of the Congress to delegate money powers to the FED could be found in the constitution, which it cannot, the actual nature of the delegation made by Congress is unconstitutional. It fails to meet tests laid down by the Supreme Court. The Congress apparently has delegated its whole monetary power (if it even had this constitutionally). That’s unconstitutional. It has not delegated the money power with definite prescribed standards. That’s unconstitutional too. It has not issued what is called an "intelligible principle".
7. The delegation made by the Congress is unconstitutional because it has been made to private persons. These are the Federal Reserve Banks. Congress cannot constitutionally give Eric S. Rosengren or any president of the private Federal Reserve Banks the powers that he and others like him have been exercising for decades.
So, anyone who accepts the legitimacy of the U.S. government and the constitution has solid legal grounds for concluding that the FED and its money are both unconstitutional. These grounds alone are enough to support ending the FED.
Central bankers are modern day sorcerers using powerpoint slides. They garb themselves in academic respectability. They garb themselves in mathematical models and econometric estimations. They produce learned papers written in guarded academic language that they abandon when they use the power to print money. Powerpoint slides do not necessarily commune with truth. What powers do these sorcerers actually possess? The central bankers can print money and give credit to banks. They can distort economic activity. They can cause bubbles. They can burst bubbles, leading to recessions and depressions. But the FED cannot create real value. The FED is a lunatic sorcerer. It boils up cauldrons and splashes them into markets. It waves fiat wands and believes that its liquids are producing oil wells and refrigerators. The economists who endorse the black art of central banking and believe in its power are legion as are the media figures who interview them and pollute the airwaves with their sorcery. That’s all it is. Sorcery. Keynesian sorcery. Lunatic sorcery.
August 20, 2012
Michael S. Rozeff [send him mail] is a retired Professor of Finance living in East Amherst, New York. He is the author of the free e-book Essays on American Empire: Liberty vs. Domination and the free e-book The U.S. Constitution and Money: Corruption and Decline.
Copyright © 2012 by Permission to reprint in whole or in part is gladly granted, provided full credit is given.

Gerald Celente - Financial Survival Network

Distraction News: Rep. Todd Akin and Legit Rape

More distracting news: Rep. Todd Akin made a misstatement on Sunday during an interview regarding abortion and rape.  Here is his exact quote as transcribed (since most media and youtubers seems to be condensing it to fit their political agenda):

"From what I understand from doctors, that's really rare. ... If it's a legitimate rape, the female body has ways to try to shut that whole thing down ... .

"But let's assume that maybe that didn't work or something. I think there should be some punishment, but the punishment ought to be on the rapist and not attacking the child."

The “a legitimate rape” phrase was, at best, a poor choice of words on his part.  Replace them with “forcible sex” and you have the same meaning I’m fairly sure Rep. Akin was trying to convey.

Naturally, Rep. Todd Akin has been disowned by everyone in America because he didn’t choose his words carefully.  Apparently, most people are too lazy to do a little research into the topic.

Now, I don’t know if what he was saying is true.  I imagine that if a woman is subjected to sex against her will, she might not provide the fluids needed for the sperm to survive and swim up to the egg.  This does not mean that pregnancy cannot result, just that it is very unlikely in an actual rape.  But don’t take my word for it ladies because I don’t really know, nor do I care to because I have no interest in rape, not even Japanese manga tentacle rape.

One thing I would like to point out is that I think Rep. Akin should not have fallen into the abortion trap.  Congressional Republicans in both houses have made it clear that they have no interest in overturning Roe v. Wade as evidenced by the almost universal non-support of Rep. Ron Paul’s many attempts to do so through legislative measures.  If they really cared about the matter, they would have all co-signed the bill, brought to the floor for debate, and voted to pass it back when President Bush Junior had control of things.

The dirty little secret about the whole Abortion debate in national politics is that the Republicans have little else to count on besides the vote of those who are socially conservative.  By claiming to be pro-life, they basically are given a free pass on just about every other issue.  Hell, half of the conservatives who voted for John McCain in 2008 did so for that sole reason.  None of them ever really liked John McCain, but because he was pro-life, he was their man.  Of course, the same cannot be said for Willard “Mitt” Romney, but I digress.

Honestly, I don’t care whether or not Todd Akin wins his Senate race anymore than I care whether or not Romney or Obama win.  In fact, I care much less because all I see these days is two sides to the same corporatist coin with very little to distinguish between both parties.

In any case, the abortion issue still continues to be a divisive non-issue on the national level because of the stupidity of the dumb masses to see that they are being used by the parties to corner a large portion of voters for themselves.

Wednesday, August 22, 2012

Gerald Celente - Mike Broomhead - 550 KFYI


Mexico's "New Jerusalem"

Forbidden to watch TV, listen to music, or dance.

A secretive religious sect in Mexico which calls itself "The New Jerusalem" has been under attack.
The frustrated community has watched its buildings being destroyed while authorities have turned a blind eye. -

Tuesday, August 21, 2012

Saturday, August 18, 2012

Everyone leads (only you can save the world)

What would it take for you to begin seeing yourself as a leader in your life, your community and your country? The government is not going to save us, we can only save ourselves and that begins with self leadership.-

Facebook and the Arrest of B. J. Raub

Friday, August 17, 2012

Happy (Belated) National Inflation Day!

Two days and 41 years ago, President Richard “Dick” Nixon took the Federal Reserve off of the gold standard (or what was left of it).  In essence, all US dollars were now backed by debt rather than partially by gold:

The only permanent government program is a temporary one.

Now, this was all part of the now proven failed Keynesian model of economics.  Here’s John Maynard Keynes himself talking about abandoning the gold standard:

See the semen on his mustache?

Abandoning the gold standard has only led to more instability and more inflation than previously realized:

Notice that while inflation relatively stable, while trending upward, it wasn’t until 1971 that it starts to shoot up in a linear fashion.  That was the same year that President Nixon decided to take us completely off the gold standard, temporarily for good, in order to save us from foreign speculators.

Although I have some disagreements with some Austrian economists, it is clear that their theories on fiat currency and its relation to inflation are correct.  Inflation is the increase in the supply of money, not the increase in prices in the market.  Without a gold standard, Congress allowed the Federal Reserve to turn on the printing presses and pushed banks to lend money out to everyone with a face.  This increased the money supply and drove up the costs of living for everyone.

Without a gold standard or some other commodity-based reserve style, we have given Congress free reign to borrow with impunity and to not give a damn about the future because they’ll just inflate away the debt by creating more of it.  It’s a massive spiral that they believe they can continue to ride out every year.  And no matter what party is in power, at the end of the day we still have an unbalanced budget and the destruction of the personal savings of the common man.  Meanwhile, the international banksters make off with all the riches and end up foreclosing on whole countries like Italy and Greece (what else do you call it when an unelected banker is put in charge of a nation?).

As a result of this, people have to resort to risky investments with mutual funds in order to try and beat inflation.  It is commonly accepted wisdom in the financial world that you need at least 8% interest in order to beat inflation.  The only way to achieve that is to invest in financial products that no common person really understands nor should they.

In light of this, I am declaring a new holiday that we should all observed, in a manner similar to observing a funeral of a tragically murdered friend or relative.  Let’s call it National Inflation Day and we should celebrate every year on August 15th.  We should remember that the promises of politicians, their economists, and other assorted scoundrels is always a lie.  Their assertions are, at best, wishful thinking with a complete lack of understanding of basic human nature.

So mark you calendars.  August 15th shall be know as National Inflation Day in the United States.

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