In a December 22 editorial the New York Times openly advocates inflation as a "cure" for unspecified "ailments" in the economy. Goldbug Howard S. Katz, who runs an investment newsletter, brought the article to my attention earlier today. Katz has been tracking the rapid expansion of Federal Reserve Bank Credit, monetary reserves and the money supply and argues that the safest way to secure your retirement is to take a pro-gold, anti-dollar position despite recent run-ups in the dollar. The stimulus the Fed is providing will lead to a bull market in stocks but a super-bull in commodities. Katz also argues that the current "crisis" has been a media phenomenon fabricated in response to bankers' demands for extra liquidity in order to extract additional wealth from America's declining economy (by declining I mean suffering from long-term, century-long misallocation of resources due to Federal Reserve and "Progressive" policies).
Allow me to quote the from the December 22 article entitled "The Printing Press Cure":
"The Federal Reserve as much as admitted last week that lowering the benchmark interest rate — even to zero — would not be powerful enough medicine to revive today’s ailing economy. And so it has opted for the printing-press cure, pledging for the foreseeable future to pump vast sums into banks, other financial firms, businesses and households.
"Economic history — of the Great Depression of the 1930s and Japan’s lost decade in the 1990s — suggests that the Fed is doing the right thing. Confronted then, as now, with the twin scourges of deepening recession and incipient deflation, governments did more damage with too little intervention than they would have done with too much.
"But that doesn’t make such intervention 'good.' It’s a big and unfortunate risk in itself."
One of the outcomes of inflationary Fed policy will be the destruction of retirement benefits based on wages earned prior to the inflation (that is, pensions of people who retired prior to the inflation during the coming 5-10 years). Many boomers will likely fall into this category. As boomers retire on annuities, traditional pensions or hold assets in Guaranteed Investment Contracts, savings accounts, safe bonds or other dollar-denominated assets, their well-being will be destroyed as the Times and Wall Street cheer on.
As well, wages do not typically keep pace with inflation. Thus, the already stretched worker will be stretched ever tighter in a Wall Street drawn noose. Employment relations, already weakened by past rounds of inflation, regulation, and globalization, will become weaker. Employers will find it in their interest to terminate post-retirement medical insurance and other benefits that keep pace with inflation. During the 1970s and 1980s employers resented indexing and escalator clauses that caused wages to keep pace with inflation. It is likely that they will be encouraged to reduce or terminate benefits just at the time that health care costs go under exponentially increasing pressure because of the retirement of the baby boomers. The problem cannot be solved by nationally sponsored health insurance because the cost pressures are demographic. All nationally sponsored insurance can do is ration care so that none of the fingers will be sewn back on, just as they wouldn't be in Cuba or France.
The Times does not say exactly why it thinks the economy is in so much trouble that inflation is necessary. Is there a law of economics that states that a few years of excessive mortgage lending necessitates inflation? Why was late nineteenth century America able to produce rising (instead of falling, as the Times advocates) wages, rising productivity, rising employment levels, absorption of massive amounts of immigration and the very deflation that the Times so dreads? Why was it possible to thrive before the Fed was founded, and why are we now in so much trouble after a century of the Fed's existence?
Two of the funnier sentences in the editorial are these:
"To jump-start the economy requires getting money to those who will spend it fast and in full. That includes unemployed workers, low- and middle-income families, and state and local governments."
Back in the 1940s and 1950s the Times supported urban renewal on the pretext that it would lead to better housing for the poor and middle class. Instead, the funding, which was huge in New York City, was given to developers, some of whom were friends of the Times's owners, the Ochs Sulzbergers. The developers used it to exercise extensive private-use eminent domain, banishing factory jobs from New York, destroying low-income neighborhoods and building expensive office buildings and co-ops for millionaires. The middle class was set up in dreary suburbs on Long Island like Levittown under the same programs (of Title I and Title II) and high-crime urban ghettos for minorities were established featuring dreadful public housing projects built with the Times's glowing support. Yes, the Times always has the interests of the poor and middle class in mind.
Now, the Times tells its readers that there is a "crisis" (what it is is never specified) and that Barack Obama's leadership in the interest of inflation is essential.
I do not normally pay attention to what the Times has to say, and this article sums up why. There are two categories of people who read the Times. The first is the people who take them seriously as an information and opinion source. Such people are lost souls at the fringes of society, and I feel sorry for them. The second is the people who read the Times in order to find out what the lost souls are thinking. But the lost souls are headed for the poor house, and the times when the Times's opinions mattered are passed. Let us bury the last copy of the Times in Adolph Ochs's grave.
As far as your own retirement goes, I would seriously consider gold, gold stocks, silver, agricultural commodities, the "DBC" and Swiss Francs. Keeping your money in US dollars is akin to flushing it down the drain.
Monday, December 22, 2008
Alles Muss Ander Sein
I received this e-mail from Jim Crum on December 8.
>Hard to argue the point being presented.
I too, like yourselves, have great concern over what is going on. I would rather be wrong and labeled a fool, but for now the date points are lining up in an uncomfortable direction.
This is simply my opinion, other my not agree.
So far, it is still a free county.
JJC.
-----Original Message-----
Subject: A STUDENT OF HISTORY!
The following was passed to me by a friend. Sam Doughty, wh o is a college professor, writes for a newspaper and among other things ... a deacon to a Priest. He never sends anything until he has it checked out. It is an interesting read, a bit long but worth the time. He did not write it. The author appeared on Pat Dollard's radio show. I must say that I am in complete agreement. Dumpy
"I Am A Student Of History" - Author TPS To Appear On This Sunday's "Jihadi Killer Hour" Radio Show
November 14th, 2008 Posted By Pat Dollard.
Friends,
Will you please take the time to read this, and if you think it worthwhile, pass it along to your email list, and ask them to read it? Even if they voted, with all good intentions, for Mr. Obama?
I am a student of history. Professionally. I have written 15 books in six languages, and have studied it all my life. I think there is something monumentally large afoot, and I do not believe it is just a banking crisis, or a mortgage crisis, or a credit crisis. Yes these exist, but they are merely single facets on a very large gemstone that is only now coming into a sharper focus.
Something of historic proportions is happening. I can sense it because I know how it feels, smells, what it looks like, and how people react to it. Yes, a perfect storm may be brewing, but there is something happening within our country that has been evolving for about ten - fifteen years. The pace has dramatically quickened in the past two.
We demand and then codify into law the requirement that our banks make massive loans to people we know they can never pay back? ...Why?
We learn just days ago that the Federal Reserve, which has little or no real oversight by anyone, has "loaned" two trillion dollars (that is $2,000,000,000,000) over the past few months, but will not tell us to whom or why or disclose the terms. That is our money. Yours and mine. And that is three times the 700B we all argued about so strenuously just this past September. Who has this money? Why do they have it? Why are the terms unavailable to us? Who asked for it? Who authorized it? I thought this was a government of "we the people," who loaned our powers to our elected leader s. Apparently not.
We have spent two or more decades intentionally de-industrializing our economy...
Why?
We have intentionally dumbed down our schools, ignored our history, and no longer teach our founding documents, why we are exceptional, and why we are worth preserving. Students by and large cannot write, think critically, read, or articulate. Parents are not revolting, teachers are not picketing, school boards continue to back mediocrity. .. Why?
We have now established the precedent of protesting every close election (now violently in California over a proposition that is so controversial that it wants marriage to remain between one man and one woman. Did you ever think such a thing possible just a decade ago?).20We have corrupted our sacred political process by allowing unelected judges to write laws that radically change our way of life, and then mainstream Marxist groups like ACORN and others to turn our voting system into a banana republic. To what purpose?
Now our mortgage industry is collapsing, housing prices are in free fall, major industries are failing, our banking system is on the verge of collapse, social security is nearly bankrupt, as is medicare and our entire government, our education system is worse than a joke (I teach college and know precisely what I am talking about)–the list is staggering in its length, breadth, and depth. It is potentially 1929 x ten. And we are at war with an enemy we cannot name for fear of offendin g people of the same religion, who cannot wait to slit the throats of your children if they have the opportunity to do so.
And now we have elected a man no one knows anything about, who has never run so much as a Dairy Queen, let alone a town as big as Wasilla, Alaska. All of his associations and alliances are with real radicals in their chosen fields of employment, and everything we learn about him, drip by drip, is unsettling if not downright scary (Surely you have heard him speak about his idea to create and fund a mandatory civilian defense force stronger than our military for use inside our borders? No? Oh of course. The media would never play that for you over and over and then demand he answer it. Sarah Palin's pregnant daughter and $15 0,000 wardrobe is more imporant.)
Mr. Obama's winning platform can be boiled down to one word: change.
Why?
I have never been so afraid for my country and for my children as I am now.
This man campaigned on bringing people together, something he has never, ever done in his professional life. In my assessment, Obama will divide us along philosophical lines, push us apart, and then try to realign the pieces into a new and different power structure. Change is indeed coming. And when it comes, you will never see the same nation again.
And that is only the beginning.
And I thought I would never be able to experience what the ordinary, moral German felt in the mid-1930s. In those times, the savior was a former smooth-talking rabble-rouser from the streets, about whom the average German knew next to nothing. What they did know was that he was associated with groups that shouted, shoved, and pushed around people with whom they disagreed; he edged his way onto the political stage through great oratory and promises. Economic times were tough, people were losing jobs, and he was a great speaker. And he smiled and waved a lot. And people, even newspapers, were afraid to speak out for fear that his "brown shirts" would bully them into submission. And then, he was duly elected to office, a full-throttled economic crisis at hand [the Great Depression]. Slowly but surely he seized the controls of government power, department by department, person by person, bureaucracy by bureaucracy. The kids joined a Youth Movement in his name, where they were taught what to think How did he get the people on his side? He did it promising jobs to the jobless, money to the moneyless, and goodies for the military-industrial complex. He did it by indoctrinating the children, advocating gun control, health care for all, better wages, better jobs, and promising to re-instill pride once again in the country, across Europe, and across the world.
He did it with a compliant media–did you know that? And he did this all in the name of justice and . . . change. And the people surely got what they voted for.
(Look it up if you think I am exaggerating.)
Read your history books. Many people objected in 1933 and were shouted down, called names, laughed at, and made fun of. When Winston Churchill pointed out the obvious in the late 1930s while seated in the House of Lords in England (he was not yet Prime Minister), he was booed into his seat and called a crazy troublemaker. He was right, though.
Don't forget that Germany was the most educated, cultured country in Europe. It was full of music, art, museums, hospitals, laboratories, and universities. And in less than six years–a shorter time span than just two terms of the U. S. presidency–it was rounding up its own citizens, killing others, abrogating its laws, turning children against parents, and neighbors against neighbors. All with the best of intentions, of course. The road to Hell is paved with them.
As a practical thinker, one not overly prone to emotional decisions, I have a choice: I can either believe what the objective pieces of evidence tell me (even if they make me cringe with disgust); I can believe what history is shouting to me from across the chasm of seven decades; or I can hope I am wrong by closing my eyes, having another latte, and ignoring what is transpiring around me.
Some people scoff at me, others laugh, or think I am foolish, naive, or both. Perhaps I am. But I have never been afraid to look people in the eye and tell them exactly what I believe–and why I believe it.
I pray I am wrong. I do not think I am.
Best regards
>Hard to argue the point being presented.
I too, like yourselves, have great concern over what is going on. I would rather be wrong and labeled a fool, but for now the date points are lining up in an uncomfortable direction.
This is simply my opinion, other my not agree.
So far, it is still a free county.
JJC.
-----Original Message-----
Subject: A STUDENT OF HISTORY!
The following was passed to me by a friend. Sam Doughty, wh o is a college professor, writes for a newspaper and among other things ... a deacon to a Priest. He never sends anything until he has it checked out. It is an interesting read, a bit long but worth the time. He did not write it. The author appeared on Pat Dollard's radio show. I must say that I am in complete agreement. Dumpy
"I Am A Student Of History" - Author TPS To Appear On This Sunday's "Jihadi Killer Hour" Radio Show
November 14th, 2008 Posted By Pat Dollard.
Friends,
Will you please take the time to read this, and if you think it worthwhile, pass it along to your email list, and ask them to read it? Even if they voted, with all good intentions, for Mr. Obama?
I am a student of history. Professionally. I have written 15 books in six languages, and have studied it all my life. I think there is something monumentally large afoot, and I do not believe it is just a banking crisis, or a mortgage crisis, or a credit crisis. Yes these exist, but they are merely single facets on a very large gemstone that is only now coming into a sharper focus.
Something of historic proportions is happening. I can sense it because I know how it feels, smells, what it looks like, and how people react to it. Yes, a perfect storm may be brewing, but there is something happening within our country that has been evolving for about ten - fifteen years. The pace has dramatically quickened in the past two.
We demand and then codify into law the requirement that our banks make massive loans to people we know they can never pay back? ...Why?
We learn just days ago that the Federal Reserve, which has little or no real oversight by anyone, has "loaned" two trillion dollars (that is $2,000,000,000,000) over the past few months, but will not tell us to whom or why or disclose the terms. That is our money. Yours and mine. And that is three times the 700B we all argued about so strenuously just this past September. Who has this money? Why do they have it? Why are the terms unavailable to us? Who asked for it? Who authorized it? I thought this was a government of "we the people," who loaned our powers to our elected leader s. Apparently not.
We have spent two or more decades intentionally de-industrializing our economy...
Why?
We have intentionally dumbed down our schools, ignored our history, and no longer teach our founding documents, why we are exceptional, and why we are worth preserving. Students by and large cannot write, think critically, read, or articulate. Parents are not revolting, teachers are not picketing, school boards continue to back mediocrity. .. Why?
We have now established the precedent of protesting every close election (now violently in California over a proposition that is so controversial that it wants marriage to remain between one man and one woman. Did you ever think such a thing possible just a decade ago?).20We have corrupted our sacred political process by allowing unelected judges to write laws that radically change our way of life, and then mainstream Marxist groups like ACORN and others to turn our voting system into a banana republic. To what purpose?
Now our mortgage industry is collapsing, housing prices are in free fall, major industries are failing, our banking system is on the verge of collapse, social security is nearly bankrupt, as is medicare and our entire government, our education system is worse than a joke (I teach college and know precisely what I am talking about)–the list is staggering in its length, breadth, and depth. It is potentially 1929 x ten. And we are at war with an enemy we cannot name for fear of offendin g people of the same religion, who cannot wait to slit the throats of your children if they have the opportunity to do so.
And now we have elected a man no one knows anything about, who has never run so much as a Dairy Queen, let alone a town as big as Wasilla, Alaska. All of his associations and alliances are with real radicals in their chosen fields of employment, and everything we learn about him, drip by drip, is unsettling if not downright scary (Surely you have heard him speak about his idea to create and fund a mandatory civilian defense force stronger than our military for use inside our borders? No? Oh of course. The media would never play that for you over and over and then demand he answer it. Sarah Palin's pregnant daughter and $15 0,000 wardrobe is more imporant.)
Mr. Obama's winning platform can be boiled down to one word: change.
Why?
I have never been so afraid for my country and for my children as I am now.
This man campaigned on bringing people together, something he has never, ever done in his professional life. In my assessment, Obama will divide us along philosophical lines, push us apart, and then try to realign the pieces into a new and different power structure. Change is indeed coming. And when it comes, you will never see the same nation again.
And that is only the beginning.
And I thought I would never be able to experience what the ordinary, moral German felt in the mid-1930s. In those times, the savior was a former smooth-talking rabble-rouser from the streets, about whom the average German knew next to nothing. What they did know was that he was associated with groups that shouted, shoved, and pushed around people with whom they disagreed; he edged his way onto the political stage through great oratory and promises. Economic times were tough, people were losing jobs, and he was a great speaker. And he smiled and waved a lot. And people, even newspapers, were afraid to speak out for fear that his "brown shirts" would bully them into submission. And then, he was duly elected to office, a full-throttled economic crisis at hand [the Great Depression]. Slowly but surely he seized the controls of government power, department by department, person by person, bureaucracy by bureaucracy. The kids joined a Youth Movement in his name, where they were taught what to think How did he get the people on his side? He did it promising jobs to the jobless, money to the moneyless, and goodies for the military-industrial complex. He did it by indoctrinating the children, advocating gun control, health care for all, better wages, better jobs, and promising to re-instill pride once again in the country, across Europe, and across the world.
He did it with a compliant media–did you know that? And he did this all in the name of justice and . . . change. And the people surely got what they voted for.
(Look it up if you think I am exaggerating.)
Read your history books. Many people objected in 1933 and were shouted down, called names, laughed at, and made fun of. When Winston Churchill pointed out the obvious in the late 1930s while seated in the House of Lords in England (he was not yet Prime Minister), he was booed into his seat and called a crazy troublemaker. He was right, though.
Don't forget that Germany was the most educated, cultured country in Europe. It was full of music, art, museums, hospitals, laboratories, and universities. And in less than six years–a shorter time span than just two terms of the U. S. presidency–it was rounding up its own citizens, killing others, abrogating its laws, turning children against parents, and neighbors against neighbors. All with the best of intentions, of course. The road to Hell is paved with them.
As a practical thinker, one not overly prone to emotional decisions, I have a choice: I can either believe what the objective pieces of evidence tell me (even if they make me cringe with disgust); I can believe what history is shouting to me from across the chasm of seven decades; or I can hope I am wrong by closing my eyes, having another latte, and ignoring what is transpiring around me.
Some people scoff at me, others laugh, or think I am foolish, naive, or both. Perhaps I am. But I have never been afraid to look people in the eye and tell them exactly what I believe–and why I believe it.
I pray I am wrong. I do not think I am.
Best regards
The Progressives and the Fed Are Out to Starve You
Howard S. Katz, author of the Paper Aristocracy and soon-to-be-published Wolf in Sheep's Clothing has just written an excellent blog on what the Fed is doing to you. If you aim to retire, you'd better consider putting most of your money into hard assets. With a tripling of the money supply tin foil will be worth a heck of a lot more than $100 bills.
To be fair, this is not a Democratic-Republican thing. The Democrats will starve you but the Republicans have beaten them to it. The Democrats have no intention of undoing the tripling of the money supply, of course.
The left continues to puzzle me. Sam Walton spent his life figuring out ways to cut prices. Lower prices help the poor and working class. In contrast, Wall Street has spent generations figuring out how to get the government to "print" money so that it can have low interest loans for which the rest of the country pays through high prices. But no one on the left seems to criticize Wall Street.
The policy of starving retirees to further the aims of Wall Street began with the Progressives and the establishment of the Fed. Franklin Roosevelt and the New Deal, in the cloak of establishing social programs, re enforced the Fed's power to steal from retirees and workers in order to further the aims of bankers and Wall Street via monetary expansion and inflation.
In the past, idiot leftists like William Greider were taken in by the fatuous claim that inflation helps the poor. Greider's book "Secrets of the Temple" is an encyclopedia of ignorance and self contradiction. It is unfortunate that a writer as talented as Greider lacks common sense. He contradicts himself so often that it seems hard to believe he wasn't aware of it, but never overestimate the common sense of a "progressive". On the one hand he says that inflation helps the poor. On the other, he repeatedly notes that the fresh money loans stimulate Wall Street speculation. I suppose he thinks that the poor speculate on Wall Street.
In any case, Greideresque stupidity has become much more difficult to defend with the bailout. Inflation helps Wall Street and bankers, not the poor. The bailout is being monetized. Inflation that ensues will be due to the monetization of the bailout. Eight decades of lying about the Fed and inflation are drawing to an end.
But our ruling elite, Barack Obama, George Bush, Henry Paulson and the people they represent have decided to inflate to the heavens. As one of my students said they other day, they have decided to suck the life blood out of this country.
But the left continues to puzzle me. They are so wedded to inflation-helps-the-poor that one must wonder: (a) are they stupid? (b) are they tools of the power structure? or (c) are they hoping for a collapse so a latter-day Lenin can step in and turn America into a Soviet Union?
In any case, if you want to retire you are going to need to think about commodities investing. Either that or Swiss Francs.
To be fair, this is not a Democratic-Republican thing. The Democrats will starve you but the Republicans have beaten them to it. The Democrats have no intention of undoing the tripling of the money supply, of course.
The left continues to puzzle me. Sam Walton spent his life figuring out ways to cut prices. Lower prices help the poor and working class. In contrast, Wall Street has spent generations figuring out how to get the government to "print" money so that it can have low interest loans for which the rest of the country pays through high prices. But no one on the left seems to criticize Wall Street.
The policy of starving retirees to further the aims of Wall Street began with the Progressives and the establishment of the Fed. Franklin Roosevelt and the New Deal, in the cloak of establishing social programs, re enforced the Fed's power to steal from retirees and workers in order to further the aims of bankers and Wall Street via monetary expansion and inflation.
In the past, idiot leftists like William Greider were taken in by the fatuous claim that inflation helps the poor. Greider's book "Secrets of the Temple" is an encyclopedia of ignorance and self contradiction. It is unfortunate that a writer as talented as Greider lacks common sense. He contradicts himself so often that it seems hard to believe he wasn't aware of it, but never overestimate the common sense of a "progressive". On the one hand he says that inflation helps the poor. On the other, he repeatedly notes that the fresh money loans stimulate Wall Street speculation. I suppose he thinks that the poor speculate on Wall Street.
In any case, Greideresque stupidity has become much more difficult to defend with the bailout. Inflation helps Wall Street and bankers, not the poor. The bailout is being monetized. Inflation that ensues will be due to the monetization of the bailout. Eight decades of lying about the Fed and inflation are drawing to an end.
But our ruling elite, Barack Obama, George Bush, Henry Paulson and the people they represent have decided to inflate to the heavens. As one of my students said they other day, they have decided to suck the life blood out of this country.
But the left continues to puzzle me. They are so wedded to inflation-helps-the-poor that one must wonder: (a) are they stupid? (b) are they tools of the power structure? or (c) are they hoping for a collapse so a latter-day Lenin can step in and turn America into a Soviet Union?
In any case, if you want to retire you are going to need to think about commodities investing. Either that or Swiss Francs.
Sunday, December 21, 2008
Progressives on the Warpath: US Army's Civilian Inmate Labor Program
H/t Orly Tatz. The US Army established a Civilian Inmate Labor Program in 2005 under Army Regulation 210-35, which states:
"This regulation provide guidance for establishing and managing civilian inmate labor programs on Army installations. It provides guidance on establishing prison camps on Army installations..."
Under Section 1-5:
"Civilian inmate labor programs
a. Civilian inmate labor programs benefit both the Army and corrections systems by—
(1) Providing a source of labor at no direct labor cost to Army installations to accomplish tasks that would not be
possible otherwise due to the manning and funding constraints under which the Army operates.
(2) Providing meaningful work for inmates and, in some cases, additional space to alleviate overcrowding in nearby
corrections facilities.
(3) Making cost–effective use of buildings and land not otherwise being used.
b. Except for the 3 exceptions listed in paragraph 2–1d below, installation civilian inmate labor programs may use
civilian inmate labor only from Federal corrections facilities located either off or on the installation."
Under Chapter 2:
"With a few exceptions, the Army’s Civilian Inmate Labor Program is currently limited to using inmates from
facilities under the control of the Federal Bureau of Prisons (FBOP). Section 4125(a), Title 18, United States Code
allows the Attorney General to make available to other Federal agencies the services of Federal inmates and defines the
types of services inmates can perform. The FBOP provides civilian inmate labor free of charge to the Army."
"This regulation provide guidance for establishing and managing civilian inmate labor programs on Army installations. It provides guidance on establishing prison camps on Army installations..."
Under Section 1-5:
"Civilian inmate labor programs
a. Civilian inmate labor programs benefit both the Army and corrections systems by—
(1) Providing a source of labor at no direct labor cost to Army installations to accomplish tasks that would not be
possible otherwise due to the manning and funding constraints under which the Army operates.
(2) Providing meaningful work for inmates and, in some cases, additional space to alleviate overcrowding in nearby
corrections facilities.
(3) Making cost–effective use of buildings and land not otherwise being used.
b. Except for the 3 exceptions listed in paragraph 2–1d below, installation civilian inmate labor programs may use
civilian inmate labor only from Federal corrections facilities located either off or on the installation."
Under Chapter 2:
"With a few exceptions, the Army’s Civilian Inmate Labor Program is currently limited to using inmates from
facilities under the control of the Federal Bureau of Prisons (FBOP). Section 4125(a), Title 18, United States Code
allows the Attorney General to make available to other Federal agencies the services of Federal inmates and defines the
types of services inmates can perform. The FBOP provides civilian inmate labor free of charge to the Army."
Subscribe to:
Comments (Atom)
