Wednesday, October 19, 2016

Dear Mr. Trump

First of all, I am not a registered voter.  I will discuss my reasons for not being registered, as for years voting was a religion to me.  My explanation might go a long way to answering why the process is rigged.  I must say your answer that Hillary was the Democratic nominee, despite her scandals, goes a long way to pointing out how rigged the system is and why I am not voting at this time. 

Your performance in the debate was okay.  Clinton can sound very convincing some times and I can see how someone who didn't know better, would vote for her.  Just who could, having even a clue how corrupt she has been and probably will continue to be.  Lying is a habit for her. 

Anyhow, you missed on some things.  The most important of which was the WikiLeaks.  Hillary threw out the red herring about the Russians being the culprits, with at best evidence that would be thrown out of court, and you bit on her attack.  The proper answer would have been, had the leaks come out against you, the media would have beat you to death, even if it came from the devil himself.  Where you missed was that no one has dispelled the legitimacy of the emails.  There were even emails from the guy who organized the riots at your rally in Chicago.  WikiLeaks wouldn't have known that man's name from mine.  Point being, there is plenty of important information on who Hillary Clinton really is.  That was a fat pitch and you took it and struck out on the one that followed. 

Remember, Americans are stupid enough that most of them actually believe you had no taxable income the past 18 years.  Unless things have changed, you had to pay tax on your TV show.  Maybe there was enough depreciation on your properties, along with property taxes and interest to shelter all the income that came in.  I highly doubt this, because a lot of these properties are depreciated out and they are still class A properties.  Point being, a carry forward loss is a real loss and to be honest, I thought you were broke at the time.  Maybe you were and didn't throw in the towel. 

My point on the previous paragraph is the vast majority of people don't know Apple computer borrows money to keep from bringing their cash back to the United States.  Most miss the significance of $2.5 trillion coming back to the United States, because they don't understand we get zero taxes out of money the multi-nationals leave off shore.  At the same time, the corporate tax rate kills rising small business, just as a billionaire pays at the same bracket as someone making $700,000.

Then there is the deficit.  The moderator got away with using a phony figure for the national debt.  Hillary got away with stating there is a social security trust fund and the implication Clinton balanced the budget, when in fact that counted extra social security funds.  They talked about the improvement in the budget deficit, when in fact, year ending September 30th, Federal debt was $1.4 trillion higher than October 1, 2015.  We are already over 100% of GDP in debt, which is considered the point of no return.

A politician should be prohibited in using the term, Social Security Trust Fund.  The trust fund has been spent and the only way the fund exists is if the same people pay the taxes again to make it exist.  Instead, it is a classic Ponzi scheme and there should never any action taken to recreate the imaginary fund again, lest it be stolen again. 

The biggest drain on the middle class of the United States is monetary inflation.  Monetary inflation is debt inflation and the illusion is money is easy to pay back and wages are going up.  It drains savings and devalues capital.  The only beneficiaries are the rich, who have first access to the money and government bureaucrats.  They can indebt the people painlessly, only to spring the debt on them later. 

The Clintons claim the 1990's.  The 1990's were a debt bubble and the country was funded on home equity, hidden because declining interest rates inflated values.  Franklin Raines, a Clinton cabinet member, created the almost no down payment  standards on FNMA loans, then took over FNMA to finish the bubble and draw out $100 million in compensation.  Raines gave us a bankrupt FNMA and Barack Obama. The middle class is either renting now or stuck in mortgaged up homes.  Artificially low rates are going to take the rest of the equity this time around.  

We all know what happened to the stock market in 2000 to 2002.  This bubble was fueled by hype and money withdrawn from the housing stock of the American people.  The 401K's were making people rich and providing money for the bubble, only for it to disappear in worthless stocks, hyped by analysts who never saw a sell recommendation. Wall Street got fat and many retirement funds were left holding huge cap value stocks like Enron and WorldCom.  The highest value stocks at the time, Microsoft, Intel, GE and Cisco have yet to make it back to their 2001 tops nearly 16 years later.  These 4 stocks made up over 1/8 of total market capitalization and were universally held in excess in mutual funds. 

Where the American people are fooled is inflation helps the rich, bails out the bankers, who operate a Ponzi of their own and devalue the assets of the middle class.  Capital gains are only for quick money, as over time, most capital gains are noting but devaluation of the money and no gain at all.  I don't think it would be too bad if capital gains were taxed at full income amounts, as long as the basis was indexed to inflation. 

The other thing that fools most people is there is nothing free.  In fact, the cost of government falls directly on the people that work for a living.  You can tax the excess of the rich, but you can't gain by taxing capital over time.  That is because capital provides the basis of a rising standard of living.  Government produces nothing.  It does provide services, but in sum, those services are derived from the people that work outside the government.  The term GDP means nothing, when the measuring stick means nothing and so much of it is fluff.  A few intellectuals position themselves to convince the rest of us they know more about our business than we do.  This is why central planning doesn't work.

My other reason for not voting is philosophical.  I am a Rothbard leaning Libertarian.  Gary Johnson is just another statist, a guy that held office all his life.  A self respecting Libertarian wouldn't touch him with a 10 foot pole.  The most powerful government for a libertarian would be at city hall, where we could get our hands on them.  DC would amount to next to nothing, maybe 5% the size it is today. 

As to why I don't vote?  I had a hell of a time not registering this time to vote for you.  You get elected and run again, I will probably get in line.  But, you aren't supposed to be on the ticket, which is why it is rigged.  I don't believe the press is as rigged as it has been this time around.  I think they just happen to work for those that usually pick the candidates.  As you like to point out, your movement is an anomaly.  It is, because you aren't supposed to get the nomination.  In fact, George Washington,, Abe Lincoln, Andrew Jackson or Thomas Jefferson would have almost no chance of running for President today, unless they sold out.  I quit voting in 1994, when I realized they were going to make the second George Bush President after Clinton.  I was right and there is no way in hell George should have been within  200 yards of the White House.  The same goes for his father and the Clintons.  Reagan was said to be an anomaly, but Reagan was just another establishment guy who happened to be on the opposite end of the spectrum.  He worked for General Electric when he did Death Valley Days.  He didn't fall out of the sky to be the speaker at the RNC in 1964.  His administration was dominated by Rockefeller men, just as Carter and Nixon's was. 

If you get elected, it will be the greatest political event in my lifetime.  The establishment will have been defeated, at least temporarily.  I'm sure you have been close enough to politics that you couldn't see what I have been able to see, standing back.  Just as I did years ago, I'm sure you are getting a big dose today.  You aren't supposed to be the nominee.  Anyone in their right mind knows Hillary isn't supposed to be there, in reality, but American politics is a stage show. Nor was Romney or McCain the best men for the job, but stand ups for Obama, who raised a huge war chest from Wall Street in 2008 and paid his dues by putting none of them in jail for the massive fraud that led to the breaking bubble.  Not to mention he kept Bernanke in power, giving them fuel to pile up even more wealth on leverage that cost nothing.  Then there was Bob Dole in 1996, when Clinton would have been easy to defeat.  Why such a dull candidate, when the Republicans had a winner in 96?  Same with Dukakis in 1988.  At least the Democrats ran Mondale in 1984, who had the appearance of being legitimate. 

I respect you DJT.  Any man who could take the shit dished out the last year and still be moving forward with hope, is a real man.  I'm going to send you a little money, just as I sent Ron Paul money and Rand Paul money.  It is too bad you were so naïve as to think we had legitimate elections in the US.  It has little to do with capability or honesty and a lot to do with who with money and power puts up.  Both the nominees are supposed to be their guys. 

The executive branch of government was never supposed to be this powerful. What scares me about Hillary or, if not Hillary, the next guy or woman, is that we are just a step away from being a dictatorship.  The average Joe wouldn't know one if they saw it, until is started acting as a dictatorship.  We are already there, as Congress has declared too many wars on the domestic front and woven too much Federal funding through the states.  This is where we get ridiculous stuff like allowing transvestites in with our daughters at school.  No one in their right mind would make such a ruling, other than someone who is seeing how much the people of a country will take.  As you can see, we are already there.  Executive orders are orders of war.

The US was set up as a mercantile system and we were told it was free enterprise.  It is, where they aren't involved.  That area is getting more narrow all the time.  They get bailed out, we get regulated.  There are no regulations that either fail to provide the oligarchs with more money or eliminate their competition.  If it hits them too hard, they go to China. 

Thursday, October 13, 2016

Right Wing Conspiracy

There are really only 3 types of societies in the world, tribalism, socialism and classical liberalism.  Classical liberalism is not to be confused with what they call liberal in the US and around  the world, but instead a system of free enterprise, minimal government intrusion, little or no redistribution of wealth. 

Tribalism is what you make of it.  It could be socialistic or classical liberal.  Socialism is another animal.  There are 2 general types of socialism, communism on the left and Fabian socialism on the right.  Fabian socialism either is or is closely aligned with fascism.  Fascism is national socialism, the kind preached by Obama and for the most part, both parties of the US government.  One party merely wants to go faster toward state ownership of much of the means of production and economy the other. 

There is almost no true left wing socialism with any power in the United States.  Instead, we have 2 parties that are much closer to the fascist model, right wing.  The model is called the corporate state.  The left is right and the right is just less right. 

How strong is the system?  Watch the election.  There is no free mainstream press in the United States.  It is all geared to support the fascist, international domination line.  There is no one on the scene more prepared to go down this line than Hillary Clinton, even if it ends up bankrupting the United States and draining it of what was once a massive amount of accumulated capital.  The point is to keep those in charge that are in charge, because this is the very means of support and the continuation of such system.  The problem is, it eventually goes bankrupt.  The globalists don't care, because they have their nests feathered and can live where they wish. 

Trump is no classical liberal, that is certain.  All one has to do is listen.  But, it is clear that he has a plan for the country and not for the globalist multinational corporations and international bankers.  Clinton, on the other hand, seems to be interested in selling out the United States, giving the people the typical bones that fascists throw them.  We are going to get rid of greenhouse gasses, a fascist conspiracy, in the first place.  The little guy just won't have a car, while the globalist flies in a private jet and rides in a limousine.  Less demand for oil and gas will merely conserve more of this resource for them, while their taxes are merely recycled back to them.

One only need watch the debate Monday to witness how the conspiracy works.  Anderson Cooper made certain to nail Trump down on whether he had groped any women.  This whole matter had been constructed out of Trumps boasting of his celebrity on that tape.  The entire Clinton structure is in the corporate press.  It has to be, as Trump would really make a mess of their plans of draining the US so they can build up their worldwide interests.  It takes all of 3 days to pull up some women that claim Trump molested them.  The entire matter was lined out so Hillary can run out the clock on what will be the greatest right wing scam since the election of Woodrow Wilson.

One must look at how easy a target Donald Trump is in this matter.  Who is he?  Probably the most celebrity rich guy in the United States.  The number of women that would sleep with him, merely on invite stretches in the tens of millions.  The number of women he has probably hugged in some fashion is in the tens of thousands.  The nature of his business and celebrity brings him into contact with many. 

If Trump groped the 4 women, he has probably groped thousands.  Where have they been all these years?  He has been in the celebrity class for the past 35 years.  One for every 9 years doesn't fit the model.  Where are his yard children?  Sex for a middle class decent looking male isn't hard to find.  Women can get it on demand, provided they are average or better.  A man of Trump's status doesn't need to grope women.  He merely needs to ask them.  The evidence against him is sketchy at best. 

Then we must turn to the women themselves.  As public a figure as Trump has been, the chances he has had close contact with the mere public percentage of mentally ill people would definitely raise the odds of imaginary molesting of hundreds of women.  If there were 100 women that even thought Trump groped them, that wouldn't be shocking.  25% of American women are taking psychiatric drugs, at least that is what I have read.  For what?  The doctor thought something was going on between the ears.  There is a lot of projection, where people project onto others what they want.

The point of all of this isn't to argue whether Trump is guilty or not.  The point is to look at the coverage in the press.  Hillary has more fires blazing around her than Smoky the Bear.  They don't look.  The Obama Administration is unequally prosecuting people in the US.  They don't look.  Hillary blames everything on the Russians, when in fact the WikiLeaks are the writings of her and her associates.  The Clinton's now claim a $250 million net worth, though neither has had much of a private sector job.  Clearly they are selling influence or collecting for past favors.  The big press isn't even looking at these matters. 

The question here is whether there is still a we the people in the US or merely a group of people dependent on what their masters will let them have.  It is clear there is a fascist power structure in the US that protects itself, spins the information Americans are allowed to have and wants to control them to the hilt.  They need politicians that will continue the status quo, because to interrupt it, everything falls apart. 

Trump has seen this go on for years and thought he could do something about it, because he believed the fable that the US is a free society with free elections.  Much of the American population has believed the same, that they could choose their leaders, when in fact, we have been voting for a group of cardboard cutouts, anyone not in the mold, eliminated by the right socialist press.  What is guaranteed for average Americans is a declining standard of living and a continued theft of the rights guaranteed in the bill of rights.  The current structure either violates or has eliminated much of them already.  Remember, they are your rights not the governments. 

Wednesday, October 12, 2016

Stood Up

There is a popular British series called Peaky Blinders.  In it, they hire a kid to get thrown in jail to appease the authorities.  They call it "stood up".  The kid was paid well and all was well, except the organized crime opponents of the Blinders killed him.

Stood up meant there was a purpose for the authorities and the criminal element involved.  In the case of the Blinders, they needed an arrest of a bookie, a phony at that, to get the cops off their real bookies.  In the case of the police, they needed an arrest to show the government that was demanding action, they were doing their job. 

Such is the current political climate.  In fact, we have been voting for stood up candidates for President most, if not all my life.  The only exceptions I can think of are Trump and maybe Reagan.  But, Reagan was a political figure, brought into the mix at the Republican Convention of 1964.  Sometimes we have 2 viable establishment characters, so the puppeteers can't lose.  Other times, we have basically a dummy to face their man in power.  An example was Dole in 1996, when it would have been easy for the Republicans to dust off a new face and beat Clinton in 1996.  Dole was in the same pockets that Clinton was in, thus making it a safe bet. 

I made a decision to quit voting in 1994 and despite my strongest urges to register and vote against Hillary, I haven't done so.  My reasoning at the time was they were going to make the  second Bush  the President of the United States, when they stood him up as Governor of Texas.  2000 confirmed my suspicions.  It was either 2002 or 2004 that Obama was elected to the Senate.  Immediately,  he was being touted as a Presidential candidate, the first black President.  It only took 4 years, despite Obama doing nothing to distinguish himself in the Senate.  The timing of his election, the financial crisis, along with the massive campaign war chest he had, tells a story.  Afterwards, there was very little in criminal prosecution of the sins of Wall Street and some of the main characters involved were brought into his government. 

McCain was also a stood up character.  One of the Keeting 5, McCain was certain to be friendly to the bankers.  Then we have the capital firm character, Mitt Romney.  What an insider and what an easy target for Obama.  Was the plan to elect Obama or to have 2 candidates in the pocket of the establishment?

This brings us to Hillary Clinton.  What has Hillary done?  Next to nothing, but she was touted 25 years ago, as the first woman President.  She had worked in a law firm a few years, her practice tinged with corruption.  Other than that, her claim to fame was she was married to a politician.  Someone decided she would be Senator of a state, where she hadn't resided in over 25 years.  Broke, according to her story, she buys a mansion.  The state, New York, is ruled by bankers.  Presto.

If we the people understood what was going on, Donald Trump would win this election by 50 points.  I'm not going to say Trump has all the great ideas, but for the first time in a long time, likely in my lifetime, we have a man that isn't owned by the same powerful international groups.  His opponent is tainted with more scandals and corruption than possibly any character who has ever run for any national office.  The actions of the establishment against Trump model the actions of a totalitarian state. 

The current controversy is about something Trump said on an open mike while riding in a bus with other celebrities.  The establishment had this on the shelves to release at an appropriate time.  What time?  When all the damning facts about his opponent comes out.  We saw this when the Obama phony, doctored birth certificate was released.  Suddenly they kill Bin Laden.  The WikiLeaks releases confirm Hillary is a 2 faced liar, who doesn't work for the people, doesn't unite the people, but uses divisive tactics that may or may not be her actual opinion.  She peddles influence to the few, using the many to get into power, effectively destroying the middle class.  The establishment doesn't care about us.  They care about having someone in power that will spread their influence and pad their pockets.  The American people are pawns to keep them in power. 

Trump was actually telling it as it is.  He never admitted to grabbing pussy, only that he could do it, if he wanted in a lot of cases.  Is it true?  There are women that don't care who they sleep with, as long as there is status in doing so.  The NBA teams travel around the country.  Women hang out to get someone of note as a notch on their gun.  Some of these guys end up paying child support to women they don't know.  You hear about it all the time. 

WikiLeaks comes out with all the dirt on Hillary (their emails, not some rumor) and here this off color interview of Donald Trump telling it like it is.  The press can't talk about how Hillary looks at the typical American as a pawn or how she despises us.  No it is about Trump telling it as it is, likely having fun behind closed doors in telling it.  Locker room talk, as in the 19th hole locker room.

How many women has Donald Trump met that would go to great lengths to have him show sexual interest toward them?  Probably 100,000 or more.  Wilt Chamberlain claimed to have had sex with something like 5000 women.  Think he got all of them that were available? They were lying in wait for him, if this was true.  That is 1 a week for 100 years and Wilt probably did it in 35 years or less.  He wasn't going out on dates with these gals, as Wilt was a bachelor his entire life and not even Wilt could handle that stream of women.  I never heard any rumors of rape against Wilt.  Think Wilt didn't grab a lot of pussy?  He was black and he was an icon.  He was also a notch on thousands of women's guns. 

So, the mainstream media plays these comments over and over again, while emails showing what a group of thugs are managing the Democratic Party candidate.  Hillary Clinton is a criminal.  Not only is she guilty of violating the espionage act, but there is massive evidence of the peddling of influence.  The Feds go after local authorities engaged in minor violations, while Hillary pockets tens of millions, then runs for President.  That, with the mainstream media aiding and abetting her along the way. 

Why?  Trump is the first candidate for President that the people of the United States selected, in my lifetime.  The Republican establishment fought him.  The Democrats demonize him, yet is he likely closer to the blacks, Hispanics and whites of the US than Hillary ever was.  His views on illegal immigration is twisted to mean he hates Mexicans, while the Americans of lower economic status are priced out of the market, social systems are financially strained and the country bears a cost.  Trump has come out for the United States and its people.  The establishment is fighting him, because they want to get rid of the United States as we know it and use the world as their source of more power. 

So, we are looking at a cardboard cutout in Hillary and the people's choice in Trump.  The establishment candidate can be whomever they like, as they are in the habit of controlling both candidates.  Mickey Mouse could be on the ticket, as long as the administration behind him was composed of establishment, Goldman Sachs types. This is what we will get with Hillary, more characters selling the common man and women of the United States down the river, under the guise of diversity and nation building. 

As for me?  I resisted the urge to register to vote once more.  Maybe one day I will get involved with local issues and register.  If Texas isn't a safe state for Trump, my vote wouldn't matter, as the establishment would have succeeded in pulling the wool over the sheeples eyes once more.  The United States has been destroyed by these people and we are seeing a last gasp effort by a movement to save what is left.  Our debt and our working class is being used as collateral to further the aims of the multinationals and globalists.  Even the poorest American couldn't stand what is on its way, if we don't reverse this collateralization of America for international purposes.  In the meantime, the current administration is pushing us toward world war, likely to cloud the issue of impending financial collapse.  The main players are going to need a place to hide and Hillary will give  it to them, in exchange for a little fame, fortune and power.  Our industry is gone and the debts are piling up.  We the people are a dead issue, if we the people elect Hillary.  Elect our candidate, not theirs. 

Saturday, January 24, 2015

Monday, January 19, 2015


The talk over the past couple of years has been, when does the Fed raise its discount rate?  The fact of the matter is this talk is to be taken with a grain of salt, as any possible threat is met with assurances from some Fed dove that raising rates in the near term just isn't possible.  I have a few explanations to offer that go outside of this jawboning policy, that actually moves to the point that only the market will ever raise rates, as the Fed is stuck on zero.

The first point to make is that since the Japanese bank went to zero, a bank that actually went so far, has never been able to get out of the trap they built themselves.  There are many reasons why this is the case, but the primary one is that the monetary base has no natural way to have increased itself while stuck at zero.  A zero fed funds rate raises no money for depositors or bankers, who have excess cash.  The only thing that grows is the monetary debt associated with increased bank lending in the first place.  Thus, debt has either increased or remained flat, while the compound interest equation has consumed the means of repayment.  For those that don't understand this policy, I will go into details. 

All the money in circulation today has been created by the system of banks either creating debt or buying the debt of others.  This includes the central banks, which must maintain a balance sheet that at least presents a case of solvency.  In making such loans, they never create the interest with which to pay the debt back to its source.  Repayment has to either come out of the deposit balances in the banking system, out of the capital position of banks or out of the forfeiture of property, in the event of default.  In any case, the ability to service debt, placed on the debit side of the bank ledger, has to come from the credit side of the ledger.  This is what constitutes the entire base of funds to service the cumulative ledgers of the banking system. 

Once we have met zero, all kinds of carry trade financing takes place.  Banks and other entities that have the capacity, borrow at zero and buy higher yielding securities that give them a free ride, along with allowing all sorts of borrowers a source of lower financing, much lower than the normal risk situation presented often deserves.  To raise rates, puts this entire systematically created situation at risk.  The carry trade in various currencies around the world is in full force and effect. 

How large is this trade?  I have no way of knowing, but I would suspect it is behind the low government rates around the world, just as is QE itself.  As more money is put on the debit side of the bank ledger, more funds become available at zero, to anyone willing to take the risk.  The Japanese carry trade has been happening for close to 20 years.  Japan has never moved off the zero rate.  The 10 JGB is trading about as close to zero as could ever be imagined for a government that for all practical purposes is insolvent and has absolutely no mathematical capacity to service its debt any anything resembling a real interest rate.  Its entire tax revenue would be consumed at such a rate.

As long as those in position to know can make the assumption that rates are going to remain at or almost at zero, this trade will go on.  It appears to me they have the central bankers trapped, as the losses of even a couple a percent move in longer dated paper would create a margin call that exceeds the capital of the entire system that supports such carry.  A 20% haircut on sovereign debt or corporate debt issued to support the trillions in stock buybacks and acquisitions would make the subprime disaster look like a rained out picnic.

Then, one must look at the other side of the game, the banking system itself.  Excess reserves total in the multi-trillions in the US alone.  How could such a massive pool of money be put in demand to create a bid, when the system is so flush with cash?  Are the central banks going to commit suicide and destroy the mark to market on what they hold as collateral, in order to raise rates?  To reverse QE and start selling bonds would by itself, destroy the leveraged carry trade.  I suspect this activity isn't even in the cards. 

The proposed method is to raise the interest rate paid on reserves.  That rate, from what I understand, is at 1/2%.  There is no real bid in the Federal funds market or the rate on funds would be what the Fed would pay on reserves, in the first place.  Why would it be any less?  Why would banks give up this rate to lend these risk free funds in the broad market?  Is it because no one needs any funds at this level of supply or am I missing something?  It would only be the Fed itself providing funds at a lower rate that could answer any needs of funds.  Absent a bid, there is no Fed funds market.

My preferred means of raising the discount would be to raise the reserve requirement.  This would fly in the face of the TBTF banks, as they would be the most likely entities that would be affected by such a move, in that they would be most likely the more highly levered institutions.  Could we see such a move?  I highly doubt it.

Without a system that needs funds, how can the Fed create a bid?  They are limited as to how much they can pay on reserves, because they are the holders of such a large amount of low yielding paper.  I would suspect, having some clue as to the rates of interest on 10 year paper over the past few years, they would be limited to maybe 2.5% to 3% on the top.  This is hardly a real interest rate, but high enough to upset the finances of government and destroy any carry trade in dollars.  A 2% inflation rate, from what I have been taught, implies a 5% risk free rate on bonds.  A move in the coupon from around 2% to 5% on a 10 year bond, implies a roughly 25% loss in current market value of such securities.  How could such a move be transacted for long?

In this vein, we are faced with only 3 remedies for the Fed to raise rates.  Sell assets and draw in money, raise the rate paid on reserves or raise the reserve requirement, forcing banks to hold more cash.  The only one that can be successfully used over the short term would be to pay a higher rate of interest on excess reserves.  But, this is limited to the average rate the Fed receives on its assets, surely less than 3%, which is a normal rate at around zero inflation.  Pulling money out of the system, though the wise position, would create an unwind of the carry trade on bonds and the inflated stock bubble, destroying the false prices of assets we see at this time. 

When a small group can purchase a return for free, we end up with an unbalanced economy and one that is rife with systematic risk.  The average American doesn't have access to free money.  Only those positioned to take advantage of the financial engineering mechanisms developed over the past 30 years have this advantage.  In the meantime, it is mandatory that someone hold the excess money produced, whether it be the banks, which have the money immediately returned to them through the closed system of banking or the poor guy who saved his money and has sense enough to not trust the asset inflation that has come around to bite them over and over again. 

In the end, at zero or at a higher rate, this system will collapse.  It will collapse, because no one lives off their own body and the fact of the matter is the earnings excess we see in corporate America is a result of excessive debt, taken on largely by people that have no capacity to borrow and service more debt.  Financing available to them is only available at rates a long way from zero, some of the subprime, paying rates that were against the law at one time.  Paying zero on liabilities created by the entities that have been entitled to pay zero is also against the law, the law of nature and mathematics.  Something that can't go on forever won't. 

Wednesday, September 3, 2014

New Commitment

I haven't been here in awhile, though I have drafted a few posts that never made it to the site.  The subjects have become stale, so it is probably no use saving old material.  In any case, it is time for some new stuff.

Some of you that follow me know I write plenty around the net.  I write because I read and I think I have something to say on a subject, right or wrong.  Everyone has their own version of reality and that includes the guy that does your local news.  Sports writers make Gods and goats and guys that write on markets and economics look like fools or geniuses, depending on which way the grain is running. 

Though I am still interested mainly in markets and economics, reading various Austrian economic and libertarian sites, my perspective has changed somewhat.  Though the perception presented in the mainstream press is that countries like Russia and China are run by oligarchs, the truth of the matter is, so are the western countries.  There are questions about the politics and economics of the western states that I don't believe I would have asked a few years ago.  Some of this is due to reading and listening to men like Murray Rothbard, one of the great informed minds of the last half of the last century.  In many places, his philosophy would be dismissed as pure bullshit, as I was informed by one of my favorite writers on the net.  But, my study of the last 100 years tells me Rothbard was right on.  Whether you call it conspiracy or merely people with power taking care of their business and feathering their own nests, doesn't matter. 

There are a couple of questions that have come to mind recently that I don't know I would have studied in the past.  One is, why is the USA continually looking for the next scape to get into?  This is even more important a question, as the resources of the country have become drained over the past 50 years or so, through the same repetitive activities.  It is even more important, in that it appears the foreign policy and actions of the US are designed to create the next enemy, as they have with ISIS and Al Qaeda.  I call this procedure knocking over bee hives.  It appears we are racing toward a big finale, where Americans lose their prosperity and freedom and maybe even the war.

The biggest question that has to be asked today is, why are there more people in prison in the US than anywhere else in the world?  It isn't just violence, but all kinds of crimes.  And, why are so many common people in prison, yet those that rig financial games to defraud others and expose the economy to risks not there with them?   Is there a good old boys club, where they not only profit from others being in prison, but they see to it that their crimes are swept under the table and at best, the corporation, generally a banking conglomerate, are fined?

In his history classes, Rothbard brought up something that isn't taught in American history, the religion of the Eastern Establishment, namely what Murray called Yankees.  This not only has to do with morality, but it has to do with the promoted biblical prophecy that we hear all the time.  I doubt there was much discussion of this prophecy 200 years ago, but someone found it and it appears they are pushing to bring it about.  Rothbard says it caused the Civil War.  I think it might have caused the prison population as well.  Rothbard called these people humanitarians with a guillotine.  They have been around for hundreds of years.  The idea of socialism and communism actually is derived from these religious groups. 

One thing I never thought would happen was the degree of asset purchases we have seen by the central banks.  I suspected the US would do the same thing as Japan when the time came, after many claims that they would never do so.  The US has done one thing differently, they recapitalized the banks first then shoved in the dirt.  Being that the balance sheet of banks can only be recapitalized by shifting money from being liabilities to capital, someone had to replace the money for the scam to work.  The debts owed banks can only be paid out of the supply of money on the credit side of the schedule or by reducing capital.  This back door bailout has kept a lot of powerful people, many guilty of criminal activity, in power. 

Then we have the greatest asset bubble in history.  You would think we are in an economic boom, but the spending power of the basic customer of the corporate world has been exhausted.  We are instead in an inflationary asset bubble, where the real power has been provided by low interest rates and the borrowing of money to buy back stock by companies that will have little means of repaying the money should another credit crunch occur.  In the process, the purchasing power of those lower down the economic scale has been diminished greatly.  The equation is broke and the US, save for the fact the population is still growing is headed for a Japan situation.  Europe is already there. 

I hope to see all of you soon.  I will dedicate time to post this site 3 or 4 times a month minimum.  I encourage debate, should you like to comment.  Thanks for showing up. 

Friday, November 1, 2013

The Road to Serfdom and Obamacare

Like many of my posts, this one was originally written on Karl Denninger's site

I decided to search the site to see if they posted the Hayek book, The Road to Serfdom. It is there. I had bought it in paperback a few years ago, but I would suspect I have gained more perspective, watching the NAZI's in power and reading other stuff. If you haven't read the book, or have and it has been awhile, this is the book to read now and turn onto your friends. I put it on Facebook, which is about all I do on Facebook. That is post stuff I hope others will read.

hayek page 47 wrote..
Nobody saw more clearly than the great political thinker de
Tocqueville that democracy stands in an irreconcilable conflict
with socialism: Democracy extends the sphere of individual
freedom, he said. Democracy attaches all possible value to each
man, he said in 1848, while socialism makes each man a mere
agent, a mere number. Democracy and socialism have nothing in
common but one word: equality. But notice the difference: while
democracy seeks equality in liberty, socialism seeks equality in
restraint and servitude.

hayek page 49-50 wrote..
Democratic assemblies cannot function as planning agencies.
They cannot produce agreement on everything the whole direction
of the resources of the nation for the number of possible
courses of action will be legion. Even if a congress could, by
proceeding step by step and compromising at each point, agree on
some scheme, it would certainly in the end satisfy nobody.
To draw up an economic plan in this fashion is even less
possible than, for instance, successfully to plan a military
campaign by democratic procedure. As in strategy, it would
become inevitable to delegate the task to experts. And even if,
by this expedient, a democracy should succeed in planning every
sector of economic activity, it would still have to face the problem
of integrating these separate plans into a unitary whole. There
will be a stronger and stronger demand that some board or some
single individual should be given powers to act on their own
responsibility. The cry for an economic dictator is a characteristic
stage in the movement toward planning.

Thus the legislative body will be reduced to choosing the
persons who are to have practically absolute power. The whole
system will tend toward that kind of dictatorship in which the
head of government is from time to time confi rmed in his position
by popular vote, but where he has all the power at his command to
make certain that the vote will go in the direction that he desires.

hayek page 53-54 wrote..
Advancement within a totalitarian group or party depends
largely on a willingness to do immoral things. The principle
that the end justifi es the means, which in individualist ethics is
regarded as the denial of all morals, in collectivist ethics becomes
necessarily the supreme rule. There is literally nothing which the
consistent collectivist must not be prepared to do if it serves the
good of the whole, because that is to him the only criterion of
what ought to be done.
Once you admit that the individual is merely a means to
serve the ends of the higher entity called society or the nation,
most of those features of totalitarianism which horrify us follow
of necessity. From the collectivist standpoint intolerance and
brutal suppression of dissent, deception and spying, the complete
disregard of the life and happiness of the individual are essential
and unavoidable. Acts which revolt all our feelings, such as the
shooting of hostages or the killing of the old or sick, are treated
as mere matters of expediency; the compulsory uprooting and
transportation of hundreds of thousands becomes an instrument
of policy approved by almost everybody except the victims.

To be a useful assistant in the running of a totalitarian state,
therefore, a man must be prepared to break every moral rule he
has ever known if this seems necessary to achieve the end set for
him. In the totalitarian machine there will be special opportunities
for the ruthless and unscrupulous. Neither the Gestapo nor
the administration of a concentration camp, neither the Ministry
of Propaganda nor the SA or SS (or their Russian counterparts)
are suitable places for the exercise of humanitarian feelings. Yet it
is through such positions that the road to the highest positions in
the totalitarian state leads.

Any legitimate American can't read this and look at the current administration and not see the Road to Serfdom being paved by the NAZI's in power. When confronted with their lies, the administration tells more lies. They go right from telling people they can keep their insurance coverage, to writing rules that force insurers to cancel policies because they are against the law to blaming the insurance companies. Who is writing the business under Obamacare? The insurance companies, of course. So, the new idea will be to get rid of the insurance companies and institute new taxes to run the system. All decisions dealing with health care, treatments, who will live, etc., will be done by the regime. Dissenters will be fined or imprisoned. Or be pursued by the IRS.

Health insurance really isn't anything more than a means of financing health emergencies. You pay in advance for what you might need. Now, where are we? Everyone that has had insurance that has had an illness since being insured is now impaired as an insurable life. Remember, health insurance is life insurance. You can't buy life insurance when you are dead and you can't buy it when you are likely to die, at least at a premium most people would be willing to pay. But, if you are terminal, they can't cancel you. Not even on a term policy where the fixed term is up, you can still pay the renewal to 95 rate and you can sell your policy and let someone else pay it.

But, with health insurance, if the pool is cancelled, those that are uninsurable are fucked. They had insurance and now they don't. I have never sold health insurance, because between the noise you hear from the socialists and my misunderstanding of various payment clauses in the policies (I have never used a health insurance policy in my adult life), I never felt competent to discuss such coverage. I have had contracts to sell insurance though and there was always a guarantee you had coverage in a new pool, if the pool you were in was discontinued. I guess the only out the insurance company had was to quit doing business in your state. The bullshit you hear from the mouths of the defenders of this current mess is just that, bullshit.

I posted the Hayek link, because I think every American should read this book and examine what we are seeing now. I get a lot of argument from people I know about this NAZI stuff I rant. Mainly, because they are clueless as to how the Hitler's happen. This is how they happen. Good intentions or not, a group sets the stage and another group comes in and takes over. It is already clear that the Obama administration has absolutely no morals. The entire group lie. They intend to use force at some point. They spy on the people. I can go on and on. It might not be Obama that turns this into a totalitarian dictatorship, but it is apparent we are well on our way. There will be more adherents to socialized medicine, as the system comes out of this totally fucked up. We are really looking at a situation which would be not unlike Japan, where instead of 2 bombs, we flew over the same cities and dropped another on each and then put a couple on Tokyo to boot. Some will say you can't fuck up what is already fucked up. Any of us that have been through difficulties know that is not true, as it can always get more screwed up.

What if the news Karl posted above had come out when the data was available? The whole government shutdown mess would have been a mute point. At the worst, we would have had a case for postponing the Unaffordable Care Act for a year, that the American people would have probably demanded. As it is now, the genie is out of the bottle. I don't think they get the genie back in the bottle at this point. We have seen the nuclear option used on the healthcare system of the United States. The only way to save the village was to destroy it.

There is only one way we come out of this in one piece. That is to allow the free market to work. There have been examples posted here and wrote about a couple of MD's running no insurance operations, one a GP and the other a surgeon. Anyone with credit can afford to get a surgery under the free market system. The payments would probably be less than those on a health care policy and there would be no coinsurance.

I am sure that if any free market plan comes to fruition, the NAZI's will step in to stop it. I am not sure that such a restraint of trade and freedom would pass court muster, but this day and time, you never know. as the legal system has been steered in a fascist direction as well. If enough people dropped their health insurance and bought policies that covered cancer, heart problems and accidents and paid the rest out of pocket, American health care would be revolutionized. If you think we would see the current cash pricing in pharmacies continue without insurance, you are missing the boat. But, the can of worms is open and the totalitarian solution Hayek diagrams is likely to be used. NAZI's cannot afford to have their authority questioned.