The Real Reasons Behind Fed Secrecy

An audit would expose the Fed as a massive fraud perpetrated on this country, enriching a privileged few bankers at the top of our economic food chain, and leaving the rest of us with massively devalued dollars which we are forced to use by law. An audit would make people realize that, while Bernie Madoff defrauded a lot of investors for a lot of money, the Fed has defrauded every one of us by destroying the value of our money. An honest and full accounting of how the money system really works in this country would mean there is not much of a chance the American people would stand for it anymore.

Ron Paul continues his effort to shine the light of day on the shenanigans of the Federal Reserve.

The Investor's Mind

How to buy high and sell low. Funny graph - funny unless it's happened to you.

The Economy is a Lie, too

When it hits, interest rates will rise dramatically as the U.S. struggles to finance its massive budget and trade deficits while the rest of the world tries to escape a depreciating dollar.

Since the spring of this year, the value of the U.S. dollar has collapsed against every currency except those pegged to it. The Swiss franc has risen 14 percent against the dollar. Every hard currency from the Canadian dollar to the Euro and British pound has risen at least 13 percent against the U.S. dollar since April 2009. The Japanese yen is not far behind, and the Brazilian real has risen 25 percent against the almighty U.S. dollar. Even the Russian ruble has risen 13 percent against the U.S. dollar.

What sort of recovery is it when the safest investment is to bet against the U.S. dollar?

Don't bet on the "recovery" being around for very long.

HSBC bids farewell to dollar supremacy

A monetary policy of near zero rates – further juiced by quantitative easing – is completely incompatible with circumstances in most of Asia, the Middle East, Latin America, and Africa. Divorce is inevitable. The US is expected to hold rates near zero through 2010 to tackle its own crisis.

What is occurring is an epochal loss in the relative wealth and economic power of the old G10 bloc of rich countries compared to rising regions of the world. The euro, yen, sterling, Swiss franc and other mature currencies will be relegated along with the dollar in this great process of rebalancing, but the Greenback will bear the brunt.

Reckless spending and massive debt are relegating the dollar to a third-world currency.

There’s No Flu Shot for the Thrift Bug

So, if a fellow needs money for his retirement, where is he going to get it? Not from his house. Not from a pay raise. And not from his stocks either. He needs savings. He needs real money.

Americans aren’t so stupid after all. When they need to stop spending, they stop spending. When they need to save, they save. Too bad about the economy.

Yes, what is good for individuals seems to be bad for the economy. When people save instead of spend, the consumer economy stalls. And then economists think there is something wrong. They think an economy needs to expand constantly. And so, they try to find ‘solutions’ to the ‘problem.’

Too bad the government economists can't understand the obvious which is: we're spending money we don't have and borrowing money when we already have too much debt.

The Growing Debt Bomb

Federal government expenditures are growing far faster than the economy, and thus the government is becoming a larger and larger share of gross domestic product. Obviously, this cannot continue forever because eventually the government would totally drive out the private sector.

The entitlement programs (i.e., Social Security, Medicare, Medicaid, etc.) all continue to grow faster than the economy, and they will take more than 100 percent of all federal tax revenue this year, requiring that virtually all of the other government spending programs, including defense and interest payments on the debt, be funded by more borrowing.

America's experiment with socialism is succumbing to bankruptcy.

Rocket Men: The “Missile Defense” Con Game

[P]utting the US taxpayer on the hook for the defense of Europe against Iran will embolden the governments in that region and allow them to rattle sabers and indulge in belligerent behavior without having to bear the economic costs of that behavior. This makes the prospect of conflict with Iran more, not less, likely, and increases the likelihood that the US will become entangled in such conflict.

The whole “missile defense” scam, in both its Bush and Obama variants, is a classic example of the logic and behavior of governments. I’ve quoted Mencken on this before, but it bears repeating:

“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.”

Obama's "new" plan is no more constitutional than Bush's old plan.

Nowhere Else to Go

Believing there to be a political solution to the mess we are now in is folly indeed. The government owns the entire game: political parties, the congress, elections, law enforcement, the military, the courts and the ability to forcibly take whatever it wants under the fear of death. Our opinions and concerns mean nothing. Writing letters to these thugs is a waste of time. If they cared about our opinions, the banks would never have been bailed out nor the latest Supreme Court Justice confirmed. The opinion of the people no longer matters; live with it.

They're Mr. Smith when they first leave for Washington but soon evolve into "Lonesome" Rhodes.

Is Your Doctor Getting Ready to Quit?

Terry Jones revealed stunning poll data showing that 45 percent of American physicians “would consider leaving their practice or taking an early retirement” if Congress passed the proposed ObamaCare health legislation.

As a practicing physician, I’m not surprised. These numbers mirror the sentiments I’ve heard expressed by my professional colleagues. I’ve been in practice for over 15 years and I’ve never seen physician morale as low as it is today.

Older physicians have told me that they’re glad to be “getting out” and retiring soon. Medical students have asked me whether they should switch to engineering or pharmacology before it’s too late. Physicians in the middle of their careers are just hoping to survive any “reform.”

Politicos are running the risk that their health care plans may provoke a mutiny by medical care providers.

Ignoring the Feds

No matter what side of the political aisle you sit on, the federal government is not your friend. It’s not a friend to the Constitution, and it’s certainly no friend to your liberty. For years and years... and years, people have yelled "vote the bums out!" "Call Congress now!" "March on DC!" But, in the long run, little to none of this actually works.

If you oppose this national health care plan, they’ll give you that one. If you oppose one war, you’ll get another one. If you oppose today’s bailout, they’ll find a different one tomorrow. Decade in and decade out, the government keeps growing, and your liberty keeps shrinking. And it doesn’t matter if the person in charge is named Obama, or Bush, or Reagan, or Clinton.

The bottom line? Looking to the federal government — whether it’s though elections, or protests, or lawsuits, or rallies — is a failed strategy. So how about trying something new?

States, municipalities and individuals will need to assert their independence to regain their liberty.

Socialized Medicine - Ronald Reagan

Ronald Reagan warned us about government medical care over 50 years ago. (Thanks to Charlie for the link)

March Away From, Not On, Washington

Don’t get me wrong – I’m all in favor of letting government people know you want them the hell off your back and out of your life without exception or compromise, but that should always be done within the context of a manner that shows you don’t care about them. You’re not begging them for anything or to even act in a certain way – any more than you would beg a robber, murderer, or thief to pretty-please change their ways and not be so cruel or heavy-handed. These despicable individuals are to be shunned, ignored, ostracized from society altogether. You don’t send that message by showing up in crowds of thousands at the seat of government.

Politicians thrive by offering alms to the voters and getting re-elected in return. Over 90% of Congress is re-elected every two years and given another chance to steal from you in order to bribe your neighbor. Voting seems not to be an effective tool for change.

The Government-Based Economy

A lot more people seeking the same number of jobs is pretty bad, especially when the number of people is still rising while the number of jobs is actually still falling! Yikes!

Meanwhile, however, the government has spent its time growing bigger and bigger, like a huge, cancerous, oozing lump that is growing on your neck and already people are being repulsed by both the sight and the smell of it, and now there are 6% more people on “government payrolls” than there were in 2001, which is only the tip of the iceberg.

And, as if to add insult to injury, they all make more money than you! Hahaha! For the first time in history, the average pay of a government employee is higher than the average wage of non-government employees! And when you add in their generous benefit packages, they make a lot more, and they are not going to take it kindly that you want them to suffer losses in pay and employment like us average morons out here.

Losing jobs in the private sector and replacing them with government jobs - this is not the prescription for recovery.

What the Heck Is Going on in China?

That’s a question that Westerners have been asking for, oh, several millennia now. Or at least since Marco Polo aimed his ponies down the old Silk Road in 1271.

Now as then, China keeps its own counsel. We know what they want us to know, plus what we can surmise from rumor and reading between the lines. But lately, we’ve been able to add presumption to news and come up with something that looks very significant.

Specifically, there’s been a flood of tantalizing stories out of the East that, taken together, strongly suggest a growing preoccupation with a form of money that was ancient even in Signor Polo’s time. And it ain’t silk. It’s gold.

Speaking of China, is China hoarding gold? Doug Hornig thinks so.

Greenback Gases, Gold & The Coming Shift

Bankers in charge of our economies makes as much sense as candy makers being in charge of our diets

At the end of a good movie, oftentimes apparently unrelated events are woven together and it becomes clear how and why things happened. If, today, it feels as if we are at the end of an era, it is because we are; and, just like the movies, only at the end do certain events and the reasons for them become clear.

The removal of gold from the global monetary system was not by accident. It allowed governments to do what they could not otherwise do. Gold cannot be printed. Paper money can. Therein lays the cause and consequence of what is happening today.

The plight of the US dollar is dire. It is backed only by the fear of its collapse. Nations sell us goods and services and receive our dollars in return. If the dollar collapses before they can exchange them for something, they will have been swindled. China is the largest holder of US dollars and they would not like being swindled.

The Trouble With "Sustainable Development"

In short, it’s all about wealth redistribution. Your wealth into a green rat hole.

During the Cold War, communists tried to get us to surrender our liberties and way of life for the wisdom of Karl Marx. Americans didn’t buy it.

But now, they have taken the same clap trap and wrapped it all in a nice green blanket, scaring us with horror stories about the human destruction of the environment -- and so we are now throwing our liberties on the bon fire like a good old fashioned book burning -- all in the name of protecting the planet.

It sounds so friendly. So meaningful. So urgent. But, the devastation to our liberty and way of life is the same as if Lenin ordered it.

Environmentalism is one of the tactics being used to socialize us.

The Duty to Be Free

We founded a land, and founded in it not just our right to be free and independent and responsible, but the inalienable duty of man to be free and independent and responsible. What I am talking about is responsibility. Not just the right but the duty of man to be responsible, the necessity of man to be responsible if he wishes to remain free; not just responsible to and for his fellow man, but to himself; the duty of a man, the individual, each individual, every individual, to be responsible for the consequences of his own acts, to pay his own score, owing nothing to any man.

We knew it once, had it once. Because why? Because we wanted it above all else, we fought for it, endured, suffered, died when necessary, but gained it, established it, to endure for us and then to be bequeathed to our children.

Only, something happened to us.

William Faulkner was concerned about the loss of freedom and liberty in 1953.

The Keynesians Were Wrong Again

Ronald Reagan's decision to dump Keynesianism in favor of supply-side policies—which emphasize incentives for investment—produced a 25-year economic boom. That boom ended as the Bush administration abandoned every component of Reaganomics one by one, culminating in Treasury Secretary Henry Paulson's throwback Keynesian stimulus in early 2008.

Mr. Obama showed up in early 2009 with the dismissive certitude that none of this history ever happened, and suddenly national economic policy was back in the 1930s. Instead of the change voters thought they were getting, Mr. Obama quintupled down on Mr. Bush's 2008 Keynesianism.

The result is the continuation of the economic policy disaster we have suffered since the end of 2007. Mr. Obama promised that his stimulus would prevent unemployment from climbing over 8%. It jumped to 9.7% last month.

The Obama administration is hindering an economic recovery with spending and debt.

Government Solutions Lack Understanding

[A]ll of these problems and their wrong-headed solutions come from one greater problem - which is not understanding the reasons that we are here. The economy is in bad shape because of too much government intervention producing a myriad of unintended consequences and perverse incentives. Healthcare is broken because the doctor-patient relationship has been broken down by hyper regulation and too much government interference. Afghanistan is a mess because they ignored the mission approved by Congress - to seek out those who attacked us on 9/11. They have instead gotten sidetracked with nebulous interventionist tasks such as promoting democracy and nation building. Eight years later, there is no real progress. The Soviets bankrupted themselves fighting in the mountains and caves of Afghanistan and we’re about to do the same.

Government solutions are exacerbating our problems, here and abroad.

Rotten Log

America is up to its eyeballs in debt. Inflation since 1913 has devastated American's ability to save for their future, to provide capital for growth. Growth now largely comes from debt laying off large chunks of America's future to whoever will buy it...

Inflation is a deliberate impoverishment of the benighted masses, by the political elites. It is an unlegislated tax, confiscation of capital. The Fed would have us believe inflation is like cosmic rays or a hurricane something out of their control, but that would be mendacity, i.e. a lie. It is a deliberate policy and always has been it is an unlegislated tax, nothing more.

Are we on the Eve of Destruction?

The Causes, Aftermath and Lessons of 9/11

Saddam had no weapons of mass destruction, no operational ties to al Qaeda and no involvement with 9/11. The declared American goal soon became one of bringing democracy and stability to Iraq. A socialist Iraqi constitution was drafted and a new U.S.-allied regime in Iraq with friendly ties to Iran and deference to Sharia law was born. Alliances would shift over the next several years, culminating in the celebrated U.S. "surge" of 2007 that cynically involved paying off Iraqi militias to fight "al Qaeda in Iraq" rather than U.S. forces. Such bribery, as well as the fact that the Sunnis had effectively lost the civil war by then and Iranian intervention had reduced Sadrist belligerence, was probably what really stemmed the bloodshed temporarily.

More than four thousand Americans have been killed, tens of thousands wounded. Independent estimates of Iraqi dead range from a hundred thousand to a million.

And of course, Osama bin Laden has yet to be found.

Which has caused more damage to our country: the 9/11 attacks or our response to them?

The Trouble with Democracy: Maslow Meets Hoppe

H.L. Mencken described politicians as "men who, at some time or other, have compromised with their honour, either by swallowing their convictions or by whooping for what they believe to be untrue."[1] "Vanity remains to him," Mencken wrote, "but not pride."[2]

The Sage of Baltimore had it correct, that to be elected and stay elected in American politics to any full-time position requires the suspension of any ethics or good sense a person may possess.

Doug French explains why we keep electing corrupt politicians. Our founders created a republic. They never intended for America to become a democracy.

Inflation and Deficits

The founders of our nation feared paper currency because it gave government the means to steal from its citizens. When inflation is unanticipated, as it so often is, there's a redistribution of wealth from creditors to debtors. If you lend me $100, and over the term of the loan prices double, I pay you back with dollars worth only half of the purchasing power they had when I borrowed the money. Since inflation redistributes (steals) wealth from creditors to debtors, we can identify inflation's primary beneficiary by asking: Who is the nation's largest debtor? If you said, "It's the U.S. government," go to the head of the class.

The Fed's policies of spending and debt and fiat dollars are governmental theft.

The Boomers are Out of Time – And Out of Money

The simpletons – who had no idea that the crisis would come…and then thought it could be easily contained…and then mistook it for a monetary, banking crisis…and then judged it over before it had really started…

…these same simpletons still do not understand that the problem is not a lack of money, it’s a surplus of debt…

…they now reassure us that they know just how much money to put into the system…and just when to take it out.

If you believe them…you might want to stay in stocks and US bonds. If not, you should head for cover.

The country is being run “by a gang of clueless bozos,” says Lee Iacocca, in his new book.

The inmates are running the asylum.

A run on the Bank of the Gold Cartel

Goldsmiths as early as the 16th century invented the fraud of "fractional reserve banking." They found that customers would buy gold from them but not take it away, leaving it with them for safe keeping. As long as the goldsmiths had a gold bar to show a new customer, they could sell him gold and give him a deposit receipt. The gold bar then was returned to the vault and could be sold several times over. The goldsmiths discovered that the "safe" buffer of gold to have in inventory was about 10 percent, as that was in practice the typical maximum demand they would see from customers wanting to take delivery.

I estimate that today 1 ounce of gold backs about 20 ounces of gold sales. Just like 500 years ago, investors are prepared to accept a paper IOU for gold in lieu of physical gold -- whether that IOU be in the form of pool accounts, futures, derivatives, unbacked ETFs, etc. Just as it did in history, the game will come to an end when there is a demand for physical that cannot be met.

If you are thinking about buying gold, buy real gold - like Gold Eagles or Krugerrands - instead of investing in the promise of gold.

US Hypocrisy Astonishes the World

To stem opposition to its wars, the War Department hides signs of American casualties from the public. Angry that evidence escaped the censor, the War Secretary and the American Legion attacked with politically correct jargon: "insensitive," "offended," and the "anguish," "pain and suffering" inflicted upon the Marine’s family. The War Department sounds like it is preparing a harassment tort.

Isn’t this passing the buck? The Marine lost his life not because of the Associated Press and a photographer, but because of the war criminals – Gates, Bush, Cheney, Obama, and the US Congress that supports wars of naked aggression that serve no American purpose, but which keeps campaign coffers filled with contributions from the armaments companies.

The Vietnam fiasco ended because Americans could see the carnage on the news every evening. The incursions into Iraq and Afghanistan have been sanitized by the military and the media to keep the public in check.

Killing America's Kids

Spin is so very important in war these days. While America is only barely a democracy, still, if the public, the great sleeping acquiescent ignorant beast, ever gets really upset, the war ends. The Pentagon is acutely aware of this. It remembers its disaster in Asia. The generals of today learned nothing military from Vietnam—they are fighting the same kind of war as stupidly as before—but they learned something more important: Their most dangerous enemy is the America public. You. Me. Defeating the Taliban isn’t particularly important, or even desirable. (No war means fewer promotions and fewer contracts). But while the Taliban cannot possibly defeat the Pentagon, the American public can.

The anti-war movement has been mostly silent since the election of Obama yet the wars continue.

Button, Button

[A] mysterious, black-clad gentleman arrives at the apartment and presents Mrs. Lewis with an offer that proves both tempting and frightening. He informs her that she and her husband have two options with regard to the box:

1. Don’t push the button. The man will come back to reclaim the box. No gain, no loss. The end.

2. Push the button, after which two things will happen: "Someone whom you do not know will die. And afterward you will receive $200,000, tax-free."

The stranger then leaves to let the bewildered Mrs. Lewis think over her options.

Government is impersonal but interventions in freedom affect real people.

A Failure of Capitalism?

Politicians often find scapegoats for America’s economic woes. It is rare – if ever – that they point the finger at themselves. Yet, the basic cause of the current severe economic problem lies in the machinations of government.

It is clear to even a casual observer that Congress has abused its power to tax and spend. It has taxed success to subsidize failure. It has purchased votes by enacting an unending stream of entitlement programs, financed by taxation, foreign debt and a progressive degradation of the U.S. paper dollar.

Politicians create problems with manipulative laws and then rush to the "rescue" with more manipulations.

Ten Reasons To Be Happy

The nation states of the world cannot stop spending money they don’t have. They know they must stop, but they cannot. It is the nature of democratic republics. All the controls the United States and others have put on their governments have now broken down. It was inevitable.

We can expect our government to continue running rampant. It will continue growing in its brazenness, in its sheer stupidity. What’s happening now will only get worse. And worse. We will reach a tipping point.

And it will be time for a change.

We don't get upset and attend town halls and yell at politicians. We don't believe politicians - except Ron Paul - are attending to Constitutional duties. They are trying to get re-elected and, in the process, get rich off the public teat. No, we just observe with dismay the havoc they wreak and prepare as best we can for the consequences.

Plain Sailing – the Keynesian Way

The problem is that no-one in government has either the guts or understanding, or both, to do what is needed. The last time anyone had the courage was during the Regan [sic] administration. Fed Chairman Paul Volcker stopped pushing counterfeit money into the system and let interest rates soar. In spite of incredible public hostility Ronald Regan [sic] stood by him. Of course, the healing process was painful but recovery followed and the USA, as usual, dragged the rest of the world back with it. Nothing has changed here. Recovery in the USA is still required before the global economy can recover.

But "real" recovery in the USA is no-where in sight.

Too much debt and we keep piling on more debt. The national debt is almost $12T and counting plus we have unfunded liabilities out the ying-yang. That much debt can never be repaid. Recovery is, at best, a very long way off.

The Estrogen Recession

Women should be reminded, frequently, that each one of them needs to be on guard against her sex’s tendency to overspend on homes.

Criticism makes people behave better. Look at white men. We’re just about the only people you are allowed to criticize as a group these days, and now, under this stream of constant criticism, we’re usually on our best behavior.

The alternative (and more popular) theory is that criticism depletes crucial self-esteem vitamins, causing the formerly criticized groups to live down to their stereotypes. Thus, no critiques are allowed today of the propensities of women, blacks, homosexuals, Latinos, and most other organized pressure groups. With so few targets left, TV advertising humor is now directed relentlessly at putting down the clueless white guys who run everything.

Who's to blame? The Fed, Democrats, Republicans, Congress, the President? No! It's women.

The Legacy of Progressivism

The national debt runs out of control. The Federal Reserve System has purchased hundreds of billions of dollars of private assets by creating new money out of thin air. The number of prisoners in the nation’s jails continues to grow to new records every year. Government at all levels systematically erodes our liberties.

All these things and more are symptomatic of the modern age, but the problems we face today are the legacy of a movement that occurred more than a century ago: the Progressive Era, which ran from the late 1800s to the end of World War I.

A history lesson from William Anderson.

Washington's Lies

At its start, in 1966, Medicare cost $3 billion. The House Ways and Means Committee, along with President Johnson, estimated that Medicare would cost an inflation-adjusted $12 billion by 1990. In 1990, Medicare topped $107 billion. That's nine times Congress' prediction. Today's Medicare tab comes to $420 billion with no signs of leveling off. How much confidence can we have in any cost estimates by the White House or Congress?

It's hard to account for the gullibility of American voters. Will they get fooled again?

Clunker Legislation

Before government extends Cash for Clunkers to more products, it might be a good idea to examine the original. The fact that Washington and the buyers who took advantage of Cash for Clunkers are gaga is hardly evidence that it was in the public interest.

It wasn't. As usual, the program has been judged only by its first and most visible consequences, violating Henry Hazlitt's teaching in his classic, "Economics in One Lesson" (http://tinyurl.com/dkx9pm):

"The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."

Politicians have been refusing to face economic reality for years. Now that the disastrous consequences of their policies have come to pass, they continue to engage in economic fantasies.

The Record of the Federal Reserve

While we all take inflation as a "given" - as something that "just happens" in the economy - this belief is utterly incorrect. Inflation, which is the loss of value in your saved dollars, is caused by the Federal Reserve through its management of the money supply. Next time you see Ben Bernanke on the television telling you that they "will take the necessary steps" to help the country, consider their track record so far, and their dismal failure at their stated objective: preserving the value of America's money.

Inflation is looming based on the Fed's track record. A scary chart for your perusal.