Saturday, July 16, 2011

July 16 2011: The Real State of US Housing


Frances Benjamin Johnston Spring House 1944
"Spring house, Hill Plantation. Washington vicinity, Wilkes County, Georgia"





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Ilargi: The more the ratings agencies come under fire for downgrading, the more they do just that -or so it seems-: downgrade (or threaten to). While it may seem strange that they still have credibility left after being late on just about any call they've made in ages, don't let's forget that they are very much part of the political and banking system, and therefore fully engaged in extend and pretend policies. It's still funny that the EU cries foul over Fitch, a company that boasts 60% French ownership.

Perhaps it would be even better if the ratings agencies start rating European banks for real. The stress tests certainly don't do that. All you really need to know about those tests is in this one line from Harry Wilson and Philip Aldrick at the Telegraph:

European banks set for 'chaos Monday' after nine fail stress test
While Greek bonds are trading at about half their face value in the market, the EBA only required banks to assume a 15% loss on their holdings.

Ilargi: Maybe they're thinking Greek debt will recover? Not very likely to happen, the yield on Greek 2-year bonds broke over 32% this week. Keep that up for a bit, and Greece is going going gone.

The reality is, we're just watching a bunch of Punch and Judy shows here, stress tests, downgrades, the US debt ceiling "controversy". Obama has now put his job on the line to get a deal done; he must be pretty sure he’ll get one in the end; a job and a deal.

Still, whether it comes to either that potential US downgrade Moody‘s and S&P are threatening, or to the debt ceiling charade, or the stress tests, all of the above are based on entirely the wrong numbers, and I wouldn't be one bit surprised if that is fully intentional: all are meant to hide what's really happening, and where the real hurt lies.

In the end, the US economy -as expressed in the GDP- remains 70% dependent on consumers. And I doubt there's anyone left who would pretend that consumers are doing well, or even getting better. The richest few percent perhaps, but certainly not the majority. This is obvious from all kinds of data, like unemployment, consumer confidence etc., but it's nowhere clearer than in housing. Which, conveniently, seems to have fallen off most radars. Convenient, but also patently ridiculous. So here we go once again, the true shape of US housing -and banking-, seen through the lens of a few recent articles that did offer a look behind the -media- veil:

On June 12, Suzanne Kapner wrote this in the Financial Times:
Concern rises over US mortgage defaults
Mortgages held by US banks are performing far worse than home loans sold to Fannie Mae and Freddie Mac, the government-controlled mortgage finance companies, according to federal data made available to the Financial Times. The Office of the Comptroller of the Currency has never before released the data but is considering adding the information to its monthly mortgage report.

Bank-retained loans would typically be made to higher-risk borrowers and, therefore, tend to have higher default rates than loans sold to or guaranteed by the government. But the rate at which bank-held loans are going delinquent raises questions about whether the banks have properly reserved for future losses.

Nearly 20 per cent of non-government-guaranteed mortgages held by the banks are at least 30 days late or in some stage of foreclosure, compared with 7 per cent for loans held by Fannie Mae and Freddie Mac, now controlled by the federal government, according to the data.

The rate at which borrowers of these bank-held loans are falling behind on payments is second only to mortgages that were packaged by banks into securities and sold to investors. Roughly 30 per cent of borrowers with mortgages in these instruments, known as “private-label” securities, have missed at least two payments, according to Laurie Goodman of Amherst Securities


Ilargi: On June 20, Dan Alpert reacted to Kapner's article in a guest post at The Big Picture:
The Next Crisis in Residential Mortgages – New Data Emerges
[..] lender recoveries of loan principal through the liquidation of foreclosed mortgage collateral has been dismal – averaging between 35% and 40% of loan face amount (taking into consideration both selling price and all costs related to the foreclosure and liquidation) for years now and showing no signs of improving.

With home prices, per the S&P Case Shiller 20-City Index, having fallen 6.2% from the end of Q3 2010 through the end of Q1 2011, and now more than 33% below peak levels in July of 2006, the largest banks in the U.S. are therefore loath to repossess and liquidate defaulted home loan collateral. [..]

Some 20% of bank-held mortgage loans, according to Kapner, are 30-days or more past due, which we read as meaning loans that are about to miss two or more payments. We are very interested in seeing more work from Ms. Kapner on this subject as banks hold nearly $3 trillion of mortgage loans in non-securities form on their books. 20% could be an alarmingly large number relative to existing loan loss provisions if such loans are eventually liquidated at anything near today’s prevailing recovery rates.

Ilargi: US banks have $3 trillion "worth" of non-securitized mortgages on their books. 20% of these loans are in various stages of grave distress ("loans that are about to miss two or more payments"). That made me think of a few graphs, and the text below it, from Chicago real estate man Michael David White at Housingstory.net this past March:




An admittedly crude calculation would seem to indicate that on non-securitized mortgages alone, US banks are at risk for 20% of $3 trillion, or $600 billion. The typical return is 35% to 40% of face value, meaning between $210 billion and $240 billion can be expected to be recovered, and therefore $360 billion to $390 billion to be lost. And that's today's face value. That implies a housing market that doesn't deteriorate any further, and isn't flooded with more of the foreclosed homes, the 3.5 million in inventory and the 6.7 million already delinquent mortgages.




Again, the $600 billion at risk at US banks is just for non-securitized mortgages. We're not taking into account risks US banks carry on other assets, and we're not even mentioning mortgage backed securities and other derivatives, like CDS issued on Greece and other PIIGS members. $600 billion is scary enough all by itself.

Not that you would know it from the banks themselves, or the media, indicates Shanthi Bharatwaj at The Street:
Dividend Bump May be in JPMorgan's Future
U.S. banks are going to have so much extra capital over the 12 months, they are not going to know what to do with it, JPMorgan Chase CEO [Jamie Dimon] said Thursday, signaling investors should expect more dividends and share buybacks from the nation's second largest bank.

Ilargi: Yes, that is just completely weird, having hundreds of billions at serious risk but being flush with cash regardless, but still, come on, why make loan loss provisions when you're not required to by regulators and politicians, and you know when push comes to shove you'll simply be handed more taxpayer money? Oh, the pleasures of being too big to fail...

There are of course multiple reasons (MERS, judges come to mind) why banks don't execute foreclosure proceedings, but non-recognition of losses is certainly one of the big ones. Still, when you see in the graph above that 20-30 times more homes stay in foreclosure than are sold off, and 6.7 million mortgages are delinquent, you need to ask yourself a few questions. Like: what on earth is going on here? What happens when this ship starts leaking and refuses to sail any longer? Who's going to pay the piper then?

And what are the chances that the housing situation will improve? First of all, that's simply not going to happen with the unemployment numbers as we see them today, not even with the embellished ones the US government reports, let alone the more realistic ones that include all Americans with no or too little work.

From the same piece by Michael David White, Spring 2011 Guide of 30 Key Charts to See Before You Buy or Sell Your Home , published March 30,. here's a number of other graphs which make it all a lot clearer, starting off with White's version of the Case/Shiller index until its 2006 peak:




And then the same index, but including the 37% drop since 2006, as well as the projected trendline:




US domestic real estate has lost 37% of an estimated $22 trillion 2006 peak value, or over $8 trillion. More is lost each and every day. This loss has no reason to stop at $10 trillion. Real unemployment is sky high, as is the housing inventory. There is far too much supply and not nearly enough demand. It's not rocket science.

The only "solution" to this problem, only it isn't truly one, is that the US government starts buying up all homes for sale, or maybe even all homes, period. The Bulgaria model: socialized housing for everyone. Well, teh US has been very busy trying to achieve just that:




And the idea that mortgages are less risky these days doesn't float either. The government, through Fannie Mae, Freddie Mac and Ginnie Mae has a larger share of the mortgage market than ever before, at a time when homes are bought with more leverage than ever before. How 'bout them apples?




So once mortgage debt catches up with real home values (let's call it mark to market), and it necessarily must, as you can easily deduct from the next graph, it's the government, and that means the American taxpayers, who will be on the hook for the trillions of dollars in zombie value that has yet to evaporate. Or, actually, we should say, as we have so many times before: the value disappears, but the debt remains.




But those trillions of dollars are not counted when it comes to the debt ceiling, and the government doesn't even carry Fannie and Freddie on its books. Is proper accounting were applied, that ceiling would have to be raised close to $20 trillion, not the paltry $14.5 trillion or so that Congress says it's fighting about.

The sole comfort for Americans is that they're by no means alone. There have been real estate bubbles in many places, and the US doesn't even come close to being the worst, though we must remember that homeownership rates are higher than in many other countries:




One last graph from Michael David White, which brings us back to banks, in this case the Irish ones.




Ireland is in really bad shape. I wouldn't be surprised at all if the EU decides to let it fall, alongside Greece and Portugal, before the year is over.

Ther are many comparisons out there between the Greek debt situation and the fall of Lehman Brothers. I think there's one important difference, albeit one of many: the bond vigilantes were not involved in Lehman, at least not to a similar degree. They're very much there today, and they can smell blood in many corners. Why they would hold back now, I can't fathom.




Speaking of Ireland, Stoneleigh and I have both been invited there to attend a retreat organized by FEASTA starting tomorrow. If posting becomes a tad spotty during the next week, that's why.











CDS on U.S. Banks Stubbornly High
by Nicole Hong - Wall Street Journal

The cost of insuring major U.S. banks' debt against default is still nine times as high as it was before the credit crisis, with the cost of credit default swaps for some institutions' bonds at levels normally associated with credit ratings on the edge of "junk."

Analysts and money managers blame several factors for the stubbornly elevated CDS levels—regulatory uncertainty, declining loan volumes and concerns about how much U.S. banks are exposed to Europe's sovereign debt crisis. Some said they believed the CDS market is too bearish, others that robust earnings would bring protection costs down.

Median spreads for CDS on six major U.S. banks—Morgan Stanley, Bank of America Corp., Citigroup Inc., Goldman Sachs Group, J.P. Morgan Chase & Co. and Wells Fargo & Co.—averaged 1.41 percentage points Friday, according to Markit data. This means that it costs an average of $137,000 annually to insure $10 million of debt against default for five years.

Although these spreads have tightened since they peaked at an average of 3.95 percentage points in March 2009, they are still a far cry from their levels before the credit crisis. In January 2007, average CDS spreads at these six banks were only 0.15 percentage point.

Curiously, CDS no longer correlate to credit ratings the way they did before the crisis. Average CDS-implied ratings at U.S. banks were about one notch higher than their Moody's credit ratings before the crisis, but now are three to five notches lower. These six big banks all have solidly investment-grade credit ratings between Aa3 and A3, but four have CDS-implied ratings of Baa3, just one notch above junk bonds.

Analysts and investors are divided on how much to read into this anomaly. "It doesn't mean the companies will lose access to their deposits or to funding markets," said Tony Smith, senior director at Moody's Analytics. "This is just one metric that will capture investor sentiment at the moment."

But Jeffrey Sica, president and chief financial officer at Sica Wealth Management LLC, said he believes U.S. bank bonds to be a "horrendous investment" now, given their anemic growth since the credit crisis. "A lot of buyers are specifically focused on credit ratings as the core criteria for putting a security into a portfolio, so they're looking at credit ratings and implied credit ratings," Mr. Sica said. "Most money managers are going to avoid anything that has a potential of a downgrade."

To be sure, the likelihood of a major U.S. bank actually missing a debt payment is remote, Smith said. Even if CDS spreads were to widen to about 185 basis points--the current level for non-investment-grade CDS—default risk is not high at any of the banks, he said.

U.S. banks have been reporting steadily improved asset quality and lower leverage in 2011, Barclays Capital analyst Jonathan Glionna wrote in a research note. And earnings are rising. Capital One Financial Corp. said Wednesday that its second-quarter profit rose 50%, beating analyst expectations. Also this week, J.P. Morgan reported a 13% jump in second-quarter profit, and Citigroup posted a 24% increase.

Among the six top banks, J.P. Morgan and Wells Fargo have the tightest average CDS spreads: 0.91 and 1.01 percentage points, respectively, on Friday, according to Markit. At the other end, Bank of America and Morgan Stanley have the widest CDS spreads: 1.75 and 1.76 percentage points, respectively.

Bank of America's spreads have been driven wider by recent management changes and litigation concerns; it's not clear yet whether the bank's controversial offer of $8.5 billion to settle claims involving hundreds of billions of dollars worth of soured mortgage-backed securities will be sufficient. Morgan Stanley is also experiencing franchise reorientation and transition, which have left investors cautious, Smith wrote in a research note. Both companies declined to comment.

The direction of CDS spreads will remain unclear until Dodd-Frank reform rules, which will have an enormous impact on derivatives trading and risk hedging at banks, are completed at the end of this year. "What you need for bank spreads to tighten is more certainty," said Scott MacDonald, head of research at Aladdin Capital LLC. "As long as you don't have clarity in litigation, the economy and regulation, spreads relative to other sectors will stay wide."




European banks set for 'chaos Monday' after nine fail stress test
by Harry Wilson and Philip Aldrick - Telegraph

European banks are set for a day of "chaos" on Monday as investors and analysts derided the latest round of industry stress tests as "inadequate".

The nine banks that failed the European Banking Authority's (EBA) stress tests will have to raise just €2.5bn (£2.2bn) between them to meet their capital shortfall.

City analysts and investors said the criteria used by the EBA were overly optimistic and failed to capture the severity of the current sovereign debt crisis sweeping across the eurozone. "If the European Union could monetise the value of the credibility it has destroyed it would be richest organisation on Earth," said one major credit manager.

The detail provided by the banks is far greater than in last year's stress tests and the fear now is that with so much information fund managers and banks analysts will be able to make their own judgments on how much extra capital will be required by the 90 banks covered by the tests. "I think next week could see chaos. It's clear the tests the EBA has done are inadequate. We now have the weekend to work out what the banks really need," said one analyst at a major European bank.

Andrea Enria, chairman of the EBA, insisted on Friday the tests the organisation had performed were rigorous, though he admitted market conditions had worsened since the criteria were set. "European banks are clearly in a better position to absorb shocks," he said.

In addition to the nine banks that failed, a further 16 others need to strengthen their balance sheets to rebuild confidence in the embattled sector. Britain's lenders received a clean bill of health but five banks in Spain, two in Greece and one in Austria failed the test. Another German bank would have failed but dropped out of the tests due to a dispute over its capital. A further seven Spanish, two Greek, two Portuguese and two German lenders were among the 16 identified as perilously close to danger.

The tests were conducted on lenders in 21 countries to assess whether they could withstand a prolonged recession without suffering such deep losses that their core capital ratios – their reserves against losses – dropped below 5pc. The tests were designed to placate nervous investors and restore investor confidence in the industry. The EBA has already faced criticism for being too soft, particularly because it did not make any allowance for a sovereign debt default – as is now widely expected in Greece. While Greek bonds are trading at about half their face value in the market, the EBA only required banks to assume a 15pc loss on their holdings.

The accusations follow last year's widely-derided tests by the Committee of European Banking Supervisors. Seven banks failed the last set, but all the Irish banks passed. A few months later, Ireland had to nationalise its banking industry as its lenders faced insolvency. Despite the criticism, analysts have welcomed the EBA's insistence on a far higher degree of disclosure than the previous tests.

Spain has already begun taking steps to bolster the five regional savings banks that failed by injecting taxpayer funds, but the EBA has gone further than expected by instructing those banks that nearly failed to take remedial action. Those banks identified, thought to be the 16 with less than 6pc capital under the stress scenario, have just three months to detail how they will bolster their balance sheets and until April to "fully implement" the plans.

The EBA argued its tests were "rigorous", saying the banks would need to provision €200bn in each of 2011 and 2012 – the two-year timeframe under review. The level of provisioning was "equivalent to the loss rates of 2009 repeated in two consecutive years", it said.

However, the EBA revealed it allowed a large degree of discretion for recapitalisation plans. Although the test was applied to 2010 results, any capital raised between January and April this year was admissible, bolstering balance sheets by £50bn. A further £28bn of "existing and future actions" also helped increase overall capital levels.

The EBA said that without the £50bn of capital, 20 of the 90 banks would have failed the stress tests. "The stress tests haven't accurately compared the health of banks", said Alvarez & Marsal, the firm restruturing the estate of defunct US investment bank Lehman Brothers, in one of the first responses to the release of the stress tests. Their comments set the tone of the snap opinion that the tests would fail to comfort the market.

"The perception that the exercise was not tough enough to see many banks fail but just tough enough for a few to fail will prove hard to correct," said analysts at BNP Paribas. "It will be interesting to see what view the markets take on the EBA's findings over the next seven days," added law firm SJ Berwin.

Of the nine banks to fail, five were Spanish savings banks, or cajas. These were: Caja3, CAM, Catalunyacaixa, Pastor and Unnim. Greece was second with two banks: ATE, which had a core Tier 1 capital ratio of -0.8pc; and ATE. One Austrian bank, Volksbanken, failed the test as did one German bank, Helaba, which refused to publish the results of its test after an argument over its use of disallowed form of loss-bearing capital.




Stress-test message to banks: Prepare for possible Greek default
by Robert Peston - BBC

Probably the most significant announcement by the European Banking Authority after publishing the results of tests of the resilience of European banks - so called stress tests - was not the headline-grabbing one, to wit that eight out of 90 banks had flunked the tests (or nine, if you include the German bank Helaba which walked out of the exam in a huff at the last minute).

The shortage of capital to absorb losses in those banks, 2.5bn euros ($3.5bn; £2.2bn), is a rounding error in the context of the losses that could be foisted on the financial system if there were a chain reaction of further crises within eurozone economies

It was what the EBA had to say about banks that only narrowly passed the tests, and have significant exposure to the state debts of Greece, Ireland and Portugal, that reverberated. The EBA said it recommends that these banks be forced by their respective national regulators to raise additional capital as a protection against possible further losses from loans going bad, with a deadline of 15 October for the formulation of remedial plans and 15 April 2012 for implementation.

Now this matters, because it is the first time that an EU institution has hinted that there is a realistic possibility of default by Greece, Ireland and Portugal. The important point is that the stress tests forced banks to make provision for losses on their loans to distressed nations, such as Greece, from a change in the terms of those loans that would fall short of actual default. But if, as the EBA says, those estimated losses may not be the worst that could happen, the implication is that default is no longer unthinkable.

And the EBA is insisting that plans to cope with such a default have to be drawn up by vulnerable banks within three months. That suggests a restructuring of Greek sovereign debt - which would see a formal reduction in the value of that debt - is a more imminent prospect than official pronouncements by eurozone governments and EU officials would suggest.

As it happens, the stress-test results imply that if a default were confined to Greece, it would be painful for some banks but not devastating for the integrity of the European financial system. The results also suggest that if a reduction in the value of what Greece owes were followed by Ireland and Portugal insisting that they too should be let off some of their debts, the consequential losses would be just about bearable - though there would have to be a fair amount of help for banks from eurozone, especially German, taxpayers.

That said, the end of the wedge would become perilously thin if the tumbling dominoes of sovereign defaults destroyed investors' belief in the ability of Spain and - especially - Italy to honour their financial obligations.

So after what traders described as the scariest week of trading in European debt markets since the creation of the eurozone - with some investors not wishing to touch Italian government debt - it is increasingly clear that a restoration of confidence in the integrity of Europe's currency union probably requires a more comprehensive and far-reaching plan than just sorting out Greece.




Italian, Spanish, Irish, Portuguese Bonds Decline as Debt Crisis Spreads
by Emma Charlton and Garth Theunissen - Bloomberg

Italian two-year note yields surged the most in over a year, as the nation’s borrowing costs rose at a debt sale and contagion from Greece’s debt crisis spread across the 17-nation euro region.

Yields on notes from Ireland, Portugal and Greece soared to euro-era records, while German bunds advanced for the fifth time in six weeks as Europe’s politicians clashed over how to craft a new rescue plan for Greece involving private bondholders. Spanish and Italian 10-year bonds slumped, sending yields to the most since the euro’s inception in 1999, as borrowing costs rose to a three-year high at a sale of five-year Italian securities. France, Spain and Germany plan to sell debt next week.

“The market isn’t looking at fundamentals, it is just worried about contagion,” said Huw Worthington, a fixed-income strategist at Barclays Capital in London. “There’s been growing infection across most of the euro-region issuers and it’s hard to see what the catalyst is going to be to get confidence back into the markets with all the issuance next week.”

Italy’s two-year yield climbed 75 basis points over the week to 4.26 percent as of 4:40 p.m. in London yesterday. That’s the biggest weekly increase since the five trading days ending May 7, 2010, the week before Europe’s leaders announced a $1 trillion backstop for the euro. Yields on 10-year notes advanced 48 basis points to 5.75 percent. They reached 6.02 percent on July 12, the most since 1997.

Italian Austerity
A market selloff this week that sent Italian stocks sliding and bond yields surging led Prime Minister Silvio Berlusconi to push for the speedy passage of 40 billion euros ($57 billion) in deficit cuts to balance the budget in 2014 in an attempt to shield his country from the crisis.

Ireland’s two-year bonds plunged after Moody’s Investors Service cut the nation to Ba1 from Baa3 on June 12, saying it is likely to need a second bailout. The country’s two-year yields climbed 6.9 percentage points to a record 23.12 percent, while its 10-year bond yields advanced 1.13 percentage points.

Greek 10-year yields climbed 71 basis points over the week, while the nation’s two-year bond yields soared 2.69 percentage points. Fitch Ratings slashed Greece’s credit rating on July 13 to CCC, its lowest grade, and said that a default is a “real possibility.”

Spain’s 10-year bonds dropped, pushing the yield up 39 basis points to 6.06 percent. Spanish debt may continue to fall next week as the nation prepares to auction 5.5 percent securities maturing in 2021 and 2026 on July 21. It will also sell 12- and 18-month bills on July 19.

German government bonds have handed investors a return of 1.9 percent this year, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg, while Italian bonds have lost 2.5 percent. Greece’s debt has dropped 20.33 percent and Spain’s has returned 0.7 percent.




The AAA bubble
by Tracy Alloway - FT/Alphaville

This, we think, could well be the most important chart in the world right now:


It comes from a new report, issued by the BIS and Basel Committee’s joint forum, on the subject of securitisation incentives. But what it shows has much wider, more current implications.

According to the report, between 1990 and 2006 — the year in which issuance of Asset-Backed Securities (ABS) peaked — assets with the highest credit rating rose from a little over 20 per cent of total rated fixed-income issues to almost 55 per cent. Think about it. More than half of the world’s debt securities were, for all intents and purposes, considered risk-free. In 2006, that was nearly $5,000bn of assets.

The financial crisis had a lot to do with triple-A ratings being slapped on to subprime securities which didn’t warrant them, we know that. The report says between 1990 and 2006 ABS accounted for 64 per cent of the total growth in the amount of AAA-rated fixed income, compared with 27 per cent attributable to the growth in public debt, 2 per cent to corporate and 8 per cent to other products.

But watch what starts happening from 2008 and 2009.

The AAA bubble re-inflates and suddenly sovereign debt becomes the major force driving the world’s triple-A supply. The turmoil of 2008 shunted some investors from ABS into safer sovereign debt, it’s true. But you also had a plethora of incoming bank regulation to purposefully herd investors towards holding more government bonds, plus a glut of central bank liquidity facilities accepting government IOUs as collateral.  Where ABS dissipated, sovereign debt stood in to fill the gap. And more.

It’s one reason why the sovereign crisis is well and truly painful.

It’s a global repricing of risk, again, but one that has the potential for a much larger pop, so to speak.





Return of the Gold Standard as world order unravels
by Ambrose Evans-Pritchard - Telegraph

As the twin pillars of international monetary system threaten to come tumbling down in unison, gold has reclaimed its ancient status as the anchor of stability. The spot price surged to an all-time high of $1,594 an ounce in London, lifting silver to $39 in its train.

On one side of the Atlantic, the eurozone debt crisis has spread to the countries that may be too big to save - Spain and Italy - though RBS thinks a €3.5 trillion rescue fund would ensure survival of Europe's currency union.

On the other side, the recovery has sputtered out and the printing presses are being oiled again. Brinkmanship between the Congress and the White House over the US debt ceiling has compelled Moody's to warn of a "very small but rising risk" that the world's paramount power may default within two weeks. "The unthinkable is now thinkable," said Ross Norman, director of thebulliondesk.com.

Fed chair Ben Bernanke confessed to Congress that growth has failed to gain traction. "Deflationary risks might re-emerge, implying a need for additional policy support," he said. The bar to QE3 - yet more bond purchases - is even lower than markets had thought. The new intake of hard-money men on the voting committee has not shifted Fed thinking, despite global anger at dollar debasement under QE2.

Fuelling the blaze, the emerging powers of Asia are almost all running uber-loose monetary policies. Most have negative real interest rates that push citizens out of bank accounts and into gold, or property. China is an arch-inflater. Prices are rising at 6.4pc, yet the one-year deposit rate is just 3.5pc. India's central bank is far behind the curve.

"It is very scary: the flight to gold is accelerating at a faster and faster speed," said Peter Hambro, chairman of Britain's biggest pure gold listing Petropavlovsk. "One of the big US banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money."

China, Russia, Brazil, India, the Mid-East petro-powers have diversified their $7 trillion reserves into euros over the last decade to limit dollar exposure. As Europe's monetary union itself faces an existential crisis, there is no other safe-haven currency able to absorb the flows. The Swiss franc, Canada's loonie, the Aussie, and Korea's won are too small.

"There is no depth of market in these other currencies, so gold is the obvious play," said Neil Mellor from BNY Mellon. Western central banks (though not the US, Germany, or Italy) sold much of their gold at the depths of the bear market a decade ago. The Bank of England wins the booby prize for selling into the bottom at €254 an ounce on Gordon Brown's orders in 1999. But Russia, China, India, the Gulf states, the Philippines, and Kazakhstan have been buying.

China is coy, revealing purchases with a long delay. It has admitted to doubling its gold reserves to 1,054 tonnes or $54bn. This is just a tiny sliver of its $3.2 trillion reserves. China's Chamber of Commerce said this should be raised eightfold to 8,000 tonnes. Xia Bin, an adviser to China's central bank, said in June that the country's reserve strategy needs an "urgent" overhaul. Instead of buying paper IOU's from a prostrate West, China should invest in strategic assets and accumulate gold by "buying the dips".

Step by step, the world is edging towards a revived Gold Standard as it becomes clearer that Japan and the West have reached debt saturation. World Bank chief Robert Zoellick said it was time to "consider employing gold as an international reference point." The Swiss parliament is to hold hearings on a parallel "Gold Franc". Utah has recognised gold as legal tender for tax payments.

A new Gold Standard would probably be based on a variant of the 'Bancor' proposed by Keynes in the late 1940s. This was a basket of 30 commodities intended to be less deflationary than pure gold, which had compounded in the Great Depression. The idea was revived by China's central bank chief Zhou Xiaochuan two years ago as a way of curbing the "credit-based" excess.

Mr Bernanke himself was grilled by Congress this week on the role of gold. Why do people by gold? "As protection against of what we call tail risks: really, really bad outcomes," he replied.
Indeed.




QE3 Guaranteed to Fail
by John DeFeo - The Street

in
Whether or not the Federal Reserve opts to make more large-scale asset purchases (colloquially referred to as "QE3") remains to be seen -- but I suspect that Ben Bernanke himself is beginning to realize that QE3 is guaranteed to fail.

Bernanke told Congress on Wednesday that the Fed is ready to provide additional monetary stimulus should the U.S. see adverse economic developments. On Thursday, Bernanke qualified his statement, saying that the Fed is "not prepared at this point to take further action."

Let's analyze the situation:

So What Exactly is Quantitative Easing, Anyway?
Quantitative easing is when the United States' central bank, the Federal Reserve, buys U.S. Treasury bonds.

  • Treasury bonds are a future obligation of the United States, paid out with Federal Reserve notes (dollars).


  • Federal Reserve notes are a current obligation of the United States, redeemable for goods and services.


If the Federal Reserve purchases bonds directly from the United States Treasury, they are exchanging dollars (current obligations) for future obligations. This is inflationary if the amount of obligations (money) is increasing faster that the amount of capital (goods, services, products and ideas).

However -- the Federal Reserve doesn't buy bonds from the Treasury, it buys them from "primary dealers." Primary dealers are a network of banks (including Goldman Sachs, JPMorgan Chase and Citigroup) that are obligated to buy bonds from the U.S. and serve as a trading partner with the Federal Reserve.

The triangular relationship between the U.S. Treasury, Federal Reserve and major banks can be a head-scratcher -- but make no mistake, this relationship is making some people rich (we'll touch on this point later).

Criteria for the [Long Term] Success of Quantitative Easing
  1. If banks are facing a liquidity crisis -- and because of this fact -- are unwilling to lend to qualified borrowers.


  2. If qualified borrowers want to borrow money -- and most importantly, are willing to invest in entrepreneurial ideas that will provide a return on invested capital.


Quantitative easing could hypothetically improve the U.S. economy, for the long term, if both of the above criteria are met. Unfortunately, this is not the reality of our situation.

Thanks to taxpayer-funded bailouts and the first two rounds of quantitative easing, major U.S. banks are adequately reserved (in other words, they are liquid). The problem lies in point No. 2: Statements from major banks suggests a drought of qualified borrowers.

Creditworthy individuals (however small this segment of the population might be) are not borrowing. We can blame the uncertainty of tax policies, the staggering unemployment figures or the overall fragility of the economy. But at the end of the day, creditworthy individuals aren't borrowing.

The banks don't need further reserves -- the people need confidence. And confidence comes from the leadership, foresight and conviction from our elected officials, not the Federal Reserve.

Is Quantitative Easing Helping Anyone?
Yes, unfortunately.

Quantitative easing is providing major banks with arbitrage opportunities (risk-free trading profits). Goldman Sachs can buy a bond from the Treasury on Monday and sell it to the Federal Reserve on Tuesday (at a profit) -- the blog ZeroHedge has named this game "Flip That Bond."

Quantitative easing is also helping elected officials shirk their duties to the American public -- in a sense, enabling politicians to spend money the country does not have (or make good on promises that should be broken). Forbes' William Baldwin illustrates this concept beautifully.

"The government wants to spend $1,000 it doesn't have. So it sells a bond. The [ultimate] buyer is the Federal Reserve. The Fed pays for the bond with some folding money. The Treasury spends the $1,000 on farm subsidies or whatever.

The Fed makes a show of treating the $1,000 bond as an investment. It collects $40 in interest from the Treasury. But this is a charade. The Fed declares the $40 (after some overhead costs) as profit and sends the profit right back to Treasury. In reality, the interest payment never left the Treasury building.

When the dust settles, this is what has happened. The farmer has $1,000 of cash. The government did not get this cash by collecting taxes. It got the cash by creating it."


Has Quantitative Easing Ever Been Tried Before? If So, Has It Worked?
Yes -- and to the second question, I don't see any evidence it has worked.

In 1961, the Fed embarked on a similar strategy known as "Operation Twist." But Twist was dismissed as a failure by most, while others blamed the lack of efficacy on the small scale of the operation.

Quantitative easing was attempted again -- on a larger scale -- by Japan in 2001. More than a decade later, Japan has not escaped its problems, and Masaaki Shirakawa, governor of the Bank of Japan, stated that if "short-term stimulative policy measures" are the only cure, then "[policy makers] face a risk of writing the wrong policy prescription."

Unfortunately, some prominent U.S. economists (notably, Larry Summers and Paul Krugman) don't view this history as a cautionary tale, instead suggesting that stimulus only fails when enough of it wasn't done. To this point, I wholeheartedly agree with Mike "Mish" Shedlock's statement, "The disgusting state of affairs is that bureaucratic fools in the EU, US and everywhere else, all believe the cure is the same as the disease if only done in big enough size."

What's the Worst Case Scenario for the Economy
The worst-case scenario is that the nation's banks, under political pressure to lend (see Masaaki Shirakawa's statement above), begin making loans to corporations and individuals that are not creditworthy. Of course, this is exactly how the financial crisis came to fruition, and like before, will end in tears for the greater American public.

Is Ben Bernanke the Problem
I do not think Ben Bernanke is evil or stupid (nor do I think he is insane), rather, I prefer to think of him as a kindly-yet-timid doctor prescribing an obese patient antidepressants. The doctor knows that only the patient can solve the patient's problems, but the doctor lacks the courage to tell the patient, "Go on a diet, get some exercise and get the hell out of my office!"





Europe Makes Rating Agencies Look Good
by Floyd Norris - New York Times

Mortgage securities destroyed the reputations of credit rating agencies. Could sovereign debt restore them?

When the housing market crumbled, the agencies — Moody’s, Standard & Poor’s and Fitch — came across as incompetent, conflict-ridden and craven. They had handed out Triple-A ratings as if they were party favors, based on mathematical models that turned out to be absurdly overoptimistic. They did not do the work to notice that many securities were stuffed with mortgages of far lesser quality than advertised. They were paid for the ratings by those who created the bad securities.

Now the agencies are under attack again, but this time they look noble. If European politicians have their way, the new image could be one of persecuted truth-tellers.

Moody’s has recently led the way in cutting the ratings of European countries to junk status. It followed S.& P. in cutting Greece’s rating, but has led in recent days in cutting first Portugal’s and then Ireland’s. It pointed to the fact that Greece might be allowed to default as a reason to worry about other countries. A reasonable political reaction would be to say that the negative opinions would be proved wrong, and then to take the actions needed to avoid defaults. Unfortunately, Europe has no real idea how to accomplish that.

Instead, Europe has chosen the strategy laid out 90 years ago in a novel by Ring Lardner, in which a father had a ready answer for an unwanted question: “ ‘Shut up,’ he explained.”

“We should ask ourselves,” said Michel Barnier, the European commissioner whose bailiwick includes financial markets, in a speech this week, “whether it is appropriate to allow sovereign ratings on countries which are subject to an internationally agreed program.”

Coming from the man with primary responsibility for policy decisions on rating agencies in Europe, that sounds very much like a threat. He was echoing a suggestion voiced in March by Christine Lagarde, then the French finance minister, after Moody’s downgraded Greek government bonds, already rated below investment grade, to a lower class of junk. “I am personally convinced,” she told an interviewer, “that credit ratings agencies should not intervene and should not grade countries which are working with the European Commission, the International Monetary Fund and the E.C.B.,” the European Central Bank. Ms. Lagarde now runs the I.M.F.

The Moody’s report that so alarmed Ms. Lagarde said, “There is some possibility that private creditors would be expected to bear some losses” in Greek bonds. Now it turns out that the I.M.F. thinks Moody’s was right, according to a staff report issued Wednesday. Over all, the rating agencies have done a decent job on sovereign debt. “All sovereigns that defaulted since 1975 had noninvestment-grade ratings one year ahead of their default,” the I.M.F. reported last year.

The power of the rating agencies grew in recent decades because government regulators often found it easier to incorporate the ratings in other rules. Worried about the credit quality of securities owned by money market funds? Require those securities to have high ratings. Trying to decide how much capital banks need to offset the risk of differing loans? Tie credit rules to ratings.

Now there is general agreement that regulators should stop requiring the use of ratings, and thereby remove any official imprimatur from the agencies. But that is running into resistance from bank regulators and banks, particularly smaller ones, in both Europe and the United States. They don’t want to have to do their own credit research, and say that in some cases it would be too complicated.

In the past, it has not just been perceptions of expertise that caused the agencies’ opinions to seem important. The agencies sometimes were allowed access to confidential corporate information, a practice that should be banned. If they can know something, so should anyone else interested in the security. There is a certain chicken-and-egg question that politicians might consider. Are Europe’s finances a mess because the rating agencies spoke up, or did they speak up because the finances are in disarray? That answer is obvious.

Greece’s prime minister, George Papandreou, rightly said this week that European leaders were guilty of “taking decisions that in the end prove too little, too late, to convince markets.” Of course, Greece’s own inability to collect taxes and control its budget deficit has more than a little to do with the failure to convince markets.

What seems to anger Mr. Barnier the most is that the agencies are messing in areas where international judgment has already been applied. “These states are under international programs,” he told me this week. “These efforts may be jeopardized by ratings coming out of nowhere.” He added, “The problem is one of democracy.” Europe already requires that countries get 12 hours advance notice of any reports, to give them time to argue that facts are incorrect. (Is it conceivable that some finance ministry has used the time to tip off favored traders about what is coming? Yes.)

The European Union is considering lengthening that period to three days. It also has discussed finding ways to punish agencies for “incorrect ratings.”

For better or worse, the rating agencies sometimes have little influence on markets. In 2004, Standard & Poor’s cut Greece’s rating a notch, although it was still investment grade. Among euro countries, S.& P. wrote, “Greece has the weakest public finances, whether measured in terms of debt ratio or budget deficits.” The analysis was hardly prescient — it said being in the euro zone “shields Greece effectively from potential pressures related to the balance-of-payments” — but the caution was ignored by the market. In those days, Greece had to pay virtually the same rate as Germany when it borrowed money.

There is an attitude in Europe, particularly strong in France, that governments know best, particularly in times of stress. I talked to Mr. Barnier after a meeting in New York of the monitoring board that oversees the group that supervises the International Accounting Standards Board. At that meeting, he called for “a better balance” at the I.A.S.B. between the interests of investors and the need for “financial stability.”

European governments are having a great deal of trouble accepting the idea that they could possibly not be deemed creditworthy. But the public infighting within Europe over how far a bailout should go, and whether investors should have to pick up part of the cost, has clearly worried investors. Moody’s cited that in downgrading both Ireland and Portugal to junk status, but of course traders had noticed the fights without any help from rating agencies.

It should be noted that politicians can get a bit overwrought on this side of the Atlantic as well. “Credit rating agencies have no authority to dictate terms to Congress,” Representative Dennis Kucinich, an Ohio Democrat, declared after Moody’s said Wednesday that the current budget impasse could lead to a downgrading of the United States’ rating. “Moody’s and its compatriot S.& P. were a direct cause of the near collapse of the economy of the United States. That industry should be subject to greater oversight, regulation and fundamental overhaul,” he said.

To politicians, markets can be immensely frustrating. They are told the markets demand this or that, only to be told that it turns out the markets want more. Markets can be fickle and unreliable, punishing companies — or countries — for the same things that they seemed to love only months or years before. But telling the rating agencies — or anyone else — to shut up will not accomplish anything. Unless, of course, it enables rating agencies to appear to be successors to the boy in the story of “The Emperor’s New Clothes.” No doubt they would greatly prefer that reputation to the one they now have.




Obama Eliminates Warren as Consumer Head
by Mike Dorning and Carter Dougherty - Bloomberg

President Barack Obama has chosen a candidate other than Elizabeth Warren as director of the new Consumer Financial Protection Bureau, according to a person briefed on the matter.

The president’s choice is a person who already works at the consumer agency, the person said today. Obama may make the nomination as soon as next week, another person briefed on the administration’s plans said. The people, who spoke on condition of anonymity because the process isn’t public, didn’t give the name of the choice.

Elizabeth Warren, a Harvard professor, was appointed last fall by Obama to set up the consumer bureau until a director was named. Warren previously was head of the congressional watchdog panel overseeing the bank bailout.

Raj Date, a top deputy to Warren at the consumer bureau, was on a short list of candidates to become director, Bloomberg News reported last month, citing a person briefed on the process.

The consumer bureau, which is to begin formal operations on July 21, was established by the 2010 Dodd-Frank financial- regulatory overhaul to fill what lawmakers said was a gap in oversight of products whose abuse contributed to the 2008 credit crisis, including mortgages and credit cards.

The bureau’s director requires confirmation by the Senate. After 44 Republican senators announced in May that they wouldn’t vote to approve any candidate to run the bureau without changes in its structure, analysts said the White House might have to resort to a temporary appointment during a congressional recess. Sixty of the 100 senators are effectively required to vote for a nomination due to procedural rules.


136 comments:

TAE Summary said...

What about Bob:

Bob said:
* Invest in lipstick, nylon stockings and odor eaters
* Stocks will go up long term
* The market is as firm and buoyant as a pair of silicon implants in situ
* A stock market crash would please TAEers
* The love of money is the root of all virtue
* Comfortable retirement is the sine qua non of our existence
* Humans seek patterns; TAE provides patterns but does nothing for your itchy back
* My S&P cup runneth over; Surely goodness and mercy will follow me all the days of my life
* Civilization has always been messy; There are no good old days, just a shiny, golden future
* Bad things happen; Just make sure they don't happen to you
* There's nothing better than being trapped like lemmings in shiny metal boxes
* Sysiphus was engaged in God's work

The Anti-Bob said:
* Bob is Cheryl with huevos
* Bob blathers
* If Bob would post on TOD instead of TAE, the average IQ of posters on both sites would go up
* Bob is married to a croupier and his mistress is a bigger fool
* Bob is a lemming
* Bob is a DOD avatar
* Bob is a rat in a maze
* Bob doesn't factor in nuclear disaster, climate change, European dis-union or American insolvency
* Bob doesn't realize billions will die in the coming collapse
* Bob is a cog with dissonance; He deserves a raise and a fools-gold-plaited watch
* Bob is a people like Bob
* Bob is measured in the balance and found wanting
* Bob is actually Alex Jones on quaaludes

America. Her heart is full; her torch is still golden, her future bright. She has arms big enough to comfort and strong enough to support, for the strength in her arms is the strength of her people.
- Ronald Reagan

Ash said...

Skilo (from last thread),

"If you think the Constitution is being followed as written and intended, I suggest you actually read the document itself and consider what it actually says."

No thanks, I've done that enough times in the last few years. Let me ask you, how many court decisions have you read interpreting the provisions of the Constitution? How closely have you followed the legal reasoning of various SC justices in their opinions over the years?

"Nowhere does the Constitution say that the court can nullify the words in the Constitution.

Or that Congress can nullify the Constitution."

You are failing to understand that the Constitution's lack of very specific prohibitions, including the one you mention, serves to do the opposite of what you argue it does (protect the people from the oppressive tactics of big capital OR the central state). Less than 40 years after the Constitution was drafted, the SC unilaterally took on the role of being its final arbiter in Marbury v. Madison. Through this role of final interpretation, it has very clearly "nullified" the plain meaning of the words in the document, to the extent they had any.

I can't get in the heads of the people who drafted and voted for the wording, and I'm not arguing that SC chose to interpret the words in a way that is obviously incorrect. In fact, I am saying it was just the natural evolution of a complex socioeconomic system that led these documents and institutions to develop the way they did.

"In fact, the Constitution LIMITS Congress' authority and the court's authority - exactly opposite of what you suggest!"

Actually, the main articles of the Constitution lay out the governing structure of the country and GRANT the executive, Congress, and the federal judiciary various powers over the states and people. The BOR, which was only added as a last minute "compromise" to get it ratified, and subsequent amendments limit the government's power, and in a very general way that makes it all but inevitable that they will be diluted over time.

"They are criminals who have subverted the Constitution, the same way they have subverted the Federal Reserve Mandate."

The Federal Reserve Act itself is a great example of how the general and alleged "principles" of the Constitution can be easily subverted and that subversion will be sanctioned by the courts if the executive so desires (and what's more important to maintaining the status quo than a central bank?)

Addendum:

I know the professed ideals of the founding fathers very well. That was the subject of perhaps the most boring course I have ever taken, "The Founder's Constitution". Well, that, and "Commercial Paper" (the law of US negotiable instruments, aka checks...). The issue is whether those ideals were furthered by the codification of the US Constitution, which served to centralize economic and political authority away from local/state governments.

Given your fundamental ideological disagreement with any form of Marxist theory, I doubt we will ever see eye to eye on this one. BTW, have you been frequenting the FOFOA forum recently? I noticed you have been throwing out the word "sophism" or "sophistry" a lot... ;-)

rapier said...

re: "don't let's forget that they are very much part of the political and banking system,"

Which is why I believe they are now on the attack against sovereign debt. In my conception the plan has always been to bankrupt Treasuries, and therefore governments, in order to further de legitimize them. Government is losing its primacy as the most important organizational model, after 10,000 years. (OK sort of over the top I admit) The emergent organizational model is the modern corporation.

The tricky part is that it is government which creates corporations through law. Some vestige of government will always continue to exist to enforce and extend those laws.

The relentless move to enshrine the person hood of corporations serves the same purpose. A favorite trope of the right is that of the 'sovereign citizen'. Of course it was the governments under kings and then various republican forms which claimed sovereignty. The movement to claim ultimate sovereignty for individual citizens is mostly a egotistical exercise for individuals but for corporations it is something else. For corporations are now seen to have a sovereignty of their own. GE and C are in many ways seen by the public as sovereign, more than government. Job well done.

eeyores enigma said...

Late '70s I moved to South Lake Tahoe to peruse my career as a professional skier.

I worked nights at Harrahs Casino in the carpool, driving shuttle, parking cars, and I even got to drive the Rolls-Royce Silver Cloud on occasion.

Back then Harrahs had a policy where anyone who approached an employee with a hard luck story of loosing it all would be directed to the Carpool offices and garage to receive a free full tank of gas to get back home.

Frequently on the weekends there would be quite a line. We took ID so no one could work it as an angle.

During the 3 years I worked there I was propositioned in every way humanly possible… from both male and female, even offering the services of their mate. A friend of mine bought a classic mustang car for less than a tenth of the current value. Jewelry was the most common deal. Sure they could get a little better deal at a pawn shop but that meant driving to Carson city. They invariably talked about how they just needed a little bit of cash so they could go back in and get even then they would buy it back. None ever did. By the way these were not all lowlifes but mostly regular middle class folks with decent cars and dressed well.

Ultimately this became so depressing to me I had to get out.

I can't help but think back to these experiences when I read about all this "raising the debt ceiling" crap.

Depressing.

Bigelow said...

http://www.washingtonpost.com/blogs/ezra-klein/post/thirty-years-of-the-debt-ceiling-in-one-graph/2011/07/11/gIQAEJdEGI_blog.html

Ash said...

Skilo (from last thread).

"Actually, the powers that were granted were quite limited, as I stated, and ALL OTHER POWERS were given to the people or the states.

If you disagree that these powers were limited, do list the explicit powers given to the Central State by the Constitution."


Hmmm, let's see here. A1 of the Constitution sets out the governing structure for Congress, and Section 8 provides the following explicit powers to Congress:

Section. 8.The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow Money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

To establish Post Offices and post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries (the genesis of federal patent law);

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;


To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; — And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

el gallinazo said...

Ilargi

Hat off (well actually a baseball cap) for a very impressive and educational essay today.

TAE Summary

Brilliant! You haven't lost your edge.

eeyores enigma

It could be worse. These people could be hooked on buying truckloads of classical CD's as is Gabor Maté, a fate even worse than casino gambling :-) By the way, Maté, who has treated Vancouver's addict population for the last 20 years, demonstrates through an in depth lay analysis of the endorphin, dopamine, and pre-frontal cortex systems, that non-substance addictions function almost identically to addicting substances in terms of brain chemistry and activation. He also demonstrates that the addictive personality is created by intense stress and deprivation in utero and childhood, particularly sexual abuse. Without these factors, substance addiction rarely occurs. He uses as a case in point, the use of heroin by US grunts in Vietnam. Daily use was estimated at 20% of combat troops. Yet when these soldiers returned to their lives back in the USA, the addicted fraction quickly fell to the percentage of the population at large.

Ash said...

Cont...

Skilo: "Now compare that list to what the the Central State actually claims are within its powers."

I actually see a wide range of powers given to Congress in Article 1 Section 8, with perhaps the most crucial power being implied in what are called "the necessary & proper clause" and the "interstate commerce clause", which essentially allow Congress to legislate in any way that helps it carry out its delegated functions or on any issue that has even the slightest relation to commercial activity between states. (don't get me started on the judicial interpretations of the CC).

It is clear that the Constitution itself provides the foundation for which oppressive policies can be implemented by all three branches of government, who are supposedly checking and balancing each other, but have neither checked nor balanced anything for the benefit of the people. Yes, the centralized power dynamics have obviously gotten worse since that time, but the reasonable conclusion is that the progression of power has found refuge in the vague words of the Constitution, rather than it being some fundamental obstacle to their oppressive policies.

Now, that was just Congress. While Article II and III are somewhat smaller, A2 still gives the President and his executive complete dominion over matters of foreign policy and strategic military decisions. Congress power to "declare war" has been rendered meaningless, as every US war since WWII was not officially declared. A3 basically says there will be a Supreme Court, who can decide to establish more inferior courts, and that the Constitution and federal laws and treaties are to be considered the "supreme law of the land", trumping any inconsistent state laws.

The above granted powers can be in no way characterized as "limited". That's why the anti-federalist bunch were very hesitant to ratify it without additional codified protections of citizens from their government. They finally got the Bill of Rights, which was written in a manner that political and judicial authorities could find almost any meaning they want within the words.

That leaves us with Constitutional Articles which created the most centralized political machine known to man, and the Amendments which are so filled with exceptions, and exceptions to exceptions), that their meaning have been rendered the political/legal equivalent of securitized derivatives in the complex field of finance. Incomprehensible for the layperson, and a Goose that never stops laying golden eggs for the super-wealthy class.

SecularAnimist said...

""Some vestige of government will always continue to exist to enforce and extend those laws. ""

Of course, the nation state's premise, is to protect the property of the wealthy from the multitude of propertyless.

It's funny to me that all the propertyless, or those of little property, are concerned about the sovereignty of the nation-state.


For Skilo

Area Man Passionate Defender Of What He Imagines Constitution To Be
http://www.theonion.com/articles/area-man-passionate-defender-of-what-he-imagines-c,2849/

ESCONDIDO, CA—Spurred by an administration he believes to be guilty of numerous transgressions, self-described American patriot Kyle Mortensen, 47, is a vehement defender of ideas he seems to think are enshrined in the U.S. Constitution and principles that brave men have fought and died for solely in his head.

I. M. Nobody said...

TAE Summary,

Another fine example from the resident humorist. And due to your fine work all can now relax in the knowledge that Bob's your uncle. You did not for some reason make note of Bob's admission to being a member of the Silicon Valley Tribe. A mostly peaceful band of post-agricultural despoilers of landscapes.

Many years of dancing in the pale moonlight with members of this tribe left me with some knowledge of their ways. They are remarkable for extravagant displays of hubris and arrogance. Possibly due at least in part to all the toxic wafer processing chemicals they once upon a time drained into wells drilled into the valley floor. Despite the vast numbers of them that routinely ride the kerosene hawks to places far and near, most of them maintain a very low-level of understanding of anything happening beyond the borders of their happy hunting grounds.

The Silicon Valley Tribe is culturally and religiously diverse. While almost every religion on the Terra Planet is openly tolerated. The tribe is almost universally subjected to pressure to worship the Goddess of Progress.

Frank said...

@IMN IMO, the twist that made the silicon valley tribe's moment in the sun was an insight by the sociopaths in charge that had escaped all but a very few such sociopaths before.

In previous technological revolutions, the sociopaths told their geeks "You're a flunky. Be grateful we pay you twice what we pay the guy that sweeps the floor."

In silicon valley they said "You're a wizard. Work your magic for us and we'll give you enough money to buy any toy you ever want, and even get laid."

It cost the sociopaths 10% instead of 2%. But magic was worked. And 90% of 2 billion is a lot more than 98% of 1 billion.

Metanis said...

-
Geithner, however, has said that Congress could give the federal government special authority to borrow money to make Social Security payments after Aug. 2.
-
It's really obvious that rules and regulations that stand in the way of "extend and pretend" are going to be ignored or blatantly violated without consequence.

After all, what public official wants to be the one responsible for the entire house of cards crumbling? You can hear their rallying cry from here, "Not on my watch!".

So long as "most" people play along then the game can continue. The debt limit theater just confirms the willingness of all the actors to keep on acting. Even the dire warnings of default and catastrophe are part of the script.

On August 3rd I fully expect the US Treasury will push the transactions to people's accounts that represent their Social Security payments. This will take place regardless of Congressional activity or lack thereof.

I'm convinced the game could go on indefinitely so long as the big guys aren't getting hurt. Who's going to call the bluffs when everyone is bluffing?

If you are Stoneleigh and Ilargi how can you predict an outcome for a situation that is becoming more illogical and illegal by the day?

It reminds me of the games of Monopoly we played as kids where we made up the rules as we went along.
*
And the Banker always won!
*

ogardener said...

Old & In The Way - Midnight Moonlight

Wyote said...

So, it turns out that Elizabeth Warren's appointment was held in reserve and given up at the end to garner a few crucial debt limit extension votes.

I suppose she should have known better then to enter the game with a pistol. But we cheered hopefully anyway. How used she must feel.

It may be the last we see of her, and that's a shame.

omega1alpha said...

Living and surviving in the world of global finance has taught me one thing, it ain't over until the fat lady sings. Guess what? The fat lady will continue to sing until certain goals are met. It's nice to see a mess of you preparing, but don't kill yourself worrying. Sound logic will not help you out here. I applaud TAE, but you can't use logic to explain this madness/religion. You are all serfs and you adore your serfdom. Can't get enough of the crack...I mean goodies. The moral ones got out a long time ago. Humanity is a failed species. Too bad.

"It's a club and you ain't in it." - George Carlin

seychelles said...

Inflation is the disease.
Deflation is the cure.
Social mood is the lever.

Impatient souls who are dismayed by current headlines will find some consolation by reading
Prechter's 7/16/11 Elliott Wave Theorist,
"Gathering Storm Clouds of Deflation"
(subscription required).

Metanis said...

-
The study in the journal Science shows the remarkable ability of the natural world to correct for human pollution and errors.
-
I thought this was interesting especially with reforestation taking place in many blighted cities like Detroit.
-

SecularAnimist said...

Einstein back in 1949:

"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights."

http://monthlyreview.org/2009/05/01/why-socialism

Patrick said...

el gallinazo

Interesting post to me personally, apologies to everyone else for being off topic.

I knew Gabor Mate at UBC very well as we were in the same small group of "radicals" at the time. I've run into him once since.

The reference to US soldiers in Vietnam is correct but perhaps of a much greater scale.

I interviewed Harvard psychiatrist Dr. Norman Zinbeg for CTV'S W-5 in 1973. He was sent by the US Army to Vietnam and did a comprehensive study of drug use there. As I recall up to 90% of US soldiers regularly used heroin, mostly smoking it. But when they returned stateside most simply stopped using. Zinberg was at the time working on his hypothesis that drug addiction was an interaction of the particular drug, the mental outlook of the individual and the social setting or environment they found themselves in. Zinberg eventually published his theory as a book: Drug, Set, and Setting in 1986.

Rosan said...

Question:

TAE recommends getting out of debt. Is all debt equal? For instance, what kind of trouble would having a few hundred dollars of credit card debt cause?

I had the thought to max out my credit card buying things like water filters, medical supplies, homestead equipment, etc. My credit card billing address is in the US and I live in Japan, does that matter? Also, someone told me that unpaid credit card debt is dropped after 7 years. Thoughts?

scandia said...

@Metanis, I have a friend who plants trees. She has been doing so around town for years.In her spare time she packs up small tree seedlings in her back pack and gets on her bike.( Doesn't own a car) She plants along laneways/ back roads, abandonned industial sites, etc, basically whereever there is a spot to plant without infringing on private property. She hasn't waited for legislation, she saw the need/solution and got going . A remarkable young woman who works from home and home schools her 3 children etc.
I live in a heavily treed neighbourhood and am ever grateful to those who lined the streets with shade trees long ago. I feel pity for those living and baking out in the burbs without shade. Trees have been planted in some of the burbs but it will be many years before those neighbourhoods green up. Hopefully before the builder crap housing deteriorates.
Re Ilargi's post on real eastate it would be interesting to note if foreclosures are more prevalent in treeless tracts? I would hazard a guess that they are.
Recently a neuroscientist was saying that looking at trees/green affects the deveopment of brain synapses. Pine trees especially assist in the development of some fine networks.In other words, take the babies to the park!
There is more going on than we know eh?

FB said...

@ Scandia

Are you familiar with this:

http://www.perso.ch/arboretum/man_tree.htm

and the original French:
http://www.perso.ch/arboretum/pla.htm

There are some very nice editions with beautiful drawings.

Ciao,
FB

Robert said...

Re TPTB: I have often pointed out the extreme measures used in Usistan to control opposition.

We are not much better than our neighbours to the south. The treatment of protestors at the G-20 in conference in Toronto was just about as bad: http://veetle.com/index.php/channel/view#4ca21d8eaba21

The action starts at about 1hr20 min into documentary.

rcg1950 said...

IMNobody, re Goddess of progress.

There was a time not so long ago when this was a faith in full, not the sluggish, bad faith that so many drag along with them now. Take a look at the images in the link below. I think Ma Bell and the ad agencies of 1910 were completely sincere. Now their sentiment is quaint at best from our standpoint 100 years later having come to see the limitations of Progress. But for them it was a religion, and it guided their projects and constrained their actions. What we wouldn't do now to have a socially operative 'religion' that constrained unlimited self-interest and criminality?

our former faith

I. M. Nobody said...

@ rcg1950

I will not embrace the idea that ad creators were ever much devoted to truth. Their job has always been to embellish it.

I do agree that belief in Progress was for many decades widely held. And why not, life was improving almost everywhere in the capitalist world. Until the other side of Mr. Hubbert's Peak came into view in the early 1970's. After that the Progress Religion found its most devoted followers retreating to a few bubble-wrapped regions like Silicon Valley. Places where the Tribal Shamans flogged it for all it was worth.

All I was trying to say in that comment was that Bob may not be a sock puppet. In the Silicon Valley Tribe, it is easy to find people who actually do believe that kind of bullsh*t. The vast middle part of the country, where I currently live is practically unknown to them. They like to call it flyover country. They do not know that their "progress creating products" are actually contributing to regress in most of the world.

I. M. Nobody said...

Sara N. has returned from wherever she goes and brought a present in the form of a litany of things that the purveyors of progress have accomplished. Published by Kay McDonald (formerly known as Kalpa) on her blog, big picture agriculture.

jal said...

Re: Debt celling

The US gov. must reduce its CASH FLOW by 44% if it is to achieve a balanced budget.

Laying off 10 gov. employees, ( that includes people making tanks for the military), that draw 60% of their income in U.I. would only reduce the cash flow by 40% or 4 people.

Laying off 10 gov. employees that take retirement at 80% of their income reduces cash flow by only 20% or 2 people.

Laying off 10 gov. employees that get a golden handshake raises the the cash flow.

Laying off gov. employees means that some towns will be decimated.

Greece here we come.

jal

scandia said...

@FB...thank you so much for the moving and inspiring story of the life of Elzeard Bouffier. It opens a door of life giving possibilities for those pondering change. That he just kept to his vision through 2 world wars is beyond remarkable.
Perhaps things are not as hopeless, we not as helpless as fear would have us accept?

jal said...

If you are a new and don’t understand finance, then read the following.

http://www.washingtonsblog.com/2011/07/we-have-forgotten-what-ancient.html

We Have Forgotten What the Ancient Sumerians and Babylonians, the Early Jews and Christians, the Founding Fathers and Even Napolean Bonaparte Knew About Money

Wyote said...

@ rapier,
Nice to see you commenting again. Obviously you're a reader of David Korten.

From: When Corporations Rule the World
(1995) " The corporate libertarians tell us that the process of economic globalization is advancing in response to immutable historical forces and that we have no choice but to adapt and learn to compete with our neighbors.It is a disingenuous claim that belies the well organized, generously funded, and purposeful efforts by the cloud minders to dismantle national economies and build the institutions of a global market."

"..and in the darkness, bind them"

Eric Lilius said...

@Scandia

I was also moved by the story of Elezard Bouffier. I was sad to learn that it was an allegorical tale. However, the story has inspired others, Wikipedia has some details
https://secure.wikimedia.org/wikipedia/en/wiki/The_Man_Who_Planted_Trees

I. M. Nobody said...

jal,

A great link to Washington's blog. Everyone should read. Here is what I thought was THE money quote.

"If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."
- Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta


The social dementia implied in that quote is staggering. Those of us who are debt free and continue to elude them are seen as having no value to them, except to stand in as the elusive pot-o-gold at the end of a rainbow. Those who fell prey and helped them balloon their balance sheets are viewed as roadkill. Is anything other than a dystopian future possible? I think not.

The larding on of additional sovereign debts seems to be the only thing keeping the spectators in the stands. Many come here asking when it all goes to hell. Perhaps the closest thing to a reasonable answer would be to say, it all goes to hell the day that the kicker winds up for a mighty swing and misses the can.

Loveandlight said...

I have yet to read the entry from "Washington's Blog", but just a brief perusal makes me think it's important enough to merit a working hyperlink.

seychelles said...

Also good from Washington's Blog:

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."
- Napoleon Bonaparte

Albert E was pretty hard to fool too, even far afield from theoretical physics.

Monsieur Bouffier had the right idea, especially in conjunction with throttling the baby machine.

skilo said...

@Ash,

My paradigm is that the Founding Fathers understood the biggest threat to a nation's people was a mega Central State, specifically because they understood criminals would eventually take it over (check), legalize their crimes (check) and use their enforcement arm to loot society dry (check).

Of course, the people who wanted to do EXACTLY this began working to subvert this concept and completely subverted the Constitution.

And one of their methods was to miss educate people as to what the whole revolution thing was about and to make Constitution classes boring. ;-)

As for Marxism, I haven't done much study on it, so I couldn't really tell you what it is from first hand research.

I do believe, however, that what is called "communism" isn't anything remotely close to the dictionary definition of same.

Rather, they are different forms of oligarchical dictatorships that severely oppress the people (same as we see in corrupted America, just a different form and a different implementation - at least for the present time).

This isn't an "ideology," Ash, it is thousands of years of human HISTORY!

It is reality. If you disagree, please list all the nation states with a large Central State whose "authorities" benevolently cared about their "subjects" equal to how the rulers cared about themselves.

Once SA was asked to do this, he all of a sudden had to admit that tyranny was the rule and that it was obvious to search one's nation for the expression of said tyrannical rule.

skilo said...

@Ash,

People are selfish, power corrupts the selfish and absolute power (and someone must always wield it) corrupts the selfish absolutely.

Study the research on what power does to people... and how people easily will fall in line with the evil... it is pretty compelling.

http://en.wikipedia.org/wiki/Milgram_experiment

As far as moral code goes, though, I suspect we have very similar views.

I identify with the common person, I like under dogs, I dislike tyrants that oppress people, I despise the systems that oppress and the actions of the people who create such systems.

I'm for a safety net of some kind and I'm for positive ways to help the needy, vs training them to be dependent on a system that will leave them out in the cold one day.

I don't spend time on FOFOA's forum, although, I did visit there some time back when a post here challenged his view, which, BTW, didn't resonate with me.

I use the word "sophist" and "sophistry" when I think it applies.

So many people use logical fallacy in place of rational argument... and what word describes people who do that better than "sophists?"

The point is to highlight the various logical fallacies and the person using them in preference over actual rational logic.

BTW, I wish people weren't selfish. I wish policies weren't instituted to purposeful murder millions of people via starvations. I wish mass murderers didn't always find their way to power. I wish, I wish, I wish, but I now understand that wished don't change the tyranny of a large Central State anymore that they can make hot air sink relative to cold air.

PS - I'm much more complex than the predetermined "boxes" that the social engineers have created to divide us while they conquer us. Everyone is.

skilo said...

@rapier,

I think you misconstrue what is going on here. The establishment (controlled by Big Finance Capital parabolic debt money crooks) will sell the people that national government failed (when the BFC crooks took them down on purpose) and that a world governing authority is the solution.

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. The one aim of these financiers is world control by the creation of inextinguishable debt.” Henry Ford

"In the technotronic society the trend would seem to be towards the aggregation of the individual support of millions of uncoordinated citizens, easily within the reach of magnetic and attractive personalities exploiting the latest communications techniques to manipulate emotions and control reason."
— Zbigniew Brzezinski (Between Two Ages: America's Role in the Technetronic Era)

"We are grateful to the Washington Post, The New York Times, Time
Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years."

"It would have been impossible for us to develop our plan for the world
if we had been subjected to the lights of publicity during those years.
But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national
auto-determination practiced in past centuries."
~David Rockefeller

The people who use policy to starve millions of people, who finance war that murders hundreds of millions, who thrive on impoverishing and robbing society blind, who want to privatize and profit from everything including every time you exhale and the rain that falls from the sky...

they want to RULE OVER you.

The first step is to destroy nation states.

Anybody see that game in play?

skilo said...

@Ash,

That was only 1/3 of the project, Ash (listing Constitutional mandates for the Congress).

Now do the rest...

1. List what the federal government actually does.

2. Compare the two.

Doing only one third of project and ignoring the 2/3 is a logical fallacy - it is called a straw man logical fallacy.

As you highlighted, the Congress doesn't even do what it is supposed demanded to do by Constitutional law - declare wars and control the nation's money.

So, not doing what it is supposed to do and doing what it not supposed to do (which will become patently obvious once you actually complete the project) can't reasonably be blamed ont he Constitution.

Rather, it has to be blamed on the CRIMINALS who usurped the Constitution and the apathetic populace who allows it to happen.

Which was my central point - that isn't about be contested by a straw man logical fallacy without my pointing it out. ;-)

BTW, logical fallacy is so ingrained into society that most people don't even know they are employing it.

That's why studying the trivium and logical fallacy is so important to a true classical liberal (free person) edcuation.

skilo said...

@seychelles,

>>Inflation is the disease.
Deflation is the cure.
Social mood is the lever.<<

Inflation is a symptom, not the disease. The disease is exponential, interest bearing, debt based money, coupled with criminally operated fractional reserve lending.

The cure is to...

1. End debt based money.
2. End criminally controlled fractional reserve lending.
3. Educated people voting in people who will use the monetary system to better the nation instead of the criminals who set up the current weapons of mass debt monetary system.

Deflation will only act to bust the debtors (society, by definition, must be in debt to have non coin money) and transfer the assets to the criminal class who set up this system.

This is, first and foremost, the reason my views align with TAEs - deflation to bust the debtors and asset strip society, inflation to "balance the books" after the biggest criminal wealth transfer in human history.

Debt accrues interest, therefore, inflation must take place or else the Ponzi scheme implodes (principle < principle + interest). That's why they inflate. But it can't work forever and we are at the cliff - actually well over it with our legs spinning.

skilo said...

@Ash,

I hope you didn't make the same mistake I did, but I didn't continue reading to see that you addressed what the government actually does.

Therefore, you DID NOT cherry pick and create a straw man - MEA CULPA.

My bad for not reading further.

>>don't get me started on the judicial interpretations of the CC<<

My point exactly. The essence of the Constitution has been unreasonably circumvented by a stacked court of Big Finance Capital operatives who were put in place PRECISELY to gut the Constitution in a "boiling frog kind of way."

They can't make it too obvious, although, I have to say, they aren't too worried about public backlash at this point and are accelerating their tyranny.

My fundamental point is that the Constitution can't be blamed when criminals misapply it, however nice the robes of the criminals.

Perhaps your point is that The Constitution hasn't been able to prevent its own circumvention and that this is the fault of the document.

Yeah, I can see that, but I'd have to say that there are a lot of other factors that need to provide proper context as to the circumvention of the Constitution.

My point IS NOT that the Constitution is some kind of perfect document.

It isn't.

I haven't seen any WORKABLE (key word) principles (when not circumvented) better than the Constitution, however imperfect it is.

If you have some better principles, do share.

But if the fundamental premise of your principles RELIES on humans not acting in selfish ways and not allowing power to corrupt those who wield it (contrary to basically all of human history)... then I will believe that when I get to meet the tooth fairy. Riding a unicorn. That chits gold pieces. ;-)

Again, sorry for the straw man accusation - I don't want to use ad hominem. I'll read more posts before responding next time.

skilo said...

@Ash,

Perhaps we were talking past each other. When I say Constitution, I include the bill of rights.

>>They finally got the Bill of Rights, which was written in a manner that political and judicial authorities could find almost any meaning they want within the words.<<

I'm sure the people who subvert the Constitution teach that as an excuse to subvert the Constitution, but this seems to be very plain language to this "non Constitutional scholar" that doesn't start illegal wars and apply Orwellian names to them..

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

That doesn't sound convoluted and lacking real meaning to me, but maybe I'm not thinking it all the way through.

Can you please fix it (so criminals could not simply ignore it and act as though it allows what it explicitly restricts) so that I can then compare the better verbiage to the current flawed verbiage?

TIA...

btraven said...

@ skilo,

I like your 4:31 post. I think we are on a similar page.

I am not about to get into a debate about the Constitution with anyone, as it isn't my area of expertise. But what I am clear about is that "Small is Beautiful" (~ E.F. Schumacher) and decentralization is essential to holding people (including representatives) accountable. As I see it, lack of accountability to Main St., to taxpayers, and to the collective whole, is at the heart of the undermining of Democracy, and well-being.

The concentration of power, wealth, and influence inevitably lead to grift-n-graft, the diminished voice of "the small people," and the eradication of accountability except to those with the power, etc.

The concentration of power, wealth, and influence is an anathema to a healthy "cared-for" society, and an anathema to healthy communities, and an anathema to freedom, as well as diversity.

(That doesn't mean there aren't some societal functions that work better centralized - like a road system, or utilities or even, perhaps, a militia. But they should be the few, not the many.)

........

I'm afraid we are beyond the point of no return. As I see it, there is no way for the U.S., at the Federal level, to provide genuine care for Main St. (including ending the banksters pillaging and Corporatist "poisoning") without a revolution/insurgency, and probably a violent one at that.

In the meantime, I embrace as a viable healthy direction the creation of good things & good works (e.g. community gardens, worker co-ops, intentional communities, community wellness clinics) on a local level.

........

"Liberty without Socialism is privledge and injustice. Socialism without Liberty is slavery and brutality." - Bakunin

steve said...

they dont foreclose because they dont have bread to foreclose. it costs lots of money to foreclose

Greenpa said...

Sumerian: my fave this time:

"* There's nothing better than being trapped like lemmings in shiny metal boxes"

:-) it's just so true.

Greenpa said...

A little insight into business after the end:

http://www3.nhk.or.jp/daily/english/17_15.html

"A survey has found that nearly 40 percent of the businesses in the area hit by the March 11th earthquake and tsunami cannot be contacted.

"A private research firm, Teikoku Databank, carried out the survey of 4,280 companies in the disaster-hit prefectures of Iwate, Miyagi and Fukushima. Some of the firms lie inside the evacuation zones around the Fukushima Daiichi nuclear plant.

"The research firm says it was unable to contact 1,632 companies, or about 38 percent of the total, and many of them may have been destroyed by the tsunami."

So all that lack of complaints is not necessarily a good indication of what's really going on...

scandia said...

@Eric Lilius,,,ah well...I did begin to doubt the biographical aspect of the tale when I wondered where the acorns came from in such a barren landscape.
I sent the story to my tree planting friend. I haven't heard from her in awhile so was excited to learn she is moving. She just bought 127 acres. Now she'll be able to plant a forest:)

Bob said...

Driving = Solidarity

The morning drive to work is one of our society's greatest expressions of social solidarity.

If you don't see it, and you don't feel it, then there is a piece of your soul that's missing.

Or perhaps you don't drive to work in the morning. That might be the trouble right then and there!

Bob said...

The morning drive is:

A great mass migration of humanity each work morning from 5AM - 8AM. Brothers and sisters all of us, leaving the comforts of home and heading off into the great wild working world to earn our daily bread.

Collectively, we keep the fires of industry, commerce, and innovation burning bright.

Without us, and our daily migrations, our world would grow cold, dark, and hungry very fast.

Bob said...

Cherish and celebrate that morning drive.

It connects us to the past and reminds us of our individual duties for a better tomorrow.

Even if you no longer work (freeloaders), then get in your car and join the commute tomorrow morning.

The great Monday morning commute is only hours away, and you too should soak it in. Live it. Breathe it.

Keep your windows down and give a thumbs up to your neighbor at the red lights!

Nassim said...

Betcha Bob "works" from home

skilo said...

@btraven,

The central problem is that crooks always take over a Central State and it isn't that they can't care for society, it is that they explicitly do not want to.

Rather, they want to leverage the labors of others for their personal power and wealth accumulation.

It isn't an accident.

It is by design.

We have to reach a level where a nice suit and expensive press coverage designed to give an air of respectability isn't enough to fool us into believing a crook is anything but a crook.

BTW, I wish this wasn't so.

But I look at history and tyrants ruling with an iron fist over their prey is the rule and there are very, very, very few exceptions, if any.

Especially on a large scale.

And tyranny doesn't seek equilibrium.

The goal of the tyrants is the same as the current goal of Big Finance Capital.

In a word - "more."

Because Big Finance Capital are the tyrants.

Bob said...

Nassim,

Join me brother.

In just a few hours, go outside and turn that key, and rev that engine, and squeal those tires, and head off into the morning's early light....

with clear eyes and a full heart, and knowing deep in your bones that you are not alone.

You are one of millions. Accelerating, Breaking, and Accelerating again.

Nassim, you too can join The Brotherhood of Man.

seychelles said...

If this group were a Politburo, skilo would be our Suslov.

Loveandlight said...

I like Bob. He's funny and he makes me laugh. ;-)

Ruben said...

Bob is growing on me. I think he may have a very, very subtle sense of humour--so subtle that most people don't understand him and it may be difficult making friends.

I. M. Nobody said...

@ seychelles

Well, we are not a Poliburo, but it seems we have started accepting testimonials. Bob has jumped out to an early lead in said testimonials. He may well turn out to be the most popular commentor of all. Compared to skilo and Metanis, I think Bob has it in the bag.

rcg1950 said...

Song of the Anthill, by Bob

"You are one of millions.
Accelerating, Breaking, and
Accelerating again."

PineappleCoward said...

Is Bob channeling Stephen Colbert?

el gallinazo said...

I think that Bob is a DoD test of the new and improved corporatist anti-blog artificial intelligence missile. We should feel honored. - even more honored than an Arab who gets blasted off his camel by a Predator drone. Frank, looks like you were wrong. Not only did they get a working model with our tax dollars, but it is entertaining in an ultra Salvidor Daliesque way. They must have loaded the Firesign Theater's Don't Crush That Dwarf into its memory banks. Ah yes - "I'm high on the real thing, powerful gasoline, a clean windshield and a shoeshine"

Ash said...

Skilo,

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.""

With that passage, it appears we have A LOT to do if we ever want to discover any "plain meaning" of the words. What counts as an "establishment of religion"? Does my weekend congregation with pot-smokers and whiskey-drinkers contemplating the meaning of life and the basic reality of the Universe qualify our group as an "established religion" protected against some government bureaucrat trying to tax us out of existence.

There's already enough vagaries within the BOR Amendments to keep lawyers in business for hundreds of years and keep the the big players gaming the system, as they always have. I know that hindsight's 20/20, but are you telling me that no one back then could have seen these trends forming and lasting into the future? Kind of like no one could have possibly seen the collapse of ridiculously high home valuations.

Seriously, though, you would be horrified at how many legal research briefs, arguments and federal court decisions have been dedicated to interpreting the "finer substance" of that single Amendment you quoted... it only gets worse from there, my friend. For some time now, it has been clear that the 10A ("rights not given to fed are given to the people and states') is a completely meaningless group of words on a parchment, providing almost no benefit to the people nor their states.

It's always nice to think that we are merely victims of a ruthless financial criminal syndicate. Then you could say are also complicit to the extent we continue supporting their operations with our taxes and consumer decisions. Then, does that not beg the question of exactly how complicit the Founding Fathers" were after they fought off the Bank of Englad and then almost immediately began creating a series of similar national banks, culminating with passage of the Fed Reserve Act in 1913 along with a Constitutional Amendment establishing the federal income tax in that very same year.

The Constitution as a "limiting principle" in a "democratic republic" society? I think not.

Robert said...

Bob said: "The great Monday morning commute is only hours away, and you too should soak it in. Live it. Breathe it."

"Keep your windows down and give a thumbs up to your neighbor at the red lights!" - if you do that often enough in many areas, you will die much sooner from cancer

"Cherish and celebrate that morning drive." - a close Taiwanese friend of mine, now deceased, said "during the drive to work, you are mere centimeters from death, over and over and over again" - he was right.

Me, I prefer my little farm. Yeah, there is a chance of being squashed like a bug during tractor rollover or equally flattened by a falling tree while putting up winter firewood supply. But I prefer that work regime to the commute.

And yes, I am getting used to Bob too

Cheers,

Robert

Robert said...

Skilo, thanks for the latest series. You reflect much that I sense, observe and believe but have trouble articulating.

Cheers,

Robert (not from S. Calif.)

Bigelow said...

@el gallinazo

"Hiya friends, Ralph Spoilsport, Ralph Spoilsport Motors, the world's largest new used and used Broadway dealership. Ralph Spoilsport Motors here in the city of ... Emphasyma. Let's just look at the extras on this fabulous new car ..." Fire Sign Theater!

scandia said...

As per usual I turned on CBC radio before making the morning coffee. Couldn't believe my ears! On the business news segment i heard that the US finances are not only comparable to Greece, they are worse than Greece.Furthermore Michael said that the 16T deficit is one of the biggest lies going, that taking into account unfunded liabilities the real deficit is more like 65T.When asked about the stock market he said the stock market was like fiddling while Rome burns. Never thought I'd hear that opinion on mainstream radio news. Imagining all those commuters on the 401 listening to the radio...
No wonder Harper wants to get rid of CBC:) I applaud CBC this morning for the courage to serve up a dose of reality.

ogardener said...

Blogger Bob said...

"Without us, and our daily migrations, our world would grow cold, dark, and hungry very fast."

Aye! That's the ticket laddie!

Greenpa said...

"And yes, I am getting used to Bob too"

ah, kiddies, I do hope not. El Gal is right, this one is quite sophisticated, and a much better match for the gang here- it IS a compliment; he's probably expensive; and the first attacks were from very crude operators.

but he/it is succeeding in his agenda- which is to totally waste your/our time.

Are you here for jovial repartee? Or something substantive? There is no substance in engaging the sock puppets.

bosuncookie said...

Greenpa, gotta disagree. One person's substance is another person's foolishness. Making those judgments is kinda like a family reunion: it's all relative.

I find much foolishness and gasbaggedness on TAE every day. And I'm a believer. You just gotta pick out the nuggets from the fool's gold.

If you look back over this thread, you'll notice very little meaningful engagement with Bob.

SecularAnimist said...

skilo
""People are selfish, power corrupts the selfish and absolute power (and someone must always wield it) corrupts the selfish absolutely.""

People are supremely confused. Our "rational-self interest" as described by economists seems to have no connection to happiness or health. I think people are selfish for health and happiness. I know I am. The problem is we culturally preach false forms of happiness. And we confuse powerful cultural stressors for personal and social benefits.

Civilization is 7 billion people trying to make themselves happy by standing on each others shoulders and kicking each others teeth in. While acquiring as much materials as possible. It's not a pretty sight.

""Study the research on what power does to people... and how people easily will fall in line with the evil... it is pretty compelling.""

Sure, it's an addiction. Think, Schmiegel from lord of the rings. Like any addiction, they will lie cheat and steal to feed it. While denying it exists.


" I despise the systems that oppress and the actions of the people who create such systems."

Capitalism is primarily a system of exploitation and domination. The "state" is the referee to this system with systemic advantage given to those with the most capital per philosophical underpinnings.

Expending mental energy on the legal wranglings of the dominant minority is mostly a waste of time. They are paranoid and their mental faculties are in decay with increasingly erratic behavior. The entertainment arm of the elite, politics, should be filled with more and more ridiculous dramatic theater for our entertainment.

Everybody is paranoid about losing their stuff or how to get more stuff. Or not being enough stuff to go around.

el gallinazo said...

bosuncookie said...

If you look back over this thread, you'll notice very little meaningful engagement with Bob.

===============

If we got into a long winded "meaningful" exchange with Bob, he would certainly deserve a raise. This is exactly his plan to emasculate (sorry gezettes) this blog. IMO however, a reasonable amount of sock puppet presence in the commentariat tends to build up our antibodies to their nonsense. Since it has been decided, for the moment, not to "moderate" him, the least he can do for me personally for wasting my time is to act as a foil for acidulous humor.

Greenpa said...

Bosun Cookie:

"Greenpa, gotta disagree. "

Perfectly ok with me. :-)

"One person's substance is another person's foolishness. Making those judgments is kinda like a family reunion: it's all relative. "

Yes, true.

"I find much foolishness and gasbaggedness on TAE every day. And I'm a believer. You just gotta pick out the nuggets from the fool's gold."

yes, true

"If you look back over this thread, you'll notice very little meaningful engagement with Bob."

Not necessary, I'd already done that, and came to the same conclusion.

You'll notice however- the thread here is STILL All About Bob. No real thoughts anywhere. All the time- and attention, down the drain.

He wins. Literally. And, in the long run, if such continued to be the case, I'm outta here. I really do NOT have the time to waste sifting through endless non-information and non-thought.

The disruptors succeed- and you're ensuring that by feeding the trolls endless tidbits.

seychelles said...

It is fun to re-read old Bob TAE commentary in rotation with re-viewing vintage Jonathan Winters, Don Rickles and
Geo Carlin clips when my heart needs some
sweetening during the (perpetual) idle moment. Plus, this routine has allowed me to reduce my lexapro dosage considerably.

seychelles said...

Greenpa said

I really do NOT have the time to waste sifting through endless non-information and non-thought.

Good. You can be high commissioner for state efficiency in the nouvel regime.
Also, Stoneleigh can be the energy czar,
TAE Summary can be ultimate news editor,
skilo can be keeper of the sacred guidelines for correct thought and el g can be chief of waste management. etcetc

Greenpa said...

"Good. You can be high commissioner for state efficiency in the nouvel regime."

Good deal! What's it pay? :-)

seychelles said...

Greenpa said:

Good deal! What's it pay? :-)

The high commissioner for monetary matters
(Ashvin) says to offer you one gold biscuit per annum, regardless of the success of your labor-intensive radish farm. Gold, however, will not be legal tender in the nouvel regime. All transactions must be in radish-equivalents.

el gallinazo said...

Scandia

I hate to crush your optimism, but what you heard is not what it seems. First, when it comes to the realm of the political, geopolitical, or financial, CBC, NPR, and PBS are totally under control of the corporate establishment. What you are now seeing is phase 2 of the plan. Phase 1 was denial of the problem. Phase 2 will be implementation of "austerity" in the USA and Canada. As you may notice, in the past few months, the commentators of the MSM are now suddenly beginning to observe the obvious, that sovereign debt in the USA is totally out of control. Canada has an even larger housing bubble than the USA did at its peak, and it is only starting to burst now as is Australia's, partly due to China heading towards a recession. Expect further "honest" analysis of the sovereign debt problems of North America in the future, as a psy-ops prep for the governments pulling the plug on the social safety net.

This is not to imply that all the reporters themselves are overtly a part of this "conspiracy," though many of them are, and most are on a semi-conscious level. The last thing a fish would notice is that it swims in water. It is primarily regulated by top down filtering of pieces and suggestions for pieces. For example, NPR has been told to report in depth and repeatedly on the "irresponsibility" of the Pakistani military. This is part of the psy-ops for a proposed attack on Pakistan to "confiscate" or destroy their nuclear arsenal. It is this threat which caused the Chinese in emergency fashion to gift Pakistan with 50 of its latest fighter - interceptors a few months ago - a rather sumptuous gift. China also announced that it would view any attack on Pakistan as an attack on China proper. As the Anglo-American empire crumbles from endogenous corruption, its "policy" makers become increasingly reckless. Saudi has reportedly gifted Israel with an air corridor last year through which it could attack Iran. Reportedly, former SecDef Gates was the obstacle stalling the Israeli attack, but he has been replaced last month. Things are rarely what they seem.

Ash said...

Skilo,

Can you please fix it (so criminals could not simply ignore it and act as though it allows what it explicitly restricts) so that I can then compare the better verbiage to the current flawed verbiage?

TIA...


Sorry, I didn't really respond to your question in the earlier post. The answer is no, I can't. I could probably make it somewhat more stringent if I tried, but that would not prevent TPTB from interpreting it for their own benefit. That's merely one of the attributes of using complex language in a complex society.

It's not like there are not rational reasons for keeping the language flexible and open to interpretation. What do you if someone yells "fire" in a theater, or disseminates videos of child pornography created by other people? What if they advocate heavily for the use of extreme violence against another group, and that violence then occurs? Those are not easy questions to answer, and there are limitless sets of facts that pose similar issues in a complex society. Theoretically, what you want is a flexible and "evolving" document that serves as a general guide, but the relevant justices must apply those general principles in light of ever-changing circumstances and in furtherance of the "spirit" of the Amendment.

That sounds nice, in theory, and it is often used as a superficial justification after the fact, but practically that could never really be the underlying motive. When it comes to the most important situations, the Amendments are consistently interpreted in ways that benefit TPTB. That's why we see decisions like the one in Citizens United v. FEC, in which corporate expenditures on political campaigns are deemed to be protected by "free speech".

scandia said...

If it is true that Bob experiences a sense of community and solidarity with the pack of commuters on the highway I applaud his ability to reframe what for me would be a horrendous,hellish experience. Clearly many are trapped in the drive to earn a living. Better to reframe it as he does or go mad or just stop the commute without an alternative in place. I do hope some of the drivers spend the commute time thinking about how else to work, where else to live so they can get to work without a car.
Alas as P01 points out living without a car is considered failure, even unmanly.

Greenpa said...

scandia: "Alas as P01 points out living without a car is considered failure, even unmanly."

Excellent. Substantive. :-)

You have put your finger on a critical factor- pathways to genuine paradigm change. Gandhi, with vast moral clout, failed on this one; he worked hard, in good Confucian fashion, to make an extremely simple life one that the masses would admire.

The masses continued to admire him- but did not adapt his lifestyle.

Why; is the exact question. And I certainly do not have exact answers; but I have to think that if Gandhi had managed to convince a few more to follow his simplicity- more people to set up similar villages, where simplicity was the most respected choice- perhaps some growth in that direction could have been achieved.

I know- Reality TV! Cripes, it's easy enough to launch a successful one. Not sure if most here are aware ( I HOPE NOT!!) - but on a recent road trip, ensconced in the motel room, I scanned the current offerings, and was amazed amused and depressed to find one of the most popular new reality shows has this premise: a group of vultures (apologies, El Gal) all cluster to bid in an auction to win the rights to haul off abandoned storage cells. The excitement comes from the auction (!) - and then from watching them sift through the discarded trash and relics; searching for anything they can sell.

And apparently- millions are content to live vicariously, hour after hour, through this high drama.

The mind boggles, well and truly.

If it's that easy, why not get the Discovery Channel to do a Reality TV series on "Extreme Simplicity"; where the millions could hang on tenter hooks, as water is pumped by hand, and carried. Potatoes are weeded, with kettledrums for accompaniment.

Respect would grow by leaps and bounds.

Ilargi said...

skilo

the idea of a comments section is not to have 7 consecutive longish comments by the same person.


.

Wyote said...

@ skilo
Just a suggestion: why not write a front page post for Ilargi to consider? I think you have a lot to offer. Perhaps using the trivium education model to parse our M$M news as the crash gathers speed?

Anyway, would love to read it.

Wyote

seychelles said...

Scandia

Bob is not trapped in the drive to earn a living. His chief means of social interaction is the commute. He is a success if he stays in the correct lane and brakes and signals properly. His ego is uplifted by the occasional envious glance/ thumbs up sign in appreciation of his expensive late-model vehicle, on which he pays $750/mo interest, which he can afford due to the significant appreciation of his stock portfolio. He once tried to interact with other people more directly but this caused him to plant multiple IEDs on major freeways. He is now fully rehabilitated and enjoying his gin 'n tonic lifestyle after incarceration and intensive psychological rehabilitation.

Greenpa said...

And in the really not amusing department, via AP

"LONDON - Police say Sean Hoare, the whistleblower reporter who alleged widespread hacking at the News of the World, has been found dead.

"Police said Hoare's death at his home in England was not considered to be suspicious, according to Britain's Press Association news agency."

nope, not a bit.

FB said...

@ Scandia

I probably should have mentioned that the story about the man who planted trees is not true, it is simply a tale by a very well known French author, Jean Giono. He wanted to inspire people to plant trees.

The translation into English is often awkward or even bizarre (e.g. soup boiling on the stove when it should be simmering, etc.). But I thought you would enjoy it nonetheless.

Ciao,
FB


P.S. Has anyone else heard about a bridge between Egypt and Saudi Arabia? And about the Israeli connection?

P.P.S. I was going to comment on "Accelerating, Breaking, and Accelerating again.", but decided to refrain. What is that expression in English about shooting fish in a barrel?

Ka said...

@Greenpa,

For encouraging life a la Gandhi, I would first adopt Greer's proposal that the phrase 'voluntary simplicity' be replaced with the more accurate 'voluntary poverty', and then adopt Orlov's translation of the first line of the Sermon on the Mount as 'Happy are the voluntary poor'.

Just maybe a cultural awakening can be made out of it. (CHS says we're due for one, though alas not necessarily one of this sort).

el gallinazo said...

Greenpa

Dr. David Kelly, the British expert in biological and chemical weapons, who traveled to Iraq constantly as an inspector, was almost certainly murdered by MI6, but his death was declared a suicide. Reminds me of the reporter, Gary Webb, who broke the story on the CIA smuggling cocaine in from Central America to an Arkansas airport. Gary Webb should be in the Guinness Book of World Records for being the only official suicide who did the deed by shooting himself **twice** in the head. Nothing to see here - move on.

On a totally unrelated note:

As mentioned, I just completed Dr. Gabor Maté's latest book, which is explicitly on addiction and implicitly on the entire human condition. The book reminded me of the one addiction which I struggled with from the age of 16 to 42 - namely nicotine. And it suddenly occurred to me that I wasn't seeing smoking where I was in Sonora Mexico. I had to take a bus to the nearest city this week (an hour by bus away) to straighten out my telephone problem. So I kept making a mental note to look for cigarette smokers. Though I would often get sidetracked, I didn't see one smoker in the four hours that I spent on this trip including walking around the city. Nor have I noticed one yet in my town. Maybe Humphrey Bogart was the last one as well as the bandido who didn't need no stinkeeen badges, also located as myself in the Sierra Madres. I haven't even seen cigarettes for sale, though they probably are at the many pharmacies. OTOH, there were more smokers in Argentina than there were smokestacks in Pittsburgh, particularly among the young. Go figure.

scandia said...

@FB, I am not disappointed that it wasn't a true story. I love the story and hope it works its magic. It certainly worked magic on me so thanks again for it.
I wrote to my tree planting friend that with the newly acquired 127 acres that she'll be able to plant a forest. She wrote back that the land already has a forest but she'll now have space for a tree nursery and she's close enough to town to continue to plant trees where they are needed.
A tiny woman with a big,big spirit!

mikel paul said...

scandia

you said...Imagining all those commuters on the 401 listening to the radio...

Reminds me of the line in White Men Can't Jump

(Snipes to Harrelson)"you can listen to Jimi, but you can't hear him"

Odds that the fire in the kitchen is already out of control....While the cook is still looking for a stirring spoon.

peace

sensato said...

Talk of tree planting reminds of Kate Sessions, the "mother of Balboa Park" in San Diego. I can find no record of how many trees she actually planted, but: "She leased land in what was then called "City Park" in 1892 for a nursery. For this privilege, she was to plant one hundred trees a year in the park and furnish three hundred more for planting throughout the city."

Sessions bio

el gallinazo said...

mikel paul said...

Reminds me of the line in White Men Can't Jump

(Snipes to Harrelson)"you can listen to Jimi, but you can't hear him"

=================

That's ridiculous. Jimi was far more popular among the white, doper and acidhead community, after he started the Experience, than the black community, at least while he was alive. He was the prime performer for my junior year spring week-end at Brown U in 1967. Brown U had damn few American born browns at the time. He did set his guitar on fire:-)

Greenpa said...

Ka said...
@Greenpa,

"For encouraging life a la Gandhi, I would first adopt Greer's proposal that the phrase 'voluntary simplicity' be replaced with the more accurate 'voluntary poverty'"

As in many other points, I disagree emphatically with Greer here.

In fact, this is the life I live, as Stoneleigh can attest from the days she's spent with us. And yes, by all the standards of the standard world, we live in poverty.

But not, at all, by my standards. Nor by the standards of the "third world", where we are insanely wealthy. A wealthy lawyer friend was reported to be saying I live in "abject" poverty- I retorted with good nature, that there is nothing whatsoever abject about my poverty, on the contrary, I live in flamboyant poverty. :-)

Calling it poverty will not help, in any way.

My sons, now in their 30's, came to understand quite early, probably when they were 15 or so- that in fact we are extremely wealthy here.

We just have no money (at all). I assure you it's possible; and the fact that my children "get it", is very encouraging. One of my sons married into the other world of wealth, and still understands both. His wife, born and raised very privileged, mostly understands us.

I've been trying to work on a post for my own blog on just this point; the actual nature of wealth, for some months. Haven't succeeded, but I may.

Greenpa said...

El Gal- "Gary Webb should be in the Guinness Book of World Records for being the only official suicide who did the deed by shooting himself **twice** in the head."

Argh. I wasn't aware of that one. Your erudition is always startlingly broad. :-)

There are of course many such instances; to me they are one of the best examples of human ability to believe what we want to, evidence notwithstanding.

Many of my neighbors are among those who could, seriously, look at the "suicide by shooting in head twice"- and nonetheless BELIEVE- that of course the police speak only truth, and are only there to serve universal justice. They believe it.

Steinbeck talks of similar points in the Grapes of Wrath- children with ribs and backbone protruding, and the death certificate states "heart attack".

el gallinazo said...

Time for a serious financial / economic comment and recommendation after screwing around here for a while.

If you got a lot out of the essay on George Washington's blog of July 16, I have a very strong recommendation for you, which I suspect, because of the quotes, was a strong inspirational source for the that essay.

It is a two hour documentary video by Bill Still titled The Secret of Oz. I was arrogant enough to think I knew quite a bit of US monetary history, but this video was a real eye opener.

One theme of the video is that The Wonderful Wizard of Oz was a political and financial allegory as well as the most successful children's book until the advent of Harry Potter. While this is disputed by the majority of the talking heads community, I find the positive argument compelling. At the least I think that everyone would find the analysis of the allegory interesting and entertaining. But even if the Oz part is ignored, this presentation of American financial history is amazing.

And the most important part of the story is gold. The three points that Still makes, and in my opinion beyond dispute are:

1) A fractional reserve system will inevitably put everyone not an owner of a bank into debt serfdom.

2) The issuance of debt free money by the sovereign state is its most important moral responsibility of the state.

3) It is totally irrelevant **what** backs money. The only relevant thing is who controls the quantity of money.

Other interesting questions are answered such as why didn't the English Bankers kill Andrew Jackson when he was successfully defeated the renewal of the Second Bank of the United States? (Answer: An assassin shoved two (flintlock) pistols into his belly and pulled the triggers, and they both miraculously misfired. One must regard the picture of Jackson on the $20 Fed note as an act of historical revenge and maliciousness on a man long dead and beyond self defense). OTOH, after what Jackson did to the Seminoles and their Trail of Tears, he deserved far more karmic retribution.

The Revolutionary War, the War of 1812, and the Civil War were all essentially based on the Bank of England attempting to regain control of the USA banking system. They finally succeeded when they got their stealth candidate, a Democrat, into the Presidency, Woodrow Wilson, who sold out his country when he pushed through the Federal Reserve Act. (It is ironic that since shortly after the Civil War the Republican Party became known as the party of wealth, and the Democrats, the peoples' party, but when the banking cartel really required total control of the political system, they had traitorous Democrats elected, namely Wilson and Obama. Neither the Bull Moose nor Taft were totally in their back pockets.)

But, the most important thing which I learned from this video was how the U.S. banks used there total control over gold money to force the USA into a deflationary depression after the Civil War which lasted almost 40 years. Lincoln, issued debt free money, the famous Greenbacks, to finance the war after the New Yorker bankers wanted interest rates of over 30% for financing the war. But by issuing debt free money, he was signing his own death warrant.

el gallinazo said...

The populist movement, realizing that more debt free money greenbacks were a political impossibility at the time, went for the second best option, demanding that the government recognize silver as money as well as gold, on a 16 to 1 ratio. The bankers had captured the government after the Civil War and contracted the money supply by withholding gold, and retiring silver dollars and greenbacks. In 1873 they forced through a law, via huge congressional bribes from the Bank of England, that only gold would be recognized as money. They did this to force a deflationary depression, buy up the farms and factories for pennies on the dollar, turn the farmers into serf sharecroppers, and the industrial workers into a lupenproletariat. The NY bankers did not control silver and that is why the populists, under their Cowardly Lion, William Jennings Bryan, wanted it legally recognized a money. The bankers were quite open about their plans and motives and communicated them opening through the official newspaper of the American Banker Association. These directives to the membership are totally shocking.

So I learned about the dangers of "real" gold money, and that the bankers of the 19th century may have been even more evil than Jamie Dimon and Lord Blankfein. And if you can believe that, then zero point energy is not such a stretch :-)

Once again, I can't recommend viewing this video highly enough, and I would be most interested in reading comments about it here. Particularly Stoneleigh's if she has the time and inclination.

http://www.youtube.com/watch?v=swkq2E8mswI

el gallinazo said...

PS

And Garfield was more than a wise ass cat.

Greenpa said...

"lupenproletariat"

Interesting! this would be werewolf proles, presumably?

:-)

Well, or, it could be derived from the Monty Python lupine based monetary system...

http://www.youtube.com/watch?v=odhCBzBQC4U

Ka said...

@Greenpa,

Well, I think Greer makes a good point that it will be more difficult to misuse 'voluntary poverty' than 'voluntary simplicity', in the way that 'green' has been misused by the corporatocracy.

In any case, I think it a worthwhile goal to move from Usanistani poverty to third-world poverty willingly, rather than have it thrust upon one unwillingly, as I suspect is the fate of most.

Gravity said...

Administrative searches cannot logically result in criminal seizures of personally incriminating evidence, only a criminal search may entail such criminal seizure.

Gravity said...

@Ash, skilo
I appreciate your views on why the constitutional structure does require a fully informed and enabled citizenry [within the judiciary] to guide its function towards the benefit of the majority.

"When it comes to the most important situations, the Amendments are consistently interpreted in ways that benefit TPTB. That's why we see decisions like the one in Citizens United v. FEC, in which corporate expenditures on political campaigns are deemed to be protected by "free speech"."

Here it is determined that the SCOTUS ruling on this matter precludes a coherent definition of citizenship and political speech, and also contradicts corporate law as established, therefore said ruling is lawfully invalid.

When expressible political opinions are lawfully coerced to solely concern maximizing profit, corporate entities enjoying enhanced freedom of advertisement in the electoral process, being legally obliged to only express profitable opinions, remain logically and legally incapable of moral differentiation in all non-economic discourse, and cannot contain or express valid opinions on any cultural or social issues which cannot be monetised or commercialised within the sovereign boundaries of national politics, and which are not already expressible by collateral suffrage of constituent elements.

The concept of citizenship, when properly defined, should reveal most clearly why corporate persons remain logically incapable of political speech, and may only engage in commercial advertisement or marketing under the coercion of a profit-based legal mandate. All incorporated expressions of speech thus remain legally defined [so constricted] as profit-based marketing.
The dimensions of political expression afforded to the citizenry are not applicable to those composite structures of economic producers or consumers, which are explicitly coerced under law to only express differentiated values by self-equitable economic action and trade, and not by political discourse within moral dimensions [such discourse being legally coercible as non-altruistic and is therefore explicitly non-moral].

Corporations, even when attaining legal personhood, cannot be moral actors defined within a sovereign political boundary, and therefore cannot attain citizenship or partake of any particular right, inherent in the sovereign moral actionality of citizens.
Conversely, the employees and shareholders of corporate entities appropriate their proportional vote in general elections, negating the need for additional privatised expression of political power through particular monetised discourse, whereas any political needs befitting specific personhoods are sufficiently covered by collateral suffrage of constituent elements.

Gravity said...

@Ash, skilo
I appreciate your views on why the constitutional structure does require a fully informed and enabled citizenry [within the judiciary] to guide its function towards the benefit of the majority.

"When it comes to the most important situations, the Amendments are consistently interpreted in ways that benefit TPTB. That's why we see decisions like the one in Citizens United v. FEC, in which corporate expenditures on political campaigns are deemed to be protected by "free speech"."

Here it is determined that the SCOTUS ruling on this matter precludes a coherent definition of citizenship and political speech, and also contradicts corporate law as is established, therefore said ruling is lawfully invalid.

When expressible political opinions are lawfully coerced to solely concern maximizing profit, corporate entities enjoying enhanced freedom of advertisement in the electoral process, being legally obliged to only express profitable opinions, remain logically and legally incapable of moral differentiation in all non-economic discourse, and cannot contain or express valid opinions on any cultural or social issues which cannot be monetised or commercialised within the sovereign boundaries of national politics, and which are not already expressible by collateral suffrage of constituent elements.

Gravity said...

The concept of citizenship, when properly defined, should reveal most clearly why corporate persons remain logically incapable of political speech, and may only engage in commercial advertisement or marketing under the coercion of a profit-based legal mandate. All incorporated expressions of speech thus remain legally defined [so constricted] as profit-based marketing.
The dimensions of political expression afforded to the citizenry are not applicable to those composite structures of economic producers or consumers, which are explicitly coerced under law to only express differentiated values by self-equitable economic action and trade, and not by political discourse within moral dimensions [such discourse being legally coercible as non-altruistic and is therefore explicitly non-moral].

Corporations, even when attaining legal personhood, cannot be moral actors defined within a sovereign political boundary, and therefore cannot attain citizenship or partake of any particular right, inherent in the sovereign moral actionality of citizens.
Conversely, the employees and shareholders of corporate entities appropriate their proportional vote in general elections, negating the need for additional privatised expression of political power through particular monetised discourse, whereas any political needs befitting specific personhoods are sufficiently covered by collateral suffrage of constituent elements.

[comment was swallowed thrice]

Bigelow said...

“Mortgage industry employees are still signing documents they haven't read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures.” AP Exclusive: Mortgage 'robo-signing' goes on

Greenpa said...

Ka- I think I may be more of a pragmatist than Greer is. My interest is in real pathways to change that work. I sometimes get the idea Greer is more interested in changing things in a "proper" fashion. Change for the correct reasons only, please.

I don't have anything against correct reasons- until they wind up preventing change rather than facilitating it.

But then, it's really hot here, too. Brain cells are unquestionably on the fuzzy side. :-)

Gravity said...

The administrative search doctrine is fallaciously applied here, also something sophistic.

http://blogs.forbes.com/kashmirhill/2011/07/15/federal-court-rules-that-tsa-naked-scans-are-constitutional/

"2. Fourth Amendment Claim
Finally, the petitioners argue that using AIT for primary screening violates the Fourth Amendment because it is more invasive than is necessary to detect weapons or explosives. In view of the Supreme Court’s “repeated[] refus[al] to declare that only the least intrusive search practicable can be reasonable under the Fourth Amendment,”..., and considering the measures taken by the TSA to safeguard personal privacy, we hold AIT screening does not violate the Fourth Amendment."

Safeguarding personal privacy during a search of infants and the elderly does not make the search of these groups less unreasonable, these having statistically defined absolute negligible chance of being vectors of terror, or being [used as] carriers of weapons and explosives.
Such a search is unreasonable and in violation because its function is exclusively to detect weapons and explosives on persons by searching the most unlikely suspects for devices of criminal harm without probable or possible cause.

"As other circuits have held, and as the Supreme Court has strongly suggested, screening passengers at an airport is an “administrative search” because the primary goal is not to determine whether any passenger has committed a crime but rather to protect the public from a terrorist attack."

False dichotomy, a terrorist attack is a crime, therefore the goal is to detect intent to commit this crime and seizing criminal substance used to facilitate such a crime, in order to protect the public from said crime.
Presumably only a criminal act facilitated by the substance to be searched for can cause a terrorist attack on board of an airplane, whereas protection of the public from such an airborn attack can then only be realised in this way by successfully detecting and seizing explosive materials and weapons where present upon search.

As possession of said materials with intent to board an airplane is criminally offensive, this mode of search is in fact a criminal search of a group of suspect passengers, to enable criminal seizure of evidence on persons as searched without probable cause. If weapons or explosives were found this could only result in criminal seizure, unlike any administrative search, because it is a criminal search.

"An administrative search does not require individualized suspicion."

It does require group suspicion to afford precriminalised group searches entailing seizures, which is why they're mostly unconstitutional, and may only be validly applied when not searching for personally incriminating matters, generally.
In this context an administrative group seizure is executed precisely because of the unquantifiable nature of criminal suspicion of said group [group suspect parameters now encompass everyone including all possible terrorists and all impossible terrorists], to enable individual criminal search without the required probable cause as applied to the individual, unjustly so.

Bigelow said...

“Oh King ah? Very nice” Dennis The Constitutional Peasant Python!

mikel paul said...

@el gal

Though it was not my point, and you have a bonaroo marvelous whit, it was noted ( when i was a rude teen bass player ) by me how Jimi reached so many mostly beige listeners. At least his talent was marketed that way.
Closer to the truth IMO is that it didn't matter.....anyone can hear it.

Again, to scandia's radio alert, I am amazed at so many who can hear a door open and/or shut but either way, not get up.

Last note...you are on the board- of those i consider worthy of hearing, basically because you give a shit about more than you.

more peace


peace

Ash said...

El G,

I'm surprised you hadn't seen Still's documentaries before. Before Oz, he made an informative one called "The Money Masters". I first came across Oz on Nathan Martin's blog, which also ties in to Freedom's Vision and SwarmUSA. It's motto is the quote by Still:

It's not WHAT backs OUR money, but WHO controls the QUANTITY!"

I also agree that the evidence provided in Still's videos for various banking conspiracies underlying major US events is compelling, and really not too surprising anymore, given both the nature of the system and recent events.

At the same time, as implied by SwarmUSA, they tend to suggest that we can fix the entire system by lobbying Congress and switching to "sovereign money". As we all are quite aware thanks to I&S and a few other "big picture" types, there are much more fundamental problems with the system than just monetary design. That, and the capitalist system of production itself. It would have been a solid step in a productive direction decades ago, but something that is destined to fail miserably at this point, IMO.

el gallinazo said...

Greenpa said...
"lupenproletariat"

Interesting! this would be werewolf proles, presumably?

:-)

==========

Beats me! When I worked as a chemical trader in a German company, the trader in the next office kept saying, "Spitz wie lumpy" to his cute secretary. Perhaps there's a relation there.

mikel paul said...

latest report
"If this country defaults on its obligations, Geithner said, it will be 'much worse than the Great Depression,'" Reid added. "And it would make the massive financial crisis of 2008 look mild. It will make what we just went through look like a quaint little crisis."

Be really really scared....really scared....

Piece of work.

from peace at work

el gallinazo said...

Ash

Well I have been blessed with very slow DSL or dial up most of my life thanks to the locations of the caves I've chosen to live in. Right now I an getting 0.45 Mbps down and 0.08 up, so viewing videos can be regarded as a bit of an enterprise.

I wonder what would happen if the USA had a revolution, totally peaceful of course, and it wiped out all the odious treasury debt (Primary Dealers) and then printed Greenbacks and paid off the remaining treasuries. Interesting lumpenproletarian gedenkenexperiment :-)

Ash said...

Gravity,

"Here it is determined that the SCOTUS ruling on this matter precludes a coherent definition of citizenship and political speech, and also contradicts corporate law as is established, therefore said ruling is lawfully invalid."

But, if the Constitution is the supreme law of the land, and the SCOTUS is the final interpreter of the Constitution, then how is the decision lawfully invalid? Sure, corporate law generally establishes limited liability for shareholders, contradicting the conept of "personhood", but at the end of the day that's just state law, and state law is subsumed by federal law that contravenes it. Why? Because the Constitution says so.

Sure, managers/directors of corporations owe fiduciary duties to their shareholders and are obliged to maximize long-term institutional value and profits, but does really render them unfit to express non-economic political opinions via expenditure, under the logical dictates of the legal system? One could argue that all individuals are merely "maximizing profits" when engaging in political discourse.

They vote/spend against gay marriage because they benefit from solely having the various economic advantages of marriage at the expense of others. They vote/spend in favor of the security state because they believe it will keep them safe and making money, or making high-tech scanners and in business. Perhaps that is not always true, but it is a logical argument that can be made.

Similarly, why is it that majority, concurring and dissenting opinions within a single decision can all be equally persuasive from a logical standpoint? Or that Justice Scalia and Justice Breyer can be equally persuasive in a debate over philosophies of legal interpretation? Not always, but enough times to make it a significant feature of the system.

Ash said...

El G,

"I wonder what would happen if the USA had a revolution, totally peaceful of course, and it wiped out all the odious treasury debt (Primary Dealers) and then printed Greenbacks and paid off the remaining treasuries."

Well, I can't imagine OPEC would keep sending us cheap oil for debt-free Greenbacks, or China sending us cheap finished goods. Credit keeps the Cronies in power, and the Cronies are internationally established. Don't get me wrong, I'm all for Freedom's "Vision"... but it just a vision, and it also doesn't appear to be the systemic cure that Still and others make it out to be.

Nassim said...

Am I the only one who cannot help stifling a yawn when words like "constitution", "liberty", "justice", "socialism", "capitalism" and "revolution" get bandied about?

I guess when you get old enough, you can't help being a little cynical.

Do you think the people being herded below the sign "Arbeit Macht Frei" used similar terms?

jal said...

===
The following two quote from our illustrious commentators made me dig up the following link.

‘Lincoln, issued debt free money, the famous Greenbacks, to finance the war after the New Yorker bankers wanted interest rates of over 30% for financing the war. But by issuing debt free money, he was signing his own death warrant.”
---

“At the same time, as implied by SwarmUSA, they tend to suggest that we can fix the entire system by lobbying Congress and switching to "sovereign money".”
---

http://www.nakedcapitalism.com/2011/07/why-matt-yglesias-and-felix-salmon-are-wrong-about-a-legal-way-to-circumvent-the-debt-ceiling-impasse.html

MONDAY, JULY 18, 2011
Why Matt Yglesias and Felix Salmon are Wrong About A Legal Way to Circumvent the Debt Ceiling Impasse
By Joe Firestone of Correntewire
---
Rather than going into the pros and cons of such a solution, I would propose to wait and see if Timmy and Ben decide to go that route.

jal

p01 said...

Ash said
"Well, I can't imagine OPEC would keep sending us cheap oil for debt-free Greenbacks, or China sending us cheap finished goods."

Honest question: What would OPEC do with the oil and China with the finished goods?

I. M. Nobody said...

Nassim said...
I guess when you get old enough, you can't help being a little cynical.

One of our finest comediennes, Lily Tomlin, is famously quoted as having said, "No matter how cynical you get, you can't keep up."

Do you think the people being herded below the sign "Arbeit Macht Frei" used similar terms?

Perhaps a better question, how many of them believed the sign?

As far as I'm concerned, the definitive treatise on the matters being argued to no avail here was published 50 years ago. Joseph Heller's Catch-22 puts it all in perfect perspective.

My favorite interpretation of Catch-22 by one of the book's characters. Catch-22 says they have a right to do anything we can’t stop them from doing.

The bombardier Yossarian spends much of the book trying to understand Catch-22.

Yossarian comes to realize that Catch-22 does not actually exist, but because the powers that be claim it does, and the world believes it does, it nevertheless has potent effects. Indeed, because it does not exist, there is no way it can be repealed, undone, overthrown, or denounced. The combination of force with specious & spurious legalistic justification is one of the book's primary motifs.


Catch-22

This wiki is also interesting.
Catch-22 (logic)

Ash said...

p01,

Good question. I imagine the US defecting from the credit-ponzi system would have severe implications for them, perhaps throwing their economies into an immediate Depression and/or igniting local uprisings. In that event, I imagine any US assets in the relevant countries would be expropriated by the government. At the same time, they could use higher prices for critical resources as leverage to coerce the American people/politicians back into the system. And/or maybe they could use it as an opportunity to transition to a new reserve system based on the Euro or the SDR "basket of currencies", and knock the US way down on the economic food chain, while using excess resources to meet "rising demand" of emerging economies. Of course, any of this stuff would create the potential for all-out global war, but the US would have even fewer friends left than it does now. At this stage of the game, it's really hard to tell what the fallout would be, but it is sure to be extreme. That's part of the reason why I believe it would never happen.

p01 said...

I think the system has escaped any form of control, and now feeds on itself. Everyone must dance until they fall flat on their faces. No one gets out on their own feet. Many will not get out at all.

el gallinazo said...

Ash

Well, I can't imagine OPEC would keep sending us cheap oil for debt-free Greenbacks, or China sending us cheap finished goods. Credit keeps the Cronies in power, and the Cronies are internationally established. Don't get me wrong, I'm all for Freedom's "Vision"... but it just a vision, and it also doesn't appear to be the systemic cure that Still and others make it out to be.

=========

Well, I am only talking about stiffing the Primary Dealer Banks, not central government banks or sovereign funds. We could send other sovereign central banks cargo planes full of new greenbacks, just like we sent the cargo planes of Fed note Franklins to Iraq that disappeared into the sands without a trace. Americans would be legally obliged to regard these neo-greenbacks as legal tender and render onto other countries all our valuables in exchange, such as Car Talk mugs, and Tomahawk missiles, etc. Furthermore, Muslims are not supposed to function in debt money or credit for interest, so we could form an alliance with Sharia Muslims. I think your response was a bit too knee jerk. I am not saying it is politically viable at this point within the USA, because our leaders are Maoist and also believe that their moral edge comes from the barrel of a gun. But forgetting the fact that they have all of the big guns for the moment, I am looking at the theory of it.

Nassim

If Arbeit Macht Frei, we is all about to have soon all the freedom that the Libertarians dream of.

R.E.Ailes said...

I'm in the process of building a bugout shelter attached to my basement through a 2.5 foot diameter tunnel.

My plan was to excavate a tunnel through the concrete foundation wall and into the yard, about 15 feet from the house.

Recently i've encountered a few problems. I wondered if anyone here has had similar issues.

First, there has been lots of rain recently and water is seeping into the basement in significant quantities. Also, the surrounding foundation wall does not seem to be tolerating my bore hole. A small crack appeared 2 weeks ago. Recently the crack widened and expanded approx. 6 feet along the foundation wall. I applied some Conseal concrete sealant but I'm not sure it will hold long-term.

Second, my 2x4 support beams aren't supporting the tunnel very well. My wife now refuses to crawl through the shaft into the bugout shelter. I still think its safe, but the tunnel's roofing structure does appear to be buckling under the weight of the soil in a few spots.

The bugout shelter itself is still a work in progress. I've wired it for electiricity from a Honda generator running in the basement. Venting exhaust through the external cellar doors risks revealing my handiwork to the neighbors, so we've been venting up through the house. This definitely isn't workable long term. We need a vinyl tubing system to carry the exhaust gasses upstairs and through to the attic perhaps. Thoughts?

My neighbor is aware that I've been doing some "projects" in the basement. I fully intend to inform my immediate family once the project is complete, but how wide should I make the circle? The bugout shelter is currently only 5x5x5. I'm considering expansion, although the necessary excavation will require at least another 4 months of work, mostly at night.

It's a really really big project. Bigger than I ever imagined. I always wanted to build a bugout shelter, even before I knew we were nearing a TSHTF moment. But the harder I work, the farther I get from my
ideal


Let's have some practical information /technical exchanges. Anyone else building an underground bugout shelter?

scandia said...

@Sensato, Thanks for telling us about Sessions. A wonderful legacy.

Ash said...

El G,

You are probably right, in the theoretical sense of it all. But that gets us back to this whole discussion about democracies, republics, Constitutions, etc., etc. A major transformation of our monetary system to "sovereign money" would make those political and legal structures work more effectively for the people, in the ideal, but then we have to remember that we are a part of a larger global monetary/financial system. And if various other economies and their respective populations made the rational choice to play ball and join us in the new and improved system, then we are still all a part of a larger global economic system.

At this point, I think a certain level of ideological divide comes into play, and, of course, my Marxist view of the capitalist system makes me inclined to think the sovereign money paradigm would still break down. To be honest, I may even go as far as to say the Freegold system would be an even better choice. Like the sovereign money system, it would strictly exclude the use of gold as a backing of currency (medium of exchange), because that is a) restrictive of productive economic growth and b) just as easily corrupted as the pure credit money system. The difference is that the Freegold order would retain a private credit money system, but with an unconditional flow of gold across and within borders as the reserve asset (global monetary reference point). Both national governments and regular people would always have the "free" option to store their wealth outside of the credit system, imposing "free market discipline" on politicians and financiers who attempt to abuse the system for their own benefit over time. It would then truly be about personal responsibility, and the people getting the government they deserve.

But then, I have to step back and say, wait a minute, neither Freegold nor "sovereign money" does anything to alter the global capitalist system of production. They just have varying degrees of monetary control in either private or public institutions. And, on top of that, they do nothing to address the inter-related issues of over-consumption, peak oil and climate change. IMO, that is the very reason why both of them are non-viable options for global society. As po1 noted, the system won't allow it.

So, yeah, from my personal perspective, all of these ideas are great and, if it were up to me, everyone in the developed world would accept lower standards of living immediately in a somewhat equal manner, and everyone else in the world would make the rational choice to work with us and keep the system functioning and relatively stable. But from a systemic perspective, the "problem" is over-complexity, which is basically synonymous with "predicament" in my mind, or "Catch-22", as IMN referenced. In this economic system, we are not citizens, but slaves... continuously creating the very conditions which prevent us from putting our collective ideals into practice.

Tarun Kumar said...

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Metanis said...

-
TAE theme song?
-
Too bad about Mao though...
-

jal said...

It’s on Main stream TV
http://www.cbc.ca/video/#/News/1221258968/ID=2061024065
The Bottom Line panel

July 18, 2011News
With financial woes in Europe and escalating debt and tensions in the U.S., how concerned should you be about your financial future?

Amanda Lang gave the best advise that could be expected from MST.

They could have explained “leverage”
They missed two possible solutions that are being worked at by the EU.
China buys the debt and the EU do a timmy save by printing money, (Issue bonds).

The prayers of recovery of the US by creating jobs is the way to avoid Armageddon. heheheh

skilo said...

@SA,

>>Einstein back in 1949:<<

Thanks for Einstein's quote. He nailed it.

skilo said...

@SA,

>>People are supremely confused. Our "rational-self interest" as described by economists seems to have no connection to happiness or health. I think people are selfish for health and happiness. I know I am. The problem is we culturally preach false forms of happiness. And we confuse powerful cultural stressors for personal and social benefits.<<

I agree 100%. Selfish based on perceived self interest, which is often far different from actual self interest.

But what is actual self interest? My view is that it is caring for others equal to oneself. Others will have a different idea. The one problem with my idea is that all it takes is a few people who play by different rules to take out the people who actually care about others equal to themselves.

This is where social Darwinism comes in - whomever dominates and kills off the competition is the ideal. No holds barred. I, probably like you, would argue that view is not in anyone's self interest, but powerful people tend to take this view anyway.


>>Civilization is 7 billion people trying to make themselves happy by standing on each others shoulders and kicking each others teeth in. While acquiring as much materials as possible. It's not a pretty sight.<<

100% agree.

>>Sure, it's an addiction. Think, Schmiegel from lord of the rings. Like any addiction, they will lie cheat and steal to feed it. While denying it exists.<<

As they say, denial is not just a river in Egypt.

skilo said...

@SA,

>>Capitalism is primarily a system of exploitation and domination. The "state" is the referee to this system with systemic advantage given to those with the most capital per philosophical underpinnings.<<

IMHO, there is no macro good system (micro can be different - TAE is exactly right in this regard, IMHO). A better system than anything that has ever existed, IMHO, would include the following:

1. A free market system.
2. An educated populace that treated BIG business as though it were the plague - the people have to regulate the size of business.
3. A small government - a very small government.

BTW, such a system could have a decent welfare system that is 1. sustainable and 2. actually helps people to be productive instead of breeding a mind numbing dependence. But the welfare can't be borrowed and the cash for it can't be spent on goodies for Big Finance Capital.

Just watched Avatar again tonight - Big Finance Capital just rubs it in our face - the military in the movie reported to a Big Finance Capital (BFC) front corporation and used to transfer assets to that BFC front corporation.

>>Expending mental energy on the legal wranglings of the dominant minority is mostly a waste of time. They are paranoid and their mental faculties are in decay with increasingly erratic behavior.<<

Yeah, but they entire societies end up suffering miserably from their insanity. I'd prefer to address these criminals BEFORE society is demolished instead of after everyone is homeless.

>>The entertainment arm of the elite, politics, should be filled with more and more ridiculous dramatic theater for our entertainment.<<

Don't forget predictive programming. ;-)

>>Everybody is paranoid about losing their stuff or how to get more stuff. Or not being enough stuff to go around.<<

Actually, I'm primarily worried about the world my family, my community and the rest of the world will live in when all the debtors (almost everyone, by definition of debt based money) are asset stripped by the criminals at the top.

You know, the ones who get off deceiving and murdering people and plundering their loot.

skilo said...

@seychelles,

>>skilo can be keeper of the sacred guidelines for correct thought<<

yes, but the correct thought that i keep is that you, as a sovereign person, should be able to think whatever the heck you want to think.

You can even play tyrant with yourself - just not other people.

Freedom and liberty are precious.

Unlike Lenin, though, I don't think freedom and liberty should be rationed (and only allowed for the criminal; power mongers).

"It is true that liberty is precious; so precious that it must be carefully rationed."
Vladimir Lenin

But anyone that agrees with Lenin is free to do so, they just can't impose that belief on others.

Freedom - such a novel concept.

Nassim said...

R.E.Ailes,

I used to be a civil engineer, but I defer to the expertise of this gentleman:

http://www.guardian.co.uk/society/2006/aug/08/communities.uknews

Whatever you do, don't do as this German did:

http://www.dailymail.co.uk/news/article-1333412/German-trapped-home-TWO-DAYS-DIY-bodge--tunnel-neighbours-house.html

Nassim said...

Ailes (alias Wings),

I will try to be serious (for once).

The normal way of making an underground room/bunker which lies close to the surface is to dig a large hole, taking care to prevent the walls from caving in, and to build the structure and then to backfill it. This is a lot easier than trying to do it from the bottom up.

OK, I realize that you don't want your neighbours to see what you are doing and so on. One possibility is to hide the hole behind some fabric or a light structure of some sort and to do the work behind it.

Rudy said...

El G, Greenpa


Lumpenproletariat

http://en.wikipedia.org/wiki/Lumpenproletariat


Rudy

Skip Breakfast said...

I start reading about digging bunker holes, and I think really have lost my mind buying into TAE.

So I go over to FOFOA to read about the alternative view (hyperinflation) and he's rather convincing. Until he offers up his own bunker hole, in the form of a chart:

http://3.bp.blogspot.com/-tODlKGqn5yI/ThuqVOo5QCI/AAAAAAAABzM/JAv6pvaArvE/s1600/Orbital_Launch.jpg

Apparently he's selling the "gold will reach a permanently high plateau" religion. Just has a kind of nasty ring to , harkening back to too many men who pronounced the same only to lose it all.

So I guess FOFOA is just as crazy as I am for listening to any of it. Feels like it would be much warmer and cozier with "the herd" right now.

p01 said...

Something's missing.
Bob?

p01 said...

Do we get a 40?. Can I hear a forty? Forty? Once...twice...Forty anyone?

In unrelated news, we're back to happy days again.

Ilargi said...

New post up.




Fracking Our Future




.

bluebird said...

R.E.Ailes said "I'm in the process of building a bugout shelter attached to my basement through a 2.5 foot diameter tunnel."

Here is an article about a guy who replaced his pool area with a bugout shelter. Looks interesting, and might give you some ideas...
http://tinyurl.com/3jhp86b