Thursday, March 29, 2012

Lets stop with the political hot potato concerning oil.

There has been a lot of talk of late centering around President Obama and the gas price hike we have seen in the US. Many people blame his policies, pushing alternative green energy over conventional energy (like Nat gas, coal and Crude). There has been people in the administration that have actually gone on record admitting as much. Dr Stephen Chu actually said in an interview with the Wall Street Journal in late 2008 (before he became part of the cabinet):

"Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,"

According to the WSJ, Dr Chu would do this by quote: "raising gasoline taxes gradually over 15 years to coax consumers into buying fuel-efficient cars and discouraging sprawl".

Now, we haven't seen that happen as of yet. We already have seen however that the Administration does play favorites when it comes to the agenda or promotions of industries they see fit. We have seen that with Solyndra and GM. While that does point to an obvious flaw or at least a blurred line in the relationship between private industry and the state; it is something that isn't unique to the Obama Administration alone. It is also not he reason gas prices have gone up either these last few years.

Just like playing favorites when it comes to energy sources, the Obama Administration is guilty of a double standard in handling or at least blaming the source for fluctuations in gasoline prices. This was a stump speech in Indiana from 2008, one in which President elect Obama was campaigning on the high oil prices pushing blame on the Bush Administration and the oil companies, staying true to his populist ideals:

There have been examples of President Obama deflecting when it comes to what is happening with the price of gas, blaming everyone from speculators to people driving SUV's. So its pretty clear, the Obama Administration has favored alternative energy over conventional and he has also used double standard logic to defend the rise in oil prices.

Again, these are not reasons why gas prices have went up. As i pointed out earlier this year, we here in the US are now actually a net exporter of fuel for the first time since the 1940's, yet prices in gasoline have only went up. The reason is very simple. Its a global economy and oil is the heart of the global economy, there is very little one country can do to offset the global price that is measured in US inflationary dollars. 

Now, with that said, the biggest reasons we are seeing rises in fuel prices specifically at the pump is also simplistic. The world is consuming more oil, the supply has remain unchanged, thus the law of supply and demand have driven the price up. Just look at the demand.

 As we can see the emerging markets and growing economies are consuming more and more oil and we are consuming less. We are seeing now the fruits of their labor that comes from producing our cheap goods. The emerging economies are showing the world what it means when people say "a rising tide lifts all boats". And to the contrary, ours are staying stagnate or sinking. That's just cause and effect. Now what about supply?

As we can see here and pointed out by Gail Tverberg:

"Since 2005, world crude oil supply has bumped up against what seems to be a limit of 75 million barrels of oil a day. No matter how hard companies try to extract more crude oil, and no matter how high world oil prices rise, they seem unable to extract more than 75 million barrels a day (MBD)."

So again, supply has stayed level, while demand has risen and while some look at the price of gas and the recession and rise in prices during the recession as proof of something to use as an excuse for blaming the administration its clearly not based on fact. Here is the graph that really tells what is happening.

Chart courtesy of Gecko Software

As you can see above, the demand in oil has increased with the price, nothing fishy or speculative about that. Its just simple mathematics. What we seen in the march from 2002-2008 is what we are seeing now. 2008 wasn't some anomaly; it is reality. That is where the economic equilibrium now lies, but the more reckless spending and the more we rely on credit that dilute savings; the equilibrium will only rise in terms of dollars.

This idea that we can spend and borrow our way to prosperity is going to have some consequences; cheap oil is one of them. And when you factor in the emerging economies, it only speeds the rise in prices that much quicker. Call it cause and effect, call it 2+2= 4.... whatever you do call it, just call it what it really is, not what you want it to be. Stop pretending this is some partisan issue when clearly, this long term, cannot be a political football. Now if you want talk about getting Nat-Gas powered cars... that's a different issue. Natural gas is really where our ultimate prize lies.

Monday, March 26, 2012

Get your Burl "silver" Ives on.

Everyone remembers the movie “Indecent proposal”. The movie where Robert Redford offered Woody Harrelson's character 1 Million dollars for one night with his wife, who was played by Demi Moore. The movie gave a complex view of how people value themselves in relation to money and it probably made a lot of people play the “what if” game because of it. I remember being a teenager playing the “what if” game myself. More often than not, it was centered on money as well. For example: 

How much would it take for you, to let Michael Jackson fondle you?
If reincarnation allowed you to come back as someone, who would it be?
If you won a million dollars, what would you do with it?
The first scenario was when MJ was in his heyday of molestation, so it was relevant then – not proud of it, but true nonetheless. That last scenario was the one I would think about often to myself.  Being that i was young, the answers were predictable for a kid who just wanted to play sports and nothing else. Those fantasy dollars were chasing imaginary possessions like: cars, houses and basketball court's in my backyard(s). You get the idea. As I got older, the view became more conservative, one built on investing and preserving that wealth. I’ll get back to that later. 

Up until recently I haven’t given the “what if” game much thought. That is until I seen this story of a woman in Michigan, who won a lottery worth: 1 million dollars. 

Amanda Clayton, a 24 year old unemployed female, won the "Make Me Rich!" lottery earlier this month as reported on by everyone in the national media. The overview is simple. Mrs Clayton took a lump-sum payment of 500K after taxes and bought two houses and a car. Or exactly what I would have done…20 years ago. 

The rub is that Mrs Clayton also collected $200 in food stamps monthly even after she had won. Now any reasonable person would understand or sense an obligation to end his or her case and stop receiving the foodstamps but Mrs Clayton does have a point. She went on record stating that:

“I thought, maybe, it was OK because I'm not working. It's hard. I am struggling."

You see she is struggling, she doesn’t have a job and if that wasn’t hard enough, maybe you will tear up when you know that she quote:

“I have no income and I have bills to pay. I have two houses."

How is someone able to hit the lottery for seven figures and still legally be eligible for food stamps? Because, according to federal guidelines; gambling and lottery winnings are considered liquid assets and don't count as gross income. Therefore, one could hit the Mega-Millions 350 Million dollar Jackpot and still collect their foodstamps. So technically speaking, she wasn’t breaking any laws. Technically is one thing, morally or ethically is another.

Now, you are probably asking yourself… what does that have to do with you and the “what if” game and Mrs Clayton striking it rich then still collecting foodstamps? It’s obvious that what Mrs Clayton did was unethical and really a microcosm for many in society, who feel they are entitled to benefits. Many times, those benefits are goodwill or tax dollars from others used to give the less fortunate a hand; to only be stolen and pillaged by people that could otherwise do for themselves but would rather go this route because it easier.

Now, when I played the “what if” game as I got older I would always say I would invest the money in a CD or save it in a Money Market or just conventional savings account. Back when I was doing my dreaming (in the mid-90’s) a Jumbo CD yield was anywhere from 4-6%. Obviously I would have taken out multiple CD’s because of the limitations of the FDIC, but that is really all you would have to do to live off the interest. Pretty simple, no money manager needed. Sure it’s not exotic but its conservative and simplistic. What about now? 

 Graph from:

In the 90’s we could live off of 35-40K a year, the yield we could expect from a million dollar investment. I assume that would be sufficient for Mrs Clayton (she may only be able to own one house thou) and I know it would be for me. Now with that said, let’s play the “what if” game in today’s environment. 

For anyone of us that frequent a bank and see the rates on the wall, we know the return isn’t worth them holding our cash. As you can see from the link below, a jumbo today would yield you at the most 1.15% with most of the interest rates being below 1%. Using today’s interest rates, it would have us collecting anywhere from $7,500-$13,000 off of 1 Million dollars in Jumbo CD’s. That is not livable by most standards.
What this says is what we already know: fiat money, fractional reserve banking and our entire monetary policy/system is starting to eat itself. The debt driven - black hole gathers strength. It’s hurting the poor and those people who rely on cash of course but like we see here, it hurts the savers (where true capital comes from) and instead, favors the wealthiest and credit whores. As I pointed out with pending interest rate tsunami that is coming when/if the FED raises interest rates and the fact that the American consumer is tapped out and saturated in debt, our demise is only a mater of time. Today, the “what if” game for me and hopefully anyone else (including you too Amanda) only consists of silver and gold… and some guns.  

Sunday, March 25, 2012

The pigs are at the Sanford trough

There has been a media firestorm surrounding the death of Trayvon Martin, the 17 year old tragically killed in Florida last month. Martin, who was unarmed and black, was returning home from a 7-Eleven when he was gunned down by George Zimmerman, a neighborhood watchman, who is half Spanish and half white, had a permit to carry a concealed weapon. 
Photo from: AP

The tragic death of Martin is undeniable. A young man cut down before even reaching the age of adulthood by the hand of an adult, is a tragedy that has a unique sting to it. Anytime a child or teenager is raped or murdered by an adult; it always cuts deeper and this is no exception.  

Now, much of this case is still pending but it appears this was a murder and if it was race motivated or not, is anyone’s guess at this point. The only person that could answer that for certain is Zimmerman and Zimmerman only. If it is in fact a hate crime, then Zimmerman wouldn’t be the first or the last white man to kill a black male. Just as there will be black males who kill white males. 

The motives for individuals involving any violent act have to be taken at a case by case basis. There is crime and murder everyday involving all races in a variety of ways and this will continue happening everyday, until the day every man exists this earth. In fact, the more the population grows, the more tragedies there will be, it's just simple math.

What is interesting to this author, is the relevance of this situation in terms of race and the charge of racism. How often do we look and say that these events that take place so often daily are racially motivated? And if they were, then it would be a racist committing a murder. There is nothing you can do to stop these events from happening; it’s up to each of us individually to do so. 

Racism and terrorism is the necessary evils of a free and open society, it's consequences we have to live with. We don’t have to like it, but it's individual responsibility that will keep them at a minimum, not exclusion and division; they only fuel the fires of the very same things they are against.

However, don’t tell that to those people who make a living off division, collectivism and race baiting that bit; it wouldn’t fit their agenda. And wouldn’t you know it, as soon as this tragedy started to simmer towards a boiling point across the country, the usual suspects had arrived (well at least half anyway) all feasting on this tragedy like pigs at a trough. Under a guise of racial justice, you can’t help but notice the stench of wicked self promotion, racism and cynicism trailing their every move, like freshly flattened skunk; beneath a tire on the road to collectivism.

Al Sharpton and Jesse Jackson Sr have become synonymous, if not the face of every national crime, injustice, slandering etc etc involving a black victim and a white perpetrator or instigator, for the last forty years. Both of their entire careers and livelihood, have been made possible by racism, and the dividing of people based on race and creed. But above all, the creation of national headlines based on isolated incidents, is where their pockets get lined in emerald.

I could understand the national outcry if we were seeing an influx of murders like this happening everywhere but that isn't the case. We live in a country of 300+ million; it’s statistically unavoidable to not have incidents like this happen. Even if this case was involving the grand wizard/master of the KKK, it’s still an isolated incident. One person killing another person isn’t indicative of anything broad or sweeping.

In this case, we have a potential racist who uses self defense and felt his life was in danger even though the kid was unarmed while Zimmerman was. Zimmerman felt fear for his life even as he was following the young man. Pretty damning to me and he should be tried and/or punished accordingly. You also have the police department who didn’t arrest Zimmerman or at the very least detain him for questioning. This is also worth an investigation from local or state authorities. But how this is a national story is beyond me.

Even our own President’s Press Secretary,  Carney said as much earlier this week:

“Our thoughts and prayers go out to Trayvon Martin’s family but obviously, we’re not going to wade into a local law-enforcement matter.”

But that didn’t last long, as we all know by now. The president, true to his populist DNA, flipped the script and appeased to those calling for justice when the media began to run with this story. By doing so he did the exact opposite of what he said (and it was the right thing to do then and now) just days earlier, he waded into it. And why wouldn’t he? A populist running for re-election following the breeze of the assembling masses? Surprise…surprise. Titus Livius said it best:

The populace is like the sea motionless in itself, but stirred by every wind, even the lightest breeze.

Mr. Livius, I would like you to meet our President of the United States, Barack Obama; he is the Pacific Ocean in terms of populace seas. Our President however isn’t a race baiter, he isn’t out to divide anyone more so than any politician is by political nature. Al Sharpton however does not share that trait with our President. These were his quotes this week concerning this tragedy speaking at a rally in Sanford, Florida. Notice the vast amounts of pronouns and the context and which how they are used.
“Violence is killing Tray Martin, on’t act like we are the ones [who are] violent. We didn’t shoot nobody.”

“I want our people to understand that how you behave is going to be a reflection on this case”

“[No matter] how angry we get, don’t let them make you act in a way that they will say, ‘see, that’s what to think with Trayvon.’”

“We are going to act intelligent, we going to act dignified. And, we’re going to be determined. We may be angry, but we’re not mad dogs. We’re too smart to fall for [that].”

This is deliberate, divisive language. This is man who’s made a career of divisiveness. Outside of working as James Brown’s manager (that must have been pretty cool to be honest) for a brief stint, what has he done to create anything or provide a service before getting his own show on MSNBC? He’s been a preacher at some point just like Jesse Jackson was and just like Jesse Jackson, he has only made a living creating movements and rallying around isolated incidents to gain national exposure for his own personal gains.

Al Sharpton has appeared on numerous television shows, has tax fines from the IRS and leans, been fined by the FEC for breaking campaign finance rules – the man is opportunist, and a hot mess of greed, corruption and exploitation. I would call him the biggest leech and scourge on the black community but that distinction belongs to Jesse Jackson. Jesse Jackson hasn’t made the trip to Florida from what I have heard as of yet, but he did offer up this tidbit:

"Blacks are under attack." 

From whom you might ask? “Big Business” is according to Jackson

Blacks are under attack, indeed. But the attacks are coming from within, under a masquerade of outrage while concealing the truth that is self promotion via division and sensationalism. After all, if we eliminate racism what would that do in terms of job security for these two? Jesse's on a roll, apparently it is big business that is responsible. Exploitation is big business (just ask MSNBC and Al Sharpton) because it's always turning profits; to bad that there is a victim and family in mourning to make this happen.

Thursday, March 22, 2012

Hyperinflation, the end game or will it be crippling interest? Choose your side.

Recently I saw an interview done with Kyle Bass, which was done in early November as a part of AmeriCatalyst 2011. The interview was over an hour in but if you start at the 46-minute mark, I assure you will be glad you did as it will lead you to the same conclusion that I came to and its one I want to address today. That is concerning the Keynesian debt system and interest payments on the debt. 

Kyle Bass, who founded Hayman Capital in 2006, made a fortune betting against the sub-prime mortgage bond market. Yes, that same bond market that was at the forefront of the great meltdown in 2008-present. You can also find Bass’s surging rise to the top in Michael Lewis’s book 'Boomerang: The Meltdown Tour'.

Towards the latter part of this interview, Mr Bass says that if the FED raises the interest rates, for every 1% point moved higher it will “create an additional 140 billion in interest expenses”. That got me thinking.

The FED is already on record saying they will not move interest rates until 2014 at the earliest, so the amount of liquidity in the system will only explode until then. That we know is a given.

What isn’t a given is what happens when they do raise interest rates. Kyle Bass seems to think that the Keynesian end point is zero and that, of course, would lead to massive hyperinflation. I assume that to be somewhat true as well, although I think the FED will do something to intervene to prevent that from happening, because:

A. they are too arrogant not to
B. their sole responsibility is to control our money supply.

So, even with unemployment news getting better the last few months, we are still (as we have said before) in the period of time of the worst, extended lack of job growth; then any point in modern Keynesian history. There is another factor and that is the FED isn’t going to raise rates for the next few years; then it hit me.

What happens when the FED has to go the Volckeresque route and raise rates too early 80’s height to stave off inflation, assuming zero isn’t the end game?

Will we see a repeat of the “October massacre” of ’79 sometime in the future, where interest rates were raised dramatically? In 1979 inflation was running at 13%. After those interest rate hikes by Volcker over the next few years, inflation dropped to 3.2%.

That, however, was not the politically smart thing to do at the time but it was the prudent thing for the country going forward. It also brought on a recession and I can’t think of any politician let alone anyone from the FED willing to do so in this day in age outside of Ron Paul.
“Strictly speaking, it probably is not “necessary” for the federal government to tax anyone directly; it could simply print the money it needs. However, that would be too bold a stroke, for it would then be obvious to all what kind of counterfeiting operation the government is running. The present system combining taxation and inflation is akin to watering the milk; too much water and the people catch on.” – Ron Paul
It is also important to note, that interest rate hike also made the perfect organic soil for a vast economic expansion to blossom as well, go figure.

If we know the interest payments are 450 Billion on the debt last year (combining both public and intra debt) and we have heard from Kyle Bass that for every point raised brings about an additional $140 billion in interest… and if we approached the prime rate today what Volcker’s prime rate topped out at 21.5 percent, what would our interest payment be?

It would be a whopping 2.9 Trillion in additional interest payments…annually. On top of the 450 billion currently obligated by law to pay… annually. Thus the interest payment today, on the debt, at early 1980 levels; would be about as much as the entire federal budget is today. If that isn’t a sign of the times and further proof of us living beyond our means, I don’t know what else is. No wonder Bass thinks the end game is zero. No wonder he has over 20 million nickel coins and bars of gold in his drawer… hyperinflation here we come!

Tuesday, March 20, 2012

The post 9-11 double-sided coin

The continent of Africa has been in the news quite a bit of late and it's been a mixed bag of reasons why. Economically speaking, there has been astonishing progress and growth in emerging markets like Angola, who has seen its GDP increase over 1000% since 2000. There has also been a major boom in China and African trade agreements, as more and more African nations are brokering deals to send their vast resources into the commodity starved eastern power. George Clooney was arrested protesting at the Sudanese Embassy in Washington for the ongoing civil war that is ravishing the nation. Then we have had the blitz of KONY 12 the last few weeks and the bizarre twist, in which we seen the creator of the viral sensation get arrested for creating a scene in public naked and belligerent. 

The most fascinating aspect of KONY 12 wasn’t the astounding swath of attention through social networking then subsequent conventional media. It wasn't Jason Russell's public meltdown caught on camera. Nor was it the removal of an African warlord, because even when he was arrested, somebody would fill the vacuum. No, the single most important aspect of this “movement” is something nobody is talking about and that is the American public double standard.

For over a decade now, we have all at one time or another heard the world Islam and it immediately became synonymous with the word terrorism. I have done it. We see it in person, in the media (all facets of the media) and every other aspect of our lives. It’s only human to do so, considering the coverage and the emotional impact a 9-11 will have on a country. When you add the fighting of two wars to defeat terrorism, it only adds to the cognitive dissonance we experience as a whole.   

However, an open mind and a clean motive will allow you to understand that Islam, like any other widespread religion, is for the most part, made up of peaceful, good natured people. If we take the 1.5+ billion people whom call themselves Muslims, it is mathematically unavoidable to not have some bad apples. We have seen just 19 Hijackers on 9-11 send the world into a tailspin. We have heard of just 75-100 people alone taking on the US military in Afghanistan. To this day that has us still counting losses in blood and treasure. Economically, the cost being somewhere in the hundreds of billions. In the form of life, priceless.   

It is expected and highly probable to have a small percentage of people be violent and/or suicidal by human nature alone. Then suppose you factor in degrading aspects like: lack of education, no commerce to provide steady work or access to true representative government… the numbers of bad apples only swell.

And that is where we find the disconnect in our rational.

Here we have a tyrant, named Joseph Kony, who leads the Lord’s Resistance Army. That “Lord” at the forefront of the acronym isn’t some arbitrary name for a gang. It means what it does in Uganda, as it does here. That "Lord" being the very same as the Jedeo-Christian "Lord". Joseph Kony is the mastermind of a  guerrilla war against the Ugandan government (whom are Muslim’s) as he is hell bent on installing a theocracy ruled by the Ten Commandments; to replace the Islamic theocracy already in place. Where have we seen this movie before? Oh yhea, it’s called the Crusades. 

Dont tell that to people like Rush Limbaugh though. He actually went on his radio program trying to politicize the situation last year after Obama sent in 100 troops to "to remove them from the battlefield".  Now I personally don't agree in any military engagements in Sudan or Uganda, but i also don't defend a guy like Joseph Kony because it's politically expedite either. Now Rush Limbaugh later apologized for it days later but the damage was done. Here you have in Rush, a Christian-Conservative defending Joseph Kony based on the fact that he was a Christian, without even so much of a thought who or what he has done.

That is the type of mindset many of us here in the states use when the subject of religion comes up regarding Islam. What Limbaugh did was a microcosm of what most of us have done and many of us still do, we relate Terrorism to Islam and Christianity to righteousness. Even though Kony himself is a terrorist responsible for countless murders, executions and war crimes - it was assumed at face value he being a Christian, he was "fighting the good fight". Now most people who watched the video seen him for whom he was but the fact that he was calling himself a Christian goes relatively unnoticed, while anytime a brown person commits an act of terrorism, his relgion is bundled alongside his actions.

Just like many self described Christians, such as Jim Jones and David Koresh, their acts don’t jive with the overwhelming majority of Christians. Could those two and Joseph Kony actually find biblical evidence and accounts justifying their actions? Sure. The Old Testament is littered with stories or commands to kill non believers amongst other heinous acts. One of the most telling comes from Deuteronomy (13:7-12 NAB):

If your own full brother, or your son or daughter, or your beloved wife, or you intimate friend, entices you secretly to serve other gods, whom you and your fathers have not known, gods of any other nations, near at hand or far away, from one end of the earth to the other: do not yield to him or listen to him, nor look with pity upon him, to spare or shield him, but kill him.  Your hand shall be the first raised to slay him; the rest of the people shall join in with you.  You shall stone him to death, because he sought to lead you astray from the Lord, your God, who brought you out of the land of Egypt, that place of slavery.  And all Israel, hearing of this, shall fear and never do such evil as this in your midst. 

Now, many of you are probably saying to yourself, well those laws were for Jewish people and those were their laws... and you would be correct. However, the Bible doesn’t come with a disclaimer and if it is truly the word of God, why should it? And if it is simply a case of “lost in translation” like many parts of the Bible when something controversial comes up (funny how that problem never arises with the messages of eternal love and forgiveness) why would God trust man in the first place? Why trust an obvious fallible messenger   to be the courier of his word, if he cant even copy the word from one sheet of paper to the next without error? That however is another discussion for another day.

So, because books like the Bible and the Koran are obviously open to interpretation, you will always have people for a myriad of reasons using these books as a tool (consciously or subconsciously) to justify or promote what they read literally. Most Christians do not do this. Just as most Muslims do not. However, many here in the states, seem to lose sight of that.

The Koran has many passages where it talks of peace with “people of the book” meaning Christians and Jews. Yet some Muslims choose to find other passages that contradict those passages in favor of something more hostile, because it suits or justifies their means to an end. Just as what happens with some Christians and their relation with the Bible. There is plenty of uplifting and spiritual enriching lessons to be found in both books, but like the Koran (and YouTube) there is dark places to go and find the justification for almost anything you want.

So, if we are to condemn Joseph Kony as a murder and support (and i do) that he is someone who should be found and put to death based on his actions and nothing else, fine. If we are to ignore his motives and his faith as a Christian, separating them from his cruel and ruthless actions, fine again. Then, it is only logical we treat Muslim extremists the same way.

Saturday, March 17, 2012

Irony is a dish best served with a pair of latex gloves.

We all have seen the video or heard about KONY 12. Launched just two weeks ago, KONY 12 was/is a viral campaign who's sole goal is to not put an end to the Lord’s Resistance Army, who operate in Uganda. No, the goal is to gain awareness, so much so, that by the end of 2012, we will have seen the arrest of one Joseph Kony, head of the LRA.

Now, as we all have heard by now, the creator of KONY 12, Jason Russell, has apparently left the reservation. According to multiple reports (well basically police reports) he was arrested for not only stripping in public but for also "having a go" in the solitary sense, in public (think Pee-Wee Herman)...while screaming. Whoa. So needless to say, its rather amusing, the irony of the situation. Not that anyone is keeping score, but lets suppose we are, what would it look like so far?

Image courtesy of


Wednesday, March 14, 2012

Im Rick Santorum and i would approve this here message:

Picture from:

At first glance, I thought this was a fake. It however seems to be all too real, as there are plenty of signs like this, all across the United States. Then I started out to post some nifty words with similes and analogizes relating to Santorum's disdain for universities or his desire for "I.D." to be taught alongside evolution. I was well into my twentieth or so minute of pondering all the tasty possibilities, before it dawned on me. Pictures are often said to be worth a 1,000 words, so, here you go. Its 7:49pm, 61 degrees, in the middle of March, in NW Pennsylvania. This, is the definition of a win-win. Enjoy my fellow demons in bondage.

Monday, March 12, 2012

2012: the Year of the Bible (but only the parts we like)

As some of you may or may not know, Pennsylvania this year actually passed a bill that declared 2012: the Year of the Bible. I have no idea what that means, seems to me, 2012's year after the persecution and death of Jesus is a rather ambiguous point to set something as important as “the year” of the Bible, but this state and country “continues to face great tests and challenges” according to the author of the bill, Rep Rick Saccone (R). Thus it was said… 2012: The year of the Bible. It was also a total whitewash in support as the bill passed by a whopping 193-0 vote in the state assembly too! And who said there was no longer any bi-partisanship?

Well, if you were like me, you didn’t pay anymore attention to this piece of news then did the 193 people who glossed over the five-billion dollar state deficit did. Obviously, within the first few weeks of the new year, this crucial piece of legislation had to go through. I mean, what would we have done without our state rep's branding the Bible as the book of the year? Funny, 193 elected officials sitting around declaring 2012:  the Year of the Bible, while authorizing the purchasing of a 100 million dollar building in Harrisburg even as the state is drowning in again, 5 Billion dollars of red ink this year. I have no idea why government is so ineffective?

Now, what gets me, is that here you have 2012 being passed into law as the Year of the Bible. And this isn’t a partisan issue, again, 193 elected officials for it, none against it. So you have all this overwhelming support and an organization, who opposed the bill decided to put up a quote from the Bible entitled: “Slaves, obey your masters." Biblically speaking, its accurate… but yet you have that organization chastised by some of the 193 for it? Seems, kind of strange, I thought 2012 was: the Year of the Bible?

And that’s where the humor comes in. It is the Year of the Bible, its just not part of the Bible… the 193 like. Typical really…but hypocritical and hilarious at the same time? You betcha’.  

State Rep. Ronald G. Waters, chairman of the Pennsylvania Legislative Black Caucus wrote a letter condemning the billboard company (Lamar) for putting up the message from the Bible with an African man in bondage. Mr Waters went on to say "This image and mere reminder of slavery are offensive to minority citizens in the city of Harrisburg”. Fair enough, but is the billboard not truthful?

Were black folks not slaves at one point here in this nation? Obviously, the Bible was talking about the plight of Jews and Jewish law, but the word "slavery" here in this nation, does not make one think of slaves from 3k years ago Because we have a rather recent and dubious history with the word here. Does the Bible have a verse that commands slaves to “Obey your masters? If this is truly the: Year of the Bible, I suppose we ought to consider actually celebrating all of it, not just the parts that we don’t like or choose to ignore. After all, its not Year of the Bible chapters that aren't offensive, is it? Although, that would be the logical thing to do, in this context, logic isn’t useful when discussing the book of the year.

Maybe, just maybe, Mr Waters ought to consider the minority of people who didn’t want 2012 to be the Year of the Bible and used a billboard to demonstrate that. He had no problem passing this bill, which clearly would/could be found to be offensive by another type of minority as well. And therein lies the problem.

Mr Waters does not seem to care about the minority offended by this bill. However, he does care for the minority (his minority) that might be offended for displaying our history and quoting the book…that has been passed into law (by his own vote) as the: Book of the Year? There is a lesson to be learned from this and its one most people don't do enough of. That is, thinking for oneself. From political parties, caucuses inside those political parties, hate groups, religions etc etc… collectivism is a dangerous ideal that relies on double standards, ignorance and division. Don't be a slave to it.

Think for yourself and question authority – Timothy Leary

Friday, March 9, 2012

Thou not lead us to temptation

When I was working on my last entry concerning FEMA and Ron Paul, I started to get into a bit of a tirade concerning the debt. This, in this writers opinion, is the United States greatest threat, not some foreign enemy. With most people showing no interest or regard for it, its up to those of us who do hold these truths to be evident, to keep putting that word out there... and that word is debt (specifically insurmountable debt) is slavery and nothing more then a transfer of wealth; from the many to the few. 

In this article I want to tackle two situations that I see problematic and the key cogs to insurmountable debt. First, there is the federal government and our elected "leaders" role in this failure to be reasponsible. Secondly, is the Federal Reserve and its banks, that have been culpable in allowing (through the manipulation of interest rates) this economy to take a path that will see it fall off a cliff. What the recoil will be from QE 2,3,4,5,6,7 bailouts and stimulus remains to be seen, but there can be only one thing we know for sure. 

That is, we are accumulating debt. And vast amounts of it. The implication of compound interest makes these actions basically treasonous by our elected leaders and criminal by the FED. How can Congress and the executive branch both complicity push the cost of running the government so far out of the realm of practicality? How is it legal for the FED to lend huge sums at what amounts to no interest to those banks that were all considered "too big to fail" who then take that liquidity and invest in T-Bills that will actually yield a 2-3% interest? These practices destroy existing savings and the incentive to save; thus creating only one desired effect - consumption. 

Because, without people borrowing and spending the whole thing blows up. Money = debt, debt = money.  The biggest problem is that the American population are over saturated in debt thus why the sub-prime in housing was needed. Like its population, the US government, is over saturated as well. They, unlike you and I, have no limits and that defies logic. Lets look at the executive's role.

The Interest payment is the only debt payment required by the Constitution that must be accounted for in the budget each year to be paid.

With that said, every President hopeful on the Republican side and President Obama have all released a budget or a proposed budget.

Not one of them have a plan to balance the budget next year, neither will any one of them do so in four years either (with the exception of Ron Paul). We will without a doubt have continuous mounting deficits that will probably be in the 1-2 Trillion mark annually regardless of who is in office (with the exception of Ron Paul). Starting to notice a trend here?

We have seen Obama’s appetite for destruction already regarding deficit spending; so let’s take a peek at the eventual Republican nominee’s (Mitt Romney) insanity.

Mitt Romney wants to increase defense spending by putting 100k more troops on the ground and rebuild parts of the Navy and Air Force. He would not have left Iraq, appears to have an itch to scratch in Iran and will not leave Afghanistan until its won (the forever war) or at least until his generals say to leave??? His budget has the wealthiest Americans (who pay the most income taxes) getting a significant tax cut on top of the existing tax cuts that are already in place.

Romney has no plans to offset the lost revenue that will surly happen when these cuts take place, nor does he have any plans to make any significant cuts in existing outlays to recoup the ramped up defense spending. This defines logic. Mitt Romney's plans are contrary to anything sane in regards to the federal government living within its means. He’s fiscal policy’s will be train-wreck like.

That however, is not how Romney sees it. He thinks if he cuts taxes the gains in receipts will pay for this increase in spending. The problem with that is that the FED doesn’t think the economy is going to grow by all that much… and they control the money supply. This leads us into the second part of the equation: the insurmountable tag team.

 The FED’s long term forecast is a relatively weak one going forward with long term GDP growth outlook being in the 2.3 to 2.6 percent ranges. The FED has also said it will not look to raise interest rates until, at the earliest, 2014. Here you have the economy just barley keeping its head above water for the foreseeable future, the FED continuing its non-stop intravenous liquidity therapy into bank’s reserves creating a soon to be inflation tsunami all the while our elected representatives continue to show no regard for the situation.

I want to take a look at two charts that really speak volumes for what is going on and what we will being seeing soon enough in our own backyards. Lets start at 2006, when the FED stopped tracking M3. As you can see below, when Shadowstats picked up the tab of tracking M3, the growth in money supply was steadily rising until early 2008. As the recession came, the Fed lowered interest rates to avoid the fire of deflation but banks weren’t loaning, so the money supply dropped with it.  

A curious situation started occurring by the middle of 2010. M3 started to rise and its rising still as of now. Meanwhile, Interest rates from 2009 on have stayed basically at zero and as we’ve already heard from the FED, they will remain that way for years. This does not bode well for the dollar or anything equity wise going forward in my opinion. If the economy continues its "recovery” like so many in the media says it is, the eventual outcome will be a pretty substantial increase in inflation. This would, by default, put relatively the majority of commodities into buy, buy and buy more mode. Most specifically gold and silver.

Equally alarming will be the federal governments penchant for debt as we have also seen, they will not live within our means, thus piling more debt on to the insurmountable existing amount. What happens when the FED has to raise interest rates? If we are seeing 450 Billion interest payments already (Intragovernmental and Public) imagine what will happen to those when interest rates go up? They could look something like this:

Just for a little perspective. In 1988, the national Debt was 2.6 Trillion. The interest payment on that in the budget was 214 Billion. The interest payment in 2011 was 450 Billion, roughly double. The principal, as we know, was 14+ Trillion.

The US government will not cut spending and we will continue to finance the welfare/warfare system. What happens in 10 years from now will be interesting thou. Can the FED really raise rates, without completely tanking the economy? And if they did, what would happen to the interest payment on the debt outstanding (besides sky rocketing into the trillion dollar mark). If the FED does not raise rates out of the fear of deflation, isn’t massive inflation the only alternative?

George Carlin said it best:

When you're born you get a ticket to the freak show. When you're born in America, you get a front row seat.

Get 'ya Popcorn ready!

Tuesday, March 6, 2012

The token FEMA "critique starlet" (Dr Paul) takes his final bow.

As we all know by now, unfortunately, we had another unexpected natural disaster last week, this time in a vast multi-state reach, covering much of the Midwest and into parts of Tennessee. This was a deadly storm that took many lives resulting in tear jerking tragedies. Like this heart wrenching story, where a 15th month old survived the initial trauma from being thrown by a twister into a nearby field. Her entire family perished that day; both parents and two siblings. Sadly, she suffered the same fate just a few days later. Or like this 36-year old mother, who lost both of her legs; in order to protect her children.

The economic impact of this storm will be in the hundreds of millions, if not approaching the billion dollar range when its all said and done. This will require all hands on deck including those at FEMA. With that said, it appears, like every Tornado and Hurricane season, a reporter (or I should say reporters), tap Congressman Dr Ron Paul on the shoulder to ask him his view on the role of government in the event of natural disasters. This is by no accident.

Dr Paul's response was already prerecorded and written on their notepad, all the crossing of the t’s and dotting of the I’s was already done. That is because Dr Paul’s consistency, can and will always allow, a lazy reporter to get a cheap story that will attract buzz, with little effort in terms of leg work. All they need him to do is go on record and their story is complete, a Presidential candidate says something off the beaten path; It’s a win-win for the reporter and his publisher.

Here is the problem with this.

Does Ron Paul believe FEMA should exist? No.
Does he believe in the federal government having a hands on role in natural disasters? No. 
Is FEMA one of the worst bureaucracies in government in terms of lack of accountability and waste? YES. 

Why does Dr Paul feel this way? Its because the constitution doesn’t specifically allow for it to be funded… period. It’s that simple. So why do they cherry pick this story? Because, asking him what role we have in building up an empire then the subsequent invading of other country’s or allowing the FED Reserve to manipulate interest rates, creating bubbles, isn’t a story. Even though the amount of wealth, blood and treasure those “programs” waste are astronomically higher and oh yeah; neither are written in the constitution either (sorry neo-conservatives, what we have isn’t a defense, its clearly offense).

Now, as Ron Paul has said many times, he has a prioritized pecking order in which he would see programs and departments eliminated and/or trimmed down; specifically aiming at the most costly and unconstitutional programs or agencies we have. Do you know where FEMA would rank on that list?

First, you would have to look to see where FEMA's budget comes from and that would be none other then Homeland Security. How fitting, an agency that was created in 2002 overseeing another program that was initially funded and created in 1979. Hardly constitutional and it fits the exact model and voting record of the self described “defender of the constitution”, but I don’t want to defeat my own point before I have even made it, so I will ignore that tidbit.

Last year, FEMA spent about 13 Billion dollars. That is a big number but it terms of our budget? Is it? It is roughly 0.003% of our budget. I would assume clearly, Dr Paul would look elsewhere for the cuts. Why not start with the national debt? Sure, we couldn’t pay off the 15 Trillion, but what about that 250 Billion interest payment on that debt? Imagine the savings if we actually started to balance the budget annually?

Why not defense? The funding for defense, as I have reported numerous times, is outright offensive and hardly a defense department. Its become a slush fund for big business and a "global force for good", their words, not mine. There is not any justification i can understand in fighting rouge terrorists who claim no allegiance to any nation on principal, let alone for the amount we have spent, and to boot - in this economic environment. The Department of Defense’s base budget has increased 81% nominally and 43% inflation adjusted since 9-11. Throw in the Nuclear budget, and that spending itself has increased 21% (inflation adjusted) since 9-11.

Imagine the savings if we knocked those back to the 2001 levels or at least cut them in half? Or, what about the 1.3 Trillion spent in endless wars in the Middle East? Surly we could find savings there. We are talking about saving TRILLIONS, not to mention lives on both sides and actually using our defense to I don’t know, maybe even defending our own borders? Now that is a novel approach, eh? Using the National Guard to actually guard the nation, as opposed to fighting wars across the globe? Who knows, maybe even providing assistance, logistics and overall support for natural disasters would be available??

Quit these wars, bring the troops home. Let them spend their money here. Let’s have a real stimulus package. We are up to our ears in debt. Trillions and trillions of dollars and no end in sight for these wars. Then we could take care of our people. Matter of fact, I have even proposed on many of these programs that I don’t fully endorse because technically they are not permissible under the constitution. But taking care of sick people and the elderly and children I have nothing against that… IF YOU CUT THE SPENDING. - Ron Paul

Those are places where Ron Paul would start. Even though FEMA is one of the worst bureaucracies in terms of waste and inefficiency, its small potatoes in the grand scheme of things, it would not be a top priority. Cutting FEMA or asking about the role of food stamps surly create emotional responses, but in reality these issues are not what is draining us. In a vacuum, those are philosophical questions that would make an interesting debate… but we are living in a time where the stakes couldn’t be higher as we fight to remain solvent, vacuum type thinking is irrelevant. We need solutions to problems and until we start asking the right questions, we will never have those debates; thus we will never fix the real problems.

"Republicans are starting to realize you cant say “oh, lets cut money for food stamps but not the food stamps for the military industrial complex” because its just not going to work. - Ron Paul

So, the next time a reporter wants to tap Dr Paul on the shoulder for a quick story when hurricane or tornado season comes around, he wont be around. He is retiring form congress at 76 years old. He, as I write this, is well behind on Super Tuesday; thus he will not be our next President. They will have to find someone else to do the work for them. Maybe, they could go out and do actual reporting. Cover the minutes from the FED meetings. Maybe go out and find Stephanie Decker, the mother who lost her legs and bring her story to the masses. Or maybe seek out these heroes from Branson Missouri, who risked their lives in order to save others in the face of a deadly tornado or the hundreds of others  if not thousands from this past week who saved lives.

There are plenty of stories waiting to be told, they just need to be reported. If that’s not juicy enough, cover the destruction of our dollar and our nation through crony capitalism, fractional reserve banking and a debt driven economy that results in war and more spending (debt) to finance it. That, however, may not make it past their publisher or editors desk. We can’t have people actually learning how bad off things really are, now can we?

Sunday, March 4, 2012

Superficial logic say’s: Obama one of the best we’ve had

It’s been well documented, Obama owns this economy. The DNC Chair Wasserman-Shultz has said as much, VP Joe Biden has also said it and a vast majority of Republicans all say Obama owns the economy as well. With piling, Trillion dollar deficits and unemployment having maintained historic levels for extended periods of time; the economic malaise Obama reigns over, is one that no President can tout.

Remember, Clinton's sign on his desk when he was in the oval office? Contrary to popular belief, it was not: “The filing cabinet is under the desk, Interns” it was actually: “It’s about the economy, stupid”. If it is truly about the economic outlook of this nation; then President Obama is in trouble come November.

Now personally, I believe the sheer size of the US economy is so vast and lumbering, that the President gets too much credit when “his” economy is running on all cylinders just as much he is unfairly ridiculed, when it’s in the toilet. That however, is not the majority of how Americans feel or think thou. If they can’t find work, it must be the Presidents fault. The truth of the matter is that the average American does not have time to research what really are the driving economic factors behind our economy good or bad; so the person sitting in the oval office is seen as a personification of the whole economy.

Now, since we are going to use this embodiment to signal a "nay or ya" regarding the economy, I would like to use this simplistic strategy to point out something that doesn’t get talked about enough.

President Obama is the first President in 20+ years to see our nation’s top export be Fuel. He is also the first President since Harry Truman (1949) to oversee the US being a net exporter of oil-based fuels. The US has imported 11% less crude then it did in 2005. Ten years ago, fuel wasn’t or barley made it in the Top 25 for US exports, but now it stands at #1?

Regardless of how or why, it doesn’t matter. He was the guy in office when this happened, thus he owns this fast break to energy independence. Never mind the new developments and discoveries in shale oil/gas or the fact that Obama inherited the worst economic situation since the Great Depression. Let’s, not let things like mitigating facts get in the way of our thinking. Mr Obama is set to become one of the greatest achievers in modern presidential history in our quest for energy independence and for that he will be looked back on as a rousing success. Its all about perception isn’t it, or is it context? 

Saturday, March 3, 2012

Romney has a bazooka in his front pocket... but an empty wallet in has back pocket

Its been a rather hot item this week. People have been picking apart Mitt Romney's latest budget proposal and it isnt pretty. The lates offering (or borrowing might fit better) of a Romney proposed budget would actually result in equal or larger deficits then we already have under the current administration. I find that odd, considering Romney has said recently that it is: "immoral to pass burdens on the next generation like that" meaning deficits and in turn the national debt.

This is the same Mittens who also said how he "can’t wait to get my hands on Washington". I had to ask myself; get your hands on it for what? Clearly, by his own admission in his proposed budget, he would actually increase the deficit not shrink it, let alone not balance the budget. 

Romney's proposed budget got me thinking... is he seriously supposed to be the candidate with business experience? You can't argue with the wealth he built up. Hell, paying only 13% of your income in taxes can have that effect on a multimillionaire, no? You can't argue with his education background or the fact that he saved the Olympics, so why is it he has a problem balancing a budget?

Surely, he had to do so in his business dealings, haggle with budgets. We know he had to do so as governor, so why is trimming the existing deficit so hard to do, let alone balance our nations budget? The short answer? He wants to appeal to everyone. That why he is flip-flop Mitt. Period.

With that said, I want to focus on one particular part of Romney's budget and that is defense. Mittens recently said he would not only not cut defense, he would commission a bump from building "nine per year to fifteen" new ships for the Navy as well as new aircraft for the Air Force. Apparently, Mittens was feeling the love from the USS Yorktown and maybe a little patriotic and nostalgic in the World War sense, because he then dropped this bomb saying (as you can see below) he would "add at least 100,000 troops to the boots on the ground capability".

The problem with that is first of all, we are not entering a world war. So where could we use this 100k influx? Iraq? We just withdrew (but lest not mention the 15K people left behind to defend the city-like embassy) our combat troops. Afghanistan? It was said two years ago that Al-Qaeda is 75-100 strong in country. That was out of the mouth of then CIA director and now Department of Defense chairman Leon Panetta. I'm guessing Panetta has no advantage of actually underselling our enemy now does he.

 These are also the same terrorists who are "on our side" in the uprising that is taking place in Syria. Hmmm, we are going to be supplying and siding up with terrorists to defeat a nation that we do not like today, but will tomorrow in efforts to stop the terrorists that we now all of a sudden hate who once used to help us.... stop me if I am wrong, but have we not seen this movie before; in Afghanistan no less, circa 1979? Oh, never-mind, this movie is titled the "forever war" (thanks Clearwater) thus we never know how it ends and the perpetual boogy man? He just keeps a comin', he just gets a new face (and accent) every now and then, ala Herbert West.

So, why do we need 100,000 additional troops for? To invade Iran? To combat terrorism? Doesn't seem plausible. Seems like using a sledgehammer to swat flies. I would assume the troop levels we have now are more than enough to defend our nation but Mitt doesn't agree:

 “We all recognize that America needs to economize, but I don’t believe that we can economize on securing our nation and protecting our citizens and ensuring that the world remains safe and free for us and for our children,” 

 In fact, if you compare our spending on defense to the rest of the world as I pointed out in an earlier article this year; it's not even close in how much we outspend the rest of the top 17 nations who spend the most on defense combined.

National defense spending has increased 38% since 2001. This idea that we are going to spend more on defense and drastically increase its scope and sheer size, leads me to the answer to my original question. So why do we need 100,000 additional troops for? And the answer is quite obvious. Just look at Romney's quote when he says:

 "ensuring that the world remains safe and free for us"

There it is. And that is the shared mentality from most of Washington not just Romney. Kind of reminds me of the newest Navy slogan "A global force for good". The problem with that? The word "Good" is awfully ambiguous. How "good" are we, if you're an innocent bystander whose lost their life or a loved one(s) in Iraq or Afghanistan. Is that "good" worth a son who was put into a battle field without even a deceleration of war from Congress?

"Good", just like the words "safe" and "free" in Romney's quote are equally indistinct. I thought we already were pretty safe. Apparently, Romney does not agree and that is why he is touting a pretty substantial face lift for the DOD. The phrase "free for us"? How can the world be free for us? Chew on that one, I know i still am.

Which leads me to my final point. Romney is proposing not only an agenda that is completely out of whack compared to what the rest of the world is spending on defense, it is also an agenda that is mathematically infeasible in an environment where we should be embracing austerity measures to live within our means. Here is a recent quote from of all people, Valdimir Putin, on the past, current and future US foreign policy outlook:

"the United States, have developed a peculiar interpretation of security that is different from ours. The Americans have become obsessed with the idea of becoming absolutely invulnerable. This utopian concept is unfeasible both technologically and geopolitically, but it is the root of the problem. By definition, absolute invulnerability for one country would in theory require absolute vulnerability for all others" 

I know some of you out there are thinking "why do we care what the future President of Russia has to say about us" and I understand that sentiment; however, it's awfully sobering to have the Russians more in line with reality than a hopeful for the Presidency of the United States. To be fair, Romney is not alone on the campaign trail in this insanity, and it clear the Oval office shares this paranoia as well.

With that, I leave you with a quote, that in today's Republican Party would be considered a Liberal stance on foreign policy. From the same man who shed the initial light on the Congressional Military Industrial Complex (how apropos), former President, Dwight D. Eisenhower:

"We will bankrupt ourselves in the vain search for absolute security"

Thursday, March 1, 2012

Bling is bling: from hood ornaments to grills.

I remember people used to steal hood ornaments back in the 90's and wear them as charms on chains. I grew up (pardon the pun) hood (in the suburbs), what can I say. In the last five to ten years I have seen the same hip-hop culture buying gold or silver "grills" for their mouth. Now it appears its has come full circle. The grill has replaced the hood ornament and for actually two reasons. First, car company's caught on and ended that trend by stopping the production of them. Secondly, gold is valuable. Not just more valuable then a hood ornament but more valuable then dollars... so they are shrewd investors, these kids nowadays.

In August of 1971, President Nixon ended Bretton Woods effectively floating our Dollar and subsequently making the dollar the reserve currency of the world, having no longer having to be exchanged for gold. When Bretton Woods ended, one ounce of gold was equal to $35 dollars. Today, gold (even taking a substantial hit) closed at $1,696 dollars. That $35 Dollars? Is worth still $35 nominally, but real purchasing power?

If I used the latest CPI from the U.S. Bureau of Labor and Statistic, that same $35 dollars would buy you $6 dollars worth of goods today. That is an 82% loss of purchasing power. At the same time, gold has lapped its initial value (in 1971) 48 times. Is there any wonder why people are clamoring to invest in precious medals? Here is a chart of gold in the last 10 years:

So it should not come to a shock when you see stories like this:

Colorado undertaker accused of stealing dental gold from corpses