OUR TOTALITARIAN FUTURE – PART TWO

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Posted on 29th July 2014 by Administrator in Economy |Politics |Social Issues

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In Part One, I asked questions your keepers don’t want to answer truthfully, while providing the contextual setting for how our over-populated world is progressing relentlessly towards a future of war and totalitarianism.

Totalitarianism Now

“Where the republican or limited monarchical tradition is weak, the best of constitutions will not prevent ambi­tious politicians from succumbing with glee and gusto to the temptations of power. And in any country where numbers have begun to press heavily upon avail­able resources, these temptations cannot fail to arise. Over-population leads to economic insecurity and so­cial unrest. Unrest and insecurity lead to more con­trol by central governments and an increase of their power. In the absence of a constitutional tradition, this increased power will probably be exercised in a dictatorial fashion.” Aldous Huxley – Brave New World Revisited – 1958

         

Huxley wrote his dystopian masterpiece in 1931 before the rise of Stalin, Hitler and Mao and their murderous totalitarian empires, sustained by torture, mass murder, surveillance, and fear. Orwell wrote 1984 in 1948, after living through the nightmare of World War II and witnessing the malevolent systematic terrorism inflicted upon innocent populations by psychopathic tyrants like Hitler and Stalin. World War II killed 65 million people. Stalin’s purges killed 20 million Russians, and Mao murdered 45 million of his own people. It appeared that Orwell’s gruesome vision of a future of brutality, surveillance, and fear would come true.

Instead, Huxley’s vision gained ground in the post war world of cheap oil, mass production, consumerism, and TV advertising. It was found that government through terror works on the whole less well than government through the non-violent manip­ulation of the environment and of the thoughts and feelings of individual men, women and children. Propaganda, amusements, materialism, easily accessible debt, and relentless media messaging convinced the masses to love their enslavement and never dream of revolution. It worked as long as energy and debt remained cheap and plentiful.

The 4.4 billion increase (157%) in the world’s population since Huxley’s warning in 1958 is attributable to vast supplies of cheap easily accessible oil, natural gas and coal, which have allowed technological and agricultural advancements that have vastly expanded food production, water purification, global transportation, and medical advancements. With the peak in traditional worldwide oil production reached around 2005, and modest subsequent production increases obtained only by mining tar sands, fracking shale and drilling in deep water at much higher production costs, the era of cheap plentiful energy has come to an end.

Propaganda and storylines about vast reserves and energy independence fail to acknowledge the concept of Energy Returned on Energy Invested (EROEI). Once it requires investing more than one barrel of oil in energy to extract one barrel of oil, the game is over. We are approaching the limits of growth because our remaining energy resources will require much more capital investment and higher prices for companies to make that investment. Oil prices were $25 per barrel when George Bush and the neo-cons launched their Iraq Freedom campaign in 2003. Eleven years later, with U.S. oil production at 44 year highs and consumption at 2000 levels, a barrel of oil is over $100 per barrel. The combination of increased demand from developing countries, vastly higher production costs, and global unrest in the areas of the world storing “our” oil under their sand will put a floor on prices, with spikes upward as resource wars flare up around the globe.

It is not a coincidence that the world economic system collapsed in 2008 after oil prices topped $140 per barrel. World food prices also spiked to all-time highs in 2008. The surge in food prices in 2011 to new highs was the impetus for the Arab Spring and social unrest across the Middle East and Africa. The FAO World Food Index spiked to levels only exceeded in 2011 earlier this year. Oil prices have surged as high as $106 and have averaged over $100 in 2014. Do you think it is just a coincidence that social unrest across the Middle East, Africa, Asia and Europe has surged in the last few months? Rising prices and the increasing scarcity of food, water and energy resources push the desperately poor towards revolution.

 

Societal strife, economic decline, poverty, lawlessness, and resource deprivation in third world countries result in dependency upon a central authority to sustain the masses. In the poorest countries without a long history of democracy, the people turn to a strong leader to save them. Before long too much power is accumulated in too few hands and totalitarian regimes are born. The world is awash in the blood spilled by dictators (North Korea, Egypt, Cuba, Saudi Arabia, Zimbabwe, Iran, Tunisia, Syria, Sudan) and presidents in name only (China, Vietnam, Nigeria, Turkey, Ukraine, Venezuela, Russia, Argentina).

Dreadfully poor people with no hope for a better future turn to radical religion, extremist ideas, and psychotic leaders. A full belly trumps freedoms and liberties. It is not surprising that despots proliferate in the poorest countries with the highest population growth rates. The so called developed world in the U.S. and Europe had been able to sidestep and even take advantage of these developing countries until the 2008 financial collapse. The oligarchs have treated the third world as slave plantations to be reaped, plundered and pillaged. Their banker solution to a crisis caused by the fraudulent issuance of debt products has been to redouble their looting and pillaging campaign through the issuance of even more debt in order to further enrich themselves at the expense of the many.

Huxley saw it beginning to happen even during the late 1950’s:

“Meanwhile impersonal forces over which we have almost no control seem to be pushing us all in the direction of the Brave New Worldian nightmare; and this impersonal pushing is being consciously acceler­ated by representatives of commercial and political organizations who have developed a number of new tech­niques for manipulating, in the interest of some minor­ity, the thoughts and feelings of the masses.” Aldous Huxley – Brave New World Revisited – 1958

I think Huxley underestimated the lengths to which a minority of criminal wealthy bankers, their crony capitalist corporate co-conspirators, and feckless bought off politicians would go in their sociopathic manipulation of the masses to gorge themselves upon the world’s resources and wealth. In 1958 the manipulators only had TV in its infancy and independent newspapers published by journalists who attempted to report the truth. They’ve come a long way baby.

The Deep State, Silent Government, Oligarchs, TPTB, or whatever term you want to employ to our Brave New World Controllers have mastered the art of propaganda, manipulation, distraction, and social engineering to such an extent the majority of Americans have come to love their techno-narcissistic, debt saturated, welfare/warfare, surveillance state. When a minority of evil minded men gain control of a nation’s currency, own and control the few remaining propaganda news outlets, run the mega-corporations selling toxic poison processed food and iGadgets to the masses on debt issued by Wall Street banks, pay-off the politicians writing legislation and tax codes, and brainwash the youth through government controlled education, your Brave New World nightmare has arrived.

Huxley believed that over-population was not an immediate threat to the personal freedoms of Americans and Europeans due to their long history under democratic constitutions. Of course our national debt of $276 billion in 1958 was only 57% of our annual GDP of $482 billion. The population of 175 million could easily be sustained, with ample supplies of energy, food and jobs. The standard of living for families rose consistently and an economy based upon savings, capital investment, and producing things flowed wealth across all classes – raising all boats. Banks accumulated deposits from citizens and leant money to small businesses. There were no stock options, derivatives, stock buybacks, or trading profits. People borrowed sparingly and saved for the things they wanted.

Huxley predicted trouble by the beginning of the twenty first century if the population of the U.S. continued to outpace the available resources to support that population. He was right again. The party ended in 2000.The National Debt has soared to $17.6 trillion, or 104% of GDP in 2014. Why did the debt go up by a factor of 64 while GDP only advanced by a factor of 35? In 1958, prior to the blossoming of the welfare/warfare state, there were little to no unfunded liabilities. Today the total exceeds $200 trillion. A country adding debt at this astronomical rate is a country consuming far more than it is producing. Depletion of resources, overconsumption, and economic decline lead to debt expansion and centralized government control. When 20% of all households depend upon food stamps to survive, your country has too many mouths to feed and a failing economic system designed to serve the oligarchs and impoverish the peasants.

Consumer debt outstanding in 1958 totaled $48 billion, all non-revolving debt mainly for auto purchases. The credit card did not exist. Consumer debt outstanding today totals $3.2 trillion. Has this 6,667% increase in consumer debt benefitted the average person or Jamie Dimon and his ilk? Is it a rational choice of consumers in a free capitalist market or is it a result of coordinated actions by the banking cabal and their captured government benefactors to enslave the masses in debt while keeping them dumbed down and distracted by electronic gadgets produced in slave labor camps overseas under the guise of globalization? Huxley didn’t anticipate Federal Reserve bankers and cowardly captured politicians purposefully inflating away 88% of the U.S. dollar’s purchasing power as they expanded the welfare/warfare state through monetary manipulation, abandonment of gold backed currency and unfettered debt expansion. The result is real wages haven’t advanced in the last 40 years, while corporate profits reach record heights and a small cadre of oligarchs reap the rewards of debt enslavement of the many.

 

The Ponzi scheme system created by the invisible “leaders” of the supposedly free developed world required never ending growth to support the never ending issuance of debt in order to keep the fleecing of the masses operation running smoothly. This is where increasing population and resource depletion have thrown a monkey wrench into their printing press operation. The autocrats harvested energy and minerals resources from third world countries, while utilizing the catch phrase of globalization, as a cover for their wage arbitrage mechanism to continue their worldwide pillaging scheme. The Ivy League educated moguls are extremely smart when it comes to figuring out new and creative ways to screw the common folk, but their unparalleled hubris and arrogant disregard for humanity blind them to the ultimate consequences of their malevolent machinations. There will be blood and they will not escape unscathed. War is coming, but not the war they anticipate.

The definition of totalitarianism is a political system in which the state holds total authority over the society and seeks to control all aspects of public and private life wherever possible. Our two party farce of a political system is aligned to control our lives through laws, regulations, rules, bylaws, procedures, tax codes, taxation, inflation, and debt, enforced by government apparatchiks, bureaucrats, politicians, bankers, police state thugs, and when all else fails – the military. While the masses were distracted by facebooking, texting, twittering, instagramming, taking selfies, playing Words with Friends, engaging make believe enemies on their PS3 or Xbox, watching the Kardashians on one of their 700 cable TV stations, or shopping for Chinese produced crap at one of our 1.5 million cookie cutter chain retail boxes, those in control of this country covertly turned the nation into a surveillance state while militarizing local police forces. They know the endless growth story is over. Our oppressors fear the repercussions when the masses realize it’s all been a big lie and they are left impoverished and hungry. They are attempting to instigate foreign wars, while preparing for the coming civil war.

The confusion, chaos, mayhem and war currently shaking the foundations of our planet are a direct result of too many people jammed into too small of a space with too few resources and too few opportunities for economic advancement. Poor, deprived, hungry people with nothing to lose begin to lose it. Revolution, civil unrest, radicalism, the rise of extremists and despots, and totalitarian regimes are the result. The invasion of Iraq was about oil. The overthrow of Gaddafi was about oil. The ongoing attempt to overthrow Assad is about a natural gas pipeline to Europe in order to isolate the Russians. The Ukrainian coup is about Russian natural gas and oil. The sanctions and saber rattling over Iran’s nuclear program is really about their oil. The United States is utilizing their military industrial complex and CIA assets to instigate turmoil and war around the world in an effort to gain control over the dwindling energy resources in the Middle East and Africa. Russia and China are blocking U.S. efforts at every turn, as the world inches ever closer to a major resource war.

Huxley’s Brave New World dystopian America had a good run from 1950 until 2000. Our keepers kept us fat, dumb, distracted, and in debt up to our eyeballs. Since 2000 Orwell’s 1984 dystopian Surveillance States of America seems to be taking shape, under the watchful eye of our very own Big Brother, the NSA. Fear, punishment, slogans (See Something Say Something) and appeals to non-thinking patriotism have replaced freedom, liberty, individual rights, the Constitution, personal responsibility for our own lives and questioning authority. The propagandists created the War on Terror as a way to keep the ignorant masses fearful and cowering behind the skirts of Big Brother. The 2008 financial collapse was another crisis that couldn’t go to waste. The Federal Government has expanded the spending of your tax dollars by 40% since 2007. The DHS concentrates on the internal enemy – you. The military industrial complex creates new foreign enemy threats every day – Hussein, Gaddafi, Ahmadinejad, Assad, and now Putin.

The monetary and fiscal policies of the country have remained in permanent crisis mode because the Ponzi scheme can’t be maintained without a constant debt fix. As our permanent state of crisis devolves into war, our remaining liberties will be stripped away in the name of safety, security and unquestioned support of the state. Huxley knew that we would consume, obey and submit until dictatorship became almost inevitable. Will you sit idly by while a small cabal of power hungry men destroys our country? Will you send your sons off to wars manufactured by tyrants as cannon fodder to further enrich the military industrial complex? Will you make a stand when they begin to round up subversives, dissenters, and malcontents under the guise of protecting you from domestic terrorists? Will you choose liberty and freedom over repression and descent into captivity and totalitarianism? The choice is yours.

“But liberty, as we all know, cannot flour­ish in a country that is permanently on a war footing, or even a near-war footing. Permanent crisis justifies permanent control of everybody and everything by the agencies of the central government. And permanent crisis is what we have to expect in a world in which over-population is producing a state of things, in which dictatorship becomes almost inevitable.” Aldous Huxley – Brave New World Revisited – 1958

 

Are you a believer?

“One believes things because one has been conditioned to believe them.” – Aldous Huxley – Brave New World

Or a truth seeker?

“You shall know the truth and the truth shall make you mad.” – Aldous Huxley

OUR TOTALITARIAN FUTURE – PART ONE

53 comments

Posted on 28th July 2014 by Administrator in Economy |Politics |Social Issues

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“On the first Christmas Day the population of our planet was about two hundred and fifty millions — less than half the population of modern China. Sixteen cen­turies later, when the Pilgrim Fathers landed at Plym­outh Rock, human numbers had climbed to a little more than five hundred millions. By the time of the signing of the Declaration of Independence, world pop­ulation had passed the seven hundred million mark. In 1931, when I was writing Brave New World, it stood at just under two billions. Today, only twenty-seven years later, there are two billion eight hundred million of us. And tomorrow — what?” Aldous Huxley – Brave New World Revisited – 1958

As the world explodes in violence, war, riots, and uprisings, it is challenging to step back and examine the bigger picture. With airliners being shot down over the Ukraine, missiles flying between Israel and Gaza, ongoing civil war in Syria, Iraq falling apart as ISIS gains ground, dictatorship crackdown in Egypt, Turkey on the verge of revolution, Iran gaining control of Iraq, Saudi Arabia fomenting violence, Africa dissolving into chaos, South America imploding and sending their children across our purposely porous southern border, Mexico under the control of drug lords, China experiencing a slow motion real estate collapse, Japan experiencing their third decade of Keynesian failure, facing a demographic nightmare scenario while being slowly poisoned by radiation, and Chinese-Japanese relations moving towards World War II levels, it is easy to get lost in the day to day minutia of history in the making.

Why is this happening at this point in history? Why is the average American economically worse off today than they were at the height of the economic crisis in 2009? Why is the Cold War returning with a vengeance? Why is the Federal Reserve still employing emergency monetary policies when we are supposedly five years into a recovery and the stock market has attained record highs? Why do the ECB and European politicians continue to paper over the insolvency of their banks and governments? Why did the U.S. support the ouster of a dictator we supported for decades in Egypt and then support the elevation of a new dictator after we didn’t like the policies of the democratically elected president? Why did the U.S. eliminate the leader of Libya and allow the country to descend into anarchy and civil war? Why did the U.S. fund and provoke a revolutionary overthrow of a democratically elected leader in the Ukraine? Why did the U.S. fund and arm Al Qaeda associated rebels in Syria who are now fighting our supposed allies in Iraq? Why has the U.S. been occupying Afghanistan for the last thirteen years with the result being a Taliban that is stronger than ever? Why are the BRIC countries forming a monetary union to challenge USD domination? Why is the U.S. attempting to provoke Russia into a conflict with NATO?

Why is the U.S. government collecting every electronic communication made by every American? Why is the U.S. government spying on world leader allies? Why is the U.S. government providing military equipment to local police forces? Why is the U.S. military conducting training exercises within U.S. cities? Why is the U.S. government attempting to restrict Second Amendment rights? Why is the U.S. government attempting to control and lockdown the internet? Why has the U.S. government chosen to treat the Fourth Amendment as if it is obsolete? Why is the national debt still rising by $750 billion per year ($2 billion per day) if the economy is back to normal? Why have 12 million working age Americans left the workforce since the economic recovery began? How could the unemployment rate be back at 2008 levels when there are 14 million more working age Americans and the same number employed as in 2008? Why are there 13 million more people on food stamps today than there were at the start of the economic recovery in 2009? Why have home prices risen by 25% since 2012 when mortgage applications have been at fourteen year lows? Why are Wall Street profits and bonuses at record highs while the real median household income stagnates at 1998 levels?

Why do 98% of incumbent politicians get re-elected when congressional approval levels are lower than whale shit? Why are oil prices four times higher than they were in 2003 if the U.S. is supposedly on the verge of energy independence? Why do the corporate controlled mainstream media choose to entertain and regurgitate government propaganda rather than inform, investigate and seek the truth? Why do corporations and shadowy billionaires control the politicians, media, judges, and financial system in their ravenous quest for more riches? Why has the public allowed a privately owned bank to control our currency and inflate away 96% of its value in 100 years? Why have American parents allowed their children to be programmed and dumbed down by government run public schools? Why have Americans allowed themselves to be lured into debt in an effort to appear wealthy and successful? Why have Americans permitted their brains to atrophy through massive doses of social media, reality TV, iGadget addiction, and a cultural environment of techno-narcissism? Why have Americans lost their desire to read, think critically, question authority, act responsibly, defer gratification, and care about future generations? Why have Americans sacrificed their freedoms, liberties and rights for the false expectation of safety and security? Why will we pay dearly for our delusional, materialistic, debt financed idiocy? – Because we never learn the lessons of history.

There are so many questions and no truthful answers forthcoming from those who pass for leaders in this increasingly totalitarian world. Our willful ignorance, apathy, hubris and arrogance will have consequences. Just because it hasn’t happened yet, doesn’t mean it’s not going to happen. The cyclicality of history guarantees a further deepening of this Crisis. The world has evolved from totalitarian hegemony to republican liberty and regressed back to totalitarianism throughout the centuries. Anyone honestly assessing the current state of the world and our country would unequivocally conclude we have regressed back towards a totalitarian regime where a small cabal of powerful oligarchs believes they can control and manipulate the masses in their gluttonous desire for treasure. Aldous Huxley foretold all the indicators of a world descending into totalitarianism due to overpopulation, propaganda, brainwashing, consumerism, and dumbing down of a distracted populace in his 1958 reassessment of his 1931 novel Brave New World.

Is There a Limit?

“At the rate of increase prevailing between the birth of Christ and the death of Queen Elizabeth I, it took sixteen centuries for the population of the earth to double. At the present rate it will double in less than half a century. And this fantastically rapid doubling of our numbers will be taking place on a planet whose most desirable and pro­ductive areas are already densely populated, whose soils are being eroded by the frantic efforts of bad farmers to raise more food, and whose easily available mineral capital is being squandered with the reckless extravagance of a drunken sailor getting rid of his accumulated pay.” Aldous Huxley – Brave New World Revisited – 1958

Demographics are easy to extrapolate and arrive at an accurate prediction, as long as the existing conditions and trends remain relatively constant. Huxley was accurate in his doubling prediction. The world population was 2.9 billion in 1958. It only took 39 years to double again to 5.8 billion in 1997. It has grown by 24% in the last 17 years to the current level of 7.2 billion. According to United Nations projections, world population is projected to reach 9.6 billion in 2050. The fact that it would take approximately 70 years for the world’s population to double from the 1997 level reveals a slowing growth rate, as the death rate in many developed countries surpasses their birth rate. The population of the U.S. grew from 175 million in 1958 to 320 million today, an 83% increase in 56 years.

The rapid population growth over the last century from approximately 1.8 billion in 1914, despite two horrific world wars, is attributable to cheap, easy to access oil and advances in medical technology made possible by access to cheap oil. The projection of 9.6 billion in 2050 is based upon an assumption the world’s energy, food and water resources can sustain that many people, no world wars kill a few hundred million people, no incurable diseases spread across the globe and there is no catastrophic geologic, climate, or planetary events. I’ll take the under on the 9.6 billion.

Anyone viewing the increasingly violent world situation without bias can already see the strain that overpopulation has created. Today, six countries contain half the world’s population.

A cursory examination of population trends around the world provides a frightening glimpse into a totalitarian future marked by vicious resource wars, violent upheaval and starvation for millions. India, a country one third the size of the United States, has four times the population of the United States. A vast swath of the population lives in poverty and squalor. India contains the largest concentration (25%) of people living below the World Bank’s international poverty line of $1.25 per day. According to the U.N. India is expected to add 400 million people to its cities by 2050. Its capital city Delhi already ranks as the second largest in the world, with 25 million inhabitants. The city has more than doubled in size since 1990. The assumptions in these U.N. projections are flawed. Without rapidly expanding economic growth, capital formation and energy resources, the ability to employ, house, feed, clothe, transport, and sustain 400 million more people will be impossible. Disease, starvation, civil unrest, war and a totalitarian government would be the result. With its mortal enemy Pakistan, already the sixth most populated country in the world, jamming 182 million people into an area one quarter the size of India and one twelfth the size of the U.S. and growing faster than India, war over resources and space will be inevitable. And both countries have nuclear arms.

More than half the globe’s inhabitants now live in urban areas, with China, India and Nigeria forecast to see the most urban growth over the next 30 years. Twenty-four years ago, there were 10 megacities with populations pushing above the 10 million mark. Today, there are 28 megacities with areas of developing nations seeing faster growth: 16 in Asia, 4 in Latin America, 3 in Africa, 3 in Europe and 2 in North America. The world is expected to have 41 sprawling megacities over the next few decades with developing nations representing the majority of that growth. Today, Tokyo, with 38 million people, is the largest in the world, followed by New Delhi, Jakarta, Seoul, Shanghai, Beijing, Manila, and Karachi – all exceeding 20 million people.

To highlight the rapid population growth of the developing world, the New York metropolitan area containing 18 million people was ranked as the third largest urban area in the world in 1990. Today it is ranked ninth and is expected to be ranked fourteenth by 2030. The U.S. had the fewest births since 1998 last year at 3.95 million. We also had the highest recorded deaths in history at 2.54 million.  The fertility rate for 20- to 24-year-olds is now 83.1 births per 1,000 women, a record low. That combination created a gap in births over deaths that is the lowest it has been in 35 years.

This is the plight of the developed world (U.S., Europe, Japan) and even China (due to one child policy). According to the U.N. report, the population of developed regions will remain largely unchanged at around 1.3 billion from now until 2050. In contrast, the 49 least developed countries are projected to double in size from around 900 million people in 2013 to 1.8 billion in 2050. The rapid growth of desperately poor third world countries like Nigeria, Afghanistan, Niger, Congo, Ethiopia, and Uganda will create tremendous strain on their economic, political, social, and infrastructural systems. Nigeria’s population is projected to surpass the U.S. by 2050. Japan, Europe and Russia are in demographic death spirals. China is neutral, and the U.S. is expected to grow by another 89 million people. I wonder how many of them the BLS will classify as not in the labor force.

What are the implications to mankind of the world adding another billion people in the next twelve years, primarily in the poorest countries of Asia, Africa and South America? What does the world think of the U.S., which constitutes 4.4% of the world’s population, but consumes 20% of the world’s oil production and 24% of the world’s food? Will there be consequences to having the 85 richest people on earth accumulating as much wealth as the poorest 3.5 billion, with 1.2 billion surviving on less than $1.25 per day? Can a planet with finite amount of easily accessible financially viable extractable resources support an ever increasing number of people? Is there a limit to growth? I believe these questions will be answered in the next fifteen years as the dire consequences play out in civil strife, resource wars, totalitarian regimes, and societal collapse. Fourth Turning Crisis cycles always sweep away the existing social order and replace it with something new. It could be better or far worse.

Impact of Over-Population

“The problem of rapidly increasing numbers in relation to natural resources, to social stability and to the well-being of individuals — this is now the central problem of mankind; and it will remain the central problem certainly for another century, and perhaps for several centuries thereafter. Unsolved, that problem will render insoluble all our other problems. Worse still, it will create conditions in which individual free­dom and the social decencies of the democratic way of life will become impossible, almost unthinkable. Not all dictatorships arise in the same way. There are many roads to Brave New World; but perhaps the straightest and the broadest of them is the road we are travel­ing today, the road that leads through gigantic num­bers and accelerating increases.” Aldous Huxley – Brave New World Revisited – 1958

The turmoil roiling the world today is a function of Huxley’s supposition that over-population pushes societies towards centralization and ultimately totalitarianism. The relentless growth in the world’s population, not matched by growth in energy resources, water, food, and living space, results in increasing tension, anger, economic decline, government dependency, war and ultimately totalitarianism. Huxley believed politicians and governments would increasingly resort to propaganda and misinformation to mislead citizens as the problems worsened and freedoms were revoked. Could this recent statement by our commander and chief of propaganda have made Edward Bernays and Joseph Goebbels any prouder?

“The world is less violent than it has ever been. It is healthier than it has ever been. It is more tolerant than it has ever been. It is better fed then it’s ever been. It is more educated than it’s ever been.”

I’m sure the people living in Gaza, the Ukraine, Libya, Syria, Iraq, Afghanistan, Thailand, Turkey, Africa and American urban ghettos would concur with Obama’s less violent than ever mantra. Disease (Cholera, Malaria, Hepatitis, Aids, Tuberculosis, Ebola, Plague, SARS) and malnutrition beset third world countries, while the U.S. obesity epidemic caused by consumption of corporate processed food peddled to the masses through diabolical marketing methods enriches the mega-corporate food companies, as well as the corporate sick care complex. Religious wars and culture wars rage across the world as intolerance for others beliefs reaches all-time highs. After three decades of government controlled public education they have succeeded in dumbing down the masses through social engineering, propaganda, and promoting equality over excellence. Obama should stop trying to think and stick to what he does best – golf and fundraising. After reading his drivel, I’m reminded of a far more pertinent quote from Huxley:

“Facts do not cease to exist because they are ignored.”

The chart below details the fact that 12% of the world’s population in countries producing 9% of the world’s oil are currently in a state of war. The violence, war, and civil unrest roiling the Ukraine, Syria, Egypt, Libya, Iraq, and Afghanistan are a direct result of U.S. meddling, instigation, and provocation. The U.S. government funds dictators (Hussein, Mubarak, Assad, Gaddafi) until they no longer serve their interests, engineer the overthrow of democratically elected leaders in countries (Iran, Egypt, Ukraine) that don’t toe the line, and dole out billions in military aid and arms to countries around the world in an effort to make them do our dirty work and enrich the military industrial complex. The true motivation behind most of the violence, intrigue and war is the U.S. need to maintain the U.S. petro-dollar hegemony and to control the flow of oil and natural gas throughout the world. The ruling oligarchy’s power, influence, and wealth are dependent upon dictating currency valuations and flow of oil and gas from foreign fiefdoms.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140725_war2.png

In Huxley’s 1931 Brave New World fable the world’s population is maintained at an optimum level (just under 2 billion) calculated by those in control. This is done through technology and biological manipulation. Procreation through sexual intercourse is prohibited. Creation of the desired number of people in each class is scientifically determined and the classes are conditioned from birth to fulfill their roles in society. When Huxley reassessed his novel in 1958’s Brave New World Revisited he didn’t argue for an optimum level of population. He simply hypothesized a close correlation between too many people, multiplying too rapidly, and the formulation of authoritarian philosophies and rise of totalitarian sys­tems of government.

The introduction of penicillin, DDT, and clean water into even the poorest countries on the planet had the effect of rapidly decreasing death rates around the globe. Meanwhile, birth rates continued to increase due to religious, social and cultural taboos surrounding birth control and the illiteracy and ignorance of those in the poorest regions of the world. The ultimate result has been an explosion in population growth in the developing world, least able to sustain that growth. Huxley just uses common sense in concluding that as an ever growing population presses more heavily upon accessible resources, the economic position of the society undergoing this ordeal becomes ever more precarious.

It essentially comes down to the laws of economics. Most of the developing world is economic basket cases. They cannot produce food, consumer goods, housing, schools, infrastructure, teachers, managers, scientists or educated workers at the same rate as their population growth. Therefore, it is impossible to improve the wretched conditions of the vast majority, as they wallow in squalor. Unless a country can produce more than it consumes, it cannot generate the surplus capital needed to invest in machinery, agricultural production, manufacturing facilities, and education. The rapidly growing population sinks further into poverty and despair. Huxley grasps the nefarious implications for freedom and liberty as over-population wreaks havoc around the globe:

“Whenever the economic life of a nation becomes pre­carious, the central government is forced to assume additional responsibilities for the general welfare. It must work out elaborate plans for dealing with a criti­cal situation; it must impose ever greater restrictions upon the activities of its subjects; and if, as is very likely, worsening economic conditions result in polit­ical unrest, or open rebellion, the central government must intervene to preserve public order and its own authority. More and more power is thus concentrated in the hands of the executives and their bureaucratic managers.”Aldous Huxley – Brave New World Revisited – 1958

Despots, dictators, and power hungry presidents arise in an atmosphere of fear, scarce resources, hopelessness, and misery. As the power of the central government grows the freedoms, liberties and rights of the people are diminished and ultimately relinquished.

In Part Two, I will examine our relentless path towards totalitarianism and war.

I SEE TROUBLE ON THE WAY

8 comments

Posted on 29th July 2014 by Administrator in Economy |Politics |Social Issues

WORLDWIDE MSM PROPAGANDA MACHINE GIVEN ITS ORDERS

11 comments

Posted on 29th July 2014 by Administrator in Economy

Orwell would be proud.
“We are at war with Eastasia. We’ve always been at war with Eastasia.”  - 1984

The not so subtle art of russophobic propaganda

I am seriously getting the feeling that the western plutocracy has decided to trigger a war with Russia. What else could explain this type of coordinated “minute of hate” -kind of propaganda:




Thanks to Cu Chulainn who send me this one:

Translation: STOP PUTIN NOW!

Thanks to LeDahu who sent me this one: 

translation: Putin’s spies in France

Thanks to Anonymous who sent me this one:

Thanks to Anonymous who sent me this one: 

translation: Putin’s guilt

The Absurd, Bureaucratic Hell That Is the American Police State

3 comments

Posted on 29th July 2014 by Administrator in Economy |Politics |Social Issues

Guest Post by John W. Whitehead

“The greatest evil is not now done in those sordid ‘dens of crime’ that Dickens loved to paint. It is not done even in concentration camps and labour camps. In those we see its final result. But it is conceived and ordered (moved, seconded, carried, and minuted) in clean, carpeted, warmed and well-lighted offices, by quiet men with white collars and cut fingernails and smooth-shaven cheeks who do not need to raise their voices. Hence, naturally enough, my symbol for Hell is something like the bureaucracy of a police state or the office of a thoroughly nasty business concern.”C.S. Lewis, The Screwtape Letters

Whether it’s the working mother arrested for letting her 9-year-old play unsupervised at a playground, the teenager forced to have his genitals photographed by police, the underage burglar sentenced to 23 years for shooting a retired police dog, or the 43-year-old man who died of a heart attack after being put in a chokehold by NYPD officers allegedly over the sale of untaxed cigarettes, the theater of the absurd that passes for life in the American police state grows more tragic and incomprehensible by the day.

Debra Harrell, a 46-year-old South Carolina working mother, was arrested, charged with abandonment and had her child placed in state custody after allowing the 9-year-old to spend unsupervised time at a neighborhood playground while the mom worked a shift at McDonald’s. Mind you, the child asked to play outside, was given a cell phone in case she needed to reach someone, and the park—a stone’s throw from the mom’s place of work—was overrun with kids enjoying its swings, splash pad, and shade.

A Connecticut mother was charged with leaving her 11-year-old daughter in the car unsupervised while she ran inside a store—despite the fact that the child asked to stay in the car and was not overheated or in distress. A few states away, a New Jersey man was arrested and charged with endangering the welfare of his children after leaving them in a car parked in a police station parking lot, windows rolled down, while he ran inside to pay a ticket.

A Virginia teenager was charged with violating the state’s sexting law after exchanging sexually provocative videos with his girlfriend. Instead of insisting that the matter be dealt with as a matter of parental concern, police charged the boy with manufacturing and distributing child pornography and issued a search warrant to “medically induce an erection” in the 17-year-old boy in order to photograph his erect penis and compare it to the images sent in the sexting exchange.  The police had already taken an initial photograph of the boy’s penis against his will, upon his arrest.

In Georgia, a toddler had his face severely burned when a flash bang grenade, launched by a SWAT team during the course of a no-knock warrant, landed in his portable crib, detonating on his pillow. Also in Georgia, a police officer shot and killed a 17-year-old boy who answered the door, reportedly with a Nintendo Wii controller in his hands. The cop claimed the teenager pointed a gun at her, thereby justifying the use of deadly force. Then there was the incident wherein a police officer, responding to a complaint that some children were “chopping off tree limbs” creating “tripping hazards,” pulled a gun on a group of 11-year-old boys who were playing in a wooded area, attempting to build a tree fort.

While the growing phenomenon of cops shooting family pets only adds to the insanity (it is estimated that a family pet is killed by law enforcement every 98 minutes in America), it’s worse for those who dare to shoot a police dog. Ivins Rosier was 16 when he broke into the home of a Florida highway patrol officer and shot (although he didn’t kill) the man’s retired police dog. For his crime, the teenager was sentenced to 23 years in prison, all the while police officers who shoot family pets are rarely reprimanded.

Meanwhile if you’re one of those hoping to live off the grid, independent of city resources, you might want to think again. Florida resident Robin Speronis was threatened with eviction for living without utilities. Speronis was accused of violating the International Property Maintenance Code by relying on rain water instead of the city water system and solar panels instead of the electric grid.

Now we can shrug these incidents off as isolated injustices happening to “other” people. We can rationalize them away by suggesting that these people “must” have done something to warrant such treatment. Or we can acknowledge that this slide into totalitarianism—helped along by overcriminalization, government surveillance, militarized police, neighbors turning in neighbors, privatized prisons, and forced labor camps, to name just a few similarities—is tracking very closely with what we saw happening in Germany in the years leading up to Hitler’s rise to power.

When all is said and done, what these incidents reflect is a society that has become so bureaucratic, so legalistic, so politically correct, so militaristic, so locked down, so self righteous, and so willing to march in lockstep with the corporate-minded police state that any deviations from the norm—especially those that offend the sensibilities of the “government-knows-best” nanny state or challenge the powers that be—become grist for prosecution, persecution and endless tribulations for the poor souls who are caught in the crosshairs.

Then there are the incidents, less colorful perhaps but no less offensive to the sensibilities of any freedom-loving individual, which should arouse outrage among the populace but often slip under the radar of a sleeping nation.

For instance, not only is the NSA spying on and collecting the content of your communications, but it’s also going to extreme lengths to label as “extremists” anyone who attempts to protect their emails from the government’s prying eyes. Adding insult to injury, those same government employees and contractors spying on Americans’ private electronic communications are also ogling their private photos. Recent revelations indicate that NSA employees routinely pass around intercepted nude photos, considered a “fringe benefit” of surveillance positions.

A trove of leaked documents reveals the government’s unmitigated gall in labeling Americans as terrorists for little more than being suspected of committing “any act that is ‘dangerous’ to property and intended to influence government policy through intimidation.” As The Intercept reports: “This combination—a broad definition of what constitutes terrorism and a low threshold for designating someone a terrorist—opens the way to ensnaring innocent people in secret government dragnets.” All the while, the TSA, despite the billions of dollars we spend on the agency annually and the liberties to which its agents subject travelers, has yet to catch a single terrorist.

No less disconcerting are the rash of incidents in which undercover government agents encourage individuals to commit crimes they might not have engaged in otherwise. This “make work” entrapment scheme runs the gamut from terrorism to drugs. In fact, a recent report released by Human Rights Watch reveals that “nearly all of the highest-profile domestic terrorism plots in the United States since 9/11 featured the ‘direct involvement’ of government agents or informants.”

Most outrageous of all are the asset forfeiture laws that empower law enforcement to rake in huge sums of money by confiscating cash, cars, and even homes based on little more than a suspicion of wrongdoing. In this way, Americans who haven’t been charged with a crime, let alone convicted of wrongdoing, are literally being subjected to highway robbery by government agents offering profit-driven, cash-for-freedom deals.

So who or what is to blame for this bureaucratic nightmare delivered by way of the police state? Is it the White House? Is it Congress? Is it the Department of Homeland Security, with its mobster mindset? Is it some shadowy, power-hungry entity operating off a nefarious plan?

Or is it, as Holocaust survivor Hannah Arendt suggests, the sheepish masses who mindlessly march in lockstep with the government’s dictates—expressing no outrage, demanding no reform, and issuing no challenge to the status quo—who are to blame for the prison walls being erected around us? The author of The Origins of Totalitarianism, Arendt warned that “the greatest evil perpetrated is the evil committed by nobodies, that is, by human beings who refuse to be persons.”

This is where democracy falls to ruin, and bureaucracy and tyranny prevail.

As I make clear in my book A Government of Wolves: The Emerging American Police State, we have only ourselves to blame for this bureaucratic hell that has grown up around us. Too many of us willingly, knowingly and deliberately comprise what Arendt refers to as “cogs in the mass-murder machine.”

These cogs are none other than those of us who have turned a blind eye to the government corruption, or shrugged dismissively at the ongoing injustices, or tuned out the mayhem in favor of entertainment distractions. Just as guilty are those who have traded in their freedoms for a phantom promise of security, not to mention those who feed the machine unquestioningly with their tax dollars and partisan politics.

And then there are those who work for the government, federal, state, local or contractor. These government employees—the soldiers, the cops, the technicians, the social workers, etc.—are neither evil nor sadistic. They’re simply minions being paid to do a job, whether that job is to arrest you, spy on you, investigate you, crash through your door, etc. However, we would do well to remember that those who worked at the concentration camps and ferried the victims to the gas chambers were also just “doing their jobs.”

Then again, if we must blame anyone, blame the faceless, nameless, bureaucratic government machine—which having been erected and set into motion is nearly impossible to shut down—for the relentless erosion of our freedoms through a million laws, statutes, and prohibitions.

If there is any glimmer of hope to be found, it will be at the local level, but we cannot wait for things to get completely out of control. If you wait to act until the SWAT team is crashing through your door, until your name is placed on a terror watch list, until you are reported for such outlawed activities as collecting rainwater or letting your children play outside unsupervised, then it will be too late.

Obedience is the precondition to totalitarianism, and the precondition to obedience is fear. Regimes of the past and present understand this. “The very first essential for success,” Hitler wrote in Mein Kampf, “is a perpetually constant and regular employment of violence.” Is this not what we are seeing now with the SWAT teams and the security checkpoints and the endless wars?

This much I know: we are not faceless numbers. We are not cogs in the machine. We are not slaves. We are people, and free people at that. As the Founders understood, our freedoms do not flow from the government. They were not given to us, to be taken away at the will of the State; they are inherently ours. In the same way, the government’s appointed purpose is not to threaten or undermine our freedoms, but to safeguard them.

Until we can get back to this way of thinking, until we can remind Americans what it really means to be a free American, and learn to stand our ground in the face of threats to those freedoms, and encourage our fellow citizens to stop being cogs in the machine, we will continue as slaves in thrall to the bureaucratic police state.

CONUNDRUM

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Posted on 29th July 2014 by Administrator in Economy |Politics |Social Issues

Hat tip DaveL

The definition of the word Conundrum is something that is puzzling or confusing.

Here are six Conundrums of socialism in the United States of America:

  1. America is capitalist and greedy – yet half of the population is subsidized.
  2. Half of the population is subsidized – yet they think they are victims.
  3. They think they are victims – yet their representatives run the government.
  4. Their representatives run the government – yet the poor keep getting poorer.
  5. The poor keep getting poorer – yet they have things that people in other countries only dream about.
  6. They have things that people in other countries only dream about – yet they want America to be more like those other countries.

Think about it! And that, my friends, pretty much sums up the USA in the 21st Century.

Makes you wonder who is doing the math.

These three, short sentences tell you a lot about the direction of our current government and cultural environment:

  1. We are advised to NOT judge ALL Muslims by the actions of a few lunatics, but we are encouraged to judge ALL gun owners by the actions of a few lunatics. Funny how that works.
  2. Seems we constantly hear about how Social Security is going to run out of money. How come we never hear about welfare or food stamps running out of money? What’s interesting is the first group “worked for” their money, but the second didn’t.
  3. Why are we cutting benefits for our veterans, no pay raises for our military and cutting our army to a level lower than before WWII, but we are not stopping the payments or benefits to illegal aliens.

Am I the only one missing something?

YOU KNOW YOU PICKED THE WRONG GAS STATION TO ROB WHEN……

7 comments

Posted on 29th July 2014 by Administrator in Economy |Politics |Social Issues

,

That’s gonna leave a mark. Hat tip Boston Bob.

THE COMING UNPLEASANTNESS – OL’ REMUS

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Posted on 29th July 2014 by Yojimbo in Economy

This is another post from Ol’ Remus at The Woodpile Report. I like his style of writing quite a bit, and agree with him entirely. He is forecasting catastrophe – and how could it be otherwise?

And yet I get the US Trust “Investment Strategy Overview” newsletter in the mail, and, of course, it is completely in opposition to Ol’ Remus – it’s bullish! Apparently, we are only 5 years into a bull market of 20 years! Major advances in technology are coming! Progress towards US energy independence! A manufacturing renaissance! The imbalances of the past cycle are correcting themselves! Etc.

How does one reconcile these two views?

What an absolutely bizarre time we live in, when there is such a massive disconnect between the mass media hypnosis and reality. Every day is another chapter in Cognitive Dissonance…

http://woodpilereport.com/html/index-380.htm

The coming unpleasantness

The guilty are sneaking away unpunished, nobody’s fixing anything, there’s an orderly-so-far devaluation of the dollar going on, the Treasury has fallen into the hands of counterfeiters and the election process has gone third-world. The home folks are broke, or nearly so, and unemployed, or about to be. Suddenly they understand DC isn’t on their side and now they’re debating whether DC is run by the criminally insane or the merely criminal. Oh yeah, this will end well.

According to a new study by the Russell Sage Foundation, the inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36% decline… it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.
Tyler Durden at zerohedge.com

Now the people who warned of 2008 are saying the market is running out of Greater Fools. They say few retail investors are in equities that don’t have to be—meaning the funds, the 401ks and IRAs, the insurance companies, the compulsive gamblers. And those that don’t hate the market fear the market. They say it’s a gas leak looking for detonation. They say the event will arrive before the warning does.

There are usually no warnings that trouble is coming because everyone at the top of the financial food chain are highly incentivized to keep quiet about problems… Just about every CEO from every major bank spent much of 2008 claiming that all was well… As former banker Jean-Claude Juncker put it, “When it becomes serious, you have to lie.”
Phoenix Capital Research at zerohedge.com

In early 2008 I noted a fairly serious decrease in online “revenue per impression” in the advertising space. This was not reflected in so-called “official” reports from various online ad firms, but I saw it quite-clearly across data I had available to me. What followed, of course, was quite clear in the markets. I am seeing the same pattern develop now.
Karl Denninger at market-ticker.org

Due diligence and fundamentals count for nothing because the arithmetic makes no sense, successful investing amounts to insider information and front running the Fed. The oscillations are wild and coming closer together. But still it goes up. One day it won’t. The crash will be 2008 on afterburner because no one trusts anybody, no one honors anything, no one believes anything. The flash-crash will look stately by comparison. It’ll be like being pushed out of a tree in the dark—pain and terror every inch of the way.

Another horrific stock market crash is coming, and the next bust will be “unlike any other” we have seen. We have never had this before. It’s going to be very painful for investors.
Jeremy Grantham, GMO, via moneynews.com

Warren Buffett’s “best single measure of where valuations stand,” comparing the market value of US companies to the gross national product before inflation, is flashing near record bubble red. Still we are sure, you’ll be able to exit before everyone else when this ends.
Tyler Durden and Bloomberg at zerohedge.com

The most reliable valuation measures have never been higher except in the advance to the 2000 peak (and for some measures the 1929 and 2007 peaks), but they have started to treat these prior pre-crash peaks as objectives to be attained… Make no mistake—this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme.
John Hussman at hussmanfunds.com

We have no right to be surprised by a severe and imminent stock market crash.
Mark Spitznagel via moneynews.com

The market isn’t the economy, true enough, but a couple dozen trillion dollars isn’t exactly budget-dust. The citizenry would see a yawning crater where their 401ks and IRAs used to be. They’d notice when their checking account is gone but their debt isn’t, and when the ATM doesn’t recognize their account number, or when their bank is an empty storefront and their car loan has been sold to Vinnie, or when their insurance company doesn’t answer the phone. As always, people don’t go nuclear until reality invites itself into their living room and defecates on the carpet. That’s when things get interesting—when people notice, when they have to face what was formerly unthinkable and their only fallback is what good people they are.

Those who drove the financial bus off a cliff know the controls still work fine—the brakes and accelerator and steering wheel, all of ‘em, but when the rubber isn’t on the road the effect just ain’t the same. But all that “driving” stuff keeps the passengers from panicking. We’ve seen the grandest larceny in all history. Now, after we’ve been cleaned out, we know the wacko conspiracy guys were right. In fact we’re worse than cleaned out, the place has been turned into a debtor’s prison from sea to shining sea.

Some would have us believe things are turning around—the market’s up and the trend is your friend. Trend? Trend?! The market made gains after the Crash of 1929 too, genuine record recoveries. “Prosperity is just around the corner” referred to those 1930-1931 upticks, not to the unstoppable plunge that followed. As they say, it’s not the fall, it’s the sudden stop. The fall itself can be surprisingly profitable. But what a fall it was. By July of 1932 the Dow had dropped from its high of 367 down to 41. Ten years later, in April of 1942, it touched 100 or so, and that was after foreign panic-money poured in from a Europe at war. The highs of 1929 weren’t seen again until the 1950s. That’s a trend.

There’s always been fraud, but sometime in the recent past the market buckled in a fundamental way and the fraud poured in. Proven reforms painfully enacted over decades were swept away. Fundamentals no longer counted. Creative finance counted. Bubbles and deceit counted. It became a criminal enterprise top to bottom. Accounting firms and regulatory agencies went over to the dark side en masse. As Mark Twain said, every profession is a conspiracy against the common man. Finally the retail investor did something sensible—he ran for his life.

The players left are those who have to stay; the funds, the retirement accounts, the insurance companies, et al, and HFT piranhas are eating them alive at millions of tiny nibbles a second. What used to be an investor’s clearing house has become a betting parlor on the Federal Reserve’s next move. The market goes up on tiny volume and bad news, and way up on very bad news and nearly no volume. They know dark horizons light up the printing presses. Meanwhile, the banks don’t know what they own, or don’t know what it’s worth, but they do know they’re insolvent and so does everybody else. So DC gives money to the banks and then pays the banks to lend it back to them. It’s IOUs paid with IOUs and they can’t write ‘em fast enough.

The bottoming is not completely done. In fact, it has barely even gotten underway yet. We keep propping up losers. The result is we still need to see a repudiation of debt at a massive scale and until that happens, the Long Wave bottom won’t be here. We’re just dancing on the front end of real economic collapse.
George Ure at urbansurvival.com

What to do. The demand for collateral will be ferocious when the debacle starts. Treat debt like any other roadside bomb. Staying current isn’t enough. Any collaterized debt is too much debt. You can’t know which exit is the last exit. The grace period with the trillion-dollar price tag is ending and it’s ending badly. This disaster has been bought off for decades. When it happens it’ll go down fast. Exactly how and when can be sorta-kinda foreseen but not actually known. A cascade can start from anywhere. But this much can be said: the collateral chaos will hit the system like a weapons-grade laxative. Everything that’s been contained, covered up and denied will come spewing out looking for daddy. It’ll take weeks, not months to come apart. Maybe days.

Get as independent as you can while you can. There are parts of this game where the only winning move is to not play. Doesn’t mean you have to go all Rambo and head off to some mountain valley, although that’s one way. But it does mean putting stuff by so you can get by. “Stuff” means food stored long-term and the wherewithal to get or grow more, uninterruptible for-sure potable water, an off-the-grid heating system, meds and medical supplies, clothing for hard times and hard work and being out in life-threatening weather because you have to be, the means to defend hearth and hoard, batteries and a way to recharge them, cash and real money—meaning gold and silver—all the things you already know but haven’t done. Knowing isn’t doing, doing is doing.

FDR‘s bailout of the Federal government also went so far as to also issue Executive Order 6814 “Requiring the delivery of all silver to the United States for coinage.” And what was that worth at the time? In terms of present dollars, that works out to about $22.77 per ounce. Given that silver is trading below current dollar equivalents of the Depression confiscation prices and gold is still trading at 3.44-times Depression confiscation prices, my personal bias may be inferred.
George Ure at peoplenomics.com

Plan B. If you’re in a city, have a viable destination and two or three tried and proven ways to get there. Practice and take notes. Again, only doing is doing. Plan as if your life depends on it. Take a hike, go the hard way through the hills and woods, you’ll discover how long an unpaved mile can be. Make a squirrel dinner, yes they’re cute, but there may come a day when only one of you is going to live. Besides, they’re yummy. Mankind acquired these tastes over geological epochs, you’ve not lost them, merely misplaced them.

Everything seems obvious and predictable in retrospect. This stuff is pretty obvious and predictable now. And there are always better reasons to not do something than to do it. You know most people won’t get serious until after it was absolutely necessary. Too late. They’ll fail, mostly. Worse, they’ll needlessly fail at the easy part of the learning curve. Prepared is prepared, you are or you aren’t. Do what you can. And as always, stay away from crowds.

We’re Ready to Profit in the Coming Correction—Are You?

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Posted on 29th July 2014 by Administrator in Economy |Politics |Social Issues

We’re Ready to Profit in the Coming Correction—Are You?

By Laurynas Vegys, Research Analyst

Sometimes I see an important economic or geopolitical event in screaming headlines and think: “That’s bullish for gold.” Or: “That’s bad news for copper.” But then metals prices move in the opposite direction from the one I was expecting. Doug Casey always tells us not to worry about the short-term fluctuations, but it’s still frustrating, and I find myself wondering why the price moved the way it did.

As investors we’re all affected by surges and sell-offs in the investments that we own, so I want to understand. Take gold, for example. Oftentimes we find that it seems to tease us with a nice run-up, only to give a big chunk of the gains back the next week. And so it goes, up and down…

The truth is—and it really is this simple, but so obvious that people forget—that there are always rallies and corrections. The timing is rarely predictable, but big market swings within the longer-term megatrends we’re speculating on are normal in our sector.

Since 2001, the gold price had 20 surges of 12% or greater, including the one that kick-started 2014. Even with last year’s seemingly endless “devil’s decline,” we got one surge. If we were to lower the threshold to 8%, there’d be a dozen more and an average of three per year, including two this year.

Here at Casey Research, we actually look forward to corrections. Why? We know we’ll pay less for our purchases—they’re great for new subscribers who missed the ground-floor opportunities years ago.

This confidence, of course, is the product of decades of cumulative experience and due diligence. We’re as certain as any investor can ever be that today’s data and the facts of history back our speculations on the likely outcomes of government actions, including the future direction of the gold price.

When you keep your eye firmly on the ball of the major trends that guide us, you can see rallies and corrections for what they are: roller-coaster rides that give us opportunities to buy and take profits. This volatility is the engine of “buy low, sell high.” Understanding this empowers the contrarian psychology necessary to buy when prices on valuable assets tank, and to sell when they soar.

There have been plenty of opportunities to buy during the corrections in the current secular gold bull market. The following chart shows every correction of 6% or more since 2001.

As you can see, there have been 28 such corrections over the past 13 years—two per year, on average. Note that the corrections only outnumber surges because we used a lower threshold (6%). At the 12% threshold we used for surges, there wouldn’t be enough to show the somewhat periodic pattern we can see above. It’s also worth noting that our recent corrections fall well short of the sharp sell-off in the crash of 2008.

Of course, there are periods when the gold price is flat, but the point is that these kinds of surges and corrections are common.

Now the question becomes: what exactly drives these fluctuations (and the price of gold in general)?

In tackling this, we need to recognize the fact that not all “drivers” are created equal. Some transient events, such as military conflicts, political crises, quarterly GDP reports, etc., trigger short-lived upswings or downturns (like some of those illustrated in the charts above). Others relate to the underlying trends that determine the direction of prices long term. Hint: the latter are much more predictable and reliable. Major financial, economic, and political trends don’t occur in a vacuum, so when they seem to become apparent overnight, it’s the people watching the fundamentals who tend to be least surprised.

Here are some of the essential trends we are tracking…

The Demise of the US Dollar

Gold is priced around the world in United States dollars, so a stronger US dollar tends to push gold lower and a weaker US dollar usually drives gold higher. With the Fed’s money-printing machine (“quantitative easing”) having been left on full throttle for years, a weaker dollar ahead is a virtual certainty.

At the same time, the US dollar’s status as reserve currency of the world is being pushed ever closer to the brink by the likes of Russia and China. Both have been making moves that threaten to dethrone the already-precarious USD. In fact, a yuan-ruble swap facility that excludes the greenback as well as a joint ratings agency have already been set up between China and Russia.

The end of the USD’s reign as reserve currency of the world won’t end overnight, but the process has been set in motion. Its days are all but numbered.

The consequences are not favorable for the US and those living there, but they can be mitigated—or even turned into opportunities to profit—for those who see what’s coming. Specifically, this big-league trend is extremely bullish for real, tangible assets, especially gold.

Out-of-Control Government Debt and Deficits

Readers who’ve been with us for a while know that another major trend destined for some sort of cataclysmic endgame can be seen in government fiscal policy: profligate spending, debt crises, currency crises, and ultimately currency regime change. This covers more than the demise of the USD as reserve currency of the world (as mentioned above); it also covers a loss of viability of the euro, and hyperinflationary outcomes for smaller currencies around the world as well.

It’s worth noting that government debt was practically nonexistent, by modern standards, halfway through the 20th century. It has seen a dramatic increase with the expansion of government spending, worldwide.

The US government has never been as deep in debt as it is today, with the exception of the periods of World War II and its immediate aftermath, having recently surpassed a 100% debt-to-GDP ratio.

Such an unmanageable debt load has made deficits even worse. Interest payments on debt compound, so in time, interest rates will come to dominate government spending. Neither the dollar nor the economy can survive such a massive imbalance so something is bound to break long before the government gets to the point where interest gobbles up 80%+ of the budget.

Gold Flowing from West to East

The most powerful trend specifically in gold during the past few years has been the tidal shift in the flow of gold from West to East. China and India are the names of the game with the former having officially overtaken the latter as the world’s largest buyer of gold in 2013. Last year alone, China imported over 1,000 tonnes of gold through Hong Kong and mined some 430 tonnes more.

China hasn’t updated its government holdings of gold since it announced it had 1,054 tonnes in 2009, but it’s plain to see that by now there is far more gold than that, whether in central bank vaults or private hands. Just adding together the known sources, China should have over 4,000 tonnes of monetary gold, and that’s a very conservative estimate. That would put China in second place in the world rankings of official gold holdings, trailing only the United States. The Chinese government supports this accumulation of gold, so this can be seen as a step toward making the Chinese renminbi a world currency—which would have a lot more behind it than US T-bills.

India presents just as strong a bullish case, if only slightly tainted with Indian government’s relentless crusade to rein in the country’s current account deficit by maintaining the outrageously high (i.e., 10%) import duty on gold and silver. Of course, this just means more gold smuggling, which casts official Indian stats into question, as more and more of the industry moves into the black and grey markets. World Gold Council research estimates that 75% of Indian households would either continue or increase their gold buying in 2014. Even without gold-friendly policies in place, this figure is extremely bullish for gold and in line with the big picture we’re betting on.

So What?

Nobody can predict when the next rally will occur nor the depth of the next sell-off. I can promise you this: as an investor you’ll be much happier about those surges if you stick to buying during the corrections. But it has to be for the right reasons, i.e., buying when prices drop below reasonable (if not objective) valuation, and selling when they rise above it. Focusing on the above fundamental trends and not worrying about short-term triggers can help.

Profiting from these trends is what we dedicate ourselves to here. Under current market conditions, that means speculating on the best mining stocks that offer leverage to the price of gold.

Here’s what I suggest: test-drive the International Speculator for 3 months with a full money-back guarantee, and if it’s not everything you expected, just cancel for a prompt, courteous refund of every penny you paid. Click here to get started now.