IT WAS A FEELING

After getting an extra hour of sleep last night I followed my normal Sunday routine of heading to Wal-Mart and Giant at 7:00 am to avoid the onslaught of Wal-Creatures. It was crisp Fall morning with temperatures in the low 50’s with a gusty breeze. The sun was up and as I looked up expecting nothing but blue skies. What did I see? I saw chem-trails all over the sky. If you looked to the left, nothing but blue. Look to the right and you saw chem-trails forming into low level clouds. That pissed me off and set the mood for the trip.

As I drove the few miles on empty roads I couldn’t help but get the feeling the next few days would be historic and game changing. Normally I just get the essentials I need at Wal-Mart and then make my way to Giant for the food. Today I had a feeling I should pick up a few extras. Another case of water and a few extra gallon jugs to add to my supply. Some more supplies from the emergency aisle. Last week I bought another large propane tank. I’ve had this feeling before, and nothing came of it. But the water and supplies are in my storage area for when I am right. No downside to being prepared too early.

Continue reading “IT WAS A FEELING”

Canada Goes Full-Krugman

Submitted by FRANCIS MARION

Prologue: The Liberal government campaigned on running a deficit and the sheep bought it. They will run about 30 billion over the next few years – almost three times the amount they originally promised. There will be lots of free shit for special interest groups and for aboriginal Canadians. Promised tax breaks for small businesses have been deferred indefinitely as a result and income taxes for the middle class are now up. The message being – the politicians, the banks and the FSA benefits and the productive and future generations will pay for it.
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 Canada Goes Full-Krugman, Jacks Up Borrowing And Spending, Confirms Gold Sale

Bill Morneau took centre stage last week in the Canadian Parliament and didn’t disappoint. The new Liberal finance minister’s first budget jacked up program spending across the board, to be paid for by borrowing and, eventually, presumably, money printing. His rhetoric was coated with suggestions that “economic growth” would solve the country’s problems. The only folks left out were taxpayers and savers.

On the face of it, Morneau’s logic makes sense. With interest rates near zero and the Canadian government’s debts among the lowest in the G-7, why not borrow a bit and invest in infrastructure? Well, there are several reasons – and all of them augur well for the future of gold.

Canadian government debt at record levels

Morneau is technically right. The Canadian government’s debt is at low levels compared to that of other advanced economies. However, those numbers are shaky. For one, they include only federal debts, not provincial debts. If you include all Canadian government debts including the provinces (US states are not allowed to run deficits), things look far worse.

Continue reading “Canada Goes Full-Krugman”

Rewriting the History of the Financial Crises and the Repeal of Glass-Steagall

Guest Post by Jesse

In December 1996, with the support of Chairman Alan Greenspan, the Federal Reserve Board issues a precedent-shattering decision permitting bank holding companies to own investment bank affiliates with up to 25 percent of their business in securities underwriting (up from 10 percent).

This expansion of the loophole created by the Fed’s 1987 reinterpretation of Section 20 of Glass-Steagall effectively renders Glass-Steagall obsolete. Virtually any bank holding company wanting to engage in securities business would be able to stay under the 25 percent limit on revenue. However, the law remains on the books, and along with the Bank Holding Company Act, does impose other restrictions on banks, such as prohibiting them from owning insurance-underwriting companies.

In August 1997, the Fed eliminates many restrictions imposed on “Section 20 subsidiaries” by the 1987 and 1989 orders. The Board states that the risks of underwriting had proven to be “manageable,” and says banks would have the right to acquire securities firms outright…

As the push for new legislation heats up, lobbyists quip that raising the issue of financial modernization really signals the start of a fresh round of political fund-raising. Indeed, in the 1997-98 election cycle, the finance, insurance, and real estate industries (known as the FIRE sector), spends more than $200 million on lobbying and makes more than $150 million in political donations. Campaign contributions are targeted to members of Congressional banking committees and other committees with direct jurisdiction over financial services legislation.

PBS Frontline: The Long Demise of Glass-Steagall

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”

Upton Sinclair

The Glass-Steagall Law was enacted as a key reform in 1933, the depths of the Great Depression, in the overall effort to prevent the corruptions and abuses of the 1920’s from enabling such a dire result again.

Continue reading “Rewriting the History of the Financial Crises and the Repeal of Glass-Steagall”

THINK OF THE ECONOMIC BOOST TO GDP

Krugman is rooting for something like this to revive our economy. Nothing like a sewer system, streets, vehicles, businesses, and people all getting wiped out in one night. Think of all the infrastructure spending, property insurance payouts, and life insurance payouts. It’s a Keynesian wet dream. Taiwan is so lucky.

At least 24 people were killed and 271 others injured when several underground gas explosions ripped through Taiwan’s second-largest city overnight, hurling concrete through the air and blasting long trenches in the streets. READ MORE: http://on.rt.com/bv4rck

CULTURE OF IGNORANCE – PART ONE

“Five percent of the people think;
ten percent of the people think they think;
and the other eighty-five percent would rather die than think.”

– Thomas Edison

The kabuki theater that passes for governance in Washington D.C. reveals the profound level of ignorance shrouding this Empire of Debt in its prolonged death throes. Ignorance of facts; ignorance of math; ignorance of history; ignorance of reality; and ignorance of how ignorant we’ve become as a nation, have set us up for an epic fall. It’s almost as if we relish wallowing in our ignorance like a fat lazy sow in a mud hole. The lords of the manor are able to retain their power, control and huge ill-gotten riches because the government educated serfs are too ignorant to recognize the self-evident contradictions in the propaganda they are inundated with by state controlled media on a daily basis.

 

“Any formal attack on ignorance is bound to fail because the masses are always ready to defend their most precious possession – their ignorance.” Hendrik Willem van Loon

The levels of ignorance are multi-dimensional and diverse, crossing all educational, income, and professional ranks. The stench of ignorance has settled like Chinese toxic smog over our country, as various constituents have chosen comforting ignorance over disconcerting knowledge. The highly educated members, who constitute the ruling class in this country, purposefully ignore facts and truth because the retention and enhancement of their wealth and power are dependent upon them not understanding what they clearly have the knowledge to understand. The underclass wallow in their ignorance as their life choices, absence of concern for marriage or parenting, lack of interest in educating themselves, and hiding behind the cross of victimhood and blaming others for their own failings. Everyone is born ignorant and the path to awareness and knowledge is found in reading books. Rich and poor alike are free to read and educate themselves. The government, union teachers, and a village are not necessary to attain knowledge. It requires hard work and clinging to your willful ignorance to remain stupid.

The youth of the country consume themselves in techno-narcissistic triviality, barely looking up from their iGadgets long enough to make eye contact with other human beings. The toxic combination of government delivered public education, dumbed down socially engineered curriculum, taught by uninspired intellectually average union controlled teachers, to distracted, unmotivated, latchkey kids, has produced a generation of young people ignorant about history, basic mathematical concepts, and the ability or interest to read and write. They have been taught to feel rather than think critically. They have been programmed to believe rather than question and explore. Slogans and memes have replaced knowledge and understanding. They have been lured into inescapable student loan debt serfdom by the very same government that is handing them a $200 trillion entitlement bill and an economy built upon low paying service jobs that don’t require a college education, because the most highly educated members of society realized that outsourcing the higher paying production jobs to slave labor factories in Asia was great for the bottom line, their stock options and bonus pools.

Instead of being outraged and lashing out against this injustice, the medicated, daycare reared youth passively lose themselves in the inconsequentiality and shallowness of social media, reality TV, and the internet, while living in their parents’ basement. They have chosen the ignorance inflicted upon their brains by thousands of hours spent twittering, texting, facebooking, seeking out adorable cat videos on the internet, viewing racist rap singer imbeciles rent out sports stadiums to propose to vacuous big breasted sluts on reality cable TV shows, and sitting zombie-like for days with a controller in hand blowing up cities, killing whores, and murdering policemen using their new PS4 on their 65 inch HDTV, rather than gaining a true understanding of the world by reading Steinbeck, Huxley, and Orwell. Technology has reduced our ability to think and increased our ignorance.

“During my eighty-seven years, I have witnessed a whole succession of technological revolutions. But none of them has done away with the need for character in the individual or the ability to think.” – Bernard M. Baruch

The youth have one thing going for them. They are still young and can awaken from their self-imposed stupor of ignorance. There are over 80 million millenials between the ages of 8 and 30 years old who need to start questioning the paradigm they are inheriting and critically examining the mendacious actions of their elders. The future of the country is in their hands, so I hope they put down those iGadgets and open their eyes before it is too late. We need many more patriots like Edward Snowden and far fewer twerking sluts like Miley Cyrus if we are to overcome the smog of apathy and ignorance blanketing our once sentient nation.

The ignorance of youth can be chalked up to inexperience, lack of wisdom, and immaturity. There is no excuse for the epic level of ignorance displayed by older generations over the last thirty years. Boomers and Generation X have charted the course of this ship of state for decades. Ship of fools is a more fitting description, as they have stimulated the entitlement mentality that has overwhelmed the fiscal resources of the country. Our welfare/warfare empire, built upon a Himalayan mountain of debt, enabled by a central bank owned by Wall Street, and perpetuated by swarms of corrupt bought off spineless politicians, is the ultimate testament to the seemingly limitless level of ignorance engulfing our civilization. The entitlement mindset permeates our culture from the richest to the poorest. Mega-corporations use their undue influence (bribes disguised as campaign contributions) to elect pliable candidates to office, hire lobbyists to write the laws and tax regulations governing their industries, and collude with the bankers and other titans of industry to harvest maximum profits from the increasingly barren fields of a formerly thriving land of milk and honey. By unleashing a torrent of unbridled greed, ransacking the countryside, and burning down the villages, the ruling class has planted the seeds of their own destruction.

When the underclass observes Wall Street bankers committing the crime of the century with no consequences for their actions, they learn a lesson. When billionaire banker/politicians like Jon Corzine can steal $1.2 billion directly from the accounts of farmers and ranchers and continue to live a life of luxury in one of his six mansions, they get the message. Wall Street bankers are allowed to commit fraud, reaping profits of $25 billion, and when they are caught red handed pay a $5 billion fine while admitting no guilt. No connected bankers have gone to jail for crashing the worldwide financial system, but teenage marijuana dealers are incarcerated for ten years in our corporate prison system. The message has been received loud and clear by the unwashed masses. Committing fraud and gaming the system is OK. Only suckers play by the rules anymore. A culture of lawlessness, greed, fraud, deceit, swindles and scams was fashioned by those in power. Reckless disregard for honesty, truthfulness, fair dealing, and treating others as you would like to be treated, has permeated the beliefs and behavior of our society.

The ever increasing number of people in the SNAP program along with abuses committed by retailers and recipients, the skyrocketing number of people faking their way into the SSDI program, billions of taxpayer dollars lost to Medicare fraud, billions more lost paying out earned income tax credit refunds based on non-existent children, public schools falsifying test scores, students cheating on SAT tests, credit card fraud on a grand scale, failure to report income and falsifying tax returns, and a myriad of other dodges and scams are just a reflection of a moral and cultural collapse. The dog eat dog mentality glorified by the media, with such despicable men as Dimon, Greenspan, Corzine, Clinton, Trump, Rubin, Bernanke and Bloomberg honored as pillars of society, has displaced honesty, compassion, humanity, shared sacrifice, and caring about our descendants. Self-interest, self-indulgence, and a narcissistic focus on what is in it for me today has led to an implosion of trust and an attitude of “who cares” about our fellow man, morality, right or wrong, and the fate of future generations. We ignored the warnings of our last President who displayed courageousness and truthfulness when speaking to the American people.

“As we peer into society’s future, we — you and I, and our government — must avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.” Dwight D. Eisenhower

The Me Generation has devolved into the Me Culture. While the masses have been mesmerized by their iGadgets, zombified by the boob tube, programmed to consume by the Madison Avenue propaganda machines, enslaved in chains of debt by the Wall Street plantation owners, and convinced by their fascist government keepers that phantom terrorists are hiding behind every bush, they surrendered their freedoms, liberties and sense of self-responsibility. There will always be evil men seeking to control and manipulate the ignorant and oblivious. A citizenry armed with knowledge, critical thinking skills, and moral integrity would not passively submit to the will of a corporate fascist oligarchy. Well educated, well informed citizens, capable of critical thinking are dangerous to rich men of evil intent. Obedient, universally ignorant, distracted, fearful, morally depraved slaves are what the owners of this country want. As the light of knowledge flickers and dies, we sink into the darkness of ignorance.

 

“No people will tamely surrender their Liberties, nor can any be easily subdued, when knowledge is diffused and virtue is preserved. On the Contrary, when People are universally ignorant, and debauched in their Manners, they will sink under their own weight without the Aid of foreign Invaders.”Samuel Adams

Cult of Ignorance

“There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that “my ignorance is just as good as your knowledge.”Isaac Asimov

  

“While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.

In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of man to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.”Henry Hazlitt

America’s cult of ignorance, combined with the selfish interests of various constituencies, the character weakness of the people elected to office, a lack of understanding or interest in basic mathematical concepts, and inability to comprehend the long term and unintended consequences of every piece of legislation, have brought the country to the brink of fiscal disaster. But still, the vast majority of Americans, including the supposed intellectuals and economic “experts”, are basking in their ignorance, as the stock market reaches a new high, the local GM dealer just gave them a 7 year $40,000 auto loan at 0% on that brand new Cadillac Escalade, Bank of America still hasn’t foreclosed on their McMansion two years after making their last mortgage payment, and they just received three pre-approved credit card notices from Capital One, American Express and Citicorp. As long as Bennie has our back printing $1 trillion new greenbacks per year, nothing can possibly go wrong. Our best and brightest economic minds are always right:

“Stocks have reached what looks like a permanently high plateau.” – Irving Fisher, Professor of Economics, Yale University, 1929

“Many of the new financial products that have been created, with financial derivatives being the most notable, contribute economic value by unbundling risks and shifting them in a highly calibrated manner. Although these instruments cannot reduce the risk inherent in real assets, they can redistribute it in a way that induces more investment in real assets and, hence, engenders higher productivity and standards of living.” – Alan Greenspan – March 6, 2000

“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.” Ben Bernanke – July 2005

The profound level of ignorance displayed by economists, politicians, business leaders, media personalities, and the average American, regarding the mathematically unsustainable path of our fiscal ship is perplexing to me on so many levels. If the Federal government was a family, the budget ceiling debate would be put into the following terms. Our household earns $28,000 per year, but we spend $38,000 per year and add $10,000 to our credit card balance, which stands at the limit of $170,000. In addition, we owe our neighbors $2 million we don’t have because we promised to pay if they voted for us as Treasurer of our homeowners association. We celebrate our good fortune of getting approved for another credit card with a $30,000 limit by increasing our spending to $39,000 per year. Intellectuals scorn such simplistic analogies by glibly pointing out that the family has a crazy uncle with a printing press in the basement and can pay-off the debt with his freshly printed dollars. And this is where the deliberate and calculated ignorance by the highly educated Ivy Leaguers regarding long term and unintended consequences is revealed. They ignore, manipulate, cover-up and obscure the facts because their wealth, power and influence depend upon them doing so. But ignorance doesn’t change the facts.

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

Nothing exposes the ignorance of various factions within our society better than a debate about budgets, spending, and unfunded liabilities. This is where every party, group, special interest, and voting bloc ignore any and all facts that are contrary to their selfish interest. They only see what they want to see. The fallacies, errors, omissions and mistruths of their positions are inconsequential to people who only care about their short-term self-seeking interests. When I question the out of control spending on entitlements and our impossible to honor level of unfunded liabilities, those of a liberal persuasion lash out with accusations of hating the poor, starving children and throwing granny under the bus. Anyone suggesting we should slow our spending is branded a terrorist by the overwhelmingly liberal legacy media.

When I accuse Wall Street bankers of criminal fraud and ongoing manipulation of the financial markets, the CNBC loving apologists for these felons bellow about the market always being right. When I rail about the military industrial complex and our un-Constitutional invasions of other countries, the neo-cons come out in force blathering about the war on terror and imminent threats. When I point out the horrific results of our government run educational system and how mediocre union teachers are bankrupting our states and municipalities with their gold plated health and pension plans, I’m met with howls of outrage about the poor children. The common thread is that facts are ignored because each of their agendas requires ignorance on the part of their team’s fans.

The following chart of truth portrays an unsustainable path. Ignoring the facts will not change them. This isn’t a Republican problem or a Democrat problem. It’s an American problem.

 

“There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: “In the long run we are all dead.” And such shallow wisecracks pass as devastating epigrams and the ripest wisdom.” Henry Hazlitt

Henry Hazlitt may have written these words six decades ago, but they aptly describe Paul Krugman and the legions of Keynesian apostles whose bastardized interpretation of Keynes’ theory has led us to this fiscal cliff. How anyone can truly believe that borrowing to consume foreign produced goods versus saving and making job creating capital investments is a rational and sustainable economic policy is the height of ignorance. One look at this chart exposes the political party system as a sham. When it comes to the fiscal train wreck, set in motion thirty years ago, the ignorant media pundits peddle a narrative about politicians failing to compromise as the culprit in this derailment. Nothing could be further from the truth. Compromise is what has gotten us to this point. The Republicans compromised and allowed the Democrats to create a welfare state. The Democrats compromised and allowed the Republicans to create a warfare state. The Federal Reserve compromised their mandate of stable prices and preventing financial calamities by inflating away 95% of the dollar’s purchasing power in 100 years, while creating bubbles every five or so years, like clockwork. There are a myriad of facts related to the chart above that cannot be ignored:

  • It took 192 years for the country to accumulate $1 trillion in debt. It has taken us 30 years to accumulate the next $16 trillion of debt. We now add $1 trillion of debt per year.
  • If the Federal government was required to use GAAP accounting, the annual deficit would amount to $6.7 trillion per year.
  • The fiscal gap of unfunded future liabilities for Social Security, Medicare, Medicaid, and government pensions is $200 trillion.
  • Using realistic growth assumptions adds another $6 trillion of state and local government unfunded pension benefits to the equation.
  • The Federal government has increased their annual spending from $1.8 trillion during Bill Clinton’s last year in office to $3.8 trillion today, a 110% increase. The population has increased by 12% over that same time frame, and real GDP has advanced by 25% since 2000.
  • Defense spending has increased from $358 billion in 2000 to $831 billion today, despite the fact that no country on earth can challenge us militarily.
  • The average Baby Boomer will receive $300,000 more than they contributed to Social Security and Medicare over their lifetime. Over 10,000 Boomers per day will turn 65 for the next 17 years.
  • The Social Security lockbox is filled with IOUs. The funds collected from paychecks over the last 80 years were spent by Congress on wars of choice, bridges to nowhere, and thousands of other vote buying ventures.
  • A normalization of interest rates to long-term averages would double or triple the interest on the national debt and increase our annual deficits by at least 30%.
  • Obamacare and the unintended consequences of Obamacare will add tens of trillions to our national debt. The initial budget projections for Medicare and Medicaid showed only a modest financial impact on the financial situation of the country. How did that work out?
  • Entitlement spending in 2003 was $1.3 trillion. Entitlement spending in 2008 was $1.7 trillion. Entitlement spending in 2013 was $2.2 trillion. Entitlement spending in 2018 will be $2.8 trillion, as these programs are on automatic pilot.

When you consider the facts in a rational manner, without vitriolic denials, bitter accusations, acrimonious blame, and rejection of the entire premise, you come to the conclusion that we’ve passed the point of no return. Decades of bad choices, bad leadership, bad men in important positions, bad education, bad governance, and bad citizenship have led to bad times. But very few people, across all socio-economic classes, have any interest in understanding the facts or making the tough choices required to save future generations from a life of squalor. We willfully choose to ignore the facts.

“Most ignorance is vincible ignorance. We don’t know because we don’t want to know.” Aldous Huxley

Our degraded and ignorant society is incapable of comprehending their dire circumstances or acting for the common good of the country. We are a nation on the take. Greed really is good. Everyone needs to play the game. From the top floor corporate CEO suite to the decaying urban wastelands, we have chosen comforting ignorance to uncomfortable knowledge. Our warped form of democracy enriches the few at the top, while dispensing enough subsistence payments to the lower classes to keep them from revolting, while enslaving the middle class in debt and convincing them it’s really wealth. Mencken understood the pathetic impulses of the American populace decades before we reached our point of no return.

“Democracy is a pathetic belief in the collective wisdom of individual ignorance.” – H.L. Mencken

The only way a democracy can survive is if the population is knowledgeable, vigilant, skeptical, educated, individually responsible, self-reliant, moral, capable of critical thinking and willing to accept the consequences of their actions. A nation of takers, fakers and blamers will not last long. We’ve degenerated into a nation of knowledge hating book burners. Our culture of ignorance will lead to the destruction of our culture and the ignorant masses will wonder what happened.

 

“But you can’t make people listen. They have to come round in their own time, wondering what happened and why the world blew up around them. It can’t last.”Ray Bradbury – Fahrenheit 451

In Part Two of this examination about our culture of ignorance I’ll explore the roles of technology, family breakdown, government, and propaganda in creating the ignorance that is consuming our system like a mutant parasite. If you are seeking a happy ending, I suggest looking elsewhere.

TRYING TO STAY SANE IN AN INSANE WORLD – PART 2

In Part 1 of this article I detailed the insane solutions proposed and executed since 2008 by our owners as they attempt to retain and further expand their ill-gotten wealth, acquired through fraud, deceit, swindles, and the brilliant manipulation and exploitation of the masses through Bernaysian propaganda techniques. Madness has engulfed the entire world, with a concentration of power in the hands of a few psychopathic financial elite wielding an inordinate and dangerous expanse of power over the lives of the common man. They are a modern day version of Al Capone, except their weapons of choice aren’t machine guns, but a printing press, peddling debt, creating derivatives of mass destruction, and peddling heaping doses of disinformation. The contemporary criminal class wears Hermes suits, Rolex watches and diamond studded pinky rings, drops $500 to dine at Masa in NYC, travels by chauffeured limo, lives in $10 million NYC penthouse suites, occupies luxurious corner offices in hundred story glass towers, and spends weekends hobnobbing with the other financial elite at their villas in the Hamptons. They have nothing but utter contempt for the lowly peasants who depend upon a weekly paycheck to make ends meet. Why work when you can steal $1 or $2 billion from farmers with no consequences?

  

The willfully ignorant masses are kept at bay by the selling them a false dichotomy of Republicans versus Democrats, conservatives versus liberals, and capitalism versus socialism. The ruling class distracts the public with fake wars on poverty, drugs and terror, while using these storylines to further enrich themselves and keep the public alarmed and frightened. We’ve been “fighting” the wars on poverty and drugs for over four decades and poverty is at record levels, while drugs are easier to obtain than candy in a candy store. The war on terror is nothing more than a corporate arms dealer welfare plan. The end of the Cold War put a real crimp in the bottom lines of Lockheed Martin and the rest of the peddlers of death. 9/11 and the subsequent undeclared wars in Iraq, Afghanistan, Libya and now Syria, with Iran on the horizon, have been a godsend to the bottom lines of the corporations Eisenhower warned about in 1961. In reality, the politicians are interchangeable and bought off by corporate and special interests. The people are sold a fable, and controlled opposition is the fairy tale. They perpetuate the welfare/warfare state that enriches Wall Street, the military industrial complex, the healthcare service complex, politically connected mega-corporations and the corporate media propaganda complex. The American people are given the illusion of choice by their keepers. The system is rigged. The real decisions are made by unelected secretive men who operate in the shadows and use their wealth to direct the decision making of the politicians, government bureaucrats, and corporate entities that benefit from those decisions. Edward Bernays described a society that existed in the 19th Century, 20th Century, and has now grown to immense proportions in the 21st Century:

“Political campaigns today are all sideshows…A presidential candidate may be ‘drafted’ in response to ‘overwhelming popular demand,’ but it is well known that his name may be decided upon by half a dozen men sitting around a table in a hotel room…The conscious manipulation of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.”Edward Bernays 

The manipulation of the masses has been perfected by the ruling class through decades of corporate mass media messaging the purposeful dumbing down of the populace through government public school education that teaches children how to feel rather than how to think. The conscious manipulation of the masses has been designed to produce obedient non-thinking consumers of corporate products, educated to believe the accumulation of material goods with debt constitutes wealth, to fear whatever the government tells them to fear, and never look up from their iGadgets long enough to actually think for themselves. We are bombarded with Orwellian memes designed to keep us sedated and pliant, as the ruling class pillages the national wealth and expands their power and control over our lives.

Conform; Stay Asleep; Do Not Question Authority; Obey; Consume; Reproduce; Submit; Watch TV; Buy; Follow; Doubt Humanity; No New Ideas; Feel, Don’t Think; Fear; Accumulate; Honor Apathy; Believe Experts; Surrender; Spend; No Independent Thought; Win; Want More; Hate; Succumb To Desire; Yield To Power; Choose Safety Over Liberty; Choose Security Over Freedom   

This insane world was created through decades of bad decisions, believing in false prophets, choosing current consumption over sustainable long-term savings based growth, electing corruptible men who promised voters entitlements that were mathematically impossible to deliver, the disintegration of a sense of civic and community obligation and a gradual degradation of the national intelligence and character.

Are You Sane?

“A sane person to an insane society must appear insane.” – Kurt Vonnegut – Welcome to the Monkey House

Vonnegut and Huxley’s social commentary reveals a basic truth that societies and human beings have been prone to bouts of madness over the course of decades and centuries. Humans are a weak species, susceptible to the vagaries of greed, lust, gluttony, wrath, sloth, envy and pride. The seven deadly sins are in full bloom today, as the American empire descends through Dante’s inferno of reality TV, celebrity worship, religious zealotry, adulation of wealthy titans, military conquest and worship of false idols. Over the centuries humans have gone mad over tulips, farm land, stocks, and real estate. The easily duped American populace has been victimized by multiple bubbles bursting since the creation of the Federal Reserve in 1913. The contention that a central bank run by private banking interests would promote a safer financial system and a stable currency is laughable. The Federal Reserve and the bankers who control it have created three stock bubbles, the largest housing bubble in history, a bond bubble and the mother of all debt bubbles, while destroying 95% of the dollar’s purchasing power in the last 100 years.

There is a common denominator in all the bubbles created over the last century – Wall Street bankers and their puppets at the Federal Reserve. Fractional reserve banking, control of a fiat currency by a privately owned central bank, and an economy dependent upon ever increasing levels of debt are nothing more than ingredients of a Ponzi scheme that will ultimately implode and destroy the worldwide financial system. Since 1913 we have been enduring the largest fraud and embezzlement scheme in world history, but the law of diminishing returns is revealing the plot and illuminating the culprits. Bernanke and his cronies have proven themselves to be highly educated one trick pony protectors of the status quo.

Greenspan’s easy money policies, manufacturing of negative real short term interest rates, regulatory malfeasance and unspoken promise to bail out Wall Street whenever their excessive risk taking threatened to burn down the financial system, led to 50% stock market crash in 2000/2001, a 40% plunge in national home prices, and another 55% stock market crash in 2008/2009. While Ivy Leaguers Bernanke, Paulson, Hubbard, Krugman, and Bush were too obtuse or too blinded by their ideology to recognize the fraudulent housing and stock market bubbles, honest clear thinking men like Robert Shiller, John Hussman, and Ron Paul recognized the bubbles well in advance and understood the consequences to the average American.

“Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss.” – Ron Paul – 2003

What Ron didn’t realize was the peddlers and packagers of fraudulent mortgage debt on Wall Street would walk away unscathed when the bubble they created popped. Trillions of net worth was vaporized due to the policies, solutions, and programs designed and implemented by Bernanke and his Wall Street co-conspirators. The losses should have been borne by those who made the loans. Instead they were borne by the American taxpayer and future unborn generations. David Stockman, in his no holds barred book about the Wall Street and K Street crony capitalist criminals, rails against the Federal Reserve led rescue of the profligate destroyers of capital markets:

“At the end of the day, this trillion-dollar infusion of capital and liquidity from the public till had a single overarching effect: it nullified in its entirety the impact of Mr. Market’s withdrawal of a similar magnitude of funding from the wholesale money market. So the very monetary distortion – the availability of cheap overnight funding in massive quantities – upon which the Wall Street financial bubble had been built had now been recreated at the lending windows of the Fed, FDIC, and the US Treasury.

The opposite path of liquidating the Wall Street bubble was eschewed, of course, not only because it would have meant massive losses to speculators in the stock and bonds of Goldman Sachs, Morgan Stanley, JP Morgan, and the remaining phalanx of the walking wounded. Crony capitalism also triumphed because in muscling the system during the white heat of crisis, Wall Street had plenty of intellectual cover. The fact is, mainstream economists of both parties were trapped in a Keynesian dead end, proclaiming that the solution to the crushing national debt load which had actually triggered the financial crisis was to pile on more of the same.

Accordingly, banks which were “too big to fail” couldn’t be busted up, since they were allegedly needed to shovel more credit onto already debt saturated household and business balance sheets. Likewise, speculators who should have suffered epochal losses during the meltdown were resuscitated by Fed-engineered zero interest rates in the money market, thereby quickly reviving the same massively leveraged “carry trades” in commodities, currencies, equities, derivatives, and other risk assets which had brought on the crisis in the first place.” David Stockman – The Great Deformation – The Corruption of Capitalism in America

The working middle class was forced at gunpoint to bail out billionaire bankers who had been fraudulently inducing feeble minded dupes and trailer trash to purchase $500,000 McMansions with negative amortization no doc subprime mortgages, while bullying appraisers into inflating appraisals, buying off the rating agencies, selling the toxic derivatives to their clients, and then shorting the very same derivatives. They subsequently committed foreclosure fraud by robo-signing legal documents. Describing these modern day Shylocks as heartless, cruel, lecherous, avaricious demons understates the vileness and contemptibility of their nature. Ben Bernanke and Hank Paulson blatantly lied to the depraved, gutless members of Congress and to the easily hoodwinked fearful American public about the threat of our financial system collapsing unless the Wall Street banks were saved. This false storyline is still peddled today and believed by millions of willfully ignorant crony capitalist devotees. The financial system wasn’t going to collapse. The stock prices of JP Morgan, Goldman Sachs, Citigroup, Bank of America, AIG, Morgan Stanley, GE, and Wells Fargo were collapsing. The wealth of the financial elites that run the country was in peril. The depositors in these banks wouldn’t have lost a penny, but the shareholders and bond holders would have been wiped out. The personal wealth of Dimon, Mack, Lewis, Prince, Immelt, Blankfein and the other titans of finance took precedence over the rule of law and the negative consequences of excessive risk taking and control fraud.

True free market capitalism embraces the concept of creative destruction. Poorly run companies fail and are replaced by well-run companies. Bankruptcy law worked perfectly during the liquidation of Washington Mutual. The orderly liquidation of the Too Big to Trust Wall Street banks would have resulted in billions of bad debt being discharged, with the losses being borne by the executives who mismanaged the banks and the investors who were foolish enough to fund the disastrous schemes perpetrated by those executives. The FDIC would have kept depositors whole. The privatization of illicit bank profits from 2002 through 2007 and the socialization of the 2008 through 2010 bank losses are proof that we are experiencing a warped, immoral, crony capitalism that enriches the well-connected and impoverishes the working middle class. Our political, economic and financial systems have been captured by corporate and special interests. This corruption will prove fatal, as the vested interests destroy the system through their myopic greed. We’ve allowed a small cadre of malevolent men to gamble away the nation’s future with impunity from all laws, regulations and any sense of morality, under the guise of capitalism. These men and the nation will pay a high price for these transgressions. The punishment will fit the crimes.

“People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.”John Kenneth Galbraith – The Age of Uncertainty

The chart below reveals the criminal plan as implemented by Bernanke, the Obama administration and the Wall Street banks. Instead of allowing insolvent financial institutions to fail, $700 billion of taxpayer funds were syphoned from the economy and handed to them. Bernanke has since stuffed their coffers with another $2.4 trillion he printed out of thin air. The purpose of this insane transfer of national wealth from the people to the parasites was not to help Main Street. Forcing the FASB to allow these criminal bankers to mark to unicorn rather than mark to market, buying their toxic mortgages, and providing billions in free money was done to cover-up the fact they are insolvent. Their balance sheets and the Federal Reserve balance sheet are choking on bad debt. The ongoing foreclosure/rent to own scam was designed to drive up home prices and allow the bankers to exit their toxic mortgages with a profit. The criminally insane bankers have used the trillions in excess funds to syphon off billions in stock market gains, with assurances from Ben that QE to infinity will always be there. They know if their gambling leads to losses, Ben will come to the rescue.

The purpose of banks was supposed to be to lend money to businesses and consumers so they could make long-term investments that helped expand the economy. These Wall Street cretins didn’t loan money to people and businesses in the real world. It was much easier to generate risk free returns and program their HFT supercomputers to buy, buy, buy. By driving real interest rates below zero for the last four years, Bernanke has stolen $400 billion per year from senior citizens living on the edge and transferred it to bloodsucking bankers. Anyone with money in a bank account is losing money. This was designed to force muppets back into the stock market where they will be fleeced for the third time in the last thirteen years.

inflation and t-bill

Bernanke’s rescue measures have been a smashing success for the .1%. Wall Street is generating record levels of profits and paying out record levels of bonuses to themselves for a job well done. The stock market is at an all-time high, while the middle class is eviscerated by relentless inflation in energy, food, healthcare, clothing, tuition, rent and taxes. Reality does not match the propaganda touted by the financial elite. Ask the 47.7 million people on food stamps.

food stamps

The economic recovery narrative propagated by Wall Street paid economists, Wall Street controlled media pundits, and Wall Street bought off politicians is nothing but unmitigated bullshit. True unemployment, that doesn’t falsely exclude the unemployed who have thrown in the towel, is north of 20%, with youth unemployment exceeding 40%. The “solutions” implemented by our owners have led to a 10% collapse in the median household income since 2008. If the middle class is seeing their real incomes decline, while their living expenses are rising by 5% per year, how can the economy be recovering? It can’t. Bernanke’s banker welfare program and Obama’s $1 trillion deficits, along with accounting fraud and under-reporting of inflation, have produced the illusion of recovery.

economix-28income-blog480

Dimitri Orlov summarizes our modern financial system and sets the table for the coming collapse:

“The main tools of modern finance are mystification, obfuscation and hypnosis. What is different now is that all the governments have already shot all of their magic bailout bullets. The guilty parties are still at large, richer than they were before this crisis and probably thinking that the next crisis will make them even richer.” – Dimitri Orlov – The Five Stages of Collapse

The questions that must be answered are: How did we allow this to happen? Are we blameless? Can our course be reversed?

Time to Look in the Mirror

“The America of my time line is a laboratory example of what can happen to democracies, what has eventually happened to all perfect democracies throughout all histories.  A perfect democracy, a ‘warm body’ democracy in which every adult may vote and all votes count equally, has no internal feedback for self-correction.  It depends solely on the wisdom and self-restraint of citizens… which is opposed by the folly and lack of self-restraint of other citizens.  What is supposed to happen in a democracy is that each sovereign citizen will always vote in the public interest for the safety and welfare of all.  But what does happen is that he votes his own self-interest as he sees it… which for the majority translates as ‘Bread and Circuses.’

‘Bread and Circuses’ is the cancer of democracy, the fatal disease for which there is no cure.  Democracy often works beautifully at first.  But once a state extends the franchise to every warm body, be he producer or parasite, that day marks the beginning of the end of the state.  For when the plebs discover that they can vote themselves bread and circuses without limit and that the productive members of the body politic cannot stop them, they will do so, until the state bleeds to death, or in its weakened condition the state succumbs to an invader—the barbarians enter Rome.” –  Robert A. Heinlein

Robert Heinlein has been dead for twenty five years. He wrote these words decades ago. His vision of a state bleeding to death is being played out as we speak. Ben Franklin had an inkling the Republic we were given would not be sustained. The success of our nation hinged upon the wisdom, self-restraint, morality, and civic mindedness of its citizens. Our form of governance was never perfect. Nothing is perfect. Adam Smith’s free market capitalism was based upon true competition, but with an underlying moral code. The rule of law meant something. Those who stole, cheated or broke the law were punished. Bankers and their usurious machinations were frowned upon. They were tolerated as a necessary evil, but they certainly weren’t admired and celebrated. When their greedy schemes to loot the populace went too far, a courageous leader would step forth and rout out the vipers and thieves:

“You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.”Andrew Jackson

Bankers gained more power after the Civil War as oil was discovered, the country grew rapidly, and the robber barons built their fortunes on debt and the backs of the poor. But still, there were leaders like Teddy Roosevelt who stood up to the banking and corporate interests. The die was finally cast in 1913 with the introduction of the income tax, the creation of the Federal Reserve and allowing the people to directly elect their Senators. A century of central banking has led to: a century of war; a century of currency debasement; a transformation from a hard-working, saving, producing society into an irresponsible, debt based spending, consuming society; and the degradation of our society into a mob of egotistical techno-narcissists, who have chosen bread and circuses over freedom, liberty and self-reliance. At first it happened gradually, but accelerated rapidly once Nixon removed the last vestiges of control over greedy bankers, corrupt politicians, and gluttonous voters. The transformation from an industrious nation of savers into a slothful nation of consumers has reached its zenith. Financialization Nation has been built on a pyramid of debt. The youth of today have been left with an un-payable debt burden and as Bill Bonner points out, the endgame will likely be violent and bloody:

“That’s a heavy burden. It is especially disagreeable when someone else ran up the debt. Then you are a debt slave. That is the situation of young people today. They must face their parents’ debt. Even serfs in the Dark Ages had it better. They had to work only one day out of 10 for their lords and masters. As it stands, young people in the U.S., Europe and Japan are expected to work their whole lives to pay for things their parents and grandparents consumed decades earlier.

Let’s see. Deny a young person work and you deny him a career. Deny him a career and you deny him a way to support a family. Deny him a family life and who knows what happens? Will today’s young people accept their lot… and remain in docile debt servitude their whole lives? Or will they rise up and burn T-bonds in public spaces… rampage down Wall Street… and perhaps hang Ben Bernanke in front of the New York Federal Reserve?” – Bill Bonner

The pyramid of debt was built brick by brick over the last century, as an unelected, secretive, unaccountable cabal of private banker pharaohs has controlled the currency of the nation and worked on behalf of the vested corporate and banking interests that control the country. Shortly after its devious creation in 1913, they enabled Woodrow Wilson to wage a war he promised to keep the nation out of. The central bank’s easy money policies during the 1920s led to an unsustainable credit driven boom in stocks, bonds and real estate. As usual, their belated monetary tightening was too late to avoid the 1929 Crash. Federal Reserve and government intervention after the crash prolonged the Depression for over a decade. The Crash of 1929 proved once again that bankers could not be trusted. Their insatiable greed and reckless thirst for more and more riches required checks on their ability to destroy our economic system. The 38 page 1933 Glass-Steagall Act made sure commercial banking was kept separate from investment banking (gambling), keeping the productive activity of helping businesses grow isolated from the parasitic activity of speculation. This clear, concise, understandable law kept bankers from destroying the lives of millions for 66 years, until a bipartisan screw job repealed the law and unleashed the kraken upon the unsuspecting public. Bernanke’s QE to infinity driven stock market gains over the last few years are reminiscent of another historic time, and this story also hasn’t reached its ultimate climax.

“A major boom in real stock prices in the U.S. after ‘Black Tuesday’ brought them halfway back to 1929 levels by 1930. This was followed by a second crash, another boom from 1932 to 1937, and a third crash. Speculative bubbles do not end like a short story, novel, or play. There is no final denouement that brings all the strands of a narrative into an impressive final conclusion. In the real world, we never know when the story is over.”Robert Shiller

The destruction of Europe, Russia and Japan during World War II and the Bretton Woods system that made the USD supreme across the world kept the economic peace for the next quarter century. A confluence of events in the late 1960s and early 1970s set the stage for the ultimate collapse of our faith based monetary system. LBJ’s Great Society welfare programs and our disastrous foray into Southeast Asia began the insane welfare/warfare dynamic that has required more and more debt to sustain. Nixon realized the debt expansion needed to pay for an ever expanding state could never be achieved with the Bretton Woods/gold pegged currency system.  In 1971 Nixon unilaterally canceled the direct convertibility of the USD to gold. It ushered in the era of freely floating currencies, relentless inflation, financial bubbles, debt accumulation, consumerism, and the rise of the corporate/fascist propaganda state. Using government supplied CPI statistics, the dollar had lost 75% of its purchasing power between 1913 and 1971. Since 1971 it has lost 83% of its remaining purchasing power. And Ben Bernanke has the guts to publicly state his worries about the ravages of deflation.

The years 1913 and 1971 will be seen by future historians as infamous dates when marking the decline of the great American empire.  Prior to 1971, the New York Stock Exchange barred the public listing of investment banks. After the exchange repealed this ban, the large investment banks (Lehman Brothers, Morgan Stanley, Merrill Lynch, Goldman Sachs, Bear Stearns) converted from partnerships, where the senior employees owned the company and were responsible for all of its liabilities, profits and losses, into publicly owned corporations, where executives’ incentives become aligned with outside shareholders, who demanded short-term profits and higher stock prices at the expense of long term sustainability. The partnership structure provided a mechanism of restraint, self-control, fiscal responsibility and cautiousness. If the bank failed, the partners’ net worth would be wiped out. Their incentives were for the long-term sustainability of the business and they were discouraged from taking undue risks that might produce huge short term profits, but might also destroy the firm. Shame and a sense of responsibility to fellow partners was a strong deterrent to obscene risk taking. The unholy combination of allowing investment banks to go public and repealing Glass Steagall in 1999, created a greed driven uncontrollable Too Big To Control brutish monstrosity consuming the world in its desire for more. It will only be stopped when it chokes to death while gorging on what’s left of the middle class.

The citizens, formerly known as the hard working American middle class, must accept their share of responsibility for the desperate circumstances we face. Some are guiltier than others, but we only need look in the mirror to find the culprits in allowing the bankers, politicians, military industrial complex, mass media and vested corporate interests to gain control over our country. The introduction of the credit card by Wall Street bankers as a must have for every citizen in the early 1970s coincided with the inflationary demons unleashed from Pandora’s Box by Nixon and the Federal Reserve, along with the peak of cheap U.S. oil production. Thus began four decades of real wages declining and consumer debt soaring. A nation of people that believed in saving before purchasing were given the freedom to spend money they didn’t have. The statistics paint a picture of a society gone mad:

  • Credit card debt grew from $5 billion in 1971 to $856 billion today, a 17,000% increase in forty-two years. GDP rose from $1.2 trillion to $16.6 trillion, a mere 1,400% increase. Real GDP only grew by 300%. Wages have grown from $600 billion to $7 trillion, a 1,200% increase. Real disposable personal income per capita grew from $17,200 to $36,800, a 200% increase.
  • Non-revolving debt (auto, student loan) grew from $127 billion in 1971 to $1.98 trillion today, a 1,600% increase.
  • There are over 600 million credit cards in circulation within the U.S. and Americans charged over $2.1 trillion last year.
  • Over 40% of Americans carry a balance on their credit card from month to month, with an average balance of $8,200 and an average interest rate of 13%.
  • 40% of all low and middle income households must rely on their credit cards to pay basic living expenses like rent, mortgage, utilities, groceries, real estate taxes, income taxes, along with their “needed” iPhones, HDTVs, bling, stainless steel appliances, and tattoo artwork.
  • Wall Street banks have written off over $300 billion in credit card debt since 2008 (and passing the bill to taxpayers), while bilking their customers out of $60 billion per year in late fees and overdraft fees.

Despite the storyline of austerity, consumer credit outstanding has reached an all-time high of $2.84 trillion because Bernanke and his Wall Street puppeteers require perpetual debt expansion to keep their Ponzi scheme alive. Federal government dispensation of loans to subprime student borrowers has helped mask the true unemployment rate and Federal government doling out of subprime auto loans through Ally Financial and their crony Wall Street partners has created a fake auto recovery. The Blackrock/Wall Street “rent to own” faux housing recovery was designed by our owners to lure clueless math challenged dupes back into the housing market. Our entire economy is nothing but a confidence game at this point.

The four decade long orgy of debt couldn’t have ensued if our currency had remained linked to the barbaric relic – gold. The apologists and lackeys for the vested interests scorn and ridicule the notion of our economic system being burdened with any checks or balances. This is where the interests of those in power and those being ruled have coincided, as a fiat based monetary system allowed unlimited spending to keep the welfare/warfare state growing, enriching the crony capitalists, deepening the power of the state, and providing the masses with foreign made trinkets, baubles, corporate logoed clothing, techno-gadgets, and pimped out financed wheels. The concepts of self-restraint, discipline, saving for a rainy day, prudence, discretion, and deferred gratification are rarely displayed in modern day America. In a case of mass delusion, Americans have convinced themselves to live for today, recklessly ignore their futures, irresponsibly spend money they don’t have on things they don’t need, neglect their civic duty towards future generations, choose ignorance over knowledge, and vote for spineless politicians who promise them entitlements that are mathematically impossible to honor. The public’s foolish attitude towards debt accumulation matches the arrogance of our gutless intellectually dishonest leaders.

“When people pile up debts they will find difficult and perhaps even impossible to repay, they are saying several things at once. They are obviously saying that they want more than they can immediately afford. They are saying, less obviously, that their present wants are so important that, to satisfy them, it is worth some future difficulty. But in making that bargain they are implying that when the future difficulty arrives, they’ll figure it out. They don’t always do that.” Michael Lewis – Boomerang

The manner in which our leaders are governing the country and citizens are living their lives can only be considered normal in relation to residing in a profoundly abnormal society. The American Dream of having the opportunity for upward mobility through educating yourself, working hard, accumulating wealth methodically by spending less than you earn, and reaching your full potential as a caring loving human being has been replaced by a perverted nightmare where we run on a hamster wheel for our entire lives trying to achieve the new American dream of accumulating throw away material goods, working to make the payments for McMansions, SUVs, stainless steel appliances, and iGadgets you rent from bankers, while driving yourself into an early grave by consuming mass quantities of processed poison and the stress created by trying to achieve the lifestyle sold to us by Madison Ave. maggots, Wall Street shysters and the mainstream media propagandists. The corporate fascists tell you what to believe, which “enemy” to fear, how you should look, what to eat, what drug to take for the illnesses caused by the food they lured you to eat, the kind of house you need to impress your friends and family, and the car you need to drive to impress your neighbors. As George Carlin aptly pronounced: “It’s called the American Dream because you’d have to be asleep to believe it.” – either asleep or insane.

“Normal is getting dressed in clothes that you buy for work and driving through traffic in a car that you are still paying for – in order to get to the job you need to pay for the clothes and the car, and the house you leave vacant all day so you can afford to live in it.”  – Ellen Goodman

Our profoundly abnormal society of materialistic zombies, who mindlessly obey the commands and marketing messages of the financial elite, has staked their futures and the future of the country on the wisdom and brilliance of an Ivy League academic who never worked a day in the real world, didn’t spot the largest fraudulent housing bubble in world history, and whose unlawful acts as Federal Reserve chairman have enriched the banking whores who destroyed the country and impoverished what remains of the dying middle class. It’s the height of insanity for the American people to trust these crooked high priests of finance to cure a disease they spread with their immoral, traitorous policies over the last century. Bernanke and his lackeys, in a desperate last gasp gamble to prolong their fiat currency pillaging of the peasants, have rolled the dice with QE to infinity, accounting fraud, and further enrichment of their corporate masters.

“Viewed as a religious cult, modern finance revolves around the miracle of the spontaneous generation of money in a set of rituals performed by the high priests of central banking. People hang on the high priests’ every word, attempting to divine the secret meaning behind their cryptic utterances. Their interventions before the unknowable deity of global finance assure them of economic recovery and continued prosperity, just as a shaman’s rain dance guarantees rain or ritual sacrifice atop a Mayan pyramid once promised a bountiful harvest of maize.” – Dimitri Orlov – The Five Stages of Collapse

Bernanke will eventually roll craps. When he does, the collapse will be epic and 2008 will seem like a walk in the park. In Part 3 of this article I will speculate on the timing, scope and consequences of the coming collapse. It’s not going to be a happy ending, especially for the existing social order.

SHADES OF 1929

For those not paying attention, we have entered a global deflationary depression. The nutjobs running the world’s central banks and the moronic politicians elected by the sheep have tried Keynesian fiscal pork, zero interest rates, fraudulent accounting, printing money at hyper-speed, propaganda, austerity for the peasants, bonuses for the criminal bankers and crony capitalism for the super rich. It is five years later and it hasn’t worked. The grand experiment has failed. Bernanke and Krugman’s theories have been discredited. The world is on the edge. Bad shit is happening. Behind the scenes, the oligarchs are panicked and scrambling to retain their wealth and power. They are criminally inept. Their solution will be to accelerate what has already failed. This is how deflationary depressions turn into hyper-inflationary collapses. The massive buying of physical gold and silver by individuals and Far East countries is rational and prudent. The oligarchs won the battle in the past week. They may win a few more battles, because they have many weapons, but they will lose the war. This Fourth Turning is about to get really interesting.  

Fed and Bank of Japan caused gold crash

Commodity prices have been falling since September, culminating in a rout over the past two weeks. That is a classic warning for the global economy.

Traditionally shaped pure raw gold bars stacked in a secure bullion room safe

By

7:22PM BST 17 Apr 2013

It is becoming ever clearer that the roaring boom in global equities since last summer has priced in an economic recovery that does not in fact exist. The International Monetary Fund has had to nurse down its global growth forecasts yet again. We are still stuck in an old-fashioned trade depression, with pervasive over-capacity in manufacturing plant and a record global savings rate of 25pc of GDP.

German car sales fell 17pc in March. That should puncture the last illusions that Germany is about to pull Europe out of a self-inflicted slump.

As you can see from the chart below, the divergence between stock markets and the Deutsche Bank index of raw materials is astonishing to behold, so like the pattern in early 1929.

Steel has fallen 31pc this year. Brent crude is off 17pc since early February, and copper 15pc.

You have to be careful reading too much into commodities, distorted by China. The time-honoured cycle is a surge of investment that comes on stream at once with a lag. America’s shale drive has turned the gas market upside down, diverting liquefied natural gas to Europe and Asia. Copper output in Chile rose 7pc last year. The crash in the Baltic Dry Index for shipping rates is partly a tale of too many ships.

Yet excess supply does not explain the collapse in gold over the past week. Cyprus may have been an incidental trigger. If the EU-IMF Troika is determined to strong-arm the Cypriots into selling most of their pint-sized holding of 14 tonnes, it may do the same to Portugal when the time comes, and then you are talking about the world’s 14th biggest holding of 382 tonnes.

Bank of America says the gold crash since Friday has already discounted sales of the entire Cypriot, Portuguese and Greek gold reserves combined. “As we believe additional gold selling in the European periphery is highly unlikely, we find it hard to fully justify the sell-off,” it said.

The central banks of China and the emerging powers bought 535 tonnes last year to escape dollars and euros, the biggest wave of state purchases since 1964. Their strategy is to buy the dips, and they are no fools. The head of China’s reserve manager “SAFE” used to run a US hedge fund.

They won’t try to catch a “falling knife”, prefering to wait until the dust settles. The upward trend of the great bull market has been broken. The technical damage is brutal. Bank of America expects a further drop to $1,200. Be patient.

My view is that the US Federal Reserve and the Bank of Japan “caused” the gold crash. The rest is noise. The Fed assault began in February when it published a paper warning that the longer quantitative easing continues, the harder it will be for the bank to extricate itself.

The report was co-written by former Fed governor Frederic Mishkin, often deemed Ben Bernanke’s “alter ego”. It said the Fed’s capital base could be wiped out “several times” once borrowing costs climb. The window will start shutting by 2014, with trouble then compounding at a “dramatic” pace.

This was a shock. It suggested that the Fed has lost its nerve, and will think long and hard before launching a fresh blitz of money if growth falters.

Then came last week’s Fed Minutes, with hints of tapering off QE earlier that expected. That was the next shock. What they seemed to be saying is that the US economy is groping it way back to normality, that the era of silly money is over, that the dollar will stand tall again.

If that were the case, gold should fall. But it is not the case. The US economy is growing below the Fed’s own “stall speed” indicator. Half a million people fell out of the workforce in March. Retail sales fell in March. So did manufacturing.

The US faces fiscal tightening of 2.5pc of GDP this year, the most since 1946. Ex-labour secretary Robert Reich said the effects have been disguised so far, but a “stealth sequester” is just starting: $51m of grant cuts to Brandeis university; $1m for schools in Syracuse; and so on, the reverse of the stealth stimulus before.

My guess is that the Fed will be forced to row back smartly from its exit talk, but first we must look deflation in the eyes.

As for the Bank of Japan, it had been assumed that the colossal monetary stimulus of Haruhiko Kuroda would revive the yen-carry trade, leaking $1 trillion into world asset markets. But the early evidence is the opposite. Japanese investors brought money home last week.

“Mrs Watanabe” is selling her Kiwi and Aussie bonds to bet on stocks and property at home. And she is selling gold like never before. That too is a shock.

Japan’s “Abenomics” may prove a net drag on the world over coming months. It is exporting deflation through trade effects. This already visible in Korea and China, where soaring wages have eroded competitiveness. “Investors may have forgotten that yen weakness was one of the immediate causes of the 1997 Asian currency crisis and Asia’s subsequent economic collapse,” said Albert Edwards from Societe Generale.

China’s growth rate fell to 7.7pc in the first quarter. It will fall further, though the catch-up boom in the hinterland cities of Chengdu, Chonquing, Changsa and Xi’an may have further to run.

Fitch Ratings says credit has surged from €9 trillion to €23 trillion over the past four years, a rise equal to the entire US banking system. Beijing pumped up loans yet again after its recession scare in the summer, but is gaining less traction. The GDP growth effect of credit has halved. It is the classic sign of an economy sated on debt. China too will have to deleverage.

The world is still in a contained depression. Sliding commodities tell us global money is if anything too tight. “There is a threat of deflation almost everywhere. A lot of central banks will have to follow the Bank of Japan, whatever they say now,” said Lars Christensen form Danske Bank

The era of money printing is young yet. Gold will have its day again.

 

V FOR VENDETTA – 2011(Oldie but Not Goodie)

It has been almost two years since I whipped this article out in a one day sleepless frenzy. I was then reminded of it by the BART incident, the London riots and the indictment of the Tea Party as terrorists by the liberal MSM and Democratic politicians in the summer of 2011, so I posted it again . There were calls for civility that week. I knew it wouldn’t happen. Now the horrific mass murder in Connecticut brought it back to my mind again. This Fourth Turning gets worse by the day.

 

Remember remember the fifth of November
Gunpowder, treason and plot.
I see no reason why gunpowder, treason
Should ever be forgot…

 

After the horrific mass murder in Tucson yesterday I had trouble sleeping last night. When my mind gets overloaded, I can’t sleep. I came downstairs at 3:30 am and for some reason decided now was the time to watch the movie V For Vendetta. Many people had recommended this movie over the years, but I had never gotten around to it. Well, on the day after the attempted assassination of a Congresswoman and murder of six others, including a Federal Judge, this movie provided a vision into what could happen next in this country.

The 2006 movie centers around a man wearing a Guy Fawkes mask who refers to himself as V.  He is a bold, charismatic freedom fighter driven to exact revenge on those who disfigured him.  The film is an allegory of oppression and coercion by government. It is a declaration against government intervention into the lives of the citizens. He blows up the Old Bailey on November 5, Guy Fawkes Day. He promises to blow up Parliament one year later on the 5th of November. His speech at the beginning of the movie, broadcast to all of England, explains what happened in a fictional England and what is happening here:

“Good evening, London.

Allow me first to apologize, for this interruption. I do, like many of you, appreciate the comforts of everyday routine, the security, the familiar, the tranquility, repetition… I enjoy them as much as any bloke. But in the spirit of commemoration, whereby those important events of the past, usually associated with someone’s death or the end of some awful, bloody struggle, are celebrated with a nice holiday, I thought we could mark this November the 5th, a day that is certainly no longer remembered, by taking some time out of our daily lives to sit down and have a little chat.

There are, of course, those who do not want us to speak. I think that even now orders are been shouted into telephones and men with guns will soon be on their way. Why? Because when the truncheon maybe used in lieu of conversation, words will always retain their power. Words offer the means to meaning, and for those who would listen, the enunciation of the truth. And the truth is, there is something terribly wrong with this country, isn’t there?

Cruelty and injustice, intolerance and oppression, and where once you had the freedom to object, to think and speak as you saw fit, you now have censors and systems of surveillance coercing your conformity and soliciting your submission? How did this happen? Who’s to blame? Well certainly there are those who are more responsible than others, and they will be held accountable, but again, truth be told, if you’re looking for the guilty, you need only look into a mirror.

I know why you did it. I know you were afraid! Who wouldn’t be? War, terror, disease… There were a myriad problems that conspired to corrupt your reason and rob you of your common sense. Fear got the best of you, and in your panic, you turned to the now High Chancellor, Adam Suttler. He promised you order, he promised you peace, and all he demanded in return was your silent, obedient, consent.

Last night, I sought to end that silence. Last night, I destroyed the Old Bailey to remind this country of what it has forgotten. More than 400 years ago, a great citizen wished to embed the 5th of November forever in our memory. His hope was to remind the world that fairness, justice and freedom are more than words, they are perspectives. So if you’ve seen nothing, if the crimes of this government remain unknown to you, then, I would suggest you allow the 5th of November to pass unmarked. But if you see what I see, if you feel as I feel, and if you would seek as I seek, then I ask you to stand beside me, one year from tonight, outside the gates of Parliament, and together we shall give them a 5th of November that shall never, ever, be forgot.”

 

The movie’s central theme revolves around the 1605 Gunpowder Plot to blow up Parliament. The plot was a failed assassination attempt against King James I of England by a group of provincial English Catholics led by Robert Catesby. The plan was to blow up the House of Lords during the State Opening of Parliament on November 5, 1605, as the prelude to a popular revolt in the Midlands during which James’s nine-year-old daughter, Princess Elizabeth, was to be installed as the Catholic head of state.

  

 Guy Fawkes, who had 10 years of military experience fighting in the Spanish Netherlands in suppression of the Dutch Revolt, was given charge of the explosives. The plot was revealed to the authorities in an anonymous letter sent to William Parker, 4th Baron Monteagle. During a search of the House of Lords at about midnight on November 4, 1605, Fawkes was discovered guarding 36 barrels of gunpowder – enough to reduce the House of Lords to rubble – and arrested. He was hanged shortly thereafter. November the 5th has been celebrated ever since this event with celebrations and fireworks.

Anarchy Has Arrived

There’s no certainty – only opportunity. V – V For Vendetta

 

As I watched hour after hour of coverage about the ambush and assassination attempt on a Congresswoman from Arizona, I couldn’t help but think this could be the spark for something bigger. There were almost immediate reactions from the MSM that this murder was instigated by the Tea Party. The liberal ideologue Paul Krugman blamed the Republican Party for the murders. Apoplectic left wing faux journalist Keith Olbermann described conservative commentators as those “who have so irresponsibly brought us to this time of domestic terrorism”. The local sheriff, an Arizona State Senator and the Congresswoman’s father all blamed the Tea Party, either directly or indirectly. Based on my reading of the murderer’s writings and youtubes, he appears to be a mentally deranged psycho. Somehow, every liberal MSM “journalist” has concluded that this was due to the contentious political atmosphere in the country. This is code for “we need less dissent”. Stop disagreeing with the Obama agenda. If you disagree, you are dangerous.

The scene in the movie that made me think of yesterday’s events was toward the end of the movie when Inspector Finch, who is trying to capture V, has a feeling about what is going to happen:

Finch: I had to see it. There wasn’t much left. But when I was there it was strange. I suddenly had this feeling that everything was connected. It’s like I could see the whole thing, one long chain of events that stretched all the way back before Larkhill. I felt like I could see everything that happened, and everything that is going to happen. It was like a perfect pattern, laid out in front of me. And I realized we’re all part of it, and all trapped by it.
Dominic: So do you know what’s gonna happen?


Finch: No, it was a feeling. But I can guess. With so much chaos, someone will do something stupid. And when they do, things will turn nasty. And then Sutler will be forced to do the only thing he knows how to do. At which point, all V needs to do is keep his word. And then…
[Dominoes collapse with TV footages showing conflicts between rioting citizens and the anti-riot police]

The line that hit me like a ton of bricks was, “With so much chaos, someone will do something stupid.” As Inspector Finch was speaking these words a scene of a policeman shooting a 10 year old girl with a Guy Fawkes Mask on is shown and then an angry mob surrounds and kill the policeman.

Yesterday, someone did something stupid. The question is what happens next.

Already, a fringe religious fanatic pastor and his followers, who have previously picketed the military funerals of Americans killed in Iraq, issued this press release:

 “Thank God for the shooter – 6 dead! WBC will picket their funerals!”  It continues on to condemn what it condemns as violence unleashed on WBC by a “hateful nation…hoping to silence our kind warning to obey God and flee the wrath to come.”

There is one thing I’m sure about. This will not result in more civil discourse. Opposing ideologies will become further entrenched in their positions. Those who attempt to be peacemakers will be shouted down. Passions will rise as they did in the 1850s when another member of Congress was badly injured as national passions flamed over slavery.  On May 19, 1856, Senator Charles Sumner of Massachusetts, a prominent voice in the anti-slavery movement, delivered an impassioned speech denouncing the compromises that helped perpetuate slavery and led to confrontations in Kansas. Sumner singled out Senator Andrew Pickens Butler of South Carolina. Butler, who had recently been incapacitated by a stroke and was recuperating in South Carolina, was held to particular ridicule by Sumner. Sumner said that Butler had taken as his mistress “the harlot, slavery.” Sumner also referred to the South as an immoral place for allowing slavery, and he mocked South Carolina.

Preston Brooks, a member of the House of Representatives from South Carolina, was particularly incensed. Not only had the fiery Sumner ridiculed his home state, but Brooks was the nephew of Andrew Butler, one of Sumner’s targets. Brooks walked to Sumner’s desk in the Senate chamber, and reportedly said: “You have libeled my state and slandered my relation, who is aged and absent. And I feel it to be my duty to punish you.” With that, Brooks struck the seated Sumner across the head with his heavy cane. Brooks continued raining blows with the cane upon Sumner, who tried to fend them off with his arms. As might be expected, northern newspapers responded to the violent attack on the Senate floor with horror. Southern newspapers published editorials lauding Brooks, claiming that the attack was a justified defense of the south and slavery. Supporters sent Brooks new canes, and Brooks claimed that people wanted pieces of the cane he used to beat Sumner as “holy relics.”

This attack was a foreshadowing of what was to come – the deaths of 600,000 Americans in the space of four years – over 4% of the male population. Yesterday’s tragedy is another step deeper into this Fourth Turning. Every Fourth Turning has proven to be a decisive era of secular upheaval, when the values regime propels the replacement of the old civic order with a new one.

Words Matter, Ideas Can Change the World

People should not be afraid of their governments. Governments should be afraid of their people. V – V For Vendetta

 

The prior Fourth Turnings in U.S. history (American Revolution, Civil War, Great Depression/World War II) all proved to be secular upheavals of immense proportions, tore apart the existing civil order, but had numerous moments of danger and uncertainty about the future turn of events. We are six years into a twenty year Crisis saeculum. Every Crisis intensifies as time progresses to an ultimate crescendo. The initial financial crisis built to a dramatic peak in September 2008 as the government and Federal Reserve have taken extraordinary and immoral actions to protect Wall Street banks. Since September 11, 2001, the government has used fear as its primary means of controlling the American population. Fear of terrorists, fear of flying, fear of WMD, fear of mushroom clouds, fear of the axis of evil, fear of economic collapse, fear of a Great Depression, and now fear of the Tea Party movement. This attack by a crazy man will lead to further losses of liberties and freedoms. That is a certainty.

Americans have been lulled into a false sense of security. V’s speech to the people of England invokes Ben Franklin:

“I know why you did it. I know you were afraid! Who wouldn’t be? War, terror, disease… There were a myriad problems that conspired to corrupt your reason and rob you of your common sense. Fear got the best of you, and in your panic, you turned to the now High Chancellor, Adam Suttler. He promised you order, he promised you peace, and all he demanded in return was your silent, obedient, consent.” V – V For Vendetta

Those who would give up Essential Liberty
to purchase a little Temporary Safety,
deserve neither Liberty nor Safety.

– Ben Franklin

This country has not reached the level of control and fear seen in Orwell’s 1984 and V For Vendetta, yet. We are moving relentlessly in that direction. Surveillance, monitoring, spying, censorship, secret prisons, predator drones, and conforming to state rules and regulations put citizens further under the thumb of an all powerful state. The freedom to dissent, the freedom to be left alone, the freedom to speak out against injustice, the freedom to disagree with your government, and the freedom to present your ideas without fear of retribution or penalty are essential in a democratic society. The next phase of this Fourth Turning will surely include another downward spiral in financial markets as un-payable debts accumulate to a tipping point level. When ATM machines stop spitting out twenties, food shelves are bare and gas stations are shuttered, social chaos will ensue. The government will react with further command and control measures. In V For Vendetta, the government creates a terrorist incident in order to gain unquestioned control over the population. Americans will need to be more vigilant than they have been over the last ten years in keeping an eye on their government.

In the movie, Parliament is the symbol of government power. The thought of destroying this symbol provided the people with a renewed sense of purpose and power. By V’s destruction of the building, the people regained their hope for the future. The symbol of America is the Statue of Liberty. The pedestal at the base of the statue states:

“Give me your tired, your poor,
Your huddled masses yearning to breathe free,

The idea of America is still alive. Whether it is kept alive is up to us. Words matter. Ideas can change the world.

 “I know of no reason why the Gunpowder Treason should ever be forgot… But what of the man? I know his name was Guy Fawkes and I know, in 1605, he attempted to blow up the Houses of Parliament. But who was he really? What was he like? We are told to remember the idea, not the man, because a man can fail. He can be caught, he can be killed and forgotten, but 400 years later, an idea can still change the world. I’ve witnessed first hand the power of ideas, I’ve seen people kill in the name of them, and die defending them… but you cannot kiss an idea, cannot touch it, or hold it… ideas do not bleed, they do not feel pain, they do not love… And it is not an idea that I miss, it is a man… A man that made me remember the Fifth of November. A man that I will never forget.” – Evey Hammond – V For Vendetta

THE IDEA OF AMERICA – THE CHOICE IS OURS

 

ALL I WANT FOR CHRISTMAS IS THE TRUTH

“Eyes blinded by the fog of things
cannot see truth.
Ears deafened by the din of things
cannot hear truth.
Brains bewildered by the whirl of things
cannot think truth.
Hearts deadened by the weight of things
cannot feel truth.
Throats choked by the dust of things
cannot speak truth.”
Harald Bell Wright – The Uncrowned King

I consider myself a seeker of truth. It isn’t easy finding it in todays’ world. In an alternate version of the famous scene from A Few Good Men, I picture myself telling Turbo Tax Timmy Geithner that I want the truth and his angry truthful response:

“Son, we live in a world that has Wall Street banks, and those banks have to be guarded by puppet politicians in Washington D.C. with lobbyist written laws and Madison Avenue PR maggots with media propaganda. Who’s gonna do it? You? You, Representative Paul? I have a greater responsibility than you could possibly fathom. You weep for the average middle class American family, and you curse the ruling oligarchs. You have that luxury. You have the luxury of not knowing what I know. That the death of the American middle class, while tragic, probably saved the bonuses of thousands of Wall Street bankers. And my existence, while grotesque and incomprehensible to you, increases the wealth of these same bankers who destroyed the worldwide economic system in 2008. You don’t want the truth because deep down in places you don’t talk about in the food bank line, you want me on Wall Street, you need me on Wall Street. We use words like derivative, fiscal stimulus, quantitative easing. We use these words as the backbone of a life spent syphoning off the wealth of the nation. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very debt that I provide, and then questions the manner in which I provide it. I would rather you just said thank you, and went on your way, Otherwise, I suggest you pick up 1000 shares of Apple, and hope our high frequency trading supercomputers can ramp the market for a while longer. Either way, I don’t give a damn what you think you are entitled to.”

I find myself more amazed than ever at the ability of those in power to lie, misinform and obfuscate the truth, while millions of Americans willfully choose to be ignorant of the truth and yearn to be misled. It’s a match made in heaven. Acknowledging the truth of our society’s descent from a country of hard working, self-reliant, charitable, civic minded citizens into the abyss of entitled, dependent, greedy, materialistic consumers is unacceptable to the slave owners and the slaves. We can’t handle the truth because that would require critical thought, hard choices, sacrifice, and dealing with the reality of an unsustainable economic and societal model. It’s much easier to believe the big lies that allow us to sleep at night. The concept of lying to the masses and using propaganda techniques to manipulate and form public opinion really took hold in the 1920s and have been perfected by the powerful ruling elite that control the reins of finance, government and mass media.

Peddlers of Propaganda

“Great is truth, but still greater, from a practical point of view, is silence about truth.” Aldous Huxley – Brave New World

 File:Edward Bernays.jpg   

Adolf Hitler understood the power of the big lie over the ignorant masses who want to believe:

“All this was inspired by the principle–which is quite true within itself–that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.” – Adolf Hitler – Mein Kampf

We are all liars. We lie to friends, family and co-workers. We convince ourselves they are only small lies and just protect others from being hurt. We would rather be lied to than face the blunt truth about our deficiencies, shortcomings and failures. Willfully believing mistruths allows a person to become dependent upon those promulgating the mistruths. It relieves them of their responsibility to act upon the knowledge that something is wrong and must be fixed. It is a cowardly path to ultimate servitude and destruction. The German people chose this path in the 1930s and the American people have chosen a similar and ultimately destructive path today. The United States Office of Strategic Services prepared a psychological profile report during the war describing Adolf Hitler’s method for controlling the minds of the German masses:

“His primary rules were: never allow the public to cool off; never admit a fault or wrong; never concede that there may be some good in your enemy; never leave room for alternatives; never accept blame; concentrate on one enemy at a time and blame him for everything that goes wrong; people will believe a big lie sooner than a little one; and if you repeat it frequently enough people will sooner or later believe it.”

America’s corruptible politicians, greedy corporate chieftains, criminal banking overlords, and despicable media manipulators all learned the sordid lessons of mass propaganda from the masters. Our willingness to lie and be lied to set us up to be manipulated by those who understood the mass psychology of a nation. Goebbels and Hitler were heavily influenced by the father of propaganda – Edward Bernays. He and his disciples are professional poisoners of the public mind, exploiters of public foolishness and ignorance, and never allow truth to interfere with a good story. What master manipulators realized is that it is easier to change the attitude of millions than the attitude of one man. By analyzing and understanding the process and motives of how the group mind works, the invisible government has been able to manipulate and regulate the masses according to their will without the masses knowing they are being managed. Bernays described this elitist view of the world in 1928:

“Those who manipulate the unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. In almost every act of our lives whether in the sphere of politics or business in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons who understand the mental processes and social patterns of the masses. It is they who pull the wires that control the public mind.” – Edward Bernays – Propaganda

The super-rich elite believe they are more intelligent, more capable of managing the affairs of state, masters of the financial world, and chosen to decide what is best for the masses. In reality, they are egocentric, psychotic, power hungry, myopic, self-serving ravenous vultures, feasting upon the carcass of a once great nation. Truth is inconsequential and irritating to their plans for world domination and control. Therefore, no truth will be forthcoming from any organization or person that is associated with the existing political, economic, financial or social order. Every bit of information that is permitted into the public realm has been vetted, manipulated and spun for public consumption. The public does not like bad news. They do not like hard facts. They do not like to think or do math. They want to be spoon fed mindless sound bites and happy talk. The oligarchs need to keep the masses sedated and subservient while they continue to plunder and pillage, so all data is massaged to provide a happy ending.

This is where I deviate from the ideologue one-trick ponies that refuse to see both sides of the issue. The ruling oligarchs are wealthy, influential, psychotic, amoral, and few. The masses are relatively poor, easily influenced, willfully ignorant, and many. The ruling oligarchs are most certainly evil, but the masses are not the hard working, stoic, downtrodden portrayed by liberal ideologues. One just needs to walk down the street in one of our urban enclaves, saunter through a suburban mall, or click on People of Wal-Mart to witness the tattooed, pierced, butt crack showing, slovenly, obese, and ignorant, attached to their electronic iGadgets, to understand how far our society has deteriorated.  Every individual born into this world has the capability to become educated, think critically, not follow the herd, live beneath their means, and not be influenced by propaganda. Aldous Huxley understood in 1931 that those in power could use material goods to invoke passivity and egotism among the populace. He feared that truth would be obscured by an avalanche of irrelevance (500 Reality TV shows), cultural trivialities (Lady Gaga, Lindsey Lohan), distractions (Professional sports), and pharmaceutical enhanced escape (Prozac). He saw the possibility that we would grow to love our servitude as the pleasures of life provided by our controllers overwhelmed any desire to think or question authority.

“There will be in the next generation or so a pharmacological method of making people love their servitude and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies so that people will in fact have their liberties taken away from them but will rather enjoy it.”  ― Aldous Huxley

By 1962 when Huxley wrote his last book, he was certain that his worst dystopian nightmares had been unleashed. His description of Western society fifty years ago could have been written today and accurately reflected our current economic paradigm. War, debt and consumption still make our world go round, but the end is nigh.

“Armaments, universal debt, and planned obsolescence – those are the three pillars of Western prosperity. If war, waste, and moneylenders were abolished, you’d collapse. And while you people are over-consuming the rest of the world sinks more and more deeply into chronic disaster.”Aldous Huxley – Island

The pillars are crumbling. The $1.4 trillion wasted on two worthless wars of choice in the Middle East, the trillions wasted and liberties sacrificed for the never ending unwinnable War on Terror, the Keynesian spending frenzy that has driven the National Debt from $9 trillion to $16.3 trillion in the last five years, the looting of the American taxpayer by Wall Street and their co-conspirators at the Federal Reserve and in Congress, and the belief that ramping up the debt driven consumption that drives 71% of our GDP is our path to prosperity is absolutely freaking nuts. The pillars will not be abolished willingly. The ruling class depends upon their continued existence and expansion. There is the rub. The math doesn’t work. We’ve reached the point where continued expansion of debt and money printing no longer works. With a national debt to GDP ratio of 102% and a total credit market debt to GDP ratio of 350%, we have passed the Rogoff & Reinhart point of no return. This time is not different. A country cannot run trillion dollar deficits indefinitely and expect to not suffer the consequences. This is why those in power are increasingly resorting to propaganda, data manipulation, and outright lies to convince the masses of their omnipotence and brilliance in managing the fiscal affairs of the state.

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

Through decades of mass media messaging the masses have been conditioned to believe whatever those in power want them to believe. To our invisible government rulers we are nothing but rats to be manipulated through food pellets and shock therapy. Pleasure and fear of pain are the drivers of our warped society. The ruling oligarchs truly think they know what is best for the masses and believe any means is worthwhile as long as the ends support their agenda. This is blatantly obvious to anyone with their eyes open and their brain functioning. Sadly, the government run educational system produces mostly drones that are barely able to tie their own shoes, spell Cat, or make change from a one dollar bill. Only 20% of all high school seniors score high enough on the SAT test to get a B minus in college and most of these kids come from private and parochial schools. This is exactly what those in power prefer. They want non-critical thinking, mindless consumers, who don’t understand the criminal nature of Federal Reserve created inflation or their enslavement in the chains of debt at the hands of their Wall Street slave owners. They certainly don’t want the masses to understand that real median household net worth is lower today than it was in 1969. Luckily for the oligarchs, 95% of the public couldn’t define the terms: real, median or net worth. Math is hard.

The average person is inundated on a 24/7 basis with pabulum from liberal network media talking heads, CNBC Wall Street shills regurgitating whatever their sponsors desire, Fox News blonde bimbos and neo-con war mongers programmed to spew Rupert Murdoch talking points, MSNBC tingling leg faux journalists, NYT intellectually corrupt Nobel prize winners, NAR nitwits repeating “best time to buy” on a daily basis for the last 12 years, and government agencies whose sole purpose is to manipulate data in a way that supports the agenda of those in power. The intellectually lazy and willfully ignorant masses are no match for those who control the message and the media. How else can you explain their ability to convince millions of drones to line up for hours in front of a store and stampede like crazed hyenas to grab a $5 crockpot, the Chinese produced gadget of the moment or a designer top made by slave labor in safety conscious Bangladesh factories? How else can you explain a population willing to be molested by government TSA dregs in the name of security from phantom terrorists, the passive acceptance of military exercises in US cities, unquestioning submissiveness as Presidential Executive Orders allow the government dictatorial powers based on their judgment, the monitoring of internet and voice correspondence of all citizens, and believing that FBI agents luring clueless teenage Muslim dupes into fake terrorist plots, providing the fake explosives, and then announcing with great fanfare how they saved us from another 9/11?

But, the prize for boldest, most outrageous, blatant use of propaganda and misinformation to cover-up their criminal looting of America goes to Ben Bernanke, his cronies at the Federal Reserve, and the Wall Street banks that own and control our Central Bank. Having the gall to portray themselves as the stabilizer of our economic system over the last 100 years is a putrid joke on the dying and broke middle class. Their mandate has been stable prices, full employment, and avoiding financial crisis. It is a tribute to Bernays and the rest of the public relations swine that the average American actually believes inflation is a good thing and it is under control despite the FACT that 96.2% of their purchasing power has disappeared since 1900, with the most rapid decline occurring since Nixon closed the gold window in 1971.

inflation-currency

The average American actually believes Ben Bernanke saved us from a Great Depression when in actuality he saved the owners of the Federal Reserve from accepting the losses they generated through the greatest financial fraud in history. His “solutions” have zombified our economic system, just as the Japanese Central Bank did 20 years ago. He has destroyed the concept of saving, while rewarding the indebted and profligate with his QE to Infinity money printing policies. And the ignorant masses have been convinced by the corporate media and their corrupt government lackeys that Ben did this for them. Kyle Bass knows otherwise. He knows how the Fed and their backers have preyed upon the masses through their understanding of human psychology:

“Humans are optimistic by nature. People’s lives are driven by hopes and dreams which are all second derivatives of their innate optimism. Humans also suffer from optimistic biases driven by the first inalienable right of human nature which is self-preservation. It is this reflex mechanism in our cognitive pathways that makes difficult situations hard to reflect and opine on. These biases are extended to economic choices and events. The primary difficulty with this train of thought is the bias that most investors have for the baseline facts: they tend to believe that the central bankers, politicians, and other governmental agencies are omnipotent due to their success in averting a financial meltdown in 2009.

Central banks have become the great enablers of fiscal profligacy. The overarching belief is that there will always be someone or something there to act as the safety net. The safety nets worked so well recently that investors now trust they will be underneath them ad-infinitum. Markets and economists alike now believe that quantitative easing (“QE”) will always “work” by flooding the market with relatively costless capital. Unlimited QE and the zero lower bound (“ZLB”) are likely to bankrupt pension funds whose expected returns happen to be a good 600 basis points (or more) higher than the 10?year “risk-free” rate. The ZLB has many unintended consequences that are impossible to ignore.

Our belief is that markets will eventually take these matters out of the hands of the central bankers. These events will happen with such rapidity that policy makers won’t be able to react fast enough. The fallacy of the belief that countries that print their own currency are immune to sovereign crisis will be disproven in the coming months and years. Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation.” Kyle Bass

What’s Normal in a Profoundly Abnormal Society?

“The real hopeless victims of mental illness are to be found among those who appear to be most normal. Many of them are normal because they are so well adjusted to our mode of existence, because their human voice has been silenced so early in their lives, that they do not even struggle or suffer or develop symptoms as the neurotic does.” They are normal not in what may be called the absolute sense of the word; they are normal only in relation to a profoundly abnormal society. Their perfect adjustment to that abnormal society is a measure of their mental sickness. These millions of abnormally normal people, living without fuss in a society to which, if they were fully human beings, they ought not to be adjusted.” Aldous Huxley – Brave New World Revisited

No sane person could honestly say that what has happened to our society over the last forty years, and particularly in the last five years, is normal. But somehow those in power have convinced the masses that $1.2 trillion deficits, 0% interest rates, declining real wages, the highest average gas prices in history, pre-emptive wars, policing the world and buying rubber dog shit produced in China with a credit card is normal and beneficial to our economy. It seems that I and a few million other people in this country are the abnormal ones. We choose not to be led to slaughter by our masters. The seekers of truth have turned to the alternative media and are able to connect with like-minded critical thinking individuals on websites like Zero Hedge, Jesse’s Americain Café, Of Two Minds, Mish, Financial Sense, among many other truth seeking blogs. This is dangerous to the powers that be and they are using their political clout and extreme wealth to try and lock down and control free speech on the internet. If this is accomplished all hope at disseminating truth will be lost.

Abraham Lincoln once said that he believed in the people and that if you told them the truth and gave them the cold hard facts they would meet any crisis. That may have been true in 1860, but not today. The cold hard facts are available for all to see:

  • A $16.3 trillion National Debt
  • 47 million people on food stamps
  • Over $222 trillion of unfunded Federal entitlement liabilities
  • Over $5 trillion of unfunded State entitlement liabilities
  • True unemployment above 20%.
  • True inflation above 5%.
  • A stock market at the same level as 1999, with a 10 year expected annual return of less than 4% – Stocks for the really, really long run. 10 year bond returns of 0% will be a miracle.
  • A savings rate of 3.7% and with Bernanke’s ZIRP, no incentive to save. Real hourly earnings continue to fall.

  • Baby Boomers within 10 years of retirement have saved an average of only $78,000, and more than a third of them have less than $25,000. More than half of U.S. workers have no retirement plan at all.
  • A crumbling, decaying infrastructure, with 150,000 structurally deficient bridges, bursting water mains, and an overstressed electrical grid.
  • Horrific government public education producing millions of low functioning morons.
  • Rotting social fabric, with 40% of children born out of wedlock (72% of black children) and a 50% divorce rate.
  • An energy policy based upon unicorns farting rainbows and press releases about green energy and the miracle of shale fracking, as average gas prices in 2012 and 2011 were the highest in U.S. history.

As the pitiful excuses for statesmen in Washington D.C. pander and posture about the dreaded fiscal cliff which was purposely created by the oligarchs as a show for the masses, none of the true issues above are being addressed. The dramatic compromise that will ultimately be reached between the equally corrupt parties will be hailed by the corporate media and Wall Street shysters and an HFT supercomputer engineered stock market rally will ensue. The cowardice of these politicians is revolting. As Huxley knew in 1958, politicians and propagandists prefer nonsense and storylines to truth, knowledge and honesty.

“Human beings act in a great variety of irrational ways, but all of them seem to be capable, if given a fair chance, of making a reasonable choice in the light of available evidence. Democratic institutions can be made to work only if all concerned do their best to impart knowledge and to encourage rationality. But today, in the world’s most powerful democracy, the politicians and the propagandists prefer to make nonsense of democratic procedures by appealing almost exclusively to the ignorance and irrationality of the electors.”Aldous Huxley – Brave New World Revisited

We want to be lied to because the truth is too painful. Hope and denial with a dash of delusion is the recipe the mindless masses prefer. The average person doesn’t want to understand the chart below. They want to believe the U.S. will dominate economically and lead the world for decades to come. We are still the bright shining beacon of democracy on the mountaintop. Even though the facts unequivocally reveal a declining empire, the masses desperately grasp at straws in the wind. The United States share of world GDP will be vastly lower in 2021, as the hubris of declining empires never allows them to take the necessary steps to reverse the decline (Rome, Great Britain).  

It is fitting that during this magical Christmas season of fantasy, delusion, debt fueled material over-consumption and fairy tales, we look at the biggest fairy tale of all – the great jobs recovery. I know from the two thousand Obama campaign commercials I was forced to watch in the last few months and 500 robo-calls at dinner every night that we’ve added 4 million jobs due to Obama’s wise economic policies. The magical journey from a 10.3% unemployment rate to a 7.9% rate is a humdinger. I stumbled across a myriad of charts on those truth-telling websites that I had previously mentioned.

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

The first chart that grabbed my attention shows the historical relationship between the U3 unemployment rate reported to the masses versus the U6 truer picture of unemployment, along with the percentage of people unemployed for longer than 15 weeks. A funny thing happened shortly after the election of Barack Obama. From 1994 through 2008 the gap between the U3 and U6 rates consistently ranged between 3% and 4%. Suddenly, the gap surged to 7% and currently sits at almost 8%. The figure reported to the masses of 7.9% is so much easier to digest than the 15% to 17% that captures the truer level of unemployment. If the gap between these two figures had remained at the levels of the previous 14 years, the unemployment that should be reported to the masses would be 11%. That is unacceptable to those in power, so the data is massaged and the propaganda machine spins the storyline necessary to confuse and mislead the masses.

 

The next two charts from Mike Shedlock again reveal truths the existing social order doesn’t want you to know. Even though the working age population has grown by 10 million people since 2008, the BLS expects critical thinking people to believe the labor force has only grown by 1.3 million people. You see, the unemployment rate is calculated using the labor force. If your economic policies don’t create jobs, just adjust the labor force dramatically lower based on nothing. In desperate economic times, people do not voluntarily leave the workforce. Only a non-thinking drone would believe that 8.7 million Americans voluntarily left the workforce since 2008, when only 4 million left the workforce from 2003 through 2007. It is not a coincidence that student loan debt, which was taken over by the Obama administration in 2009 rose by $300 billion. Those in power have doled out these billions with no concern for credit risk or academic credentials in order to reduce the number of people in the labor force. Unemployed union Twinkie workers seeking a new career in lesbian studies can get a $20,000 loan from the American taxpayer to sit in their basement along with the 500,000 other University of Phoenix enrollees. The future $300 billion taxpayer bailout was worth it to keep the unemployment rate low enough to insure Obama’s re-election.      

The Obama PR machine never fails to expound upon the fact that the economy added 4.9 million jobs since January 2009. In the same timeframe, uncovered employment rose by 6.6 million. Inquiring minds might want to know what an “uncovered” job entails. Selling your accumulated Chinese crap on Ebay is an uncovered job. Calling yourself a consultant while sleeping until noon is an uncovered job. Day trading Facebook and Apple stock is an uncovered job. Trash picking is an uncovered job. The truth is that real jobs are 1.7 million lower than they were at the depths of the recession, while bullshit jobs paying virtually nothing and offering no benefits have surged by 6.6 million. These facts don’t make a great campaign commercial. The number of employed Americans is at the same level as mid-2005, even though the working age population has grown by 18 million. Since 2008 there are 3 million less full-time jobs and 3 more part-time jobs. This trend is accelerating as small businesses react rationally to the oncoming Obamacare train, resulting in aggregate work hours declining and wage growth stagnating.

Zero Hedge reveals more truth about our glorious jobs recovery with the following two charts. They obliterate the false narrative spun by liberal ideologues that the reason for the increase of those not in the labor force is due to Baby Boomers retiring. The truth is that while those in the 55-69 age brackets have gained nearly 4 million jobs under President Obama, everyone else has lost just over 2.5 million jobs. Is this a positive development or a sign of extreme desperation among older Americans who have seen their interest income vaporized by Ben Bernanke and there food, energy, and healthcare expenses skyrocket?

Those in their prime earning years of 25 to 54 still have a net cumulative loss of 2.2 million jobs since 2009. Recent college graduates, with their billions of student loan debt, have nabbed 400,000 TGI Fridays jobs, singing happy birthday to 3 year olds, with their newly minted college degrees. This is the “normal” healthy jobs market sold to the American public by the propagandists and politicians.

The final jobs chart that portrays the truth of what has been a decades’ long spiral downward paints a picture of a country that once created wealth through producing goods from the 1940s through 1970. Since 1970 we’ve degenerated into a debt creating country that consumes foreign produced goods and makes entitlement promises it can never keep. Selling houses to each other, peddling crap on Ebay, and eating out three times a week has shockingly failed to propel our economy. The jobs picture has deteriorated rapidly since 2008 and is not improving, despite the best propaganda money can buy. There is absolutely no chance of any substantive improvement over the next four years based on the policies in place and refusal to acknowledge the economic realities that we face.

The accumulation of material possessions through the use of consumer debt, peddled by bankers and reinforced through relentless corporate marketing propaganda has left the country’s citizens weary, miserable, greedy, indebted and sick. Our obsession with technology has merely provided another means of distracting ourselves from confronting the dire challenges that must be addressed. We can ignore the facts but that doesn’t mean they do not exist. The abnormality that grips this nation is breathtaking to behold, as the status quo cheer on and encourage consumers to buy more things with money they don’t have in order to support an economic recovery that is dependent upon zero interest rates for Wall Street banks, QE to infinity, and the delusional desire for a miraculous return to the good old days when getting something for nothing was possible. We can no longer deny reality. If we want to add 30 million people to Medicaid, it must be paid for. If we want to wage never ending wars and police the world, it must be paid for. If we want a Federal government to spend $3.8 trillion per year, it must be paid for. Nothing is free in this world, but more than 50% of Americans seem to believe that to be true.

“Our economy is based on spending billions to persuade people that happiness is buying things, and then insisting that the only way to have a viable economy is to make things for people to buy so they’ll have jobs and get enough money to buy things.” Philip Elliot Slater

We are seen by those in control as nothing more than common house flies caught in their web of lies. Your owners don’t care about you. They only care about their own wealth and power. They want to control and manipulate you. They want to keep you enslaved in debt and running on the treadmill of consumption. They want passive, non-critical thinking drones to do the menial service jobs that remain in this country, while they use their control of our financial, political, tax, and legal systems to ransack and pillage the wealth of the dwindling middle class. The truth is the continuation of our current economic system is mathematically impossible. Your owners know this. This is why the use of propaganda, misinformation, fake data, and false storylines has taken on astronomical proportions. The time for passivity and accepting the deceitfulness of our leaders is coming to an end. While you’re waiting in line this Christmas season at Wal-Mart to purchase a fabulously priced shirt that only required the deaths of 112 Bangladesh slave laborers, try to figure out how we got here. Your owners think they have you by the balls.

“They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest. You know something, they don’t want people that are smart enough to sit around their kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago. Because the owners of this country know the truth, it’s called the American Dream, because you have to be asleep to believe it.” George Carlin

How many Americans are awake enough to handle the truth?

All I want for Christmas is the truth.

OBAMA USING YOUR TAX DOLLARS TO PROMOTE GREATER FOOD STAMP USAGE

 Obama is so proud of his most successful government program that he is using $3 million of your tax dollars to enroll even more people in SNAP. He isn’t satisfied spending $72 billion of your tax dollars so obese cretins in West Philly can gorge themselves on potato chips, soda, candy, and fudge brownies. I observe the people on food stamps every damn day as I drive through West Philly. There ain’t no starving people. The average weight of these SNAP recipients is about 250 pounds.

I thought we were in the 3rd year of economic recovery. I thought all these stimulus measures were designed to get us through the Crisis and then would be scaled back. That is what Obama and Krugman told me in 2009. When does their Crisis end? It never ends. This is the liberal agenda. It is a parasitic organism that grows and grows, like the tape worm in the stomachs of the obese SNAP participants.

This advertising program couldn’t be related to the upcoming election. Could it?

 

Obama Wants You on Food Stamps

Melissa Melton
June 30, 2012

If the Supreme Court upholding Obamacare left Americans with any doubts we are officially living in a debt-fueled social welfare state, the Obama Administration recently spent three million dollars to convince us we will all live healthier lives if we sign up for food stamps.

The U.S. Department of Agriculture has been running a Supplemental Nutrition Assistance Program (SNAP) propaganda campaign for several months now. Primarily aimed at Hispanics, the elderly, and the working poor and unemployed, ads include radio segments claiming that food stamps help beneficiaries “eat right”:

Woman #1: “I wonder how she stays so fit, what’s her secret?”
Woman #2: “Well she told me that food stamp benefits help her eat right, and she stays active too.”

(The full commercials may be heard here.)

Food stamp guidelines only require that items purchased with stamps are designated as “food for home consumption”. It should be noted the USDA does not station enforcement officers at grocery stores to ensure food stamp recipients’ shopping carts are filled with vegetables instead of potato chips.

Reality apparently aside, food stamp use has skyrocketed 100 percent in President Obama’s America, no doubt due in part to his stimulus act which made it easier for adults without jobs or children to receive food stamp aid. Obama also increased the total allotted benefit amount by 15 percent. Meanwhile, American poverty figures are absolutely staggering. A full third of the country’s population are considered working poor. One out of every seven Americans is on food stamps now, the highest number since the program’s inception. In fact, the USDA doled out $75 billion dollars in food stamps throughout fiscal year 2011, more than double the $34.6 billion spent in 2008.

The county is ripe with economic strife. Our national deficit is nearly $16 trillion dollars. While $3 million must seem like a drop in the bucket, federally funded food stamp advertisements raise an obvious and troubling question. At a time when more people than ever before are relying on the government to buy their food, why in the world would the USDA spend millions in an attempt to boost enrollment in an already overburdened program?

According to Agriculture Secretary Tom Vilsack, food stamps actually stimulate the economy and create jobs:

Nancy Pelosi shared Vilsack’s sentiment at a press conference back in 2010 when she claimed, “It is the biggest bang for the buck when you do food stamps and unemployment insurance.”

Following this logic, if more people are on food stamps than ever, then more people should be employed than ever, right? That must be why we have the highest long-term unemployment rates since the Great Depression.

The USDA’s radio ads are part of a newly released community outreach toolkit which its website explains is meant to “improve existing SNAP outreach to those who are eligible but not participating in the program.” This kit also includes a series of flyers that suggest “fresh ideas” to garner local offices more aid recipients, such as throwing food stamp “parties,” complete with entertainment and food stamp info-themed BINGO games.

Sounds super fun, right? Perhaps one of the game card squares should read “Road to American Serfdom.”

B-I-N-G-O!